District of Oregon
Press releases recorded for this federal judicial district.
Five Sentenced in $20 Million Bank FraudRead the Press Release
Defendants Include a Real Estate Developer, a Loan Officer, a Mortgage Broker, and an Escrow Officer in Cases Stemming From the Collapse of Desert Sun Development in Bend, OregonEUGENE, Ore. – Over the past two days, Chief U.S. District Judge Ann Aiken sentenced five defendants, including a real estate developer, a loan officer, a mortgage broker, and an escrow officer for a variety of mortgage and loan fraud charges arising out of the collapse of Desert Sun Development (DSD), a company previously headquartered in Bend, Oregon. From 2004 through 2008, DSD built commercial buildings and residential housing throughout Central Oregon. According to the court records, DSD principals and other defendants caused financial institutions to lose more than $20 million.
Tyler Fitzsimons, 35, of Gold Hill, Oregon, was sentenced to 90 months in prison for spearheading this mortgage-fraud scheme. He was also ordered to pay more than $22 million in restitution. Fitzsimons started DSD in 2004 and was its president. Codefendant Shannon Egeland, 39, of Kuna, Idaho, was DSD’s vice president. Fitzsimons and Egeland orchestrated a commercial and residential real estate scheme. As part of the commercial real estate fraud, Fitzsimons and Egeland submitted fraudulent documents, including false financial statements, tax returns, and leases, to various banks in order to obtain financing to develop and construct many of DSD’s commercial projects. Once the loans were approved, Fitzsimons, Egeland, and others submitted additional false documents, including fictitious contracts and invoices, to the banks to obtain loan proceeds for construction costs that were claimed to be associated with the fraudulent documents. For five commercial construction projects, Fitzsimons, Egeland and others obtained more than $4.2 million in funded draw requests and performed no construction.
Fitzsimons and Egeland committed fraud with DSD’s first commercial construction loan, using the money to buy themselves Dodge Vipers rather than to construct the building as promised.
Fitzsimons and Egeland also developed DSD’s employee house program, a real estate flipping scheme, and they recruited DSD employees, mortgage brokers, a loan officer, and a loan processor to help push through bad loans for participants of the scheme. Under the scheme, Fitzsimons and Egeland promised to build or sell homes at cost, and the participants agreed to flip or sell the homes and split any profit with DSD. Because most of the participants could not qualify for the loans, Fitzsimons and Egeland, among other things, undermined the loan approval process by “seasoning” or falsely inflating participants’ bank accounts through temporary deposits of DSD money. They also provided participants with undisclosed, short-term loans and submitted other fictitious documents, including letters explaining employment, large or recent deposits, and bonuses, to the banks funding the loans. As part of his guilty plea, Egeland admitted that he seasoned his own bank account with DSD money to obtain a $1.9 million construction loan to build a 22,000 square foot home in Powell Butte, Oregon. In the end, most of the homes involved in the flipping scheme were either only partially constructed or not constructed at all. Many of the properties were foreclosed upon or short sold.
Fitzsimons and Egeland used their ill-gotten gains to live an extravagant lifestyle. Among other things, they purchased large homes in Powell Butte, Oregon, Dodge Vipers, a Ferrari, a Hummer, BMWs, Mercedes, and a Malibu Wakesetter boat.
“The illegal actions of these defendants exemplify the conduct that wreaked havoc in the mortgage, financial, and real estate industries for the past several years,” said U.S. Attorney Amanda Marshall. “Banks were not the only losers in this case. Everyone lost. The effects of defendants’ large scale fraud were dramatic—the local housing market crashed, people lost their jobs, communities were littered with partially finished developments and homes, lending markets constricted, and banks suffered millions in losses. Real estate, bank, and financial insiders who commit fraud will be held accountable.” Marshall thanked the Federal Bureau of Investigation, the Internal Revenue Service, and the State of Oregon, Division of Finance and Corporate Securities, for their investigative efforts.
Egeland’s sentencing hearing is set for January 29, 2014, at 11:30 a.m.
Others sentenced for their role in the scheme include Jeremy Kendall, 36, of Camano Island, Washington, Jeffrey Sprague, 50, of Bend, Oregon, Shaun Little, 44, of Bend, Oregon, and Teresa Ausbrooks, 51, of Farmington, New Mexico.
Kendall was sentenced to 18 months in prison and was ordered to pay more than $22 million in restitution for his role in the fraud. Kendall, a DSD employee and officer manager, at Fitzsimons’s and Egeland’s direction, created and submitted fraudulent documents to various financial institutions to gain financing for various DSD projects. Kendall was also involved in seasoning bank accounts, including his own, for individuals involved in DSD’s residential flipping scheme.
Sprague was sentenced to 46 months in prison and was ordered to pay $3.6 million in restitution. Sprague, a former loan officer at West Coast Bank, falsified loan applications for individuals involved in DSD’s flipping scheme by fraudulently inflating their monthly income and falsely claiming that these homes were going to be the employees’ primary residence. Sprague also knew the loan files contained forged or scanned signatures and other material misrepresentations and omissions. West Coast Bank approved and funded the loans based on the loan applications that Sprague falsified and on the other documents that Sprague submitted to the bank that he knew were false.
Shaun Little, 44, of Bend, Oregon, was sentenced to five years of probation with eight months in a halfway house for assisting participants in DSD’s flipping scheme obtain bad loans. He was also ordered to pay $191,171 in restitution. Little, a former mortgage broker, knew DSD was seasoning participants’ bank accounts and submitted a false loan application and supporting documentation to obtain a loan for a participant of DSD’s flipping scheme.
Teresa Ausbrooks, 51, of Farmington, New Mexico, was sentenced to one year and one day in prison and was ordered to pay $184,839.66. Ausbrooks, a former escrow officer, participated in DSD’s flipping scheme and executed a similar, separate scheme. She lied on home loan applications about her income and omitted liabilities, including a side agreement with Fitzsimons.
Several other defendants involved in the DSD investigation have already been sentenced. Del Barber, Jr., 44, of Spokane, Washington, and a former mortgage broker, was sentenced to 15 months in prison for creating and submitting fraudulent loan applications for participants of DSD’s flipping scheme. He was also ordered to pay $119,654 in restitution. Robert Brink, 62, of Junction City, Oregon, a former bank building inspector for Umpqua Bank, was sentenced to 12 months and one day in prison and was ordered to pay $181,276 in restitution for submitting false inspection reports to Umpqua bank for two of DSD’s commercial projects. Brink claimed construction had occurred, when, in reality no construction had occurred and Umpqua Bank had funded more than $700,000 in draw requests.
Michael Wilson, 61, of Merrells Inlet, South Carolina, a former DSD employee, was sentenced to five years of supervised release and community service for participating in DSD’s flipping scheme. He was also ordered to pay $303,114.95 in restitution. Garret Towne, 34, of Eugene, Oregon, a former DSD employee, and Barbara Hotchkiss, 44, of Redmond, Oregon, a former loan processor at West Coast Bank, were sentenced to probation and community service in Deschutes County Court for their roles in the DSD residential flipping scheme. They were ordered to pay $202,415 and $303,069 in restitution, respectively. Kevin Mandlin, 50, of Bend, Oregon, was sentenced to one year of probation for submitting a false document to a bank on behalf of DSD for Egeland’s home in Powell Butte, Oregon.
John Partin, a building material supplier in Bend, Oregon, is scheduled to be sentenced for his role in the fraud on March 12, 2014.
“This bold fraud scheme was born out of the housing bubble long ago, but its effects will be felt by the construction and banking businesses in Central Oregon for many years to come,” said Kevin Rickett, Acting Special Agent in Charge of the FBI in Oregon. “It’s a scam that involved losses in the tens of millions of dollars as the defendants pursued lavish lifestyles. Major mortgage fraud cases such as this one are and will continue to be a high priority for the FBI.”
Mortgage fraud weakens the economic integrity of our communities and our nation, and more significantly, hurts a broad range of people,” said Teri L. Alexander, Acting Special Agent in Charge of IRS Criminal Investigation in the Pacific Northwest. “Criminals who try to line their own pockets through fraudulent schemes should see the prison sentences handed down in this case as proof that the harm mortgage fraud inflicts on our communities will not go unpunished. I am pleased that the IRS was part of the law-enforcement team that worked to dismantle this criminal enterprise and help bring fraudsters to justice.”
These cases were investigated by the FBI, the IRS, and the Oregon Division of Finance and Corporate Securities and are being prosecuted by Assistant U.S. Attorney Scott E. Bradford.
Tigard Man Admits to Theft of U.S. MailRead the Press Release
Postal Carrier is Sentenced to Federal Probation, Resigns from Job and Agrees to Pay RestitutionPORTLAND, Ore. - Bruce Douglas Menzies, 54 of Tigard, Oregon was sentenced today by U.S. District Judge Anna J. Brown to serve three years of probation, pay a $2,500 fine and pay a $100 fee assessment for theft of U.S. mail. Menzies pled guilty on August 25, 2013; as a condition of his plea agreement, he resigned from the U.S. Postal Service and agreed to pay restitution in the amount of $300.
This case came to the attention of the U.S. Postal Inspector General’s Office after they received a complaint from a postal customer in Portland, who reported that her grandmother had been sending birthday cards to her two young children that contained money. However, the greeting cards were received torn open without money, or not received at all. The victim suspected her mail carrier. The Inspector General’s Office gathered evidence of defendant, Menzies, opening numerous items of mail on June 14, 2012, August 4, 2012, and August 29, 2012. Postal carrier, Menzies, was arrested on March 25, 2013.
“The majority of U.S. Postal Service employees are dedicated public servants who take great pride in ensuring the sanctity and security of U.S. Mail”, U.S. Postal Service Office of Inspector General (USPS OIG) Special Agent in Charge Pete Gately said. “Unfortunately, Bruce Menzies betrayed the trust placed in him by the Postal Service and the public he was sworn to serve. His actions resulted in deserved consequences for such behavior. Today’s sentencing of Mr. Menzies demonstrates the ongoing commitment of the USPS OIG and the U.S. Attorney’s Office to vigorously investigate and prosecute these types of violations of the law, as we did in this case. The public can remain confident that the USPS OIG will continue to ensure the security of their mail.”
This case was prosecuted by Assistant U.S. Attorney Geoffrey Barrow.
Former Bend Attorney Pleads Guilty to $1.1 Million FraudRead the Press Release
EUGENE, Ore. – Today, Bryan W. Gruetter, 55, of Bend, Oregon, pleaded guilty to one count of conspiracy to commit wire fraud before U.S. District Judge Michael McShane. In court, Gruetter admitted to diverting more than $1.1 million of client funds.
According to court documents, Gruetter was a personal injury attorney with offices in Bend and Portland, Oregon. As part of his guilty plea, Gruetter admitted that he and others illegally diverted more than $1.1 million in client settlement funds via interstate wire transfers. He further admitted that he and others used 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 as promised. On February 3, 2012, the Oregon State Bar took custody of defendant’s law practice, and on March 9, 2012, defendant resigned his law license, desiring not to contest allegations that he neglected clients’ legal matters, failed to communicate with clients, and failed to deliver funds to clients.
Sentencing is set for March 17, 2014, at 9 a.m.before Judge McShane. The maximum penalty for conspiracy to commit wire fraud is 20 years in prison and a $250,000 fine.
This case was investigated by the FBI and IRS-CI and is being prosecuted by Assistant U.S. Attorney Scott E. Bradford.
Portland Sex Trafficker Sentenced to 200 Months in Federal PrisonRead the Press Release
Portland, Ore. — Anthony Dennell Armstrong, 25, of Portland, Oregon, was sentenced to 200 months in prison today by United States District Judge Michael W. Mosman, for transporting a 14-year-old girl from Oregon to Arizona for the purpose of prostitution. On August 15, 2013, Armstrong pleaded guilty to one count of transporting a minor across state lines for prostitution. Upon release from custody, Armstrong 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 of children is the same thing as sending a child into a hotel room to be raped, night after night,” said U.S. Attorney Amanda Marshall. “We will continue to prosecute aggressively anyone who recruits our children into this dark world.”
In imposing the 200-month sentence, Judge Mosman noted that there is nothing to distinguish the crime of sex trafficking of children from the crime of rape. He stated that sex trafficking of children is among the most serious of offenses, and added that the trafficking in this case was especially serious in light of the young age of the victim, the repeated acts of personal violence, the interstate travel, and the duration of the offense.
The government alleged that Armstrong recruited the victim into prostitution when she was just fourteen years old, and continued to traffic her until she was eighteen years old. He transported the victim from Oregon to Phoenix, Arizona for the purpose of prostitution, as well as to Las Vegas and southern California. The government alleged that Armstrong subjected the victim to regular beatings, including when she broke his rules, did not make enough money, or refused to work as a prostitute.
This case stemmed from a coordinated investigation by the Federal Bureau of Investigation’s (FBI) Child Exploitation Task Force. 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 Assistant U.S. Attorney Stacie Beckerman.
88 Year-Old Author Sentenced for FraudRead the Press Release
PORTLAND, Ore. – A former resident of Pacific City was sentenced in federal court on December 3, 2013, for stealing more than $78,000 from the Social Security Administration (SSA), the Oregon Department of Human Services (DHS), and Medicaid. Peter C. Byrne, 88, was sentenced to a three year term of probation and required to pay full restitution by the end of the week. Byrne pleaded guilty in August and admitted that between 1992 and 2012 he concealed from SSA and DHS his travels outside the United States and his compensation, while receiving Supplemental Security Income (SSI) and food stamps. Byrne had previously deposited $25,000 with the court for restitution and indicated he was prepared to pay the full balance by the end of the day.
According to documents filed by the government and Byrne’s admissions, Byrne began receiving SSI, a need-based benefit, in 1990 and was required to report to SSA certain travel outside the United States as well as his income and compensation. Between 1992 and 2012, Byrne traveled outside the U.S. for more than 30 days at least 15 times, on some occasions remaining outside the U.S. for more than four months. Between 2009 and 2012, Byrne also maintained bank accounts with Barclays of England and Wells Fargo where he held more than $85,000 at one time, and failed to disclose these bank accounts to SSA and DHS. When Byrne was questioned by SSA and investigators in 2012, he failed to disclose all of his travels and assets. When SSA asked to see his passport, Byrne advised that he had accidentally destroyed his passport by running it through the washing machine.
