District of Oregon

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.

Elderly victim bilked for $1.1 million in scheme

PORTLAND, 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.

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.

Federal Complaint Alleges 35 year old Gresham Man, His Father and His Girlfriend Involved in Production and Possession of Child Pornography

PORTLAND, 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.

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. 

Defendant Admits Starting Fire Because Her Firefighter Friends Were Bored

PORTLAND, 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.

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.

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.

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.

Defendant, an Armed Career Criminal, told the police he was “hunting” a rival

PORTLAND, 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.

Accessories Who Obtained a Murder Weapon and Helped Pedersen and Grigsby Also Sentenced

PORTLAND, 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.

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.

Conviction Relates to Distribution of $150,000 for Chechnya

EUGENE, 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.

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.

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.

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.

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.

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.

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.

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.

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, 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.

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.

Claims of Child Sex Abuse Fabricated for Money

Portland, 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.

EUGENE, Ore. – On June 9, 2014, Gretchan Anderson, 43, of Portland, Oregon, was sentenced by U.S. District Judge Michael McShane to 110 months in federal prison, in addition to the time she has been in custody since July of 2013, for possession with intent to distribute methamphetamine.  Upon her release from prison, Anderson will be on supervised release for four years. 

Anderson is a career offender who was caught twice last year dealing methamphetamine.  The first of those two incidents happened on February 26, 2013 in Portland and resulted in state charges.  During the pendency of that state case, on July 19, 2013, law enforcement apprehended Anderson as she was traveling from Portland to Lane County to distribute methamphetamine, which resulted in the instant federal charge.  Anderson has a lengthy criminal history including convictions for burglary in the first degree and manufacture of a controlled substance.

This case was investigated by DEA and the Lane County Interagency Narcotics Enforcement Team, and was prosecuted by Assistant U.S. Attorney Nathan J. Lichvarcik.

PORTLAND, Ore. — U.S. District Court Judge Michael Simon sentenced the former owners of D&R Auto Sales, D&R Motors, and D&R Ford/Mercury to federal prison for conspiring to defraud KeyBank in a car flooring loan scheme.  On May 27, 2014, Judge Simon sentenced David Spangenberg, 55, to 18 months in federal prison, and sentenced Roger Spangenberg, 52, to one year and one day in federal prison.  Upon their release, both Spangenbergs will serve a five-year term of supervised release. Judge Simon also ordered the brothers to pay $2.5 million in restitution to KeyBank.

The Spangenberg brothers owned the now-closed D&R automobile dealerships, formerly located in Hermiston and Enterprise, Oregon, and co-defendant Steven Johnson served as a manager.  All three defendants have pled guilty to the bank fraud conspiracy.  They have admitted that from January 2007 through August 2008, they conspired to defraud KeyBank in connection with a Floorplan Line of Credit and Security Agreement, known in the automobile industry as a “flooring loan.”  KeyBank extended a line of credit to the D&R dealerships to purchase new inventory, but the Spangenbergs and Johnson failed to repay KeyBank after they sold the inventory.  The Spangenbergs and Johnson deceived KeyBank into believing the dealerships had not yet sold inventory, including asking customers to return recently purchased automobiles to the dealerships to receive a free service on the day of an audit, and misrepresenting to KeyBank that automobiles not present on the lot were being used as rental cars.  The defendants also submitted false Vehicle Identification Numbers (VIN) to KeyBank to receive funding for inventory the dealerships never purchased, and “double floored” vehicles with more than one financial institution.  Steven Johnson is scheduled to be sentenced on July 9, 2014.

“Bank fraud victimizes not only the bank and its employees, but also every consumer in this district,” stated U.S. Attorney Amanda Marshall. “Fraudsters who steal from banks will find themselves in federal prison, alongside those who rob banks, for the harm is indistinguishable.”

This case stemmed from a joint investigation by the Internal Revenue Service Criminal Investigation Division and the Federal Bureau of Investigation. The case was prosecuted by Assistant U.S. Attorney Stacie Beckerman.

PORTLAND, Ore. – Kathryn Keneally, Assistant Attorney General, Tax Division, and U.S. Attorney Amanda Marshall for the District of Oregon, announced today that Latisha L. Simmons, formerly of Portland, Oregon, pleaded guilty before the U.S. District Judge Anna J. Brown to three counts involving tax refund fraud. Simmons pleaded guilty to one count of wire fraud, one count of false claims against the government, and one count of aggravated identity theft. She was indicted in December 2013, and was arrested in January 2014 in Phoenix, Arizona, where she currently resides.

According to the plea agreement, Simmons filed more than 50 false federal income tax returns from Portland, Oregon. She filed them during a two-week period in January 2012, requesting a total of more than $400,000 in fraudulent income tax refunds. Simmons obtained names, social security numbers, and dates of birth for other individuals, which she used to file fraudulent income tax returns claiming fictitious wages and inflated withholding amounts to generate fraudulent refunds of up to $8,400 per return. Simmons caused the fraudulent refunds to be direct-deposited onto stored-value debit cards and mailed to her own address or other addresses she controlled. Simmons has agreed to pay full restitution to the IRS.

Simmons faces maximum sentences of 20 years in prison for the wire fraud conviction, five years for the false claims against the government count, and a mandatory two-year consecutive sentence for the aggravated identity theft conviction. Sentencing has been scheduled for August 27, 2014.

This case was investigated by the IRS Criminal Investigation Stolen Identity Refund Fraud Task Force. Trial Attorneys Leslie A. Goemaat and Lori A.Hendrickson of the Justice Department’s Tax Division are prosecuting the case.

Additional information about the Tax Division and its enforcement efforts may be found at www.justice.gov/tax.

PORTLAND, Ore. – A Portland woman was sentenced to four months in jail for stealing more than $10,000 in benefits intended for her disabled sister.  Killda I. Boutros, 46, appeared in federal court for sentencing last week after previously pleading guilty to Social Security fraud in November. 

