Southern District of California
Press releases recorded for this federal judicial district.
Former Usd Basketball Player Brandon Johnson Sentenced for Conspiring to Commit Sports BriberyRead the Press Release
United States Attorney Laura E. Duffy announced that Brandon Johnson was sentenced today in federal court in San Diego by the Honorable Anthony J. Battaglia to serve six months in custody, followed by one year of supervised release, for his role in a conspiracy to commit sports bribery in connection with influencing the outcome of University of San Diego (USD) basketball games during the 2009-2010 season and soliciting a USD player to do the same during the 2010-2011 season. Johnson pled guilty to an indictment charging him with conspiring to commit sports bribery on November 15, 2012. To date, eight of the ten defendants indicted have pled guilty.
According to court documents and admissions from co-defendants’ guilty pleas, Brandon Johnson, the all-time points and assists leader at USD, received bribe money to influence the outcome of basketball 2 games during the 2009-2010 season while he was a member of USD’s basketball team. Utilizing Johnson, the conspiracy profited by placing bets at Las Vegas casinos on games Johnson influenced. Co-defendant Steve Goria, who was sentenced to 30 months imprisonment in October 2012, admitted that the conspiracy profited more than $120,000 from the game-fixing scheme. Johnson admitted in his guilty plea that during the 2010-2011 season, he solicited a then-current USD basketball player to influence the outcome of basketball games for bribe money.
Judge Battaglia ordered the defendant to report on May 31, 2013 to begin serving his sentence.
DEFENDANT Criminal Case No. 11CR1345-AJB Brandon Johnson SUMMARY OF CHARGESCount 1: Title 18, United States Code, Section 371 - Conspiracy
INVESTIGATING AGENCYFederal Bureau of Investigation
Woman Sentenced to Serve 60 Months in Federal Prison for Conspiracy to Commit FraudRead the Press Release
United States Attorney Laura E. Duffy announced that Kathleen Wurts was sentenced today in federal court in San Diego to serve 60 months in federal prison for conspiracy to commit mail fraud, wire fraud, and bank fraud, in connection with a $17 million Internet fraud scheme. Ms. Wurts entered a guilty plea to one count of the indictment in April 2012. United States District Judge John A. Houston also ordered that Wurts serve a three year term of supervised release following her release from custody. Due to the number of victims, the location of victims worldwide, and the complexity of the case, Judge Houston found that restitution was indeterminate.
In her plea, Wurts admitted that through at least April 2010, she engaged in a conspiracy to defraud individuals who used Internet websites (such as Craigslist and Yahoo!) to find employment, purchase and sell items, and rent and purchase real property. According to court documents, Wurts' co-conspirators mailed her counterfeit money orders and travelers' cheques from outside the United States (Nigeria, Abu Dhabi, and the United Kingdom) and provided her with stolen bank account and credit card numbers via emails and chat logs. Once received, Wurts created hundreds of fraudulent checks using the stolen bank account numbers. She then mailed the counterfeit money orders, travelers' cheques, and fraudulent checks to the victims using stolen credit card information to pay for the postage. The victims generally expected to receive a fixed amount for, as an example, the items they were selling, however, Wurts mailed them a money order, travelers’ cheque, or check in an amount that exceeded the asking price. The victims were then directed to deposit the monetary instruments into their own accounts, keep a certain percentage “for their trouble” and wire-transfer the excess portion of the stolen amount to an overseas account. Wurts received more than $800,000 in counterfeit money orders and travelers' cheques and created more than $17.2 million in fraudulent checks using stolen bank account numbers. Wurts mailed these fraudulent monetary instruments to victims and paid more than $13,000 for the postage using stolen credit card numbers.
This case was investigated by federal agents with Immigration and Customs Enforcement's Homeland Security Investigations and the United States Postal Inspection Service.
DEFENDANT Criminal Case No. 11CR1952-JAH Kathleen Wurts SUMMARY OF GUILTY PLEATitle 18, United States Code, Section 1349 - Conspiracy to Commit Mail, Wire, and Bank Fraud
INVESTIGATING AGENCIESImmigration and Customs Enforcement's Homeland Security Investigations
United States Postal Inspection ServiceMan Sentenced to Serve 35 Years in Federal Prison for Production of Child PornographyRead the Press Release
United States Attorney Laura E. Duffy announced the sentencing of David Kinh Duc Tran in federal court yesterday based upon his convictions for production of child pornography, in violation of Title 18, United States Code, Section 2251(a) and (e). United States District Judge Thomas J. Whelan sentenced the defendant to serve 420 months (35 years) in federal prison and also ordered the defendant to serve 5 years of supervised release and register as a sex offender.
On April 25, 2012, during the second day of his jury trial, Tran elected to plead guilty to all five counts of producing child pornography outside of the United States, in violation of Title 18, United States Code, Sections 2251(a) and (e). Specifically, he admitted to producing five videos of sexual exploitation of several children while he was teaching in Vietnam.
According to court documents, Tran stated that he lived in Vietnam for approximately two years and returned to the United States before his arrest. Based on a tip, on August 19, 2010, the San Diego Internet Crimes Against Children Task Force (ICAC) executed a search warrant on Tran's motel room. 2 Agents seized a laptop computer that was sent to the Regional Computer Forensics Laboratory (RCFL) to be analyzed. That analysis revealed a video of Tran teaching English in Vietnam and videos of the defendant having sex with girls who appear to be between 6 and 12 years old. The defendant has been in custody since his arrest in August 2010.
This case stems from an investigation by San Diego Police Department officers assigned to the San Diego Internet Crimes Against Children Task Force, whose members include the Federal Bureau of Investigation, the Immigration and Customs Enforcement's Homeland Security Investigations, the San Diego County Sheriff's Department, the Chula Vista Police Department, the United States Attorney's Office, the San Diego District Attorney's Office, the United States Postal Inspection Service, the Naval Criminal Investigative Service, the United States Marshals Service, the Regional Computer Forensics Laboratory, the Defense Criminal Investigative Service, the National City Police Department, the La Mesa Police Department, the Oceanside Police Department, the El Cajon Police Department, the San Diego State University Police Department, the Riverside County Sheriff's Department, and the Riverside County District Attorney's Office. For additional information regarding ICAC, please visit www.sdicac.org.
This case was brought as part of Project Safe Childhood (PSC), a nationwide initiative designed to protect children from online exploitation and abuse. Project Safe Childhood marshals federal, state and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as identify and rescue victims. For more information about PSC and Internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
DEFENDANT Case Number: 10cr3668W David Kinh Duc Tran SUMMARY OF CHARGES Five CountsTitle 18, United States Code, Section 2251(a) and (e) (Production of Images of Minors Engaged in Sexually Explicit Conduct)
INVESTIGATING AGENCIESSan Diego Internet Crimes Against Children (ICAC) Task Force
San Diego Jury Convicts Four Somali Immigrants of Providing Support to Foreign TerroristsRead the Press Release
SAN DIEGO, CA – A federal jury today convicted four Somali immigrants, including a popular imam at a City Heights mosque, of conspiring to provide material support to the terrorist group al-Shabaab.
The jury found that the four men - Basaaly Saeed Moalin, a cabdriver in San Diego; Issa Doreh, a worker at a money transmitting business that was the conduit for moving the funds; Mohamed Mohamed Mohamud, the imam at a mosque frequented by the city’s immigrant Somali community; and Ahmed Nasiri Taalil Mohamud, a cabdriver from Anaheim – conspired to raise money for the foreign terrorist organization and send it back to Somalia.
During the three-week trial, the United States presented evidence that Moalin, Mohamud, Doreh and Nasir conspired to provide money to al-Shabaab, a violent and brutal militia group in Somalia that engages in suicide bombings, targets civilians for assassination, and uses improvised explosive devices. In February 2008, the U.S. Department of State formally designated al-Shabaab as a foreign terrorist organization.
At trial, the jury listened to dozens of the defendants’ intercepted telephone conversations, including many conversations between defendant Moalin and Aden Hashi Ayrow, one of al-Shabaab’s most prominent leaders who was subsequently killed in a missile strike on May 1, 2008. In those calls, Ayrow implored Moalin to send money to al-Shabaab, telling Moalin that it was “time to finance the Jihad.” Ayrow told Moalin, “You are running late with the stuff. Send some and something will happen.” In the calls played for the jury, Ayrow repeatedly asked Moalin to reach out to defendant Mohamud – the imam – to obtain funds for al-Shabaab.
According to the evidence presented at trial, the defendants conspired to transfer the funds from San Diego to Somalia through the Shidaal Express, a now-defunct money transmitting business in San Diego.
The United States also presented a recorded telephone conversation in which defendant Moalin gave the terrorists in Somalia permission to use his house in Mogadishu, Somalia, telling Ayrow that “after you bury your stuff deep in the ground, you would, then, plant the trees on top.” Prosecutors argued at trial that Moalin was offering a place to hide weapons.
When Moalin cautioned, however, that the house could be easily identified from afar, Ayrow replied: “No one would know. How could anyone know, if the house is used only during the nights?”
According to United States Attorney Laura E. Duffy, the prosecution was the result of a lengthy investigation by the San Diego Joint Terrorism Task Force. She said she is pleased with the verdict. “Justice was served today in San Diego,” Duffy said. “The jury clearly did not accept defense claims that months of intercepted conversations about bullets, bombings and Jihad were actually conversations about their charitable efforts for orphans and schools.
“This case proves that our efforts to detect and disrupt terrorist financing – and prevent the violence that goes along with it - has paid off. The United States Attorney’s Office is dedicated to investigating and vigorously prosecuting any persons who provide support or resources to terrorists or foreign terrorist organizations. I commend the hard work and dedication of San Diego’s Joint Terrorism Task Force in this case.”
FBI Special Agent in Charge Daphne Hearn commented, "While the FBI is not concerned with the legal transfer of funds to family, friends and charities overseas, when individuals provide material support to designated terrorists or terrorist organizations, the FBI and our Joint Terrorism Task Force partners will bring all resources to bear, to investigate these plots with a common goal of protecting all Americans from those who wish to do us harm.”
“These convictions illustrate the importance of collaboration when promoting national security,” said Derek Benner, special agent in charge for ICE Homeland Security Investigations in San Diego. “Protecting our nation’s security is our top priority, and I commend all of the federal law enforcement partners who worked tirelessly to make this a successful investigation. ”
Al-Shabaab is a terrorist organization based in Somalia, with objectives including the overthrow of the Transitional Federal Government (TFG), the elimination of African Union support for the TFG. Al-Shabaab has engaged in, and used, violence, intimidation and acts of terrorism, including suicide bombings, in Somalia and elsewhere to further its objectives.
Here’s a breakdown of the verdict:
Defendant Moalin: Convicted of five counts including conspiracy to provide material support to terrorist, conspiracy to provide material support to foreign terrorist organization, conspiracy to launder monetary instruments, providing material support to terrorists and providing material support to foreign terrorist organization
Defendant Mohamed Mohamed Mohamud: Convicted of four counts including conspiracy to provide material support to terrorist, conspiracy to provide material support to foreign terrorist organization, conspiracy to launder monetary instruments, and providing material support to foreign terrorist organization
Defendant Issa Doreh: Convicted of four counts including conspiracy to provide material support to terrorist, conspiracy to provide material support to foreign terrorist organization, conspiracy to launder monetary instruments, and providing material support to foreign terrorist organization
Defendant Ahmed Nasir Taalil Mohamud: Convicted of threer counts including conspiracy to provide material support to terrorist, conspiracy to provide material support to foreign terrorist organization, and conspiracy to launder monetary instruments
Sentencing was set for May 16 at 9 a.m. before U.S. District Judge Jeffrey T. Miller.
This case was prosecuted in federal court in San Diego by Assistant United States Attorneys William Cole and Caroline Han and Department of Justice Trial Attorney Steven Ward. This case was investigated by the San Diego Joint Terrorism Task Force; the Federal Bureau of Investigation; the Department of Homeland Security, Immigration and Customs Enforcement; and the Department of Homeland Security, Customs and Border Protection.
Criminal Case No. 10cr4246-JM DEFENDANTS Criminal Case No. 10-CR-4246-JM Basaaly Saeed Moalin
Mohamed Mohamed Mohamud
Issa Doreh
Ahmed Nasir Taalil Mohamud SUMMARY OF CHARGESCount 1 (all defendants): Title 18, United States Code, Section 2339A(a) - Conspiracy to Provide Material Support to Terrorists; Maximum penalties: 15 years in prison and a $250,000 fine.