Investigators subsequently served a search warrant at Byrne’s residence and located financial and travel records, and his Will. Byrne urged that the Will be kept confidential because he feared the Social Security Administration would come after his estate for benefits he unlawfully received. Agents also located a copy of a letter from Byrne to Safari Press directing that any future royalties for his published books be sent to his girlfriend. Byrne had previously been questioned by investigators whether he was receiving royalties for the books he had written on topics such as his search for Bigfoot and game-hunting in Nepal. Byrne denied receiving royalties.
Prosecutors also noted that in the 1990s, Byrne had two previous overpayments of SSI because of unreported travel and assets. Those prior overpayments had been handled administratively by SSA.
The Honorable Garr M. King stated that Byrne’s actions had been intentional and criminal, but agreed with the parties’ recommended sentence of probation primarily because of Byrne’s age.
The case was investigated by the Social Security Administration Office of Inspector General, Office of Investigations, the U.S. Department of Health and Human Services, the Oregon Department of Human Services, and the Tillamook County Sheriff’s Office, and was prosecuted by Special Assistant United States Attorney Helen L. Cooper, as part of a partnership venture between the Social Security Administration Office of General Counsel and the United States Attorney’s Office in Portland.
Siblings Plead Guilty to Social Security FraudRead the Press Release
PORTLAND, Ore. – Two family members charged in a multi-family member conspiracy to defraud social service agencies have pleaded guilty to Social Security fraud. Jason Boutros, 49, of Portland, admitted in federal court yesterday that he concealed a family member’s travel outside the United States while continuing to accept Supplemental Security Income benefits on her behalf. He also admitted to submitting a voucher for payment for home-care services for his mother that he never provided because she also was outside the United States. Sentencing is set for March 3, 2014, before the Honorable Michael H. Simon.
According to papers filed in court, Boutros has agreed to pay approximately $220,000 in restitution for Supplemental Security Income and medical benefits family members received that they were not entitled to.
Boutros’ sister, Killda Boutros, 46, of Portland, pleaded guilty to similar charges on November 14, 2013.
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.
For more information, please see the attached indictment Here
Texas Couple Sentenced to Prison for Conspiracy to Defraud the U.S. and to Engage in Money LaunderingRead the Press Release
PORTLAND, Ore. – A federal judge in Portland has sentenced Hossein Lahiji, 50, and Najmeh Vahid Dasterjerdi a.k.a. Najmeh Lahiji, 33, both of McAllen, Texas, to prison following their June 2013 convictions by a jury in Portland for conspiracy to defraud the United States and to engage in money laundering. Hossein Lahiji is a physician specializing in urology and Najmeh Vahid is an attorney, both practicing in Texas.
On November 19, 2013, Judge Garr M. King sentenced both defendants to serve a year and a day in federal prison. In addition, the defendants were each ordered to pay $200,000 in fines and jointly to pay restitution in the amount of $973,503.00 to the Internal Revenue Service for back taxes owed. The court also confirmed the jury’s verdict forfeiting an additional $600,000 which was involved in the money laundering offense to the United States.
The indictment alleged that defendants conspired to impede and impair the functions of the Internal Revenue Service in the collection of income taxes and the Office of Foreign Assets Control of the Treasury Department in the enforcement of the Presidential Embargo against Iran.
Trial evidence showed that defendants provided funds to a Portland charity, the Child Foundation, between 1998 and 2006. The Child Foundation, in turn, gave the defendants charitable donation receipts and transferred the funds to Iran. Defendants claimed charitable deductions from their income taxes for these payments. Some of the funds were used to purchase a building in Tehran in the name of Hossein Lahiji’s sister. Additional funds were used to invest in an interest-bearing account in an Iranian bank. Yet additional funds were committed to be spent at the discretion of an Iranian Ayatollah. Some of the payments were backdated to facilitate claims of charitable donations for a year prior to the year of actual payment. Many of the uses of the funds violated the Presidential embargo against Iran, instituted in 1995. Co-conspirators Child Foundation and Mehrdad Yasrebi were separately prosecuted and sentenced in March 2012. Child Foundation has since reorganized and continues to operate under the supervision of U.S. Probation officers.
The Presidential Embargo against financial transactions with Iran was first imposed by President Clinton in 1995. Those sanctions have been renewed annually by both Presidents Bush and Obama. U. S. Attorney Amanda Marshall stated that “The enforcement of the sanctions in place against financial transactions with Iran is an important priority of the Department of Justice. Those who would evade those sanctions while cheating on their taxes should expect to be prosecuted.”
Defendants are charged in a separate federal indictment in the Houston Division of the Southern District of Texas with conspiracy to commit health care fraud, health care fraud, conspiracy to violate the Iranian Embargo, and failure to file a report of foreign bank and financial accounts. Trial in the Houston case is currently scheduled for April 2014.
These cases were investigated by the FBI and the IRS - Criminal Investigations Division, and prosecuted by Assistant U.S. Attorneys David Atkinson and Charles Gorder.
Springfield Man Sentenced to Ten Years in Prison for Distributing Child PornographyRead the Press Release
EUGENE, Ore. – On Tuesday, November 26, 2013, Chief U.S. District Judge Ann Aiken sentenced Kenneth Nin Chin, 53, of Springfield, Oregon, to a prison term of ten years and one month for distributing child pornography. Following an investigation by the Federal Bureau of Investigation and the Department of Homeland Security, a search warrant was executed at Chin’s residence. On Chin’s computer, agents discovered thousands of images depicting child exploitation, including the sexual abuse of infants and toddlers, and it was determined that Chin was also involved in distributing these images online to others. In addition, Chin engaged in online chats in which he wrote about his desire to engage in sexual activity with minor boys.
“Images of child exploitation cause tremendous harm to the victims-not just by the horrible abuse involved in creating the images but in the perpetuation of the abuse every time these images are shared,” stated U.S. Attorney Amanda Marshall. “Those involved in possessing and distributing these horrific images help fuel the market for such depravity, and my office is committed to doing everything we can to put a stop to it.”
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. 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 Federal Bureau of Investigation and Department of Homeland Security, and was prosecuted by Assistant U.S. Attorney Jeffrey S. Sweet.
Clackamas Man Sentenced to Four Years in Prison for Filing False Claims for $1.9 Million in Fraudulent Federal Income Tax RefundsRead the Press Release
PORTLAND, Ore. – U.S. District Judge Michael H. Simon sentenced defendant Miles J. Julison to four years in federal prison and three years of post-release supervision for two counts of filing false claims against the United States. The sentencing hearing on Wednesday, November 19th followed a five-day trial in August when a Portland jury convicted Julison of the charges. The evidence at trial established that Julison, a 41-year-old former real estate investor, had filed tax returns for the years 2007 and 2008 fraudulently claiming that he was due refunds for tax overpayments totaling nearly $2 million. In fact, he had paid no federal income taxes at all in those years. Julison had also helped another man file his own fraudulent claim for more than $480,000.
U.S. Attorney Amanda Marshall commended the sentence, “It is a serious sentence for a serious crime. As Judge Simon noted, Miles Julison stole hundreds of thousands of dollars from his neighbors, honest and hardworking taxpayers. He tried to steal even more and helped others do the same; the severity of the sentence properly reflects the extent of his criminal conduct.”
The evidence at trial established that Julison falsely reported on his 2007 tax return that he had earned more than half a million dollars that year and that almost all of it had been withheld for taxes. He then fraudulently claimed he was due a tax refund of $411,773.00. The IRS issued him a check for that amount two weeks later. In January 2009, Julison falsely reported on his tax return that he had earned more than $2.3 million in 2008, and that all but $815 of that total had been withheld for taxes. He fraudulently claimed a tax refund of more than $1.5 million. By then, however, Julison was already under criminal investigation, and the refund was never issued.
Julison used the refund he obtained from his 2007 return to purchase, among other things, a $60,000 Mercedes-Benz sedan, to pay off his home mortgage, and to make payments on a 23-foot ski boat, a Toyota Sequoia SUV , two Kawasaki wave runners, and two Polaris snowmobiles. Judge Simon ordered Julison to pay $411,773 in restitution to the IRS for that refund.
This case was investigated by IRS, Criminal Investigation. Assistant U.S. Attorneys Seth D. Uram and Ryan W. Bounds prosecuted the case.
Tacoma pimp sentenced to 25 years for sex-Trafficking two VictimsRead the Press Release
Under Title 18, United States Code, Section 1591PORTLAND, Ore. – U.S. District Judge Anna J. Brown sentenced Christopher Cool Wilmer, 30, of Tacoma, to 25 years in prison, followed by 10 years of supervised release, for four counts of sex trafficking involving a 16-year-old and an 18-year-old. In May 2013, just weeks before trial, Wilmer pled guilty to the indictment.
According to court documents filed for the sentencing hearing, the investigation began on February 22, 2012, when police responded to a call for help from the 18-year-old victim at a Motel 6. She reported that her pimp “Cool” had locked her out of a room where he was also pimping another young woman. Portland Police officers learned that the registered guest to that room was Christopher Cool Wilmer who had previous arrests for promoting prostitution. Officers went to the room where they found the 16-year-old victim and a john. Although the victim initially denied knowing Wilmer, Officers later observed pictures on her cell phone showing Wilmer, including pictures of him flexing under the caption “Daddy Cool,” and in a bubble bath. Wilmer manipulated the 16 year old victim into performing numerous commercial sex acts. Text messages sent to Wilmer described her pain and humiliation at having been manipulated and coerced by the defendant into performing these acts.
Further investigation uncovered records of Wilmer’s travel with the victims on Amtrak and Greyhound between Oregon and Washington. Agents also located 30 postings to the escort section of Backpage.com advertising the services of the 16-year-old minor between January and February 2012. Ads featured the minor in provocative poses and set prices for these “services” for $60 to $125 per hour. Witness testimony established Wilmer placed new sex-trafficking recruits on 90-day probation periods to evaluate their performance. He also established certain “rules” to gain compliance such as prohibiting the minor victim from eating food until she earned her daily quota from walking the “track” (Southeast 82nd) performing commercial sex acts. Wilmer demanded that the minor always answer his phone calls, stay ready to work at all times, and never look another man in the eyes.
The defendant argued against labeling him as a “pimp,” and called witness Anthony Marcus, an anthropologist, who testified that a more accurate term for Wilmer’s role was “market facilitator.” The government countered that Wilmer branded himself a pimp with arm tattoos that read: “Hoe Hard [or] Hoe Home.” “Federal law prohibits buying or selling children for sex. Safeguarding minors from commercial sexual exploitation is one of the top priorities of my office and the Department of Justice,” stated U.S. Attorney Amanda Marshall. “Contrary to defendant’s assertions that this problem is merely mythical and exaggerated by ‘panicked’ social workers, a recent research study conducted by Portland State University identified at least 469 children who were victims of commercial sexual exploitation in the Portland Metro area between 2009 and 2013. Such data reflects a serious and real problem that my office will continue to combat through aggressive prosecution.”
In crafting an appropriate sentence, Judge Brown noted the terrible nature of the offense and addressed the negative impact it has on victims and our community. She also described as an aggravating factor defendant’s history of devaluing the women around him.
“No child deserves to endure the violence that these girls face every day. They don’t deserve the rape and drug abuse and control that these pimps exert. These kids are not throwaways… they are not somebody else’s problem,” said Greg Fowler, Special Agent in Charge of the FBI in Oregon. “The Child Exploitation Task Force is doing everything it can to recover these girls and get them connected with a support system. But, this is not just a law enforcement problem or a social service problem. This is a community-wide problem, and we need a whole community response to really be effective.”
This case was investigated by the FBI’s Child Exploitation Task Force (CETF), led by two task force detectives from the Tigard Police Department and Portland Police Bureau (PPB). The FBI-sponsored CETF partners with local law enforcement agencies to combat the commercial sexual exploitation of children in the area. Partners include the Portland Police Bureau, Tigard Police Department, Beaverton Police Department, Vancouver Police Department, who work closely with prosecutors from both the U.S. Attorney’s office and Multnomah County District Attorney’s Office. This case was prosecuted by Assistant U.S. Attorney Leah K. Bolstad.
Southern Oregon Couple Pleads Guilty to Fraud and Tax ChargesRead the Press Release
MEDFORD, Ore. – Kenneth Johnson, 62 and Diana Arredondo, 56 pled guilty to federal charges stemming from their work at the Super 8 Hotel in Central Point, Oregon. Johnson pled guilty to wire fraud and filing a false tax return. Arredondo pled guilty to filing a false tax return. The maximum penalty for wire fraud is 20 years imprisonment and a $1,000,000 fine. The maximum penalty for filing a false tax return is 3 years imprisonment and $100,000 fine. Johnson is scheduled to be sentenced Febuary 10, 2014, and Arredondo is scheduled to be sentenced on February 24, 2014, both before the Honorable Owen M. Panner in Medford, Oregon.
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 financial figures to his co-parters in Montana. Johnson hired his girlfriend, Arredondo, as the hotel manager. They worked at the hotel from October 2005 through 2011.
Johnson defrauded his partners by providing them false information regarding the cash collected by the hotel. The scheme diverted approximately $500,000 in cash and checks from the Super 8 Hotel in Central Point for Johnson’s personal use.
In addition, Johnson and Arredondo each filed fraudulent income tax returns, knowingly underreporting the cash they took from the hotel.
The case is being prosecuted by Assistant U.S. Attorney Judith Harper. The case was investigated by the Internal Revenue Service and Federal Bureau of Investigation.
