District of Oregon
Press releases recorded for this federal judicial district.
Coos County Felon Receives 15-Year Prison TermRead the Press Release
EUGENE, Ore. – Christopher Michael Morgan, 42, a resident of Coos County, Oregon, appeared before United States Chief District Court Judge Ann Aiken in Eugene today, and was sentenced to 15 years in prison for being an armed career criminal. Morgan, a felon, was found in possession of a loaded .45 caliber pistol while in a woman’s restroom at Mingus Park in Coos Bay, Oregon on June 18, 2013.
According to court documents and statements made in court, Morgan and a woman, both with outstanding warrants, were inside the women’s restroom at Mingus Park. A Coos Bay police officer confronted Morgan in front of the bathroom and attempted to arrest him for violating his Oregon parole. Morgan fought the officer and during the struggle held a loaded pistol, then tossed it away. After Morgan was subdued, methamphetamine was located in his shirt pocket. In addition to the federal charges, Morgan was also charged in state court with firearm and drug offenses, and resisting arrest. Morgan plead guilty on July 30, 2014, as part of a global resolution of his federal and state charges.
Morgan qualified to be sentenced as an armed career criminal because he possessed the loaded pistol after having been previously convicted of four residential burglaries and a felony assault. He had also been convicted six times in Oregon courts for possessing methamphetamine and once for being a felon in possession of a firearm. According to court documents, Morgan has been convicted of fifteen felonies and more than a dozen misdemeanors over the past twenty-three years.
This case was investigated by the U.S. Bureau of Alcohol, Tobacco and Firearms, and the Coos Bay Police Department. Assistant U.S. Attorney Frank R. Papagni, Jr., with the assistance of Coos County Deputy District Attorney Steven Petty, prosecuted the case.
Malheur County Armed Career Criminal Sentenced to 15 Years in Federal Prison for Possessing a Firearm and AmmunitionRead the Press Release
EUGENE, Ore. – Ramiro Martinez Tristan, 40, of Ontario, Oregon, was sentenced yesterday by U.S. District Chief Judge Ann Aiken to 15 years in federal prison for unlawful possession of a firearm and ammunition. Upon his release from prison, Tristan will be on supervised release for five years.
U.S. Attorney Amanda Marshall praised the sentence imposed on Tristan stating, “Ontario and Eastern Oregon are better places with Ramiro Tristan removed from the community. This case is the result of the excellent collaboration between the Ontario Police Department, the High Desert Drug Enforcement Task Force, Oregon State Police, the Malheur County District Attorney’s Office, ATF, and my office. Coordination between federal and state partners is key to prosecuting the most dangerous criminals and keeping our communities safe, and my office is committed to working with our local partners to achieve these results.”
On September 10, 2013, Ontario, Oregon police officers executed a search warrant at an apartment where Tristan was staying and found, among other things, a stolen .40 caliber handgun next to Tristan’s identification card. A search of recovered cell phones revealed photographs of Tristan displaying bundles of cash and holding a handgun. Officers booked Tristan into the Malheur County Jail. Officials later learned that around the time of his September 10 arrest, Tristan had secreted methamphetamine in his rectum, brought the methamphetamine into the Malheur County Jail, and distributed it to other inmates.
Tristan has a significant criminal history with prior felony convictions for multiple assaults, felon in possession of a firearm, and burglary in the second degree. Under federal law, any person who possesses a firearm or ammunition after being previously convicted of three violent felonies or felony drug trafficking crimes is an Armed Career Criminal and faces a 15-year mandatory minimum sentence.
Assistant U.S. Attorney Nathan J. Lichvarcik prosecuted this case.
Oregon Armed Career Criminal Receives 15-Year Prison TermRead the Press Release
EUGENE, Ore. – Richard Gene Stephens, 43, of Linn County, Oregon, appeared before United States District Court Chief Judge Ann Aiken in Eugene yesterday and was sentenced to 15 years in prison for being an armed career criminal and for possessing a revolver that had been stolen during a burglary of a home by another felon, Mitchell Wayne Brolin.
On May 13, 2013, Albany police officers arrested Stephens after seeing him in a stolen car. A subsequent search of the vehicle revealed an overnight bag containing Stephens’ identification documents, syringes, pawn shop receipts, and a stolen revolver. When arrested, Stephens was wanted for violating his Oregon parole.
On July 2, 2014, Stephens pled guilty to being a felon in possession of a stolen firearm. Chief Judge Aiken sentenced him as an armed career criminal because he possessed the stolen revolver after having been previously convicted of robbery, two burglaries and twice delivering methamphetamine. According to court documents, in the past 24 years, Stephens has been convicted of 18 felonies, including four convictions for being a felon in possession of a firearm, and more than 20 misdemeanors.
On September 9, 2014, Brolin pled guilty to being a felon in possession of a stolen firearm and is scheduled to be sentenced on December 16, 2014, before United States District Court Judge McShane.
Stephens’ guilty plea, admissions and sentence of 15 years were part of a global plea agreement with the United States Attorney’s Office and the Linn County District Attorney’s Office. This case was investigated by the U.S. Bureau of Alcohol, Tobacco and Firearms, and the Albany Police Department. The case was prosecuted by Assistant United States Attorney Frank R. Papagni, Jr. with the assistance of Deputy District Attorney Jonathan Crow.
Coos County Tax Protestors Convicted of Tax CrimesRead the Press Release
EUGENE, Ore. – Amanda Marshall, U.S. Attorney for the District of Oregon, announced that a federal jury in Eugene, Oregon has returned verdicts convicting Ronald Joling, 71, and Dorothea Joling, 72, both of Coquille, Oregon, of federal criminal tax violations. Ronald Joling was found guilty of conspiracy to defraud the United States by obstructing the Internal Revenue Service (IRS), tax evasion, and filing false income tax returns. Dorothea Joling was likewise convicted of conspiracy to defraud the United States by obstructing the IRS. Chief U.S. District Judge Ann Aiken presided over the trial and will sentence the Jolings on February 11, 2015.
U.S. Attorney Marshall noted, “Most citizens pay their taxes as part of being responsible members of society. When people like the Jolings refuse to pay their fair share, and then threaten, harass, and file liens against people who are just trying to do their jobs, my office will aggressively prosecute them and work with the IRS to hold them accountable.”
Evidence at trial detailed the Jolings’ illegal efforts over close to twenty years to keep the IRS and the Oregon Department of Revenue from collecting almost $2 million they owed in back taxes, penalties and interest. The Jolings’ efforts to thwart the IRS included their use of sham trusts, a corporation, sole bank accounts in the names of nominees, a warehouse bank, bogus money orders, bills of exchange, bonds, and filing false tax returns with the IRS. When those efforts failed, the Jolings resorted to intimidation tactics and threats. Witnesses testified that in response to attempts to collect taxes owed, the Jolings threatened them with arrest, criminal prosecution and lawsuits. In one instance, the Jolings took out a newspaper advertisement in the Coquille Valley Sentinel accusing a local government employee of malfeasance just for performing her job. The Jolings also filed retaliatory bogus liens against federal judges, the federal court clerk’s office, and federal prosecutors who were involved in the criminal case.
Rather than pay their taxes, the Jolings spent about $750,000 on a motel and restaurant in Coquille and tracts of land in Linn County. They attempted to conceal their interest in these properties from the IRS by placing them in sham trusts.
“Every American who pays his or her taxes is harmed by those who use abusive trusts and other schemes to avoid paying their fair share,” said Special Agent in Charge Teri Alexander, IRS Criminal Investigation. “We owe it to every American taxpayer to use all lawful means to identify and prosecute those who evade their taxes.”
This case was investigated by the Internal Revenue Service, Criminal Investigation. It was prosecuted by Assistant U.S. Attorneys Scott E. Bradford and Chris Cardani.
Medford Felon Sentenced to 10 Years Federal Prison for Possessing FirearmRead the Press Release
MEDFORD, OREGON— On Monday, October 20, 2014, Senior U.S. District Judge Owen M. Panner sentenced Dennis William Lee, 45, of Medford, Oregon, to 10 years in federal prison for being a felon in possession of a firearm. Lee will be on three years of supervised release after he completes his prison term. Lee’s 10-year sentence is the maximum allowed under federal law.
On November 12, 2013, the Medford Area Drug and Gang Enforcement team (MADGE) served a search warrant at defendant’s residence after developing probable cause through surveillance and controlled heroin purchases from Lee. Lee was standing outside when police approached and he grabbed a female standing next to him, shoved her at the police, and turned to flee, only to encounter two MADGE detectives approaching from behind. Lee threw a cup of alcoholic beverage into one detective’s face and then collided into him. Officers wrestled Lee to the ground, where he continued fighting until he was tased and taken into custody.
Officers found a loaded 9mm handgun in Lee’s pocket and $2,616 cash. Detectives searched Lee’s trailer and found digital scales, a half-pound marijuana, $6,975 cash, and assorted drug packaging materials that smelled of heroin, and a small amount of methamphetamine.
Lee recently moved to Medford from Sacramento, California. His criminal history shows 40 arrests, with felony convictions for obstruct/resisting executive officer in 2007 (16 months prison), possession of heroin for sale in 2005 (four years prison), possession of methamphetamine for sale in 1997 (five years prison), sale of rock cocaine in 1990 (three years prison), possession of a controlled substance in 1993 (three years prison), and receiving stolen property in 2010 (16 months prison). In addition, Lee has misdemeanor convictions for assault with a weapon, resisting arrest, possession of burglary tools and reckless driving.
This case was investigated jointly by the Medford Area Drug and Gang Enforcement Team and the Bureau of Alcohol, Tobacco, and Firearms, and was prosecuted by Assistant U.S. Attorney Douglas W. Fong.
Klamath Falls Felon Sentenced to 15 Years Federal Prison for Possessing FirearmsRead the Press Release
MEDFORD, Ore. - Today Senior U.S. District Judge Owen M. Panner sentenced Vincent Sanchez, Jr., 37, of Klamath Falls, Oregon, to 15 years in federal prison for being a felon in possession of a firearm. Sanchez will be on five years of supervised release after he completes his prison term. The maximum sentence he faced was life in prison.
On December 12, 2013, Klamath County Sheriff’s detectives observed Sanchez in the front passenger’s seat of a vehicle. Sanchez had an outstanding felony arrest warrant, and deputies had information that he was carrying a firearm. Deputies stopped the vehicle, ordered defendant out, searched him, and found a loaded 9mm handgun in a shoulder holster concealed under his sweatshirt. A black zippered bag in the front passenger’s seat contained three baggies of methamphetamine (62 grams actual meth), drug notes, and digital scales. Deputies then searched the home where Sanchez was staying and retrieved a loaded SKS assault rifle and a Ruger 7mm bolt action rifle Sanchez had stored at the residence.
Under federal law, any person who possesses a firearm or ammunition after being previously convicted of three violent felonies or drug trafficking crimes qualifies as an Armed Career Criminal and faces a 15 year mandatory minimum prison sentence. Based upon defendant’s prior felony convictions for felony attempt to elude, assault on a police officer (three counts), conspiracy to delivery methamphetamine, and burglary, Sanchez was sentenced as an Armed Career Criminal. His criminal history also includes felony convictions for supplying contraband, transportation of a controlled substance, tampering with a witness, and possession of a methamphetamine, and misdemeanor convictions for strangulation, possessing a switchblade knife, interfering with police, false information to police, theft and disorderly conduct.
This case was investigated jointly by the Klamath County Sheriff’s Office and the Bureau of Alcohol, Tobacco, and Firearms, and was prosecuted by Assistant U.S. Attorney Douglas W. Fong.
Update on Portland, Oregon Man Sentenced Earlier this Month for Defrauding His Own Company Out of $1.4 MillionRead the Press Release
PORTLAND, Ore. – David Schrader, 47, of Portland, Oregon, was sentenced October 1 by U.S. District Court Judge Robert E. Jones to 46 months in prison for the crime of wire fraud and ordered to pay over $1.4 million in restitution to DAT Solutions (formerly Transcore), the victim of his crime. As summarized in the October 2 press release on this matter, Schrader had been employed as the Senior Vice President of Operations, and had accomplished his theft by submitting false expense reports to DAT’s accounting department that either falsified or inflated the amounts for which defendant was actually entitled to receive reimbursement. As part of his fraud, Schrader forged the signature of DAT’s president, fabricated approval emails from the president on his fraudulent reports, and submitted false credit card statements.
At Schrader’s October 1 sentencing, Judge Jones permitted Schrader to self-surrender in January 2015 to begin serving his sentence, with the expectation that Schrader would continue his efforts to sell several pieces of real estate until that time and apply the proceeds of those sales to his restitution obligation. The government had previously filed liens on multiple properties Schrader owns in the Portland area in order to secure its interest and facilitate restitution to Schrader’s victim.
The day after Schrader’s sentencing, his attorneys contacted prosecutors to inform them that one of Schrader’s properties was owned equally by Schrader and an associate, and to request that only fifty percent of the sale proceeds be applied to Schrader’s restitution obligation, with the other fifty percent going to Schrader’s associate. After confirming that Schrader’s associate was not listed in county property records, prosecutors refused the request on the ground that Schrader’s alleged associate had no legal interest in the property, regardless of any informal arrangement the two men might have had. Schrader’s attorneys then filed a motion attaching an “ownership contract executed in March 2005” between Schrader and his associate, and requested that the Court require the government to give half of the property’s proceeds to Schrader’s associate rather than to DAT. Following this filing, the government learned from Schrader’s associate that Schrader had approached him just days after being sentenced and asked him to sign and backdate the “ownership contract.”
Schrader appeared before Judge Jones again late last week to answer for this conduct. Schrader’s attorneys attempted to withdraw the fraudulent contract from the record, but Judge Jones denied the request, indicating that it “comes a bit late.” Judge Jones then revoked Schrader’s pretrial release, finding that his conduct was a continuation of the activity he had just been sentenced for, namely that of “a liar, a cheat, and a crook.” He then ordered that Schrader be taken immediately into custody to begin serving his 46-month sentence. Judge Jones refused Schrader’s attorneys’ request that they be allowed to escort Schrader to the U.S. Marshal’s Service rather than waiting for the Marshals to arrive in the courtroom, indicating that he did not “trust him farther than I can spit.”
The investigation of this case was conducted by the FBI, and the case was prosecuted by Assistant U.S. Attorneys Michelle Kerin and Katie Lorenz.
Psychic Reader Pleads Guilty to Stealing $16 Million from Oregon ManRead the Press Release
PORTLAND, Ore. - Rachel Lee, 43 of Canby, Oregon, faces up to nine years in federal prison after pleading guilty to a scheme to defraud a victim of approximately $16 million dollars. On October 14, 2014 before U.S. District Court Judge Robert E. Jones, Lee pleaded guilty to one count of conspiracy to commit wire fraud, one count of conspiracy to commit money laundering, and one count of criminal failure to file personal income taxes.