Count 2 (all defendants): Title 18, United States Code, Section 2339B(a)(1) - Conspiracy to Provide Material Support to Foreign Terrorist Organization; Maximum penalties: 15 years in prison and a $250,000 fine.
Count 3 (all defendants): Title 18, United States Code, Section 1956(h) - Conspiracy to Launder Monetary Instruments; Maximum penalties: 20 years in prison and a $500,000 fine.
Count 4 (Basaaly Moalin): Title 18, United States Code, Section 2339A(a) - Providing Material Support to Terrorists; Maximum penalties: 15 years in prison and a $250,000 fine. Count 5 (defendants Basaaly Moalin, Mohamed Mohamed Mohamud, and Issa Doreh): Title 18, United States Code, Section 2339B(a)(1) - Providing Material Support to Foreign Terrorist Organization; Maximum penalties: 15 years in prison and a $250,000 fine.
PARTICIPATING AGENCIESSan Diego Joint Terrorism Task Force
Federal Bureau of Investigation Department of Homeland Security, Immigration and Customs Enforcement
Department of Homeland Security, Customs and Border ProtectionFederal Officials Arrest and Charge A Dozen Suspected Meth TraffickersRead the Press Release
Twelve suspected members of a methamphetamine and cocaine trafficking ring were arrested early Wednesday and today at the culmination of a yearlong investigation by the Drug Enforcement Administration and the Major Mexican Traffickers’ Strike Force. All but two of the defendants appeared in federal court this afternoon for arraignment on drug conspiracy charges.
These arrests are associated with the unsealing of a criminal complaint Wednesday charging 19 defendants with conspiracy to traffic methamphetamine and cocaine. The investigation, known as “Operation Crystal Haven,” focused on a long-term distribution ring which was importing methamphetamine and cocaine from Tijuana- and Guadalajara-based cartels into San Diego County, where it was then distributed in areas of northern San Diego County and elsewhere.
The task force is a multi-agency effort to focus on Mexico-based drug trafficking organizations with ties to the San Diego area. Its members include the DEA, FBI, IRS, and ICE, with assistance from other federal and local law enforcement agencies as well.
Including the previous arrest of another defendant in the case, as of today, a total of 13 defendants are in custody, charged with distributing methamphetamine and cocaine.
“We are relentlessly pursuing major trafficking organizations that operate in our neighborhoods and imperil our children,” said U.S. Attorney Laura Duffy. “It’s gratifying to wrap up a lengthy investigation like this one with many arrests and drug seizures, knowing the community is safer because of our efforts.”
“The conclusion of this investigation marks the end of a large scale methamphetamine transportation and distribution organization that has been operating in San Diego County,” says San Diego Drug Enforcement Administration Acting Special Agent in Charge William Sherman. “This organization was distributing multi-pound quantities of methamphetamine in our cities, and making a huge profit. Throughout the course of the investigation, DEA and its law enforcement partners seized large quantities of methamphetamine and arrested 13 people who will not be selling their product on our streets.”
N. Dawn Mertz, Acting Special Agent in Charge of IRS Criminal Investigation for the Los Angeles Field Office made the following comment on Operation Crystal Haven, “All drug trafficking organizations are motivated by profit and greed. By working closely with our law enforcement partners and using our financial expertise, IRS Criminal Investigation will continue to unravel the illicit financial networks created and used to launder the money generated by these narcotics organizations.”
Daphne Hearn, Special Agent in Charge, San Diego Field Office, said: “Through the combined efforts of local, state, and federal law enforcement, a significant methamphetamine criminal enterprise has been disrupted. The FBI will continue to work with our partners to make our communities a safer place.”
“ICE Homeland Security Investigations is committed to working together with our federal partners to combat dangerous drug trafficking that threatens public safety in our communities, “ said Derek Benner, special agent in charge for ICE Homeland Security in San Diego. “ Our mutual goal is to dismantle these distribution networks that are at the core of illicit drug sales in the U.S. There is no 3 better strategy to strengthen our law enforcement resources and achieve our goals than joint operations. ”
DEFENDANTS Case Number: 13mj0608 JOSE ISIDRO RODRIGUEZ-LARA
DAVID AGUILAR
ALMA JAIME
MANUEL MARCIAL
FELIPE GARCIA-GALLEGOS
GUADALUPE NATALIE PEREZ
JOSE LUIS LOPEZ
ROSALIA LOURDES NIEVES
ALICIA REYNA MARIN
LEONARDO GARCIA-GAYTAN
NANCY BLANCAS-PENA
SYLVIA SANCHEZ-ZARATE
SYLVIA LARA
JULIO CESAR RODRIGUEZ-ZARATE
MIGUEL GUTIERREZ-MARANTES
JOSE JUAN MANCILLA-MONJE
EDSON SOLIS-VALDOVINOS
NATHAN KAHAKULANI YASSO
HERNAN SEBASTIAN BERNAL Arrested 2/20/13
Arrested 2/20/13
Arrested 2/20/13
Arrested 2/20/13
Arrested 2/21/13
Arrested 2/20/13
Arrested 2/20/13
Arrested 2/20/13
Arrested 2/20/13
In state custody
Arrested 2/20/13
Arrested 2/20/13
Fugitive
Fugitive
Arrested 2/20/13
Fugitive
Fugitive
Fugitive
Fugitive
SUMMARY OF CHARGESTitle 21, United States Code, Sections 841(a)(1) and 846 - Conspiracy to Distribute Methamphetamine
AGENCIES
Maximum Penalties: Life in Custody; Minimum Custody: 10 years; Maximum Fine: $4 millionDrug Enforcement Administration
Federal Bureau of Investigation
Internal Revenue Service
Department of Homeland Security, U.S. Immigration and Customs Enforcement, U.S. Customs and
Border Protection
San Diego County Sheriff's Department
Los Angeles County Sheriff's DepartmentAn 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.
Two Former Marines Charged in Miramar Air Station Bribery and Fraud SchemeRead the Press Release
United States Attorney Laura E. Duffy announced today that former U. S. Marine Sergeants Luis Gilbert Menchaca and Manuel Ramos Padilla have been indicted on bribery and fraud charges involving the filing of false travel and lodging claims at the Marine Corp Air Station (MCAS) Miramar.
The indictment alleges that from 2002 to 2011, Menchaca served in the U. S. Marine Corps reserves, and periodically received orders calling him onto active duty at MCAS Miramar. Ramos, a fellow Marine, worked in an administrative office at Miramar that processed lodging claims for reservists like Menchaca. The indictment alleges that Ramos and Menchaca conspired to defraud the Defense Department by submitting false monthly claims for lodging reimbursements for Menchaca, and by creating fake rental bills to substantiate those false claims. The address in San Diego that Menchaca claimed to be renting was, in fact, a nonexistent street number in Mission Valley.
According to the indictment, Ramos knowingly signed and approved dozens of false lodging claims for Menchaca and another reservist, a Staff Sergeant (identified only by initials in the indictment) who has been charged elsewhere. Each of the two reservists received tens of thousands of dollars in lodging payments as a result of the scheme. In exchange for facilitating the fraud, Ramos in turn demanded and received thousands of dollars of bribe payments from the reservists. Many of these bribes were paid by personal checks made payable to Ramos; other bribes were paid in cash.
The ten-count indictment charges both defendants with conspiracy to commit bribery and false claims in count one. Counts two through four charge Ramos with substantive counts of bribery. The remaining six counts charge the defendants with making false claims to the United States.
United States Attorney Duffy stated, “Investigating and prosecuting bribery is one of our top priorities. With our nation’s military budget being strained to the breaking point, public corruption that drains needed U. S. Marine Corps resources will not be tolerated.”
The Naval Criminal Investigative Service notes that fraud in the armed services is not a victimless crime; it squanders hard-earned tax dollars and erodes the confidence that citizens place in their military. Charles Warmuth, NCIS Special Agent in Charge for Marine Corps West Field Office, stated "The Department of the Navy is facing massive budget cuts in the near future so it is as important as ever that offenders are found and held accountable.”
Menchaca was arraigned today before U. S. Magistrate Judge Karen S. Crawford and Ramos was arraigned on January 24 before U.S. Magistrate Judge Barbara L. Major. Both defendants pled not guilty. The case has been assigned to U. S. District Judge Dana M. Sabraw. The next scheduled court appearance is March 1, 2013 for a motion hearing.
DEFENDANTS Case Number: 12cr5099-DMS Manuel Ramos-Padilla
Luis Gilbert Menchaca SUMMARY OF CHARGESCount 1: Conspiracy to commit bribery and false claims, in violation of Title 18, United States Code, Section 371 (all defendants) - Maximum penalties: 5 years in prison, $250,000 fine, term of supervised release of three years, restitution, forfeiture, and $100 special assessment.
Counts 2 to 4: Bribery, in violation of Title 18, United States Code, Section 201 (defendant Ramos) - Maximum penalties (per count): Fifteen years in prison, $250,000 fine, term of supervised release of three years, restitution, and $100 special assessment.
Counts 5 to 7: False claims, in violation of Title 18, United States Code, Section 287 (defendants Ramos and Menchaca) - Maximum penalties (per count): Five years in prison, $250,000 fine, term of supervised release of three years, restitution, and $100 special assessment.
Counts 8 to 10: False claims, in violation of Title 18, United States Code, Section 287 (defendant Ramos) - Maximum penalties (per count): Five years in prison, $250,000 fine, term of supervised release of three years, restitution, and $100 special assessment.
INVESTIGATING AGENCYNaval Criminal Investigative Service
An indictment is not evidence that the defendants committed the crimes charged. The defendants are presumed innocent until the Government meets its burden in court of proving guilt beyond a reasonable doubt.
High-Ranking Mexican Mafia Associate Sentenced in Stabbing and Drug Trafficking Case Crimes Committed in Aid of Mexican Mafia's Racketeering ActivityRead the Press Release
United States Attorney Laura E. Duffy announced that Robert Mercado, a high-ranking Mexican Mafia associate from San Diego, was sentenced today by United States District Judge Anthony J. Battaglia to 14 years in custody after Mercado pleaded guilty to Violent Crime in Aid of Racketeering, in violation of Title 18, United States Code, Section 1959. Mercado was one of thirty-six individuals arrested last year as part of "Operation Carnalismo," an investigation that targeted the Mexican Mafia's organized criminal activity. "Operation Carnalismo" was one of three similar investigations charged at the same time that focused on Mexican Mafia crime, which resulted in well over 100 arrests of local gang members and associates.
Court filings described the Mexican Mafia as a notorious, violent prison gang that controls a large portion of the criminal activity committed by Southern California Hispanic street-gang members. The Mexican Mafia controls the criminal activity of its subsidiary gangs through the extortionate collection of the proceeds from other criminal activity, such as drug trafficking. These extortion payments, commonly referred to as "taxes," are collected for the benefit of members by gang associates like Mercado. The Mexican Mafia and its associates engage in a variety of crime in order to maintain their presence in the criminal world, including murder, assault, kidnapping, extortion and drug trafficking.
As part of his plea, Mercado admitted that he carried out a variety of crimes in support of the Mexican Mafia, including assault with a dangerous weapon (stabbing), drug trafficking and extortion. Filings with the Court revealed that Mercado was a trusted lieutenant to convicted Mexican Mafia Member Salvador Colabella. Colabella had several independent methamphetamine-trafficking organizations under his command. Mercado and others took money and cars from a number of drug dealers through violence or the threat of violence. In one particular incident, Mercado admitted stabbing a drug dealer (and twisting the knife in order to maximize the damage) because he believed that the drug dealer was not properly paying taxes to Colabella. After the stabbing, Mercado and an associate sent a third member of their group to the hospital in order to prevent the injured drug dealer from speaking with the police. Adding insult to injury, Mercado and his associate further demanded that the drug dealer give them his car, which he did later that evening after being released from the hospital. As part of his plea, Mercado also admitted that he sold heroin that was provided to him by the same victim of his violent assault.
United States Attorney Duffy praised the members of the Federal Bureau of Investigation's Violent Crimes B Gang Group ("VCTF-GG"), which led this investigation, for their continued, outstanding work in pursuit of Mexican Mafia crime. The VCTF-GG is a federal task force comprised of investigators from the FBI, Bureau of Prisons, and the San Diego, Chula Vista, and National City Police Departments. Duffy added,
DEFENDANT Criminal Case No. 12CR290-AJB Robert Mercado PROGRESS OF CASES CHARGED AS PART OF OPERATION CARNALISMO
" We will continue to work tirelessly in order to ensure that our neighborhoods remain safe from organized gang activity through the successful prosecutions of cases like this. Gang members must know that their actions have serious consequences under federal law."Summary: As of February 15, 2013, 30 of 36 defendants have been convicted and 12 of those 30 have been sentenced.