US Attorney Marshall presents at White House Tribal Leaders ConferenceRead the Press Release
US Attorney Amanda Marshall with Grand Ronde Tribal Council Member Cheryle Kennedy
Jury Unanimously Finds Hood River Man Guilty of Defrauding Customers Who Purchased Dietary Supplements and Exercise MachinesRead the Press Release
Defendant falsely represented himself as a naturopathic doctorPORTLAND, Ore. – A civil jury unanimously concluded Wednesday afternoon that James Cole, 66, of Hood River, Oregon, operated schemes to defraud his customers in the operation of two separate but related businesses. The first business, Maxam Neutraceutics, manufactures and sells so-called dietary supplements in the form of spray bottles, which were advertised as being effective in treating a variety of incurable medical conditions, including autism, which was Maxam’s primary target market. The second business, TurboSonic USA, sold electronic vibration machines manufactured in Korea and designed to be used for easy exercise. The Maxam products retailed for approximately $125 per bottle, and the TurboSonic machines retailed for between $12,000 and $16,000.
The jury deliberated for approximately four hours following the six-day trial. Evidence at trial revealed that Cole’s scheme in relation to the sale of the Maxam sprays included: falsely representing that the products were created and manufactured by a Harvard chemist, when in fact, they were made by a twice-convicted federal felon and self-taught chemist in the Boston area operating in unknown labs under unknown conditions; failing to disclose that the products contained rare bacteria not listed on the labels and believed by the government’s expert to have been intentionally put into the products by the felon manufacturer; and failing to reveal that Cole had never conducted clinical trials of the products, despite advertising them as “clinically proven” to improve conditions such as autism, Alzheimer’s, Parkinson’s, and multiple sclerosis.
In addition, the customer service representatives Cole hired to respond to customer inquiries – none of whom had any medical training, and all of whom were trained solely by reviewing Maxam’s own marketing literature and speaking to Cole and to the felon chemist – were instructed to provide medical-sounding advice to customers who called the office.
Regarding the TurboSonic machines, the evidence revealed that Cole marketed the machines as FDA-Approved medical devices that were capable of treating over 100 medical conditions if the machine’s dials were turned to particular settings, including cancer and HIV. Much of the company’s marketing efforts were devoted to placing the machines in the offices of chiropractors and physical therapists. Cole’s office manager compiled an alphabetized list of diseases and their corresponding purported treatment settings into a list of “protocols” which Cole’s company distributed with the machines and instructed chiropractors to place on the walls of their offices for patients to use. The machines were then advertised by Cole to have “researched and proven medical benefits” for the treatment of conditions ranging from anemia to vertigo, when in reality, the only research conducted on the machines confirmed that they were meant to be used as exercise machines. In addition, the machines were not FDA-Approved, as the FDA considered the machines to be purely exercise machines and no different from a treadmill, and that the list of treatment protocols were unsupported by any medical research.
The case was filed as a civil asset forfeiture case, and by returning a verdict in favor of the United States, the government is now entitled to keep over $700,000 in assets that were seized from Cole’s home and businesses in April of 2011. The assets included the full balance of three bank accounts held by Cole’s businesses, Cole’s interest in a condominium located in California, and approximately 320 ounces worth of gold found in Cole’s safe. The jury concluded that those assets were traceable to the proceeds of Cole’s frauds. The evidence at trial revealed that Cole’s two businesses grossed almost $21 million between 2005 and mid-2011.
Two additional cases are still pending against Cole. In September of this year, a Portland grand jury indicted him on five counts of subscribing to false tax returns and other tax-related documents. Also in September, the Consumer Protection Branch of the U.S. Department of Justice filed a complaint against Cole, his corporation, and his office manager seeking to permanently shut down the Maxam business for failing to comply with multiple provisions of the Federal Food, Drug, and Cosmetic Act.
This case was investigated by the U.S. Food and Drug Administration Office of Criminal Investigations, and the Internal Revenue Service, Criminal Investigation. Assistant U.S. Attorneys Katie Lorenz and Allan Garten filed the civil action and represented the United States at trial.
Bend Drug Dealer Sentenced to 140 Months in Federal PrisonRead the Press Release
EUGENE, Ore. – On November 12, 2013, Matthew Collins, 49 years old, was sentenced by U.S. District Judge Michael McShane to 140 months in federal prison for possessing with the intent to distribute methamphetamine. Upon his release from prison, Collins will be on supervised release for five years.
On May 6, 2013, deputies with the Deschutes County Sheriff’s Office stopped a vehicle driven by Collins in Redmond, Oregon. Collins thereafter fled on foot and jumped into a nearby canal before he was taken into custody by Redmond Police officers. A search of the vehicle unearthed a large amount of methamphetamine that Collins was transporting from Portland to distribute in the Bend area.
Collins has a lengthy and violent criminal history and has been the subject of several recent investigations by the Central Oregon Drug Enforcement Team (CODE), which also investigated and handled the May 6, 2013 case. The CODE team is a multi-jurisdictional narcotics task force supported by the following Central Oregon law enforcement agencies: Bend Police Department, Deschutes County Sheriff’s Office, Redmond Police Department, Prineville Police Department, Crook County Sheriff’s Office, Jefferson County Sheriff’s Office, Madras Police Department, Oregon State Police, Sunriver Police Department, Black Butte Police Department, United States Drug Enforcement Administration (DEA), Warm Springs Tribal Police Department, Deschutes, Crook, and Jefferson County District Attorney’s Offices, and the Oregon National Guard.
U.S. Attorney Amanda Marshall praised the sentence imposed on Collins: “Bend and Central Oregon are better places with Mr. Collins off the streets. This case is the result of the excellent collaboration between the CODE team, the Deschutes County District Attorney’s Office, and my office. Coordination between federal and state law enforcement is key to prosecuting the most dangerous criminals and keeping our communities safe. My office is committed to working with our local and federal law enforcement partners to achieve results such as this one.”
This case was prosecuted by Assistant U.S. Attorney Nathan J. Lichvarcik.
Vancouver Man Sentenced to 92 Months in Federal PrisonRead the Press Release
Police Discover Felon in Possession of Five FirearmsPORTLAND, Ore. -- Daniel Gene Hoffman, 38, of Vancouver, Washington, was sentenced today by U.S. District Court Judge Michael W. Mosman to 92 months in prison for being a felon in possession of firearms. Hoffman pled guilty to the charge in July and has been in custody since the time of his arrest on August 25, 2012.
Hoffman was operating a motor vehicle with a stolen license plate on property near the Portland Airport and patrolled by the Port of Portland Police. Police made contact with the vehicle after it parked at a nearby hotel. Hoffman was detained and after a partially concealed handgun was seen in the vehicle, it was searched and officers seized five firearms, 113 rounds of ammunition and approximately one ounce of methamphetamine. Hoffman was prohibited under federal and state law from possessing firearms by virtue of the following felony convictions: Intent to Deliver Methamphetamine While Armed with a Firearm (1997), Possession of Methamphetamine, Possession of Stolen Property and Attempting to Elude Pursuing Police Vehicle (2003), and Felon in Possession of a Firearm (2004).
This case was investigated by the Port of Portland Police and ATF and prosecuted by Assistant U. S. Attorney Fred Weinhouse.
Felon in Possession of Firearm and Ammunition Sentenced to 67 MonthsRead the Press Release
EUGENE, Ore. – On November 5, 2013, Corey Nicholas Agard, 25 years old, was sentenced by U.S. District Chief Judge Ann Aiken to 67 months in federal prison for unlawful possession of a firearm and ammunition. Upon his release from prison, Agard will be on supervised release for three years.
On June 17, 2011, a Klamath County Sheriff’s Officer arrested Agard when he caught him with a sawed-off Mossberg shotgun and ammunition. Defendant has multiple felony convictions including felon in possession of a firearm, robbery, menacing, second degree burglary, and attempted assault.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Klamath County Sheriff’s Office, and was prosecuted by Assistant U.S. Attorney Nathan J. Lichvarcik.
Eddie Bynum, Sr. Pleads Guilty to Money LaunderingRead the Press Release
Portland, Ore. — Eddie L. Bynum, Sr. (a/k/a “Fast Eddie”), 54, of Portland, Oregon, pled guilty to money laundering today in U.S. District Court. The Internal Revenue Service’s (IRS) Criminal Investigations Division initiated a “sting” money laundering investigation of Bynum after learning from the Federal Bureau of Investigation’s Metro Gang Task Force that Bynum might be laundering money for local gang members through his Vancouver automobile dealerships. Bynum is scheduled to be sentenced by U.S. District Court Judge Marco Hernandez on February 18, 2014.
Bynum pled guilty to one count of money laundering, and admitted that he accepted $34,000 in cash from an IRS undercover agent to purchase a 2005 Maserati, and that the agent told him that the cash came from dealing drugs. Bynum also admitted that he conducted the Maserati sale to conceal the source and nature of the dirty money. Bynum acknowledged he later accepted $50,000 cash from the undercover agent, pursuant to an agreement that Bynum would launder that money by returning the $50,000 to the agent in $5,000 monthly checks from one of his businesses. The government alleged that Fountaine Motors, Manor Highway Auto, Inc., JT’s Barber Shop, and Seeznin’s Sports Bar were among the local businesses Bynum used to launder money.
This case stemmed from an investigation by the Internal Revenue Service, Criminal Investigations. The case is being prosecuted by Assistant U.S. Attorney Stacie Beckerman.
Former Umatilla Tribal Police Officer Sentenced in Federal CourtRead the Press Release
Fermore Craig, Jr., had previously pled guilty to Abusive Sexual Contact and Making False Statements to the FBIPORTLAND, Ore. – Fermore Joseph Craig, Jr., 44, of Pendleton, Oregon, was sentenced today to 30 months in federal prison by U.S. District Judge Michael W. Mosman. In August, Craig pled guilty to one count of abusive sexual contact and one count of making false statements to the FBI. Following today’s sentencing hearing, Craig turned himself in to the U.S. Marshals service to begin serving his prison term.
After Craig has completed his 30 months in prison, he was ordered to serve five years of federal supervised release. While on supervised release, Craig will be required to participate in a sex offender assessment and treatment program, and he will be prohibited from having any contact with the victim in the case. Craig’s conviction for abusive sexual contact will also require him to register as a sex offender.
“The victim in this case showed tremendous courage by speaking out against the police officer who sexually abused her,” stated U.S. Attorney Amanda Marshall. “Fortunately, Mr. Craig is no longer in law enforcement and is now in prison.”
According to the prosecutor’s statements in court, on May 11, 2013, on the Umatilla Indian Reservation, Craig touched the intimate parts of an adult female. Craig admitted that he intentionally touched the victim’s intimate parts to arouse and gratify his own sexual desire, and he did so without the victim’s permission.
When the victim subsequently disclosed the sexual abuse, the FBI and Oregon State Police initiated an investigation and interviewed Craig. On May 13, 2013, during an interview with an FBI special agent and an Oregon State Police trooper, Craig made false statements to the investigators by lying about the sexual contact he had with the victim.
Craig had been employed as a Umatilla Tribal Police Officer for approximately 15 years, but he was not on duty as a police officer at the time the sexual abuse occurred. After the abuse was reported by the victim, Craig was immediately placed on administrative leave. Craig ultimately resigned from the Umatilla Tribal Police Department in June, while the investigation was ongoing. At today’s sentencing hearing, Craig relinquished his certification from the Oregon Department of Public Safety Standards and Training, thereby terminating his right to be a police officer in the State of Oregon.
The case was investigated by the FBI’s Pendleton office and the Oregon State Police. Assistant U.S. Attorney Craig Gabriel prosecuted the case.
Aloha, Oregon Woman, A Former Credit Union Employee, Sentenced for Money LaunderingRead the Press Release
PORTLAND, Ore. - Janelle Fuston, 25, of Aloha, Oregon, was sentenced yesterday by U.S. District Judge Marco A. Hernandez to five years of probation and 200 hours of community service for the crime of money laundering. She was also ordered to pay $48,243 to the government in the form of a money judgment. Fuston pleaded guilty to the crime of money laundering in April of this year, and the money judgment represents a portion of the approximately $120,000 that Fuston admitted to laundering for her co-defendant and ex-boyfriend, Larry Fuentes.
Between April 2011 and April 2012, Fuston, who was employed at the time by First Tech Federal Credit Union in Beaverton, agreed to launder over $120,000 in Fuentes’s drug proceeds. Defendant Fuston admitted she knew that Fuentes had no legitimate income, that she knew the cash he was providing her constituted drug proceeds, and that she deposited the drug money into multiple accounts held in her name at First Tech Federal Credit Union. She further admitted to establishing one of the accounts at First Tech in her name for the sole purpose of storing those drug proceeds, and to breaking up the drug proceeds into multiple deposits because ATMs could only accept a limited number of bills at a time.
Before their crime was discovered, Fuston and Fuentes spent all but approximately $11,000 of the laundered drug proceeds, enjoying the fruits of their illegal conduct in the form of vacations, tanning salons, and other luxuries. Fuston was fired from her job at First Tech once her conduct was discovered, and her plea agreement provides that she is prohibited from working in the financial industry for ten years following her conviction.
Fuston’s co-defendant, Larry Fuentes, has also pleaded guilty to the crime of money laundering, and is scheduled for sentencing on February 4, 2014.
The investigation of this case was conducted by the High Intensity Drug Trafficking Area Interdiction Task Force, including the Portland Police Bureau’s Drugs and Vice Division, the Department of Homeland Security, and the Internal Revenue Service Criminal Investigation. The case was prosecuted by Assistant U.S. Attorney Katie Lorenz.
Portland Man Charged with Aiming a Laser Pointer at AircraftRead the Press Release
PORTLAND, Ore. - Stephen Francis Bukucs, 39, a resident of Northeast Portland, was arrested in Portland on Friday evening, October 18, 2013, on charges of aiming a laser pointer at two aircraft. A federal indictment, unsealed this morning by the court, alleges Bukucs aimed a laser pointer at United Airlines Flight 1406 and JetBlue Flight 1205 in Portland on October 13, 2013.
Bukucs is being held in custody at the Multnomah County Detention Center and will have his first court appearance today at 1:30 p.m. before U.S. Magistrate Judge Dennis M. Hubel for arraignment on the indictment.
Knowingly aiming a laser pointer at an aircraft is a felony offense under federal law, carrying a maximum sentence of five years in prison and a $250,000 fine.
