Southern District of California
Press releases recorded for this federal judicial district.
Man Arrested for Making Threat to Arizona Election OfficialRead the Press Release
NEWS RELEASE SUMMARY – February 22, 2024
SAN DIEGO – William Hyde of San Diego was arrested in San Diego today for allegedly leaving a voicemail containing a violent threat on the personal cell phone of an election official in the Maricopa County Recorder’s Office in Phoenix, Arizona.
Hyde, 52, is scheduled to make his initial appearance tomorrow at the federal courthouse in San Diego.
According to an indictment unsealed today, on or about November 29, 2022, Hyde allegedly left the following voicemail message on the personal cell phone of the victim election official: “Run, [expletive].” Approximately one minute later, Hyde allegedly left a second voicemail message for the same election official: “You wanna cheat our elections? You wanna screw Americans out of true votes? We’re coming, [expletive]. You’d better [expletive] hide.” This followed a Special Meeting held by the Maricopa County Board of Supervisors a day earlier to certify the election results in Maricopa County for the November 8, 2022, general elections for federal and state officeholders. The election official was present at this Special Meeting, which received nationwide media coverage.
“Intimidation of election officials strikes at the very heart of our democracy,” said United States Attorney for the Southern District of California Tara McGrath. “Even just one case can have a ripple effect. This Office will aggressively prosecute any attempt to intimidate, threaten, or frighten election officials as they engage in these critical duties.”
“As alleged in the indictment, the defendant left threatening messages on a Maricopa County election official’s personal cell phone the day after county officials certified the 2022 election results. The indictment alleges that the defendant accused the official of cheating the election and told the official to ‘run’ and ‘hide,’” said Acting Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division. “The Criminal Division is committed to aggressively investigating and prosecuting individuals who threaten election officials. We will not tolerate criminal intimidation of those who administer and safeguard our elections.”
“Election integrity starts with protecting those we entrust to administer elections,” said U.S. Attorney Gary M. Restaino for the District of Arizona. “We appreciate the admirable efforts of the Recorder’s Office and Elections Department in Maricopa County to efficiently register Arizonans as eligible voters, and to accurately and transparently tabulate their votes.”
“Individuals who work to ensure the integrity of our elections should not have to worry about their safety while working for the American people,” said Acting Special Agent in Charge TJ Holland of the FBI San Diego Field Office. “We will continue to collaborate with our local, state, and federal law enforcement partners to protect election officials and prosecute anyone who threatens to harm them.”
Hyde is charged with one count of communicating an interstate threat. If convicted, he faces a maximum penalty of five years in prison. The FBI San Diego Field Office investigated the case, with substantial assistance from the FBI Phoenix Field Office.
Assistant U.S. Attorney Seth Askins for the Southern District of California and Trial Attorney Tanya Senanayake of the National Security Division’s Counterterrorism Section are prosecuting the case, with substantial assistance from Assistant U.S. Attorney Mary Sue Feldmeier for the District of Arizona.
This case is part of the Justice Department’s Election Threats Task Force. Announced by Attorney General Merrick B. Garland and launched by Deputy Attorney General Lisa Monaco in June 2021, the task force has led the department’s efforts to address threats of violence against election workers, and to ensure that all election workers – whether elected, appointed, or volunteer – are able to do their jobs free from threats and intimidation. The task force engages with the election community and state and local law enforcement to assess allegations and reports of threats against election workers, and has investigated and prosecuted these matters where appropriate, in partnership with FBI Field Offices and U.S. Attorneys’ Offices throughout the country. A year after its formation, the task force is continuing this work and supporting the U.S. Attorneys’ Offices and FBI Field Offices nationwide as they carry on the critical work that the task force has begun.
Under the leadership of Deputy Attorney General Monaco, the task force is led by the Criminal Division’s Public Integrity Section and includes several other entities within the Justice Department, including the Criminal Division’s Computer Crime and Intellectual Property Section, Civil Rights Division, National Security Division, and FBI, as well as key interagency partners, such as the Department of Homeland Security and U.S. Postal Inspection Service. For more information regarding the Justice Department’s efforts to combat threats against election workers, read the Deputy Attorney General’s memo.
To report suspected threats or violent acts, contact your local FBI office and request to speak with the Election Crimes Coordinator. Contact information for every FBI field office may be found at www.fbi.gov/contact-us/field-offices/. You may also contact the FBI at 1-800-CALL-FBI (225-5324) or file an online complaint at www.tips.fbi.gov. Complaints submitted will be reviewed by the task force and referred for investigation or response accordingly. If someone is in imminent danger or risk of harm, contact 911 or your local police immediately.
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
DEFENDANT Case Number 22cr0276-BAS
William Michael Hyde 52 San Diego
SUMMARY OF CHARGES
Interstate Threatening Communication – Title 18, U.S.C., Section 875(c)
Maximum penalty: Five years in prison and $250,000 fine
INVESTIGATING AGENCIES
Federal Bureau of Investigation
Two Former U.S. Marines and Nurse Practitioner Sentenced in $65 Million TRICARE FraudRead the Press Release
SAN DIEGO – Three members of a massive conspiracy to bilk the military’s healthcare program known as TRICARE out of more than $65 million have been sentenced in federal court.
Former U.S. Marines, Daniel Castro and Jeremy Syto, were sentenced to 21 months and 15 months, respectively; Nurse Practitioner Candace Craven was sentenced to serve three months in home confinement. Castro and Syto recruited fellow Marines to receive expensive compounded drugs; Craven and others wrote bogus prescriptions and filled out fraudulent paperwork to process the insurance reimbursements. All told, tens of millions of dollars in false claims were submitted; everyone got kickbacks.
All of the defendants were working for Jimmy and Ashley Collins, a married couple living in Birchwood, Tennessee, who quarterbacked the scheme. Two weeks ago, Jimmy Collins received a 10-year prison sentence; Ashley Collins was sentenced to 18 months in home confinement. To account for all the fraud, the couple was ordered to pay $65,679,512.71 in restitution to Defense Health Agency and TRICARE.
According to plea agreements, the Marines who Castro and Syto recruited agreed to receive the pricey compounded medications in return for a monthly kickback of approximately $300. For young Marines-turned-straw-beneficiaries, this money significantly augmented their monthly paycheck. One defendant noted “it took very little work to sign people up to receive free money.”
For recruiting bogus patients, Castro and Syto were paid a commission—somewhere between 3 to7 percent of the total TRICARE reimbursement paid to the pharmacy for the drugs sent to their recruits. By the time this fraud scheme was in full swing, the average cost for these compounded drugs was more than $13,000 for a 30-day supply, peaking at around $25,000 for certain individual drugs. Over the course of the conspiracy, the illegal kickbacks amounted to at least $1,013,450.36 for Castro and $264,000 for Syto.
In total, TRICARE paid at least $11,949,710.15 in insurance reimbursements for compounded medications prescribed to straw beneficiaries directly recruited by Castro. During the same period, TRICARE paid at least $8,620,215.83 for compounded medications prescribed to straw beneficiaries directly recruited by Syto.
Nurse Practitioner Craven admitted that her primary role was to write and process fraudulent prescriptions and fill out other fraudulent paperwork for compounded drugs for the straw beneficiaries.
According to the pleadings, the sharp increase in the number of bogus prescriptions for compounded drugs was the result of multiple fraud schemes, including this one, that popped up around the country. As a result, the TRICARE program faced a $2 billion explosion in liability for compounded prescription drugs.
“This outrageous scheme undermined health services for those who risk their lives to serve our country,” said U.S. Attorney Tara McGrath. “Our military members and taxpayers deserve so much better. This case reflects our dedication to the well-being of our armed forces and our steadfast protection of the U.S. taxpayer.”
During the course of the investigation, authorities seized numerous items and properties purchased by the Collinses and others with the proceeds of the fraud: an 82-foot yacht; multiple luxury vehicles, including two Aston Martins; a multimillion-dollar investment annuity; gold and silver bars; dozens of pieces of farm equipment and tractor-trailer trucks; and three pieces of Tennessee real estate.
This case was prosecuted by Assistant U.S. Attorney Mark W. Pletcher.
DEFENDANTS Case Number: 18-CR-0432-JLS
Daniel Castro Age: 36 Oak Lawn, IL
Jeremy Syto Age: 30 Chula Vista, CA
DEFENDANTS Case Number: 18-CR-4209-JLS
Candace Michelle Craven Age: 57 Apison, TN
SUMMARY OF CHARGES
Daniel Castro:
Conspiracy, in violation of 18 U.S.C. § 1349, 1347
Maximum penalty: Ten years in prison and $250,000 fine or double loss amount, whichever is greater
An order of restitution requiring defendant to repay at least $11,949,710.15 to DHA/TRICARE
Jeremy Syto:
Conspiracy, in violation of 18 U.S.C. § 1349, 1347
Maximum penalty: Ten years in prison and $250,000 fine or double loss amount, whichever is greater
An order of restitution requiring defendant to repay at least $8,620,215.83 to DHA/TRICARE
Candace Craven:
Conspiracy, in violation of 18 U.S.C. § 1349, 1347
Maximum penalty: Ten years in prison and $250,000 fine or double loss amount, whichever is greater
An order of restitution requiring defendant to repay at least $32,750.00 to DHA/TRICARE
INVESTIGATING AGENCIES
Defense Criminal Investigative Service
Naval Criminal Investigative Service
IRS Criminal Investigation Division, Gulfport, MS
Federal Bureau of Investigation - Jackson, MS Field Office
Professional Money Launderer Sentenced to 40 Months in Prison for Transmitting $42 MillionRead the Press Release
SAN DIEGO –Jesus Vazquez Padilla of Tijuana was sentenced in federal court today to 40 months in custody for the unlicensed transmission of more than $42 million of illicit proceeds derived from the sale of drugs across the United States.
According to court records, between January 4, 2016 and May 24, 2019, Vazquez Padilla led the operation of an illegal unlicensed money transmission business by using 22 shell corporations and 85 corporate bank accounts at various U.S. banks to launder drug sale proceeds. Using the corporate bank accounts, Vazquez Padilla and his co-conspirators offered money transmitting services to the public for a fee by performing tasks that included: (1) depositing cash at financial institutions throughout the United States; (2) transferring money by wire, checks, and inter-bank transfers, and (3) transferring money to Mexico on behalf of third parties.
“The complexity of this money laundering operation was remarkable but as it unraveled so did the string of drug proceeds into the coffers of the cartels,” said U.S. Attorney Tara McGrath. “The United States will prosecute not only the drug traffickers, but also the facilitators who cannot out-maneuver justice.”
“Mr. Vasquez Padilla knowingly and willingly subverted laws that protect our financial institutions from becoming unwitting pawns in funding transnational crime and terrorism,” said Special Agent in Charge Tyler Hatcher, IRS Criminal Investigation, Los Angeles Field Office. “Furthermore, by moving over $42 million in drug money, Mr. Vasquez Padilla and his co-conspirators’ put our sons and daughters at risk of becoming statistics in the drug crisis we face as a country. IRS Criminal Investigation is committed to following the money to bring criminals like Mr. Vasquez Padilla to justice.”
In total, Vazquez Padilla’s business deposited $42,276,668 into the U.S. financial system. Of those deposits, approximately 95 percent of those funds were transferred to third party bank accounts in Mexico. The remaining 5 percent constituted the business’ fee for transmitting the funds.
Under U.S. law, a money transmission business must register with the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of Treasury; file Currency Transaction Reports and Suspicious Activity Reports; and maintain an effective anti-money laundering compliance program. Vazquez Padilla did not comply with any of these requirements.
On December 5, 2022, Vazquez-Padilla’s co-conspirator, Jose Gonzalez, was sentenced to 30 months’ custody for operating an unlicensed money transmission business and for assisting in the preparation of false tax returns related to the conspiracy. Gonzalez helped Vazquez Padilla open approximately 11 shell corporations and then, to create a veneer of legitimacy, Gonzalez filed federal tax returns on behalf of 10 of the shell corporations in tax years 2016 and 2017. In doing so, Gonzalez invented $19,615,192 in false and fictitious deductions so the shell corporations would not owe taxes.
On December 18, 2023, another co-conspirator, Juan Medina, was sentenced to 12 months and one day in custody for operating an unlicensed money transmission business. Despite knowing the laundered money represented illegal drug proceeds, Medina helped Vazquez Padilla open bank accounts for the shell corporations to enable the money laundering.
Vazquez Padilla’s sister and co-conspirator, Monica Vazquez, remains at large.
Assistant U.S. Attorneys Christopher Beeler and Carl Brooker of the Southern District of California are prosecuting the case.
DEFENDANT Case Number 22-CR-1551-RBM
Jesus Vazquez Padilla Age: 47 Tijuana, Mexico
DEFENDANT Case Number 22-CR-1472-W
Jose Gonzalez Age: 52 San Diego, California
DEFENDANT Case Number 22-CR-1473-RBM
Juan Medina Age: 42 San Diego, California
SUMMARY OF CHARGES
Conspiracy to Operate an Unlicensed Money Transmission Business – Title 18, U.S.C., Sections 371, 1960
Maximum penalty: Five years in prison, $250,000 fine; forfeiture and restitution
AGENCY
Internal Revenue Service Criminal Investigation
Husband and Wife Plead Guilty to $5 Million Unemployment Fraud SchemeRead the Press Release
NEWS RELEASE SUMMARY – February 15, 2024
SAN DIEGO –Eduard Buse and Florentina Sima pleaded guilty in federal court today to fraud and money laundering charges, admitting they participated in a scheme to steal more than $5 million in California unemployment benefits intended to help workers affected by the pandemic.
Buse and Sima were indicted by a federal grand jury in October 2023 along with 12 others. The indictment alleged that the fraud scheme involved helping hundreds of undeserving applicants apply for benefits using fraudulent documents. In their respective plea agreements, Buse and Sima admitted the fraud resulted in almost $5.2 million in bogus claims paid by the state of California.
“These covid relief funds were meant to provide critical financial relief during the pandemic. Instead, the money was used to buy luxury cars and jewelry,” said U.S. Attorney Tara McGrath. “We will not only continue to prosecute those who diverted money intended to serve as a lifeline, but we will pursue every avenue to recover and return that money to public use.”
“The Covid-19 pandemic placed an enormous financial strain on millions of Americans; however, some individuals decided to use other people’s pain as an opportunity for financial gain,” said FBI San Diego Special Agent in Charge Stacey Moy. “Our pursuit of justice for those affected by fraud during the pandemic will not stop until each and every person who took advantage of individuals during this critical time is prosecuted for defrauding the U.S. government and innocent people.”
“The defendants’ abuse of programs designed to help people in need during and in the wake of the Covid pandemic is particularly despicable,” said Special Agent in Charge Tyler Hatcher, IRS Criminal Investigation, Los Angeles Field Office. “Even worse, they took money intended to help people keep their heads above water and showered themselves with luxury items. IRS Criminal Investigation is committed to rooting out this sort of evil by following the money to bring people like these defendants to justice.”
According to Buse’s plea agreement, he not only collected $28,350 in undue EDD benefits for himself but also facilitated payouts of $244,050 to 14 co-conspirators, including Sima. Buse then sent $128,902.99 and Sima sent $58,881.53 of fraud proceeds to their associates in Romania through money service businesses.
Buse admitted that he purchased a 2020 BMW X6 for $105,044 in Glendale, California, with proceeds from the fraud and shipped it from San Diego to Romania on April 28, 2023.
On November 13, 2023, Romanian authorities served search warrants on addresses affiliated with Buse at the request of the United States. They seized the BMW with California license plates along with approximately $9,476.50 in U.S. currency; a Rolex Yacht Master II and a rose gold luxury men’s watch purchased for $15,550 U.S. dollars; a Rolex Sky Dweller watch; a Breitling 1884 men’s watch; and a Rolex Oyster Perpetual Date women’s watch.
As part of their plea agreements, Buse and Sima agreed to forfeit the BMW, cash and luxury watches, along with all other property seized in connection with the case.
Buse also agreed to forfeit $128,902.99 and agreed to pay restitution in the amount of $244,050 to the State of California Employment Development Department. Sima agreed to forfeit $58,881.53 and pay the same amount in restitution to the State of California Employment Development Department.
Buse and Sima are scheduled to be sentenced on May 20, 2024, at 9 a.m. before U.S. District Judge Larry A. Burns. This case is being prosecuted by Assistant U.S. Attorneys Jessica Adeline Schulberg and Valerie Chu.
DEFENDANTS Case Number 23CR2090-LAB
Eduard Buse Age: 30 Transient, Romanian
Florentina Sima Age: 29 Transient, Romanian
SUMMARY OF CHARGES
Title 18, U.S.C. § 1349 — Conspiracy to Commit Wire Fraud
Title 18, U.S.C. § 1343 — Wire Fraud
Maximum penalty: Thirty years in prison, $1 million fine
Title 18 U.S.C. § 1956(a)(2)(B)(i) — Laundering of Monetary Instruments
Maximum penalty: Twenty years in prison and $500,000 fine or twice the value of the monetary instrument or funds involved in the transportation, transmission, or transfer, whichever is greater
AGENCY
Federal Bureau of Investigation
San Diego Police Department Economic Crimes Unit
IRS Criminal Investigation
California Employment Development Department Investigative Division
U.S. Department of Labor Office of Inspector General
U.S. Department of Homeland Security
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Company and Owners Plead Guilty to Violating the Clean Water ActRead the Press Release
NEWS RELEASE SUMMARY – February 15, 2024
SAN DIEGO – Brothers Robert and Filip Sulc, along with their company Bio-Edge Inc., pleaded guilty in federal court today, admitting they discharged methanol-contaminated wastewater to the sewers at their San Diego-based facility in violation of the Clean Water Act in June of 2023.
Bio-Edge, a company located on Nancy Ridge Drive in San Diego, produced polymeric additives. The company used methanol, both as part of its manufacturing process and to clean glassware.
In violation of both federal pretreatment standards and Bio-Edge’s permit with the City of San Diego, Robert Sulc instructed Bio-Edge employees to collect their methanol-contaminated wastewater, treat it with salt to prevent drain clogs, dilute it with water, and dump the wastewater down the drain into the municipal sewage system.
According to the plea agreements, federal pretreatment standards (40 CFR 403.5(b)(1)) and the permit prohibit the discharge of wastewater that includes pollutants that create a fire or explosion hazard in municipal sewer systems, such as methanol. The federal pretreatment standards (40 CFR 403.6(d)) and the permit further prohibit the use of dilution as a substitute for approved treatment in order to achieve compliance.
Robert Sulc and Bio-Edge, Inc. each pleaded guilty to felony violations of the Clean Water Act. Filip Sulc pleaded guilty to a misdemeanor violation of the Clean Water Act, admitting he acted negligently with respect to the same wastewater discharge.
“Environmental regulations don’t just keep San Diego beautiful; they keep us safe.” said U.S. Attorney Tara McGrath. “We have one planet, and the United States Attorney’s Office will do everything in our power to protect it.”
“The deliberate and routine discharge of a toxic and ignitable chemical into the city of San Diego’s sewer system by Bio-edge, Robert Sulc, and Filip Sulc, posed a risk to the community and the company’s employees,” said Kimberly Bahney, Acting EPA-CID Special Agent in Charge. “Criminal neglect and disregard for Clean Water Act requirements are vigorously prosecuted to ensure protection of human health and the environment.”