By her guilty plea, defendant Lee admits that she conspired with at least one other person to make false or misleading promises which caused the victim to part with his money and to provide other personal information to defendant. Based on false statements from the defendant, the victim granted defendant access to and control of his bank accounts. Additionally the defendant told the victim he needed to sell his business holdings in order to pay for taxes due and owing.
Defendant Lee further admitted that she conspired with others to spend the proceeds of the fraud on items including but not limited to the July 27, 2012 purchase of a 2012 Bentley and a 2012 Ferrari.
The defendant is in custody and sentencing is scheduled for January 20, 2015. By the terms of Lee’s plea agreement, she will be sentenced to no less than 87 months and no more than 108 months in prison and ordered to pay full restitution. She has also agreed that assets seized by agents during the course of the investigation will be forfeited and the proceeds provided to the victim to offset restitution. Seized assets in this case include $1.9 million in cash, multiple vehicles, and ten parcels of property.
This case was investigated by the Internal Revenue Service, Criminal Investigations and the Canby Police Department with assistance from the Social Security Administration - Office of Inspector General, Multnomah County Sheriff’s Office, Portland Police Department, and the Oregon Department of Justice. The case is being prosecuted by Assistant U.S. Attorney Donna Maddux and Assistant U.S. Attorney AnneMarie Sgarlata.
Portland Man, Former Senior Vice President at DAT Solutions Sentenced for Defrauding his own Company out of $1.4 MillionRead the Press Release
PORTLAND, Ore. – David Schrader, 47, of Portland, Oregon, was sentenced yesterday by U.S. District Court Judge Robert E. Jones to 46 months in prison followed by three years of supervised release for the crime of wire fraud. He was also ordered to pay over $1.4 million in restitution to DAT Solutions (formerly Transcore), the victim of his crime, as well as a sizeable money judgment to the government as punishment for his crime. Schrader pleaded guilty to the crime of wire fraud in June of this year.
Between 2003 and 2014, Schrader stole more than $1.4 million from the company while employed as the Senior Vice President of Operations. At the time the company discovered his theft in early 2014, Schrader was one of the highest paid employees at DAT, earning close to half a million dollars in salary and benefits. Schrader accomplished his theft by submitting false expense reports to DAT’s accounting department that either falsified or inflated the amounts for which defendant was actually entitled to receive reimbursement. As part of his fraud, Schrader forged the signature of DAT’s president, fabricated approval emails from the president on his fraudulent reports, and submitted false credit card statements.
Tim Bickmore, the former president of DAT Solutions, testified at the sentencing hearing about the toll that Schrader’s fraud had taken on the company. During many of the years that Schrader’s fraud went undetected, DAT Solutions was dealing with the consequences of the recession affecting all U.S. companies. As a result of the combination of the recession and the significant theft by Schrader, DAT was forced to lay off multiple employees and make adjustments to the salaries and bonuses of other employees, many within the state Oregon, Mr. Bickmore told Judge Jones. David Liner, general counsel for DAT Solutions, also testified at the sentencing, and estimated that the actual loss to DAT’s shareholders—which included employee retirement funds—exceeded $22 million. When handing down Mr. Schrader’s sentence of 46 months in prison, Judge Jones told the defendant that when he was called a crook, a liar, a cheat, and a forger by his former colleagues, he had “earned each of those titles.”
The investigation of this case was conducted by the FBI, and the case was prosecuted by Assistant U.S. Attorneys Michelle Kerin and Katie Lorenz.
Portland Gang Associate Sentenced to 94 Months in Prison after being convicted of unlawfully possessing ammunitionRead the Press Release
The case arose from a shooting where the police were unable to recover a firearmPORTLAND, Ore. – October 2, 2014, Thomas Douglas Smith, 35, of Portland, Oregon, was sentenced to 94 months’ imprisonment after his federal conviction for being a felon in possession of ammunition. When the defendant is released from prison he will serve an additional three years of supervised release.
The defendant’s conviction stemmed from a gang involved shooting in which two people were shot, yet failed to cooperate with law enforcement. On May 22, 2011, the defendant was implicated in shooting two individuals inside the Interstate Bar and Grill in north Portland, Oregon. The shooting stemmed from an initial physical altercation between the defendant and two rival gang members. DNA evidence and video surveillance from inside the bar indicated that the defendant, after being punched by two other individuals, pulled out a gun and started shooting. Two individuals were shot but they would not cooperate with either the police or the District Attorney’s Office. No firearm was recovered from the scene. While investigating the shooting, Portland Police Bureau (PPB) Detectives and Officers with the Gang Enforcement Team recovered two spent .380 caliber shell casings and two fired .380 caliber bullets.
After extensive follow-up work by the PPB Gang Enforcement Team and the Bureau of Alcohol, Tobacco, Firearms and Explosives, on March 21, 2012, the defendant, a felon, was indicted in federal court for being a felon in possession of ammunition that had traveled in interstate commerce. At the time of the crime, the defendant had prior felony convictions for Escape in the Second Degree, Possession of a Controlled Substance, Burglary in the First Degree, Felony Assault in the Fourth Degree, Delivery of a Controlled Substance, and Delivery of a Controlled Substance within 1,000 feet of a School. The defendant pled guilty to the charge on October 30, 2012. The defendant had been released from state prison less than three months prior to the shooting.
This case was investigated by the Portland Police Bureau’s Gang Enforcement Team and the Bureau of Alcohol, Tobacco, Firearms and Explosives. The case was prosecuted by Assistant U. S. Attorneys Scott Kerin and Stacie Beckerman, both members of the U.S. Attorney’s Office Gang and Sex Trafficking Prosecution Team.
Soto-Vasquez Brothers Each Sentenced to Ten Years in Federal Prison for Drug DealingRead the Press Release
PORTLAND, Ore. -- United States District Judge Anna J. Brown sentenced, in separate proceedings, Jose Antonio Soto-Vasquez, 29, and Jesus Manuel Soto-Vasquez, 27, each to ten years in federal prison on Wednesday, October 1, 2014. Earlier this year, both co-defendants pleaded guilty to conspiracy to distribute and possess with intent to distribute methamphetamine.
“The sentences in this case reflect the seriousness of federal sentencing for drug distribution,” said U.S. Attorney Amanda Marshall.
Both brothers were investigated by the Drug Enforcement Administration (DEA) as part of drug distribution ring operating in Salem, Oregon and were arrested in 2013. They admitted to officers that they had been active in a southern Oregon outdoor marijuana grow and had returned to Salem where they distributed marijuana and methamphetamine. Each defendant was found by the court to have possessed a firearm in connection with the offense. The quantity of methamphetamine they possessed for sale subjected them to a ten-year mandatory minimum sentence.
The case was investigated by the Salem office of the DEA and prosecuted by Assistant U. S. Attorney Thomas H. Edmonds.
International Fugitive for 15 Years Caught by FBI and Sentenced for 1997 Methamphetamine OffenseRead the Press Release
EUGENE, Ore. –Joseph Floyde DeArmond, 51, previously of Medford, Oregon, was sentenced today by U.S. District Chief Judge Ann Aiken to 36 months in federal prison for an offense he committed in 1997 – possession with intent to distribute methamphetamine. Upon his release from prison, DeArmond will be on supervised release for three years.
On June 9, 1997, law enforcement seized a distributable amount of methamphetamine from defendant’s Medford, Oregon home. After being federally charged, DeArmond pled guilty and was scheduled to be sentenced on June 30, 1998. Rather than appear for sentencing, DeArmond fled the United States to Costa Rica. The FBI’s fugitive hunt lasted from 1998 until 2013, when DeArmond was located in Costa Rica living under an assumed name. After positively identifying him as Joseph DeArmond, the FBI worked with the Costa Rican government to arrange for his return to the United States.
Assistant U.S. Attorney Nathan J. Lichvarcik prosecuted this case.
Felon Sentenced to 41 Months for His Role in a Firearms Straw Purchasing/Trafficking InvestigationRead the Press Release
EUGENE, Ore. – On October 1, 2014, Charles Thornton, 39 years old, of Patterson, California, was sentenced by U.S. District Chief Judge Ann Aiken to 41 months in federal prison for his role in a firearms straw purchasing and trafficking investigation. Upon his release from prison, Thornton will be on supervised release for three years.
In August 2008, Thornton, a felon and crack cocaine dealer, recruited a woman named Eleanor Arceneaux, a crack cocaine customer of his, to buy firearms for him from various firearms dealers in southern Oregon. Thornton needed others to buy firearms because, as a felon, he was prohibited from doing so. Purchases of guns in this manner, where the actual purchaser conceals his involvement from the seller of the firearm, are commonly known as “straw purchases.” Firearms straw-purchasing offenses are particularly reprehensible because those firearms often end up in the hands of people who are not lawfully allowed to possess them and regularly end up being used in violent crimes.
Over the next few months, Arceneaux acted as a straw-purchaser in purchasing approximately 35 firearms for Thornton and others. During the transactions involving Thornton, he gave Arceneaux the money to purchase the firearms, accompanied her to the firearms dealers, instructed her which firearms to purchase, and compensated her with crack cocaine. At least several of the firearms purchased during this scheme surfaced at crime scenes in the Oakland, California area shortly after purchase.
After being federally charged, Thornton pled guilty to three counts of making false statements in connection with the acquisition of firearms and three counts of being a felon in possession of firearms. Arceneaux, for her part, pled guilty in federal court to one count of conspiracy to straw purchase firearms and nine counts of making false statements in connection with the acquisition of firearms, and was sentenced earlier this year to five years of probation.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and was prosecuted by Assistant U.S. Attorney Nathan J. Lichvarcik.
Convicted Bomb Plotter Sentenced to 30 YearsRead the Press Release
PORTLAND, Oregon. –Mohamed Osman Mohamud, 23, who was convicted in 2013 of attempting to use a weapon of mass destruction (explosives) in connection with a plot to detonate a vehicle bomb at an annual Christmas tree lighting ceremony in Portland, was sentenced today to serve 30 years in prison, followed by a lifetime term of supervised release.
Mohamud, a naturalized U.S. citizen from Somalia and former resident of Corvallis, Oregon, was arrested on Nov. 26, 2010, after he attempted to detonate what he believed to be an explosives-laden van that was parked near the tree lighting ceremony in Portland. The arrest was the culmination of a long-term undercover operation, during which Mohamud was monitored closely for months as his bomb plot developed. The device was in fact inert, and the public was never in danger from the device.
At sentencing, United States District Court Judge Garr M. King, who presided over Mohamed’s 14-day trial, said “the intended crime was horrific,” and that the defendant, even though he was presented with options by undercover FBI employees, “never once expressed a change of heart.” King further noted that the Christmas tree ceremony was attended by up to 10,000 people, and that the defendant “wanted everyone to leave either dead or injured.” King said his sentence was necessary in view of the seriousness of the crime and to serve as deterrence to others who might consider similar acts.
“With today’s sentencing, Mohamed Osman Mohamud is being held accountable for his attempted use of what he believed to be a massive bomb to attack innocent civilians attending a public Christmas tree lighting ceremony in Portland,” said John P. Carlin, Assistant Attorney General for National Security. “The evidence clearly indicated that Mohamud was intent on killing as many people as possible with his attack. Fortunately, law enforcement was able to identify him as a threat, insert themselves in the place of a terrorist that Mohamud was trying to contact, and thwart Mohamud’s efforts to conduct an attack on our soil. This case highlights how the use of undercover operations against would-be terrorists allows us to engage and disrupt those who wish to commit horrific acts of violence against the innocent public. The many agents, analysts, and prosecutors who have worked on this case deserve great credit for their roles in protecting Portland from the threat posed by this defendant and ensuring that he was brought to justice.”
“This trial provided a rare glimpse into the techniques Al Qaeda employs to radicalize home-grown extremists,” said Amanda Marshall, U.S. Attorney for the District of Oregon. “With the sentencing today, the court has held this defendant accountable. I thank the dedicated professionals in the law enforcement and intelligence communities who were responsible for this successful outcome. I look forward to our continued work with Muslim communities in Oregon who are committed to ensuring that all young people are safe from extremists who seek to radicalize others to engage in violence.”
According to the trial evidence, in February 2009, Mohamud began communicating via e-mail with Samir Khan, a now-deceased al Qaeda terrorist who published Jihad Recollections, an online magazine that advocated violent jihad, and who also published Inspire, the official magazine of al-Qaeda in the Arabian Peninsula. Between February and August 2009, Mohamed exchanged approximately 150 emails with Khan. Mohamud wrote several articles for Jihad Recollections that were published under assumed names.
In August 2009, Mohamud was in email contact with Amro Al-Ali, a Saudi national who was in Yemen at the time and is today in custody in Saudi Arabia for terrorism offenses. Al-Ali sent Mohamud detailed e-mails designed to facilitate Mohamud’s travel to Yemen to train for violent jihad. In December 2009, while Al-Ali was in the northwest frontier province of Pakistan, Mohamud and Al-Ali discussed the possibility of Mohamud traveling to Pakistan to join Al-Ali in terrorist activities. Mohamud responded to Al-Ali in an e-mail: “yes, that would be wonderful, just tell me what I need to do.” Al-Ali referred Mohamud to a second associate overseas and provided Mohamud with a name and email address to facilitate the process.
In the following months, Mohamud made several unsuccessful attempts to contact Al-Ali’s associate. Ultimately, an FBI undercover operative contacted Mohamud via email under the guise of being an associate of Al-Ali’s. Mohamud and the FBI undercover operative agreed to meet in Portland in July 2010. At the meeting, Mohamud told the FBI undercover operative he had written articles that were published in Jihad Recollections. Mohamud also said that he wanted to become “operational.” Asked what he meant by “operational,” Mohamud said he wanted to put an explosion together, but needed help.
According to evidence presented at trial, at a meeting in August 2010, Mohamud told undercover FBI operatives he had been thinking of committing violent jihad since the age of 15. Mohamud then told the undercover FBI operatives that he had identified a potential target for a bomb: the annual Christmas tree lighting ceremony in Portland’s Pioneer Courthouse Square on Nov. 26, 2010. The undercover FBI operatives cautioned Mohamud several times about the seriousness of this plan, noting there would be many people at the event, including children, and emphasized that Mohamud could abandon his attack plans at any time with no shame. Mohamud indicated the deaths would be justified and that he would not mind carrying out a suicide attack on the crowd.
According to evidence presented at trial, in the ensuing months Mohamud continued to express his interest in carrying out the attack and worked on logistics. On Nov. 4, 2010, Mohamud and the undercover FBI operatives traveled to a remote location in Lincoln County, Oregon, where they detonated a bomb concealed in a backpack as a trial run for the upcoming attack. During the drive back to Corvallis, Mohamud was asked if he was capable of looking at all the bodies of those who would be killed during the explosion. In response, Mohamud noted, “I want whoever is attending that event to be, to leave either dead or injured.” Mohamud later recorded a video of himself, with the assistance of the undercover FBI operatives, in which he read a statement that offered his rationale for his bomb attack.