The arrest is the result of a joint investigation by the Federal Bureau of Investigation (FBI), the Federal Aviation Administration (FAA), the Port of Portland Police, and the Portland Police Bureau. The Transportation Security Administration (TSA), the Washington County Sheriff’s Office and the Clackamas County Sheriff’s Office also provided substantial assistance.
An indictment is only an accusation of a crime, and a defendant should be presumed innocent unless and until proven guilty.
The case is being prosecuted by Assistant U. S. Attorney Stephen F. Peifer
For more information, please see the attached indictment Here
Former President of National Charity Arrested and Charged in $4 Million Fraud and Money Laundering SchemeRead the Press Release
PORTLAND, Ore. – Amanda Marshall, U. S. Attorney for the District of Oregon, today announced the arrest of Beaverton resident, Brian J. Brown, 56, former president of National Relief Charities, and the unsealing of an indictment charging Brown with conspiring to defraud National Relief Charities of $4 million and conspiring to commit money laundering violations with the proceeds of the fraud scheme. FBI and IRS agents arrested Brown Sunday morning, October 20th, at Portland International Airport as Brown returned to the United States from Thailand and Japan.
The indictment, returned under seal on October 9th, alleges that in late 2005, when Brown stepped down as the president of National Relief Charities, 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. Brown then allegedly induced National Relief Charities to fund Charity One, Inc. with $4 million from 2006 through 2009, which Brown represented would be used to fund educational scholarships for Native Americans. Instead, Brown and unnamed coconspirators allegedly used the entire $4 million for their personal benefit.
The indictment further alleges that Brown established the principal office for Charity One, Inc. in Beaverton, Oregon and that National Relief Charities, which also maintained an office in Beaverton, mailed monthly checks for $100,000 or $200,000 from its offices in Beaverton, Oregon and in Sherman, Texas to Charity One, Inc. To facilitate the fraud scheme, Brown allegedly gave National Relief Charities false financial statements showing Charity One, Inc. was properly using the money.
Brown appeared today before U.S. Magistrate Judge Dennis J. Hubel and entered not guilty pleas to the charges. Magistrate Judge Hubel released Brown pending trial subject to release conditions including surrendering his passport to the federal Pretrial Services office and GPS monitoring. Brown’s trial is scheduled to begin on December 17, 2013, before U.S. District Judge Michael H. Simon.
“Anyone who defrauds a charity for their own personal gain should expect to be found, 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.
U.S. Attorney Amanda Marshall Announces Hiring Grants for Law Enforcement and School Safety Officers Funds Will Hire School Resource Officers and Critical Law Enforcement PositionsRead the Press Release
PORTLAND, Ore. - U.S. Attorney Amanda Marshall, in conjunction with the U.S. Department of Justice Office of Community Oriented Policing Services (COPS), today announced funding awards for the District of Oregon. The grantees and amount awarded include:
$125,000 Junction City, Oregon 1 Officer
$375,000 City of Medford, Oregon 3 Officers
$125,000 Sutherlin Police Department 1 Officer
$157,320 City of Winston, Oregon 1 Officer
“In the wake of past tragedies, it's clear that we need to be willing to take all possible steps to ensure that our kids are safe when they go to school,” said Attorney General Eric Holder. “These critical investments represent the Justice Department's latest effort to strengthen key law enforcement capabilities, and to provide communities with the resources they need to protect our young people. Especially in a time of increased challenges and limited budgets, our top priority must always be the safety and well-being of our children.”
Overall the COPS Office funded awards to 263 cities and counties, aimed at creating 937 law enforcement positions. More than $125 million will be awarded nationally, including nearly $45 million to fund 356 new school resource officer positions.
“When I convened the "Call To Action Summit" on combatting gun violence, we identified school resource officers as a crucial piece of ensuring our children are safe when they go to school," said U.S. Attorney, Amanda Marshall. "I am pleased to join the Attorney General and the COPS Office in announcing these grants which will help provide our communities with the resources needed to accomplish this vital mission,”“The COPS Office is pleased to assist local law enforcement agencies throughout the country address their most critical public safety issues,” said Joshua Ederheimer, Acting Director of the COPS Office. “Funding from this year’s program will allow many cities and counties to apply new sworn personnel to issues related to violent crime, property crime, and school safety.”
The COPS Hiring Program offers grants to state, local and tribal law enforcement agencies to hire or rehire community policing officers. The program provides the salary and benefits for officer and deputy hires for three years.
Grantees for the 2013 hiring program were selected based on their fiscal needs, local crime rates, and their community policing plans. There was an additional focus this year on agencies requesting assistance in developing school safety programs that would include the hiring of a school resource officer. School resource officer positions funded by the COPS Office are sworn law enforcement positions that work within a school district or facility, interacting directly with school administrators and students.
The COPS Office is a federal agency responsible for advancing community policing nationwide. Since 1995, COPS has awarded over $14 billion to advance community policing, including grants awarded to more than 13,000 state, local, and tribal law enforcement agencies to fund the hiring and redeployment of approximately 125,000 officers and provide a variety of knowledge resource products including publications, training, and technical assistance.
For the entire list of grantees and additional information about the 2013 COPS Hiring Program, visit the COPS website at www.cops.usdoj.gov.
Defendant Sentenced to 12 Years for His Second Federal Child Pornography ConvictionRead the Press Release
EUGENE, Ore. – On September 24, 2013, Christopher Lyn Sparks, 48 years old, was sentenced by U.S. District Chief Judge Ann Aiken to 12 years in federal prison for possessing child pornography and violating the terms of his supervised release. After serving his sentence, Sparks will be on lifetime supervised release.
Defendant was first sentenced to 51 months in prison in Eugene federal court in 2007 for possession of child pornography. In early 2013, after being released from custody and while on federal supervised release, FBI agents executed a search warrant at Defendant’s home and seized a number of items that contained additional child pornography. As a recidivist, this time around Defendant faced an increased mandatory minimum and multiple supervised release violations, and eventually pled guilty on June 18, 2013.
U.S. Attorney Amanda Marshall praised the sentence imposed on Sparks: “My office aggressively prosecutes child exploitation offenses. This defendant did not get that message the first time. The 12-year sentence imposed today is a clear reminder to those who seek gratification from the exploitation of children that their conduct will not be tolerated, especially when they are repeat offenders like Christopher Sparks.”
"Not once, but twice this defendant has been caught exploiting children through his possession of images and videos showing those children being violently abused," said Gregory Fowler, Special Agent in Charge of the FBI in Oregon. "The FBI, in concert with our law enforcement partners, will continue to pursue those who seek to abuse and exploit children."
This case was investigated by the FBI and was prosecuted by Assistant U.S. Attorney Nathan J. Lichvarcik.
Scappoose Woman Sentenced for Bank LarcenyJade Carnahan convicted of embezzling $400,000 from local credit unionRead the Press Release
PORTLAND, Ore. – Jade Carnahan, 35, of Scappoose, Oregon, was sentenced today by U.S. District Court Judge Marco A. Hernandez to 18 months in prison for the crime of bank larceny. In addition to her prison term, the Court also ordered Carnahan to serve three years of supervised release following her release from prison and to repay $408,062.38 in restitution.
Carnahan was the Operations Officer at the Rivergate Federal Credit Union located on N. Ramsey Blvd in Portland, Oregon. In that capacity, she had access to customer account information. Between 2005 and 2012, she embezzled more than $400,000 from the bank vault and from customer accounts, including elderly customers, converting the money to her own use. At sentencing, Carnahan blamed an addiction on pain medication in accepting responsibility for her crime.
“Customers depend on the employees of their local credit unions to guard their money, not steal it,” said U.S. Attorney Amanda Marshall. “Crimes like this are especially offensive when perpetrated against seniors and have a lasting effect on the trust we place in our financial institutions.”
“Drug abuse helps to drive crimes of opportunity,” said Gregory Fowler, Special Agent in Charge of the FBI in Oregon. “In this case, the defendant was in a position of trust to guard her bank’s funds and those of its customers. She broke that trust, using her access as a bank employee to feed a drug habit. Addiction to prescription pain killers can be just as devastating as street drugs, such as crack and heroin.”
The investigation was initiated by the Portland office of the FBI. The case was prosecuted by Assistant U.S. Attorney Scott Erik Asphaug.
Portland Man Sentenced to 78 Months in Federal Prison After Admitting to Investment Fraud Scheme Involving over $6 MillionRead the Press Release
sub titlePORTLAND, Ore. - Honorable Ancer Haggerty, U.S. District Judge for the District of Oregon, sentenced Yusaf Jawed, age 44, of Portland, to 78 months in prison, three years of supervised release, and ordered him to make restitution to the victims of his fraudulent investment program in the amount of $6.47 million. Jawed had previously entered a guilty plea to five counts of mail fraud and 12 counts of wire fraud in connection with an investment fraud scheme he orchestrated in Oregon, Washington, California and in other states.
The 17 count Information filed by the U. S. Attorney’s office, to which Jawed pled guilty, alleges that from February 2008 through September 2009, Jawed raised approximately $6.47 million from over ten investors in a hedge fund he controlled called Alpha Qualified Fund. Very little of the money was actually invested and most of the money was diverted to other purposes including the repayment of money owed to prior investors.
“In these uncertain economic times, it is vital that investors can seek advice from trusted advisors,” said U.S. Attorney Amanda Marshall. “When that trust is violated, the government will take strong measures to punish the financial predators and restore confidence in the financial system.”
During the sentencing hearing today, the government stated that Jawed had fulfilled a part of the plea agreement which required him to cooperate with the Securities and Exchange Commission, which had filed a lawsuit against him and with investors who had sued him. The government pointed out that Jawed’s cooperation helped to facilitate a financial recovery against other parties who had assisted him in perpetuating the scheme to defraud.“This defendant lied to his clients – over and over again. He promised high returns and strong investments. In the end, the clients lost millions,” said Gregory Fowler, Special Agent in Charge for the FBI in Oregon. “We have a responsibility to make sure he faces justice while working to help the victims recover what funds they can.”
The case was investigated by the FBI, with the assistance of the Securities and Exchange Commission. Senior Litigation Counsel and Assistant U. S. Attorney Allan M. Garten, prosecuted the case for the government.
Investigators, Prosecutors Combat Financial Fraudsub titleRead the Press Release
SALEM, Ore. – For the 13th consecutive year, a unique financial crimes conference will be held in Oregon. The Financial Crimes & Digital Evidence Conference has become international in scope, attracting participants from Europe and Asia. It brings together in the same place at the same time, from multiple jurisdictions, law enforcement investigators and prosecutors, financial institution fraud investigators, and corporate fraud investigators to learn how, through teamwork, to apply the most recent technology to combat financial fraud. Financial fraud results in billions of dollars of losses annually in the United States and law enforcement officers in Oregon are determined to reduce the harm to consumers and to hold more offenders accountable.
On Tuesday, September 24, through Thursday, September 26, law enforcement investigators, prosecutors, financial institution fraud investigators, corporate fraud investigators and auditors will gather at the Salem Convention Center to learn how to better investigate and prosecute financial fraud. The conference will provide investigators and prosecutors who handle financial crimes, and private-sector personnel who assist them in doing so, tools to assist in the detection, investigation and prosecution of financial fraud. The conference is open to all city, county, state, and federal law enforcement officers and prosecutors; fraud investigators and security officers for financial institutions; internal auditors for public agencies; and private-sector personnel who assist law enforcement in the investigation of financial crimes.
The seminar will address a variety of topics, including: (1) digital forensic evidence; (2) the use of financial and digital evidence in solving violent crime; (3) gender based financial crime; (4) identity theft and tax fraud; (5) culturally transient criminals; (6) working with victims of fraud; (7) organized retail fraud; (8) Medicaid fraud and financial exploitation of elders; and (9) state and federal search and seizure legal updates.
“The value of the Financial Crimes & Digital Evidence Conference is reflected in its international audience,” said U.S. Attorney Amanda Marshall. “It supports a continuous need for training in the increasingly sophisticated area of financial fraud and reflects our desire to hold accountable those who victimize our citizens. The combined training of investigators and prosecutors fosters a team approach and provides immediate tools to better detect, investigate, and prosecute those who commit financial fraud.”
The 2013 Financial Crimes & Digital Evidence Conference is sponsored by the United States Attorney’s Office, the Oregon Department of Justice, the Oregon Department of Public Safety Standards and Training, and the Federal Bureau of Investigation. For further information, please contact Sean Hoar at [email protected] or visit www.financialcrimesconference.com.
Southern Oregon Couple Indicted in Mail Theft Scheme to Defraud VictimsRead the Press Release
sub titleMEDFORD, Ore. – Gregory Brooks 49, and Michelle Lustig, 44, of Grants Pass, Oregon, were indicted by a federal grand jury. Both were charged with conspiracy to commit mail theft and bank fraud and committing aggravated identity theft. The charges involve the theft of mail from over 400 victims in communities located in Jackson and Josephine Counties during a four month period beginning in March 2013, and include a scheme in using the victim’s stolen personal identity to defraud banks and local merchants. Brooks was arraigned on the charges before Federal Magistrate Judge Mark Clarke who set Brook’s trial for November 19, 2013. Brooks remains in federal custody. Arrest warrants have been issued for Lustig and anyone with information about her whereabouts is requested to contact the Grants Pass Department of Public Safety or their nearest law enforcement agency.
An indictment (see attached) is only an accusation of a crime, and a defendant should be presumed innocent unless and until proven guilty. If convicted, the sentences range from maximum sentences of 5 to 30 years in prison, with a mandatory minimum sentence of two years for an aggravated identity theft conviction.
The U.S. Attorney’s Office is working with the U.S. Postal Inspection Service, Grants Pass Department of Public Safety and the Jackson County Sheriff’s office in the investigation and prosecution of this case.