12CR290-AJB - Convictions
INVESTIGATING AGENCIES
Salvadore Colabella - RICO conspiracy
Jose Luis Mercado - RICO conspiracy
Robert Mercado - Violent Crime in Aid of Racketeering (168 months in custody)
Maria de Jesus Claudia Ochoa - RICO conspiracy
Silvano Hernandez - RICO conspiracy
Jose Briseno-Contreras - RICO conspiracy (46 months in custody)
12CR291-AJB - Convictions
Ramon Agredano - Conspiracy to distribute methamphetamine (84 months in custody) Ricardo Cornejo - Conspiracy to distribute methamphetamine (135 months in custody) David York - Conspiracy to distribute methamphetamine
Guillermo Chaidez - Conspiracy to distribute methamphetamine (120 months in custody) Adrian Dominguez - Conspiracy to distribute methamphetamine
Charles Smith - Conspiracy to distribute methamphetamine
Anna Sheneman - Conspiracy to distribute methamphetamine (93 months in custody) Esteban Rodriguez - Conspiracy to distribute methamphetamine (60 months in custody)
12CR292-AJB - Convictions
Juan Guerrero - Conspiracy to distribute methamphetamine (135 months in custody) Jorge Moreno - Conspiracy to distribute methamphetamine
Eduardo Moreno - Conspiracy to distribute methamphetamine (120 months in custody) Allen Mundell - Conspiracy to distribute methamphetamine
Brett Youkel - Conspiracy to distribute methamphetamine (120 months in custody)
Lacy McElroy - Conspiracy to distribute methamphetamine (100 months in custody)
12CR293-AJB - Convictions
Alfredo Bazurto - Conspiracy to distribute methamphetamine
Charles Monroe - Conspiracy to distribute methamphetamine
Jose Pedro Covarrubias - Conspiracy to distribute methamphetamine (120 months in custody)
George Chavez - Conspiracy to distribute methamphetamine
Jose Esparza - Conspiracy to distribute methamphetamine
John Atkinson - Conspiracy to distribute methamphetamine (120 months in custody) Annabel Vasquez - Conspiracy to distribute methamphetamine
Fantaja Deleal - Conspiracy to distribute methamphetamine (78 months in custody)
12CR294-MMA - Convicted
Carlos Lozano - Distribution of methamphetamine (57 months in custody)Federal Bureau of Investigation
Chula Vista Police Department
San Diego County Sheriff's Department
National City Police Department
San Diego Police Department
San Diego County District Attorney's Office
U.S. Bureau of Prisons
California Department of Corrections and Rehabilitation
San Diego County Probation
Department, Immigration and Customs Enforcement's Homeland Security Investigations
Internal Revenue Service-Criminal InvestigationsFormer San Diego Mayor Squanders A Billion Dollars Then Raids Charitable Foundation to Pay Debts and Continue Gambling SpreeRead the Press Release
Former San Diego Mayor Maureen O'Connor entered a deferred prosecution agreement today in which she acknowledged misappropriating millions of dollars from her deceased husband's charitable foundation. As part of the agreement, O'Connor agreed to pay $2,088,000 in restitution to the foundation, settle any and all tax liability resulting from her receipt of these funds, and receive treatment for her gambling addiction.
According to documents filed in the proceeding, O'Connor was married to Robert O. Peterson (the Founder of the Jack in the Box restaurant chain) from 1977 until his death in 1994. Prior to his death, Peterson and others created the R.P. Foundation ("Foundation"). According to its Articles of Incorporation, "no part of the net earnings, properties, or assets shall enure to the benefit of any [Foundation] trustee . . . ." Defendant O'Connor was one of the three Trustees who were specifically prohibited from receiving a benefit from the Foundation. Prior to 2008, in accordance with its charter, the Foundation provided money to various charities, such as City of Hope, the Alzheimer's Association, Sharp Healthcare, Little Wishes Foundation, San Diego Hospice, and the John Burton Foundation.
As revealed in court documents, between 2000 and 2009, O'Connor won more than $1 billion while gambling in various casinos in Las Vegas, Atlantic City and San Diego. Despite these immense winnings, she suffered even larger gambling losses - resulting in a sizable net loss. Indeed, by early 2008, she incurred large, outstanding gambling debts at a number of different casinos. In order to stay afloat financially and continue her gambling spree, O'Connor liquidated her savings, sold numerous real estate holdings and auctioned valuable personal items. She also obtained second and third mortgages on her personal residence in La Jolla, California.
By September 2008, O'Connor had few, if any, assets that had not been mortgaged, sold off, or otherwise liquidated. At that point, she turned to the Foundation's assets to both pay her outstanding debts and continue her high-stakes gambling. Between September 2008 and March 2009, O'Connor misappropriated more than $2,088,000 from the foundation. Equally troubling, despite winning hundreds of thousands of dollars during that time period, she literally "threw good money after bad" by continuing gambling - rather than reimbursing the Foundation for the wrongfully taken funds.
As noted in Court, O'Connor's transfers from the Foundation to her personal bank account were contrary to the Foundation's explicit charitable purpose and its non-profit status with the IRS. Her misappropriation of funds deprived the Foundation of its remaining assets and left it completely bankrupt. As a result, the Foundation was forced to close its bank accounts in April 2009. Although O'Connor characterized the misappropriated funds as "loans" from the Foundation (and may have initially intended to repay the funds) her actions were nevertheless specifically prohibited - and constituted impermissible self-dealing in violation of her fiduciary responsibility to the Foundation.
Despite having limited, if any, assets other than the funds improperly taken from the Foundation, O'Connor continued her non-stop gambling. After March 2009, Defendant made payments to casinos in an attempt to satisfy outstanding gambling markers (or lines of credit), yet once again did not make any attempt to repay the Foundation or bring it out of bankruptcy. In doing so (as specified in the Government's charging documents), she improperly engaged in monetary transactions knowing that the transactions involved proceeds of her misappropriation of charitable funds.
According to court records, in 2011, surgeons operated on O'Connor to remove a large tumor from her brain. She subsequently suffered significant complications, including a pulmonary embolism and cognitive impairment. O'Connor's medical condition has resulted in a variety of continuing and serious health problems. While found competent to enter into this deferred prosecution agreement by Magistrate Judge David Bartick, all parties agree that her medical ailments render it highly improbable - if not impossible - that she could be brought to trial. If the defendant satisfies all the conditions of her deferred prosecution (including providing restitution), the government has agreed to dismiss the Information filed against her in two years.
United States Attorney Laura Duffy commented that despite the difficulties presented by this case, it was imperative to ensure that O'Connor, who was mayor from 1986 to 1992, not be allowed to simply pilfer the R.P. Foundation and avoid paying her appropriate tax obligations. "Maureen O'Connor was a selfless public official who contributed much to the well-being of San Diego," Duffy said. “However, no figure, regardless of how much good they've done or how much they've given to charity, can escape criminal liability with impunity."
N. Dawn Mertz, Acting Special Agent in Charge for IRS Criminal Investigation, Los Angeles Field Office commented: "Today, Maureen O'Connor, acknowledged that she embezzled over $2 Million from the R.P. Foundation, a charitable nonprofit organization. This embezzlement contributed to the demise of this organization. O'Connor characterized the misappropriated funds as "loans" from the R. P. Foundation to conceal her illegal activity, gambling addiction and to evade the payment of tax on her embezzled funds. O'Connor's guilty plea emphasizes that those who violate our nation's tax laws, regardless of their status, face investigation by IRS Criminal Investigation, prosecution for their crimes and remain liable for their tax liability."
U.S. Attorney Duffy praised the enforcement work by the IRS who diligently pieced together the full scope of the fraud.asdf
DEFENDANT Criminal Case No. 13cr537BEN Maureen O'Connor SUMMARY OF CHARGESOffense: Title 18, United States Code, Section 1957 - Prohibited Financial Transaction
INVESTIGATING AGENCY
Maximum penalties: 10 years custody; $250,000 fine; 3 year supervised release.Internal Revenue Service, Criminal Investigation Division
28 Arrested and 19 Firearms Seized Following Investigation of Suspected Methamphetamine TraffickersRead the Press Release
A contingent of 150 federal, state and local law enforcement officials arrested 28 people and seized 19 firearms early yesterday – including fully-automatic and semi-automatic assault rifles, silencers and high-capacity magazines - in connection with a year-long investigation of major methamphetamine traffickers.
Many of the defendants are scheduled to be arraigned before U.S. Magistrate Judge David Bartick at 1:30 p.m. today. Prosecutors will be available for interviews after court.
The arrests – from Spring Valley, La Mesa and Jamul to National City, Chula Vista and San Diego - were based on three grand jury indictments of 33 suspected methamphetamine traffickers unsealed in federal court Tuesday. The charges include conspiracy to distribute controlled substances, distribution of methamphetamine and possession of methamphetamine with intent to distribute. Three defendants were still at large.
During the predawn raids, agents seized about 26 pounds of methamphetamine with an estimated $291,200 street value; a pound of cocaine with estimated $12,800 street value; $151,000 in cash; plus weapons that included an AR-15, a TEC 9, a Glock semi-automatic handgun, bolt action rifles and five silencers. Eight of the guns and the silencers were found at one home on Millar Ranch Road in Jamul. Authorities also discovered indoor marijuana grows with hundreds of plants in two apartment units in Spring Valley.
The investigation, dubbed “Red Menace,” involved federal wiretaps, undercover drug buys and extensive surveillance. Numerous defendants are documented members of gangs, including Skyline, Emerald Hills and Oriental Killer Boys. Rival criminal street gangs often cross gang affiliation for the purpose of facilitating drug distribution.
The arrests are the latest in a series of large-scale multi-agency crackdowns on street gang activity in San Diego County neighborhoods. Including yesterday’s action, more than 180 defendants have been charged in various federal gang prosecutions since January 2012, with more than 80 guilty pleas so far. Most charges are drug- and gun- related; Sentences have ranged from 10 to 21 years in federal prison.
“We are committed to keeping neighborhoods out of the clutches of gang members who deal in drugs and who stash deadly, high-powered automatic weapons in their homes, next door to unwitting neighbors,” said U.S. Attorney Laura Duffy.
U.S. Attorney Duffy praised the coordinated effort of the law enforcement agencies of the East County Regional Gang Task Force under the Organized Crime Drug Enforcement Task Force ("OCDETF") for the coordinated team effort culminating in the charges filed in these cases. The OCDETF program was created to consolidate and utilize all law enforcement resources in this country’s battle against major drug trafficking.
San Diego FBI Special Agent In Charge, Daphne Hearn, commented, “As our communities are faced with increasing threats of crime and violence, the FBI and our partners with the East County Regional Gang Task Force, will work together to confront these threats and make our communities safer.”
San Diego County Sheriff Bill Gore said, "This operation is on-going. It's a team effort that requires careful planning and persistent follow-through. Our aim is straightforward: take back communities for law abiding families and protect them from gang members and drug dealers who threaten their safety."
In the 1990s, San Diego County had the dubious distinction of being called the “Meth Capital” of the country, and East County was the hub of meth-related activity. Until recent years, methamphetamine was typically produced in small to medium quantities in local clandestine laboratories in homes, garages, storage units, apartments, and motel rooms.
Because of a law enforcement crackdown and policies that restrict access to ingredients needed to manufacture meth, San Diego County today has very few meth labs. But now, most of the methamphetamine available for sale here is linked to the sophisticated manufacturing and distribution operations of international drug cartels and local street gangs.
While law enforcement efforts have curtailed local manufacturing, methamphetamine use is still one of the biggest drug-related threats in the district - and the country.
And it’s coming across the border in significant quantities. While there has been a decline in the amount of marijuana and cocaine being smuggled through our district, there has been a significant increase in the amount of methamphetamine.
Border officials seized 427 loads of methamphetamine at San Diego ports of entry in FY 2012 compared to 364 in FY 2011. That’s a 17 percent increase. In Imperial County, the amount of methamphetamine seized jumped by almost 100 percent, from 745 kg to 1,442 kg.