On Nov. 18, 2010, undercover FBI operatives picked up Mohamud to travel to Portland to finalize the details of the attack. On Nov. 26, 2010, just hours before the planned attack, Mohamud examined the 1,800 pound bomb in the van and remarked that it was “beautiful.” Later that day, Mohamud was arrested after he attempted to remotely detonate the inert vehicle bomb parked near the Christmas tree lighting ceremony
This case was investigated by the FBI, with assistance from the Oregon State Police, the Corvallis Police Department, the Lincoln County Sheriff’s Office and the Portland Police Bureau. The prosecution was handled by Assistant U.S. Attorneys Ethan D. Knight and Pamala Holsinger from the U.S. Attorney’s Office for the District of Oregon. Trial Attorney Jolie F. Zimmerman, from the Counterterrorism Section of the Justice Department’s National Security Division, assisted.
Hillsboro Drywall Company President Sentenced for Federal Tax EvasionRead the Press Release
PORTLAND, Ore. - On Friday, September 26, 2014, Stephen Gregory Nagy, 53, Hillsboro, Oregon, was sentenced by the U.S. District Judge Michael W. Mosman, to nineteen months in federal prison for evading the payment of federal payroll taxes. Judge Mosman also ordered that Nagy pay $481,517.73 in restitution to the IRS, and serve a three-year term of supervision upon his release from prison. Nagy, who had previously pleaded guilty to tax evasion, was the president of S&S Drywall Assemblies, a company providing drywall services in the construction industry, from January 2005 through September 2011. Nagy was ordered to surrender to U.S. Marshals by December 2, 2014.
The IRS assessed S&S Drywall Assemblies $481,519 in federal employment taxes, penalties and interest for the quarters beginning June 2009 and ending September 2010. Nagy met with the IRS in May 2010, and committed to a plan to pay the past due payroll taxes for his company, but he decided not to comply with the payment plan and engaged in a variety of interrelated fraudulent schemes to evade the payment of the delinquent payroll taxes.
Nagy began conducting extensive business transactions in cash in order to hide funds from the IRS. He obtained the cash by illegally hiring undocumented workers to work on prevailing wage jobs, paying them a small portion of the prevailing hourly rate, and demanding that they kick back the largest portion of their wages to him in cash. Nagy failed to report this cash to the IRS.
Nagy also forced some S&S Drywall employees to file for unemployment benefits through the Oregon Employment Department. After the employees filed for unemployment coverage, Nagy fraudulently insisted that they continue to work full-time for S&S Drywall. The unemployment benefits did not fully compensate the employees at a rate equal to their previous S&S Drywall salaries. To make up the deficit, Nagy gave employees cash payments amounting to the difference between the unemployment benefits and their full-time salaries. These cash wages were neither reported to the IRS, nor were traceable by the IRS. Nagy did not withhold federal income taxes, or Social Security and Medicare taxes from these cash payments. Another result of this scheme was that Nagy had the State of Oregon pay a large portion of his labor costs, giving him more profit from his drywall business. Nagy used some of the cash from the prevailing wage fraud to pay the difference between his employees’ full-time salaries and the illegal unemployment benefits they were receiving. Nagy intimidated, manipulated, and threatened the loss of much needed jobs to gain the cooperation of his employees in this scheme.
Nagy also thwarted IRS collection efforts by placing business and personal assets in the names of others, by physically hiding the assets, and by eventually transferring all S&S Drywall Assemblies income, contracts, receivables, and assets to ASM Drywall, Inc., a shell company he created and placed in his sister’s name.
“Stephen Nagy spent years planning and executing his scheme to steal from his employees and to cheat the IRS,” said U.S. Attorney Amanda Marshall. “It is through the diligent efforts of our law enforcement partners, the IRS and the investigators at the Oregon Department of Justice, that this criminal was finally brought to justice.”
"When a person undertakes to cheat on their tax obligation as Nagy did, they take advantage of all the American taxpayers," said Special Agent in Charge Teri Alexander of IRS Criminal Investigation. "Paying taxes is the price we all pay to live in a free and functioning society. When someone fails to pay their fair share, the rest of us bear the burden. Moreover, in this case, Nagy cheated his employees who trusted him to pay their payroll deductions, thus robbing them of Social Security, Medicare, and other important contributions."
Special Agents with the IRS-Criminal Investigation, and the Oregon Department of Justice, Criminal Justice Division investigated the case. Assistant U.S. Attorney Claire M. Fay and Special Assistant U.S. Attorney Andrew D. Campbell prosecuted the case.
Armed Career Criminal Receives 15-Year Federal SentenceRead the Press Release
PORTLAND, Ore. – Robert Todd Britt, 27, was sentenced today by U.S. District Judge Anna J. Brown to 15 years in federal prison following his plea of guilty to being an Armed Career Criminal in possession of a firearm. Britt pled guilty to the charge on June 11, 2014, and has been in custody since the time of his arrest on December 26, 2013.
Salem police officers arrested Britt based on a state warrant charging him with robbery II. At the time of his arrest, a loaded .22 caliber pistol was found in his front pocket. The Armed Career Criminal Act provides for a mandatory minimum sentence of 15 years’ incarceration for individuals who have previously been convicted of at least three violent felonies or serious drug offenses. Britt was eligible for the 15-year sentence based upon the following prior convictions:
- Burglary I, Marion County, 2006, sentence of 22 months imposed following revocation of the initial probationary sentence;
- Delivery of a controlled substance, Marion County, 2008, sentence of two months imposed following revocation of the initial probationary sentence; and
- Delivery of a controlled substance and felon in possession of a firearm, Marion County, 2009, sentence of 34 months.
The federal sentence was imposed to run concurrently with Marion County sentences received on June 25, 2014 for robbery II, identity theft, unauthorized use of a motor vehicle and assault on a public safety officer.
This case was investigated by ATF and the Salem Police Department. It was prosecuted by Assistant United States Attorney Fred Weinhouse.
Federal Defendant Sentenced to 15 Years in Prison After Being Convicted on Drug ChargesRead the Press Release
Defendant, a Career Offender, had Two Prior Federal Drug Trafficking ConvictionsPORTLAND, Ore. – Lawrence Orlando Lee, 36, of Portland, Oregon, was sentenced to 15 years in federal prison for intent to distribute methamphetamine. At sentencing, the Court found that Lee qualified as a “Career Offender.” Following his federal prison sentence, Lee will be required to serve eight years of supervised release, which includes a condition prohibiting him from associating with any known gang members.
“The defendant was a drug dealer who helped poison the community for his own personal profit,” stated United States Attorney Amanda Marshall. “Unfortunately, almost everyone involved in the criminal justice system is well aware of the direct and indirect harms that drug dealing, especially methamphetamine and heroin, has wrought here in Oregon and elsewhere. Whether it is drug-affected individuals unable to fully function in society; drug affected parents unable to care for their children; individuals who steal and rob to support drug addictions; or drug-fueled violence, it is safe to say that methamphetamine and heroin, both the dealing and abuse of them, are true blights within our community that adversely affects all of us.”
In December 2011, the Metro Gang Task Force (MGTF) received information from multiple sources that the defendant, identified by his street moniker of “G,” was selling methamphetamine and heroin in the greater Portland, Oregon metropolitan area. On August 12, 2012, as part of their ongoing investigation, MGTF officers arrested the defendant and executed a search warrant on his residence. During the search of the defendant’s residence officers found:
● 330 net grams of methamphetamine (containing 295 grams of actual methamphetamine);
● 98 net grams of heroin;
● $1,665 in U.S. Currency;
● A Interdynamic Luger 9mm Model #KG-99 handgun, with a loaded magazine;
● A Fabrinor Victoria Firestorm .45 caliber handgun, with two loaded magazines; and,
● A Glock 27, .40 caliber handgun, with two loaded magazines.The defendant told the police he had been selling drugs due to his inability to get a legitimate job. When he was asked about the guns, the defendant acknowledged that drug dealing was dangerous and that one of the reasons he had the guns was for his protection.
The defendant was indicted in federal court on August 14, 2012, and had prior felony drug trafficking convictions in 1998 and 2008. He pled guilty in this case on February 19, 2014.
This case was investigated by the Metro Gang Task Force, which is made up of special agents and officers from the FBI; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the Portland Police Bureau; the Beaverton Police Department; and, the Tigard Police Department. The case was prosecuted by Assistant U. S. Attorney Scott Kerin, the Chief of the U.S. Attorney’s Office Drug Unit.
Nine Individuals Indicted in Two Fraudulent Tax Refund ConspiraciesRead the Press Release
WASHINGTON – Today, Deputy Assistant Attorney General Ronald A. Cimino for the Justice Department’s Tax Division, U.S. Attorney S. Amanda Marshall for the District of Oregon and Special Agent in Charge Teri L. Alexander of Internal Revenue Service (IRS)-Criminal Investigation announced the unsealing of two indictments against nine individuals involved in two tax fraud schemes, each of which claimed more than $1 million in fraudulent tax refunds.
Four Portland Residents Indicted in a $1 Million Tax Refund Fraud Conspiracy
Jheraun Dunlap, Ernest Bagsby, Jermaine Moore and Brandi McCall were indicted by a federal grand jury sitting in Portland for a federal tax refund fraud scheme.
According to the 45-count indictment, Dunlap allegedly filed at least 208 false individual income tax returns with the IRS, claiming more than $1 million in fraudulent refunds. The indictment alleges that Dunlap filed false tax returns using the names and social security numbers of other individuals, which he obtained directly and received from the other defendants. According to the indictment, Dunlap used numerous addresses obtained by Bagsby, Moore and McCall to receive stored-value debit cards loaded with fraudulent income tax refunds.
Dunlap, Bagsby, Moore and McCall were all indicted for conspiracy to defraud the government. In addition, Dunlap was indicted on 23 counts of filing false claims for tax refunds, five counts of wire fraud and five counts of aggravated identity theft; Bagsby was indicted on one count of theft of government funds and one count of aggravated identity theft; Moore was indicted on two counts of theft of government funds and two counts of aggravated identity theft; and McCall was indicted on three counts of theft of government funds and two counts of aggravated identity theft.
If convicted, Dunlap faces a statutory maximum sentence of 10 years in prison for the conspiracy to defraud the government, five years in prison for each false claims count, 20 years in prison for each wire fraud count and a statutory mandatory two year sentence in prison for the aggravated identity theft counts. If convicted, he could also be subject to fines, mandatory restitution and a money judgment. If convicted, Bagsby, Moore and McCall each face a statutory maximum sentence of 10 years in prison for conspiracy to defraud the government, 10 years in prison for each theft of government funds count and a statutory mandatory two year sentence in prison for the aggravated identity theft counts.
This case was investigated by the IRS-Criminal Investigation’s Stolen Identity Refund Fraud Task Force. Trial Attorneys Leslie A. Goemaat and Lori A. Hendrickson of the Tax Division are prosecuting the case.
Five Individuals Indicted in a $1 Million Tax Refund Fraud Conspiracy
Lori Nicholson, Jasmine Mason, Tataneisha White, Shawntina Ware and Brandon Leath were indicted by a federal grand jury sitting in Portland for a federal tax refund fraud scheme.
According to the 110-count indictment, Nicholson, Mason, White, Ware and Leath filed at least 227 false federal income tax returns with the IRS, claiming more than$1 million in fraudulent tax refunds. The five defendants are alleged to have filed false tax returns using the names and social security numbers of other individuals obtained directly and through other defendants. According to the indictment, the defendants used addresses that they could access or control to receive stored-value debit cards loaded with fraudulent income tax refunds.
Nicholson, Mason, White, Ware and Leath were all indicted for conspiracy to defraud the government. In addition, Nicholson was indicted on 16 counts of filing false claims for tax refunds, three counts of wire fraud and 13 counts of theft of government funds; Mason was indicted on 18 counts of filing false claims for tax refunds, three counts of wire fraud and eight counts of theft of government funds; White was indicted on 12 counts of filing false claims for tax refunds, three counts of wire fraud and four counts of theft of government funds; Ware was indicted on eight counts of filing false claims for tax refunds, three counts of wire fraud and five counts of theft of government funds; Leath was indicted on six counts of filing false claims for tax refunds, three counts of wire fraud and four counts of theft of government funds.
If convicted, the defendants face a statutory maximum sentence of 20 years in prison for each wire fraud count, 10 years in prison for each conspiracy to defraud the government count, 10 years in prison for each theft of government funds count and five years in prison for each false claims count. If convicted, the defendants could also be subject to fines, mandatory restitution, and a money judgment.
This case was investigated by the IRS-Criminal Investigation’s Stolen Identity Refund Fraud Task Force. Trial Attorneys Lori A. Hendrickson and Ryan R. Raybould of the Tax Division are prosecuting the case.
For both cases, an indictment merely alleges that crimes have been committed, and the defendants are presumed innocent until proven guilty beyond a reasonable doubt.
Additional information about the Tax Division and its enforcement efforts may be found on the division website.
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Vancouver Woman Sentenced to Four Years in Federal Prison for Transporting Minor for SexRead the Press Release
PORTLAND, Ore. — U.S. District Court Judge Robert E. Jones sentenced Laura Lambden, 60, of Vancouver, Washington, to 48 months in federal prison, for transporting a young girl from Vancouver, Washington, to Oregon City, Oregon, for the purpose of prostitution. At the sentencing hearing on Monday, September 15th, Judge Jones further ordered defendant to serve a five-year term of supervised release at the time of her release from federal prison.
Lambden pleaded guilty in June 2014 to violating the Mann Act. Lambden admitted to transporting another person from Vancouver to Oregon City in November 2012, for the purpose of prostitution, but denied knowing that the girl she transported was a minor. The customer (or, “john”) in Oregon City, was 64-year-old Ben Riggs, who has also pleaded guilty to violating the Mann Act. Riggs is scheduled to be sentenced on September 29, 2014.
“The commercial sexual exploitation of our children violates federal sex trafficking laws, whether the exploiter is male or female, pimps don’t always fit the stereotype” stated U.S. Attorney S. Amanda Marshall. “Anyone who traffics a child in the District of Oregon will be prosecuted.”
This case stemmed from a coordinated investigation by members of the Federal Bureau of Investigation’s (FBI) Child Exploitation Task Force, including the FBI and the Vancouver Police Department. The FBI’s Child Exploitation Task Force marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children through sex trafficking, as well as to identify and recover victims. The case was prosecuted by Assistant U.S. Attorney Stacie Beckerman.
Investigators, Prosecutors Combat Financial FraudRead the Press Release
International Audience of Professionals Meet and Discuss Strategies Fighting Crimes of Financial FraudSALEM, Ore. – For the 14th consecutive year, a unique financial crimes conference was held in Oregon this week. The Financial Crimes Digital Evidence Conference has become international in scope, attracting participants in past years from Europe and Asia. It brings together law enforcement investigators and prosecutors, financial institution fraud investigators, and corporate fraud investigators to learn how to apply the most recent technology to combat financial fraud. Financial fraud results in billions of dollars of losses annually in the United States and law enforcement officers in Oregon are determined to reduce the harm to consumers and to hold more offenders accountable.