For more information, please see the attached indictment Here
Attorney General's Native American Issues Subcommittee to Meet in OregonRead the Press Release
VAWA 2013 Implementation, Offender Re-entry, White Collar Crime, Juvenile Justice among Agenda ItemsPORTLAND, Ore. — U.S. Attorneys from the Attorney General’s Advisory Council (AGAC) Native American Issues Subcommittee (NAIS) will meet in Hood River, Oregon, next week, Sept. 17-19, 2013. On the agenda are, among other items, efforts to strengthen offender reentry efforts in Indian country, to address juvenile justice and the effects of exposure to violence on American Indian and Alaska Native youth, to defend Indian hunting and fishing rights, to clarify jurisdictional issues on the Columbia River, and to support implementation of the Violence Against Women Reauthorization Act of 2013 (VAWA 2013).
On Sept. 18, U.S. Associate Attorney General Tony West and Assistant Attorney General for the Office of Justice Programs Karol Mason will join the U.S. Attorneys for a special joint session with tribal leaders from Oregon, Washington, and Idaho to be held in Celilo Village, Oregon.
“While we are mindful of the great progress that is being made by U.S. Attorneys and tribal justice systems across Indian country, I look forward to exploring with the NAIS and tribal leaders ways that we can strengthen our government-to-government relationships even more, work ever closer with tribal nations, and advance our shared goal of building safe, sustainable, and healthy communities,” said Associate Attorney General West.
“This meeting will be a significant and historic event in which leaders from the federal government, who have a trust relationship with Indian nations, will meet with tribal leaders from Oregon, Washington, and Idaho to discuss issues ranging from Public Safety to strengthening tribal sovereignty through implementation of the Tribal Law and Order Act and the Violence Against Women Act”, said Amanda Marshall, U.S. Attorney for the District of Oregon. “It is especially fitting that these important discussions will take place at Celilo Village, once the location of Celilo Falls, where native settlements and trading villages existed there in various configurations for 15,000 years. This is a unique and meaningful opportunity for federal officials and Northwest Tribal Leaders to engage with each other on a number of critical topics.”
Thirty U.S. Attorneys from districts with Indian country or one or more federally recognized tribes serve on the NAIS. The NAIS focuses exclusively on Indian country issues, both criminal and civil, and is responsible for making policy recommendations to the Attorney General regarding public safety and legal issues.
VAWA 2013 was signed into law by President Obama on March 7, 2013. This law contains provisions that significantly improve the safety of native women and allow federal and tribal law enforcement agencies to hold more perpetrators of domestic violence accountable for their crimes. Many of these critical provisions were drawn from the U.S. Department of Justice’s July 2011 proposal for legislation to combat violence against native women. The department is exploring with tribal leaders how the department can help support the new law’s implementation. This law generally takes effect on March 7, 2015, but also authorizes a voluntary pilot project to allow certain tribes to begin prosecuting additional cases sooner.
In June 2009, Attorney General Eric Holder launched a department-wide initiative to enhance public safety in Indian country. Significant progress has been made since then, and the U.S. Attorney’s Offices with Indian country jurisdiction have had a major role in this success.
In May 2013, the Justice Department released its first report to Congress, required under the Tribal Law and Order Act, entitled Indian Country Investigations and Prosecutions (ICIP). The ICIP report, based on data compiled from the case management system used by U.S. Attorney’s Offices (USAOs) with Indian country jurisdiction, shows among other things a 54 percent increase in Indian country criminal prosecutions since 2009.
The information contained in the report shows, among other things, the following:
• The Justice Department’s prioritization of Indian country crime has resulted in a notable increase in commitment to overall law enforcement efforts in Indian country. Caseloads have increased overall from 1,091 cases filed in fiscal year (FY) 2009 to 1,138 in FY 2010 to 1,547 in FY 2011 to 1,677 in FY 2012. This represents a 54 percent increase in the Indian country crime caseload.
• The report shows a new era of partnership between the federal government and American Indian tribes, including an unprecedented level of collaboration with tribal law enforcement. The increase in collaboration and communication strengthens the bond of trust between federal and tribal investigators, prosecutors and other personnel in both federal and tribal criminal justice systems. As a result, tribal communities will be safer places to live, work, and raise families.
The number of Indian Country prosecutions in Oregon has increased significantly in the past two years due to partnerships between tribal and federal law enforcement officers. For example, in Warm Springs, a Multi-Disciplinary Team of social workers, tribal prosecutors, tribal detectives, FBI agents, and federal prosecutors meet monthly to review and evaluate ongoing child abuse investigations. Additionally, a lawyer from the Umatilla Indian Reservation was commissioned last year as a Special Assistant United States Attorney to prosecute federal crimes and help coordinate joint tribal-federal investigations of major crimes. Additionally, U.S. Attorney Amanda Marshall travels annually to consult with leaders from all nine of Oregon’s Tribal Nations to listen to their concerns about public safety in their communities. Ms. Marshall also serves on the Attorney General’s Native American Advisory Committee and chairs the Juvenile Justice in Indian Country Working Group.
Read more about the Justice Department’s efforts to support implementation of VAWA 2013: www.justice.gov/tribal/vawa-tribal.html
Read the entire ICIP report: www.justice.gov/tribal/tloa-report-cy-2011-2012.pdf
ead about the Justice Department’s efforts to increase public safety in Indian country at www.justice.gov/tribal/accomplishments.html
Bend Resident Pleads Guilty to Stealing More Than $320,000 Through Fraudulent Refund SchemeRead the Press Release
EUGENE, Ore. –Mark Timothy Ellis, 38, of Bend, Oregon, pled guilty on September 11, 2013, to making a fraudulent claim to the United States and to filing a false lien against a federal employee. As part of his plea agreement, Ellis admitted that he made a false claim to the United States when he filed a false federal tax return and obtained a $327,062 refund based on that false return. Ellis also admitted that he filed a false lien against the federal law enforcement officer who was investigating the false tax return as a means of retaliation and intimidation.
Sentencing is set for January 7, 2014, at 9 a.m. before Chief U.S. District Judge Ann Aiken. The maximum penalty for making a false claim is five years in prison and a $250,000 fine. The maximum penalty for filing a false lien is 10 years in prison and a $250,000 fine.
This case was investigated by IRS Criminal Investigations and is being prosecuted by Assistant U.S. Attorney Scott E. Bradford.
Bank Robber Sentenced to 63 Months in PrisonRead the Press Release
EUGENE, Ore. – Christopher Franklin Weaver, 34, of Lane County, Oregon, was sentenced today by U.S. District Chief Judge Ann Aiken to 63 months in prison for three counts of bank robbery. Upon his release from prison defendant will be on supervised release for three years.
On November 5, 2012, defendant robbed the Wells Fargo Bank on Polk Street in Eugene, Oregon. Nine days later, on November 14th, defendant robbed the U.S. Bank on West 7th Street in Eugene. On November 29th, defendant robbed the Pacific Continental Bank on High Street in Eugene. He was arrested shortly after the robbery and the money he stole was recovered on his person.
This case was investigated by the Federal Bureau of Investigation and the Eugene Police Department and was prosecuted by Assistant U.S. Attorney Jeffrey Sweet.
Former Teacher, Logan Storm, Sentenced to Prison for Possessing Child Pornography and Failing to Appear in CourtRead the Press Release
PORTLAND, Ore. – Logan Storm, a former teacher at Stoller Middle School in Beaverton, Oregon, will spend eight years in prison for possessing child pornography and failing to appear in court the day after a federal jury convicted him of the child pornography offense in January. At a sentencing hearing this morning, United States District Judge Michael H. Simon sentenced Storm, 37, to 84 months in prison in the child pornography case, and to a consecutive term of 12 months in prison for failing to appear for a detention hearing the day after the jury returned their guilty verdict in the pornography case. Upon release from prison, Storm will be subject to a 10 year term of supervised release with stringent conditions, including prohibitions on associating with minors, and restrictions on his use of computers. Storm will also be required to participate in sex offender treatment, and must register as a sex offender.
The investigation began in July 2010 when Storm’s then-girlfriend discovered images of child pornography on his laptop computer and on a thumb drive he had hidden in their bedroom, and reported it to the police. The Multnomah County Child Abuse Team served a search warrant at Storm’s residence and seized the laptop and two thumb drives from Storm’s bedroom, while Storm’s minor son was sleeping across the hall. Storm fled the country the following day, without saying good-bye to family or friends. He drove to Canada then flew to Europe, where he remained for more than six months.
Meanwhile, forensic examinations revealed images of child sexual abuse on the computer and both thumb drives. Many of the images were interspersed in Power Point presentations with graphic cartoons of child sexual abuse, child erotica, and non-pornographic, classroom photographs of his former students at Stoller Middle School.
Storm was originally charged with a number of offenses in the Multnomah County Circuit Court. He eventually returned to the United States to face those charges. The state charges were later dismissed in favor of this federal prosecution.
Storm was convicted in federal court on January 29, 2013, after a five day jury trial. He was allowed to remain out of custody pending a detention hearing the following morning. Later that evening, however, Storm cut off an electronic monitoring bracelet and fled once again, failing to appear as required at the detention hearing. An international manhunt ensued – for the second time.
Approximately six weeks later, Storm was apprehended in Mexico City, Mexico. He initially denied his identity. Eventually, however, Storm was deported to the United States and returned to Oregon, where he was detained on a new indictment for failure to appear, and in the child pornography case. He later pled guilty to the failure to appear charge. He was sentenced this morning in both cases.
In imposing the sentences, Judge Simon said that while Storm had many positive characteristics and traits, it was “quite clear” that he “does not accept responsibility for his conduct.” The judge had “no doubt” that the jury reached the “correct factual decision” when it found Storm guilty, yet Storm continues to blame others for his own unlawful conduct. Judge Simon also discussed the serious nature of the offense: “All child pornography offenses, including possession, are extremely serious because they result in perpetual harm to the victims, and validate and normalize the sexual abuse of children.” The victims, Judge Simon said, are “victimized over and over and over again” when offenders trade in and possess images of their sexual torture.
Judge Simon commended the U.S. Marshals Service for locating and apprehending Storm after he fled to Mexico: “The U.S. Marshals Service consists of brave, dedicated, thorough public servants who ensure if someone flees, they will be caught.” Judge Simon told Storm to think about the extra time he will be serving because he fled. He also urged Storm to recognize that he has a problem, and to seek treatment for it while incarcerated.
U.S. Attorney Amanda Marshall praised the sentence imposed on Storm, noting that it reflected the serious and troubling nature of Storm’s criminal conduct. “Logan Storm was a middle school teacher when he committed this offense,” she said. “He intermingled classroom photos of the very children he was entrusted with teaching into slide shows containing images of child sexual abuse and exploitation.” Storm’s offense was “particularly egregious,” she added, because “he twice fled the country, once shortly after officers served a search warrant at his house, and again only hours after the jury convicted him.”
Marshall praised the collaborative efforts of the local and federal law enforcement agencies responsible for the investigation and prosecution of the child pornography offense, and the efforts of the U.S. Marshals Service and authorities in Mexico in tracking and locating Storm after he fled the country. “Justice was delayed,” she said, but “ultimately it prevailed.” She hoped Storm’s sentence “sends a clear message to those who seek gratification in the sexual exploitation of children,” as well as those “who believe they can flee from justice.”
“The children of Oregon are safer with Logan Storm in prison,” said Brad Bench, special agent in charge of HSI Seattle, who oversees Oregon investigations. “HSI will continue to aggressively target those who prey upon and sexually exploit our children. We owe it to the young victims whose abuse is perpetuated by offenders around the world who collect and trade child pornography.”
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.
The investigation involved the cooperation and participation of the Portland Police Bureau, the Multnomah County Child Abuse Team, the Northwest Regional Computer Forensics Laboratory, the U.S. Department of Homeland Security/Homeland Security Investigations, the Multnomah County District Attorney’s Office, and the United States Attorney’s Office. The case was prosecuted by Assistant United States Attorneys Jane Shoemaker and Gary Sussman.
Local Mortgage Broker and Other Investors Sentenced to Prison for Large Mortgage Fraud SchemeRead the Press Release
PORTLAND, Ore. – David Ovist, 45, of Lake Oswego, Oregon, was sentenced today for his role in a $2.5 million mortgage fraud scheme that involved four other investors who were also sentenced recently. U.S. District Court Judge Anna J. Brown sentenced David Ovist to 57 months in prison and three years of supervised release.
Ovist was a licensed mortgage loan broker and the owner of Oregon Mortgage Services, Inc., located in Beaverton, Oregon. He was also a real estate investor. On February 8, 2013, Ovist was convicted of bank fraud and wire fraud following a ten-day jury trial for preparing residential loan applications for 12 different properties that falsified the borrower’s financial qualifications. The applications were then submitted by Ovist to seven different banks and mortgage lenders. Ovist and the other investors manipulated the underwriting process in order to qualify borrowers for home loans they would not otherwise be qualified for so the investors could buy houses as an investment.
To convince lenders to approve the loans, Ovist or the other investors falsified information about borrowers who had been recruited to obtain loans in their names because they had good credit, even though they could not otherwise qualify for the loans. They falsely inflated the monthly income stated on the home loan applications, omitted liabilities including other mortgages, falsely claimed that the borrower intended to live in the property as a primary residence rather than purchase it as an investment property, used straw buyers to obtain loans for some of the properties, forged rental agreements to make it appear as if a borrower received rental income when she did not, and falsified employment verifications about the existence, nature and length of a borrower’s employment.
“Mortgage fraud undermines our financial institutions and continues to be a burden on the economy,” said U.S. Attorney Amanda Marshall. “Brokers who abuse their authority and lie in order to help greedy investors cheat our financial institutions will go to prison.”
Judge Brown recently sentenced four other investors for their roles in the scheme. Don Kazlauskas, 46, of Portland, Oregon, was sentenced to six months in prison, followed by six months of home detention and three years of supervised release. Jacob Shoop, 30, of Portland, Oregon, was sentenced to six months of home detention, and three years of supervised release. Shoop’s father, Ricki Shoop, 58, of Portland, Oregon, was sentenced to two months of home detention, and three years of supervised release, and his mother, Sherrie Inouye, 58, of Portland, Oregon, was sentenced to three years of supervised release. The Court scheduled a restitution hearing for October 10, 2013 to determine how much restitution each of the defendants owes to the victims.