DEFENDANTS Case Number: 13cr0492-GPC Pedro Millan
Carlos Contreras Sanchez
Laura Millan
Princeton Beon Franks
Eduardo Sanchez
Gilberto Lamas
Adolfo Siordia
Rosita Eunice Corrales - Fugitive
Nicholas Oliveri
William Kilmer
Stephanie Cleveland
James Cheevers
Raymond Lopez
Jasmine Millan
Daniel Erique Millan-Aispuro
Ascarelli LopezSummary of Charges
Title 21, United States Code, Sections 841(a)(1) and 846 - Conspiracy to Distribute Methamphetamine
Title 21, United States Code, Section 841(a)(1) - Possession of Methamphetamine With Intent To Distribute
Maximum Penalties: Life in Custody; Minimum Custody: 10 years; Maximum Fine: $4 million
Case Number: 13cr0491-GPCChristopher Robles
Summary of Charges
Sarat Sek - Fugitive
Ronald Bonoan
Shannon White
Robert Duren
Joshua Wayne McGuire
Robert McKinney
Alfredo Barias
Robert Young
David Marinelli
Cory Evans
Keith Lusk
Pamela Miranda
Scott Smith
Title 21, United States Code, Sections 841(a)(1) and 846 - Conspiracy to Distribute Methamphetamine
Title 21, United States Code, Section 841(a)(1) - Possession of Methamphetamine With Intent To Distribute
Maximum Penalties: Life in Custody; Minimum Custody: 10 years; Maximum Fine: $4 million
Case Number: 13cr0493-GPC
Roberto Carrillo Gonzalez
Cedric Gregory
Marcel Clady
Summary of Charges
Title 21, United States Code, Sections 841(a)(1) and 846 - Conspiracy to Distribute Methamphetamine
Title 21, United States Code, Section 841(a)(1) - Possession of Methamphetamine With Intent To
Distribute Maximum Penalties: Life in Custody; Minimum Custody: 10 years; Maximum Fine: $4 million
AGENCIES
Federal Bureau of Investigation
San Diego County Sheriff’s Department
La Mesa Police Department
San Diego County District Attorney’s Office
San Diego County Probation Department
El Cajon Police Department
San Diego Police Department
Chula Vista Police Department
Bureau of Alcohol, Tobacco, Firearms and Explosives
U.S. Immigration and Customs Enforcement, Homeland Security Investigations
U.S. Customs and Border Protection
U.S. Marshals Service
U.S. Border Patrol
California Highway Patrol
Drug Enforcement Administration’s Narcotics Task Force
Bureau of Prisons
Internal Revenue Service
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.Nine Charged with Conspiracy and Bribery Involving Southern California DMV OfficesRead the Press Release
United States Attorney Laura E. Duffy announced today that a manager who supervises the Licensing Registration Examiners at the California Department of Motor Vehicles ("DMV") in El Cajon, CA, was charged in a criminal complaint for his involvement in a bribery conspiracy that resulted in the production of fraudulent driver licenses for applicants who had failed - or not taken - the required driver license tests. According to court documents, Jesse Mario Bryan supervised DMV officials responsible for conducting driving tests for driver license applicants, including Jim Lynn Bean and Jeffrey Bednarek who were charged in a criminal indictment in May 2012 in a related case (12CR1852-CAB). Agents with the Federal Bureau of Investigation (FBI) and DMV Investigations Division arrested the defendants earlier today.
The complaint also alleges that Alexander Gonzalez recruited applicants who would pay for fraudulently obtained driver licenses. The complaint further alleges that this entire conspiracy involved the payment of more $100,000 in bribes by applicants to recruiters.
According to the complaint, Frank Tom Attiq, Ali Al Nadawi, Saleh Almuzini, Matthew Allan Elliott, Mohamed Alali, James Lester Shaw and Hassan Hamad Althami are applicants who paid bribes to receive fraudulent driver licenses by paying recruiters who brokered the corrupt deals for fraudulent licenses by getting money from the applicants and paying the bribes to the DMV employees.
The complaint alleges that from December 2010 through April 2012, Bryan supervised employees at both at the El Cajon DMV office, located at 1450 Graves Avenue, El Cajon, California, and the Rancho San Diego DMV office, located at 1901 Jamacha Road, El Cajon, California, who falsely entered both "passing" written and "passing" driving test scores for applicants in exchange for bribes ranging from $75 to $600 per license. In May 2012, 21 defendants (four of whom were DMV officials) were charged in an indictment with conspiracy to commit bribery and to produce unauthorized identification documents (12CR1852-CAB).
The complaint unsealed today alleges that the corruption scheme involved the fraudulent production of both Class C (regular) and Commercial Class A driver licenses. The applicants paid recruiters approximately $400-$500 for each fraudulent Class C license, which the conspirators produced at the El Cajon DMV. The complaint alleges that the DMV employees accepted bribes paid by these applicants despite the obvious public safety risk posed. Applicants seeking Commercial Class A licenses (produced at the Rancho San Diego DMV) typically paid recruiters $2,500-$3,000. Commercial Class A driver licenses allow the licensee to drive commercial vehicles weighing more than 10,000 pounds, which can cause enormous harm to the public if operated incorrectly by an unqualified driver. Increasing the danger to the public, DMV employees entered false passing test scores that allowed applicants to fraudulently obtain additional certifications for the operation of the commercial vehicles, such as transporting hazardous materials or towing multiple trailers.
The defendants arrested in the Southern District of California are expected to make their initial appearances before United States Magistrate Judge David H. Bartick at 1:30 p.m. today. Two defendants arrested in the Central District of California are expected to make their initial appearance there and be transferred to the Southern District of California on a later date.
United States Attorney Duffy noted that this is a joint investigation by the FBI and DMV and if anyone in the community has information about corruption at the DMV, they are asked to contact the San Diego Division of the Federal Bureau of Investigation at 877-NO BRIBE (877-662-7423) or the DMV's Investigations Branch-Office of Internal Affairs at 626-851-0173.
The public is reminded that a complaint is not evidence that the defendants committed the crimes charged. The defendants are presumed innocent until the Government meets its burden in court of proving guilt beyond a reasonable doubt.
DEFENDANTS Magistrate Case No. 13MJ0475-DHB Jesse Mario Bryan
Alexander Gonzalez
Frank Tom Attiq
Ali Al Nadawi
Saleh Almuzini
Matthew Allan Elliott
Mohamed Alali
James Lester Shaw
Hassan Hamad Althani SUMMARY OF CHARGESAll Defendants
Title 18, United States Code, Section 371 -- Conspiracy to Commit Bribery and to Produce Unauthorized Identification Documents -- statutory maximum sentence of 5 years in prison, a maximum fine of $250,000, and $100 special assessment.
Defendant: Jesse Mario Bryan
Title 18, United States Code, Section 666(a)(1)(B) -- Bribery -- statutory maximum sentence of 10 years in prison, a maximum fine of $250,000, and $100 special assessment.
Defendant: Alexander Gonzalez
Title 18, United States Code, Section 666(a)(2) – Bribery – statutory maximum of 10 years in prison, a maximum fine of $250,000, and $100 special assessment.
INVESTIGATING AGENCIESFederal Bureau of Investigation
Department of Motor Vehicles - Investigations DivisionMan Sentenced to Serve 150 Months in Federal Prison for Sex Trafficking of ChildrenRead the Press Release
United States Attorney Laura E. Duffy announced that Randy Martell Ballard, also known as “Jazmin Davis,” was sentenced today by United States District Court Judge Roger T. Benitez to serve 150 months in federal prison, followed by 5 years of supervised release, pay a $1,000.00 fine and mandatory registration under the Sex Offender Registration and Notification Act. Ballard pled guilty in November 2012 to sex trafficking of children, in violation of Title 18, United States Code, Section 1591(a) and (b).
According to court documents, Ballard met a fourteen-year-old girl in El Paso, Texas and transported her to San Diego for the purpose of engaging her in prostitution. He purchased a bus ticket for her using a false name. Court documents further show that Ballard posted online prostitution ads on the Internet with a phone number that the minor had in her possession and provided the minor with false identification documents.
This case arises from an investigation by the National City Police Department and the Immigration and Customs Enforcement’s Homeland Security Investigations.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
DEFENDANT Case Number: 12cr2259BEN Randy Martell Ballard SUMMARY OF CHARGETitle 18, United States Code, Sections 1591(a) and (b) - Sex Trafficking of Children
INVESTIGATING AGENCIESNational City Police Department
Immigration and Customs Enforcement’s Homeland Security InvestigationsFlorida Man Pleads Guilty to Selling Unapproved Cancer DrugsRead the Press Release
United States Attorney Laura E. Duffy announced today that Martin Paul Bean, III, pled guilty before United States Magistrate Judge David Bartick to conspiring to import unapproved foreign oncology drugs and sell them to doctors throughout the United States.
As part of his guilty plea, Bean admitted that between 2005 and 2011, he operated a business from his residence in Boca Raton, Florida, that sold over $7 million of prescription oncology drugs (for the treatment of cancer) to doctors throughout the United States. Bean ordered the drugs from various foreign sources, including companies in Pakistan, Indian and Turkey, and directed the drugs to be shipped in bulk directly to Oberlin Medical Supply in San Diego.
In pleading guilty, Bean acknowledged that he did business as GlobalRxStore, and marketed the drugs via an Internet website and through "blast faxes" sent to doctors’' offices. GlobalRxStore operated a call center in Winnipeg, Canada, where orders from doctors in the United States were accepted by telephone, facsimile and electronic mail. Bean admitted that the GlobalRxStore website falsely stated that it was lawful to import the drugs from abroad and that such drugs could be sold and used in the United States. Bean further admitted that he falsely advised doctors that GlobalRxStore's association with Oberlin Medical Supply somehow made his conduct legitimate. The drugs sold by Bean and GlobalRxStore were prescription drugs, including drugs marketed in the United States under the names Gemzar7, Taxotere7, Eloxatin7, Zometa7 and Kytril7. As Bean acknowledged he was aware, such drugs were intended for sale in markets outside the United States, and could not be lawfully imported, marketed or used in the United States.
Bean admitted that over the course of the conspiracy, he received $865,000 in proceeds from the sale of the unapproved foreign oncology drugs. As part of the plea agreement, Bean forfeited a 2004 Jaguar XJ he purchased with proceeds received from the illegal sale of drugs through GlobalRxStore.
Bean further admitted that on June 20, 2011, he caused a package containing Zoldria to be delivered to a doctor in Lawndale, California. Zoldria is manufactured in India and sold in that country, and although its manufacturer represents that it contains the same active ingredient as Zometa7, it is not approved for use in the United States.
Bean’s guilty plea is subject to final acceptance by United States District Court Judge William Q. Hayes. Bean is scheduled to be sentenced on May 6, 2013 at 9:00 a.m. before Judge Hayes.
This case is related to United States v. Maher Idriss, Criminal Case No. 12cr1775-WQH. On March 8, 2012, Maher Idriss pled guilty to conspiring to import merchandise contrary to law. At the time of his plea, Idriss admitted that between May 1, 2006, and May 5, 2011, he operated Oberlin Medical Supply and conspired with the owners and operators of GlobalRxStore to import and distribute unapproved oncology drugs not intended for sale in the United States. Idriss admitted that he and the owners of Global were all aware that it was unlawful to import these drugs. For example, after unapproved drugs to be shipped to Oberlin were seized by federal authorities in transit, Idriss discussed the seizures and the unlawful nature of the importation with Bean and other owner of Global. Idriss is scheduled to be sentenced before Judge Hayes on May 20, 2013 at 9:00 a.m.
The Food, Drug & Cosmetic Act ("FDCA"), is intended to assure, among other things, that all drugs manufactured and distributed within the United States are safely manufactured, made from appropriate ingredients, and properly labeled. Pursuant to the terms of the FDCA, the U.S. Food and Drug Administration (" FDA") regulate the manufacture, processing, labeling, and distribution of all drugs shipped and received in interstate commerce, including the wholesale distribution of prescription drugs. Under the FDCA, anyone manufacturing, preparing, compounding, or processing prescription drugs for sale and use in the United States must annually register with the FDA as a drug establishment, and provide a list to the FDA of the drugs which they manufacture for commercial distribution, and a copy of all labeling. This registration requirement applies equally to drug establishments located outside of the United States that import their drugs into the United States. Under the FDCA, a drug is deemed misbranded if it was manufactured at any domestic or foreign establishment and that drug was not annually listed with the FDA by the establishment as one of the drugs which was manufactured for commercial distribution in the United States at that location.
Under the FDCA, no person may offer for sale in the United States any drug not approved by the FDA. The approval process addresses the chemical composition of the drug, the drug's safety and effectiveness, and elements of the drug's distribution, such as the methods used in, and the facilities and controls used for, the manufacture, processing, and packing of the drug, as well as the labeling to be used for the drug. The approval process is specific to each manufacturer and each product and its labeling. Drugs manufactured outside the United States which are not intended for use in the United States do not go through this approval process and are considered unapproved drugs.