Beginning on Tuesday, September 9, through Thursday, September 11, law enforcement investigators, prosecutors, financial institution fraud investigators, corporate fraud investigators and auditors have gathered at the Salem Convention Center to learn how to better investigate and prosecute financial fraud. The conference provides investigators and prosecutors who handle financial crimes, and private-sector personnel who assist them in doing so, tools to assist in the detection, investigation and prosecution of financial fraud. The conference is open to all city, county, state, and federal law enforcement officers and prosecutors; fraud investigators and security officers for financial institutions; internal auditors for public agencies; and private-sector personnel who assist law enforcement in the investigation of financial crimes.
The seminar address a variety of topics, including: (1) trends in online fraud; (2) the emerging role of law enforcement in response to data breaches; (3) social media investigations; (4) mortgage fraud; (5) digital and virtual currency; (6) consumer fraud schemes; (7) credit card fraud; (8) social security disability fraud, (9) financial exploitation of elders; and (10) state and federal search and seizure legal updates.
“The value of the Financial Crimes Digital Evidence Conference is reflected in its international audience,” said U.S. Attorney Amanda Marshall. “It supports a continuous need for training in the increasingly sophisticated area of financial fraud and reflects our desire to hold accountable those who victimize our citizens. The combined training of investigators and prosecutors fosters a team approach and provides immediate tools to better detect, investigate, and prosecute those who commit financial fraud.”
The 2014 Financial Crimes Digital Evidence Conference is sponsored by the United States Attorney’s Office, the Oregon Department of Justice, and the Oregon Department of Public Safety Standards and Training.
For further information, please contact Donna Maddux at 503-727-1000 or visit www.financialcrimesconference.com.
Douglas County Meth Dealer Receives 10-year Federal SentenceRead the Press Release
EUGENE, Ore. – Scott Arnam Wiley, 46, of Douglas County, Oregon, was sentenced today by U.S. District Court Chief Judge Ann Aiken to a 10-year prison term for possession with intent to distribute methamphetamine. Following his release from prison, Wiley will be on supervised release for five years.
Wiley was a significant and long-term methamphetamine dealer in Douglas County, Oregon with prior convictions for manufacture of methamphetamine and distribution of a controlled substance. The Douglas Interagency Narcotics Team (DINT) and the DEA conducted an investigation into his drug distribution and he was arrested in September 2012. Wiley’s residence was searched, and more than a half-pound of methamphetamine was located. His residence was gated, and had a reinforced door and security cameras in order to deter and detect law enforcement. After the United States filed a lis pendens on the property to seek its forfeiture, Wiley agreed to sell the property and the residence was demolished.
This case was investigated by the Douglas Interagency Narcotics Team and the Eugene Resident Office of the DEA. Assistant U. S. Attorney Jeffrey Sweet prosecuted the case.
Attorney General Recognizes District EmployeesRead the Press Release
WASHINGTON – Assistant United States Attorneys Billy J. Williams, Tim Simmons, Craig Gabriel, and Gary Sussman of the U.S. Attorney’s Office, District of Oregon, were among 243 members of the Department of Justice recognized by Attorney General Eric Holder and Executive Office for U.S. Attorneys (EOUSA) Director Monty Wilkinson at the 30th annual Director’s Awards Ceremony today in Washington D.C.
The District of Oregon was one of 44 districts represented at the ceremony, which was held today in the Great Hall at the Robert F. Kennedy Department of Justice Building.
In his prepared remarks to awardees, Attorney General Holder said, “Locally, nationally, and internationally, you represent the very best that this Department has to offer. Your work embodies our ongoing commitment – not merely to win cases, but to do justice; to protect our fellow citizens from crime, violence, and terrorism; to empower the most vulnerable among us; and to uphold the rule of law.”
EOUSA Director Monty Wilkinson echoed those sentiments, saying to the recipients, “You have persevered, and remained focused and motivated – achieving remarkable results in work that makes a difference in the lives of citizens across our great country. The vast scope of your collective accomplishments is nothing short of exceptional.”
Assistant United States Attorneys Billy Williams, Tim Simmons, and Craig Gabriel all serve as Tribal Liaisons for the District of Oregon. They are recognized for their achievements in promoting the safety of Indian Tribal communities, establishing trusted government-to-government relationships, and prosecuting Indian Country cases. They have instituted concrete changes in Indian Country to promote safety and improve law enforcement, with a particular emphasis on advancing the welfare of Indian youth. They have built the partnerships necessary to have effective Indian Country law enforcement, and employed those resources to aggressively prosecute the most dangerous offenders, resulting in a dramatic increase in prosecutions and an equally dramatic reduction in Indian Country crimes and violence.
Assistant U.S. Attorney Gary Sussman has served as the Project Safe Childhood (PSC) Coordinator for over seven years, and the award recognizes the impact of his work as a leader in developing partnerships with state and local law enforcement and his success in the area of prosecuting sexual predators. During his time as the PSC Coordinator, Sussman has worked directly with federal, state, and local law enforcement agencies that investigate child sexual abuse and exploitation offenses to increase the number, type, quality, and complexity of cases. He has encouraged state and local prosecutors to refer appropriate cases for federal prosecution, and to coordinate joint federal/state prosecution of particularly serious offenders. As a result, many dangerous sexual predators are now serving substantial federal prison sentences. PSC prosecutions doubled between FY 2011 and FY 2012.
“It is an honor and a privilege to work with these dedicated professionals,” said U.S. Attorney Amanda Marshall. “My Indian Country team works tirelessly to fulfill the United States’ trust responsibilities to Tribal Nations by protecting Indian treaty and ancestral rights, and by facilitating partnerships between tribal officials and both federal and state law enforcement and regulatory agencies.” Ms. Marshall added, “Further, the phenomenal commitment of Oregon's Project Safe Childhood Coordinator, AUSA Sussman, in changing the landscape for sexual predators in the District of Oregon by cultivating strong partnerships with state and federal law enforcement, has greatly impacted our ability to bring successful prosecutions of these cases. Enhancing safety in Indian Country and fighting child exploitation has been, and will continue to be top priorities for this office.
EOUSA provides oversight, general executive assistance, and direction to the 94 United States Attorneys’ offices around the country. For more information on EOUSA and its mission, visit http://www.justice.gov/usao.
Two Indicted for Illegally Growing 5,000 Marijuana Plants on Federal LandsRead the Press Release
MEDFORD, OR – Amanda Marshall, United States Attorney for the District of Oregon, announced that two defendants were indicted in relation to an illegal marijuana grow on federal land in Jackson County. Humberto Salgado-Salgado, 36, and Juan Albert Lopez-Moroyoqui, 50, were charged with conspiracy and manufacturing marijuana. In addition, Lopez-Moroyoqui was charged with being an alien who illegally returned to the United States after being deported for a drug related conviction.
Salgado-Salgado and Lopez-Moroyoqui were arrested in the marijuana grow on Forest Service Land in rural Jackson County, Oregon on August 18, 2014. Federal and State agents served a search warrant and seized approximately 5,000 marijuana plants.
An indictment is only an accusation of a crime, and a defendant should be presumed innocent unless and until proven guilty.
The Jackson County Sheriff’s Office, U. S. Forest Service, Department of Homeland Security, and the DEA all assisted in the investigation, and the prosecution is being conducted by Assistant U. S. Attorney Judith Harper.
Albany Woman Pleads Guilty to Threatening to Bomb SchoolRead the Press Release
EUGENE, Ore. – Jenelle Robyn Pinkston, 47 of Albany, Oregon, faces up to ten years in federal prison after pleading guilty to making a telephonic threat to blow up an Albany elementary school.
In the early afternoon of April 16, 2013, Pinkston made a call to Waverly Elementary School and advised the receptionist that the school was going to blow up in ten minutes. Though there was no bomb, police were called, fire alarms were activated and the school was evacuated. Telephone records led police to Pinkston.
In her plea agreement, Pinkston admitted she was also the caller on two bomb threats the following month at Waverly Elementary and another Albany school, Periwinkle Elementary.
Sentencing is set for December 17, 2014 in Eugene. In the meantime, Pinkston will remain in custody.
The FBI, Albany Police Department and the Linn County Sheriff’s Office conducted the investigation. Assistant U.S. Attorney William “Bud” Fitzgerald prosecuted the case.
Federal Fugitive Extradited from Argentina Sentenced to Three Years in Prison for Gun OffenseRead the Press Release
EUGENE, Ore. – Patrick Champlin Tansy, 50, was sentenced on September 2, 2014, to thirty-seven months in federal prison after pleading guilty to felon in possession of a firearm.
On November 7, 1996, Tansy and another man were cutting firewood on federal land near Lapine, Oregon. Law enforcement officers from the U.S. Bureau of Land Management, U.S. Forest Service and local police made contact with the two men after receiving information that trees in the area were being cut without proper permits.
In the course of conducting a search for officer safety, a .22 caliber pistol was discovered in Tansy’s back pocket. Police knew from previous contacts with Tansy that he was a convicted felon and they arrested him for unlawful possession of a firearm.
After Tansy’s arrest, federal authorities widened the investigation and a federal grand jury in Eugene later indicted Tansy for multiple counts of felon in possession of a firearm, as well as charges relating to the unlawful taking of timber on public land. Tansy had previously been convicted in California in 1989 on a felony narcotics charge.
In April 2002, Tansy pled guilty to one count of felon in possession of a firearm and was allowed to remain out of custody while awaiting sentencing. Tansy failed to appear for his sentencing hearing in Eugene and a warrant was issued for his arrest. Authorities later learned that Tansy fled Oregon and moved his family to Buenos Aires, Argentina. While in Argentina, Tansy assaulted his wife during a domestic dispute and was ultimately convicted and sentenced to prison. He was released to U.S. authorities in January 2014 in response to a request for extradition.
The Bureau of Land Management, U. S. Forest Service and U. S. Marshal Service worked with state and local police on the investigation. Assistant U.S. Attorney William “Bud” Fitzgerald prosecuted the case.
Coos County Man Sentenced to 27 Months for Being a Felon in Possession of a Firearm and AmmunitionRead the Press Release
EUGENE, Ore. – On September 4, 2014, Richard Walsh Curtis, 44 years, of Coos Bay, Oregon, was sentenced by U.S. District Chief Judge Ann Aiken to 27 months in federal prison for unlawful possession of a firearm and ammunition. Upon his release from prison, Curtis will be on supervised release for three years.
On August 18, 2012, officers responded to a rural property near Coos Bay because a caller had reported that Curtis, a known felon, was shooting a firearm into the trees. Upon arrival, officers encountered Curtis and seized a loaded .22 caliber revolver from him. Officers learned that Curtis had previously shown the firearm to a young child and had a history of terrorizing the neighbors – for instance, one neighbor reported Curtis had used a chainsaw to cut open his house door and then assaulted him. Curtis has prior felony convictions for assault in the fourth degree constituting domestic violence, felon in possession of a firearm, and possession of a controlled substance.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Oregon State Police, and the Coos County Sheriff’s Office, and was prosecuted by Assistant U.S. Attorney Nathan J. Lichvarcik.
Career Offender Admits to Possessing a Firearm While Trafficking in HeroinRead the Press Release
PORTLAND, Ore. – Marcelino Lopez-Diaz, 25, of Nayarit, Mexico appeared today before U.S. District Judge Robert E. Jones and entered guilty pleas to possession with the intent to distribute heroin in quantities of 1 kilogram or more and possession of a firearm in furtherance of a drug trafficking crime. The maximum sentence on both charges is life and both carry mandatory minimum sentences of ten and five years respective. The mandatory five years sentence for the firearm charge must run consecutive to the 10 year drug sentence. Lopez-Diaz is scheduled to appear for sentencing on December 11, 2014.
On Novemeber 7, 2012 several members of the Hillsboro Police Department and the Washington County Westside Interagency Narcotics Team (WIN) responded to a residence in Hillsboro, Oregon where Jeremy Mollet was found lying on the floor of a locked bathroom. A spoon and syringe were found nearby. Mollet was transported to Tuality Hospital where he was pronounced dead. The medical examiner noticed fresh puncture marks on Mollet’s foot which were consistent with injections sites. An autopsy report confirmed that Mollet died from the combined toxic effects of heroin and oxycodone.
Agents were able to quickly examine Mollet’s cellular phone. They observed a number of text messages describing his last heroin purchase. After speaking with Mollet’s girlfriend, agents were able to identify the person who last supplied the heroin that resulted in his death. From there, agents conducted an investigation into the chain of distribution. The investigation produced five coconspirators that ended with Lopez-Diaz.
On November 11, 2012, agents executed a search warrant at Lopez-Diaz’ residence. Lopez-Diaz flushed narcotics down the toilet drain as agents entered the residence. During the execution of the search warrant, agents located and seized over two pounds of heroin, two digital scales, packaging materials, approximately $28,000 in cash, and a Beretta 9mm firearm with 5 rounds of ammunition. Lopez-Diaz admitted having prior convictions for delivering controlled substances and that he was selling heroin in order to send money home to his mother in Mexico.
The investigation of the case was led by the Washington County Sheriff’s Office, Drug Enforcement Administration (DEA) through its Portland DEA Drug Task Force, and the Washington County Westside Interagency Narcotics Team (WIN), and Oregon State Medical Examiner.
The case was prosecuted by Assistant U.S. Attorney Kemp Strickland.
Prominent Businessman for Private Consulting Group Pleads Guilty to Wire Fraud and Money LaunderingRead the Press Release
Elderly victim bilked for $1.1 million in schemePORTLAND, ORE. – Robert L. Keys, 65, an Oregon resident, pled guilty today to two counts of wire fraud, two counts of money laundering, and one count of bankruptcy fraud, based on an indictment returned by a grand jury on June 27,2012, against him and two co-defendants.
Keys was a prominent businessman who ran a company called Private Consulting Group, which at one time, had assets of $400 million and managed investments for high net worth individuals from around the country.The maximum sentence for the two counts of wire fraud is 20 years per count and a fine of $250,000. The money laundering charges carry a 10-year sentence per count, and the bankruptcy fraud charge has a five-year term of prison. Pursuant to a plea agreement entered into with the government, the government will be recommending a sentence of 70 months and a money judgment and order of restitution of $1.1 million. Sentencing is scheduled to take place on January 20, 2015.
At the change of plea hearing, the government contended that in 2008, as Keys’ business ventures were failing, he turned to one of his long-term clients, a widow in her mid-80s, and persuaded her to loan $1.1 million to co-defendant William Kearney, a Florida businessman who died recently. The indictment alleges, and the government stated at the September 2 hearing, that Keys lied to his client about the terms of the loan, such as the existence of treasury bonds as collateral for the loan and failed to disclose important facts to her in order to fraudulently obtain the money for his benefit and that of the late co-defendant, Kearney. This transaction resulted in the two wire fraud counts to which Keys pled guilty.