According to court records and Boutros’ admissions in court, Boutros became her sister’s Representative Payee in September 2006, which enabled her to receive her sister’s Supplemental Security Income (SSI), a needs-based benefit administered by the Social Security Administration (SSA).  As the Representative Payee, Boutros was required to report to SSA if her sister left the United States for more than 30 days.  While her sister and other family members were outside the United States for months at a time, Boutros failed to report to SSA as she repeatedly withdrew the benefits. The government also showed the court documents seized from the Boutros family residence that included receipts for restaurant meals, groceries, utilities, and rent that were intended to be used by Boutros as proof of her sister’s expenses. In fact, the receipts were for time periods that her sister was outside the United States, indicating Boutros saved receipts of her own expenses to deceive SSA.

Citing the nature and circumstances of the offense, including the fact that Boutros committed the offense within months of becoming a naturalized U.S. citizen, U.S. District Judge Michael Simon sentenced Boutros to four months in custody, despite her lack of criminal history and her assurances that she would not re-offend.  She was further ordered to pay $142,337.10 in restitution to SSA and the U.S. Department of Health and Human Services for SSI and Medicaid benefits fraudulently obtained by other family members.  Judge Simon also advised Boutros that the jail sentence should send a message of “general deterrence” to the public.

Boutros was ordered to begin her jail sentence on June 19, 2014.  Boutros’ brother, Jason, was sentenced to six months in jail in March, and will begin serving his sentence May 19, 2014.  Two family members also charged in the indictment remain fugitives.

This case was investigated by agents for the Medicaid Fraud Unit, the Department of Health and Human Services, and the Social Security Administration, Office of Inspector General.  The case was prosecuted by Special Assistant United States Attorney Helen L. Cooper as part of a partnership venture between the U.S. Attorney’s Office in Portland, Oregon, and the Seattle Region of the Social Security Administration, Office of the General Counsel.

Southern Oregon Victims the Subject of Identity Theft and Fraud

MEDFORD, Ore. - Michelle Renee Lustig, 45, of Grants Pass, Oregon, was sentenced to 42 months in federal prison by Senior U.S. District Judge Owen M. Panner, after her convictions for conspiracy to commit mail theft, conspiracy to commit bank fraud and aggravated identity theft.  As part of her sentence, Lustig received a mandatory consecutive term of two years in prison required by federal statute where a victim’s identification was possessed or used in committing bank fraud.  Lustig was also ordered to pay $12,387.06 in restitution to victims of the fraud.  Her co-defendant, Gregory Stephen Brooks, 50, also of Grants Pass, Oregon, was sentenced last month by Judge Panner to 81 months in federal prison.

Between March 2013 and July 2013, Lustig and Brooks stole substantial quantities of mail from the mailboxes of over 400 victims in Jackson and Josephine Counties.  Some of the stolen mail was recovered discarded along the roadside, and two boxes of stolen mail, which included financial instruments, were recovered from a U-Haul truck being used by Lustig and Brooks.  Additional boxes of stolen mail were recovered from a residence where they both were staying in Grants Pass.  The two forged and deposited stolen checks, and used stolen debit and credit cards for making withdrawals from victim bank accounts and fraudulent retail purchases.  They also used victims’ personal identification to apply for and obtain credit and debit cards from victim companies.  When Lustig was arrested, law enforcement discovered additional stolen mail in her car, including mail previously stolen that was in the process of being returned by postal authorities to earlier victims from the Onion Mountain area of Josephine County. 

This case was investigated by the Jackson County Sheriff’s office, Grants Pass Department of Public Safety and the U.S. Postal Inspection Service, and was prosecuted by Assistant U. S. Attorney Byron Chatfield.

MEDFORD, Ore. -  On Monday, May 12, 2014, Senior U.S. District Judge Owen M. Panner sentenced Christopher Darrell Joseph Sage, 49, of Grants Pass, Oregon, to 20 years in federal prison, after he previously pleaded guilty to being a felon in possession of a firearm and possession of methamphetamine with intent to distribute.   Sage will be on supervised release for five years after he completes his prison sentence.

On January 2, 2013, Rogue Area Drug Enforcement Team (RADE) detectives observed Sage enter and leave the Grants Pass apartment of a previously arrested methamphetamine dealer.  A Grants Pass patrol unit and a RADE detective followed Sage to a motel parking lot.  Sage got out of his pickup and began walking away, ignoring the officers’ multiple commands to stop and take his hands out of his pockets.  Sage fought with the officers and had to be tasered three times before he was finally subdued and handcuffed.  Officers discovered that Sage was a multiple convicted felon and probation absconder.  Officers searched Sage’s truck and found a stolen Bushmaster AR-15 semi-automatic assault rifle with two 30 round magazines and several boxes of .223 ammunition, a Remington 12 gauge shotgun, digital gram scales, ziplock plastic baggies, and drug notes.  In his coat pocket Sage had a quarter pound of methamphetamine and a handwritten list of firearms. 

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 prison sentence.  Sage is an Armed Career Criminal based upon his prior felony convictions for assault on a police officer (2 counts), and three felony convictions for manufacture of methamphetamine.  His criminal history additionally includes previous felony convictions for felon in possession of a firearm, unauthorized use of a vehicle, and possession of methamphetamine, and receiving stolen property, and misdemeanor convictions for forgery, theft, obstructing police, DUII, and reckless driving.

This case was investigated jointly by the Rogue Area Drug Enforcement Team, the Grants Pass Department of Public Safety, and the Bureau of Alcohol, Tobacco, and Firearms, and was prosecuted by Assistant U.S. Attorney Douglas W. Fong.