Any prescription drug whose labeling fails to bear the words "Rx only" is deemed to be misbranded. Moreover, all wording required by the FDCA to appear on drug labels and labeling sold in the continental U.S. must be in the English language. It is unlawful for anyone other than the manufacturer of a drug manufactured in the United States and exported to import that same drug back into the United States.
Criminal Case No. 12cr3734-WQH DEFENDANT Martin Paul Bean, III SUMMARY OF CHARGEConspiracy, in violation of Title 18, United States Code, Section 371
Criminal Case No. 12cr1775-WQH DEFENDANT Maher Idriss SUMMARY OF CHARGE Importation Contrary of Law, in violation of Title 18, United States Code, Section 545
Maximum Penalties: 5 years in custody, $250,000 fine, restitution and forfeiture.
Maximum Penalty: 20 years in custody and/or $250,000 fine INVESTIGATING AGENCIESFood and Drug Administration, Office of Criminal Investigations
Immigration and Customs Enforcement’s Homeland Security Investigations
Federal Bureau of Investigation
Postal Inspection ServiceRecipient of Ponzi Schemer’s Funds Sentenced to 57 Months in Custody for Evading More Than $1 Million in Income TaxesRead the Press Release
United States Attorney Laura E. Duffy announced that Donald E. Lopez was sentenced today in federal court in San Diego to serve 57 months in custody for tax evasion stemming from his willful failure to pay income taxes the more than $3.94 million in funds he received from convicted Ponzi-scheme operator Matthew La Madrid. U.S. District Judge Larry Alan Burns ordered Lopez immediately into custody, and directed him to pay $1,345,693.26 in restitution to the Internal Revenue Service for his crimes. Lopez had previously pled guilty to a one-count felony information charging him with willfully evaded income taxes on this $3.94 million in revenue, his concealment of his use of the money, and his false representations in court proceedings in San Diego in order to conceal the fact that he had received and spent the money for his own use and benefit.
As outlined in Lopez’s plea agreement and other court records, the funds Lopez concealed were part of a $10 million transfer La Madrid had made to Lopez’s company in November 2007, as part of La Madrid’s fraudulent investment, real estate, and mortgage fraud schemes. The money was identified in other proceedings as investor funds from La Madrid’s and related fraud schemes. La Madrid has already been sentenced to serve ten years in prison for orchestrating these schemes, which included sending these funds to Lopez without his client’s knowledge or consent.
In connection with his plea to tax evasion, Lopez admitted that, after taking these funds, he did not file tax returns for 2007 and 2008, and knowingly and willfully failed to report the funds as income for those years. As a result, the IRS lost more than $1.3 million in tax revenue.
Previously, on November 13, 2009, Lopez had pled guilty to a federal obstruction of justice charge based on his false representations in a civil case filed in the United States District Court for the Southern District of California, seeking to recover La Madrid investor funds. Lopez admitted in that proceeding that he sought to conceal from the Court and the IRS the true location, condition, and disposition of the $10 million wired by La Madrid to Lopez’s company in November 2007. Lopez had served a 15 month sentence on the obstruction of justice conviction before being charged last year with tax evasion.
DEFENDANT Case Number: 12CR4033-LAB Donald E. Lopez SUMMARY OF CHARGEIncome Tax Evasion, in violation of Title 26, United States Code, Section 7201
INVESTIGATING AGENCYInternal Revenue Service - Criminal Investigation
San Diego Company Admits Misleading SEC as Part of Settlement Agreement Unico, Inc. Agreed to Pay A Monetary Penalty and to Submit to Oversight by A Government-Approved Monitor for A Period of at Least Three YearsRead the Press Release
United States Attorney Laura E. Duffy announced today that San Diego-based Unico, Inc. (“Unico”) entered into a negotiated settlement in which it admitted that its former CEO, Mark Anthony Lopez, made a false statement to the Securities and Exchange Commission (“SEC”) when he mischaracterized funds received from a lender. Unico also agreed to pay a monetary penalty and to submit to at least three years of oversight by a corporate monitor approved by the United States Attorney’s Office.
As part of the negotiated settlement, Unico (on January 30, 2013) entered into a deferred prosecution agreement with the United States Attorney’s Office before the Honorable William McCurine, Jr. According to the terms of the agreement, the monitor (who is required to act as an independent thirdparty) will have the power to approve—as well as veto—various business and financial decisions that Unico attempts to make. In exchange for Unico’s concessions, the United States Attorney’s Office agreed to postpone its prosecution against Unico for charges related to securities fraud, false statements and obstruction of justice.
The deferred prosecution agreement comes after the January 17, 2013 arrest of Unico’s former CEO on charges of conspiracy to commit securities fraud and obstruction of justice. According to the indictment against Lopez, he conspired with New Jersey-based stock trader Mark Allen Lefkowitz (who previously pled guilty) to manipulate the share price and volume of Unico’s stock to benefit corporate insiders at the expense of shareholders. As a result of the fraud, the company issued approximately 9 billion new shares of its stock that it did not register with the SEC. These new, unregistered shares diluted existing shares, causing their value to drop by as much as $7 million. At the same time, Lefkowitz received free-trading shares from Unico worth more than $28 million, which he sold to unsuspecting buyers on the open market.
Also according to the indictment against Lopez, he tried to obstruct an SEC probe into his misconduct by refusing to turn over emails, which he printed and concealed in two manila folders marked “Files Deleted” and another marked “Not Released to SEC Subpoena (Delete).” The indictment further alleged that Lopez redacted portions of an email and tried to delete it from his computer, and later lied to the SEC under oath during deposition testimony.
According to United States Attorney Duffy, the Deferred Prosecution Agreement was an appropriate vehicle in this case as it did not further penalize Unico’s stockholders for criminal behavior undertaken by Lefkowitz and a former company executive. She added, though, that this remedy was available only because of the company’s cooperation in this investigation. The United States Attorney also stressed that the designation of a corporate monitor was another integral component of this agreement as it guards against Unico being involved in future stock fraud.
DEFENDANT Case Number: 13CR0355-JAH Unico, Inc. SUMMARY OF CHARGESFalse Statement to a Government Agency, in violation of Title 18, United States Code, Section 1001(a)(2). Maximum penalties: 5 years in prison, 5years' supervised release, a $500,000 fine and a $400 special assessment.
INVESTIGATING AGENCYFederal Bureau of Investigation
The public is reminded that an indictment 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.
Doctor and Owner of Medical Supply Company Plead Guilty in Million-Dollar Power Wheelchair ScamRead the Press Release
United States Attorney Laura E. Duffy announced that a California medical doctor and the owner of the Oceanside Medical Supply in Long Beach, CA have both pled guilty to participating in a conspiracy to defraud the Medicare trust fund by submitting more than $1 million in fraudulent power wheelchair claims. Dr. Irving Schwartz and Jose Melendez entered their guilty pleas before Magistrate Judge Nita L. Stormes in federal court in San Diego, and pursuant to their plea agreements, the defendants are obligated to pay restitution to the Medicare trust fund for the losses caused by their scheme.
According to court papers and admissions by the defendants, the fraudulent conspiracy focused on the sale of bogus prescriptions, with the ultimate goal being to obtain reimbursements from Medicare for expensive power wheelchairs that patients did not need and, in some cases, did not want. Dr. Irving Schwartz admitted today during his guilty plea that in 2007-2008, he would travel to El Centro, California, in search of elderly Medicare patients. Dr. Schwartz would write prescriptions for power wheelchairs, even though the patients did not need the equipment and could walk without assistance. In exchange, Schwartz collected a $300 cash kickback for each fraudulent power wheelchair prescription. One of Schwartz’s co-conspirators would then sell the power wheelchair prescriptions to Melendez, a medical supply company owner, charging him $1,000 per fraudulent prescription.
According to court papers and admissions at today’s hearing, Melendez sold some of the power wheelchair prescriptions to other co-conspirators, charging them an additional mark-up on each fraudulent prescription. As the last step in the scheme, Melendez and other co-conspirators would submit the fraudulent prescriptions to Medicare for reimbursement, billing the government thousands more per wheelchair than it had cost them to purchase and deliver the equipment. Often the unneeded equipment would sit unused in patients’ homes for years.
Dr. Schwartz admitted today in open court that he wrote at least 186 fraudulent power wheelchair prescriptions for Medicare beneficiaries in exchange for more than $55,000 in bribes and kickbacks. Melendez, the owner and operator of Oceanside Medical Services, admitted that he purchased these 186 fraudulent prescriptions and used them to submit over $830,000 in false claims to Medicare.
In a related case, co-conspirators Aristeo and Laura Tavares have pled guilty and admitted to submitting more than $250,000 in false claims based on Dr. Schwartz’s fraudulent prescriptions. In total, the scheme resulted in more than $1 million in false claims to the Medicare trust fund.
United States Attorney Duffy said, “Combating health care fraud is a top priority of the Department of Justice. When Medicare dollars are wasted on expensive and unnecessary equipment, senior citizens run the risk of not being able to obtain the legitimate medical treatment they need. In this time of fiscal austerity, we must aggressively prosecute those who pilfer Medicare dollars to line their own pockets.”
“Health care fraud schemes involving false claims of durable medical equipment, cost U.S. taxpayers billions of dollars each year,” said Daphne Hearn, Special Agent in Charge of the San Diego FBI Office. “This prosecution should serve notice, that the FBI will aggressively pursue those individuals and criminal enterprises who would line their own pockets at the expense of U.S. taxpayers.”
“There can be no doubt that the federal government will crack down on physicians and other individuals defrauding the Medicare program," said Glenn R. Ferry, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General’s Los Angeles region. “When business owners conspire with doctors to pay kickbacks and write phony prescriptions, they both should expect to be brought to justice."
The pleas are subject to final acceptance by United States District Judge Marilyn L. Huff. The defendants are scheduled to be sentenced by Judge Huff on May 6, 2013 at 9:00 a.m.
DEFENDANTS CRIMINAL CASE NO. 12cr2599-H Irving J. Schwartz
Jose Melendez SUMMARY OF CHARGESCount 1: Conspiracy to Pay and Receive Health Care Kickbacks and Defraud -Title 18, United States Code, Section 371; Maximum Penalties: Five years in custody; $250,000 fine; 3 year of supervised release; and mandatory restitution
INVESTIGATING AGENCYFederal Bureau of Investigation
Department of Health and Human Services, Office of Inspector GeneralDefense Contractor Pleads Guilty to Theft of Employee Payroll TaxesRead the Press Release
United States Attorney Laura E. Duffy announced that Ildiko Pinero, an owner and the Chief Financial Officer of Alpha Machining Products & Development Inc. (“Alpha”), pled guilty today before United States Magistrate Judge Nita L. Stormes to failing to pay over to the United States payroll taxes that she withheld from the paychecks of Alpha employees. At the time of the offense, Alpha was a San Diego defense contractor engaged in the machining of weapons parts and other products for the U.S. Department of Defense.
As an employer, Alpha was required to withhold employment taxes from the wages it paid to its workers, including federal income taxes and the employees’ share of Federal Insurance Contributions Act taxes (Social Security and Medicare taxes). These withheld employment taxes are commonly referred to as “trust fund taxes,” because an employer holds these funds in trust for its employees. After collecting these trust fund taxed, Alpha was required to pay them over to the Internal Revenue Service (“IRS”). In addition, Alpha was required to account for and pay over its own “employer’s share” of the Social Security and Medicare taxes resulting from employing these workers.
As Pinero admitted during her guilty plea this morning, from January 2006 through September 2008, she withheld payroll taxes from the paychecks of Alpha’s employees. These taxes included over $110,000 in withholdings for federal income tax, plus the employees’ share of Medicare and Social Security taxes. Despite withholding these sums from the employees’ paychecks, Pinero refused to pay the taxes to the Internal Revenue Service. Similarly, Pinero also failed to pay over Alpha’s share of Social Security and Medicare taxes, in the amount of approximately $57,000.
United States Attorney Duffy emphasized that, “When an employer withholds federal taxes from the paychecks of its hard-working employees, that money isn’t the employer’s to spend. Failing to pass along those withheld funds to the IRS amounts to stealing. This applies to defense contractors like Alpha, just like any other employer.” U.S. Attorney Duffy praised the efforts of agents from the IRS Criminal Investigation, the Defense Criminal Investigative Service, Immigration and Customs Enforcement, and Army Criminal Investigation Division for their collaborative work in this multi-agency investigation.