During the plea hearing, the government stated that Keys failed to disclose he was receiving over $100,000 in kickbacks as part of the scheme to defraud his long-time client. Those kickbacks were wired to him by co-defendant Kearney the day after he persuaded his client to loan Kearney the $1.1 million. The kickbacks form the basis of the two money laundering charges.
In 2010 Keys, along with his wife, filed for bankruptcy. The indictment charges Keys with fraudulently attempting to discharge $148 million in debt by lying to the Bankruptcy Court, concealing assets and income, and filing false documents the Court. Brenda Carper, 63, his long-time bookkeeper, was also charged with bankruptcy fraud. She previously pled guilty to one count of lying to the bankruptcy court and is scheduled to be sentenced on October 22, 2014.
Keys also pled guilty to one count of lying to the Bankruptcy Court regarding a company that he had transferred to Mrs. Carper but which he continued to control for his personal benefit.This case was investigated by the Internal Revenue Service, Criminal Investigation, and the United States Trustees’ Office. The case is being prosecuted by Assistant United States Attorney and Senior Litigation Counsel Allan M. Garten.
Court Approves Police Reform Agreement in Portland, OregonRead the Press Release
WASHINGTON– Today, the United States won court approval of a settlement agreement to reform the ways in which the Portland Oregon Police Bureau (“PPB”) interacts with individuals with actual or perceived mental illness. The agreement was entered jointly by the United States and the city of Portland, Oregon, with the approval of the Albina Ministerial Alliance Coalition for Justice and Police Reform (“AMA Coalition”) and Portland Police Association (“PPA”). The agreement addresses constitutional claims in a civil action filed by the United States pursuant to the Violent Crime Control and Law Enforcement Act of 1994. In today’s order, the court approved the agreement with the requirement that the parties appear for periodic hearings to provide the court progress on implementation of the agreement.
The agreement requires changes—many of which PPB has already begun to implement—in PPB’s policy, training, supervisory oversight, community-based mental health services, crisis intervention, employee information systems, officer accountability and community engagement and oversight. The agreement also calls for innovative new mechanisms for ongoing community involvement in the implementation of reforms. In addition, the agreement establishes an independent compliance officer and community liaison (“COCL”), who will be responsible for synthesizing data related to PPB’s use of force, reporting to the city council, the Justice Department and the public and gathering input from the public related to PPB’s compliance with the agreement. Finally, the agreement lays the framework for a community oversight advisory board (“COAB”), which will be a crucial mechanism for civil engagement in the reform process.
“We are committed to continuing to work with our partners in the community throughout the reform process to ensure full implementation of the settlement agreement,” said Acting Assistant Attorney General Molly Moran for the Civil Rights Division. “We applaud the city’s efforts to implement portions of the settlement agreement during the pendency of the litigation. We are pleased to provide the court information about reforms through ongoing periodic hearings. We are also appreciative of the continued collaboration with the AMA Coalition and the participation of the PPA to resolve these issues to enable the entry of the settlement agreement. We look forward to the positive changes that these civil rights reforms will bring about for the people of Portland.”
“Today’s decision is the culmination of significant work on the part of all parties to reach such a groundbreaking resolution for the citizens of Portland,” said U.S. Attorney Amanda Marshall for the District of Oregon. “We are very grateful to the court for entering this order, and look forward to continued collaboration with the city of Portland, the Portland Police Bureau, the Portland Police Association, the Albina Ministerial Alliance Coalition for Justice and Police Reform, and all citizens of Portland to ensure the letter and the spirit of this agreement are upheld.”
The United States’ complaint followed an investigation, launched on June 8, 2011, and conducted by the Civil Rights Division’s Special Litigation Section and the U.S. Attorney’s Office for the District of Oregon. The investigation focused on whether PPB engages in unconstitutional or unlawful policing through the use of excessive force, with a specific focus on the use of force against people with actual or perceived mental illness or in mental health crisis.
In a September 2012 findings letter detailing the outcome of the 14-month investigation, the Justice Department found that most uses of force by PPB officers were lawful and reasonable, but it also found reasonable cause to believe that PPB engages in a pattern or practice of excessive force, in violation of the Fourth Amendment of the U.S. Constitution and the Violent Crime Control and Law Enforcement Act of 1994, in certain contexts. Following the release of the findings letter, the United States and the city engaged in settlement negotiations resulting in the settlement agreement, which the city council voted to approve. The city fully cooperated with the United States throughout its investigation and was eager to address problems identified in the United States’ findings letter regarding Portland Police Bureau’s policies, practices, training and supervision through entry of the settlement agreement.
On Dec. 17, 2012, the United States initiated a lawsuit against the city and, with the city’s cooperation, concurrently filed a joint motion asking the court to approve the negotiated settlement agreement and conditionally dismiss the case. Specifically, the United States’ complaint alleged that PPB engages in a pattern or practice of using excessive force on individuals with actual or perceived mental illness by: (1) too frequently using a higher level of force than necessary; (2) using electronic control weapons (“ECWs”), commonly referred to as “Tasers,” in circumstances when such force is not justified, or deploying ECWs more times than necessary on an individual; and (3) using a higher degree of force than justified for low-level offenses.
Both PPA and the AMA Coalition subsequently moved to intervene in the suit, seeking to join the case as parties and objecting to the proposed settlement agreement. The court partially granted PPA’s motion to intervene and granted the AMA Coalition enhanced amicus status, allowing the AMA Coalition to participate in the litigation. The court then ordered all parties to mediation to attempt to resolve PPA’s and the AMA Coalition’s objections to the settlement agreement. Such mediation efforts have resulted in a memorandum of understanding with PPA and a separate agreement previously reached with the AMA Coalition.
Following a fairness hearing on the settlement agreement, the court previously found that the settlement agreement is substantively fair, reasonable and adequate. The court found, however, that it needed a procedure to receive information on the city’s implementation of reforms on at least an annual basis. In today’s ruling, the court required the parties and COCL to file quarterly reports with the court and required the parties to appear for periodic hearings to describe to the court the progress being made toward achieving substantial compliance with all provisions of the settlement agreement and any obstacles or impediments toward that end, and to respond to the court’s questions on these issues.
The assigned attorneys in the United States Attorney’s Office in Portland were Bill Williams, Adrian Brown and David Knight. From the Civil Rights Division of the Department of Justice in Washington, D.C., the assigned attorneys were Laura Coon, Jonas Geissler and Michelle Jones.
For more information on the Justice Department’s Civil Rights Division, please visit www.justice.gov/crt. If you have any comments or concerns specific to this matter, please feel free to contact us at [email protected] 1-877-218-5228.
Multiple Defendants Charged with Federal Offenses Related to Child PornographyRead the Press Release
Federal Complaint Alleges 35 year old Gresham Man, His Father and His Girlfriend Involved in Production and Possession of Child PornographyPORTLAND, Ore. – James Lee Hickerson, 35, of Gresham, Oregon, was arrested Tuesday after Magistrate Judge Stewart approved a criminal complaint charging him with receipt and possession of child pornography. According to information presented at the detention hearing, following his arrest, James Hickerson admitted sexually abusing his girlfriend’s child, in both Washington and Oregon, and taking screen shots of his girlfriend abusing her child while they were Skyping. Hickerson made his initial appearance in federal court on Wednesday. If convicted of the pending charges, Hickerson faces a mandatory minimum of five years in prison, and up to 30 years. He would also be required to serve a minimum of five years on supervision upon release from prison, and be required to register as a sex offender. A release decision regarding defendant Hickerson’s custody status is pending further review by the court.
Neil Lee Hickerson, 56, of Gresham, Oregon, is charged in a separate complaint with possession of child pornography. Neil Hickerson is James Hickerson’s father. Because Neil Hickerson has previously been convicted of an offense relating to abusive sexual conduct relating to a minor, he is facing a mandatory minimum sentence of 10 years, and up to 20 years, in prison, to be followed by a minimum of five years, and up to life, on supervised release. Neil Hickerson also made an initial appearance before Magistrate Judge Stewart on Wednesday, and was temporarily detained pending a detention hearing set for Friday, August 29 at 1:30.
Carolyn M. Knudsen, 28, of Camas, Washington, is charged in a separate criminal complaint with production of child pornography and aiding and abetting. If convicted of the charges, Knudsen is facing a mandatory minimum of 15 years in prison, and up to 30 years. She would also be required to serve a minimum of five years on supervised release after completion of her prison sentence, and would be required to register as a sex offender. Knudsen was also arrested Tuesday and made her initial appearance in federal court Wednesday afternoon. Her detention hearing is also set for Friday. Magistrate Judge Stewart ordered Knudsen detained pending the hearing.
The cases arose after law enforcement officers executed a search warrant at the Hickersons’ residence, believing they had one suspect, and discovered evidence leading to the charges against all three defendants. As a result, law enforcement also identified and rescued a young child in Camas, Washington, who, evidence revealed, had been sexually abused. The matter was referred to Child Protective Services in Vancouver, Washington.
All three cases will be presented to a federal grand jury, and additional charges may be filed.
“This is a heartbreaking case, but thanks to the great investigators who executed the search warrant, a very young child was rescued from further sexual abuse,” said U.S. Attorney Amanda Marshall. “These offenses are insidious, and when exposed, are often met with shock, and even disbelief. Sadly, these cases are all too common. My office will continue to charge these crimes and pursue sentences that ensure all of those who abuse or exploit children are punished to the fullest extent of the law.”
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse. Launched in May 2006 by the Department of Justice and led by United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
A criminal complaint is only an accusation of a crime, and a defendant should be presumed innocent unless and until proven guilty.
The case is being investigated by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); the Interagency Child Exploitation Prevention Team (INTERCEPT); and the Camas and Vancouver, Washington, police departments, and is being prosecuted by Assistant U.S. Attorney Jane Shoemaker, Chief of the Violent Crimes Unit for the U.S. Attorney’s Office in Oregon.
Defendant Enters Guilty Plea Admitting to Delivery of Heroin Resulting in Death of 21 Year Old Salem WomanRead the Press Release
PORTLAND, Ore. - Sergio Quezada-Lopez, 35, of Mexico, appeared on Monday, August 25, 2014, before U.S. District Judge Michael Simon and entered a plea of guilty to conspiracy to distribute heroin in quantities of 1 kilogram or more that resulted in death. The maximum sentence is life and the charge carries a mandatory minimum 20 years imprisonment. The defendant is scheduled to appear for sentencing on December 1, 2014.
The investigation began on April 16, 2012 when police officers responded to the Keizer, Oregon residence of 21 year old Laurin Putnam, who was found deceased. The initial investigation indicated that her death was likely caused by a heroin overdose and later confirmed by the Oregon State Medical Examiner’s Office. Soon after her death, investigators learned the identity of the last person in the chain that was responsible for distributing the heroin to Putnam that caused her death. From there, investigators were able to identify several conspirators and move six levels up the chain of distribution to Sergio Quezada-Lopez. During the investigation, agents learned that Sergio Quezada-Lopez was a high level member of a large scale conspiracy involving the distribution of significant quantities of heroin in Oregon, Washington, Nevada, and Colorado.
Quezada-Lopez’s role in the conspiracy involved his taking over and operating a network of stash houses in Portland and Vancouver, Washington. He would receive orders for heroin and then direct it’s delivery to customers. Co-conspirators collected cash payments and then transferred the money to Quezada-Lopez. During searches of stash houses, agents seized over four pounds of heroin, additional quantities of methamphetamine and cocaine, drug ledgers, identification documents, packaging materials, two guns, and over $20,000 in US Currency. In one of the stash houses, Quezada-Lopez’ fingerprints were found on a drug ledger along with an identification document bearing his photograph. Soon thereafter, agents were able to listen to a telephone conversation between Quezada-Lopez and a co-conspirator where Quezada-Lopez described an amount of heroin that should be delivered. He was arrested on April 20, 2012, less than a week after Ms. Putnam’s death.
The investigation of the case was led by the Drug Enforcement Administration (DEA) through its Salem DEA Drug Task Force, and the Keizer Police Department with assistance from the Salem Police Department; the Marion County Sheriff's Office; the Oregon State Police; the Washington County Interagency Narcotics Team (WIN); the Portland Police Bureau; the Oregon State Medical Examiner; the Clark-Skamania Drug Task Force; the Oregon Department of Justice; and, the Portland based Highway Interdiction Team.
The case was prosecuted by Assistant U.S. Attorneys Kemp Strickland and Kathleen Bickers.
Warm Springs Woman Pleads Guilty to Setting Fire Results in Brush Fire Burning over 50,000 AcresRead the Press Release
Defendant Admits Starting Fire Because Her Firefighter Friends Were BoredPORTLAND, Ore. – Sadie Renee Johnson, 23 of Warm Springs, entered a plea of guilty before U.S. District Judge Marco A. Hernandez on May 19, 2014, to the crime of setting brush and timber on fire on the Warm Springs Indian Reservation.
By her guilty plea the defendant admits that on July 20, 2013, at about 9:15 a.m., she was riding as a passenger in a car traveling on Route 3 near Sunnyside Drive on the Warm Springs Indian Reservation in the District of Oregon and she used a lighter to light a small firework and threw the firework out the passenger window into the brush along the side of the road (Route 3) as they were driving. The lit firework started the brush on the side of the road on fire, which quickly spread northwest. The fire was called in to dispatch at approximately 9:29 a.m. The first responders identified the point of origin at milepost 5 on the north side of the road within a 1- to 1.5-acre area. Within minutes the fire spread and increased in size ultimately burning approximately 51,480 acres of brush on the Warm Springs Indian Reservation. The fire was contained by July 29, 2013, was under control by August 13, 2013, but not declared out until September 13, 2013. The approximate cost to fight and contain this 51,480-acre fire for the Bureau of Indian Affairs was $7,901,973. Defendant is required to pay full restitution.
When questioned by detectives, defendant admitted she threw a tiny firework out the window of the vehicle that she lit with a cigarette lighter. Johnson said her firefighter friends were bored and needed work but she didn’t mean for it to be 30,000 acres. Defendant stated she thought it would be a two-day fire and be put out. On July 22, 2013, defendant posted a statement on Facebook stating: “like my fire?”
The defendant is in custody and sentencing is scheduled for September 3, 2014. Johnson faces a maximum sentence of five years in prison, a fine of $250,000, and three years of supervised release.
This case was investigated by BIA Special Wildland Arson Investigation Team and the Confederated Tribes of Warm Springs Police Department. Assistant U.S. Attorney Pamala Holsinger is handling the prosecution of the case.
Bombing of District Attorney's Office Results in Federal Prison SentenceRead the Press Release
MEDFORD, Ore. – Alan Leroy McVay, 47, of Medford, Oregon was sentenced to 15 years in federal prison by Senior U.S. District Judge Owen M. Panner after his conviction for malicious destruction of property by explosion for the bombing of the Jackson County District Attorney’s Office. The court also ordered McVay to pay $14,854.20 in restitution to Jackson County for the damage to the District Attorney’s office.