Mail Theft Victims Subjected to Identity Theft and Fraud

MEDFORD, Ore. – Gregory Stephen Brooks, 50, Grants Pass, Oregon was sentenced Monday to 81 months in federal prison by Senior U.S. District Judge Owen M. Panner after his convictions for conspiracy to commit mail theft, conspiracy to commit bank fraud and aggravated identity theft.  As part of the sentence, Brooks received a mandatory consecutive term of two years in prison required by federal statute where a victim’s identification was possessed or used in committing bank fraud.  Brooks was also ordered to pay $12,387.06 in restitution to victims of the fraud.

Between March 2013 and July 2013, Brooks and his co-defendant, Michelle Renee Lustig, 45, Grants Pass, Oregon, stole substantial quantities of mail from over 400 residential and business mailboxes in Jackson and Josephine Counties.  Large quantities of stolen mail were recovered at a series of locations:  discarded along the roadside; in a U-Haul truck being used by defendants; and from a residence where defendants were staying in Grants Pass.  Defendants forged and deposited stolen checks, used stolen debit and credit cards to make withdrawals from victim bank accounts and to make fraudulent retail purchases, and used victim personal identification to apply for and obtain fraudulent credit and debit cards from victim companies.  Brooks has an extensive criminal history of convictions dating back to 1981 including numerous thefts and burglaries, as well as drug trafficking offenses.  Lustig is scheduled to be sentenced next month for her role in the criminal activity.

This case was investigated by the Jackson County Sheriff’s Office, Grants Pass Department of Public Safety and the U.S. Postal Inspection Service and prosecuted by Assistant U. S. Attorney Byron Chatfield.

EUGENE, Ore. – On April 17, 2014, Cecilio Galan, 45, of Metolius, Oregon, was sentenced today to 63 months in prison and 5 years of supervised released for possession and distribution of child pornography.

Defendant possessed child pornography he located on the internet.  He then made that pornography available to others on a file sharing site in the hopes that he could obtain additional child pornography himself.  Defendant carried on his possession and distribution activities while serving as a custodian in a local school and after having served as a reserve police office and a bus driver.  The investigation did not reveal any evidence that Galan had any inappropriate contact with the students at the school where he worked.

This case was investigated by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and the Jefferson County Sheriff’s Office and was prosecuted by Assistant U.S. Attorney Amy Potter.

This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc  For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."

EUGENE, Ore. – On Wednesday, April 16, 2014, U.S. District Judge Ann Aiken sentenced Mark Timothy Ellis, 38, of Oregon City, Oregon, for making a fraudulent claim to the United States and for filing a false lien against a federal employee to serve 12 months and one day in prison and three years of supervised release, and ordered him to pay $311,459 in restitution.

According to court documents, Ellis admitted that he made a false claim to the United States when he filed a series of fraudulent documents with the Internal Revenue Service (IRS), including false 1099s and false tax returns, and obtained a fraudulent $311,459 refund based on those false documents.  Ellis also admitted that he filed a false and retaliatory lawsuit and false and retaliatory liens against the IRS employees who were investigating his illegal conduct, including the special agent who was investigating him for tax fraud, as a means of retaliation and intimidation.

This case was investigated by IRS Criminal Investigations and the U.S. Treasury Inspector General for Tax Administration and was prosecuted by Assistant U.S. Attorney Scott E. Bradford.

EUGENE, OR. – On April 17, 2014, Chief United States District Judge Ann Aiken sentenced career offender Leodis Robert Roach, 31, of Multnomah County, Oregon, to serve fourteen years and four months in federal prison for robbing the Eugene downtown branch of the Bank of America, and a ten-year concurrent sentence for possessing a loaded pistol while he was a passenger in a car outside of Spokane, Washington.  Roach will serve his federal sentences concurrently with state prison sentences he is presently serving in Oregon for first degree robbery and being a felon in possession of a firearm. 

In 2001, Roach shot a person in Portland, Oregon, over an illegal drug debt and was convicted of assault in the first degree.  He was released from prison in 2009, and attended classes at Lane Community College in Eugene, Oregon.

In April 2010, Roach was convicted of attempting to elude Portland police, a felony.  In May 2011, Roach was arrested by U.S. Marshals for illegally possessing a loaded .45 caliber pistol near Spokane, Washington.   Roach was released from custody pending his trial on the federal firearm charge.

On June 21, 2011, while committing a robbery, Roach exchanged gunfire with a drug dealer in a commercial area of Portland, Oregon.  On July 22, 2011, Roach robbed the Bank of America in Eugene and, with the aid of an accomplice, returned to Portland, Oregon.  On August 19, 2011, Roach was arrested by Portland police for the June 21, 2011, robbery.  On March 20, 2013, an Oregon state judge sentenced Roach to ten years in prison after a jury found him guilty of first degree robbery and being a felon in possession of a firearm.

On November 14, 2013, Roach appeared in federal court in Eugene and pled guilty to robbing the Bank of America in Eugene as a career criminal.  Roach earlier pleaded guilty to illegally possessing the loaded pistol in Washington.  Today, Judge Aiken imposed the 14 year sentence for the federal offenses, and ordered them to be served concurrently with Roach’s state sentences.

The federal cases were investigated by the Federal Bureau of Investigation, the Bureau of

Alcohol, Tobacco and Firearms, the Portland Police Department, the Eugene Police Department and the Washington State Patrol.  They were prosecuted by Assistant U.S. Attorney Frank R. Papagni, Jr., and Assistant United States Attorney Aine Ahmed.

EUGENE, Ore. – Victor Rivera-Cruz, 39, of Orange County, California, was sentenced today by U.S. District Court Chief Judge Ann Aiken to a 10-year prison term for possession with the intent to distribute methamphetamine.  Following his release from prison, Rivera-Cruz will be on supervised release for five years.

In April 2012, the Oregon State Police conducted a traffic stop of defendant’s vehicle near Glenwood, Oregon.  A search of the vehicle revealed nearly four pounds of methamphetamine.  Rivera-Cruz’ criminal history includes convictions in 2001 and 2002 for possession of controlled substances, and convictions in 2005 for possession for sale of heroin, cocaine, methamphetamine and marijuana, felon in possession of a firearm, and child abuse.