Sentencing is scheduled to occur on May 6, 2024, before U.S. District Judge Marilyn L. Huff
This case is being prosecuted by Assistant United States Attorneys Carl Brooker and Melanie Pierson.
DEFENDANTS Case Number 24-cr-00242
Count 1
Robert Sulc Age: 46 San Diego, CA
Bio-Edge, Incorporated
Count 2
Filip Sulc Age: 48 San Diego, CA
SUMMARY OF CHARGES
Count 1: Violation of a Federal Pretreatment Standard – Title 33, U.S.C., Section 1317(d)/1319(c)(2)(A)
Count 1: Maximum penalty as to Robert Sulc: Three years in prison and a fine of not less than $5,000 nor more than $50,000 per day of violation.
Count 1: Maximum penalty as to Bio-Edge Inc.: Five years of probation and a fine of not less than $5,000 nor more than $50,000 per day of violation.
Count 2: Violation of a Federal Pretreatment Standard – Title 33, U.S.C., Section 1317(d)/1319(c)(1)(A)
Count 2: Maximum penalty: One year in prison and a fine of not less than $2,500 nor more than $25,000 per day of violation.
AGENCY
U.S. Environmental Protection Agency
Man Sentenced to 12 Years for Sex Trafficking a 15-Year-Old GirlRead the Press Release
NEWS RELEASE SUMMARY – February 12, 2024
SAN DIEGO – Gabriel Joseph Gonzalez of Pomona, California was sentenced in federal court today to 12 years in prison for sex trafficking a 15-year-old girl in early 2023.
Gonzalez pleaded guilty in July 2023 to one count of sex trafficking of a minor. The victim was a runaway living at a group home in Los Angeles County when Gonzalez began trafficking her. Gonzalez had known the victim since she was 13. He enticed her to leave the group home to engage in commercial sex work for Gonzalez’s financial benefit. He then transported the victim to San Diego and forced her to walk areas known for prostitution on Dalbergia Street in San Diego and Roosevelt Avenue in National City.
During January 2023, Gonzalez forced the victim to engage in commercial sex work every day for seven straight days– except for the victim’s 16th birthday. He allowed her to take that day “off.”
The victim escaped by calling 911. She was rescued by the San Diego Police Department on January 26, 2023, and the case was turned over to the San Diego Human Trafficking Task Force.
Even after entering a guilty plea in July 2023, Gonzalez attempted to continue to traffic the victim while in custody through jail calls. U.S. District Judge Larry Alan Burns pronounced the 12-year sentence, noting Gonzalez’s “absolute lack of remorse” in his conduct while in custody and his continued victimization of the minor.
“The victim’s courage to call 911 in this case was extraordinary,” said U.S. Attorney Tara McGrath. “Her trust in law enforcement demonstrated that when someone reports abuse, the public servants in this community are all hands on deck to bring abusers to justice.”
“Human trafficking and sexual exploitation of a minor is inexcusable,” said Attorney General Rob Bonta. “At the California Department of Justice, we are fighting to hold perpetrators accountable and help survivors get a fresh start. I’m thankful to all our partners for their collaboration in the California DOJ-led San Diego Human Trafficking Task Force. I’m proud of our office’s work to help uplift vulnerable Californians. When we work together, we get results.”
“The vital work being done by local and federal partners on the Human Trafficking Task Force to combat sex trafficking cannot be quantified,” said FBI San Diego Special Agent in Charge Stacey Moy. “The violence or coercion that is committed against sex trafficking victims can have a lasting negative impact on the victim, their families, and the community for years to come.”
If you are living or working under threat of violence or extortion, or you suspect someone else may be, call the National Human Trafficking Resource Center toll free, 24/7 Hotline: CALL: (888) 373-7888 or TEXT BeFree or 233733.
This case was prosecuted by Assistant U.S. Attorney Derek Ko and Lyndzie M. Carter.
DEFENDANTS Case Number 23-cr-0513-LAB
Gabriel Joseph Gonzalez Age: 20 Pomona, CA
SUMMARY OF CHARGES
Sex Trafficking of a Minor – Title 18, U.S.C., Section 1591(a) and (b)(1)
Maximum penalty: Up to life in prison and $250,000 fine; Ten-year mandatory minimum sentence
AGENCY
San Diego Police Department
National City Police Department
Federal Bureau of Investigation, San Diego
San Diego Human Trafficking Task Force
Guatemalan Leader of Multi-Ton Cocaine Trafficking Organization Sentenced to Almost 22 Years in PrisonRead the Press Release
SAN DIEGO – Josue Adan Lemus-Lara, aka “Fenix,” was sentenced in federal court today to 260 months in prison. His sentence follows his conviction after a week-long jury trial in November 2023 where he was convicted on all charges in a maritime cocaine trafficking conspiracy.
During a multi-year wiretap investigation led by agents from Homeland Security Investigations and the Drug Enforcement Administration, Josue Lemus-Lara and his brother and co-conspirator, Willian Lemus-Lara, aka “Humilde,” were identified as leaders of a transnational criminal organization. The organization moved multi-ton quantities of cocaine at sea from South America to Guatemala and ultimately over land to Mexican counterparts, including members of the Sinaloa Cartel, for importation to the United States.
At trial, prosecutors presented evidence from 13 rounds of court-authorized wiretaps demonstrating that in 2017 Josue Lemus-Lara traveled from Guatemala to Colombia to oversee the Lemus-Lara Organization’s cocaine trafficking operation and to establish new cocaine supply lines. As Josue Lemus-Lara told a co-conspirator, “We either make money or we get thrown in jail or we get killed.”
In January 2018, U.S. Coast Guard officers seized a vessel sent by the
organization with cocaine concealed within fuel barrels.Prosecutors presented evidence at trial showing Lemus-Lara’s role as head of South American operations for the organization, including extensive wiretap transcripts, pictures Lemus-Lara sent of bespoke cocaine brands the group was procuring, and over a dozen photos of a cocaine laboratory in the Ecuadorian jungle. As prosecutors outlined at trial, in just a five-day span in May 2017, the organization dispatched four vessels, each carrying over 750 kilograms of cocaine from South America to Guatemala. Interdiction efforts by the United States Coast Guard stymied two of those loads, including 781-kilograms seized from the vessel below.
Josue Lemus-Lara, a Guatemalan national, was initially apprehended by Colombian authorities in February 2019. He was extradited to the United States from Colombia on December 2, 2020, upon request by the United States government.
This was a “highly sophisticated” and “spectacular conspiracy in its scope and depth,” said Chief U.S. District Judge Dana M. Sabraw. “It’s hard to put into words how sophisticated and involved it was.”
“This prosecution sends a shot across the bow to maritime traffickers moving narcotics across the Americas and into the United States,” said U.S. Attorney Tara McGrath. “Coordinated efforts of U.S. government agencies continue to identify, dismantle, and prosecute these operators inside our borders and beyond.”
“This significant sentencing reflects HSI, the United States Attorney’s Office, and our partner law enforcement agencies’ commitment to holding international drug traffickers responsible for their illicit activity,” said Chad Plantz, special agent in charge for HSI San Diego. “This complex multi-year investigation demonstrates HSI’s ability to disrupt and dismantle transnational criminal organizations and our commitment to protecting our communities and the people of the United States of America.”
“Drug traffickers drive addiction and destroy communities,” said DEA Acting Special Agent in Charge Paul Abosamra. “As such, the DEA and its partners will continue to pursue these traffickers in every corner of the globe and bring them to justice.”
“The members of the U.S. Coast Guard remain dedicated to helping dismantle the transnational criminal organizations that continue to threaten the lives within our community and country,” said Rear Admiral Andrew Sugimoto, commander, Coast Guard District 11. “As a service, we will continue to work with our international, federal and local partners to put an end to their illegal and dangerous operations and ensure these individuals are held accountable.”
This case was prosecuted by Assistant U.S. Attorney P. Kevin Mokhtari and Special Assistant U.S. Attorney Allison B. Murray.
DEFENDANT Case Number 18cr0390-DMS
Josue Adan Lemus-Lara Age: 39 Esquipulas, Guatemala
SUMMARY OF CHARGES
Conspiracy to Possess with Intent to Distribute Cocaine on Board a Vessel – Title 46, U.S.C., Sections 70503 and 70506(b)
Conspiracy to Distribute Cocaine Intended for Unlawful Importation into the United States – Title 21, U.S.C., Sections 959, 960 and 963
Maximum Penalties: Life in prison; $10 million fine
AGENCIES
Homeland Security Investigations (HSI)
Drug Enforcement Administration (DEA)
Customs and Border Protection (CBP)
U.S. Coast Guard
HSI Attaché Guatemala City, Guatemala
Department of Justice, Office of Enforcement Operations
Department of Justice, Office of International Affairs
Department of Justice, Organized Crime and Drug Enforcement Task Force (OCDETF)
Joint Interagency Task Force-South (JIATF-S)
San Diego Restaurant Owner Charged with Tax and COVID-Relief Fraud SchemesRead the Press Release
A federal grand jury in San Diego returned a superseding indictment on Feb. 2, charging a California man with wire fraud, conspiracy to commit wire fraud, tax evasion, filing false tax returns, conspiracy to defraud the United States, conspiracy to commit money laundering and failing to file tax returns.
According to the indictment, Leronce Suel was the majority owner of Rockstar Dough LLC and Chicken Feed LLC, both of which operated restaurants in the San Diego area. He allegedly conspired with his business partner to underreport over $1.7 million in gross receipts on Rockstar Dough LLC’s 2020 corporate tax return filed with the IRS. The indictment alleges that from March 2020 to June 2022, Suel and the business partner then used this false corporate tax return to qualify for the COVID-19-related Paycheck Protection Program and Restaurant Revitalization Funding loans. Suel also allegedly falsely certified on loan forgiveness applications that he spent the money his restaurants received from these programs only for payroll. The indictment charges that Suel and his co-conspirator made substantial cash withdrawals from their business bank accounts to launder the fraudulently obtained funds. As part of the conspiracy, Suel and his co-conspirator allegedly concealed more than $2.4 million in cash at their residence.
The indictment further charges that Suel failed to report income he received from his businesses, including millions of dollars in cash and personal expenses paid for by the businesses, such as the rent for his home. In 2023, Suel also allegedly filed original and amended tax returns for prior tax years that included false depreciable assets and business losses.
If convicted, Suel faces a maximum penalty of 30 years in prison for each count of wire fraud and conspiracy to commit wire fraud, 10 years in prison for each count of conspiracy to commit money laundering, five years in prison for tax evasion and conspiracy to defraud the United States, three years in prison for each count of filing false tax returns and one year in prison for each count of failing to file tax returns. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Attorney Tara K. McGrath for the Southern District of California made the announcement.
IRS Criminal Investigation is investigating the case.
Trial Attorney Julia Rugg of the Justice Department’s Tax Division and Assistant U.S. Attorney Christopher Beeler for the Southern District of California are prosecuting the case.
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
San Diego Drug Dealer Sentenced to Eight Years in Fatal Fentanyl OverdoseRead the Press Release
NEWS RELEASE SUMMARY—February 5, 2024
SAN DIEGO— Derek Neal Turfler of San Diego was sentenced in federal court today to 97 months in prison for his role in selling fentanyl pills to a 27-year-old woman who fatally overdosed on May 9, 2022.
According to his plea agreement, Turfler arranged a meeting to deliver fentanyl to the victim, Faithe Sioban Thogode, who died later that morning after using the fentanyl he provided. According to the government’s sentencing memorandum, the defendant was addicted to fentanyl, knew how deadly the drug was, and knew the consequences for selling the drug and causing another’s death, yet he sold her the drug anyway.
Turfler also knew that the victim worked at a drug and alcohol treatment center, had just celebrated five years of sobriety, and was going through a drug relapse when he sold her the deadly pills.
According to the sentencing memo, this was not the first time the defendant had seriously hurt someone due to fentanyl. In 2019, he was convicted in California state court of driving under the influence of fentanyl and causing great bodily harm and was on formal probation for that felony conviction at the time he sold the deadly pills to Thogode.
“Faithe Thogode is not a statistic. She was a loving daughter and a devoted friend to dozens of people who appeared in court today to show their lasting appreciation for her infectious laugh and kind heart,” said U.S. Attorney Tara McGrath. “The U.S. Attorney’s office is committed to our partnership with the DEA and the Overdose Response Team to hold accountable dealers—like this defendant—who deliver a fatal overdose.”
“Fentanyl kills and those who sell this lethal drug must be brought to justice,” said DEA Acting Special Agent in Charge Paul Abosamra.
Special Agents and Task Force Officers with the Drug Enforcement Administration’s Overdose Response Team (formerly known as Team 10) led the investigation into Thogode’s death. This case is the result of ongoing efforts by the U.S. Attorney’s Office, the Drug Enforcement Administration, the San Diego Police Department and the California Department of Health Care Services to investigate and prosecute the distribution of illegal drugs—fentanyl in particular—that results in overdose deaths. The Drug Enforcement Administration created the Overdose Response Team as a response to the increase in overdose deaths in San Diego County.
This case was prosecuted by Assistant U.S. Attorney Patrick C. Swan.
DEFENDANT Case Number: 23-cr-175-LL
Derek Neal Turfler Age: 29 San Diego, CA
SUMMARY OF CHARGES
Distribution of Fentanyl – Title 18, United States Code, Section 841(a)(1)
Maximum penalty: Twenty years in prison
AGENCIES
Drug Enforcement Administration
San Diego Police Department
State of California Department of Health Care Services
San Diego Restaurant Owner Charged with Tax Fraud and COVID-Relief FraudRead the Press Release
SAN DIEGO – San Diego restaurant owner Leronce Suel was indicted by a federal grand jury today on charges that he provided bogus information in applications for COVID relief programs and failed to report more than $1.7 million in revenue to the IRS.
According to the indictment, Leronce Suel was the majority owner of Rockstar Dough LLC and Chicken Feed LLC, both of which operated a series of restaurants in the San Diego area. He allegedly conspired with his business partner to underreport the $1.7 million in gross receipts on Rockstar Dough LLC’s 2020 corporate tax return (Form 1120-S) filed with the IRS.
The indictment alleges that from March 2020 to June 2022, Suel and his business partner conspired to use the false corporate tax return for tax year 2020 to qualify for the COVID-related Paycheck Protection Program and Restaurant Revitalization Funding loans. Suel also made materially false certifications on loan applications regarding the use of the money. The indictment charges that Suel and his business partner made substantial cash withdrawals from their business bank accounts to launder the fraudulently obtained funds. As part of the conspiracy, Suel and his business partner allegedly concealed more than $2.4 million in cash at their residence.
The indictment further alleges that Suel also failed to report personal income he received from his businesses, including millions of dollars in cash and personal expenses paid by his businesses. Suel allegedly failed to timely file his individual tax returns for tax year 2018 and 2019 and evaded his individual income taxes for tax year 2020. The indictment alleges that in 2023, Suel filed original and amended tax returns that included false depreciable assets and business losses.
Assistant U.S. Attorney Christopher Beeler of the Southern District of California and Trial Attorney Julia Rugg of the Justice Department’s Tax Division are prosecuting the case.
*An indictment is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
DEFENDANT Case Number 23-CR-965-RBM
Leronce Suel Age: 47 San Diego, CA
SUMMARY OF CHARGES
Wire Fraud Conspiracy – Title 18, U.S.C., Section 1349
Maximum penalty: Thirty years in prison; $1 million fine; forfeiture and restitution
Wire Fraud – Title 18, U.S.C., Section 1343
Maximum penalty: Thirty years in prison; $1 million fine; forfeiture and restitution
Money Laundering Conspiracy – Title 18, U.S.C., Section 1956(h)
Maximum penalty: Twenty years in prison; $500,000 fine, and forfeiture
Conspiracy to Defraud the United States – 18 U.S.C., Section 371
Maximum Penalty: Five years in prison and $250,000 fine
Tax Evasion – 26 U.S.C., Section 7201
Maximum penalty: Five years in prison; $100,000 fine; and restitution
Filing a False Tax Return – 26 U.S.C., Section 7206(1)
Maximum penalty: Three years in prison; $100,000 fine; and restitution
Failure to File a Tax Return – 26 U.S.C., Section 7203
Maximum Penalty: Five years in prison; $25,000 fine; and restitution
AGENCY
Internal Revenue Service – Criminal Investigation
Former U.S. Border Patrol Agent Pleads Guilty to Attempting to Distribute Methamphetamine and Receiving BribesRead the Press Release
SAN DIEGO – Former U.S. Border Patrol Agent Hector Hernandez pleaded guilty in federal court today, admitting that he used his official position to smuggle unauthorized immigrants and illegal drugs across the border in exchange for money.
According to his plea agreement, Hernandez admitted to using his official position to open border fences and allowing undocumented immigrants and controlled substances to enter the United States from Mexico. Hernandez also admitted to moving the drugs from the Southern District of California to other locations within the United States.
“Agent Hernandez betrayed his badge and his country,” said U.S. Attorney Tara McGrath. “Instead of providing protection from smugglers and drug traffickers, he joined them.”
“Border Patrol Agent Hernandez broke the public’s trust and abandoned his oath,” said DEA Special Agent in Charge Shelly Howe. “Law enforcement officers are required to uphold the law, not break it.”
“It’s always disheartening when individuals misuse their positions of trust within our government for nefarious activities,” said FBI San Diego Special Agent in Charge Stacey Moy. “Let this be a clear message, that we are absolutely resolved with our partners to rigorously investigate and pursue justice in all cases---even when they involve one of our own.”
“Department of Homeland Security Office of the Inspector General is grateful for the continued collaboration with our law enforcement partners as we root out corruption and crime along the Southwest Border. Today’s plea agreement sends a clear message that federal employees will be held accountable for their actions,” said the DHS Inspector General, Dr. Joseph V. Cuffari.
Hernandez admitted to taking Mexico-based smugglers on a tour of the US/Mexico border, identifying the best locations to sneak unauthorized immigrants into the United States, and sharing the locations of monitoring devices and cameras near the border to help them evade detection. Hernandez also admitted to opening restricted border fences on at least five occasions and allowing immigrants to enter the United States for cash payments of $5,000 each time.
On May 9, 2023, Hernandez met with someone he believed to be a drug trafficker but who was, in fact, an undercover federal agent. During this meeting, Hernandez agreed to pick up a bag full of narcotics that would be hidden near the border fence and bring it to the undercover agent in exchange for $20,000. Undercover agents loaded the bag with 10 kilograms of fake methamphetamine, one pound of real methamphetamine, and a tracking device, before placing the bag in a storm drain near the border fence.
Later that evening and while on duty, Hernandez drove his official vehicle to the storm drain and retrieved the bag. He drove the bag to his residence in Chula Vista and left it there for the remainder of his work shift. On May 10, 2023, after his shift was over, Hernandez returned home, retrieved the bag, and drove to meet with the undercover agent. He was arrested at that meeting. Upon arrest, investigators confirmed the bag still contained both the fake and real methamphetamine.