At the sentencing of Ovist, Judge Brown stated, “The criminal conduct here is so repetitious and so serious that it requires a prison sentence.” The Court rejected the notion that a white-collar defendant with no criminal record should be sentenced to probation saying, “Somehow the notion is that prison isn’t going to happen. But it does.”
“We will relentlessly pursue those who engage in mortgage fraud and others who seek to undermine the integrity of our economy,” said Greg Fowler, Special Agent in Charge of the FBI in Oregon.
The case was investigated by the Portland office of the Federal Bureau of Investigation, and was prosecuted by Assistant U.S. Attorneys Scott Erik Asphaug and Hannah Horsley.
Former Bend Area Mortgage Broker and Others Sentenced for $7 Million Mortgage Fraud SchemeRead the Press Release
EUGENE, Ore. – This week U.S. District Court Judge Ann Aiken sentenced Peter Wilkinson and six others for their roles in a $7 million mortgage fraud scheme. Wilkinson, 43, of Eugene, Oregon, received the largest sentence: 57 months in prison and five years of supervised release. The court has not yet ruled on restitution.
According to court records, Wilkinson was a former state-licensed mortgage broker and owned and operated Deschutes Mortgage Group in Bend, Oregon, during the housing boom. As part of his scheme, Wilkinson knowingly submitted almost 60 bad loans for more than 30 properties, causing lenders to lose between $2.5 million and $7 million. Wilkinson pocketed more than $500,000 from these loans. He also involved six of his client-borrowers in his scheme: Cary Martinez, Barry Seaton, Kurtis Israel, Sean Bart, Jason Hoby, David McNulty, and Amy Ridley.
To convince lenders to approve the loans, Wilkinson and his client-borrowers falsely inflated their monthly incomes on home loan applications, omitted their liabilities from home loan applications, falsely claimed on home loan applications that the financing was for a primary residence rather than an investment property, or used straw borrowers to obtain financing for real estate. Additionally, Wilkinson and his client-borrowers deposited large amounts of money, often $100,000 or more, into their checking accounts to falsely prove cash reserves needed for the loan approval process.
U. S. Attorney Amanda Marshall noted, “The defendants fraud was extensive, involving at least eight individuals, more than 30 properties, more than 50 loans, money laundering, numerous victims, countless financial transactions, straw borrowers, millions of dollars in losses, and potentially millions of dollars in restitution. These defendants, members of the finance and real estate industries, and home buyers need to understand that fraud will not be tolerated. Such selfish choices affect more than a few individuals. They affect entire industries and communities. The defendants’ conduct, when taken with similar fraudsters, contributed to the housing bubble that left our great state and nation reeling when it burst.”
Cary Martinez, 41, of Boulder, Colorado, was sentenced to 36 months of prison, 200 hours of community service, and three years of supervised release; Barry Seaton, 50, of Long Beach, California, was sentenced to 24 months in prison, and three years of supervised release. Aside from their role in Wilkinson’s scheme, they were also sentenced for laundering drug proceeds through real estate and financial transactions. Kurtis Israel, 40, of Portland, Oregon, Sean Bart, 43, of Bend, Oregon, Jason Hoby, 40, of Albany, Oregon, and David McNulty, 40, of Bend, Oregon, were each sentenced to five years of probation and 500 hours of community service.
Kenneth Hines, Special Agent in Charge of IRS-Criminal Investigation in the Pacific Northwest, stated, “Mortgage fraud continues to be a burden on our economy and affect our daily lives. When so-called professionals lie and cheat to pay for an elaborate lifestyle that includes expensive cars and tickets on the 50-yard line, it may bring an illusion of success. However, the ultimate outcome may be serving time in jail.”
“The main defendant put hundreds of thousands of dollars into his own pockets while defrauding more than 20 banks and businesses out of millions of dollars,” said Greg Fowler, Special Agent in Charge of the FBI in Oregon. “This case represents a systematic and deliberate attempt to undermine the ground on which the housing market in the Bend region is built. The fraud has a direct impact on the health of our economy and, therefore, on the financial well-being of all people in Central Oregon."
The last charged defendant in these cases, Amy Ridley, 54, of Kentucky, pled guilty on Wednesday, September 04, 2013, for her role in the scheme and is scheduled to be sentenced on January 22, 2014, at 9 a.m. before U.S. District Chief Judge Ann Aiken. The maximum penalty for conspiracy to commit wire fraud is 20 years in prison and a $250,000 fine.
This case was investigated by the Internal Revenue Service - Criminal Investigation and the Federal Bureau of Investigation and is being prosecuted by Assistant U.S. Attorney Scott E. Bradford.
U.S. Attorney Amanda Marshall Issues Statement Regarding Today's Marijuana Guidance from U.S. Department of JusticeRead the Press Release
PORTLAND, Ore. – Marijuana poses a significant risk to public health and its cultivation, distribution, and possession remains illegal under federal law. The Department of Justice is committed to enforcing the Controlled Substances Act, and will use its limited investigative and prosecutorial resources to address the most significant threats posed by illegal drug trafficking.
Today’s updated guidance memo from the Department reiterated eight priority areas related to enforcing federal marijuana laws:
- 1. Preventing the distribution of marijuana to minors;
- 2. Preventing revenue from the sale of marijuana from going to criminal organizations, gangs, and cartels;
- 3. Preventing the diversion of marijuana from states where it is legal under state law in some form to other states;
- 4. Preventing state-authorized marijuana activity from being used as a cover or pretext for the trafficking of other illegal drugs or other illegal activity;
- 5. Preventing violence and the use of firearms in the cultivation and distribution of marijuana;
- 6. Preventing drugged driving and the exacerbation of other adverse public health consequences associated with marijuana use;
- 7. Preventing the growing of marijuana on public lands and the attendant public safety and environmental dangers posed by marijuana production on public lands; and
- 8. Preventing marijuana possession or use on federal property.
Here in Oregon, federal prosecutors will remain aggressive when it comes to protecting these eight federal enforcement interests. That means exercising their prosecutorial discretion to investigate and prosecute individuals who infringe against any of these stated federal interests, regardless of state law. Outside of these stated priorities, we will continue what we have been doing since the passage of the Oregon Medical Marijuana Act, relying on state and local authorities to address lower-level or localized marijuana activity through enforcement of their own narcotics laws.
Having looked at the marijuana cases we have prosecuted in this district in the past two years, including all of our open cases involving marijuana cultivation, delivery or possession, we can certify that every case involves at least one, and in most cases more than one, of the eight federal priorities. So, this really doesn’t change anything for the way we do business at the U.S. Attorney’s Office in Oregon.
The Department expects that states that have legalized the use of marijuana, whether for medical purposes or otherwise, will establish and enforce strict regulatory schemes that protect the eight federal interests identified in the Department’s guidance. These schemes must be tough in practice, not just on paper. They must include strong, state-based enforcement efforts, backed by adequate funding. We will take a “trust, but verify” approach. In other words, as long as the state follows through in imposing strict controls regulating marijuana-related conduct, it is less likely that any of the Department’s eight enforcement priorities will be threatened and federal action will be less necessary. But if any of the stated harms do materialize—either in spite of a strict regulatory scheme, or because of the lack of one—federal prosecutors will act aggressively to bring individual prosecutions and may challenge the regulatory scheme themselves.
Man Sentenced to 6.5 Years in Federal Prison for Sexual Abuse on the Umatilla Indian ReservationRead the Press Release
The abuse began when the victim was 14 years oldPORTLAND, Ore. — U.S. District Judge Anna J. Brown sentenced Thomas Lee Bear, 31, of Lewiston, Idaho, yesterday to 78 months in federal prison, to be followed by 10 years of supervised release. In January 2013, Bear pled guilty before Judge Brown to sexual abuse of a minor. After Bear completes his prison term, he will be required to register as a sex offender and undergo sex offender treatment. Bear has been in the custody of the U.S. Marshals Service since his arrest in this case in July 2012.
“It is absolutely repugnant for grown men to use the internet to prey upon teenage girls,” said U.S. Attorney Amanda Marshall. “The rate of sexual abuse against girls in Indian Country is tragically high. The prison sentence in this case should serve as a warning to anyone who would do harm to the children of Tribal Nations.”
Bear admitted to having sexual intercourse with a girl on the Umatilla Indian Reservation in the fall of 2011. The victim, who was 14 years old at the time the sex abuse began, is an enrolled member of the Confederated Tribes of the Umatilla Indian Reservation. Bear further admitted that he used a social networking website to persuade, induce, entice, and coerce the victim into having sexual intercourse.
This case was investigated by the Umatilla Tribal Police Department and the FBI’s Office in Pendleton, Oregon. The case was prosecuted by Assistant U.S. Attorney Craig Gabriel.
Salem Engineering Firm Settles Lawsuit Alleging Fair Housing Act ViolationsRead the Press Release
PORTLAND, Ore. – The Justice Department announced today that the engineering firm, Multi/Tech Engineering Services, Inc., (Multi/Tech) located in Salem, Oregon, has agreed to pay $60,902.70 to settle a lawsuit pending in the U.S. District Court of Oregon, which alleges that Multi/Tech violated the Fair Housing Act by designing an apartment complex with steps and other features that made it inaccessible to persons with disabilities. This settlement will both assist in compensating victims of discrimination and in removing accessibility barriers at Gateway Village, a 275-unit complex in Salem. In May 2013, the Justice Department and the Fair Housing Council of Oregon (FHCO) had previously settled with the developers of the property under similar injunctive terms and monetary relief. This settlement resolves the remaining substantive claims of the lawsuit.
Under the terms of the parties’ agreement, Multi/Tech will pay $7,902.20 in damages to the FHCO, which had intervened in the lawsuit as an aggrieved person under the Fair Housing Act. Multi/Tech will also pay an additional $32,000 to a settlement fund for the purpose of compensating individuals with disabilities who were impacted by the alleged accessibility violations. Furthermore, Multi/Tech will pay $21,000 to a fund established to take extensive actions to make the complex accessible to persons with disabilities. These corrective actions, which will be taken by the developer, include removing steps from sidewalks, widening interior doorways, reducing threshold heights, replacing excessively-sloped portions of sidewalks, and installing properly-sloped curb ramps to allow persons with disabilities to access the sidewalks from the parking areas.
“Steps, narrow doors and other accessibility barriers prevent people with disabilities from exercising the same rights to obtain housing of their choice that other people enjoy,” said Acting Assistant Attorney General for the Civil Rights Division Jocelyn Samuels. “We will hold builders and designers accountable and those who fail to follow the law will face enforcement action.”
“The right to accessible housing is a fundamental protection afforded by law,” stated U.S. Attorney Amanda Marshall. “I am committed to working with the Fair Housing Council of Oregon, and our federal, state, and local partners to ensure that those who design and construct housing units make them accessible to persons with disabilities in compliance with the Fair Housing Act.”
The lawsuit, filed in September 2011, arose as a result of a complaint filed by the Fair Housing Council of Oregon with the U.S. Department of Housing and Urban Development (HUD). After HUD investigated the complaint, it issued a charge of discrimination and referred the matter to the Justice Department.
“This settlement highlights the importance of the designer in guaranteeing equal opportunity access to housing for people with physical limitations. We encourage building design professionals around the country to understand their responsibility under the Fair Housing Act’s 1988 design and construction requirements and go well beyond these minimum standards to make all housing fully accessible, ” said Pegge McGuire, Executive Director, Fair Housing Council of Oregon.
“For more than two decades the law has required that newly-built multifamily housing provide equal access to people with disabilities,” said Bryan Greene, HUD’s Acting Assistant Secretary for Fair Housing and Equal Opportunity. “Throughout that time, HUD and the Department of Justice have educated builders, design professionals and others on those requirements, most recently through guidance issued this past April. Where those efforts fail, our agencies will gain compliance through enforcement of the law.”
Individuals who are entitled to share in the settlement fund will be identified through a process established in the settlement. Persons who believe they were subjected to unlawful discrimination at Gateway Village either when they lived there or considered living there should contact the Justice Department toll-free at 1-800-896-7743 mailbox # 9993, or e-mail the Justice Department at [email protected].
The federal Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin and disability. More information about the Civil Rights Division and the laws it enforces is available at www.usdoj.gov/crt. Individuals who believe that they have been victims of housing discrimination can call the Housing Discrimination Line at 1-800-896-7743, e-mail the Justice Department at [email protected], or contact HUD at 1-800-669-9777.
For more information, please see the attached consent order Here
Former Oregon Resident Pleads Guilty to FraudRead the Press Release
PORTLAND, Ore. – A former resident of Pacific City pleaded guilty in federal court today to stealing more than $70,000 from the Social Security Administration (SSA), the Oregon Department of Human Services (DHS), and Medicaid. Peter C. Byrne, 87, admitted before U.S. District Court Judge Garr M. King that between 1992 and 2012, he concealed from SSA and DHS his travels outside the United States and his compensation, while receiving Supplemental Security Income (SSI) and food stamps. Sentencing is scheduled for December 3, 2013, at 10:30 a.m.
According to documents filed by the government and Byrne’s admissions today, Byrne began receiving SSI in 1990 and was required to report to SSA certain travel outside the United States, as well as his income and compensation. Between 1992 and 2012, Byrne traveled outside the U.S. for more than 30 days at least 15 times, on some occasions remaining outside the U.S. for more than four months. Between 2009 and 2012, Byrne also maintained bank accounts with Barclays of England and Wells Fargo where he held more than $85,000 at one time, and failed to disclose these bank accounts to SSA and DHS. When Byrne was questioned by SSA and investigators in 2012, he failed to disclose all of his travels and assets. When SSA asked to see his passport, Byrne advised that he had accidentally destroyed his passport by running it through the washing machine.
The plea agreement requires Byrne to pay restitution to SSA, DHS, and Health and Human Services. Byrne has deposited $25,000 with the court to be applied towards restitution immediately following sentencing.
The case was investigated by the Social Security Administration Office of Inspector General, Office of Investigations. It is being prosecuted by Special Assistant United States Attorney Helen L. Cooper, as part of a partnership venture between the Social Security Administration Office of General Counsel and the United States Attorney’s Office.