This case was investigated by the Eugene Resident Office of the Drug Enforcement Administration and the Oregon State Police.  Assistant United States Attorney Jeffrey Sweet prosecuted the case.

PORTLAND, Ore. — Taquarius Kaream Ford, also known as “Cameron,” has been indicted by a federal grand jury on sex trafficking and conspiracy charges. Ford has pled not guilty to all charges.  Following a detention hearing today, U.S. Magistrate Court Judge Janice M. Stewart detained Ford, pending his trial.  Trial is currently set for June 3, 2014, before U.S. District Court Judge Garr M. King.

The grand jury indictment alleges that Ford and a co-conspirator sex trafficked adult females in the District of Oregon and elsewhere, by force, fraud and coercion.  In its’ court filings, the government alleges that Ford recruited young women in suburban shopping malls and elsewhere across the United States by posing as a modeling executive and promising them a modeling contract.  He convinced young women to travel to Los Angeles, wined and dined them in Hollywood, and then told them that if they want to be models, they must first work for him as prostitutes.  In one case, he recruited an 18-year-old girl at a suburban mall, flew her to Los Angeles, and took her to Hollywood parties.  He then coerced her to work in his escort business, and when she protested, he forcibly raped her.  Ford and his co-defendant also threatened to harm the victim’s family.  Thereafter, defendants transported the victim to Portland for the purpose of prostitution, where she was rescued at an airport hotel by Port of Portland officers.  Further investigation by the FBI’s Child Exploitation Task Force revealed that defendant had recruited other young women across the country into his “escort” business.  The FBI has identified additional victims in Idaho, Arizona, and Georgia.

Sex trafficking by force, fraud, and coercion carries a mandatory minimum sentence of 15 years in prison, and a statutory maximum of life imprisonment.  A criminal indictment is only an allegation and not evidence of guilt. Defendant is presumed innocent unless and until proven guilty.

The FBI urges anyone who was victimized by Taquarius “Cameron” Ford, to contact the Portland FBI office at (503) 224-4181.

The charges stem from a continuing investigation by the FBI and the Tigard Police Department, members of the FBI’s Child Exploitation Task Force. The case is being prosecuted by Assistant U.S. Attorney Stacie Fatka Beckerman, and Special Assistant U.S. Attorney Glen Ujifusa of the Multnomah County District Attorney’s Office.

Four Banks and Two Motels Robbed During Crime Spree Last Fall

PORTLAND, Ore.- Andrew Frank Laviguer, 57, was sentenced today by Senior U.S. District Judge Robert E. Jones to 240 months in federal prison for the robbery of four banks and two motels in Oregon and Washington during August and September of last year.  Laviguer pled guilty to the charges in November of 2013 and has been in custody since the time of his arrest on September 9, 2013.

Laviguer was sentenced for the following robberies: (1) August 14, 2013, armed robbery (replica firearm) of the Columbia Bank on NE Halsey Street in Portland, Oregon; (2) August 30, 2013, robbery of the Key Bank on 17th Avenue SW in Seattle, Washington; (3) September 4, 2013, robbery of the Sterling Savings Bank on Tacoma Mall Blvd. in Tacoma, Washington; (4) September 7, 2013, robbery of the Super 8 Motel on SW Parkway Avenue in Wilsonville, Oregon; (5) September 8, 2013, attempted robbery of the Roadway Inn on Astoria Way NE in Salem, Oregon; and (6) September 9, 2013, armed robbery (replica firearm) of the Wells Fargo Bank on NW 11th Avenue in Portland, Oregon.

Laviguer was arrested by Portland Police Bureau officers after he robbed the Wells Fargo Bank in September of 2013.  Laviguer received a sentence of 180 months, following a 1992 Salem bank robbery.  After serving that sentence and being released, he was convicted of robbing a bank in Gresham in 2007 and was sentenced to 77 months in prison.  Following his release from the Federal Correctional Institution in Williamsburg, South Carolina, on July 9, 2013, he was ordered to report to the Lane County Work Release Center to begin his supervised release for the 2007 bank robbery.  He failed to report and the robbery spree began less than one month later.

In order to achieve the 20-year sentence, Jones found that Laviguer was a “career offender” under federal sentencing law and departed upward from that sentencing range because of Laviguer’s aggravated criminal history and the number of robberies he committed.

This case was investigated by the FBI, the Portland Police Bureau, the King County Sheriff’s Office, the Tacoma Police Department, the Clackamas County Sheriff’s Office and the Salem Police Department.  It was prosecuted by Assistant U.S. Attorney Fred Weinhouse.

PORTLAND, Ore. — Keith Lawrence McMurray, 32, of Portland, Oregon, was sentenced to 204 months in prison today by United States District Judge Marco A. Hernandez for sex trafficking a 17-year old Beaverton girl. On September 4, 2013, McMurray pleaded guilty to one count of sex trafficking a minor. Upon release from custody, McMurray will serve a 10-year period of supervised release.  During his supervised release, he must abide by a number of conditions, including registration as a sex offender.

“Sex trafficking a minor continues to be a huge concern for this community,” said U.S. Attorney Amanda Marshall. “Young girls and boys in our community are preyed upon for commercial sex, and are used by traffickers as simply a way to gain money. We will continue to prosecute aggressively anyone who exploits, aids or recruits our children into this dark world.”

In imposing the 204-month sentence, Judge Hernandez noted that defendant’s objectification of the victim was extremely concerning.

The government alleged that McMurray recruited the victim into prostitution when she was 17 years old. He used various prostitution web sites to advertise the minor and even posed as a customer in order to promote her on one of the web sites. In addition, McMurray filmed sex acts with her during the time she was a minor.  All of this was done while the defendant was on post-prison supervision.