“Corporate executives have a continuing responsibility to collect and turn over all IRS payroll taxes,” said N. Dawn Mertz, IRS Criminal Investigation (CI) Acting Special Agent in Charge for the Los Angeles Field Office. “The failure to pay over withheld payroll taxes is a very serious offense. IRS CI intends to vigorously pursue those who fraudulently collect payroll taxes and fail to timely remit those taxes.”
The guilty plea is subject to final acceptance by United States District Judge Dana M. Sabraw. Sentencing in this case is currently scheduled for April 19, 2013, at 9:00 a.m., before Judge Sabraw.
DEFENDANT Case Number: 12cr3125DMS Ildiko Pinero SUMMARY OF CHARGESCount 2: Willful failure to pay over tax, in violation of Title 26, United States Code, Section 7202 - Maximum penalties: 5 years in prison, $250,000 fine, term of supervised release of three years, restitution, and $100 special assessment.
INVESTIGATING AGENCYInternal Revenue Service - Criminal Investigation
Defense Criminal Investigative Service
Immigration and Customs Enforcement’s Homeland Security Investigations
Army Criminal Investigation DivisionCamp Pendleton Contractors Indicted for Pilfering over $3 Million in Medical EquipmentRead the Press Release
United States Attorney Laura E. Duffy announced that three civilian contractors who worked at Camp Pendleton were arraigned today on an indictment charging them with stealing millions of dollars’ worth of medical equipment that was to have been shipped to combat commands throughout the world. Defendants Henry Bonilla, Richard Navarro and Michael Tuisee made their first court appearance today before Magistrate Judge William McCurine, Jr. The three were arraigned on a six-count indictment charging the Department of Defense contractors with Conspiracy, Theft of Government Property and Criminal Forfeiture.
According to the indictment, the three defendants worked in warehouses run by 1st Medical Logistics Company (“1st MEDLOG”) aboard Camp Pendleton (the United States Marine Corps’ largest West Coast expeditionary force training facility). 1st MEDLOG is the unit responsible for maintaining medical equipment and shipping necessary medical items to combat forces. By virtue of their employment as defense contractors, the defendants had access to sophisticated, expensive medical equipment stored at 1st MEDLOG warehouses. Throughout 2012, the defendants repeatedly stole expensive medical equipment from 1st MEDLOG, transported it using their personal vehicles to other locations in Southern California, and sold the stolen items to medical equipment resellers. According to the indictment, exchanges with resellers often took place at night, in parking lots near commercial businesses. All told, the defendants are alleged to have stolen over $3 million worth of medical equipment needed by United States Marines.
At today’s hearing, Magistrate Judge McCurine set bond for the defendants, and ordered them to appear before District Judge Cathy A. Bencivengo on March 8, 2013. Each defendant faces a maximum penalty of 10 years in prison – as well as mandatory restitution to the U.S. military – if convicted of stealing government property.
United States Attorney Duffy advised that these charges are the result of an ongoing investigation into theft of valuable property aboard Camp Pendleton, and asked the public to contact the Naval Criminal Investigative Service (NCIS) at 1-800-264-6485 or www.ncis.navy.mil if they have any information relevant to that investigation.
The public is reminded that an indictment 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.
DEFENDANT Case Number: 13cr0338-CAB Henry Bonilla
Richard Navarro
Michael Tuisee SUMMARY OF CHARGESCount 1: Conspiracy to Engage in Theft of Government Property, Title 18, United States Code, Section 371 (all defendants)
Maximum penalties: 5 years in prison, $250,000 fine, term of supervised release of 3 years, restitution, and $100 special assessment.
Count 2: Theft of Government Property, Title 18, United States Code, Section 641 (Navarro)
Maximum penalties: 10 years in prison, $250,000 fine, term of supervised release of 3 years, restitution, and $100 special assessment.Count 3: Theft of Government Property, Title 18, United States Code, Section 641 (Tuisee)
Maximum penalties: 10 years in prison, $250,000 fine, term of supervised release of 3 years, restitution, and $100 special assessment.Count 4: Theft of Government Property, Title 18, United States Code, Section 641 (Bonilla)
Maximum penalties: 10 years in prison, $250,000 fine, term of supervised release of 3 years, restitution, and $100 special assessment.Count 5: Theft of Government Property, Title 18, United States Code, Section 641 (Bonilla)
Maximum penalties: 10 years in prison, $250,000 fine, term of supervised release of 3 years, restitution, and $100 special assessment.Count 6: Theft of Government Property, Title 18, United States Code, Section 641 (Bonilla)
INVESTIGATING AGENCY
Maximum penalties: 10 years in prison, $250,000 fine, term of supervised release of 3 years, restitution, and $100 special assessment.Naval Criminal Investigative Service
Creator of Two Retail Marijuana Stores Sentenced to Serve 100 Months in Federal PrisonRead the Press Release
SAN DIEGO - A man who created two medical marijuana dispensaries and a phony board of directors as a front for a multimillion-dollar drug trafficking operation was sentenced today to serve 100 months in federal prison. The defendant was immediately remanded into custody.
Joshua John Hester of San Diego pleaded guilty January 3, 2012, to eight felony charges, including conspiracy to distribute over 1,000 kilograms of marijuana, conspiracy to maintain drug-related premises, conspiracy to launder money, and criminal forfeiture. He was sentenced by United States District Judge Irma E. Gonzalez.
According to his plea agreement, Hester admitted that he was the silent owner of two marijuana dispensaries known as the “Downtown Kush Lounge” in downtown San Diego and the “Green Kross Collective” in Mission Beach, where he made millions of dollars in the retail sale of marijuana.
This is the most significant prosecution of a large-scale dispensary operator in the Southern District of California. And, this was the first time federal authorities used wiretaps in an investigation of medical marijuana dispensaries.
“Joshua Hester is the poster boy for the types of marijuana dispensary operations that the federal government is criminally targeting,” said U.S. Attorney Laura Duffy. “He wasn’t overseeing a non-profit collective that served sick people. He was a convicted drug trafficker making millions of dollars selling high-quality marijuana to recreational users and exploiting state laws that were meant to help the seriously ill.”
“The role of IRS Criminal Investigation (CI) in the investigation of Joshua Hester was to follow the money laundered as part of the conspiracy to distribute illegal marijuana,” said N. Dawn Mertz Acting Special Agent in Charge of IRS CI's Los Angeles Field Office. “IRS CI will continue to collaborate with our law enforcement partners to trace the proceeds in this highly lucrative industry and enforce our nation’s federal tax and money laundering laws.”
“This case illustrates the kind of criminal activity going on within medical marijuana dispensary operations,” said San Diego Drug Enforcement Administration Acting Special Agent in Charge William R. Sherman. “The proprietors of these operations are simply drug dealers who are hiding behind the guise of compassionate care, when in fact their only motivation is making money. We will continue to investigate these criminal enterprises that are not only violating the Federal Controlled Substances Act, but are also involved in a variety of other criminal activities.”
Since October 2011, the United States Attorney’s Office in coordination with the DEA, has issued cease and desist letters to approximately 253 marijuana dispensaries operating in the district. There has been a 95% self-closure rate in response to the letters, with less than 12 dispensaries remaining open.
In his plea agreement, Hester admitted to two types of trafficking in this case. First, he went the traditional route, using a supplier, distributing over 1,000 kilograms of high-quality marijuana known as “Canadian BC Bud,” and laundering millions of dollars of profits. When his supplier was arrested, Hester opened dispensaries and started selling and manufacturing his own marijuana and purchased bulk quantity from others.
Hester admitted that he set up a “sham” Board of Directors at the Green Kross Collective and Downtown Kush Lounge, which had no authority or control over the management of the cooperatives. Hester also admitted that he laundered over $2 million in connection with the purchase of a residence in Rancho Santa Fe, California, where he manufactured marijuana at that location. Hester also admitted selling the supposedly non-profit Green Kross Collective for $250,000 in cash.
Hester acknowledged that he was the true owner of the 37-acre Palomar Mountain Property, but placed the property in another name to conceal his ownership. And, he acknowledged that he intended to grow marijuana at that location. As part of his plea agreement, Hester agreed to forfeit over $575,000 in assets, including cash, vehicles, and jewelry.
An investigation of Hester by federal drug agents began in spring of 2008 in connection with marijuana trafficking in San Diego County that was unrelated to dispensaries. It was a chance encounter with police in Glendale, California, on December 8, 2008, that propelled Hester into the dispensary business.
Glendale police had been following a suspected small-time marijuana dealer to a storage locker in Calabasas, California. “The local officers were extremely surprised to find $843,000 in cash inside the locker as they accidentally stumbled into a multi-million dollar international drug operation,” according to Hester’s sentencing memorandum.
Hester came on the radar when he and his key marijuana supplier, Rajeev Kaushal, arrived at the locker to pick up the cash. Hester was detained but not charged. But Kaushal was taken into custody in Los Angeles and ultimately pleaded guilty in Los Angeles. Court documents said that in the two years leading up to Kaushal’s arrest in December 2008, Hester had purchased over 3,000 pounds of high-grade Canadian marijuana from Kaushal for almost $9 million, and distributed it throughout San Diego County.
With his key supplier in custody in December 2008, Hester “turned to medical marijuana dispensaries” in the spring of 2009, according to the sentencing memorandum.
In February of 2010, the investigation shifted to the dispensary operations and agents from the Internal Revenue Service and the DEA’s Narcotics Task Force obtained federal wiretaps, intercepting text messages for a 30-day period, then expanding for another 30 days to both text messages and phone conversations.
According to the Government’s sentencing memorandum, “These wiretaps demonstrated that defendant Joshua Hester, who was making millions of dollars in connection with these ‘medical marijuana dispensaries,’ was using these ‘dispensaries’ as retail marijuana outlets and distribution centers. He had assembled management teams and had a Board of Directors, who worked under his direction.” Hester has admitted the board was a sham, and directors had no power.
The wiretap revealed that the Green Kross Collective and the Downtown Kush Lounge were making between $5,000 -7,000 each day at each location on the average, the sentencing memorandum said. Assuming that together, both locations generated at least $10,000 each day, Hester was grossing approximately $3.5 million dollars annually. The California sales tax records for the collectives show far less reported income.
According to court documents, the products seized by federal agents included: Many plastic bottles of THC-laden soft drinks labeled “7 High,” “Dr. Feelgood,” “Laughing Lemonade,” “Rasta Berry Iced Tea,” “Danktopia,” “Orange Cush,” “Root Buzz,” and “Marijuana Dank.” There were cookies and brownies labeled “White Chip Hash Brownie,” “Reese’s Crumbled Hash Brownie,” “Cannabis Creation Brownie,” “Reefers Peanut Butter Cup,” “M&M Hash Brownies,” Reefers Peanut Butter Cup with Nuts,” “Cannabis Creation Sugar Free Cookies,” and “Cannabis Creation Cookies.” Agents also seized marijuana candy, including “Jolly Stones THC Medicated Hard Candies,” and “Stone Candy,” and different flavored lollipops, including strawberry, watermelon, bubble gum, cotton candy, orange, lemon, pina colada, and grape. The officers also seized “Bud Head Bubblegum.”
The office computer showed that Green Kross Collective had approximately 1,732 members - most of the members were between the ages of 18-22, court records said. The computerized records also showed that the Downtown Kush Lounge had 811 members. Judge Gonzalez ordered restitution in an amount to be determined at a later date.
Likewise, in a related development, the Court on January 14, 2013, ordered Hester’s realtor on the Rancho Santa Fe and Palomar Mountain properties, Marco Luis, to pay restitution in the amounts of $329,767 to CitiGroup and $615,935 to JP Morgan. Luis pleaded guilty in August to money laundering charges in connection with those properties and was sentenced to 48 months in prison.
DEFENDANT Criminal Case No. 10CR2967-IEG Joshua John Hester SUMMARY OF CHARGESTitle 21, United States Code, Sections 846 and 841(a)(1)[count 1] - Conspiracy to distribute over 1,000 kilograms of marijuana
Title 21, United States Code, Sections 856(a)(1) and 846 [counts 6, 7 and 8] - Conspiracy to maintain drug related premises Title 18, United States Code, Sections 1956(a)(1)(A)(I) and 1956(h) [count 15] - Conspiracy to launder money
Title 18, United States Code, Sections 1957 and 1956(h) [count 16] - Conspiracy to launder money
Title 18, United States Code, Sections 1957 and 1956(h) [count 25] - Conspiracy to launder money
Title 18, United States Code, Sections 1956(a)(1)(B)(I) and 1956(h) [count 33] - Conspiracy to launder money
INVESTIGATING AGENCIESThis investigation was conducted by the Internal Revenue Service, Criminal Investigation, San Diego, and the San Diego Drug Enforcement Administration’s Narcotics Task Force. The lead prosecutor is Sherri Walker Hobson.