After Hernandez was arrested, agents searched his residence and found close to $140,000 in cash and 9 grams of cocaine. By Hernandez’s own admission, at least $110,000 of the seized cash represented proceeds from narcotics trafficking and bribery.
As part of his plea agreement, Hernandez forfeited his personal vehicle used to bring the drugs to the undercover agent; $110,000 of the seized cash; and his interest in the residence where the drugs were maintained.
This case is being prosecuted by Assistant U.S. Attorneys Sean Van Demark and Lawrence A. Casper.
Hernandez is scheduled to be sentenced on April 19, 2024 at 9 a.m. before U.S. District Judge Janis L. Sammartino.
DEFENDANTS Case Number 23cr1114-JLS
Hector Hernandez Age: 55 Chula Vista, CA
SUMMARY OF CHARGES
Attempted Distribution of Methamphetamine – 21 U.S.C., Sections 841(a)(1) and 846
Maximum penalty: Life imprisonment with a 10-year mandatory minimum
Receiving Bribe by Public Official – 18 U.S.C., Section 201(b)(2)
Maximum penalty: Fifteen years in prison
INVESTIGATING AGENCIES
Department of Homeland Security, Office of the Inspector General
Drug Enforcement Administration
Federal Bureau of Investigation
IRS Criminal Investigation
Attorney General Garland Honors U.S. Department of Justice Employees and Others for their Service at Annual Awards CeremonyRead the Press Release
SAN DIEGO – Attorney General Merrick B. Garland today announced the recipients of the annual Attorney General’s Awards recognizing extraordinary work of Justice Department employees and others. Recipients included several San Diego-based federal prosecutors and San Diego County District Attorney Summer Stephan.
“Each of today’s recipients has served with distinction, and in so doing, they have enabled the Justice Department to advance its work on behalf of the American people,” said Attorney General Garland. “Their exceptional leadership, heroism, and dedication have benefited people and communities across the country.”
San Diego recipients include:
- Chief of National Security and Cybercrimes John Parmley; Assistant U.S. Attorneys Fred Sheppard and Sabrina Feve; FBI Special Agents Amy Poling, Adam James, Marina Shalfeyeva, Nicholas Arico, and Udell Hardy; and FBI Supervisory Special Agent Edison Constante. They received the Attorney General’s Award for Excellence in Furthering the Interests of U.S. National Security, which recognizes outstanding achievements and contributions toward protecting U.S. national security. They were singled out for their work on an espionage case. Please see https://www.justice.gov/usao-sdca/pr/four-chinese-nationals-working-ministry-state-security-charged-global-computer.
"This extraordinary team identified and exposed a worldwide computer-hacking campaign,” said U.S. Attorney Tara McGrath. “Their perseverance and dedication disrupted China’s efforts to steal trade secrets and sensitive data from universities, companies, and governmental organizations around the globe.”
- First Assistant U.S. Attorney Peter Ko, second-in-command of the U.S. Attorney’s Office, was recognized for exemplary leadership over the course of his DOJ career. “Mr. Ko has demonstrated outstanding professionalism and commitment to justice for more than two decades,” McGrath said. “I can’t think of anyone more deserving of this recognition.”
- San Diego County District Attorney Summer Stephan received the Attorney General’s Award for Meritorious Public Service. Each year the DOJ gives out just one award for meritorious public service nationwide. The award is designed to recognize significant contributions of citizens and organizations that have assisted the Department in accomplishing its mission and objectives.
“During Summer Stephan’s tenure as DA, San Diego has remained one of the safest large cities in America,” McGrath said. “Collaborative law enforcement relationships have been a hallmark of DA Stephan’s leadership. Her work with Department of Justice partners has resulted in dozens of high-impact cases, from fentanyl trafficking and elder fraud to illegal firearms and violent crime.”
For a comprehensive list of all award winners, please see https://www.justice.gov/opa/pr/attorney-general-merrick-b-garland-honors-justice-department-employees-and-partners-70th-and.
- Chief of National Security and Cybercrimes John Parmley; Assistant U.S. Attorneys Fred Sheppard and Sabrina Feve; FBI Special Agents Amy Poling, Adam James, Marina Shalfeyeva, Nicholas Arico, and Udell Hardy; and FBI Supervisory Special Agent Edison Constante. They received the Attorney General’s Award for Excellence in Furthering the Interests of U.S. National Security, which recognizes outstanding achievements and contributions toward protecting U.S. national security. They were singled out for their work on an espionage case. Please see https://www.justice.gov/usao-sdca/pr/four-chinese-nationals-working-ministry-state-security-charged-global-computer.
Imperial County Dentist Sentenced to over Three Years in Prison and Nearly $8.5 Million in Restitution for Medicare FraudRead the Press Release
NEWS RELEASE SUMMARY – January 26, 2024
SAN DIEGO – Imperial County dentist Javad Aghaloo was sentenced in federal court today to 37 months in prison for defrauding Medicare and then covering it up. His former billing manager, Melissa Rosas, was sentenced to three years of probation with one year of home confinement for obstructing Medicare’s efforts to audit Aghaloo’s dental offices by providing false information.
The pair, along with others, conspired to commit health care fraud by billing Medicare for procedures that were not covered, not performed, or otherwise not necessary. Aghaloo pleaded guilty on October 2, 2023 to conspiracy to commit health care fraud; Rosas pleaded guilty on October 13, 2023 to obstructing a federal audit.
“Doctors should treat patients, not exploit them,” said U.S. Attorney Tara McGrath. “This office is committed to protecting vulnerable patients from doctors who take advantage of them, particularly when they do so with no regard for patient safety.”
U.S. District Judge Jinsook Ohta also ordered Aghaloo to forfeit more than $1 million in property purchased with money obtained from the fraud and pay restitution to Medicare in the amount of $8,476,466.23.
According to court records, Aghaloo and others recruited Medicare beneficiaries to get dental work done at one of Aghaloo’s two dental offices in Imperial County. To recruit Medicare patients, Aghaloo and his employees marketed their dental services as being covered by Medicare. Aghaloo and his employees knew this was untrue since Medicare does not cover dental services.
Once a Medicare beneficiary was in one of Aghaloo’s offices, Aghaloo and others performed some type of procedure (usually a tooth extraction) and submitted false claims to Medicare for the dental work using the person’s Medicare beneficiary number. Since tooth extractions are not covered by Medicare, Aghaloo’s offices submitted false claims for procedures like bone grafts that were never performed.
Between March 1, 2016 and October 18, 2018, Aghaloo’s dental offices submitted more than 7,000 false claims totaling over $18 million to Medicare, for which Aghaloo’s offices received $8,476,466.23.
To conceal the fraud, between April of 2017 and October of 2018, Rosas and Theresa Flores, Aghaloo’s office manager, submitted false documents to Noridian Healthcare Solutions, LLC., a Federal auditor for the Medicare program. Flores, who also pleaded guilty to obstructing an audit, is scheduled to be sentenced on Friday, March 8, 2024.
This case is being prosecuted by Assistant U.S. Attorney Christopher Alexander.
DEFENDANT Case Numbers 23cr0616-JO; 23cr2127-JO
Javad Aghaloo Age: 50 Indio, CA
Melissa Rosas Age: 42 Calexico, CA
SUMMARY OF CHARGES
Conspiracy to Commit Health Care Fraud, a felony, in violation of Title 18, United States Code, Section 371.
Maximum Penalty: Five years in prison and a fine of $250,000.
Obstructing a Federal Audit, a felony, in violation of Title 18, United States Code, Section 1516.
Maximum Penalty: Five years in prison and a fine of $250,000.
INVESTIGATING AGENCIES
Federal Bureau of Investigation
U.S. Department of Health and Human Services, Office of Inspector General
Alleged Drug Trafficker Wilder Emilio Sanchez Farfan Extradited from ColombiaRead the Press Release
NEWS RELEASE SUMMARY – January 26, 2024
SAN DIEGO – Wilder Emilio Sanchez Farfan, aka Gato, an Ecuadorian national and alleged drug trafficker, made his first appearance in federal court today following his extradition to the United States from Colombia yesterday.
At the hearing, Sanchez Farfan entered a not guilty plea. U.S. Magistrate Judge Barbara L. Major ordered him detained pending trial. The next hearing is scheduled for March 4, 2024, at 1:30 p.m. before U.S. District Judge Gonzalo P. Curiel.
On October 30, 2019, a federal grand jury in the Southern District of California returned an indictment charging Sanchez Farfan with participating in a transnational conspiracy to traffic substantial quantities of cocaine from Colombia, through Ecuador, and into the United States. Sanchez Farfan’s organization is alleged to have been a major source of supply for the Sinaloa Cartel and the New Generation Jalisco Cartel in Mexico.
Sanchez Farfan was apprehended by Colombian authorities at the request of the United States in February 2023 while traveling in Colombia.
“We thank Colombian and Ecuadorian law enforcement authorities for their significant assistance,” said U.S. Attorney Tara K. McGrath.
The Justice Department’s Office of International Affairs and the Narcotic and Dangerous Drug Section’s Judicial Attaché’s office at the U.S. Embassy in Bogota provided critical assistance in securing the arrest and extradition of Sanchez Farfan.
This case is being prosecuted by Assistant U.S. Attorneys Kyle Martin and Ashley Goff.
DEFENDANT Case 19cr1610-GPC
Wilder Emilio Sanchez Farfan Age: 43 Ecuador
SUMMARY OF CHARGES
International Conspiracy to Distribute Controlled Substances– Title 18, U.S.C., Section 959, 960, and 963
Maximum penalty: Life in prison with a mandatory minimum of ten years in prison
INVESTIGATING AGENCIES
Drug Enforcement Administration
Federal Bureau of Investigation
Internal Revenue Service, Criminal Investigations
U.S. Marshals Service
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Husband and Wife Sentenced for $65 Million TRICARE FraudRead the Press Release
NEWS RELEASE SUMMARY – January 25, 2024
SAN DIEGO - Jimmy and Ashley Collins, a married couple living in Birchwood, Tennessee, were sentenced in federal court today for orchestrating a health care fraud scheme that bilked TRICARE – the health care program that covers United States service members – out of more than $65 million.
Jimmy Collins received a 10-year prison sentence and was immediately taken into custody; Ashley Collins was sentenced to 18 months home confinement. The couple was ordered to pay $65,679,512.71 in restitution to Defense Health Agency and TRICARE.
The couple pleaded guilty in July 2023, admitting they worked with others to recruit sham TRICARE beneficiaries, mainly Marines from southern California who agreed to receive expensive, compounded medications in return for a kickback of approximately $300. Doctors and a nurse practitioner at Choice MD, a Tennessee medical clinic owned and operated by the Collinses, then wrote prescriptions for the sham TRICARE beneficiaries, despite never examining the patients.
Choice MD sent the prescriptions to The Medicine Shoppe, a small pharmacy in Bountiful, Utah, which filled the prescriptions and later received reimbursement from TRICARE. At the peak of the conspiracy, The Medicine Shoppe billed TRICARE over $10,000 (and at times upwards of $20,000) per fraudulent compounded prescription.
Between December 2014 and May 9, 2015 – the day TRICARE stopped reimbursing for compounded medications – the conspirators wrote thousands of fraudulent prescriptions amounting to $65,679,512 in fraudulent reimbursements.
The owners of The Medicine Shoppe then paid kickbacks to the Collinses based on a percentage of the TRICARE reimbursement. Between approximately February and July 2015, these kickback payments to the Collinses totaled at least $45.7 million dollars. The Collinses, in turn, kicked back a small percentage of that money (approximately 10 percent) to recruiters working as part of their network, including defendants Josh Morgan, Kyle Adams, and Daniel Castro.
Authorities seized numerous items and properties purchased by the Collinses and others with the proceeds of the fraud: an 82-foot yacht; multiple luxury vehicles, including two Aston Martins; a multimillion-dollar investment annuity; gold and silver bars; dozens of pieces of farm equipment and tractor-trailer trucks; and three pieces of Tennessee real estate.
The Collinses are the latest members of the conspiracy to be sentenced. The doctors who prescribed the compounded creams, and the corporate owner of the pharmacy that filled these prescriptions, were previously sentenced for their roles in the conspiracy to commit healthcare fraud. The patient recruiters and the nurse practitioner who facilitated the conspiracy await sentencing.
“Access to medical care is not a benefit for the service member, it’s a benefit to the rest of America to have a healthy and well cared for military force,” said U.S. Attorney Tara McGrath. “Today, defendants who defrauded millions of tax dollars intended for the care of our nation’s service members were held accountable for their crimes. Yachts and Aston Martins are a fantasy now, and prison is the reality.”
“Today’s sentencing demonstrates the commitment of the Department of Defense Office of Inspector General, Defense Criminal Investigative Service (DCIS), and our law enforcement partners, to aggressively pursue illegal actions that pilfer taxpayer funds and degrade our military healthcare system,” said Acting Special Agent-in-Charge Gregory Shilling, DCIS Southwest Field Office. “DCIS will continue to diligently investigate these schemes in order to protect our service members and their families.”
“TRICARE fraud is not a victimless crime; it is theft of taxpayer dollars that would be directly used in support of the health and readiness of our warfighters,” said Special Agent-in-Charge Greg Gross of the NCIS Economic Crimes Field Office, “Today’s sentencing demonstrates NCIS’ and our law enforcement partners’ dedication to ensure the integrity of our government programs for the sake of the U.S. military and taxpaying public.”
DEFENDANTS Case Number: 18-CR-0432-JLS
Jimmy Collins Age: 59 Birchwood, TN
Ashley Collins Age: 37 Birchwood, TN
SUMMARY OF CHARGES
Jimmy Collins:
Receipt of Illegal Remuneration, in violation of 42 U.S.C. §1320(a)-7b(b)(1)(A)
Maximum penalty: Ten years in prison and $100,000 fine or double loss amount, whichever is greater
An order of restitution requiring defendant to repay at least $65,679,512.71 to DHA/TRICARE
Ashley Collins:
Conspiracy, in violation of 18 U.S.C. § 371
Maximum penalty: Five years in prison and $250,000 fine or double loss amount, whichever is greater
An order of restitution requiring defendant to repay at least $65,679,512.71 to DHA/TRICARE
INVESTIGATING AGENCIES
Defense Criminal Investigative Service
Naval Criminal Investigative Service
IRS Criminal Investigation Division, Gulfport, MS
Federal Bureau of Investigation - Jackson, MS Field Office
Man Who Plundered Investors’ Money in $8.1 Million Ponzi Scheme Sentenced to 90 Months in PrisonRead the Press Release
NEWS RELEASE SUMMARY – January 22, 2024
SAN DIEGO – Richard Lee Ramirez was sentenced in federal court today to seven-and-a-half years in prison for running a Ponzi scheme that resulted in millions of dollars in losses to investors.
Between 2018 and 2022, Ramirez and his company, JMJ Capital Group (JMJ), obtained more than $8.1 million from dozens of investors and caused more than $5.4 million in losses through his scheme and misrepresentations.
Ramirez was indicted by a federal grand jury in September 2022 and pleaded guilty to securities fraud and money laundering charges in August 2023. In addition to Ramirez’s prison sentence, the court ordered forfeiture of $8,188,928 and restitution to 34 victims totaling $5,440,192.50.
The defendant solicited investments by lying to investors. Ramirez made several different misrepresentations, telling various investors, for instance: JMJ purchased and resold personal protective equipment (PPE); factored accounts receivable; sold furniture to major home improvement retailers; and contracted with a cruise line to rebuild and refurbish ships’ air conditioning units. JMJ did no such business.
Ramirez promised investors high short-term and medium-term returns on their money—between 10 and 30 percent—but they never received those returns. Ramirez also falsely told investors they could withdraw their money at any time, and sent them fake funding agreements and falsified account statements to carry out the scheme.
Rather than using investors’ money as promised, Ramirez used it to pay for his own personal expenses and to make Ponzi-style payments to other investors. He spent hundreds of thousands of dollars on travel, lodging, clothing, jewelry, and entertainment, and he spent over a half million dollars of investor funds on luxury cars including a Rolls Royce and Cadillac Escalade. Ramirez also used the money to take luxury vacations, to charter private jets and yachts, and to make an escrow payment on a property in San Diego County.
“Fraud and greed don’t pay unless you are in the market for a lengthy prison sentence. We hope this outcome provides some relief to the 34 victims, many of whom suffered devastating losses,” said U.S. Attorney Tara McGrath.
“The lasting effects of financial crimes on unsuspecting victims can be devasting both personally and economically,” said FBI San Diego Special Agent in Charge Stacey Moy. “The FBI and its law enforcement partners will continue to seek justice for individuals and businesses who are victimized by criminals who seek to defraud others for personal gain.”
This case is being prosecuted by Assistant U.S. Attorneys Peter Horn and Kevin Mokhtari.
DEFENDANT Case Number 22cr2264-BAS
Richard Lee Ramirez Age: 54 Encinitas, CA
SUMMARY OF CHARGES
Securities Fraud – Title 18, U.S.C., Sections 78j(b), 78ff, and Title 17, C.F.R., Section 240.10b-5
Money Laundering – Title 18, U.S.C., Section 1957
Criminal Forfeiture – Title 18, U.S.C., Sections 981(a)(1)(C), 982(a)(1), 982(b), and Title 28, U.S.C., Section 2461(c)
Maximum penalty: Twenty years in prison and $5 million fine
AGENCIES
Federal Bureau of Investigation
Securities and Exchange Commission
U.S. Attorney’s Office Collects $30.7 Million in Civil and Criminal Actions in Fiscal Year 2023Read the Press Release
NEWS RELEASE SUMMARY – January 19, 2023
SAN DIEGO – The U.S. Attorney’s Office for the Southern District of California collected $30,730,539.87 in criminal and civil actions in Fiscal Year 2023. Of this amount, $27,973,011.98 came from criminal actions and $2,757,527.89 from civil actions.
Additionally, the Southern District of California worked with other U.S. Attorney’s Offices and components of the Department of Justice to collect $845,298.42 in cases pursued jointly by these offices.
“We pursue every possible means to compensate victims for loss and trauma suffered as a result of criminal acts,” said U.S. Attorney Tara McGrath. “Over the past year we joined forces with investigators and victim rights advocates to maximize restitution and return assets as quickly and efficiently as possible.”
For example, in United States v. Glenn Arcaro, 21CR2542-TWR, the government recovered and subsequently sold bitcoin controlled by the defendant, resulting in $17,647,813 in restitution paid directly to the victims of his criminal activity. The U.S. Attorneys’ Office also secured an additional $1,003,900.17 in forfeited funds for victims. Please see https://www.justice.gov/usao-sdca/pr/victims-bitconnect-scheme-receive-more-17-million-compensate-losses.
The U.S. Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims Fund, which distributes the funds collected to federal and state victim compensation and victim assistance programs.
Additionally, the U.S. Attorney’s Office in the Southern District of California, working with partner agencies and divisions, collected $9,072,677 in asset forfeiture actions in Fiscal Year 2023. Forfeited assets deposited into the Department of Justice Assets Forfeiture Fund are used to restore funds to crime victims and for a variety of law enforcement purposes.