This case stemmed from a coordinated investigation by the Federal Bureau of Investigation’s (FBI) Child Exploitation Task Force and Multnomah County Parole and Probation. 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 rescue victims. The case was prosecuted by Special Assistant U.S. Attorney JR Ujifusa.

Police Seize Methamphetamine, Handguns, and Cash from Defendant’s Home

PORTLAND, Ore. – Juan Miguel Lopez, 29, of Madras, Oregon, was sentenced on Monday, March 31, 2014, to 135 months in federal prison by U.S. District Judge Marco A. Hernandez.  In December 2013, Lopez pled guilty to one count of possession with intent to distribute more than 50 grams of actual methamphetamine.  The defendant is currently in the custody of the United States Marshals Service.  After Lopez has completed his 135-month prison term, he will be required to serve 5 years of supervised release, during which time he will be prohibited from associating with any gang members.

“Mr. Lopez was a dangerous, armed drug dealer who spread destruction throughout Central Oregon and Warm Springs,” stated U.S. Attorney Amanda Marshall.  “The long prison term imposed by Judge Hernandez will protect the public from this prolific drug dealer.”

Lopez, who went by the nickname “Monster,” told police that he was associated with the Mexican Mafia.  Prior to this federal case, Lopez had five prior felony convictions for either delivery or possession of drugs.  Lopez also has a prior conviction in Jefferson County Circuit Court for reckless endangerment, based on his hurling a bottle at a woman and throwing gang signs at Cove Palisades State Park.

This federal conviction for possession with intent to distribute methamphetamine is based on a search warrant executed at Lopez’s home on August 6, 2012, in Madras.  During the search warrant, police officers seized approximately one-half pound of methamphetamine, a .45 caliber semiautomatic handgun, a .40 caliber semiautomatic handgun, ammunition, scales, drug packaging materials, and $2,655 in cash.  Defendant, who was on Jefferson County probation at the time, was arrested that same day.

An investigation by the Warm Springs Police Department’s High Intensity Drug Trafficking Area (“HIDTA”) task force revealed that Lopez had been selling drugs around the Madras and Warm Springs areas.  The defendant admitted to police that the two handguns seized from his home did, in fact, belong to him. Lopez told the police that he bought the firearms from an unidentified person at the Indian Head Casino in Warm Springs.

The case was investigated by the Warm Springs Police Department’s HIDTA task force.  Assistant U.S. Attorney Scott Kerin prosecuted the case.

MEDFORD, OR – Kenneth Johnson, 62, and Diana Arredondo, 56, both of Central Point, Oregon, were sentenced to federal prison based on an embezzlement and tax fraud scheme relating to the operation of a local hotel.  Johnson was a partner in the Super 8 Hotel in Central Point, Oregon since it opened in October 2005.  He was in charge of the hotel’s daily operations and reported the hotel’s revenue to his partners in Montana.  Johnson hired his girlfriend, Arredondo, as the assistant hotel manager.  They operated the hotel from October 2005 through 2011.  Johnson engaged in a scheme to defraud his hotel partners by providing them false information regarding the amount of cash collected by the hotel, and diverting some of the funds for his and Arredondo’s use.  Over a period of time, Johnson diverted a total of about $500,000 and shared some of the tainted funds with Arredondo.  In addition, both defendants filed fraudulent income tax returns, failing to report the money embezzled from the hotel.  Based on a plea agreement entered into with the government, Johnson pleaded guilty to tax fraud and wire fraud and Aredondo pleaded guilty to tax fraud.

On Monday, March 31, 2014, Senior U.S. District Judge Owen M. Panner sentenced Johnson to 33 months in federal prison and Arredondo to 10 months in prison.  Johnson was ordered to pay $561,101.05 in restitution and Arredondo was ordered to pay $16,229.00 in restitution.

This case was investigated by the Federal Bureau of Investigation, Internal Revenue Service, Criminal Investigation, and was prosecuted by Assistant U. S. Attorney Judith Harper.

PORTLAND, Ore. – Yesterday, U.S. District Judge Marco A. Hernandez sentenced Sergey Yefimovich Turzhanskiy, 26, to 30 months in federal prison for possession of an unregistered destructive device.  Turshanskiy pleaded guilty to using the device, a Molotov cocktail, in a 2012 attack on a Portland Police Bureau (PPB) patrol car.

Turzhanskiy entered PPB’s North Precinct parking lot at 449 North Emerson Street at about 1:30 am on November 5, 2012.  He ignited the Molotov cocktail (a glass beer bottle with fuel and a cloth wick), and hurled it at a parked patrol car.  The device bounced off the hood of the car onto the ground and initially failed to break.  Turzhanskiy picked up the device and threw it a second time at the vehicle.  It hit the pavement, broke and caused a fire next to the car.  Turzhanskiy fled on a bicycle but was apprehended by the police a few blocks away.

A native of Ukraine, Turzhanskiy immigrated to the United States as a child, became a U.S. citizen, and grew up in Chicago, Illinois.  He had lived in Portland a short time when the crime occurred.

After serving the prison sentence, Turzhanskiy will be on supervised release for three years.  In light of Turzhanskiy’s prior associations, Judge Hernandez ordered as a special condition of supervised release that he “shall have no communication or contact with anarchist groups or affiliates” in the future.  He has already paid $1,314.12 in restitution to the City of Portland for damage to the patrol car.

“We are pleased with the sentence imposed by Judge Hernandez,” stated United States Attorney Amanda Marshall.  “Violent attacks such as this one on law enforcement deserve substantial punishment as a deterrent to similar conduct by others.”

In addition to the Portland Police Bureau, investigative work in the case was performed by the Federal Bureau of Investigation and the Bureau of Alcohol, Tobacco, Firearms and Explosives.  The case was prosecuted by Assistant U.S. Attorney Stephen F. Peifer.