Federal Indictment Charges 18 Defendants in Eastern Oregon Cockfighting RingRead the Press Release
PORTLAND, Ore. – A federal grand jury has indicted 18 defendants on various charges in connection with a cockfighting operation in Irrigon, Morrow County, Oregon, involving ten “derbies” occurring from April 1, 2012, through May 19, 2013.
Arrests on the charges occurred today at various sites in Oregon and Washington. Those arrested in Oregon are scheduled to appear for arraignment before a federal magistrate judge in Portland on Friday, August 16, 2013, at 1:30 p.m. Those arrested in Washington will appear for arraignment before a federal magistrate judge in Yakima, Washington.
Six individuals are charged with operating an illegal gambling business:
- John Wesley Walker, 67, of Irrigon;
- Irina Walker (aka Irina Kreuger), 60, of Irrigon;
- Mario Perez (aka El Cuba), 62, of Hermiston, Oregon;
- David Sanchez, 29, of Irrigon;
- Jose Luis Virgen Ramirez, 48, of Hermiston; and
- Aurelia Garcia Mendoza, 33, of Irrigon.
These six persons are also charged, along with 12 others, with conspiracy to violate the Animal Welfare Act by conducting unlawful animal fighting ventures on ten occasions. The additional defendants are:
- Apolinar Munoz Gutierrez (aka Polo), 37, of Irrigon;
- Cecilio Mendoza Magana, 63, of Kennewick, Washington;
- Mauro Gonzalez Pulido (aka Cala), 47, of Zillah, Washington;
- Ruben Saltos Godina (aka Chino), 42, of Moxee, Washington;
- Arturo Olmedo Silva (aka El Havolin, Cepillo), 45, of Hermiston;
- Eduardo Cisneros (aka Mariachi), 27, of Sunnyside, Washington;
- Eulalio Delamora Anguiano (aka Lalo), 44 of Moxee, Washington;
- Francisco Javier Vega (aka Sergio Gonzalez Manzano), 39, of Plymouth, Washington;
- Oscar Acosta Navarrete, 46, of Prosser, Washington;
- Antonio Dominguez Robles (aka Tono, Memo), 37, of Pasco, Washington;
- Gerardo Gomez Castillo (aka Aguilo), 54, of Wapato, Washington; and
- Valente Piedra Magana, 38, of Union Gap, Washington.
“Cockfighting is illegal under federal law and under the laws of all 50 states,” Amanda Marshall, United States Attorney for the District of Oregon, stated. “Besides being a barbaric practice, cockfighting jeopardizes public health and safety and facilitates the commission of other criminal acts,” she added.
Each of the charged offenses – illegal gambling (one count), unlawful animal fighting venture (ten counts), and conspiracy (one count) – carries a maximum sentence of five years in prison and a fine of $250,000. The indictment also alleges that, upon conviction of illegal gambling, defendants John Wesley Walker and Irina Walker are subject to the forfeiture of their real property and buildings used in the gambling business, located on Depot Lane in Irrigon, Morrow County, Oregon.
A copy of the 12-count indictment is attached. An indictment is a charging instrument only, and all defendants are presumed innocent unless and until found guilty beyond a reasonable doubt.
The case was investigated by the Office of Inspector General, U.S. Department of Agriculture, with assistance from the Drug Enforcement Administration, the Oregon State Police, the Washington State Gaming Commission, and the Blue Mountain (Oregon) Narcotics Team. The case is being prosecuted in Oregon by Assistant U. S. Attorney Stephen F. Peifer.
For more information, please see the attached Indictment Here
Ocean Park, Washington Woman Sentenced for Wire FraudRead the Press Release
PORTLAND, Ore. – Lisa Mottaghi, 46, of Ocean Park, Washington, was sentenced by U.S. District Court Judge Ancer L. Haggerty to 33 months in prison for the crime of wire fraud involving a “sweetheart swindle” of a retired widower from St. Helens, Oregon. In addition to her sentence, the Court ordered Mottaghi to serve three years of supervised release following her release from prison and to repay $649,536 in restitution.
“Schemes like this devastate innocent victims and their families. It is especially cruel when fraudsters target senior citizens,” said U.S. Attorney Amanda Marshall. “This conviction demonstrates what happens to those who abuse vulnerable citizens in our community.”
At the sentencing hearing, the government laid out for the Court Mottaghi’s scheme to defraud. In June of 2005, Lisa Mottaghi began borrowing significant sums of money from Gerald Voorhees, a 74-year old widowed retiree from Saint Helens, after developing a relationship of trust with him. By 2009, Voorhees told Mottaghi that he would not loan her any more money.
Shortly thereafter, Voorhees was contacted by email by Tonia Jorgenson, a woman identifying herself as the sister of Mottaghi. Jorgensen told Voorhees about her stable life (albeit with a sick husband) and promised to repay the debts of her sister. However, not long after the first email, Jorgenson wrote Voorhees again with the terrible news of her husband’s death and the fact that her ability to repay the debts of her sister would be delayed due to family interference in the settling of the estate. To make matters worse, she soon claimed her own finances were compromised as a result of her husband’s death and she too needed the financial help of Voorhees. The truth, in fact, was that Jorgenson did not exist. She was the fraudulent creation of Mottaghi.
Writing as her sister, Mottaghi began a two-year scheme to defraud Voorhees. With a tale of loss and vulnerability, Mottaghi created a character designed to elicit compassion and sympathy from him. Over a short period of time, Mottaghi manufactured, in the name of Jorgenson, a fraudulent romance complicated by health concerns and legally-created delays in her access to great wealth, all non-existent or false in every regard.
Voorhees paid the defendant, acting as Jorgenson, nearly $650,000. So strongly did Voorhees believe the lies that Mottaghi told him as Jorgenson, that even after his own family intervened in 2011 to restrict his ability to get access to his own money (information he shared with the defendant), he continued to find ways to give her money. Even knowing that Voorhees no longer had the ability to control his own finances, Mottaghi solicited $2,500 with the lie that if she didn’t get the money, she would lose future contact with her grandson; a grandson that, of course, she didn’t have. Voorhees took out a loan on his car and gave her the $2,500. None of the nearly $650,000 has been recovered.
The investigation of this case was conducted by the Portland office of the Federal Bureau of Investigation. The case was prosecuted by Assistant U.S. Attorney Scott Erik Asphaug.
Former Umatilla Tribal Police Officer Pleads Guilty to Abusive Sexual Contact and Making False StatementsRead the Press Release
PORTLAND, Ore. – Fermore Joseph Craig, Jr., 43, of Pendleton, Oregon, pled guilty yesterday before U. S. District Judge Michael W. Mosman to one count of abusive sexual contact and one count of making false statements to the FBI. The maximum sentence for abusive sexual contact is two years in prison, a fine of $250,000, and a lifetime of supervised release. Craig’s conviction for abusive sexual contact will require him to register as a sex offender. The maximum sentence for making false statements to the FBI is five years in prison, a fine of $250,000, and three years of supervised release. Sentencing is scheduled for November 4, 2013. Craig is currently out of custody and under the supervision of a federal court officer, pending the sentencing hearing.
“Sexual assault is always a heinous crime,” stated U.S. Attorney Amanda Marshall. “But when a tribal police officer, whose very duty is to protect the members of a Tribal Nation, commits such an act, the impact is especially egregious as it violates the trust and safety not only of the victim, but the entire tribal community.”
According to the prosecutor’s statements in court, on May 11, 2013, on the Umatilla Indian Reservation, Craig touched the intimate parts of an adult female. Craig admitted that he intentionally touched the victim’s intimate parts to arouse and gratify his own sexual desire, and he did so without the victim’s permission.
When the victim subsequently disclosed the sexual abuse, the FBI and Oregon State Police initiated an investigation and interviewed Craig. On May 13, 2013, during an interview with an FBI special agent and an Oregon State Police trooper, Craig made false statements to the investigators by lying about the sexual contact he had with the victim.
Craig had been employed as a Umatilla Tribal Police Officer for approximately 15 years, but he was not on duty as a police officer at the time the sexual abuse occurred. After the abuse was reported by the victim, Craig was immediately placed on administrative leave. Craig ultimately resigned from the Umatilla Tribal Police Department in June, while the investigation was ongoing.
The case was investigated by the FBI’s Pendleton office and the Oregon State Police. Assistant U.S. Attorney Craig Gabriel prosecuted the case.
Clackamas Man Convicted of Presenting Two False Claims Against the United StatesRead the Press Release
PORTLAND, Ore. – A jury in federal court in Portland convicted Miles Julison, 40, of two counts of filing false claims against the United States. The defendant, a resident of Clackamas and a former real estate investor, was found guilty on August 9th, 2013, after he filed tax returns for the years 2007 and 2008 falsely claiming total refunds due in the amount of more than $1.9 million, despite having paid no federal income taxes in those years. Sentencing in the case is scheduled for November 20, 2013, before U.S. District Judge Michael H. Simon.
“Both collecting revenue to fund the essential functions of the federal government and promptly refunding overpayments by individual taxpayers depends on all taxpayers’ good-faith compliance with the tax laws,” said U.S. Attorney Amanda Marshall. “The administration of the Internal Revenue Code rests on the proposition that every taxpayer will pay the taxes he or she owes, without having to be audited by the IRS. This office and the IRS will continue to ensure that those taxpayers who do not do so will face the consequences established by law.”
After a five-day trial and three hours of deliberations, the jury found Miles Julison guilty of filing two false claims for income tax refunds to which he was not entitled. The evidence at trial established that, in July 2008, Julison falsely claimed on his tax return that he had earned more than half a million dollars in 2007 and that almost all of it had been withheld for taxes. He then fraudulently claimed he was due a tax refund of $411,773.00. The IRS issued him a check for that amount two weeks later. In January 2009, Julison falsely claimed on his tax return that he had earned more than $2.3 million in 2008, and that all but $815 of that total had been withheld for taxes. He fraudulently claimed a tax refund of more than $1.5 million. By then, however, Julison was already under criminal investigation, and the refund was never issued.
The evidence at trial established that Julison used the refund he obtained to purchase, among other things, a $60,000 Mercedes-Benz sedan, to pay off his mortgage, and to make payments on a 23-foot ski boat, a Toyota Sequoia SUV, two Kawasaki wave runners, and two Polaris snowmobiles. The trial featured testimony from two other criminal defendants who had collaborated with Julison in filing similar claims for fraudulent refunds. Those men were expected to plead guilty to charges of filing false claims against the United States in cases pending elsewhere.
This case was investigated by IRS, Criminal Investigation. Assistant U.S. Attorneys Seth D. Uram and Ryan W. Bounds prosecuted the case.
Hundreds of children are being trafficked for sex in portlandRead the Press Release
U.S. Attorney's Office commissioned study, conducted by Portland State University, documents wide spread victimization of children in the Portland metro areaPORTLAND, Ore. – Today, U.S. Attorney Amanda Marshall and Portland State University released the findings of a research study documenting that at least 469 children were the victims of sex trafficking in the last four years.
The Portland State University (PSU) study was sought by the United States Attorney’s Office and conducted in partnership with the Department of Human Services Child Welfare (DHS) and the Sexual Assault Resource Center (SARC), in order to quantify the scope of child sex trafficking in the Portland area and provide data to guide intervention and services for these children.
“The results of the PSU study are truly shocking,” said U.S. Attorney Amanda Marshall. “The data confirms that we have a devastating epidemic of child sex trafficking within our community – an epidemic that demands action.”
To see a copy of the report, click here.
To see local news coverage, click KGW, KATU, KOIN, Oregonlive
Christopher Carey, PhD, JD of Portland State University and Lena Teplitsky, Portland State MPH Candidate collected quantitative and qualitative data on documented Commercial Sexual Exploitation of Children (CSEC) cases in the Portland Metro Area between December 2012 and June 2013.
What we found:- At least 469 children were trafficked for sex in the Portland Metro Area in the last four years. This number represents CSEC victims served by DHS & SARC.
- The average age at which victims were referred to DHS or SARC was 15.5. The youngest victim in the system was 8. (See footnote 1)
- 96% of victims are female, close to 3% are male, and approximately 1% are transgender.
- 40.51% of victims are Caucasian, 27.08% are African American, and 5.12% are Hispanic. (See footnote 2)
- 16.62% have had a baby.
- 50.85% of active CSEC cases served by SARC have a gang connection.
Given the covert nature of CSEC, cases are widely underreported. As a result, the findings in this report are very conservative. Collecting standardized data for victims is also difficult due to the highly-sensitive nature of the information, as well as the perceived danger that may result from disclosure. The data utilized for this study came exclusively from DHS and SARC, as law enforcement data has not been standardized to date.
“By quantifying the problem we are giving policy makers, social service providers, and other stakeholders the data they need to respond to the needs of these children,” noted U.S. Attorney Marshall. “My office works hand-in-hand with the FBI’s Child Sexual Exploitation Task Force, and other state and local partners, to aggressively prosecute sex trafficking cases. We currently have twelve open cases against pimps and we recently indicted a john on federal charges. Still, for every indictment, there are dozens of cases we cannot bring because the child who was trafficked is back on the street – and to solve that problem we need to find and provide safe and secure placements for these kids.”
1 These age figures reflect age at first referral to a support agency, not age at which exploitation began to occur.
2 African Americans make up 5.8% of Multnomah County’s population (2% of the state population).
Oregon Man Sentenced to 20 Years in Federal PrisonRead the Press Release
Linn County Man Admits to being an Armed Career Criminal and Shooting Two Men with a Short Barreled Shotgun during a Drug DealEUGENE, Ore. – Karl David Bowman, Jr., 36, of Linn County, Oregon, appeared before U. S. District Court Chief Judge Ann Aiken in Eugene today and pled guilty to being an armed career criminal. Bowman admitted shooting two men at Cheadle Lake Park on June 16, 2012, with a short-barreled shotgun loaded with birdshot while attempting to rob them of drugs, money, and their car. The men received serious but non-life threatening injuries.
After accepting the guilty plea, Chief Judge Aiken sentenced Bowman to 20 years in prison and five years of post-prison supervision following his release. Chief Judge Aiken sentenced Bowman as an armed career criminal because he possessed the shotgun after being previously convicted of two robberies, a residential burglary, and delivery of methamphetamine.