San Diego County Veterinary Clinic Pays $125,000 for Mishandling Controlled SubstancesRead the Press Release
NEWS RELEASE SUMMARY – January 17, 2024
SAN DIEGO – Best Veterinary Care, a veterinary clinic in Valley Center, has paid $125,000 to resolve alleged Controlled Substances Act violations for diversion of controlled substances and failure to properly keep records necessary to account for controlled substances.
The settlement arises from a U.S. Drug Enforcement Administration investigation into suspected illegal activity at Best Veterinary Care d/b/a Valley Center Veterinary Clinic. Based on an inventory audit conducted by the DEA and other investigative activity, the Government concluded that Best Veterinary Care committed multiple violations of the Controlled Substances Act from 2020 through 2022. The alleged violations include failing to control the clinic’s inventory of controlled substances, failing to maintain a complete record of controlled substances, and failing to maintain effective controls to guard against theft and diversion of controlled substances. Best Veterinary Care’s failure to control inventory included unaccounted-for pills, including benzodiazepines alprazolam (e.g., Xanax) and diazepam and tramadol, an opioid.
In addition to paying $125,000 to resolve the government’s claims, Best Veterinary Care entered into a Memorandum of Agreement with the DEA requiring Best Veterinary Care to undertake additional measures to handle controlled substances properly and safely.
“Veterinarians have a responsibility to keep opioids and other dangerous drugs out of the wrong hands,” said U.S. Attorney Tara McGrath. “Failure to do so is not only reckless but is illegal and contributes to the raging opioid epidemic in this country.”
“Veterinarians, like all registrants, must dispense controlled substances in a lawful manner and provide effective controls to prevent the diversion of controlled substances,” said DEA Special Agent in Charge Shelly Howe. “DEA will continue to ensure registrants are upholding these policies and procedures.”
This settlement was the result of a coordinated effort by the U.S. Attorney’s Office for the Southern District of California and the Drug Enforcement Administration.
To report a tip directly to a DEA representative regarding medical personnel writing suspicious opioid prescriptions and pharmacies dispensing large amounts of opioids, call (571) 324-6499, or visit the DEA’s website (https://www.deadiversion.usdoj.gov/) and click on “Report Illicit Pharmaceutical Activities.”
This case was prosecuted by Assistant U.S. Attorney Dylan M. Aste.
The claims resolved by the settlement are allegations only, and there has been no determination of liability.
Mexican Mafia Associates Sentenced to Lengthy Prison TermsRead the Press Release
NEWS RELEASE SUMMARY – January 16, 2024
SAN DIEGO – Marquella Marshall and Marsha Delacruz were sentenced in federal court today to 180 months and 48 months in prison, respectively, for their parts in a methamphetamine distribution conspiracy that operated in San Diego jails.
According to court records, Marshall, a Texas resident who previously lived in San Diego, is an Eastside San Diego street gang member and a “facilitator” and “secretary” for the Mexican Mafia. In that role she was tasked by high-ranking Mexican Mafia members to communicate on their behalf, collect and launder money, handle drug transactions, and direct street operations on the Mafia’s behalf.
At today’s hearing, U.S. District Judge Larry Alan Burns described Marshall as “a conduit” for the Mexican Mafia and further described the distribution conspiracy as “an assault on the integrity of the prison system.”
U.S. Attorney Tara McGrath said: “Drug smuggling and use in prisons result in overdose, violence, and power struggles. These significant sentences are a strike against the prison drug culture which puts guards and staff at risk and exists in large part because of dangerous gangs like the Mexican Mafia.”
“Our focus is and always will be on protecting our communities from violent gang activity and the distribution of dangerous narcotics," said FBI San Diego Acting Special Agent in Charge John Kim. "This was a collective effort, and we thank our partners that make up the Violent Crime Task Force – Gang Group for their coordination in disrupting the illegal activities of the Mexican Mafia and ensuring Marshall and Delacruz suffer the consequences of their actions.”
Delacruz, of Lemon Grove, who also is an Eastside San Diego street gang member, worked at the direction of Marshall. As part of the conspiracy, Marshall, Delacruz, and others mailed methamphetamine to various locations, including jails and prisons in Southern California. Marshall and Delacruz disguised some of the narcotics-laden packages as legal mail to avoid detection by law enforcement and prison/jail officials.
Marshall, Delacruz, and several other Mexican Mafia associates were apprehended after an investigation by the FBI Violent Crimes Task Force - Gang Group.
DEFENDANTS Case Number 23-cr-00373-LAB
Marquella Marshall Age: 41 Houston, TX
Marsha Delacruz Age: 47 Lemon Grove, CA
SUMMARY OF CHARGES
Conspiracy to Distribute of Methamphetamine – Title 21, U.S.C., Sections 846 and 841(a)(1)
Maximum penalty: Life in prison, with a mandatory minimum of ten years (Marshall only), and $10 million fine
AGENCY
Federal Bureau of Investigation, Violent Crimes Task Force – Gang Group (VCTF-GG), which included investigators from the following agencies:
- Federal Bureau of Investigation
- San Diego Police Department
- Homeland Security Investigations
- Bureau of Alcohol, Tobacco, Firearms and Explosives
- California Department of Corrections
- San Diego County Sheriff’s Department
- Chula Vista Police Department
- National City Police Department
- Bureau of Prisons
- U.S. Postal Inspection Service
- San Diego District Attorney’s Office Investigations
Sinaloa Cartel Associate Sentenced After Decades of Cocaine TraffickingRead the Press Release
A Mexican national was sentenced today to 21 years and 10 months in prison and ordered to forfeit $280 million for his role in an international conspiracy to transport tens of thousands of kilograms of cocaine into the United States over the span of four decades.
In March 2023, Raul Flores-Hernandez, 71, pleaded guilty in the U.S. District Court for the District of Columbia to international cocaine trafficking conspiracy.
“For more than three decades, Raul Flores-Hernandez worked with the leaders of the world’s largest, most violent cartels, including El Chapo of the Sinaloa Cartel, to traffic deadly drugs into the United States,” said Attorney General Merrick B. Garland. “The Justice Department has held him accountable for his crimes, and he has been sentenced to more than 20 years in prison. Anyone who profits from the violence and devastation of the illegal drug trade at the expense of the American people should be prepared to face the full force of the Justice Department.”
“It may be impossible to quantify the destruction wrought by this defendant channeling vast quantities of cocaine across the globe,” said U.S. Attorney Tara McGrath for the Southern District of California. “One thing is certain—the world is far safer with this sentence.”
According to court documents, Flores-Hernandez was the leader of a drug trafficking organization responsible for trafficking hundreds of millions of dollars’ worth of cocaine from South America through Mexico and into the United States. For example, in 2003, Flores-Hernandez and his partners used oil tanks to smuggle more than two tons of cocaine into Mexico every week, at least half of which was imported into the United States. In 2007 and 2008, Flores-Hernandez sent tens of millions of dollars in U.S. currency to Colombia to purchase cocaine. During his time as a narcotrafficker Flores-Hernandez was closely aligned with the leaders of some of the most violent drug cartels, including Joaquin “El Chapo” Guzman of the Sinaloa Cartel and Hector Beltran of the Beltran Leyva Organization.
“Raul Flores Hernandez spent decades working closely with El Chapo and others to transport hundreds of kilograms of cocaine from South America, through Mexico, into the United States, knowing it would devastate American communities,” said Administrator Anne Milgram of the Drug Enforcement Administration (DEA). “He will now spend decades in prison. I commend DEA’s Los Angeles Field Division and San Ysidro District Office and our law enforcement partners for their work bringing Flores Hernandez to justice.”
“Today’s sentencing is the result of the close cooperation and dedication of HSI’s domestic and international law enforcement partners,” said Executive Associate Director Katrina W. Berger of Homeland Security Investigations (HSI). “HSI is dedicated to working with our partners to investigate, disrupt, and dismantle those transnational criminal organizations that threaten national security and the safety of our communities.”
The DEA Los Angeles Field Division and San Ysidro Office, as well as HSI San Diego, investigated the case, with assistance from the U.S. Marshals Service’s Investigative Operations Division.
Acting Assistant Deputy Chief Melanie L. Alsworth and Trial Attorneys Kirk Handrich and Jonathan Hornok of the Criminal Division’s Narcotic and Dangerous Drug Section and Assistant U.S. Attorney Kyle Martin for the Southern District of California represented the United States during Flores-Hernandez’s sentencing.
The Justice Department’s Office of International Affairs worked with Mexican authorities to secure the arrest and extradition of Flores-Hernandez.
Prolific Drug Trafficker Sentenced to Almost 22 Years in Prison and Ordered to Forfeit $280 millionRead the Press Release
SAN DIEGO –Narcotrafficker Raul Flores Hernandez was sentenced in federal court today to 262 months in prison for moving hundreds of millions of dollars worth of cocaine into the United States over more than three decades. He was also ordered to forfeit $280 million in drug proceeds.
According to court documents, Flores Hernandez was a leader of a prolific drug trafficking organization that worked closely with Joaquin “El Chapo” Guzman of the Sinaloa Cartel and Hector Beltran of the Beltran Leyva Organization. He utilized his connections with suppliers in South America and corrupt government employees to transport hundreds of millions of dollars’ worth of cocaine into Mexico for importation into the United States.
“It may be impossible to quantify the destruction wrought by this defendant channeling vast quantities of cocaine across the globe,” said U.S. Attorney Tara McGrath. “One thing is certain - the world is far safer with this sentence.”“DEA and our partners will continue to hold drug traffickers, like Mr. Flores, responsible for their actions,” said DEA Special Agent in Charge Shelly Howe. We are steadfast in our commitment to reduce addiction, prosecute criminals, and make our communities safer.”
“Today’s sentencing is the culmination of years of relentless work by Homeland Security Investigations (HSI) and its partners targeting the Sinaloa Cartel,” said HSI San Diego Special Agent in Charge Chad Plantz. “This investigation highlights HSI’s dedication to go after cartel members importing dangerous drugs into our communities. This substantial sentence not only holds Mr. Hernandez accountable but also sends a resounding message that transnational criminal organizations are being continuously investigated and their leaders will be brought to justice.”
During more than three decades as a narcotrafficker, Flores was closely aligned with the leaders of some of the most violent drug cartels, including. In addition to leveraging his relationships with cartel bosses, Flores benefited from corrupt government employees who facilitated Flores’s drug trafficking activities in exchange for bribes.
This prosecution was a joint effort between the Southern District of California and the Department of Justice Criminal Division Narcotics and Dangerous Drugs Section.
Assistant U.S. Attorney Kyle Martin for the Southern District of California, Acting Assistant Deputy Chief Melanie L. Alsworth and Trial Attorneys Kirk Handrich and Jonathan Hornok of the Criminal Division’s Narcotic and Dangerous Drug Section prosecuted the case.
DEFENDANTS Case Number 17-CR-51 (BAH) (District of D.C.)
Raul Flores Hernandez Age: 74 MexicoSUMMARY OF CHARGES
International Conspiracy to Distribute Cocaine, 21 U.S.C. §§ 959, 960, 963
Maximum penalty: Life in PrisonAGENCY
Homeland Security Investigations
Drug Enforcement Administration
This prosecution is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.Former U.S. Navy Doctor Sentenced for Perpetrating a $2 Million Insurance Fraud SchemeRead the Press Release
SAN DIEGO – Dr. Michael Villarroel, who at the time of his crimes was a doctor in the U.S. Navy, was sentenced in federal court today to one year and one day in custody after admitting that he and others participated in a scheme to file false claims to obtain unearned benefits from an insurance program that compensates service members who suffer serious and debilitating injuries while on active duty. He was also ordered to pay $180,000 as criminal forfeiture. A restitution hearing is scheduled on April 2.
Villarroels’ sentence followed his guilty plea to conspiracy to commit wire fraud. According to his plea agreement, participants in the scheme obtained approximately $2 million in payments from fraudulent claims submitted to the insurance program - Traumatic Servicemembers Group Life Insurance Program, or TSGLI.
Villarroel admitted that from 2012 to at least December 2015, he conspired with other members of the Navy to obtain money from the United States by making claims for life insurance payments based on exaggerated or fake injuries and disabilities. Villarroel certified that he reviewed the records and determined the injuries were legitimate when in fact he knew they were fake or exaggerated. At times Villarroel falsely stated that he interviewed the claimant and provided others service members actual medical records to be used in fabricating claims. Villarroel knew the claims were false but he signed off on them to receive kickbacks once the fake injuries resulted in insurance payouts.
“As fraudulent schemes go, this one was egregious,” said U.S. Attorney Tara McGrath. “Today the defendant found out there is a high price to be paid for pocketing money intended for injured and traumatized servicemembers.”
“Fraudulent activities compromise the integrity of government programs and services and divert compensation from deserving recipients,” said Special Agent in Charge Rebeccalynn Staples with the Department of Veterans Affairs Office of Inspector General’s Western Field Office. “This sentence holds the defendant accountable for his dishonest actions, and the VA OIG will continue to work tirelessly with our law enforcement partners to ensure schemes like this are uncovered, investigated, and prosecuted to the fullest extent of the law.”
“Michael Villaroel’s blatant abuse of his position of trust within the United States military is unscrupulous and this sentencing proves that such actions will not be tolerated,” said FBI San Diego Acting Special Agent in Charge John Kim. “The FBI and its law enforcement partners remain committed to aggressively disrupt, and, ultimately, bring to justice anyone who defrauds the United States government.”
“Dr. Villarroel betrayed his oath to the Navy and has been held to account for his role in a scheme that diverted more than $2 million in critical resources away from wounded service members recovering from traumatic injuries,” said Special Agent in Charge Greg Gross of the NCIS Economic Crimes Field Office. “NCIS and our partners are committed to rooting out corruption that threatens the safety and wellbeing of our service members and their families.”
The Traumatic Servicemembers Group Life Insurance (TSGLI) program was administered by Prudential for the Navy and funded by servicemembers and the Department of the Navy. TSGLI provided financial assistance to servicemembers recovering from traumatic injuries.
According to court records, Villarroel’s co-defendants were part of the Explosive Ordinance Disposal Expeditionary Support Unit One (“EOD ESU One”) based in Coronado, California.
Assistant U.S. Attorneys Peter Ko and Mark Conover for the Southern District of California are prosecuting the case.
DEFENDANT 18CR1674-JLS
Michael Villarroel 51 Coronado, CaliforniaRELATED CASES
Kelene Meyer 18CR1674-JLS Jacksonville, FL
Christopher Toups 18CR1674-JLS White, GA
Paul Craig 18CR1674-JLS Austin, TX
Richard Cote 18CR1674-JLS Oceanside, CA
Earnest Thompson 18CR1674-JLS Murrieta, CA
Ronald Olmsted 20CR0659-JLS Mobile, AL
Anthony Coco 20CR0197-JLS San Diego, CA
Stephen Mulholland 20CR0052-JLS Panama City Beach, FLSUMMARY OF CHARGES
18 U.S.C. § 1349, Conspiracy to Commit Wire Fraud
Maximum Penalty: Twenty years in prison, $250,000 fine, forfeiture and restitution
Others:
18 U.S.C. § 1349, Conspiracy to Commit Wire Fraud
Maximum Penalty: Twenty years in prison, $250,000 fine, forfeiture and restitution
18 U.S.C. § 1343, Wire Fraud
Maximum Penalty: Twenty years in prison, $250,000 fine, forfeiture and restitution
18 U.S.C. § 287, Making a False Claim
Maximum Penalty: Five years in prison, $250,000 fineAGENCIES
Federal Bureau of Investigation
Naval Criminal Investigative Service
Department of Veterans Affairs - Office of Inspector GeneralNational City Man Sentenced for Transporting Teens for ProstitutionRead the Press Release
NEWS RELEASE SUMMARY – January 5, 2024
SAN DIEGO – Kenneth Tenorio of National City was sentenced in federal court today to 106 months in prison for transporting two female teens from San Diego to Phoenix, Arizona and El Paso, Texas, for the purpose of prostitution.
U.S. District Court Judge Cathy Bencivengo admonished the defendant for his treatment of victims, saying: “You just took advantage of their vulnerabilities to put money in your pocket.” She noted the maximum sentence of 120 months was appropriate but gave Tenorio credit for the time he spent in custody in Texas on local charges prior to the federal proceedings.
According to court records, Tenorio’s conduct spanned multiple states and involved multiple victims, including juveniles. The defendant exploited women and minors who had been removed from their homes and placed in the foster care system as part of his overall scheme to profit from their commercial sex work.
Tenorio pleaded guilty on August 8, 2023, admitting that he transported two of his victims from California to Arizona and Texas for the purpose of offering them for commercial sex for his own financial gain. The defendant used his Megapersonals account – a dating website that is frequently used to solicit prostitution – to post commercial sex advertisements featuring the two victims wearing lingerie. The defendant expected his victims to provide him with a portion of the proceeds they earned from engaging in commercial sex acts in these various locations.
According to his plea agreement, beginning in September 2020, the defendant also trafficked a 15-year-old minor identified as JF1. The defendant knew JF1 was a minor and nonetheless sent text messages to JF1 for the purpose of recruiting and enticing her to engage in prostitution.
The plea agreement reflects that in October 2020, JF1 stayed with the defendant at his residence in National City, California, and he used a false California identification to post online commercial sex advertisements featuring her. He also instructed her on how to engage in prostitution on “the blade” – a slang term that refers to an area of town where prostitutes/sex workers solicit sex-buyers – and informed her that he would provide protection for a fee. The defendant admitted that JF1 worked “the blade” for him a number of times in October 2020, and each time, he drove her there and picked her up, collecting a portion of the illicit proceeds she earned.
“Sex trafficking is a deplorable crime that impacts victims for a lifetime,” said U.S. Attorney Tara McGrath. “This sentence brings justice to the victims and the community is safer with this defendant off the streets. People being exploited are often overlooked and isolated. If you suspect someone is in an unsafe situation or they are being controlled by a “pimp,” romantic partner, manager or employer, or anyone who monitors their movements, their spending and/or their communications, please report it to law enforcement. If we know about it, we can offer help.”
“This lengthy sentence serves as an appropriate punishment for the defendant’s role in exploiting multiple victims for the sole purpose of financial gain, including preying upon a minor,” said Chad Plantz, special agent in charge for HSI San Diego. “Now behind bars, this man cannot participate in the lowest form of humanity – placing our most vulnerable population in harm’s way. HSI and our partnered agencies are committed to aggressively targeting those who continually victimize people for profit.”
“Predators like Mr. Tenorio take advantage of vulnerable people and underage victims. They alternate locations, thinking law enforcement won’t catch on. But that’s not true, and the results of this case as well as this substantial sentence should be a warning to other criminals,” said Chula Vista Police Chief Roxana Kennedy. “I’m proud of our detectives for playing a key role in the initiation and follow up of this investigation. The Chula Vista Police Department remains dedicated to working with all of our law enforcement partners and community organizations to combat sex trafficking and hold those who participate in these unconscionable acts accountable.”
January is National Human Trafficking Prevention Month, a time to raise awareness and educate the public about how to identify and prevent this crime. Indicators that someone is being trafficked include frequent running away; sudden separation or isolation from friends and loved ones; changes in behavior, appearance, and attire; new friend groups; unexplained new or multiple cell phones; and secrecy with phones and social media.