PORTLAND, Ore. – A Portland man was sentenced to 6 months in jail for stealing more than $8,000 in benefits intended for his disabled sister.  Jason I. Boutros, 49, appeared in federal court for sentencing yesterday after previously pleading guilty to Social Security fraud in December.

According to court records and Boutros’ admissions in court, Boutros became his sister’s Representative Payee in February 2009, which enabled him to receive his sister’s Supplemental Security Income (SSI), a needs-based benefit administered by the Social Security Administration (SSA).  As the Representative Payee, Boutros was required to report to SSA if his sister left the United States for more than 30 days.  While his sister and other family members were outside the United States for months at a time, Boutros failed to report to SSA as he repeatedly withdrew her benefits.  In addition to his sister’s SSI, Boutros withdrew the SSI benefits being paid to his parents, Zakia and Iskander Boutros, who have also been indicted and are currently fugitives living outside the United States. 

Telling Boutros that he had a “moral obligation” to repay the funds, the Honorable Michael H. Simon ordered Boutros to pay more than $220,000 in restitution to SSA and the Oregon Department of Human Services for the SSI and Medicaid benefits his family received.  He further ordered that $1,900 in currency found in defendant’s residence be applied towards the restitution.  Judge Simon found Boutros’ guideline range to be 0-6 months, stating that despite the government’s “well-marshalled evidence of falsehoods,” the government had not proven that Boutros deserved a higher guideline range for being an organizer, manager, or supervisor of his family’s fraud scheme.  He further stated that he believed a 12-month prison term was justified, but that he did not believe the record supported an upward departure to a higher guideline range.

Boutros was ordered to begin his jail sentence on May 19, 2014.  Boutros’ sister Killda Boutros is scheduled for sentencing April 17, 2014, at 2:00 p.m.

This case was investigated by agents for the Medicaid Fraud Unit, the Department of Health and Human Services, and the Social Security Administration, Office of Inspector General.  The case is being prosecuted by Special Assistant United States Attorney Helen L. Cooper as part of a partnership venture between the U.S. Attorney’s Office in Portland, Oregon, and the Seattle Region of the Social Security Administration, Office of the General Counsel.

PORTLAND, Ore. – Federal agents of the Social Security Administration, Office of Inspector General, Office of Investigations, working with the U.S. Attorney’s Office, obtained a search warrant for Safety Net of Oregon, a Representative Payee organization, located on SE Morrison Street.  The warrant was executed on March 6, 2014.

According to the affidavit in support of the search warrant, the Social Security Administration terminated Safety Net as an Organizational Representative Payee effective April 1, 2014, following a review of Safety Net that revealed that approximately $600,000 of beneficiary funds was unaccounted for.

Prior to the execution of the warrant, the Social Security Administration began contacting each of the approximate 900 beneficiaries by telephone or letter to advise them of Safety Net’s termination as an Organizational Representative Payee.  During the execution of the warrant, clients of Safety Net who arrived at the business were provided a flyer advising them of Safety Net’s termination and directing them to contact the Social Security Administration.   They were also provided names of organizations that could potentially serve as Representative Payees. Employees of the local Social Security Administration field offices have been working with local disability organizations and social service agencies with the goal that all of Safety Net clients will be transitioned to a new Representative Payee as soon as possible.

The U.S. Attorney’s Office’s investigation is on-going.  A search warrant is an investigative tool and not evidence of guilt.  The subjects of the search warrant are presumed innocent unless and until they are proven guilty.

The U.S. Attorney’s Office urges any beneficiaries who were clients of Safety Net and who have not yet contacted the Social Security Administration, to do so immediately in order to avoid any interruption in the payment of their benefits.

Social Security hours:

Monday, Tuesday, Thursday, Friday: 9:00 AM – 3:00 PM
Wednesday 9:00 – Noon

Local Social Security Offices

SOCIAL SECURITY              
194 BEVERLY DRIVE
OREGON CITY OR 97045
BUSINESS: (866) 964 4264

SOCIAL SECURITY                  
1538 SW YAMHILL ST
PORTLAND OR 97205      
BUSINESS: (888) 632 6990

SOCIAL SECURITY                  
17925 SE DIVISION ST
PORTLAND OR 97236       
BUSINESS: (866) 331 6402

SOCIAL SECURITY   
1229 SE 3RD STREET SUITE 100         
PENDLETON OR 97801 
BUSINESS: (877) 405 0480

SOCIAL SECURITY
11975 SW 2ND ST SUITE 100      
BEAVERTON OR 97005
BUSINESS: (866) 964 2036

SOCIAL SECURITY       
1750 MCGILCHRIST ST SE STE 110               
SALEM OR 97302
BUSINESS: (866) 593 1559

Representative Payee Organizations

Share and Care
13855 Pacific Highway
Tigard, OR 97281
503-684-8882
*If you cannot get to the Tigard location, call them and the payee will arrange to meet you.
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Action Payee Services Inc.
503-352-5349
* Contact by phone and the payee will arrange to meet you.
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On the Budget
971-227-6294

* Contact by phone and the payee will arrange to meet you.

PORTLAND, Ore. - On March 18, 2014, U.S. District Court Judge Marco Hernandez sentenced Samuel Navarrette-Aguilar, 41, a citizen of Mexico, to 240 months for his managerial role in a heroin trafficking conspiracy involving a kilogram or more of heroin. A federal jury found the defendant guilty of the conspiracy in June of 2013. Judge Hernandez further found by a preponderance of evidence that heroin distributed by the defendant resulted in the death of Erin Freeman, 22, who overdosed on heroin in her Portland residence in June of 2012. Judge Hernandez cited this and other factors to support his sentence including the fact that the defendant committed this crime after escaping from a Washington state prison sentence for drug trafficking and having remained at large since 1999.  Although the quantity of heroin subjected the defendant to a statutorily mandated minimum sentence of twenty years, Judge Hernandez indicated he would have pronounced the same sentence independent of the mandatory minimum requirement. 
 