On November 13, 2013, McVay assembled a bomb by attaching a CO2 metal cylinder filled with gunpowder to a propane tank and inserted a fuse into the CO2 cylinder as a means of detonating the tank. McVay wanted to destroy the District Attorney’s office in order to delay his plea and sentencing in state court scheduled for the following day. McVay had been charged in state court with committing four residential burglaries and being a felon in possession of a firearm.
At approximately 4:30 a.m., McVay took the bomb to the District Attorney’s office, lit the fuse and attempted to throw it through an office window, but it was held on the window sill by an office blind, preventing it from completely entering the office. The CO2 cylinder exploded, puncturing a hole in the propane tank resulting in fire spewing from the tank. The device was blown just outside the broken window and was on fire when police and fire personnel arrived on the scene. The explosion broke other exterior windows and debris was blown both in and outside the building. Immediately following the explosion, it was unknown whether there were other explosive devices in the area, whether a specific prosecutor or the entire office was being targeted and whether there were other targets. Police began checking other government buildings, residences of the prosecutors and judges, and the state circuit court was closed that morning. The District Attorney’s office remained inaccessible for two days.
Several days later, detectives and federal agents received a tip that McVay was believed to have committed the bombing. Following up on the tip, they determined that McVay and his codefendant in the state case, who had already been sentenced, had several telephone conversations. Recordings of those conversations revealed McVay talking before the bombing about having “some things to do it with,” “[getting] rid of all kinds of paper from the ground up” and “it’ll be fun” and “you’ll hear about it.” After the bombing, McVay mentioned about somebody blowing up the District Attorney’s office and it was “funny shit.” They also determined McVay was in the vicinity of the District Attorney’s office during the early morning hours of the bombing. Later, search warrants for McVay’s pickup and residence uncovered containers of gun powder, bullets separated from cartridges and the exact type of tape on the explosive device used in the bombing. When McVay was arrested and confronted with all the evidence the police had accumulated against him, McVay confessed to the bombing.
Judge Panner agreed that the use of the destructive device in an attempt to destroy the District Attorney’s office and the significant disruption it caused to that office and the Jackson County criminal justice system warranted the enhanced 15 year sentence. As part of McVay’s federal guilty plea, he will also enter guilty pleas to the four residential burglaries and being a felon in possession of a firearm in state court with those sentences to be served concurrent with his federal sentence.
U.S. Attorney Amanda Marshall commended both local and federal law enforcement for their thorough and effective investigation in quickly solving the bombing of the District Attorney’s office. She also said, “Any attack on the criminal justice system will not be tolerated” and “if the District Attorney’s office had been destroyed or anyone injured, the consequences for the attack would have been even more severe.”
This case was investigated by the Medford Police Department, the Oregon State Police, the FBI and ATF. The case was prosecuted by Assistant U.S. Attorney Byron Chatfield.
Man Sentenced in Federal Court for Failure to Register as a Sex Offender as Required by LawRead the Press Release
PORTLAND, Ore. – Anthony Lee McThrow, 28, formerly residing on the Umatilla Indian Reservation, was sentenced on August 11, 2014, to 30 months in federal prison by U.S. District Judge Michael W. Mosman. In November 2013, McThrow pled guilty to a single count indictment charging failure to register as a sex offender as required by law. McThrow has remained in custody of the U.S. Marshal since his arrest in July of 2013. His sentence was ordered to run concurrently to a state prison sentence for conviction of first degree forgery, he is currently serving.
After McThrow has completed his 30 months in prison, he was ordered to serve three years of federal supervised release. While on supervised release, McThrow will be required to register as a sex offender with the state sex offender registration agency in any state where the defendant resides. He is also required to participate in a sex offender assessment and treatment program.
“The Sex Offender Registration and Notification Act (SORNA) is an important tool to track the location of sex offenders in order to protect children in the community” stated U.S. Attorney Amanda Marshall. “Those who try to elude registration so they can't be tracked are exactly the people who pose the greatest risk to reoffend. My office, along with our law enforcement partners, are committed to finding those who violate federal law by failing to register and holding them accountable."
According to the public filings in the case, McThrow was living on the Umatilla Indian Reservation and required to register as a sex offender every 90 days based on prior convictions for Sex Abuse II and Sex Abuse III in Umatilla County, Oregon. McThrow admitted he knew he was required to register but did not do so in violation of federal law.
The case was investigated by the U.S. Marshal Service. Assistant U.S. Attorney Pamala R. Holsinger prosecuted the case.
34-Year Old Career Offender Sentenced to over Fifteen Years in Federal Prison for Methamphetamine DealingRead the Press Release
PORTLAND, Ore. - U. S. District Judge Marco A. Hernandez sentenced Portland-area man, Steven Lee Gill, to 188 months in federal prison on August 13, 2014. In January 2014, Gill pleaded guilty to possession with intent to distribute methamphetamine. His sentence was increased because he was found to be a “career offender,” under federal sentencing law, based on his lengthy criminal history that included convictions for crimes of violence.
“This sentence will incapacitate this career offender and protect the public,” said U.S. Attorney Amanda S. Marshall. “Federal law requires long sentences where drug dealing, firearms, and a significant criminal history come together at sentencing. This case demonstrates that career criminals will go to prison for a very long time when they end up in federal court.”
Portland Police arrested Gill, who is also known as Steven Schaible, on November 2, 2012 who was found in possession of large quantities of methamphetamine and heroin and two firearms, in a car he operated alone. Gill had seven previous adult felony convictions, including drug delivery, assault and a conviction related to a drive by shooting, at the time of his arrest. Gill admitted to Portland Police officers that he was a methamphetamine and heroin dealer and possessed a .45 caliber handgun and 12-gauge shotgun for protection. In addition to the over-fifteen year prison term, Judge Hernandez ordered that Gill will face supervision by federal authorities for five years after his sentence is served.
The case was investigated by Portland Police Bureau and the Drug Enforcement Administration and prosecuted by Assistant U. S. Attorney Thomas H. Edmonds.
Portland Gang Associate Sentenced to 15 Years in Prison After Being Convicted on Federal Gun ChargeRead the Press Release
Defendant, an Armed Career Criminal, told the police he was “hunting” a rivalPORTLAND, Ore. – August 11, 2014, Eddie Ray Strickland, Jr., 35, of Portland, Oregon, was sentenced to 15 years in federal prison after he was convicted of being a felon in possession of a firearm and the Court finding that he qualified as an Armed Career Criminal. Following his federal prison sentence Strickland will be required to serve three years of supervised release, which includes a condition prohibiting the defendant from associating with any known gang members.
On July 27, 2011, the defendant, a multi-convicted felon, was arrested and found in possession of two loaded firearms that were located inside of his residence. Earlier that day, the Portland Police Bureau’s Gun Task Force received information that the defendant had been in numerous fights with his girlfriend and during the most recent altercation he held a gun to her head and said “[i]f you don’t shut up, I’ll kill you and everyone else in the house.” This incident occurred in front of her young children. Officers also received information that about a month prior to this incident the defendant had also threatened his girlfriend with a gun and then fired a shot in her direction which left a hole in the couch she was sitting on. The officers knew the defendant was a felon and thus prohibited from possessing a firearm. With this information officers applied for a state search warrant, which was granted. Later that day, officers executed the search warrant on the defendant’s residence located on NE 49th Avenue, Portland, Oregon.
During the execution of the warrant by the Portland Police Bureau Special Emergency Reaction Team (SERT), officers found two loaded firearms, a Kel-Tec .380 caliber handgun and a Taurus .40 caliber handgun, inside a crawl space under the stairs.
After he was arrested, Portland Police Detectives with the Gang Enforcement Team interviewed the defendant. During the interview the defendant admitted that the two firearms were his and that he had the guns for “protection.” When the detectives asked why he needed the guns for “protection,” the defendant told the detectives that he and another person have both been looking for each other and they want to shoot each other. The defendant believed the other individual killed his brother in a gang shooting so the defendant was “hunting” him in an effort to try and kill him or the person’s brother. The other individual knew this, and according to the defendant, the other individual had been trying to kill the defendant before the defendant gets to him. Thus, as the defendant told the detectives, he needed the guns for “protection.” The defendant also said he had two guns so he could carry one and leave the other in the house.
The defendant was indicted in federal court on August 10, 2011, for felon in possession of a firearm and pled guilty to the charge on October 16, 2013. At the time the defendant possessed the firearms he had previously been convicted of, and received state prison sentences for, the following felony crimes:
● Attempted Robbery in the First Degree, in 2005;
● Attempted Robbery in the First Degree, in 2005;
● Unlawful Possession of Firearm in the First Degree, in 1999; and,
● Robbery in the Third Degree, in 1998.
“When Congress passed the Armed Career Criminal Act, the defendant was exactly the type of criminal it had in mind – an individual who repeatedly engages in violent felonies and places the community at substantial risk of harm,” noted U.S. Attorney S. Amanda Marshall. “When a batterer has a gun, the risk of intimate partner homicide is increased more than five times than in instances where there are no weapons. Quite simply, without police intervention, this defendant was a homicide waiting to happen. This lengthy prison sentence protects the public from this defendant and also sends a strong message of deterrence to violent felons that they will pay a steep price for unlawfully possessing firearms.”
This case was investigated by the Portland Police Bureau’s Gun Task Force, Portland Police Bureau’s Gang Enforcement Team, and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). The case was prosecuted by Assistant U. S. Attorney Scott Kerin, the Chief of the U.S. Attorney’s Office Drug Unit and former head of the Gang and Sex Trafficking Prosecution Team.
White Supremacists Sentenced to Life in Prison for Murderous Crime SpreeRead the Press Release
Accessories Who Obtained a Murder Weapon and Helped Pedersen and Grigsby Also SentencedPORTLAND, Ore. – David Joseph “Joey” Pedersen, 34, of Portland, was sentenced today to life in prison, without possibility of release, for carjackings resulting in the death of Cody Faye Myers, of Lafayette, Oregon, and Reginald Alan Clark, of Eureka, California in October 2011. U.S. District Judge Ancer L. Haggerty imposed two life sentences, to be served concurrently. Pedersen was previously convicted and sentenced to life in prison in Snohomish County, Washington for the related murders of his father, David Jones “Red” Pedersen, and stepmother, Leslie Mae “Dee Dee” Pedersen in September 2011.
Holly Ann Grigsby, 27, of Portland, was sentenced to life in prison, without possibility of release, on July 15, 2014, for conducting and participating in a pattern of racketeering activity, which included all four of those murders. Grigsby was not previously convicted or sentenced for any of the murders.
“Justice has been served. Both of these misguided killers will spend the rest of their lives in prison to account for these heinous murders,” said U.S. Attorney Amanda Marshall. “And because they did not act alone, the related prosecutions punish those who helped them by providing a firearm, disposing of evidence and harboring them in the middle of this ruthless crime spree. While much attention has been paid to the outrageous acts, and vitriolic words spewed by these two defendants, it’s important that we remember that these victims were human beings – son, brother, uncle, mother, sister, aunt, grandmother, father, grandfather, friend – they loved and were loved, and their loss can never be undone. In addition, because these killings were done in furtherance of a greater evil plan fueled by hate, they have harmed people in many different communities. We hope the resolution of the criminal case allows the victims’ loved ones to move beyond the frustrations of the courtroom and go forward as they redefine their lives.”
All four murders occurred during a 10-day crime spree that spanned from Everett, Washington to Eureka, California. Pedersen and Grigsby intended to embark on a white-supremacist mission to kill Jewish leaders, but they were stopped by a California Highway Patrol officer before that happened. Instead, they engaged in a series of robberies and carjackings to gather firearms and cars to further their mission. After murdering Pedersen’s father in Everett, Washington, they robbed and brutally murdered his wife, Dee Dee Pedersen. They then fled to Oregon, where they sought assistance and refuge at the home of Corey Wyatt and his then-fiancé, Kimberly Scott, in Springfield, Oregon. Wyatt and Scott led Pedersen and Grigsby to a secluded area near Lebanon, Oregon, where Pedersen, Grigsby and Wyatt pushed Red Pedersen’s stolen Jeep, with his body still inside, over an embankment. The next day, Wyatt and Scott drove Pedersen and Grigsby to the Oregon coast and dropped them off to pursue their white-supremacist mission. Near Newport, Oregon, Pedersen and Grigsby carjacked Cody Faye Myers and murdered him to eliminate a witness and avoid capture. They drove to California in Myers’ car, intending to pursue their mission in Sacramento. Now wanted for murder and concerned they were driving a stolen car, Pedersen and Grigsby carjacked and murdered Reginald Clark in Eureka, California to obtain another car for their mission and eliminate a witness.
Corey Eugene Wyatt, 29, of Springfield, Oregon, and his wife Kimberly Scott Wyatt, 33, now of Junction City, Oregon were sentenced by U.S. District Judge Garr M. King for being accessories after the fact to Pedersen and Grigsby’s transportation of Red Pedersen’s stolen vehicle. Corey Wyatt was also convicted for transferring a firearm to Pederson which, unbeknownst to Wyatt, was later used to murder Red Pedersen, Cody Myers and Reginald Clark. As convicted felons, neither Pedersen nor Wyatt could purchase a firearm, and Wyatt used his wife to obtain the firearm. Corey Wyatt was sentenced to a total of 100 months in prison on July 8, 2014. Judge King sentenced Kimberly Scott Wyatt to five years of probation on July 30, 2014.
Bryce Woods, 30, of Portland, has been convicted for an attempted carjacking he committed with Pedersen in September 2011, in which Pedersen used the same firearm he obtained from Wyatt. A sentencing hearing is scheduled before U.S. District Judge Marco A. Hernandez on September 22, 2014.
This case was prosecuted by Assistant U.S. Attorneys Jane Shoemaker, Hannah Horsley and Geoffrey Barrow.
Coos Bay Man Pleads Guilty in Federal Court to Being an Armed Career CriminalRead the Press Release
EUGENE, Ore. – Christopher Michael Morgan, 41, a resident of Coos County, Oregon, appeared before United States District Court Chief Judge Ann Aiken on July 29, 2014 and pled guilty to being an armed career criminal. Morgan, a felon, admitted possessing a loaded .45 caliber pistol in a woman’s restroom at Mingus Park in Coos Bay, Oregon, at 1:30 am on June 18, 2013.
After accepting the guilty plea, Chief Judge Aiken scheduled Morgan’s sentencing hearing for November 12, 2014. Morgan faces a 15-year mandatory minimum prison term and five years of post-prison supervision. Morgan qualifies to be sentenced as an armed career criminal because he possessed the pistol after being previously convicted of four residential burglaries and a felony assault. Morgan has been convicted six times for possessing methamphetamine and once for being a felon in possession of a firearm.
According to court documents and statements made in court, Morgan and a woman were inside the women’s restroom at the park. A Coos Bay police officer confronted Morgan outside the bathroom and attempted to arrest him for violating his parole. Morgan fought the officer and during the struggle held the pistol, then tossed it away. Morgan was subdued and methamphetamine was located in his pocket. He was charged in state court with firearm and drug offenses, and resisting arrest. Coos County’s District Attorney Paul Frasier requested the assistance of the United States Attorney’s office in prosecuting Morgan. Morgan’s guilty plea and admissions were part of a global resolution of his federal and state charges.