If you believe you may know someone who is in trouble, held in a forced work situation, or being exploited, please contact Homeland Security Investigations at 1-866-347-2423, the FBI, your local police department, the sheriff, or the National Human Trafficking Hotline at 1-888-373-7888.
“We can all do our part to protect the most vulnerable among us,” McGrath said. “Working together, we can find more of the people in need, offer them support, and deliver justice to those who would trade freedom for profit.”
This case is being prosecuted by Assistant U.S. Attorney Jill S. Streja.
DEFENDANTS Case Number 22cr2746-CAB
Kenneth Tenorio 54 National City, CA
SUMMARY OF CHARGES
Transportation for Purposes of Prostitution – Title 18, U.S.C., Section 2421
Maximum penalty: Ten years in prison and $250,000 fine
AGENCIES
The investigation was led by Homeland Security Investigations, the Chula Vista Police Department, and the San Diego Human Trafficking Task Force, a regional, multi-agency effort led by the California Department of Justice dedicated to supporting survivors and holding traffickers accountable. The task force is comprised of numerous federal, state, and local agencies, as well as the Southwest Border High Intensity Drug Trafficking Area program. The investigation was also supported by the San Diego District Attorney’s Office.
Anyone who has information about human trafficking should report that information to the National Human Trafficking Hotline toll-free at 1-888-373-7888, which is available 24 hours a day, seven days a week. For more information about human trafficking, please visit www.humantraffickinghotline.org.
Fugitive Leonard Francis Back in San Diego; Appears in Federal CourtRead the Press Release
NEWS RELEASE SUMMARY – January 4, 2024
SAN DIEGO – Leonard Glenn Francis, the infamous fugitive who presided over a massive decade-long conspiracy involving scores of U.S. Navy officials, tens of millions of dollars in fraud and millions of dollars in bribes and gifts, appeared in federal court today for the first time since he cut off his electronic monitoring bracelet and absconded from house arrest in San Diego in September 2022.
At the hearing, the government asked U.S. District Judge Janis L. Sammartino to set a new sentencing date immediately to avoid delays, but the judge postponed a decision based on a request by Francis’ legal team to withdraw from the case in the aftermath of his disappearance. The judge set a status hearing for February 8, 2024, at 9 a.m.
Francis, who fled the United States before he could be sentenced, was returned to the United States from Venezuela as part of a prisoner swap on December 20, 2023. From Venezuela, he arrived in the Southern District of Florida and appeared in federal court the next day in Miami, where he was ordered removed to the Southern District of California. Francis arrived in San Diego on January 3.
Francis, the owner and chief executive of Glenn Defense Marine Asia, which provided services to U.S. Navy ships in ports in the Asia-Pacific region, pleaded guilty to bribery and fraud charges in 2015. As a result of the federal investigation, more than 30 U.S. Navy officials and associates pleaded guilty.
“Leonard Francis is no longer on the run. He is on the hook,” said U.S. Attorney Tara K. McGrath. “Mr. Francis never should have fled the United States while he was waiting to be sentenced. In fact, he was ordered by a federal judge not to do so. Now that he is back in San Diego, Mr. Francis will be held fully accountable for his crimes.”
DEFENDANTS Case Number 13-CR- 4287
Leonard Glenn Francis Age: 59 Singapore
SUMMARY OF CHARGES
Conspiracy to Commit Bribery, in violation of 18 U.S.C. § 371. Maximum penalty five years in prison, $250,000 fine or twice the gross pecuniary gain or loss from the offense, whichever is greater;
Bribery, in violation of 18 U.S.C. § 201. Maximum 15 years in prison, $250,000 fine or twice the gross pecuniary gain or loss from the offense, whichever is greater. Mandatory restitution.
Conspiracy to Defraud the United States, in violation of in violation of 18 U.S.C. sec. 371. Maximum penalty five years in prison $250,000 fine or twice the gross pecuniary gain or loss from the offense, whichever is greater. Mandatory restitution.
INVESTIGATING AGENCIES
Defense Criminal Investigative Service
Naval Criminal Investigative Service
Defense Contract Audit Agency
Phillips Respironics Pays $2.4 Million for Allegedly Giving KickbacksRead the Press Release
NEWS RELEASE SUMMARY – December 22, 2023
SAN DIEGO – Phillips Respironics, a manufacturer of durable medical equipment based in Pennsylvania, has paid $2,471,359.25 to resolve allegations that it violated the False Claims Act by giving kickbacks to sleep laboratories.
The Anti-Kickback Statute prohibits paying money or giving goods to induce referrals for medical services or items covered by a federal health care program, such as Medicare, Medicaid or TRICARE. Claims submitted to these programs in violation of the Anti-Kickback Statute give rise to liability under the False Claims Act.
The settlement resolves allegations that from 2016 through 2021, Philips RS North America LLC f/k/a Philips Respironics, Inc. provided sleep labs with free masks used to treat and diagnose sleep-related respiratory disorders to induce the labs’ physicians to write referrals or prescriptions for Respironics-brand masks that suppliers would fill and bill to federal health care programs.
“When kickbacks are used as bribes, patients suffer,” said U.S. Attorney Tara McGrath. “Companies like Phillips Respironics will be held accountable if they undermine our trust in the medical system and shift medical advice from a patient’s best interest to lining their own pockets.”
“Respironics’ improper inducements corrupted the integrity of federal healthcare programs, including the Department of Defense's (DoD) TRICARE program,” said Bryan D. Denny, Special Agent-in-Charge of the DoD Office of Inspector General, Defense Criminal Investigative Service (DCIS), Western Field Office. “DCIS will continue to pursue those who defraud or attempt to defraud TRICARE, because those deceptive actions ultimately harm those defending our country and their families.”
This settlement was the result of a coordinated effort by the U.S. Attorney’s Office for the Southern District of California; the Defense Criminal Investigative Service; the Department of Health and Human Services, Office of Inspector General and Office of Counsel to the Inspector General; the Defense Health Agency Office of General Counsel; the Civil Division of the United States Department of Justice; and the National Association of Medicaid Fraud Control Units.
This case was prosecuted by Assistant U.S. Attorney Dylan M. Aste.
The claims resolved by the settlement are allegations only, and there has been no determination of liability.
Fresno Man Admits He and Coconspirator Murdered Family of Five in Their Home, including Three ChildrenRead the Press Release
NEWS RELEASE SUMMARY – December 21, 2023
SAN DIEGO – Christopher Baltezar Hernandez of Fresno, California, pleaded guilty in federal court today, admitting that he and another man stalked and fatally shot a family of five – including three children - in their Tijuana home on December 3, 2021.
According to court records, Hernandez traveled from Fresno, California, to Tijuana, Mexico, through San Diego, armed with an assault rifle, .223 caliber ammunition, and two revolver speed loaders on December 3, 2021. That same day, Hernandez met up with codefendant Victor Aguilar, who has already pleaded guilty and is awaiting sentencing.
Both Hernandez and Aguilar, armed with a .223 assault rifle and revolver and wearing dark clothes and gloves, traveled to the victims’ residence in Tijuana. According to the plea agreement, which identified the victims by their initials, the defendants shot and killed J.H. and her eight-year-old daughter, A.M.M., in the kitchen. G.M.V. was shot and killed while attempting to shield the other two children behind a bedroom door. The door was forced open and nine-year-old A.M. and four-year-old S.M. were each shot in the head.
Prior to the murders, Hernandez and Aguilar had researched the victims’ address and the surrounding area over 200 times. Hernandez also bought the parts and built a fully functional .223 caliber assault rifle as well as a pair of revolver speed loaders. On the day of the murders, Hernandez and Aguilar acquired a revolver in Tijuana, Mexico.
A sentencing hearing for Hernandez is scheduled for March 18, 2024, at 10 a.m. before U.S. District Judge Linda Lopez. Aguilar’s sentencing hearing is currently scheduled for June 26, 2024, also before Judge Lopez.
This case is being prosecuted by Assistant U.S. Attorneys Mario Peia, Matthew Brehm and Fred Sheppard.
DEFENDANTS Case Number 22cr778-LL
Christopher Baltezar Hernandez Age: 27 Fresno, CA
Victor Armondo Aguilar Age: 22 Tijuana, MX
SUMMARY OF CHARGES
Conspiracy to Murder – Title 18, U.S.C., Section 1117
Maximum penalty: Life in prison
Stalking Resulting in Death – Title 18, U.S.C., Section 2261A
Maximum penalty: Life in prison
AGENCY
Federal Bureau of Investigation
San Diego County Sheriff’s Department
Chula Vista Woman Admits Coordinating Alien Smuggling Through Otay Mesa Port of EntryRead the Press Release
NEWS RELEASE SUMMARY – December 19, 2023
SAN DIEGO – Ericka Aldana of Chula Vista pleaded guilty in federal court today, admitting that she managed all aspects of a human smuggling operation - from helping to place undocumented immigrants in trunks, to coaching drivers to successfully cross the Otay Mesa Port of Entry, to staging immigrants at a Chula Vista stash house, to helping transport them to their final destinations in the U.S.
Aldana admitted that she recruited at least five drivers, procured vehicles for their use, obtained passports for them, and coached them how to dress and how to answer questions by Customs and Border Protection officers. Aldana said she crossed the border in tandem with the drivers to direct them to what she considered the less risky border lanes.
Aldana acknowledged smuggling more than 25 aliens during a five-year span, some of whom paid as much as $10,000 to be smuggled into the United States.
“Ms. Aldana avoided getting caught for years, but she could not evade accountability forever,” said U.S. Attorney Tara K. McGrath. “Federal law enforcement brought a carefully choreographed network of cross-border human smuggling to justice today.”
“Human smuggling is a serious and dangerous offense,” said Sidney K. Aki, Director of Field Operations for Customs and Border Protection’s San Diego Field Office. “This effort was an outstanding demonstration of law enforcement partnership and commitment to dismantling criminal organizations that exploit vulnerable migrants for profit.”
“Human smuggling is driven by greed as the defendant demonstrated in this case,” said Chad Plantz, special agent in charge for HSI San Diego. “HSI and partnered law enforcement agencies will not stand for this deceitful and often violent act of human smuggling. We are committed to bringing down human smugglers one by one.”
The defendant is scheduled to be sentenced on March 15, 2024, at 9 a.m. before U.S. District Judge Cathy Ann Bencivengo.
This case is being prosecuted by Assistant U.S. Attorneys Julie A. Bauman and Michael A. Deshong.
DEFENDANTS Case Number 23cr2174-CAB
Ericka Aldana Age: 40 Chula Vista, California
SUMMARY OF CHARGES
Conspiracy to Bring in Aliens Without Presentation – Title 8, United States Code, Section 1324(a)(2)(B)(iii) and Title 18, United States Code, Section 371
Maximum penalty: Five years in prison and $250,000 fine
AGENCIES
Homeland Security Investigations
United States Customs and Border Protection
Woman Sentenced to 31 Months in Prison for Stealing Stimulus Payments and Purchasing Mercedes-Benz and JewelryRead the Press Release
NEWS RELEASE SUMMARY – December 18, 2023
SAN DIEGO – Alexandra Crystal Jackson was sentenced in federal court today to 31 months in prison for using the personal information of others to obtain Economic Impact Payments from the IRS and benefit payments from California’s Employment Development Department and spending the proceeds on luxury goods.
Jackson pleaded guilty on September 21, 2023. In her plea agreement, Jackson admitted that she collected personal information from homeless and low-income individuals as well as detainees at local detention facilities. She admitted she used the information to apply for Economic Impact Payments, commonly referred to as “stimulus checks,” and directed payments to bank accounts she controlled. Jackson also admitted to using the information to apply for benefit payments from California’s Employment Development Department (EDD), and to receiving at least 40 EDD debit cards in the names of others. Jackson used the EDD debit cards to withdraw cash from ATMs and to pay for jewelry, furniture, and a Mercedes-Benz G-Glass 550 SUV that the IRS seized.
U.S. District Judge Gonzalo P. Curiel also ordered Jackson to pay restitution and entered a preliminary forfeiture order for the Mercedes-Benz.
Jackson’s co-defendant, Demetrius Montre McFarland, previously admitted he provided Jackson with the personal information of his fellow detainees at the Vista Detention Center. McFarland entered a guilty plea on December 11, 2023, and his sentencing hearing is set for March 5, 2024.
“These government programs were meant to help California residents get through the pandemic,” said U.S. Attorney Tara McGrath. “They were not intended as a get-rich-quick scheme for criminals who want a Mercedes.”
“Taking advantage of some of our communities’ most vulnerable adults and conspiring with your spouse to line your pockets is deplorable,” said Special Agent in Charge Tyler Hatcher, IRS Criminal Investigation, Los Angeles Field Office. “The Economic Impact Payments were meant to help our communities during a time of crisis. Ms. Jackson and her husband abused the system and now Ms. Jackson will have time to reflect on her actions. IRS:CI is committed to identifying and investigating these types of schemes which includes the seizure of any assets purchased with funds stolen from these relief programs. We are dedicated to bringing justice to our communities affected by these types of schemes.”
This case is being prosecuted by Assistant U.S. Attorneys Eric R. Olah and Joseph Orabona.
DEFENDANTS Case Number 23-CR-1098-GPC
Alexandra Crystal Jackson Age: 32 San Diego, CA
Demetrius Montre McFarland Age: 31 San Diego, CA
SUMMARY OF CHARGES
Conspiracy–Title 18, U.S.C., Section 371
Maximum penalty: Five years in prison and $250,000 fine
AGENCY
Internal Revenue Service, Criminal Investigation
Man Pleads Guilty to Aiming Laser at San Diego Sheriff’s HelicopterRead the Press Release
NEWS RELEASE SUMMARY – December 14, 2023
SAN DIEGO – Ruben Ricardo Rodriguez pleaded guilty in federal court today to aiming a laser at a San Diego Sheriff’s helicopter.
According to admissions in his plea agreement, on June 12, 2021, the Federal Aviation Administration (FAA) control tower at San Diego International Airport received multiple reports of a green laser striking commercial aircraft while they were landing. The FAA notified the San Diego Sheriff’s helicopter ASTREA of the laser strikes and gave the approximate location of the origin of the laser near National City, CA.
ASTREA, an acronym for Aerial Support To Regional Enforcement Agencies, the air support unit of the San Diego County Sheriff's Department, responded to the area and was struck in the cockpit by a green laser. The entire helicopter illuminated green in the sky. Video captured Rodriguez walking around a house while pointing the laser at the ground and across the street. Rodriguez then looked at ASTREA and aimed the laser at it again. The pilot said the laser strike created a bright dazzling effect on the aircraft’s glass. The laser struck the other deputy onboard in the eyes.
“Laser pointers are not toys, and aiming them at aircraft is a crime, not a prank,” said U.S. Attorney Tara McGrath. “Pilots could be blinded or incapacitated, causing deadly accidents.”
“Pointing a laser at an aircraft is a serious criminal act and can have potentially deadly consequences,” said FBI San Diego Acting Special Agent in Charge Jamie Arnold. “The FBI and its partner agencies take allegations of interfering with the operation of an aircraft seriously and encourage anyone with information about such incidents or if they see someone pointing a laser at an aircraft to report it to the FBI.”
Rodriguez is scheduled to be sentenced on March 4, 2024, at 9 a.m. before U.S. District Judge Cynthia A. Bashant.
This case is being prosecuted by Assistant U.S. Attorneys Jaclyn Stahl, Edward Chang, and Shivanjali Sewak.
DEFENDANT Case Number 23-CR-1467-BAS
Ruben Ricardo Rodriguez Age: 33 Logan, UT
SUMMARY OF CHARGES
Aiming a laser pointer at an aircraft – 18 U.S.C. § 39A
Maximum penalty: Five years in custody and a $250,000 fine
AGENCY
Federal Bureau of Investigation
Captain and Co-Captain Sentenced for Maritime Smuggling Effort That Left Three DeadRead the Press Release
NEWS RELEASE SUMMARY – December 14, 2023
SAN DIEGO – The captain and co-captain of a boat that capsized off Imperial Beach during a 2022 smuggling incident, resulting in the deaths of three people, were sentenced in federal court today to 54 and 50 months in prison, respectively.
Jorge Armando Preciado-Vasquez, the captain, and Alexis Martinez-Preciado, the co-captain and navigator, attempted to smuggle seven adults and an unaccompanied minor from Mexico into the United States over Thanksgiving weekend in 2022.
The victims were a 39-year-old woman and 47-year-old man, both from Mexico; and a still unidentified young woman, believed to be from Guatemala.
According to plea agreements and the government’s sentencing documents, the defendants navigated the open-hull craft from Mexico on the open ocean through the night until they approached Imperial Beach early in the morning on November 26. As they approached the shore, at approximately 6 a.m., the defendants directed all eight people on board to take off their life vests, a common practice so passengers are quicker and more inconspicuous making their way to the shore.
Soon after removing the life jackets, however, the panga boat overturned as shown in the images below. The three victims drowned despite the best efforts of surfers, witnesses and Imperial Beach lifeguards to rescue them.
Two bodies were recovered that morning; the third was discovered on the beach days later.
“This case is a horrible tragedy and three lives were needlessly lost when profiteering overtook caution,” said U. S. Attorney Tara McGrath. “Criminal smuggling organizations consistently disregard the welfare of the human beings they smuggle.”
“Maritime human smuggling is an incredibly dangerous tactic which has claimed numerous lives. However, transnational criminal organizations have no regard for human life and continue to enrich themselves using the tactic,” said Chad Plantz, Special Agent in Charge for Homeland Security Investigations San Diego. “HSI is committed to using all means at our disposal to investigate and hold accountable those placing human beings at substantial risk of injury and death.”
This case is being prosecuted by Assistant U.S. Attorneys Peter Horn and Ronald Sou.
DEFENDANTS Case Number 22-CR-2928-TWR
Jorge Armando Preciado-Vasquez Age: 30 Baja California, Mexico
Alexis Martinez-Preciado Age: 20 Baja California, Mexico
SUMMARY OF CHARGES
Bringing in Aliens for Financial Gain and Aiding and Abetting – Title 8, U.S.C., Section 1324(a)(2)(B)(ii); Title 18, U.S.C., Section 2
Penalties: Mandatory minimum of three years and maximum of ten years in prison, and up to a $250,000 fine
AGENCIES
Homeland Security Investigations – San Diego Marine Task Force
United States Border Patrol
United States Customs and Border Protection
United States Coast Guard
San Diego County Sheriff’s Department
San Diego Harbor Police Department
San Diego County Medical Examiner’s Office
High-Level Trafficker Pleads Guilty to International Cocaine TraffickingRead the Press Release
NEWS RELEASE SUMMARY – December 12, 2023
SAN DIEGO –Augusto Jean Carlo Castillo-Hernandez of Guatemala pleaded guilty in federal court today, admitting that he and his co-conspirators coordinated the smuggling of multi-ton quantities of cocaine from South America to Guatemala with an ultimate destination of the United States.
Castillo-Hernandez was arrested on August 31, 2021, in Guatemala and extradited to the United States in February 2022 along with two others. He is scheduled to be sentenced on February 23, 2024 at 9 a.m. before Chief U.S. District Judge Dana M. Sabraw.