Reaching into the upper echelon of a trafficking conspiracy from the tragic scene of a young woman’s last failure against heroin addiction, required a fast moving investigation led by the Portland Police Bureau Drugs and Vice Division with support from the Federal Bureau of Investigation and the Drug Enforcement Administration.  
 
“This sentence serves justice.  In 2012 we lost 147 Oregonians to heroin, many of those, like Erin Freeman, were far too young”, said U.S. Attorney Amanda Marshall.  “This defendant and other purveyors of this deadly drug face heavy penalties as Oregon and communities across the nation address the clear and present danger of this heroin epidemic.”

This case was prosecuted by Assistant U.S. Attorney Kathleen Bickers.

MEDFORD, Ore.—On Monday, March 17, 2014, Senior U.S. District Judge Owen M. Panner sentenced Christopher Keith Hammer, 43, of Central Point, Oregon, to 37 years in federal prison for production of child pornography.

In February 2013, a nationwide FBI child pornography investigation revealed that sexually explicit photos of a four year old child were being distributed from an e-mail account linked to Hammer’s residence.  The Southern Oregon High Tech Crimes Task Force (SOHTCTF) executed a search warrant at Hammer’s residence, identified the child, and matched the clothing and furniture depicted in the sexually explicit photos.  Hammer was arrested immediately.  Hammer’s e-mail account contained several thousand images of child pornography, along with dozens of photos of the four year old child in sexually explicit poses, which Hammer took over the course of a year.  Hammer e-mailed the photos to several other child molesters he met online, and described his ongoing sexual abuse of the child, and his plans to take photos and videos of the sexual abuse.  Hammer also indicated a desire to sexually abuse other children, and encouraged other child molesters to sexually abuse their own children and send photos of the abuse to Hammer.

Hammer has two previous felony convictions in California for Lewd and Lascivious Acts Upon a Child Under 14 in 1994, in which he sexually abused his six year old and eight year old relatives.  Under federal law, any person who produces child pornography after two previous felony convictions for child sex abuse faces a mandatory minimum of 35 years in prison.

“These pictures represent the worst type of child sex offender—one who not only sexually exploits children, but also documents and shares his experiences with others, and encourages others to do the same, “” said U. S. Attorney Amanda Marshall.  “The severe penalties imposed by federal law are well deserved and necessary to protect our most vulnerable victims--children.”

This case was investigated by the SOHTCTF, a multi-jurisdictional computer crimes task force comprised of the FBI, Department of Homeland Security, Central Point PD, Medford PD, Ashland PD, Jackson County Sheriff's Office, and the Jackson County District Attorney's Office, and was prosecuted by Assistant U. S. Attorney Douglas W. Fong.

EUGENE, Ore. – Today, U.S. District Judge Michael McShane sentenced Bryan Gruetter, 55, of Portland, Oregon, to 63 months in prison and ordered him to pay $1,144,487.97 in restitution.  According to court documents, Gruetter, a former personal injury lawyer, embezzled more than $1.1 million from his clients between 2008 and 2012.

Gruetter, an attorney licensed to practice law in Oregon, had offices in Portland and Bend, Oregon, and primarily worked personal injury and wrongful death cases.  In 2012, law enforcement began investigating Gruetter’s use of his clients’ money and determined that between January 2008 and January 2012 he had illegally diverted more than $1.1 million of his clients’ money to pay for personal and business expenses rather than to pay the clients or to pay the clients’ legal, medical, insurance, or other associated costs.  When interviewed, Gruetter admitted that he was “robbing Peter to pay Paul” because his law firm’s monthly income was insufficient to cover the monthly overhead, which included personal family payments and expenses.  On March 9, 2012, defendant resigned his law license, deciding not to challenge the allegations. 

Currently, the Oregon State Bar through the Client Security Fund has paid more than $900,000 to some of his clients in an attempt to mitigate some of the damage Gruetter caused.  In fact, the Gruetter claims exhausted the Client Security Fund reserves, requiring an increase in bar members’ annual assessments from $15 to $45 until the reserve is fully funded.

U. S. Attorney S. Amanda Marshall commented, “As a lawyer, this defendant had a solemn duty to help his clients seek justice. Instead, he betrayed their trust and victimized vulnerable individuals by lying to them and stealing their money. His conduct tarnishes a profession full of hard-working, ethical attorneys who work hard every day helping people solve complex problems. My office will not tolerate this type of behavior from professionals who violate the public's trust in this manner.”

This case was investigated by the FBI, the IRS, the Deschutes County District Attorney’s Office, and the Bend Police Department and is being prosecuted by Assistant U.S. Attorney Scott E. Bradford.

PORTLAND, Ore. - On March 12, 2014, federal fugitive Kelly Vern Mark Swoboda, 49, was killed during an encounter with a Portland Police Bureau Officer near Wilson High School.  Swoboda was a wanted federal fugitive based on a supervised release violation issued in connection with his prior bank robbery conviction.  He was convicted of the bank robbery in 2006 in Portland and received a sentence of 70 months in prison.  His supervised release commenced last March and a supervised release violation warrant was issued in November of last year.  The United States Marshal’s Service Fugitive Task Force had been actively trying to locate Swoboda since the warrant was filed.

Yesterday, a federal indictment was filed against Swoboda alleging that he committed three bank robberies: (1) November 22, 2013, NW Priority Federal Credit Union in Milwaukie, Oregon, (2) December 6, 2013, Cutting Edge Federal Credit Union in Milwaukie, Oregon and (3) December 21, 2013, Unitus Community Credit Union in Portland,  Oregon.