Calexico Resident Found Guilty of Receipt of Child PornographyRead the Press Release
United States Attorney Laura E. Duffy announced that Lawson Hardrick, a retired United States Customs and Border Protection Officer was found guilty by a federal jury earlier today in San Diego of two counts of receipt of images of minors engaged in sexually explicit conduct, each a felony. The verdicts follow a one-day trial before United States District Judge Marilyn L. Huff.
According to the evidence presented at trial, agents with Immigration and Customs Enforcement’s Homeland Security Investigations conducted an investigation of persons using peer to peer file-sharing programs to make child pornography available to others. According to the forensic evidence introduced at trial, the defendant received videos of children as young as four and nine years old through a file-sharing program in 2008 through 2010. The indictment was handed up by a federal grand jury sitting in San Diego in July 2012.
The defendant is next scheduled to be in court on April 29, 2013 at 9:00 a.m., before Judge Huff for a sentencing hearing.
DEFENDANT Case Number: 12cr3061-H Lawson Hardrick SUMMARY OF CHARGESCounts: 2
INVESTIGATING AGENCY
Receipt of Images of Minors Engaged in Sexually Explicit Conduct- Title 18, United States Code, Section 2252(a) (2)
Maximum Penalties: 20 years’ incarceration with a five year mandatory minimum sentence, $250,000 fine, a minimum of 5 years and up to a lifetime of supervised release and registration as a sex offender.Immigration and Customs Enforcement’s Homeland Security Investigations
La Jolla Oncologist and Medical Practice Plead Guilty to Dispensing Unapproved DrugsRead the Press Release
SAN DIEGO - A prominent La Jolla oncologist and his corporate medical practice have pleaded guilty in connection with a scheme to import unapproved foreign cancer drugs at a deep discount, dispense them to unwitting patients, bill Medicare as if the drugs were legitimate, and pocket the profits.
In a hearing before U.S. Magistrate Judge Bernard Skomal on January 15, Dr. Joel I. Bernstein entered a guilty plea to a single count of introducing an unapproved drug into interstate commerce – in this case, a cancer drug called “Mabthera” intended for market in Turkey - and administering it to patients. The approved U.S. drug with the same active ingredient is Rituxan, which is used to treat lymphomas and leukemias such as non-Hodgkin lymphoma and chronic lymphocytic leukemia. Bernstein was released pending sentencing, which is scheduled for April 16 at 1:30 p.m. before Judge Skomal.
In addition, his medical practice, Dr. Joel I. Bernstein, M.D., Inc., also pleaded guilty at a hearing today before U.S. District Judge Cathy Ann Bencivengo to one count of Health Care fraud. According to the plea agreement with the corporation, employees of Dr. Joel I. Bernstein, M.D., Inc. purchased $3.4 million of foreign cancer drugs, knowing they had not been approved by the U.S. Food and Drug Administration for use in the United States. From 2007 to 2011, Bernstein’s office purchased these drugs for significantly less than market value in the U.S., and then submitted claims to Medicare at the full reimbursement price. To conceal the scheme, the office fraudulently used Medicare reimbursement codes for approved cancer drugs, as Medicare does not pay for unapproved drugs.
The plea agreement for the corporation also calls for $1.7 million in restitution to Medicare, plus forfeiture of $1.2 million in profits. The corporate medical practice is scheduled to be sentenced on May 17, 2013, before Unites States District Judge Cathy Ann Bencivengo.
In addition, the government has also filed a False Claims Act lawsuit in District Court against Dr. Bernstein and his medical corporation for submitting false claims to the Medicare Program for these unapproved drugs. According to this civil complaint, the Medicare Program was defrauded of over $1.7 million, and under the False Claims Act, the United States can recover triple the amount of damages plus monetary penalties.
The cases involving Dr. Bernstein and his practice are the latest example of an alarming nationwide trend that potentially puts patients at risk by exposing them to foreign drugs – particularly injectable chemotherapy drugs - that are not vetted by the FDA. Agency officials have described the trend as an “epidemic of unapproved and counterfeit drugs.”
The FDA’s Office of Criminal Investigations (OCI) currently has over 200 investigations nationwide involving schemes in which medical practices purchase foreign, unapproved drugs and dispense them to unsuspecting patients for personal financial gain.
This practice is particularly disturbing because, unlike traditional prescription drugs which are dispensed to the patient by a pharmacy, oncology drugs are typically infused into a patient without the patient ever seeing the box it came in, or any of the related labeling.
“This isn’t just about the greed of one doctor, but about the welfare of many patients,” said U.S. Attorney Laura Duffy. “In a worst-case scenario, chemotherapy drugs that have not been approved by the FDA may be fake, ineffective, unsafe and dangerous. This is what motivates the Department of Justice and the FDA to be more aggressive in stopping those who would corrupt the integrity of the pharmaceutical supply chain with no regard for the well-being of patients.”
John Roth, director of the FDA’s Office of Criminal Investigations, the lead agency on the case, said, "When medical professionals decide that patient safety is less important than finding a great deal on pharmaceutical products from foreign countries and unknown suppliers our nation’s pharmaceutical supply chain is at risk and patients are vulnerable. FDA’s Office of Criminal Investigations will continue to investigate these cases and work closely with our regulatory counterparts in FDA and our law enforcement partners who share the same commitment to address this problem. We hope this message is heard loud and clear within the medical community-you will face criminal prosecution if you engage in this type of illegal activity."
Daphne Hearn, Special Agent in Charge of the San Diego FBI, said, “Health care fraud costs the country billions of dollars each year and undermines the security of the Medicare program. The FBI will continue to work with our law enforcement partners and prosecutors to ensure the safety of the public and ensure the Medicare program will be there for those who need it most.”
Derek Benner, Special Agent in Charge of Immigration and Customs Enforcement’s Homeland Security Investigations, said, “As part of this case, HSI agents and our law enforcement partners uncovered an intricate network involved in the illicit distribution and importation of unapproved drugs that were sold to doctors in the U.S. It’s disturbing to see licensed, trusted medical professionals who are willing to put their own financial gain over public health and safety. We owe it to consumers to aggressively pursue pharmaceutical fraud given the significant risk to public health.”
According to the corporation’s plea agreement, Bernstein’s employees knowingly purchased foreign drugs containing the same active ingredient as drugs sold in the United States as Abraxane, Alimta, Aloxi, Boniva, Eloxatin, Gemzar, Neulasta, Rituxan, Taxotere, Venofer and Zometa, but were intended for use in markets outside the United States and had not been approved for sale in the United States.
The medical practice, in pleading guilty, admitted that it was aware that the drugs were not approved by the FDA in part because the practice had received a Notice from the FDA in October, 2008, that a shipment of drugs had been detained because the drugs were not approved for use in the United States by the FDA. Despite this warning, Bernstein’s medical practice continued to purchase unapproved cancer drugs and inject them into patients.
The FDA regulates the introduction of pharmaceuticals into commerce. This regulation helps ensure that drugs are safely manufactured, made from appropriate ingredients and properly labeled. The approval process addresses the chemical composition of the drug, the drug’s safety and effectiveness, and the elements of the drug’s distribution, such as the methods used in the manufacture, processing and packing of the drug, as well as the labeling to be used for the drug.
Only drugs that comply with vigorous U.S. standards should be given to patients in this country. Drugs manufactured outside the United States which are not intended for use in the United States do not go through this approval process and are considered unapproved, and therefore potentially unsafe.
In the Bernstein case, investigators found no evidence the illegal drugs involved were counterfeit. The unapproved foreign medications that were seized during the investigation were tested and found to contain the appropriate level of active ingredients. Although it’s difficult to determine whether a decline in a patient’s health should be attributed to unapproved drugs or to cancer, the investigation uncovered no evidence to indicate that Bernstein’s patients were harmed by the foreign drugs he administered.
There have been numerous similar cases of illegal importation and distribution of foreign unapproved drugs in San Diego and around the United States in recent years.
In cases related to Bernstein, a Florida-based cancer-drug supplier, Martin Paul Bean III, was indicted by a federal grand jury in San Diego in September 2012 for allegedly selling more than $7 million of misbranded and unapproved prescription oncology drugs to U.S. doctors. Please see 12-cr-03734-WQH USA.
The indictment alleged that from 2005 to 2011, Bean, doing business as GlobalRxStore, ordered the misbranded and unapproved drugs from foreign countries, including Turkey, India and Pakistan, and sold them to the doctors throughout the U.S. at substantially discounted prices via a wholesale pharmacy in San Diego.
That pharmacy - Oberlin Medical Supply and Service Corp. - was owned and operated by Maher Idriss, who pleaded guilty March 8, 2012, to conspiring with Bean to supply the unapproved drugs. Idriss acknowledged that U.S. doctors paid him over $7 million for foreign-sourced unapproved oncology drugs from May 2006 to May 2011. Idriss faces up to five years in prison and restitution and has already forfeited approximately $54,000 of profits. He is scheduled for sentencing May 20, 2013. Please see 12- cr-01775-WQH.
According to the plea agreement for the Bernstein medical practice, employees ordered drugs from Oberlin, among other suppliers.
Idriss admitted that after receiving payments from the doctors, he transferred the funds to the foreign suppliers and to the GlobalRXStore owner's bank account in Canada, keeping a portion for himself.
In another related case with a San Diego connection, James Newcomb of La Jolla was sentenced in August 2012 to 24 months in prison for conspiring to distribute adulterated prescription drugs to physicians in the United States.
Newcomb admitted that he distributed unapproved prescription drugs from foreign countries to physicians located in the United States, with the assistance of persons in Canada and the United Kingdom. Please see 12-cr-00009-RWS-1. Newcomb and others marketed these illegal drugs to U.S. doctors by offering them at up to 60% off the average wholesale price of the legitimate drugs in the United States.
According to the plea agreement of Bernstein’s medical practice, employees of his office purchased unapproved oncology drugs from Newcomb’s businesses, which included Medication Brokers, Pricing Logix, Richard’s Services, Ban Dune Marketing and Warwick Healthcare Solutions. Newcomb based his operations in offices in La Jolla. La Jolla resident Sandra Behe and Dr. Abid Nisar of St. Louis, Missouri, were also convicted in the same investigation.
Elsewhere in the country, doctors, office staff and drug suppliers in Maryland, Missouri, Tennessee and California were indicted in similar schemes in 2011 and 2012. They were accused of importing misbranded cancer drugs at significantly cheaper prices, providing them to patients without disclosing the source of the drugs, and then submitting claims for reimbursement from healthcare programs.
It was the FDA’s discovery of two counterfeit drugs - Avastin, the approved blockbuster cancer drug for treatment of colorectal, lung, kidney and brain cancer, and Altuzan, the unapproved Turkish version of Avastin - that brought national media attention to the problem. The Altuzan was found to contain no active ingredient at all, and thus would provide no benefit whatsoever to patients.
The FDA, recognizing the seriousness of this illegal activity and the discovery of the counterfeit Avastin and Altuzan, took the unprecedented regulatory action of issuing letters to numerous medical practices and physicians around the country, including many that purchased unapproved cancer drugs. To date over 500 letters have been issued.
Dr. Bernstein was among those who received a letter from the FDA prior to being charged with federal crimes.
The letter to Bernstein said, in part: “Purchasing prescription drug products, such as injectable cancer medications, from foreign or unlicensed suppliers puts patients at risk of exposure to drugs that may be fake, contaminated, improperly stored and transported, ineffective, and dangerous. In virtually all cases, purchasing unapproved prescription drugs from foreign sources violates the Federal Food, Drug, and Cosmetic Act and is illegal.”
The letter warned of the risks of purchasing medications from foreign, unfamiliar or unlicensed suppliers and selling unapproved versions of injectable cancer medications, noting that “patients were unknowingly placed at risk when they received medications of uncertain purity, storage, handling, identity and sourcing.”
The letter also noted that importing these medications from foreign sources is a violation of the Federal Food, Drug and Cosmetic Act.
“In an effort to protect the health of patients, health care providers should use only FDA-approved versions of these cancer medications,” the letter said. “Health care providers should be aware that purchasing medications from direct-to-clinic promotions that are from non-verified sources might increase the risk of receiving a potentially unsafe and ineffective product, since the products offered for sale may be unapproved, not manufactured with the quality attributes of FDA-approved products, or counterfeit.”