Court documents described Castillo-Hernandez as an organizer and leader in the conspiracy to distribute cocaine in Guatemala and elsewhere. The conspiracy spanned at least 2017 to July 2020.
The defendants were arrested as part of a multi-year investigation targeting high-level cocaine traffickers operating in northwest Guatemala and which exposed the inner workings of cocaine trafficking in that country. The probe involved multiple countries, multiple law enforcement agencies around the United States, and multiple federal districts.
“This case demonstrates the impact of dedicated partnerships across the United States, reaching into Guatemala to prevent immeasurable amounts of cocaine from arriving on our streets,” said U.S. Attorney Tara McGrath. “While Mr. Castillo-Hernandez is being held accountable today, the bigger message is to the organizers who push this poison north. The long arm of American justice will reach across the globe to protect our communities.”
“This guilty plea of a known drug trafficker is the culmination of years of collaborative efforts between HSI and our partners at the Department of Justice,” said HSI San Diego Special Agent in Charge Chad Plantz, “The joint effort has significantly impacted this international criminal organization’s ability to import dangerous drugs into the United States.”
The Justice Department’s Office of International Affairs provided substantial assistance in securing the arrest and extradition of the defendant.
This case is being prosecuted by Assistant U.S. Attorney Kevin Mokhtari.
DEFENDANT Case Number 20cr2242-DMS
Augusto Jean Carlo Castillo-Hernandez Age: 34 Guatemala
aka “Metal” aka “Joker”
SUMMARY OF CHARGES
Conspiracy to Distribute Cocaine Intended for Unlawful Importation into the United States–
Title 21, U.S.C., Sections 959, 960, 963Maximum penalty: Life in prison and $10 million fine
Criminal Forfeiture – Title 21, U.S.C., Sections 853
AGENCIES
Homeland Security Investigations
Homeland Security Investigations Attaché, Guatemala
U.S. Department of Justice, Office of International AffairsU.S. Department of Justice, Office of Enforcement Operations
Department of Justice, Organized Crime and Drug Enforcement Task Force (OCDETF)Customs and Border Protection Officer Admits Using Unreasonable Force and Agrees to Resign from Law EnforcementRead the Press Release
NEWS RELEASE SUMMARY – December 12, 2023
SAN DIEGO – U.S. Customs and Border Protection Officer Andre Maurice Chevalier pleaded guilty in federal court today to using unreasonable force on an individual who had applied for admission to the United States from Mexico.
Chevalier admitted in his plea agreement that on April 23, 2022, while he was on duty at the San Ysidro Port of Entry, he encountered a woman at a primary inspection booth. Chevalier admitted that he pulled the woman, identified in court documents by the initials Y.F., out of her vehicle and slung her into the booth. Her face struck the booth. She sustained injuries to her face and fell to the ground. Chevalier then picked up Y.F., shoved her against her vehicle and handcuffed her. Chevalier admitted that he acted willfully and intentionally and deprived Y.F. of her right to be free from an unreasonable use of force.
Chevalier agreed to resign and not seek future employment with a federal law enforcement agency.
“Mr. Chevalier’s conduct was inexcusable,” said U.S. Attorney Tara K. McGrath. “His guilty plea and resignation mean he no longer has authority over, or the opportunity to abuse, those entering the country.”
“Federal law enforcement officers are expected to treat the public with courtesy and respect,” said Department of Homeland Security Inspector General Joseph V. Cuffari. “Those who fail to adhere to this standard will be held accountable.”
Chevalier is scheduled to be sentenced on March 8, 2024, at 9 a.m. before U.S. District Judge Anthony J. Battaglia.
This case is being prosecuted by Assistant U.S. Attorneys Seth Askins and Jill Streja.
DEFENDANT Case Number 23cr2510.
Andre Maurice Chevalier Age: 41 Temecula, CA
SUMMARY OF CHARGES
Deprivation of Rights Under Color of Law (misdemeanor) – Title 18, U.S.C., Section 242
Maximum penalty: One year in prison and $100,000 fine
AGENCY
Department of Homeland Security – Office of Inspector General
Foreign Nationals Charged with International Drug TraffickingRead the Press Release
NEWS RELEASE SUMMARY – December 6, 2023
SAN DIEGO – Three indictments were unsealed in the Southern District of California today charging 29 individuals with international drug trafficking offenses.
The unsealing of the indictments comes at the same time that the U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC) announced sanctions against nine of the defendants for their ties to the Beltran Leyva Organization, a violent, Mexico-based group involved in trafficking drugs to the United States for over two decades. Please see https://home.treasury.gov/news/press-releases/jy1952
“These indictments have neutralized dozens of alleged maritime traffickers and prevented addictive, harmful, and increasingly often deadly drugs from reaching American shores and streets,” said U.S. Attorney Tara McGrath. “Cases like this are critical for disrupting, disabling, and dismantling the sinister and deadly operations of foreign drug trafficking organizations in the United States.”
“Today’s announcement sends a clear message that Homeland Security Investigations and our law enforcement partners will use all available measures to investigate and dismantle transnational criminal organizations (TCO) responsible for the smuggling, transportation, and distribution of narcotics and illicit proceeds – wherever they attempt to operate” said Chad Plantz, special agent in charge for HSI San Diego. “HSI San Diego’s sophisticated and global investigation demonstrates law enforcement’s commitment to disrupting this TCOs criminal activities. We, along with our law enforcement partners, are committed to protecting the United States’ financial infrastructure from bad actors.”
Five related indictments were also unsealed today in the District of Columbia, Central District of California and Northern District of Illinois charging an additional 31 Mexican and foreign nationals with international heroin, methamphetamine, cocaine, fentanyl, and marijuana trafficking, bringing the total to 60 charged. Please see Office of Public Affairs | Sixty Foreign Nationals Charged with International Drug Trafficking | United States Department of Justice
“The eight indictments unsealed today charging 60 defendants are the latest installments in the Justice Department’s relentless pursuit of drug trafficking organizations that smuggle illicit narcotics into the United States,” said Deputy Attorney General Lisa O. Monaco. “Together with our partners — across the U.S. government and around the world — we will use every tool at our disposal and target every link in the supply chain to dismantle the organizations that flood our communities with deadly narcotics.”
In San Diego, one indictment returned in September 2019, 19CR3736-GPC, charges Oscar Manuel Gastelum Iribe, Servando Lopez Lopez, and another individual with conspiring to distribute cocaine knowing it would be imported into the United States and a maritime drug conspiracy.
A second indictment returned in April 2023, 23CR0621-BAS, charges Juan Pablo Bastidas Erenas, Bogar Soto Rodriguez, Juvenal Leon Rodriguez, Mario German Beltran Araujo, Ulises Franco Figueroa, Oscar Aleman Meza, and 17 others with the same offenses.
The third indictment returned in April 2023, 23CR0699-GPC, charges Josue De Jesus Estrada Gutierrez, and two others with conspiring to import cocaine, methamphetamine, and fentanyl.
OFAC announced sanctions against Iribe, Lopez, Erenas, Soto Rodriguez (under the name Ricardo Estevez Colmenares), Leon Rodriguez, Araujo, Figueroa, Meza, and Gutierrez (under the name Jose De Jesus Estrada Gutierrez) on the same date the indictments were unsealed.
One defendant, Oscar Manuel Gastelum Iribe, aka Salgado and Musico, 49, is indicted in the Southern District of California , the District of Columbia and the Northern District of Illinois. As alleged in court documents, Gastelum Iribe coordinated deliveries of multi-kilogram quantities of cocaine and heroin into the United States and deliveries of millions of dollars of cash narcotics proceeds from customers in the United States for the Beltran Leyva Organization.
This case is supported by the Organized Crime Drug Enforcement Task Forces (OCDETF).
This case is being prosecuted by Assistant U.S. Attorney Joshua C. Mellor and Special Assistant U.S. Attorney Allison B. Murray. The Justice Department’s Office of International Affairs provided significant assistance.
DEFENDANTS Case Number 19cr3736-GPC
Oscar Manuel Gastelum Iribe *All Defendants are from Mexico
aka “El Musico,”
aka “Salgado,”
Servando Lopez Lopez
aka “El Huevo,”
Jose Fernando Zambada Ley
aka “El Chino”
Case Number 23cr-0621-GPC_
Juan Pablo Bastidas Erenas,
aka “Payo,”
Ugan Lopez Beltran,
aka “Kiwuas,”
aka “Prada,”
Bogar Soto Rodriguez,
aka “Loco,”
aka “Tio,”
Juvenal Leon Rodriguez,
aka “Gallo,”
Arnoldo Villa Sanchez,
aka “Arnol,”
Mario German Beltran Araujo,
aka “El Ninon,”
Jose Roberto
Navarrete Mendoza,
aka “Mono,”
Cesar Homero
Magallanes Gonzalez,
aka “Chayo,”
Ulises Franco Figueroa,
aka “Charco,”
Elvis Villatoro De La Cruz,
aka “Yogurt,”
Jesus Alonso Zamora Roman,
aka “Sobrino,”
Luis Antonio Espeleta Esparza,
aka “Negro Trailero,”
Jose Misael Macedo Alvarez,
Jose Francisco Osuna Osorio,
aka “Gabino,”
Eduardo Adalberto Sustaita Castaneda,
aka “Susto,”
Carlos Antonio
Pacheco Castaneda,
Jesus Sergio
Santiago Gonzalez,
aka “Zucaritas,”
Oscar Aleman Meza,
Lorenzo Mendez Sanchez,
aka “Lencho,”
Juan Manuel Hernandez Soto,
aka “Piki,”
aka “Guero,”
Pedro Rodriguez Moreno,
Francisco Ramon
Pelaez Luengas,
aka “Wawis,”
Eduardo Gabriel Ibarra Mone
Case Number 23cr-0699-GPC_
Josue De Jesus
Estrada Gutierrez,
aka “Barbas,”
aka “Barbon,”
Brayan Carrizoza Arredondo,
Alejo Lopez Perez,
SUMMARY OF CHARGES
International Conspiracy to Distribute Cocaine – Title 21, U.S.C., Sections 959, 960 and 963
Conspiracy to Possess with Intent to Distribute Cocaine on Board a Vessel - Title 46, U.S.C., Secs. 70503 and 70506(b)
Conspiracy to Import Controlled Substances - Title 21, U.S.C., Sections 952, 960 and 963
Maximum penalty: Life in prison with a 10-year mandatory minimum; $10 million fine
AGENCY
Homeland Security Investigations
Federal Bureau of Investigation
Drug Enforcement Administration
Coast Guard Investigative Service
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
San Diego Man Admits Bank, Tax FraudRead the Press Release
NEWS RELEASE SUMMARY – December 4, 2023
SAN DIEGO – Alvin Pates of San Diego pleaded guilty in federal court today to bank and tax fraud charges, admitting that he participated in a scheme to deceive banks by using straw borrowers and bogus financial information to obtain loans.
According to his plea agreement, beginning as early as July 2014 and continuing through at least April 2020, Pates admitted that he used the names, social security numbers, and credit of the straw borrowers to obtain loans and lines of credit that primarily benefited Pates. Pates prepared, or directed others to prepare, the fraudulent loan and credit card applications. The applications included information about the borrowers’ income and employment that Pates knew to be false and were supported by false paystubs, W2s, and bank statements procured by Pates.
In exchange for the use of the straw borrowers’ personal identifying information and credit, Pates typically paid a 10 percent kickback from the loan proceeds to the straw borrower, and falsely promised to make all the payments on the loans. On at least one occasion, Pates communicated by telephone directly with a financial institution, pretending to be the straw borrower, in order to pass security questions and obtain approval of a loan.
Pates acknowledged in his plea agreement that he funneled the majority of the loan proceeds through the bank accounts of one of his shell companies to use for his personal benefit. For example, Pates admitted to using the funds for numerous personal transactions, cash withdrawals, personal living expenses for himself and his family, and to make payments to other credit unions. Pates admitted that the value of the fraudulent loans charged in the indictment is $87,000, and that he will be required to pay restitution of at least $40,500.
In addition to the bank fraud, Pates also admitted to aiding and assisting in the preparation of false tax returns for two taxpayers for the calendar year 2015. The tax return for one of the taxpayers falsely stated that the individual received “Other Income” in the amount of $538,462 and had paid federal income taxes of $543,643, thus entitling him to a refund of $376,260. Pates supplied false Forms 1099 to the taxpayer to support the return and accompanied the taxpayer to the IRS to submit the false return. The Internal Revenue Service (IRS) issued a refund check to the taxpayer for $376,260, which was ultimately returned to the IRS.
Pates is scheduled to be sentenced on March 1, 2024, at 9 a.m. before U.S. District Judge Cathy Ann Bencivengo.
This case is being prosecuted by Assistant U.S. Attorneys Melanie K. Pierson and Loren G. Rene.
DEFENDANT Case Number 20CR2204-CAB
Alvin Pates a.k.a. Al Noble Age: 54 San Diego, CA
SUMMARY OF CHARGES
Count 8
Bank Fraud – Title 18, U.S.C., Sections 1344(1) and 2
Maximum penalty: Thirty years in prison, $1 million fine, forfeiture and restitution
Count 9
Aiding and Advising Preparation of a False Tax Return—Title 26, U.S.C., Section 7206(2)
Maximum penalty: Three years in prison, $250,000 fine, 3 years’ supervised release, forfeiture and restitution
AGENCIES
U.S. Secret Service
IRS Criminal Investigation
California Businessman Pleads Guilty to COVID-Relief FraudRead the Press Release
NEWS RELEASE SUMMARY – November 30, 2023
SAN DIEGO – Sean Winston, the CEO of Atlas Capital Management, LLC, pleaded guilty in federal court today, admitting that he fraudulently obtained $875,900 from COVID-19 pandemic-era loan programs.
According to his plea agreement, Winston held Atlas Capital Management out to the public as an entity that financed business projects, but in fact performed no business and was a shell corporation. Winston admitted that he submitted five loan and loan-forgiveness applications containing false statements to trick lenders into giving his company relief funds. Winston submitted fabricated bank account records, false payroll data, and a fake IRS Form 1120-S to create the illusion that Atlas Capital Management qualified for various pandemic era loans.
Winston admitted that he used the borrowed funds to pay his personal expenses and purchase luxury vehicles, such as a 2021 Lamborghini Urus, 2018 Rolls Royce Dawn, 2020 Chevrolet Corvette, and 2021 Cadillac Escalade. On September 28, 2023, federal law enforcement agents seized the vehicles and money in two bank accounts. Winston agreed to forfeit the cars and money to the United States.
The defendant applied for loans through the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), which was enacted on March 27, 2020, to provide more than $2 trillion of economic relief to workers, families, small businesses, industry sectors and other levels of government that were hit hard by the public health crisis created by COVID-19. The CARES Act authorized the Small Business Administration (“SBA”) to temporarily guarantee loans under a new loan program titled the Paycheck Protection Program (“PPP”).
Under the PPP, financial institutions made loans to qualified borrowers, and the SBA backed the loans. Borrowers agreed to use the PPP loans to cover payroll costs and certain eligible nonpayroll costs. In some cases, the borrower could apply for forgiveness of the loan. If approved for forgiveness, the SBA paid the loan for the borrower. One of Winston’s loans was forgiven.
The CARES Act also authorized the SBA to provide Economic Injury Disaster Loans (“EIDL”). Winston also submitted a false EIDL application. Borrowers agreed to use EIDL funds solely as working capital to alleviate economic injury caused by the disaster. Working capital expenses included payroll expenses, sick leave, production costs, and ordinary business obligations, like debts, rent, and mortgage payments.
Winston is scheduled to be sentenced by U.S. District Judge William Q. Hayes on March 4, 2024.
This case is being prosecuted by Assistant U.S. Attorneys E. Christopher Beeler and Carl F. Brooker, IV.
DEFENDANT Case Number 23-CR-2441-WQH
Sean K. Winston Age: 44 Chino Hills, CA
SUMMARY OF CHARGES
Wire Fraud – Title 18, U.S.C., Section 1343
Maximum penalty: Thirty years in prison and $1 million fine
AGENCY
Homeland Security Investigations
Married Couple Sentenced for Laundering $1.4 Million in Proceeds from Jewelry Thefts and Unemployment Fraud During PandemicRead the Press Release
NEWS RELEASE SUMMARY – November 20, 2023
SAN DIEGO – Eduard Ghiocel and his wife, Floarea Ghiocel, were sentenced in federal court today to 36 months and 30 months, respectively, for laundering $1.4 million in proceeds from dozens of grand thefts, robberies and swindles targeting mostly elderly victims in San Diego County.
According to their plea agreements, the Ghiocels, along with co-conspirators Gabriel Ghiocel, Marius Ghiocel, Larisa Ghiocel, and Argentina Alexandru, conducted a series of 17 grand thefts and robberies of jewelry in elderly communities in San Diego. They then pawned the stolen jewelry and watches for cash in jewelry stores in Los Angeles.
In addition, Eduard and Floarea Ghiocel admitted submitting fraudulent unemployment claims to the California Employment Development Department (EDD) to obtain approximately $32,250 in California unemployment insurance benefits intended to help workers affected by the COVID-19 pandemic.
Eduard and Floarea Ghiocel admitted wiring proceeds from the jewelry thefts and the unemployment insurance fraud to Romania, as well as using the proceeds to purchase gold bars, gold coins, and high-end luxury vehicles from locations in Southern California and shipping these items to Romania. In total the Ghiocels sent almost $1.4 million to Romania, knowing the money was proceeds of theft, robbery, and fraud, the plea agreement said.
Eduard and Floarea Ghiocel agreed to forfeit proceeds of the crime including two Lamborghini Urus, a 2020 Ferrari Portofino, and a BMW X4 all seized by authorities in Romania. The forfeitures will be used pay restitution to victims of the crimes.
The co-conspirators remain at large.
This case is being prosecuted by Assistant U.S. Attorney Jessica Adeline Schulberg with assistance from the Department of Justice’s Office of International Affairs, FBI's Legal Attaché in Bucharest, and Romanian authorities including the Directorate for Combating Organized Crime (DCCO) Service for Countering of Organized Criminal Groups, Brigade for Combating Organized Crime (BCCO) – Pitești, County Service for Countering Organized Crime – Teleorman, Romanian Gendarmerie Battalion, Romanian Ministry of Justice, and Romanian Criminal Investigative Directorate - Fugitive Unit.
DEFENDANT Case Number 23CR0386-LAB
Eduard Ghiocel (1) Age: 48 Romania
aka Eduard Alexandru, aka “Filica”
Floarea Ghiocel (2) Age: 49 Romania
aka Floarea Alexandru
SUMMARY OF CHARGES
Title 18 U.S.C. § 1956(h) and Title 18 U.S.C. § 1956(a)(2)(A) — Conspiracy to Transport Funds to Promote Unlawful Activity
Maximum penalty: Twenty years in prison and $500,000 fine or twice the value of the monetary instrument or funds involved in the transportation, transmission, or transfer, whichever is greater
AGENCY
Federal Bureau of Investigation
San Diego Police Department Economic Crimes Unit
IRS Criminal Investigation
California Employment Development Department Investigative Division
Department of Labor Office of Inspector General
U.S. Department of Homeland Security
Foreign National Sentenced to 40 Months Custody for $5 Million Unemployment Fraud SchemeRead the Press Release
NEWS RELEASE SUMMARY – November 20, 2023
SAN DIEGO – Constantin Bobi Sandu, who admitted that he masterminded a scheme to steal more than $5 million in California unemployment benefits intended to help workers affected by the pandemic, was sentenced in federal court today to 40 months in prison.