PORTLAND, Ore. - On March 12, 2014, U.S. District Court Judge Michael Simon sentenced Charly Aguayo-Caro to 12 years in prison for his role in distributing heroin that resulted in the death of Michael Rael. Aguayo-Caro, 24, of Xalisco, Nayarit, Mexico, was responsible for managing the day-to-day operations of an active heroin distribution business operating out of Portland, Oregon. Aguayo-Caro managed the business and accepted telephone orders for heroin from customers. Aguayo-Caro then employed couriers to distribute the heroin throughout the Portland metro-area beginning in 2008 and continuing until 2012.

On September 10, 2012, Michael Rael, 23, of Milwaukie, Oregon, was found deceased from a heroin overdose near his residence. Rael recently moved to Oregon from New Mexico to pursue higher-education and full-time employment. Following Rael's death, Clackamas County Interagency Task Force officers specializing in overdose investigations began re-tracing the heroin ingested by Rael. Investigators were able to trace the heroin to the drug-trafficking organization managed by Aguayo-Caro. On September 18, 2012, investigators arrested Aguayo-Caro in Wilsonville, Oregon where he was returning from California.

At sentencing, Judge Simon acknowledged the "national emergency" communities are facing from heroin overdoses. Simon referenced United States Attorney General Eric Holder's recent public statement about the "urgent and growing public crisis" heroin is having in communities across the country where heroin overdose deaths have increased 45 percent nationally between 2006-2010. U.S. Attorney Amanda Marshall echoed Simon and Holder by affirming her commitment to prosecuting drug trafficking organizations that are responsible for saturating the Portland market with heroin that led to the heroin overdose deaths of 147 Oregonians in 2012. Marshall stated: "We will continue to use every tool at our disposal to actively dismantle these drug trafficking organizations that are responsible for the devastating effects of heroin in our communities." This case was prosecuted under the "Len Bias" sentencing enhancement which increases mandatory sentences for individuals and organizations that distribute heroin which ultimately results in an overdose death.

The federal charges stem from an investigation led by state and federal law enforcement agencies including the Clackamas County Inter-Agency Task and the Federal Bureau of Investigation with the assistance of the Clackamas County District Attorney's Office.

The case was prosecuted by Special Assistant U. S. Attorney Steve Mygrant.

Letters Went to U.S. Senators, Representatives, and Members of the Media

PORTLAND, Ore.—U. S. District Judge Michael H. Simon sentenced Christopher Lee Carlson to 24 months in prison today on a charge of conveying false information and a hoax containing a purported biological toxin.  Carlson, 41, of Vancouver, Washington, pleaded guilty to mailing approximately 100 threatening letters with white powder to U.S. Senators, Representatives and media personalities in February 2012.

About 24 of the letters were received and opened by staff members before law enforcement was able to intercept the remainder.  The letters were sent to Congressional offices in Washington, D.C., and their field offices across the country.  Results included evacuated offices, responses by hazardous materials units, decontamination procedures for affected persons, and interrupted workdays.  Dozens of law enforcement and emergency response teams responded in 24 federal districts.  Examination of the powder revealed it to be celery salt and cornstarch.

The threatening letters expressed frustration with politicians, corporations, and lobbyists.  Promising a new American Revolution, some included the warning:

“Oh yeah, the powder.  50 Senators were randomly selected to receive this letter as opposed to the other one.  Since I put the bug in ten of these letters, again randomly selected, there’s a 20% chance that you’ve just been exposed.  If you aren’t wearing a biohazard suit, anyway.”

In addition to serving 24 months in custody, Carlson must pay $36,311.07 in restitution to state and local law enforcement agencies for expenses incurred in the emergency responses.  After serving his prison sentence, Carlson will be on three years of supervised release and must comply with mental health treatment and medication requirements.

U. S. Attorney, Amanda Marshall, noted, “These types of hoaxes threaten the health and safety of the American people.  They instill fear in the public, overburden the resources of law enforcement and emergency responders, and harm the nation’s morale and economy.”

The Federal Bureau of Investigation led the nationwide investigation from its Portland office.  Valuable assistance was provided by the U.S. Capitol Police and the U.S. Postal Inspection Service. 

“Anthrax hoaxes are no joke,” said Kevin Rickett, Acting Special Agent in Charge of the FBI in Oregon.  “They cause fear for those who receive these letters, and they cost taxpayers a great deal of money during the resulting investigation.  We must treat these events as real threats, and that, in turn, forces agents and staff to spend significant time and resources investigating and resolving these crimes,” he added.

The case was prosecuted by Assistant U. S. Attorneys Stephen F. Peifer and David L. Atkinson.

Received over $296,000 in Fraudulent Refund

PORTLAND, Ore. – Ricky Lee Greenwood, 32, of Portland, Oregon, was sentenced in federal court for a wide-spread tax refund fraud scheme, announced U.S. Attorney S. Amanda Marshall for the District of Oregon. Today, Greenwood was sentenced to 40 months in prison. The sentence will be followed by three years of supervised release. In October 2013, Greenwood pleaded guilty to aggravated identity theft, wire fraud, and filing a false, fictitious, or fraudulent claim against the government.

According to court documents, Greenwood electronically filed at least 66 false tax returns with fictitious wage and false dependent information, requesting more than $300,000 in fraudulent refunds. Greenwood obtained the names and Social Security numbers of unemployed individuals in order to file fraudulent tax returns in their names. According to court documents, Greenwood also obtained the social security numbers of children and claimed them on the tax returns of unrelated individuals to maximize refundable credits – such as the Earned Income Tax Credit and the Additional Child Tax Credit – and further inflate the fraudulent refunds. Greenwood had more than $296,000 in fraudulent refunds deposited into accounts that he controlled or delivered to addresses he could access. Today, Greenwood was ordered to pay $296,106 in restitution to the IRS.

This case was investigated by the IRS Criminal Investigation Stolen Identity Refund Fraud Task Force. Trial Attorneys Leslie A. Goemaat and Todd P. Kostyshak of the Justice Department’s Tax Division are prosecuting the case.

Additional information about the Tax Division and its enforcement efforts may be found at www.justice.gov/tax.