This case was investigated by the U.S. Bureau of Alcohol, Tobacco and Firearms, and the Coos Bay Police Department. Assistant U.S. Attorney Frank R. Papagni, Jr., with the assistance of Coos County Deputy District Attorney Steven Petty, prosecuted the case.
Specially Designated Global Terrorist Al-Haramain Islamic Foundation, Inc. Pleads Guilty to Tax FraudRead the Press Release
Conviction Relates to Distribution of $150,000 for ChechnyaEUGENE, Ore. - Amanda Marshall, United States Attorney for the District of Oregon, announced that on July 29, 2014, the Al-Haramain Islamic Foundation (AHIF), Inc., a tax exempt charity registered in Oregon, pleaded guilty in U.S. District Court in Eugene, Oregon to one count of filing a false tax return with the Internal Revenue Service.
The conviction relates to a $150,000 donation AHIF’s parent organization in Saudi Arabia received in 2000, intended to be sent to Chechnya. The $150,000 was wire transferred by the donor from an overseas bank account into an AHIF-US bank account in Ashland, Oregon. An employee of AHIF flew from Saudi Arabia to Oregon and, together with the head of AHIF-US, they withdrew the $150,000, and the funds were transported to Saudi Arabia.
Under U.S. law, tax exempt charities must file a return with the Internal Revenue Service, known as a Form 990, reporting the receipt and distribution of all its donations. An accountant in Medford, Oregon was retained by AHIF-US to prepare the Form 990. This accountant was not told by AHIF that the $150,000 was sent overseas. Instead, AHIF-US representatives informed the accountant that most of the funds were used as part of the purchase price for a building in Missouri, and that a portion of the funds were refunded to the donor. This information was false.
Relying on the information provided to him by AHIF representatives, the accountant prepared a Form 990, which falsely reported how the $150,000 was distributed, and made no mention that the funds were sent overseas. A representative of AHIF-US signed the return and it was filed with the IRS.
In its guilty plea today, AHIF, acting through its attorney, acknowledged that it filed the Form 990 with the IRS, knowing it was false as to a material manner.
Prior to entering the plea agreement, AHIF paid the IRS $121,275.00 to satisfy all taxes, penalties and interest due as a result of the false return. At sentencing, AHIF was placed on probation for three years. During that time, AHIF agreed that it will make no attempt to resume operations as a tax exempt charity in the United States.
In return, the United States agreed to dismiss criminal charges pending against Pirouz Sedaghaty (Pete Seda), the former head of AHIF in the United States. A third defendant, Soliman Al-But’he, remains under indictment. An arrest warrant is outstanding for Al-But’he and he is a fugitive.
“This conviction sends an important message to charities such as Al-Haramain that they need to carefully scrutinize donations to ensure they are used for proper purposes,” said US Attorney Amanda Marshall. “When they fail, and lie to the Internal Revenue Service about where charitable funds are sent, there will be consequences.”
“We have a duty to protect the sanctity of our nation’s charitable donations”, said Special Agent in Charge Kenneth Hines of IRS Criminal Investigation. “When an organization misrepresents the cause and destination of pledged funds, IRS Criminal Investigation, together with our partners at the FBI and Homeland Security Investigations, will be there to bring it to justice. We will not tolerate any organization that exploits its’ exempt status.”
This case was investigated by the IRS, the FBI and Homeland Security Investigations. Assistant U.S. Attorney Chris Cardani, Assistant U.S. Attorney Charles Gorder and First Assistant U.S. Attorney Kent Robinson handled the prosecution of the case.
Child Sex Trafficker Sentenced to 12 Years in PrisonRead the Press Release
EUGENE, Ore. – On Wednesday, July 23, 2014, Chief U.S. District Court Judge Ann Aiken sentenced Steven Anthony Kidd, 21, of Linn County, Oregon, to a prison term of 12 years for two counts of child sex trafficking. Following his release from prison, Kidd will be on supervised release for five years.
In December 2012, a Eugene Police Department (EPD) officer learned that Kidd might be trafficking minors for sex, and further investigation confirmed this. EPD and the FBI learned that Kidd had trafficked a minor female, referred to as “AA,” starting in late 2011 and lasting for nearly a year. Kidd transported AA to Medford, Albany, Eugene, Corvallis, Harrisburg and Portland, Oregon, as well as cities in Washington. He obtained hotel rooms, posted ads soliciting sex and collected proceeds from the sex trafficking. Kidd imposed a set of rules for AA to follow and subjected her to physical abuse.
On two occasions in December of 2012, Kidd also trafficked another minor female, referred to as “BB.” Kidd posted an advertisement soliciting customers to engage in sex with BB, and drove her to Corvallis for the sex acts. Kidd kept the proceeds from these acts of sex trafficking.
The residence Kidd was staying at in Albany, Oregon was searched, and Kidd was arrested the same day. Two pistols were located, along with significant information demonstrating Kidd’s involvement in child sex trafficking, including a notebook in his closet. The notebook had handwritten notes, including some titled “Hoe Bi**h Rules”, which included “Bi**h Always look at the ground.” Other handwritten notes included, “First and Foremost, Break the Bi**h’s old Phone,” (sic), “Don’t let the B**h think for herself,” and, “Make them fear DADDY.” Other evidence located at the residence further confirmed Kidd’s trafficking of the minor victims.
“This case is a prime example of how pimps use violence, power, and control to manipulate vulnerable victims into a life of terror”, said U.S. Attorney Amanda Marshall. “ My office will continue working with our federal and local law enforcement partners to make it clear to traffickers that our children are not for sale. “
This case was investigated by the Federal Bureau of Investigation and the Eugene Police Department, with assistance from the Albany Police Department, and was prosecuted by Assistant U.S. Attorney Jeffrey S. Sweet.
Federal Indictment Charges Three Individuals with Drug Crimes Related to Distribution of MethamphetaminesRead the Press Release
EUGENE, Ore. - Three defendants were charged in two separate indictments based on their drug activity in Lincoln County.
Christobal Portillo, 37, and Salina Perez, 35, both of Oregon, were charged with conspiracy to distribute methamphetamine. Both made their initial appearances on July 18, 2014 and entered pleas of not guilty. Trial is set for September 23, 2014 before Chief U. S. District Judge Ann Aiken.
Separately, Patrick Ball, 37, of Toledo, Oregon, was charged with possession with intent to distribute methamphetamine. He also made his initial appearance on July 18, 2014 and pleaded not guilty. Bell is also scheduled for trial on September 23, 2014 before Chief U. S. District Judge Ann Aiken.
Both conspiracy to distribute methamphetamine and possession with intent to distribute carry maximum sentences of twenty years in prison and a one million dollar fine.
A criminal indictment is only an allegation and not evidence of guilt. The defendants are presumed innocent unless and until proven guilty. These cases were investigated by the Lincoln Interagency Narcotics Team, the Polk County Interagency Narcotics Team and the Drug Enforcement Administration. This case is being prosecuted by Assistant U.S. Attorney Amy Potter.
Coos Bay Company, Its Owner and Four Employees Plead Guilty to Fraud on Defense ContractsRead the Press Release
PORTLAND, Ore. — A Coos Bay business, its owner, and four employees pled guilty before the Honorable Michael J. Mosman in federal court today to conspiracy to defraud the United States. Kustom Products, Inc. (KPI), a vehicle parts supply business located in Coos Bay, Oregon, its owner, and four employees admitted that they committed fraud on contracts with the United States Department of Defense (DOD).
Pleading guilty were the owner of KPI, Harold Ray Bettencourt II, 60, of Coos Bay, Oregon; his sons, Bo Bettencourt, 34, Nicholas Ryan Bettencourt, 32, and Peter Tracy Bettencourt, 28, of North Bend, Oregon; and KPI’s office manager, Margo Antoinette Densmore, 43, also of Coos Bay, Oregon. The matter is scheduled for sentencing on December 10 and 11, 2014. All defendants were released on conditions pending sentencing.
The United States Attorney charged that KPI, Bettencourt, and the others conspired to commit wire fraud, money laundering, and trafficking in counterfeit goods and services. As part of the plea, the defendants agreed to forfeit all proceeds traceable to the fraud, including $365,503.26 in funds from 20 bank accounts, eight vehicles, one boat, two boat trailers, two jet skis, and three all-terrain vehicles.
Amanda Marshall, United States Attorney for the District of Oregon, emphasized the serious nature of the charges. “The actions of these defendants in putting their own greed before the safety of military personnel warrant serious repercussions,” Marshall stated. “We will bring the full extent of this criminal activity to the Court’s attention during the sentencing hearing.”
The defendants’ scheme, as laid out in Court during the guilty plea hearing, related to the defendant’s actions while contracting to provide supplies to the Department of Defense (DOD) from approximately 2006 through 2010. The DOD sought equipment, supplies, and services that were filled through purchase orders awarded to DOD contractors, including KPI. Some of these products were identified as critical application items, meaning that they were items essential to weapons systems performance or operation, or to preserve the life and safety of military personnel. The contracts were awarded through a web-based posting of contract solicitations. Each contained the specific details about the items to be procured, including the requirements related to the specific part desired by Original Equipment Manufacturer (OEM) part number and by approved OEM vendor, whether the part was a critical application, and whether the part was required to be manufactured in the United States. In solicitations for specific products, the contractor was required to supply the “exact product” and to certify that fact by stating that the bid was “without exception.” The solicitation made clear that submitting alternate products could result in criminal and civil penalties.KPI, acting through the individual defendants, lied to the DOD in order to secure what the government found to include 750 fraudulent contracts with a value in excess of $10,000,000 and used wire communications in interstate and foreign commerce to carry out the scheme. In addition, the defendants knowingly engaged in approximately $8,000,000 in monetary transactions in amounts greater than $10,000 derived from the wire fraud scheme. Finally, in some contracts, the defendants supplied counterfeit Freightliner parts and shipped some parts on pallets that falsely contained the logo and heat treatment certification stamp of Timber Products Inspection, Inc. In essence, the defendants bid to supply a specific OEM part from an approved vendor at a price consistent with an OEM part, but instead knowingly provided a knock-off part from an unapproved vendor that cost them significantly less. This allowed them to under-bid the competition, and generated substantial profits for KPI and the individual defendants.
To highlight one contract, the United States set out the defendants’ actions related to the provision of aviation locknuts. In 2008, KPI was awarded contracts to supply aviation locknuts to the DOD, which were used to secure the blades to the main rotary assembly of the Kiowa Helicopter. The locknuts were flight critical and of proprietary design to be acquired from only two approved manufacturers, SPS or Bristol Industries. Rather than obtain the locknuts from one of the approved sources, Nicholas Bettencourt contacted Coloc Manufacturing in Texas and arranged with them to make and deliver thousands of non-conforming locknuts for fulfillment of the contract. Coloc was unaware that the parts they were contracted to manufacture were proprietary and were to be used in a flight-critical military application. In August 2008, the defective locknuts were detected throughout the military supply chain, which triggered the issuance of a DOD-wide safety alert, a worldwide inspection of all aircraft and stockpiles. After DOD notified KPI about the defective parts, Nicholas Bettencourt provided the DOD officials with false information in an attempt to cover up the acquisition of the defective locknuts.
KPI was also contacted by a DOD inspector, who requested KPI officials provide a written response as to the cause of the deficiency. KPI, through employee Josh Kemp, provided the DOD with a false explanation as to why the locknuts were not in compliance with the contract requirements, explaining that the parts were pulled from the wrong storage bin.
Even after the defendants were notified of the deficiency, instead of replacing the defective parts with authentic parts from the approved manufacturers, they went back to Coloc and directed them to re-machine another batch of non-conforming locknuts to more closely resemble the authentic part. The additional defective locknuts were shipped to the DOD, all with complete disregard for the contract specifications on this critical application and the potential for catastrophic failure to the helicopter and injury or death to the occupants as a result.Again, when the second batch of defective locknuts were detected in the supply chain, DOD officials requested acquisition records from KPI. In response, Nicholas Bettencourt, in conjunction with Margo Densmore, created false records that reflected that the correct parts were ordered by KPI and supplied to the military. Several more requests for records were made by DOD officials, and in response to these requests, Harold Bettencourt II provided the DOD with falsified records and false explanations as to the origin of the defective locknuts. KPI, through Margo Densmore, altered purchase orders to indicate that the correct parts were ordered, and produced those altered documents to DOD officials and investigators. Harold Bettencourt II also provided DOD officials with these false purchase orders and provided DOD officials with a price quote from a parts dealer for authentic conforming parts that KPI never actually ordered. Harold Bettencourt II obtained this quote for the purpose of deceiving the DOD into believing that the correct parts had been ordered.
The United States alleged that these actions by the defendants compromised the integrity of the aviation supply chain and put service members in harm's way by knowingly placing defective and unsafe aviation components into the supply chain and attempting to conceal their actions by falsifying records, and misleading DOD officials and investigators with false statements and information.
“The guilty pleas of the owners and operators of Kustom Products, Inc. (KPI) are part of an ongoing effort by the Defense Criminal Investigative Service and its law enforcement partners to bring to justice to individuals who seek unjust enrichments at the expense of U.S. taxpayers, while recklessly compromising the safety of U.S. service members,” said Chris Hendrickson, Special Agent in Charge, DCIS Western Field Office. “This is an unfortunate example of a dishonest contractor who disregarded safety and profited through risking the lives of our troops by knowingly placing faulty and unsafe parts and equipment, including flight critical components, into the military supply chain. This plea serves as notice that these types of practices by a contractor will be fully investigated and punishment pursued.”
“The financial cost of this fraud – more than $10 million – is significant, but the human cost could have been much higher,” said Greg Bretzing, Special Agent in Charge of the FBI in Oregon. “The counterfeit hardware that Kustom Products passed off as real could have led to catastrophic failures of trucks and helicopters used by our military. This case shows that we – with many partners at the Departments of Defense and Homeland Security as well as the IRS – will not allow anyone to make what they believe to be an easy buck on the backs of our service members.”
“As a law enforcement official I’m proud that my agents helped bring these criminals to justice, and as a Veteran it is hurtful to see profit put before the safety of our nation’s most precious treasure, our sons and daughters,” said Special Agent in Charge Kenneth Hines of IRS Criminal Investigation. “These crooks took deliberate actions to supply defective equipment to our military, putting our service men and women in harm’s way during a time of war. Then, they spun a web of complex lies to cover it all up. This a clear message from the IRS and DOD-OIG Special Agents and the United States Attorney’s Office that this will not happen on our watch. If your actions harm or place our military service members at risk, we will bring you to justice.”
The case is being investigated by the Department of Defense/Office of Inspector General/Defense Criminal Investigative Service, the Army Criminal Investigative Division Major Procurement Fraud Unit, the Federal Bureau of Investigation, the Internal Revenue Service, Criminal Investigation Division, and Immigration and Customs Enforcement. The case is being prosecuted by Assistant U.S. Attorney Scott Erik Asphaug.