According to his plea agreement, Sandu conspired with over 200 other individuals across California and in Romania to fraudulently obtain millions of dollars by fabricating documents, creating fictitious accounts and businesses, and filing bogus claims with California’s Economic Development Department, which administers the state’s unemployment benefits. Among other things, Sandu wired $16,000 in fraud proceeds to Romania to renovate his house.
Sandu also was ordered to forfeit $214,950 that he personally received from the offenses.
“This devious scheme diverted millions of dollars from those who truly needed it during the pandemic,” said U.S. Attorney Tara McGrath. “The public health emergency may be over, but we are still tracking, charging, and convicting the people who exploited it.”
“The FBI remains fully committed to ensuring people who intentionally stole government funds during the COVID-19 pandemic are brought to justice,” said FBI San Diego Special Agent in Charge Stacey Moy. “We continually collaborate with our law enforcement partners to thoroughly investigate all those responsible for stealing from the United States Government and its people during such a critical time in our lives, taking away valuable resources and services from those truly in need.”
“Mr. Sandu and his criminal organization committed financial crimes that hurt people here in California and stole funds intended for those in need,” said Special Agent in Charge Tyler Hatcher, IRS Criminal Investigation, Los Angeles Field Office. “IRS:CI is committed to partnerships with law enforcement organizations around the world, and we will follow the money to find the guilty and bring them to justice.”
This case was prosecuted by Assistant U.S. Attorney Jessica Adeline Schulberg.
DEFENDANT Case Number 23CR0386-LAB
Constantin Bobi Sandu, Age: 34 Romanian national
aka Constantin Sandu,
aka Bobi Sandu,
aka Ionut Mihai
SUMMARY OF CHARGES
Title 18, U.S.C. § 1349 and 1343 - Conspiracy to Commit Wire Fraud
Maximum penalty: Thirty years in prison, a fine of $1 million or both;
Title 18 U.S.C. § 1956(a)(2)(A) — Laundering Monetary Instruments
Maximum penalty: Twenty years in prison and $500,000 fine or twice the value of the monetary instrument or funds involved in the transportation, transmission, or transfer, whichever is greater;
Title 18 U.S.C. §§ 981(a)(1)(C) and 982(a)(1), and Title 28, U.S.C. § 2461(c) - Criminal Forfeitures
AGENCY
Federal Bureau of Investigation
San Diego Police Department Economic Crimes Unit
IRS Criminal Investigation
California Employment Development Department Investigative Division
Department of Labor Office of Investigator General
U.S. Department of Homeland Security
Dual U.S./Mexican Citizen Extradited to the United States from Spain to Face Charges Related to Most Potent Fentanyl SeizureRead the Press Release
NEWS RELEASE SUMMARY – November 21, 2023
SAN DIEGO –Aaron Leib Kobisher, the alleged leader of a drug trafficking organization based in San Diego and Tijuana, made his first appearance in federal court today following his extradition from Spain to face fentanyl, methamphetamine, and cocaine trafficking charges.
According to publicly filed court documents, the charges relate to multiple seizures, including a June 2021 interception of approximately two kilograms of powdered fentanyl that was linked to Kobisher and his drug trafficking organization. After the fentanyl was tested by the DEA Southwest Laboratory, investigators discovered that it was the most concentrated powdered fentanyl that had been tested to date by the laboratory.
At today’s hearing, the United States moved for detention, arguing that Kobisher was a substantial flight risk. U.S. Magistrate Judge Steven B. Chu scheduled a detention hearing for November 24, 2023, at 10 a.m.
Kobisher is the lead defendant charged in a six-defendant indictment stemming from a long-term investigation. Four others charged in the same indictment were arrested earlier this year. One defendant remains a fugitive.
In court documents, Kobisher was described as an organizer and leader of the drug trafficking organization who coordinated the smuggling of fentanyl, methamphetamine and cocaine from Mexico to San Diego for distribution in the U.S.
Prosecutors alleged that Kobisher fled to Mexico in November 2022, after several seizures linked to Kobisher and his drug trafficking organization.
Kobisher was arrested in Spain on June 21, 2023. He had boarded a flight in Madrid that was headed to Mexico City, Mexico. After the flight left the gate, Spanish police stopped the aircraft and arrested Kobisher based on an Interpol Diffusion Notice from the United States government. On November 20, 2023, Kobisher was extradited to the United States.
“Fentanyl is deadly in all forms, but one of the seizures in this case packed an extraordinary punch,” said U.S. Attorney Tara McGrath. “Getting fentanyl out of the hands of drug traffickers – especially the most potent versions - no doubt saves many lives. The diligence of law enforcement means our neighborhoods are safer.”
“Drug trafficking is a violent crime, that impacts the safety and security of our communities,” said DEA Special Agent in Charge Shelly Howe. “The DEA and its partners will continue to work together to disrupt drug trafficking organizations and bring drug traffickers to justice. These organizations must be held accountable for the harm they cause in our communities.”
“Fentanyl continues to be the most significant drug-related concern for Homeland Security Investigations and our partners due to its widespread availability, highly addictive features, and deadly effects,” said Chad Plantz, Special Agent in Charge for Homeland Security Investigations San Diego. “The success of this investigation is the result of law enforcement agencies working together to dismantle drug trafficking organizations and holding those accountable for their actions- no matter where they hide.”
The Justice Department’s Office of International Affairs provided substantial assistance in securing the arrest and extradition of Kobisher.
This case is being prosecuted by Assistant U.S. Attorney Kevin Mokhtari.
DEFENDANT Case Number 23cr0916-JES-1
Aaron Lei Kobisher Age: 34 Mexico
aka “El Kobi”
SUMMARY OF CHARGES
Conspiracy to Distribute Methamphetamine, Fentanyl and Cocaine –
Title 21, U.S.C., Sections 841(a)(1), 846Maximum penalty: Life in prison and $10 million fine
Criminal Forfeiture – Title 21, U.S.C., Sections 853
AGENCIES
Drug Enforcement Administration
Homeland Security Investigations
United States Marshals ServiceDEA Attaché Madrid, Spain
U.S. Department of Justice, Office of International AffairsU.S. Department of Justice, Office of Enforcement Operations
Department of Justice, Organized Crime and Drug Enforcement Task Force (OCDETF)U.S. Customs and Border Protection
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
San Diego Businessman Pleads Guilty in Multi-Million Dollar Covid-Related FraudRead the Press Release
NEWS RELEASE SUMMARY – November 16, 2023
SAN DIEGO – Thomas Zolezzi of San Diego pleaded guilty in federal court today, admitting that he committed fraud to obtain almost $3 million intended to help those affected by the COVID-19 pandemic.
In his plea agreement, Zolezzi admitted he submitted five loan applications containing false statements to trick lenders into providing the relief funds. He used the borrowed funds to pay his personal expenses. As part of his guilty plea, Zolezzi agreed to pay restitution of $700,884.75 to the Small Business Administration (“SBA”) and $2,238,910.24 to Capital Plus Financial.
The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted on March 27, 2020, to provide over $2 trillion of economic relief to workers, families, small businesses, industry sectors and other levels of government that were hit hard by the public health crisis created by COVID-19. The CARES Act authorized the SBA to temporarily guarantee loans under a new loan program titled the Paycheck Protection Program (“PPP”).
Under the PPP, financial institutions made loans to qualified borrowers, and the SBA backed the loans. Borrowers agreed to use the PPP loans to cover payroll costs and certain eligible nonpayroll costs. In some cases, the borrower could apply for forgiveness of the loan. If approved for forgiveness, the SBA paid the loan for the borrower.
The CARES Act also authorized the SBA to provide Economic Injury Disaster Loans (“EIDL”). Borrowers agreed to use EIDL funds solely as working capital to alleviate economic injury caused by the disaster. Working capital expenses included payroll expenses, sick leave, production costs, and ordinary business obligations, like debts, rent, and mortgage payments.
According to court records, Zolezzi applied for and received three PPP loans and two EIDLs. Zolezzi’s loan applications, which started in May 2020, falsely overstated the number of his employees, his payroll amount, and his annual revenue to fraudulently obtain $2,939,794.99 in loans.
Sentencing is scheduled for February 5, 2024, at 9 a.m. before U.S. District Judge Anthony J. Battaglia.
This case is being prosecuted by Assistant U.S. Attorney Christopher Alexander.
DEFENDANT Case Number 23-cr-02352 -AJB
Thomas Zolezzi Age: 61 San Diego, CA
SUMMARY OF CHARGES
Wire Fraud, a felony, in violation of Title 18, United States Code, Section 1343
Maximum Penalty: Twenty years in prison and a fine of $250,000
AGENCIES
Homeland Security Investigations, Immigration and Customs Enforcement
On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the Department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (“NCDF”) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
Fourteen Defendants Indicted in $5 Million California State Unemployment Fraud SchemeRead the Press Release
NEWS RELEASE SUMMARY – November 16, 2023
SAN DIEGO – An indictment partially unsealed today charges 14 defendants with fraud and money laundering offenses for a scheme centered around fraudulent unemployment applications submitted to the California Employment Development Department during the pandemic. The indictment alleges the fraud netted the defendants almost $5.2 million in funds from the state of California.
According to the indictment, David Constantin and Constantin Bobi Sandu, who was arrested and charged separately in March 2023, helped hundreds of applicants apply for EDD benefits using fraudulent documents. Constantin and Sandu recruited potential applicants through Facebook and met applicants at parks throughout Southern California to complete the application process. Applicants paid Constantin or Sandu a partial fee up front for assisting with fraudulent applications and another fee after applicants received EDD payments.
The indictment alleges that from July 2020 to August 2022, Constantin transmitted more than $128,000 in fraud proceeds to associates in Romania. Another defendant who fraudulently obtained EDD benefits with Constantin’s help, Eduard Buse, transmitted almost $129,000 to Romania in the same period. Buse also purchased a 2020 BMW X6 with over $105,000 in cash fraud proceeds in December 2022 and shipped the vehicle to Romania. Several other defendants also transmitted fraud proceeds to accounts in Romania.
David Constantin was arrested in Romania at the request of the United States on November 13th by Romanian authorities who also served search warrants and seized, among other things, the BMW with California license plates. The Department of Justice will seek Constantin’s extradition to the United States. Buse and defendants Leonard Miclescu, Constantin Iosif Constantin and Florentina Sima were arrested in California and Texas. Nine other defendants remain at large.
This case is being prosecuted by Assistant U.S. Attorneys Jessica Adeline Schulberg and Valerie Chu with assistance from the Department of Justice’s Office of International Affairs, FBI's Legal Attaché in Bucharest, and Romanian authorities including the Directorate for Combating Organized Crime (DCCO) Service for Countering of Organized Criminal Groups, Brigade for Combating Organized Crime (BCCO) – Pitești, County Service for Countering Organized Crime – Teleorman, Romanian Gendarmerie Battalion, Romanian Ministry of Justice, and Romanian Criminal Investigative Directorate - Fugitive Unit.
DEFENDANTS Case Number 23CR2090-LAB
David Constantin Age: 27 Arges County, Romania
aka Vlad Alexandru
Eduard Buse Age: 30 Transient, Romanian
Leonard Miclescu Age: 49 Transient, Romanian
Constantin Iosif Constantin Age: 30 Transient, Romanian
Florentina Sima Age: 29 Transient, Romanian
*Additional defendants are not in custody and their names are redacted
SUMMARY OF CHARGES
Title 18, U.S.C. § 1349 — Conspiracy to Commit Wire Fraud
Title 18, U.S.C. § 1343 — Wire Fraud
Maximum penalty: Thirty years in prison, $1 million fine
Title 18 U.S.C. § 1956(h) — Conspiracy to Launder Monetary Instruments
Title 18 U.S.C. § 1956(a)(2)(A) — Laundering of Monetary Instruments
Title 18 U.S.C. § 1956(a)(2)(B)(i) — Laundering of Monetary Instruments
Maximum penalty: Twenty years in prison and $500,000 fine or twice the value of the monetary instrument or funds involved in the transportation, transmission, or transfer, whichever is greater
AGENCY
Federal Bureau of Investigation
San Diego Police Department Economic Crimes Unit
IRS Criminal Investigation
California Employment Development Department Investigative Division
Department of Labor Office of Inspector General
U.S. Department of Homeland Security
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Former Navy Civilian Employee and Defense Contractor Indicted in Bribery SchemeRead the Press Release
NEWS RELEASE SUMMARY – November 14, 2023
SAN DIEGO – A federal grand jury has indicted a former civilian employee of the Naval Information Warfare Center in San Diego and the owner of a Virginia-based defense contractor for a bribery scheme.
According to the indictment, Phillip Flores, owner of Intellipeak Solutions, bribed James Soriano, the former employee, with free dinners at San Diego restaurants including De Medici Cucina, the University Club and Bluewater Boathouse Grill and Ruth’s Chris in Virginia as well as tickets to the 2018 World Series and the 2019 Super Bowl.
In return, Soriano allowed Flores to draft procurement documents for various contracts, including contracts for which Flores and Intellipeak ostensibly were in competition with others. Soriano also steered millions of dollars in contracts to Intellipeak that Flores subcontracted to others, including contractors ineligible to receive the contracts.
To conceal their activity, Soriano falsified government paperwork and Flores falsely affirmed that Intellipeak had completed 51 percent of the work on awarded contracts when the company had not. On October 29, 2019, in a recorded call, Flores coached Soriano to be “very careful” about how he answered questions from federal agents and to falsely say contractors drafting government documents was “market research.”
“Our nation’s military depends upon the honesty of its civilian workforce and the contractors who provide invaluable services to the men and women who help defend our country,” said U.S. Attorney Tara K. McGrath. “Those who choose greed and corruption breach that sacred trust.”
“The announced indictment is a critical first step in holding all three parties accountable for their alleged criminal efforts to enrich themselves financially by subverting the integrity of the government’s acquisition process through the improper awarding or promise of awarding lucrative contracts,” said Bryan D. Denny, Special Agent in Charge for the Department of Defense Office of Inspector General, Defense Criminal Investigative Service (DCIS), Western Field Office. “DCIS remains committed to working jointly with the United States Attorney’s Office and our law enforcement partners to investigate and deter public corruption within the Department of Defense.”
“Bribery and procurement fraud within the Department of the Navy threatens warfighter safety and perpetuates unfair contracting practices that negatively affect honest businesses,” said Special Agent in Charge Greg Gross of the NCIS Economic Crimes Field Office. “NCIS and our partners remain committed to exposing those who abuse the DON procurement process for personal gain.”
“The indictment alleges that Mr. Soriano and Mr. Flores put national security at risk by actively trying to skirt the government contract process that exists to ensure our warfighters are equipped to fight and win in a complex environment,” said Special Agent in Charge Tyler Hatcher, IRS Criminal Investigation, Los Angeles Field Office. “CI is committed to working with our fellow law enforcement partners to root out corrupt activities by following the money to help protect our heroes in uniform.”
“Using a position of public trust as a means to fraudulently grant access to federal programs for personal gain will not be tolerated,” said SBA OIG’s Western Region Special Agent in Charge Weston King. “Our office will remain relentless in the pursuit of fraudsters who seek to exploit SBA’s vital economic programs. I want to thank the U.S. Attorney’s Office and our law enforcement partners for their dedication and commitment to seeing justice served.”
DEFENDANTS Case Number 23cr2282-TWR
James Soriano Age: 63 Las Vegas, NV
Philip Flores Age: 52 Nashville, TN
Intellipeak Solutions, Inc. Virginia
RELATED CASE Case Number 23cr2192-TWR
Dawnell Parker Age: 54 Athens, AL
SUMMARY OF CHARGES
Conspiracy to Commit Bribery - Title 18, U.S.C., Section 371
Maximum penalty: Five years in prison; $250,000 fine
Bribery – Title 18, U.S.C., Section 201
Maximum penalty: Fifteen years in prison; $250,000 fine for an individual or $500,000 for an organization, or three times the monetary equivalent of the thing of value, whichever is greater.
AGENCIES
Defense Criminal Investigative Service
Naval Criminal Investigative Service
Small Business Administration – Office of Inspector General
Internal Revenue Service Criminal Investigation
Department of Health and Human Services – Office of Inspector General
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
If you have information regarding fraud, waste, or abuse relating to Department of Defense personnel or operations, please contact the DoD Hotline at 800-424-9098.
El Cajon Woman Admits to Coordinating the Transportation of More than 75 Undocumented Immigrants and Collecting $1 Million in PaymentsRead the Press Release
NEWS RELEASE SUMMARY – November 14, 2023
SAN DIEGO – Blanca Estella Gomez of El Cajon pleaded guilty in federal court today, admitting that she managed and directed drivers who transported undocumented immigrants within the United States.
In her plea agreement, Gomez said she coordinated with individuals in Mexico who smuggled immigrants across the border. Gomez directed her drivers to pick up the immigrants in the United States, told the drivers where to take the immigrants, and told them how much money to collect.
According to her plea agreement, Gomez admitted that one driver working for her transported more than 75 immigrants from October 2021 to April 2022. Gomez said that the same driver collected and delivered to her more than $1 million in payments for alien smuggling.
“The coordinated effort to bring this defendant to justice underscores the power of our law enforcement partnerships along the southern border to dismantle criminal smuggling operations at every level,” said U.S. Attorney Tara McGrath.
“Human smuggling is a serious and dangerous offense,” said Sidney K. Aki, Director of Field Operations for Customs and Border Protection’s San Diego Field Office. “This effort was an outstanding demonstration of law enforcement partnership and commitment to dismantling criminal organizations that exploit vulnerable migrants for profit.”
The defendant is scheduled to be sentenced on February 2, 2024, at 9 a.m. before U.S. District Judge Ruth Bermudez Montenegro.
This case is being prosecuted by Assistant U.S. Attorneys Daniel D. Shin and Michael A. Deshong of the Southern District of California.
DEFENDANTS Case Number 23cr1120-RBM
Blanca Estella Gomez Age: 47 El Cajon, California
SUMMARY OF CHARGES
Conspiracy to Transport Aliens – Title 8, United States Code, Section 1324(a)(1)(A)(ii) and (v)(I)
Maximum penalty: Ten years in prison and $250,000 fine
AGENCY
Homeland Security Investigations
United States Customs and Border Protection
Tijuana Woman Sentenced to 12 Months for Stealing Dead Mother’s Social Security Benefits for 13 YearsRead the Press Release
NEWS RELEASE SUMMARY – November 13, 2023
SAN DIEGO – Kimberly Kay Brandt, a 51-year-old U.S. citizen living in Tijuana, was sentenced in federal court today to 12 months and one day in prison for concealing her mother’s death from the Social Security Administration for 13 years to steal more than $268,000 in retirement benefits.