DEFENDANT Criminal Case No. 13cr0120-BGS Joel I. Bernstein SUMMARY OF CHARGESTitle 21, United States Code, Section 331(d), 333(a) (1) and 355(a), a misdemeanor – Introducing or causing to be introduced into interstate commerce an unapproved new drug
MAXIMUM PENALTIESOne year in prison; $100,000 fine, one year supervised release; restitution.
DEFENDANT Criminal Case No. 13cr0119-CAB Dr. Joel I. Bernstein, M.D., Inc. SUMMARY OF CHARGESTitle 18, United States Code, Section 1347 – Medicare Fraud
MAXIMUM PENALTIESFive years’ supervised release; $500,000 fine; mandatory restitution.
INVESTIGATING AGENCIESThe U.S. Food and Drug Administration’s Office of Criminal Investigations was the lead investigative agency in this case. Other agencies involved were the Federal Bureau of Investigation and Immigration and Customs Enforcement’s Homeland Security Investigations. The lead prosecutor is Melanie Pierson.
Former CEO-President of San Diego-Based Company Charged in $28 Million Stock Fraud Mark Lopez Also Accused of Obstructing SEC Investigation by Hiding Emails in Manila Folders Marked “Files Deleted” and “Not Released to SEC Subpoena (Delete).”Read the Press Release
United States Attorney Laura E. Duffy announced today the unsealing of an indictment charging Mark Anthony Lopez – the former President and CEO of Unico, Inc. (“Unico”) – with one count of conspiracy to commit securities fraud and two counts of obstructing justice. Unico is a San Diego-based mining company whose stock is publically traded. Lopez was arrested on January 17, 2013, by Special Agents of the FBI.
According to the indictment, Lopez conspired with New Jersey-based stock trader Mark Allen Lefkowitz (who previously pled guilty) to manipulate the share price and volume of Unico’s stock to benefit corporate insiders at the expense of shareholders. As a result of the fraud, the company issued approximately 9 billion new shares of its stock that it did not register with the Securities and Exchange Commission ("SEC"). These new, unregistered shares diluted existing shares, causing their value to drop by as much as $7 million. At the same time, Lefkowitz received free-trading shares from Unico worth more than $28 million, which he sold to unsuspecting buyers on the open market.
To carry out the fraud, Lopez and Lefkowitz exploited Section 3(a)(10) of the Securities Act of 1933 C a little-known provision that allows companies to issue unregistered shares of stock to settle "bona fide" debts. Lopez, on behalf of Unico, would enter into purported loan agreements with various shell corporations owned by Lefkowitz, most of which were based in the Turks and Caicos Islands. It was understood by the conspirators that Unico would purposefully default on the loan agreements so that Lefkowitz’s companies could initiate sham lawsuits against Unico.
Each and every one of these sham lawsuits would be brought by Florida-based lawyers in a Sarasota, Florida court. The Florida attorneys, even though they represented opposite sides in the lawsuits, would obtain their pleadings from a single Manhattan-based law firm that oversaw the sham lawsuits. Very soon after each lawsuit was filed C and typically within the very same week C Lopez and Lefkowitz would draft a written settlement agreement. The terms of the written settlement agreement would be extremely favorable to Lefkowitz. In short, Lopez would agree to settle Unico’s debt by issuing unregistered shares of stock worth on average seven times the debt that Unico actually owed. According to a secret side-agreement with Lopez, Lefkowitz would sell the shares on the open market to unsuspecting buyers and kick back a portion of the proceeds to Unico. This kickback would take the form of a new loan C which would have the added benefit of continuing the fraud scheme.
According to the indictment, Lopez also tried to obstruct an SEC probe into his misconduct by refusing to turn over emails, which he printed and concealed in two manila folders marked “Files Deleted” and another marked “Not Released to SEC Subpoena (Delete).” The indictment also alleged that Lopez redacted portions of an email and tried to delete it from his computer, and later lied to the SEC under oath during deposition testimony.
Lopez faces up to a total of 65 years in prison and $750,000 in fines. According to public filings, Lopez resigned his positions as CEO and President of Unico on June 9, 2012.
United States Attorney Duffy emphasized that this type of fraud attacks the very heart of our financial system. "The leaders of corporations—including and especially CEOs—owe a special duty to their shareholders. When these corporate leaders ignore that duty and use their positions to enrich insiders, it not only harms shareholders, but also threatens to undermine confidence in our financial markets and slows our country’s ongoing economic recovery." Duffy added that this investigation was initiated by special agents of the Federal Bureau of Investigation.
Lopez is expected to appear in court before the Honorable Barbara L. Major on January 23, 2013 at 9:30 a.m. for a bond hearing, and before the Honorable Irma E. Gonzalez, United States District Court Judge on February 22, 2013 at 2:00 p.m., for a motion hearing.
DEFENDANT Case Number: 12CR5236-IEG Mark Anthony Lopez SUMMARY OF CHARGESConspiracy to Commit Securities Fraud, in violation of Title 18, United States Code, Section 1349. Maximum penalties: 25 years in prison, 5 years= supervised release, a $250,000 fine and a $100 special assessment.
Destruction, Alteration and Falsification of Records, in violation of Title 18, United States Code, Section 1519. Maximum penalties: 20 years in prison, 5 years’ supervised release, a $250,000 fine and a $100 special assessment
INVESTIGATING AGENCYFederal Bureau of Investigation
An indictment itself is not evidence that the defendant committed the crimes charged. The defendant is presumed innocent until the United States meets its burden in court of proving guilty beyond a reasonable doubt.
CBP Officer Sentenced for Concealing Fugitive from Law EnforcementRead the Press Release
United States Attorney Laura E. Duffy announced that former Customs and Border Protection Officer Thomas P. Silva was sentenced today by United States District Judge Anthony J. Battaglia to serve eight months in custody after Silva pled guilty to concealing a person from arrest, in violation of Title 18, United States Code, Section 1071, and wire fraud, in violation of Title 18, United States Code, Section 1343. As part of the sentence, Judge Battaglia ordered Silva to forfeit over $16,000 in illegal proceeds from his criminal activity and pay $8, 129.37 in restitution to Farmers Insurance, the victim of his wire fraud scheme.
Silva previously admitted to concealing a wanted fugitive from arrest while on duty at the San Ysidro Port-of-Entry. In particular, Silva admitted allowing the fugitive to enter the United States from Mexico without inspection - despite verifying the fugitive's status using CBP's computer systems. Silva 2 further assisted the fugitive by purposefully entering inaccurate information related to the fugitive's car in CBP's computer system in an effort to help the fugitive elude arrest.
Silva also admitted in his plea agreement to engaging in a separate scheme to defraud Farmers Insurance of over $7,000 by falsely reporting that his Nissan Titan pickup truck had been stolen from a local San Diego community. Silva admitted, however, that he had in fact taken the truck to Mexico prior to reporting it stolen in furtherance of his fraudulent scheme. Thereafter, Silva filed the false claim with Farmers Insurance, which the insurance company then paid based on his misrepresentations.
In handing down the judgment, Judge Battaglia told Silva that his conduct was "an abomination" and that he had "brought shame" to the United States by carrying out these criminal activities while working as a CBP officer.
United States Attorney Duffy praised the members of the Border Corruption Task Force, a federal task force comprised of law enforcement officials from the Federal Bureau of Investigation, CBP-Internal Affairs, CBP-Field Operations, the Transportation Security Administration, and the Drug Enforcement Administration for their outstanding work to uncover Silva's criminal activity. Duffy added that her Office had a "zero tolerance" policy for government employees who thought they were above the laws that they were sworn to enforce.
DEFENDANT Criminal Case No. 12CR4050-AJB Thomas P. Silva SUMMARY OF CHARGES Count 1: Title 18, United States Code, Section 1343 B Wire Fraud
Count 2: Title 18, United States Code, Section 1071 B Concealing Person From Arrest INVESTIGATING AGENCIESFederal Bureau of Investigation
Transportation Security Administration
Customs and Border Protection
Drug Enforcement Administration*Indictments and complaints are not evidence that the defendant committed the crime charged. All defendants are presumed innocent until the United States meets its burden in court of proving guilt beyond a reasonable doubt.
Former Border Patrol Agent Sentenced for Possession of Child Pornography and Theft of Government PropertyRead the Press Release
United States Attorney Laura E. Duffy announced today that United States District Judge Marilyn L. Huff sentenced former United States Border Patrol (USBP) agent Rodolfo Zuniga to serve 37 months in prison and five years of supervised release, and to pay $9,937.71 in restitution to the United States based on his conviction of three federal crimes: (1) possession of images of minors engaged in sexually explicit conduct, in violation of Title 18, United States Code, Section 2252(a)(4)(B); (2) theft of government property, in violation of Title 18, United States Code, Section 641; and (3) interstate transportation of stolen goods, in violation of Title 18, United States Code, Section 2314. Judge Huff also ordered Zuniga to comply with all federal, state, and local laws, including to register as a sex offender.
According to information included in Zuniga’s written plea agreement and discussed at his sentencing, during the period between November 2009 and March 2010, Zuniga was a USBP agent 2 employed by U.S. Customs and Border Protection (CBP), U.S. Department of Homeland Security (DHS). He was assigned to the Imperial Beach Border Patrol Station, San Diego Sector, located in Imperial Beach, California.
While assigned to the Imperial Beach USBP station, Zuniga served as an Explorer Scout Advisor, and while serving in that capacity he had access to equipment owned by the USBP/CPB. The equipment included night vision goggles (NVGs) and global positioning system (GPS) units. From time to time, Explorer Scouts under Zuniga's supervision used that equipment as part of their training. While assigned to the Imperial Beach USBP station, Zuniga stole four sets of NVGs and one GPS unit, and thereafter sold them on the Internet auction and shopping website, eBay, Inc. Zuniga received payments for the stolen property through PayPal, Inc., from an individual located in China. The total amount of money Zuniga received for the NVGs, which were not recovered, was $9,937.71. The GPS unit was sold to a couple in New Jersey, for $77.73. Agents recovered the GPS unit.
On June 29, 2012, agents served a federal search warrant at Zuniga’s Chula Vista apartment. Zuniga's desktop computer and an external hard drive were seized. Later forensic analysis revealed the computer and external hard drive contained 384 visual depictions of minors engaged in sexually explicit conduct (89 images were discovered on the desktop computer; the external hard drive contained 220 images and one video).
Zuniga was arrested by Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) and the DHS Office of Inspector General (OIG). Zuniga resigned from the USBP on July 16, 2012.
DEFENDANT Case Number: 12CR3759-H Rodolfo Zuniga SUMMARY OF CHARGESCount 1 - Title 18, United States Code, Section 641 (Theft of Government Property) Count 2 - Title 18, United States Code, Section 2314 (Interstate Transportation of Stolen Goods)
INVESTIGATING AGENCIES
Count 3 - Title 18, United States Code, Section 2252(a)(4)(B) (Possession of Child Pornography)Immigration and Customs Enforcement's Homeland Security Investigations
Department of Homeland Security Office of Inspector GeneralSan Diego Woman Charged with Conspiracy to Provide Material Support to Al-ShabaabRead the Press Release
An indictment charging San Diego resident Nima Ali Yusuf, 24, with conspiracy to provide material support to terrorists, conspiracy to provide material support to al-Shabaab and making false statements to a government agency in a matter involving international terrorism, was unsealed today, Laura E. Duffy, U.S. Attorney for the Southern District of California, announced.
With the assistance of Customs and Border Protection, special agents of the FBI arrested Yusuf on Nov. 12, 2010. On Nov. 15, 2010, U.S. Magistrate Judge Nita L. Stormes arraigned Yusuf on the indictment. Yusuf will be held without bail pending a detention hearing scheduled for Nov. 18, 2010.
According to U.S. Attorney Duffy, the arrest arises from an investigation by the San Diego Joint Terrorism Task Force.
The charge of conspiracy to provide material support to terrorists carries a maximum penalty of 15 years in prison and a $250,000 fine. The charge of conspiracy to provide material support to a foreign terrorist organization carries a maximum penalty of 15 years in prison and a $250,000 fine. The charge of making false statements to a government agency in a matter involving international terrorism carries a maximum penalty of eight years in prison and a $250,000 fine.
An indictment itself is not evidence that the defendants committed the crimes charged. The defendant is presumed innocent until the government meets its burden in court of proving guilt beyond a reasonable doubt.