Klamath Falls Drug Dealer Sentenced to 10 Years in PrisonRead the Press Release
MEDFORD, OREGON— On Monday, July 14, 2014, Senior U.S. District Judge Owen M. Panner sentenced Earl Allen IV, 39, of Klamath Falls, Oregon, to ten years in federal prison, after he pleaded guilty to possession of methamphetamine with intent to distribute and being a felon in possession of a firearm. Allen will also be on five years of supervised release after he completes his prison term.
On June 30, 2013, a Rogue Area Drug Enforcement (RADE) detective received information that Allen and a female companion, both Klamath Falls fugitives, were staying in Grants Pass, and that Allen had methamphetamine for sale. RADE detectives checked various Grants Pass motels and eventually observed Allen standing outside the Comfort Inn. RADE detectives arrested Allen and found him holding $3,216 cash. The female arrived a short time later driving one of Allen’s vehicles and was also arrested.
Detectives obtained search warrants for Allen’s motel room and two vehicles. The motel room contained 95.8 grams of pure methamphetamine, digital scales, drug packaging materials, marijuana, and a stolen laptop computer. Allen’s Ford F150 pickup truck contained multiple sets of digital scales, drug notes, and drug packaging materials in the pickup bed, a 9 mm handgun behind the driver’s seat with a loaded magazine under the seat, and a loaded .22-caliber revolver also under the seat.
Allen is a multiple convicted felon with prior convictions for delivery of methamphetamine in 2007 and 2004, possession of methamphetamine in 2006, supplying contraband in 2000, and multiple misdemeanor convictions for assault, menacing, and robbery.
This case was investigated jointly by the Rogue Area Drug Enforcement Team, the Bureau of Alcohol, Tobacco, and Firearms, and the U.S. Drug Enforcement Administration, and was prosecuted by Assistant U.S. Attorney Douglas W. Fong.
Former High School Principal Sentenced to Prison in Child Pornography CaseRead the Press Release
PORTLAND, Ore. – Robert Paul Patton, the former principal at Sherwood High School, was sentenced to more than ten years in prison following his plea of guilty to possession of child pornography. At a sentencing hearing on July 1, 2014, Senior U. S. District Judge Garr M. King sentenced Patton, 45, to 127 months in prison, followed by a ten-year term of supervised release. Patton will be subject to stringent conditions of supervision, including prohibitions on associating with minors, restrictions on where he can live, and restrictions on his use of computers. Patton will also be required to participate in sex offender treatment, and must continue to register as a sex offender.
This is Patton’s fourth criminal conviction. In 2003, he was convicted in Washington County of possessing materials depicting sexually explicit conduct of a child and two counts of third degree sexual abuse, after twice having sexual relations with a 16-year-old boy. In 2011, he was convicted in Multnomah County of failure to register as a sex offender. In 2013, he was convicted in Multnomah County of attempted first degree sexual abuse in connection with an incident involving a 12-year-old boy. During the course of that investigation, detectives from the Portland Police Bureau served a state search warrant at Patton’s Milwaukie residence, and seized computer equipment later found to contain child pornography. After filing and litigating motions to suppress the evidence seized from his residence, Patton pled guilty to possessing child pornography, reserving the right to appeal the denial of his motions.
U.S. Attorney Amanda Marshall praised the sentence imposed on Patton, noting that it reflected the serious nature of Patton’s criminal conduct. “Prior to being caught in possession of child pornography, which lead to the conviction in this case, Robert Patton had a criminal history going back to when he was a high school principal who possessed child pornography and sexually abused a teenage boy,” she said. “Patton’s conduct was particularly concerning, because it suggests an ongoing sexual interest in children that did not abate following his first conviction.” She also hoped that Patton’s sentence “sends a clear message to those who prey on our children.”
Because of his prior Washington County conviction, Patton faced a mandatory minimum sentence of ten years in prison. In imposing the 127-month sentence, Judge King took into account the nature and seriousness of the offense, Patton’s background, history, and characteristics, the need to provide just punishment and adequate deterrence, and the need to protect the public. Judge King noted that Patton served a 24-month sentence in the Multnomah County attempted sex abuse case, and while serving that sentence, made “good use” and “appropriate use” of his time, tutoring other inmates, completing training courses, and participating in various activities. Judge King also noted that Patton had “a great deal of support” from his family. For his part, Patton apologized to his victims, sought forgiveness, and promised to “get help.”
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse. Launched in May 2006 by the U.S. Department of Justice and led by United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
This case was investigated by the Beaverton Police Department, the Portland Police Bureau, and the Northwest Regional Computer Forensic Laboratory, and was prosecuted by Assistant U. S. Attorney Gary Sussman, Project Safe Childhood Coordinator for the District of Oregon.
Former Federal Express Employee Sentenced to 41 Months in Federal Prison for Stealing Suspected Drug-Related CashRead the Press Release
MEDFORD, OR – Victor Manuel Chavez, 40, of Medford, Oregon, was sentenced Monday to forty-one months in federal prison by Senior U.S. District Judge Owen M. Panner, after Chavez pleaded guilty in March 2014 to theft from interstate shipment and money laundering. As part of his sentence, Chavez was fined $25,000, will serve three years of post-prison supervised release, and must pay restitution to victims of the theft.
Chavez was employed by Federal Express for four years as a driver and was responsible for unloading FedEx packages from aircrafts at the Medford, Oregon airport and delivering them to their ultimate destinations. In 2011 and 2012 Chavez engaged in a scheme by identifying packages he believed contained large quantities of cash - suspected by law enforcement to be the proceeds of marijuana sales - as well as electronic equipment, jewelry and other valuable items. Once identified, Chavez reprinted FedEx labels, re-routing the targeted packages to his truck, enabling him to steal the packages. Chavez sold stolen electronics and other items to his friends and associates.
On January 30, 2012, law enforcement served a search warrant at Chavez’s residence and seized evidence, which included rolls of FedEx adhesive labels and several items of merchandise which matched items reported missing by FedEx customers. Law enforcement also searched a suitcase Chavez had given to a friend to hold in return for $10,000. Inside the suitcase was $250,000 in cash. Law enforcement believe that most if not all of this money was the proceeds of marijuana sales by Oregon growers, who use Federal Express and other delivery service companies to send Oregon grown marijuana to out of state customers, in return for cash payments sent back to them via the same companies. Subsequent investigation revealed that Chavez had used some of the stolen money to pay his mortgage, and laundered other proceeds through bank accounts he controlled. In total, law enforcement officials believe that Chavez stole more than $200,000 in cash and property.
The $263,525 in U.S. currency seized from Chavez has been forfeited. Additionally, forfeited items include lap tops, i-Pads, i-Phones, other electronic items and sports equipment.
“People like Mr. Chavez, who abuse their position of trust to steal, will be caught and prosecuted,” stated U.S. Attorney S. Amanda Marshall.
This case was investigated by the Medford Police Department and the Federal Bureau of Investigation and prosecuted by Assistant U. S. Attorney Judith Harper.
Former Board Member of National Charity Charged in $4 Million Fraud and Money Laundering SchemeRead the Press Release
PORTLAND, Ore. – Amanda Marshall, U. S. Attorney for the District of Oregon, today announced that William R. Peters, 63, of Glen Burnie, Maryland, a former member of the Board of Directors of National Relief Charities (NRC), has been charged with conspiring to defraud NRC of $4 million and conspiring to commit money laundering violations with the proceeds of the fraud scheme. Brian J. Brown, a former president of NRC, was charged with the same federal crimes in October 2013. Brown’s case is pending in federal court in Portland, Oregon.
The indictment alleges that in late 2005, when Brown stepped down as the president of NRC, a national charity dedicated to improving the quality of life for Native Americans, he established a nonprofit company called Charity One, Inc., dba American Indian Education Endowment Fund. Peters and Brown then allegedly induced NRC to fund Charity One, Inc. with $4 million from 2006 through 2009. Brown allegedly represented these funds would be used to fund educational scholarships for Native Americans. Peters allegedly used his position as a member of the Board of Directors of NRC to cause NRC to execute endowment agreements with Charity One, Inc. in which NRC gave Charity One, Inc. $1 million a year for four years. Peters and Brown allegedly used the entire $4 million for their personal benefit.
“Anyone who defrauds a charity for their personal gain should expect to be caught and prosecuted. This conduct harms the charity, its donors, and, most importantly, the intended recipients of the fraudulently diverted funds,” said U.S. Attorney Marshall.
This case is being investigated by the Federal Bureau of Investigation and the Criminal Investigation Division of the Internal Revenue Service. Assistant U.S. Attorney Seth D. Uram is handling the prosecution of the case.
Federal Len Bias Indictment Shows Heroin's Grip Expanding to Smaller CommunitiesRead the Press Release
PORTLAND, Ore. – Rockie Morse, 40, of Sweet Home, Oregon, was indicted today for distribution of heroin that resulted in death, announced Amanda Marshall, United States Attorney for the District of Oregon. Prosecutors also indicted Tammy Tongate, alleged to be the Portland-area source of supply, who made her initial appearance last week. The federal charges were brought after an investigation led by the Linn County Sheriff’s Office and the Drug Enforcement Administration (DEA) uncovered a major influx of heroin into Sweet Home, Oregon. Investigators worked closely with the Portland Police Bureau Drugs and Vice Division, the Sweet Home Police Department, Lebanon Police Department, and the Linn County District Attorney’s Office.
Ashley Marie Ames, 25, a resident of Lebanon, Oregon, was found dead on October 2, 2013. Investigators found drug paraphernalia and residue quantities of black tar heroin. Prior to her death, Ames was scheduled to enter drug treatment. “Heroin dealers are the grim reapers of the drug trafficking world,” said U.S. Attorney Amanda Marshall. “We are seeing a rise in heroin use in rural communities outside the main distribution hubs of Portland, Salem, and Eugene. I applaud the efforts of the Linn County Sherriff’s Office and the DEA in attempting to get in front of this deadly epidemic.” A total of 15 individuals have been arrested and are facing federal and state charges stemming from this investigation.
The United States Attorney’s Office has made the investigation and prosecution of drug overdose cases a high priority due to the devastating impact drug distribution has in Oregon. Several significant drug dealers who would have otherwise gone undetected, have been arrested, successfully prosecuted, and sentenced to prison in both state and federal court as a result of this combined state and local effort to investigate and prosecute drug overdose deaths.
The federal indictment in this case includes three other defendants in a heroin distribution conspiracy and includes several substantive counts of heroin distribution, including distribution within 1,000 feet of Sweet Home High School. Count 1 charges Morse and Tongate with distribution of heroin resulting in death and was brought under the federal “Len Bias” statute. This count carries a statutory mandatory minimum prison term of twenty (20) years, a maximum of life in prison, and a fine of up to $2 million.
An indictment is only an accusation of a crime, and a defendant should be presumed innocent unless and until proven guilty in court. Trial is set for August 12, 2014, before U.S. District Court Judge Marco Hernandez. The case is being prosecuted by Assistant U.S. Attorney Leah K. Bolstad.
Eugene Armed Career Criminal Sentenced to 15 Years in Federal Prison for Possessing a FirearmRead the Press Release
EUGENE, Ore. – On June 18, 2014, Dean Allen Fleury, 52, of Eugene, Oregon, was sentenced by U.S. District Chief Judge Ann Aiken to 15 years in federal prison for unlawful possession of a firearm. Upon his release from prison, Fleury will be on supervised release for five years.
On April 8, 2013, officers with the Lane County Interagency Narcotics Enforcement Team (“INET”) caught Fleury with a large, distributable amount of methamphetamine. Fleury admitted he had been selling methamphetamine for the last few decades and officers thereafter found a 12-gauge shotgun that he possessed and a large quantity of cash. Fleury has a criminal history spanning 30 years, with numerous felony convictions for unlawful delivery and possession of methamphetamine. Under federal law, any person who possesses a firearm or ammunition after being previously convicted of three violent felonies or felony drug trafficking crimes is an Armed Career Criminal and faces a 15-year mandatory minimum sentence.
This case was investigated by INET, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Federal Bureau of Investigation, and was prosecuted by Assistant U.S. Attorney Nathan J. Lichvarcik.
Malheur County Man Sentenced to 63 Months for Being a Felon in Possession of Firearms and AmmunitionRead the Press Release
EUGENE, Ore. – Cory Homestead, 35, of Nyssa, Oregon, was sentenced today by U.S. District Chief Judge Ann Aiken to 63 months in federal prison for unlawful possession of firearms and ammunition. Upon his release from prison, Homestead will be on supervised release for three years.
On August 15, 2012, Nyssa Police Department Officers responded to a domestic violence call and learned that Homestead had violently assaulted the female victim and fled with two firearms. Officers soon thereafter located Homestead passed out in his vehicle in possession of a loaded 9mm pistol and a .40 caliber pistol. Homestead has a history of domestic violence and has prior felony convictions for conspiracy to commit robbery, theft, and possession of a controlled substance.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Nyssa Police Department, and was prosecuted by Assistant U.S. Attorney Nathan J. Lichvarcik.
Federal Prison Inmate Sentenced for Mail Fraud Against Catholic ChurchRead the Press Release
Claims of Child Sex Abuse Fabricated for MoneyPortland, Ore.—Shamont Lyle Sapp, 50, was sentenced today by United States District Judge Anna J. Brown to 33 months in prison for mail fraud in an unsuccessful scheme to obtain money from four Roman Catholic dioceses through fictitious claims of child sex abuse by priests. A former Pennsylvania resident, Sapp pleaded guilty to pursuing fabricated cases against dioceses in Portland, Oregon; Tucson, Arizona; Covington, Kentucky; and Spokane, Washington, from 2005 through 2010. He filed the fraudulent claims in pending bankruptcy and class action cases while he was a federal prison inmate serving lengthy sentences for ten Pennsylvania bank robberies he committed in 1995.
Each of Sapp’s claims falsely alleged that he had been sexually abused as a teenage runaway in 1978-79. Sapp’s allegations required extensive investigative and legal work by courts, special masters, and the four dioceses before being disproved and dismissed as groundless. The longest case occurred in U.S. District Court in Portland in 2008-2010. It directly incurred $70,000 in legal expenses by the Archdiocese of Portland, which Sapp must pay as restitution as part of his criminal sentence.
This is the second mail fraud case in Portland involving fictitious claims of child sex abuse against a former Portland priest. In 2005, Thomas Edward Smolka received a three-year federal sentence for concocting a similar scheme.
“Fraudulent claims in court, especially by prison inmates, are a serious drain on public and private resources and deserve significant penalties,” United States Attorney Amanda Marshall said. “This is particularly true of fictitious sex abuse cases, which injure the falsely accused and hurt real abuse victims, who frequently remain silent, thinking no one will believe them.”
The nationwide investigation of Sapp was conducted by the U.S. Postal Inspection Service. The case was prosecuted by Assistant United States Attorney Stephen F. Peifer.