Brandt pleaded guilty to Social Security fraud in August 2023. According to her plea agreement, Brandt’s mother, identified in court records as H.B., moved from California to her daughter’s home in Tijuana when her health declined. She died in Mexico in June 2010. H.B. had been receiving retirement benefits from the Social Security Administration (SSA) via direct deposit into her bank account.
After H.B. died, Brandt did not inform the SSA and continued to use H.B.’s bank card to withdraw the benefits intended for H.B. Brandt admitted that she impersonated H.B. in a call to H.B.’s bank, purportedly to update H.B.’s address and request a new bank card in H.B.’s name. Brandt enlisted a third party to bring the new bank card to her in Mexico. After the SSA discovered H.B.’s death and stopped paying benefits, Brandt impersonated H.B. again in a call to the bank to inquire about the missing payment. Brandt was arrested on June 27, 2023, as she attempted to cross into the U.S. from Mexico, three weeks after the SSA benefits stopped.
Brandt was ordered to pay $268,143 in restitution to the Social Security Administration.
This case is being prosecuted by Special Assistant U.S. Attorney Lisa J. Sanniti.
DEFENDANTS Case Number 23cr1484-BAS
Kimberly Kay Brandt Age: 51 Tijuana, Mexico
SUMMARY OF CHARGES
Social Security Fraud – Title 42, U.S.C., Section 408(a)(4)
Maximum penalty: Five years in prison and $250,000 fine
AGENCY
Social Security Administration Office of the Inspector General
Second “United Against Hate Week” Begins TodayRead the Press Release
SAN DIEGO – Beginning today, the U.S. Attorney’s Office and the San Diego Anti-Hate Coalition launch their second “United Against Hate Week,” joining cities throughout California for a series of events that promote tolerance and respect.
United Against Hate Week began in the Bay Area as a call for local civic action to stop the hate and implicit biases that are a dangerous threat to the safety and civility of our neighborhoods. The campaign has now spread to more than 200 communities.
“Combating hate crimes requires a committed, coordinated, and united effort,” said U.S. Attorney Tara K. McGrath. “No one should live in fear of hate-filled violence. The Justice Department is committed to building on our partnerships with all of you to effectively prosecute illegal acts of hate.”
The full calendar of events for United Against Hate Week can be accessed at https://www.justice.gov/usao-sdca/united-against-hate.
McGrath will be available for brief interviews about United Against Hate Week. If interested, please contact Kelly Thornton at [email protected].
“As we launch this collaborative effort, there are many ways to participate,” said McGrath. “Every person who joins in, increases the impact of this incredibly important campaign to end intolerance. We can all make a difference by learning more about the campaign, attending an event, or following on social media.”
For more information, please contact Assistant U. S. Attorneys Cindy Cipriani (619-546-9608) and Alicia Williams (619-546-8917) and Law Enforcement/Outreach Coordinator Shastity Urias (619-546-9399). Please follow us on social media @sdantihate to get updates about the upcoming events and resources.
Members of the public are encouraged to report hate incidents and hate crimes to the Federal Bureau of Investigation at 1-800-CALL-FBI or online at https://tips.fbi.gov/. Please call 911 if you need emergency assistance.
Mexican Mafia Associate Sentenced to 10 Years in PrisonRead the Press Release
NEWS RELEASE SUMMARY – November 13, 2023
SAN DIEGO – Juan Castro of San Diego was sentenced today in federal court to 10 years in prison and 10 years of supervised release for selling 109 grams of methamphetamine to a cooperating individual.
A government memorandum submitted for Castro’s sentencing described him as a high-ranking member of the San Ysidro (or “Sidro”) street gang and an associate of the Mexican Mafia. Castro oversaw day-to-day operations for Sidro which included collecting payments in exchange for allowing others to commit crimes in the San Ysidro area. The payments, or taxes, were then distributed to high-ranking Mexican Mafia members. In sentencing Castro, U.S. District Judge Larry Alan Burns called him a “hand puppet for the Mexican Mafia.”
Castro was apprehended after a long-term investigation by the FBI’s Violent Crimes Task Force and Gang Group.
DEFENDANT Case Number 23-cr-00371-LAB
Juan Castro Age: 38 San Diego, CA
SUMMARY OF CHARGES
Distribution of Methamphetamine – Title 21, U.S.C., Section 841(a)(1)
Maximum penalty: Forty years in prison, with a mandatory minimum of five years, and $5 million fine
AGENCIES
Federal Bureau of Investigation – Violent Crimes Task Force – Gang Group (VCTF-GG), which currently includes investigators from the following agencies:
- Federal Bureau of Investigation
- San Diego Police Department
- Homeland Security Investigations
- Bureau of Alcohol, Tobacco, Firearms and Explosives
- California Department of Corrections
- San Diego County Sheriff’s Department
- Chula Vista Police Department
- National City Police Department
Although not currently part of VCTF-GG, during the investigation of this case, VCTF-GG also included investigators from the following:
- Bureau of Prisons
- San Diego District Attorney’s Office of Investigations
CEO of San Diego Financial Firm Charged in Loan ScamRead the Press Release
NEWS RELEASE SUMMARY – November 13, 2023
SAN DIEGO – The CEO of San Diego-based Ethos Asset Management, Inc., which offers financing to international businesses, was arrested in New Jersey Sunday night in connection with fraud charges in the Southern District of California.
Carlos Manuel da Silva Santos of Portugal was taken into custody in Newark, New Jersey as he arrived in the United States from abroad. Santos made his initial appearance there today after the United States unsealed a complaint charging him with wire fraud conspiracy related to a loan scam. Santos is accused of orchestrating the fraud through his company, San Diego-based Ethos Asset Management, Inc.
According to the complaint, Santos required prospective borrowers to provide an upfront fee in an amount equal to a certain percentage of the loan amount. However, upon receipt of the upfront fee, Santos and Ethos did not disburse the loan as agreed upon by the parties. Santos used the upfront fees to repay other prospective borrowers, issue commissions to his co-conspirators, and to pay for personal expenses.
The complaint alleges that to lure prospective borrowers and to obtain lines of credit from financial institutions in furtherance of the scheme, Santos manipulated Ethos’ balance sheets and real financial account statements to artificially inflate Ethos’ net worth. For example, the complaint alleges that Santos induced at least one victim to pay an upfront fee in excess of $8 million by representing Ethos had $359,088,190.22 in a specific brokerage account, but records established that Ethos had no such account. Similarly, the complaint contends Santos altered Ethos bank account statements to inflate bank account balances to prospective borrowers, sometimes by more than $100 million than what was deposited in the account.
This case is being prosecuted by Assistant U.S. Attorney E. Christopher Beeler and Carl F. Brooker, IV.
DEFENDANTS Case Number 23-MJ-4145
Carlos Manuel da Silva Santos Age: 29 Portugal
SUMMARY OF CHARGES
Wire Fraud Conspiracy – Title 18, U.S.C., Section 1349
Maximum penalty: Twenty years in prison and $250,000 fine
AGENCY
Homeland Security Investigations
*The charges and allegations contained in a complaint are merely accusations, and the defendant is considered innocent unless and until proven guilty.
Migrant Smuggler Admits to Sexually Assaulting Juvenile During Travel to the United StatesRead the Press Release
NEWS RELEASE SUMMARY – November 2, 2023
SAN DIEGO – Cecilio Yonatan Jimenez-Bautista of Mexico pleaded guilty in federal court today to alien smuggling charges and admitted that, in carrying out those crimes, he sexually assaulted a 17-year-old female multiple times while traveling from Mexico to the United States. The minor was not accompanied by relatives or a guardian.
According to his plea agreement, on multiple occasions from March 15, 2022, to June 29, 2022, Jimenez-Bautista led at least 25 undocumented aliens from Mexico into the United States. The smuggling fees ranged from at least $5,000 to $9,500 per migrant.
In particular, from June 14, 2022, to June 16, 2022, Jimenez-Bautista and another individual led a group of 10 undocumented migrants from Tijuana, Baja California, Mexico to an area near Otay Lakes Road in Chula Vista, California. The group included the minor. Jimenez-Bautista admitted that on June 14 and 15, 2022, he isolated the juvenile from the group and touched her breasts and genitalia without permission. On June 16, 2022, he sexually assaulted her, causing serious bodily injury.
“The defendant had no regard for this child’s humanity,” said U.S. Attorney Tara McGrath. “The brutal victimization of a 17-year-old minor is yet another example of the cruelty of smugglers who care only about profit.”
“This guilty plea is a reminder of what the combined effort of law enforcement can accomplish,” said Chad Plantz, special agent in charge of HSI San Diego. “HSI special agents remain vigilant to investigate violent human smugglers capable of such revolting actions in the course of circumventing our country’s immigration laws.”
“We continue to work with our local, state, and federal partners to deliver consequences to those nefarious characters who wish to inflict harm in our communities,” said San Diego Sector Chief Patrol Agent Patricia McGurk-Daniel. “We have zero tolerance for these types of actions, and we will do everything in our power to bring those responsible to justice.”
The defendant is scheduled to be sentenced on January 29, 2024.
This case is being prosecuted by Assistant U.S. Attorneys Katherine McGrath and Edward Chang of the Southern District of California, and Trial Attorney Danielle L. Hickman of the Human Rights and Special Prosecutions Section of the Criminal Division of the Department of Justice.
DEFENDANTS Case Number 22cr1550-LL
Cecilio Yonatan Jimenez-Bautista Age: 27 Mexico
SUMMARY OF CHARGES
Bringing an Alien to the United States for Financial Gain and Aiding and Abetting – Title 8, U.S.C., Section 1324(a)(2)(B)(ii), and Title 18, U.S.C., Section 2
Maximum penalty: Fifteen years (Five years mandatory minimum) and $250,000 fine
AGENCY
Homeland Security Investigations
U.S. Border Patrol
Project Manager Admits to Submitting Fake Permit for Fill of WetlandsRead the Press Release
NEWS RELEASE SUMMARY – October 30, 2023
SAN DIEGO – Fiona Skye McKenna, a project manager for a firm developing properties in the Otay Mesa area, pleaded guilty in federal court today, admitting that she falsified permits that led to the illegal discharge of pollutants in connection with a project known as the International Industrial Park.
In pleading guilty, McKenna admitted that she forged permits purportedly issued by the California Regional Water Quality Control Board and the U.S. Army Corps of Engineers to place fill dirt, rock and sand into Johnson Canyon Creek at the International Industrial Park site. McKenna falsified the permits by cutting and pasting from permits the firm had obtained for work at another site.
On October 26, 2022, McKenna submitted the forged permits to the San Diego County Land Development Office to obtain a grading permit. After receiving the grading permit, the firm discharged fill dirt, rock and sand into portions of Johnson Canyon Creek, utilizing dump trucks and heavy duty powered shovels. The wetlands area of Johnson Creek flows into the Otay River, which flows into San Diego Bay.
According to the EPA, wetlands are important because, in addition to providing food and habitat for a diverse array of plants and animals, they act as buffers to flooding and erosion and serve as key links in the global water cycle. Because of their sponge-like ability to absorb water, wetlands can slow the momentum of flood waters or a coastal storm surge. Wetlands’ highly developed root systems also hold soil in place and filter pollutants, naturally improving water quality.
Sentencing is set for January 19, 2024, at 9:00 a.m., before U.S. District Judge Ruth B. Montenegro.
This case is being prosecuted by Assistant U.S. Attorney Melanie K. Pierson.
DEFENDANT Case Number 23cr2249-RBM
Fiona Skye McKenna Age: 37 San Diego, CA
SUMMARY OF CHARGES
Illegal Discharge of Pollutants – Title 33, U.S.C., Sections 1311(a) and 1319(c)(2)(A)
Maximum penalty: Three years in prison and fine of not less than $5,000 or more than $50,000 per day of violation
AGENCY
U.S. Environmental Protection Agency, Criminal Investigations Division; U.S. Army Corps of Engineers; California State Water Board Office of Enforcement
Poway Man Sentenced to Prison after Concealing Mother’s Death for 32 years, Stealing over $800,000 in Government BenefitsRead the Press Release
NEWS RELEASE SUMMARY – October 27, 2023
SAN DIEGO – Donald Felix Zampach, who concealed his mother’s death in 1990 then stole more than $800,000 in government benefits intended for her, was sentenced in federal court today to 24 months in prison.
Zampach pleaded guilty to money laundering and Social Security fraud in June 2023. According to his plea agreement, Zampach’s mother died in Japan in 1990. At the time of her death, she was receiving a widow’s pension from the Social Security Administration and an annuity from the Department of Defense (DoD). Zampach maintained his mother’s bank accounts for over three decades after her death, forged her signature on certificates of eligibility to keep her government benefits in pay, and filed forged federal income taxes.
Zampach admitted that between November 1990 and September 2022, he received at least $830,238 intended for his mother. Zampach used his mother’s identity to fraudulently open credit accounts with at least nine financial institutions, causing losses of more than $28,000. Zampach laundered the stolen monies in part to pay off the mortgage on his Poway home.
Zampach was ordered to pay $858,876.28 in restitution and to forfeit more than $830,000, including his home.
“This is theft on a grand scale,” said U.S. Attorney Tara K. McGrath. “Mr. Zampach stole from service members and those who dutifully pay into Social Security, expecting that when their time comes to retire, the money will be there. Thanks to the diligent efforts of our Social Security Administration partners, Mr. Zampach must pay back what he stole, and be held accountable for this decades-long crime.”
“Mr. Zampach’s sentencing culminates a more than 30-year fraud scheme that he knowingly and willingly implemented to the detriment of the American taxpayer by unlawfully obtaining Department of Defense and Social Security benefits,” said DoD Inspector General Robert P. Storch. “My office, working through its Defense Criminal Investigative Service and with our law enforcement partners, will continue to vigorously investigate and prosecute criminal activities that siphon away the invaluable resources entrusted to the DoD.”
“Mr. Zampach intentionally withheld material information from the Social Security Administration (SSA) to fraudulently obtain more than $250,000 in SSA benefits. This sentence holds him accountable for his devious, decades-long fraud,” said Gail S. Ennis, Inspector General for SSA. “In total, he stole more than $800,000 in public money; and my office will continue to partner with law enforcement to investigate those who defraud SSA and government agencies. I thank the investigators, the U.S. Attorney’s Office, and Special Assistant U.S. Attorney Jeffrey D. Hill for their successful efforts in investigating and prosecuting this crime.”
This case was prosecuted by Special Assistant U.S. Attorney Jeffrey D. Hill.
DEFENDANT Case Number 23cr1268-CAB
Donald Felix Zampach Age: 65 Poway, CA
SUMMARY OF CHARGES
Money Laundering – Title 18, U.S.C., Section 1956(a)(1)(B)(i)
Maximum penalty: Twenty years in prison and $500,000 fine
Social Security Fraud – Title 42, U.S.C. Section 408(a)(4)
Maximum penalty: Five years in prison and $250,000 fine
AGENCIES
Social Security Administration – Office of the Inspector General
Department of Defense – Office of the Inspector General – Defense Criminal Investigative Service
Illicit Money Transmitters Admit Criminal Scheme to Funnel Money to Nevada CasinoRead the Press Release
NEWS RELEASE SUMMARY – October 27, 2023
SAN DIEGO – Two Mexican nationals and their unlicensed money transmitting business admitted in federal court today that they illegally helped foreign gamblers move money stealthily through the U.S. financial system to avoid scrutiny by U.S. and foreign law enforcement and regulators.
Defendants Francisco Alberto Garza-Vargas and Ricardo Najera-Almaguer, both of San Pedro Garza Garcia, Mexico, and Carma de Monterrey SA de CV, a Mexican corporation headquartered in Monterrey, Mexico, admitted they conspired to operate an unlicensed money transmitting business on behalf of foreign patrons of the casino industry.
Garza-Vargas was previously a registered agent with the Nevada Gaming Commission. Casinos typically contract with such agents to be a liaison between casinos and high-rolling guests. These agents bring players into a particular casino; and in return, they are compensated with commission by that casino.
According to court documents, the defendants’ unlicensed money transmitting enterprise conducted more than 115 illegal transfers with bank accounts controlled by the casino industry in the aggregate amount of approximately $8,129,664.
These cases bring to 15 the total number of defendants who have admitted wrongdoing in this investigation into money laundering, unlicensed money transmitting, and other crimes, with associated criminal penalties of over $7.5 million.
During today’s hearing, U.S. District Judge Dana M. Sabraw accepted Garza-Vargas’ and Najera-Almaguer’s deferred prosecution agreements and the corporation’s guilty plea and ordered the defendants to pay criminal fines and other financial penalties totaling $3,198,397.
According to court documents, the defendants conducted financial transactions for casino patrons located abroad who sought to gamble in the United States. To have funds available for that purpose in the United States, the defendants transferred the patron’s funds through a series of bank accounts controlled by the corporation defendant and others into casino-controlled bank accounts. The circuitous transfers helped patrons evade laws and regulations designed to prevent money laundering.
As a result of not registering their money transmitting business, not maintaining an anti-money laundering program, and not filing required suspicious activity reports or currency transaction reports, the defendants were able to conceal the sources of funds. This conduct obscured the nature of the transactions from other United States-based financial institutions and inhibited the ability of law enforcement and other authorities to investigate.
Today’s proceedings follow a similar resolution as that of defendant Juan Carlos Palermo on April 20, 2022, who in a related case admitted to money laundering in the promotion of his own unlicensed money transmitting business. Since October 2012, while acting as an agent for one casino, defendant Palermo operated multiple unlicensed businesses in the United States and abroad that conducted more than 200 transfers with bank accounts controlled by multiple casino entities, over $17.7 million, on behalf of at least 50 casino gambling patrons.
Between approximately 2012 and 2020, defendant Palermo and his unlicensed money transmitting business transacted with clients, and related financial accounts, in at least 15 countries, including countries that the United States Department of State has identified as “Major Money Laundering Countries” of “primary concern” like Mexico, Argentina, Cayman Islands, Switzerland, United Arab Emirates, and Hong Kong. The Palermo money transmitting business’s use of these bank accounts and other financial services allowed clients to conduct international monetary transfers through underground financial networks engaged in transferring funds, exchanging currency, and other money transmitting and remitting services, while circumventing laws and regulations regarding monetary transfer and reporting in the U.S. and elsewhere.
This case is being prosecuted by Assistant U.S. Attorneys Carl F. Brooker IV, Christopher Beeler, and Mark W. Pletcher and investigated by Homeland Security Investigations and the IRS Las Vegas Financial Crimes Task Force.
DEFENDANTS
Francisco Alberto Garza-Vargas Age: 59 San Pedro Garza Garcia, MX
(Case Number 23-CR-0219-DMS)
Ricardo Najera-Almaguer Age: 68 San Pedro Garza Garcia, MX
(Case Number 23-CR-0219-DMS)
Carma de Monterrey S.A. de CV Monterrey, MX
(Case Number 22-CR-0219-DMS)
Juan Carlos Palermo Age: 64 Buenos Aires, Argentina
(Case Number 22-CR-0859-DMS)
SUMMARY OF CHARGES
Conspiracy to Operate an Unlicensed Money Transmitting Business – Title 18, U.S.C., Section 371
Maximum penalty: Five years in prison and $250,000 fine
AGENCIES
Homeland Security Investigations
IRS-Criminal Investigations, Las Vegas Financial Crimes Task Force