According to court documents and statements made in court, Bowman and an accomplice met two men near Cheadle Lake in Lebanon, Oregon, to conduct a drug deal. Bowman carried a short-barreled shotgun as he walked up to the car to conduct the deal and pointed the barrel of the weapon at the driver’s head and toward the passenger. When Bowman demanded they get out of the car and give him money, drugs and the car keys, the driver tried to accelerate and Bowman shot both men. The driver was wounded in the neck and shoulder, and the passenger was wounded in the left thigh.
Linn County Sheriff deputies and Lebanon police officers arrested Bowman and his accomplice as they attempted to leave the shooting scene. Police recovered the abandoned weapon and also found drug paraphernalia and stolen property in Bowman’s vehicle. At the time of his arrest, Bowman was wanted for identification theft, forgery, theft, illegal possession of weapons, failure to appear, trespassing and traffic crimes in Oregon and Washington. He had been released from the Oregon Department of Corrections on September 8, 2011.
The defendant’s guilty plea in federal court is the result of a global settlement, whereby the 240 months in federal prison are part of a plea agreement with the U. S. Attorney’s Office, District of Oregon, Clackamas County District Attorney, Linn County District Attorney, King County Prosecuting Attorney, Lewis County Prosecuting Attorney, and Longview City Prosecuting Attorney. As part of the overall agreement, Bowman agreed that he will pay restitution to his victim in King County, Washington.
This case was investigated by the U.S. Bureau of Alcohol, Tobacco and Firearm, Oregon
State Police, Linn County Sheriff’s Office, and the Lebanon Police Department. Assistant U.S. Attorney Frank R. Papagni, Jr., with the assistance of Linn County Deputy District Attorney Coleen Cerda, prosecuted the case.
Heroin Dealer Sentenced to Ten Years in PrisonRead the Press Release
EUGENE, Ore. – John Christopher Norton, 40, of Eugene, Oregon, was sentenced on July 29, 2013, to 120 months in federal prison after previously pleading guilty to conspiracy to possess with intent to distribute heroin.
Norton has a prior criminal history, including convictions for bank robbery and delivery of a controlled substance. In September 2011, he sold heroin within one week after being released from prison. Over the next two months, he used his stepson, Cory Beatt, to help him conduct multiple heroin deals in Lane County. In November 2011, a search warrant led to the discovery of heroin at Norton’s residence. The investigation determined that he possessed a total of 352 grams of heroin.
“Sentencing is about accountability and hope,” said U.S. District Court Chief Judge Ann Aiken, who presided over sentencing. “The damage to the community from people dealing drugs, particularly the quantities involved in this case, needs to be underscored.” The judge characterized as “unacceptable” Norton’s involvement of a family member in his criminal enterprise and reprimanded him for a text message he sent to Beatt after their arrest. In the text message, Norton urged Beatt not to cooperate with law enforcement.
Over twenty of Norton’s supporters showed up in court, spoke out on his behalf, and submitted letters to the court telling of Norton’s sixteen-month sobriety from drugs and alcohol, commitment to mentoring troubled youth and excellent employment record. Judge Aiken credited Norton with extraordinary rehabilitation and sentenced him to 120 months in prison, less than the 151 months recommended by the government.
Norton’s stepson, Cory Beatt, pleaded guilty and was sentenced today. Judge Aiken credited Beatt with the time he had already served in prison and sentenced him to no additional prison time. However, as part of his sentence, Beatt must serve up to 120 days in the Lane County Residential Reentry Center and attend Federal Reentry Court.
This investigation was conducted by the Eugene Police Department, the Lane County Sheriff’s Office and the U.S. Drug Enforcement Administration. The case was prosecuted by Assistant U.S. Attorney William “Bud” Fitzgerald.
Caregiver Sentenced to Prison for TheftRead the Press Release
EUGENE, Ore. – Carel June Cody, 47, of Cottage Grove, was sentenced to 57 months in prison for her theft of Social Security benefits that spanned more than 16 years. In addition to prison, Cody was ordered to pay restitution in the amount of $203,528. Cody has also agreed to relinquish her federal Thrift Savings Plan retirement fund, worth approximately $36,000, to the government as well as her Cottage Grove residence.
According to Cody’s admissions and court records, Cody’s scheme to defraud began in 1996 when Cody concealed the death of John Arnold, who had been in her care, and buried his body on rural private property. Each month thereafter when Arnold’s Social Security retirement benefits were electronically deposited to his bank account, Cody forged Arnold’s name on checks payable to herself. The scheme was discovered when a relative of Cody’s husband, Ernest “Bud” Cook, found a letter written by Cook in 1996 describing the death of Arnold and the theft by Cody.
Calling Cody’s actions “an abuse of trust,” U.S. District Court Chief Judge Ann Aiken stated, “You became a person everyone is afraid of. We never will know what Mr. Arnold’s final days were like. I don’t know if you can ever get enough therapy to correct what you did.”
“The relentless team effort of the Social Security Administration, Office of Inspector General, and the U.S. Attorney’s Office is making a substantial impact on Social Security fraud in Oregon,” said United States Attorney Amanda Marshall. “These are important cases because when we hold these fraudsters accountable, we recoup stolen funds for the Social Security program and deter others from committing these crimes.”
Cook was sentenced to five years of probation for his receipt of stolen government property and ordered to perform 100 hours of community service for each year he is on supervision.
The case was investigated by the Social Security Administration Office of Inspector General, Office of Investigations, the Douglas County Sheriff’s Office, and the Roseburg Police Department, and was prosecuted by Special Assistant U.S. Attorney Helen L. Cooper, as part of a partnership venture between the Social Security Administration Office of General Counsel and the United States Attorney’s Office.
Vancouver Man Sentenced to 14 Months in Prison for Lying About his Ability to Conduct Lead TestingRead the Press Release
PORTLAND, Ore. – Martin Glaves Kuna, 66, of Vancouver, Washington, was sentenced yesterday to 14 months in prison by the U.S. District Judge Michael H. Simon after pleading guilty today to one count of wire fraud. Kuna falsely advertised and told customers that he was certified to perform lead-based paint inspections and testing in homes where children resided, when in fact, he was not properly qualified or certified by state authorities to do so.
In response to medical studies on the health hazards presented to children by lead-based paint, Congress passed the Residential Lead-Based Paint Hazard Reduction Act (“Lead Hazard Act”). The Lead Hazard Act authorized the Environmental Protection Agency to develop regulations to ensure, among other things, that individuals engaged in lead-based paint inspections and testing were properly trained and certified. Oregon’s rules for the certification of individuals and firms engaged in lead-based paint inspections and testing prohibit any person or firm to perform lead-based paint inspections and testing in target housing or child-occupied facilities without first receiving appropriate certification.
From May 2008 to September 2012, Kuna advertised his services to conduct lead-based paint inspections and testing, and indicated to individuals via the internet and in person that he was certified to do so. Kuna, however, had not received the required certification and training to inspect and test target housing or child-occupied facilities for lead-based paint despite his representations that he had. Over the course of the scheme, Kuna conducted more than ten (10) such inspections. In one instance where Kuna performed lead-based paint inspections and testing, children resided in the home and Kuna provided the home owner a false negative for the detection of lead. Evidence introduced by the government at sentencing demonstrated that the defendant failed to perform the appropriate tests to determine lead in the home. As a result, some of the children in the home experienced increased lead levels in their blood.
In January 2012, civil EPA investigators intervened in Kuna’s business activities and ordered him to stop lead-based paint inspections and testing. Despite EPA’s order, Defendant Kuna continued to advertise and perform lead-based paint inspections and testing through September 2012. In sentencing Kuna, Judge Simon declared, “Our first duty in society as adults is to protect children.” Following his findings and imposition of 14 months in prison, Judge Simon told the defendant, “The bottom line is, the actions you engaged in put children at risk. Our society just cannot allow that.”
“Protecting children and families is the guiding principle behind our work,” said U.S. Attorney Amanda Marshall. “This investigation and prosecution uncovered a significant public health risk. The defendant’s lies caused young children to be exposed to dangerous levels of lead. This office, along with our partners at EPA, will continue to seek criminal penalties for those who break the law and threaten the health of our children.”
“Defendant Kuna, untrained and uncertified to perform the lead-based paint inspection and testing services he sold to unsuspecting families, put children’s health in jeopardy,” said Tyler Amon, Special Agent-in-Charge of EPA’s Criminal Investigation Division in Seattle. “I commend the diligence of the Smith family, who by questioning the services of Mr. Kuna, started a federal investigation and prevented further exposure and injury to their children. This prosecution and conviction speaks for itself – if ‘business-as-usual’ includes exposing children to lead, you will pay the price.”
The investigation was conducted by the Environmental Protection Agency, and the prosecution was handled by Assistant U.S. Attorney Michelle Holman Kerin.
Oregon Woman Sentenced to 275 Months in Prison for Being an Armed Career CriminalRead the Press Release
Defendant committed four armed bank robberiesEUGENE, Ore. – Lorinda Marie Goodin, 44, a resident of Lane County, Oregon, was sentenced today by U.S. District Chief Judge Ann Aiken to 22 years and 11 months in prison for committing two armed bank robberies in Multnomah County, two armed bank robberies in Lane County, and to possessing ammunition after having been previously convicted of eight bank robberies.
Goodin pled guilty on February 20, 2013, to robbing the Bank of the West in Portland on November 8, 2011, the Clackamas County Bank in Gresham on November 14, 2011, and the Pacific Continental Bank in Eugene on August 1 and again on November 25, 2011. Goodwin wore disguises, brandished what appeared to be a large caliber pistol, and threatened to shoot or kill bank tellers during the robberies.
Goodin was arrested on December 7, 2011, by an FBI agent and Springfield police officers after she was seen driving a stolen vehicle in Springfield, Oregon. She had a large caliber toy pistol in her possession along with various disguises. During a subsequent court-authorized search of Goodin’s residence, police found numerous rounds of .22 caliber ammunition.
Goodin also pled guilty in federal court to being a felon in possession of ammunition and agreed to be sentenced as an armed career criminal. She was convicted after a jury trial in 2003 and sentenced to six years and five months in prison by U.S. District Judge Anna Brown for robbing eight banks in Multnomah, Clackamas and Marion Counties.
When pleading guilty, Goodin admitted that from August 2011 until her arrest in December 2011, she robbed 25 businesses located in Lane County, Multnomah County, Clackamas County, Wasco County and Douglas County. When committing her robberies, Goodin carried what appeared to be a large caliber pistol and threatened to shoot employees. During several of these robberies, Goodin had an accomplice.
Goodin’s guilty pleas, admissions and agreed sentence recommendation were part of her plea agreement. As part of her overall agreement, Goodin agreed that she will also plead guilty in Oregon state courts to the multiple robberies she admitted committing, and that she should receive a sentence of up to 18 years in prison for each robbery, to be served concurrently with her federal sentence.
This case was investigated by the Federal Bureau of Investigation, Bureau of Alcohol, Tobacco & Firearms, the Portland Police Bureau, Clackamas County Sheriff’s Office, Lane County Sheriff’s Office, Eugene Police Department, Roseburg Police Department, The Dalles Police Department, Milwaukie Police Department, Gresham Police Department, and the Springfield Police Department. The case was prosecuted by Assistant U.S. Attorney Frank R. Papagni, Jr.Drug Trafficker Sentenced to 168 Months in PrisonRead the Press Release
EUGENE, Ore. – Juan Jesus Chavez-Salazar, 26, of Lane County, Oregon, was sentenced today by Chief District Judge Ann Aiken to 168 months in prison for conspiracy to possess and distribute methamphetamine. Upon his release from prison, defendant will be on supervised release for five years.
Defendant and his associates were the target of a long-term federal and state drug investigation. Beginning in June 2010, law enforcement conducted multiple purchases of methamphetamine from an individual who was acting as a courier for defendant. A stash house in Springfield, Oregon was identified, and it appeared that the residence was being used to receive and store drugs. After significant investigation and surveillance, law enforcement identified vehicles which regularly appeared at the stash house and they attempted to locate and stop one of the vehicles.
On March 28, 2011, a vehicle driven by Rafael Soto-Mendoza was stopped near Roseburg Oregon. The vehicle, which had previously been observed at the stash house, was searched. Two pounds of methamphetamine and a loaded .45 caliber pistol were located in a hidden compartment in the dash.
Two days later, on March 30, 2011, Octavio Mendoza-Diaz and Marlo Gonzalez-Meza arrived at the stash house. They had not previously been seen during this investigation and law enforcement suspected that they were transporting methamphetamine to the stash house.
On March 31, 2011, Gonzalez-Meza was stopped after he left the stash house. His vehicle was searched and $20,000 was located in a hidden compartment. Mendoza-Diaz was stopped in a separate vehicle and a drug dog alerted to his dash board which showed signs of having been removed and replaced. Chavez-Salazar was driving a third vehicle with Uriel Hernandez-Naranjo as a passenger, and he rapidly drove away from officers when they tried to stop him. An agent searched the ground in the area where Chavez-Salazar had driven and located methamphetamine.
A search of the stash house revealed 263 grams of methamphetamine, $25,269 in currency, large amounts of wrapping material, a pistol and a shotgun with a sawed-off stock. The defendants were arrested and charged in federal court.
Several of Chavez-Salazar’s co-defendants have been convicted and sentenced as follows: Rafael Soto-Mendoza was convicted of possession with intent to distribute methamphetamine on May 22, 2012, and sentenced to 87 months in prison; Octavio Mendoza-Diaz was convicted of conspiracy to distribute methamphetamine and sentenced to 60 months in prison; and, Uriel Hernandez-Naranjo was convicted of conspiracy to distribute methamphetamine on October 16, 2012, and sentenced to 33 months in prison. Co-defendant Marlo Gonzalez-Meza has pled guilty to conspiracy to distribute methamphetamine and is set for sentencing.
This case was investigated by the Drug Enforcement Administration, Immigration and Customs Enforcement, the Interagency Narcotics Team and the Oregon State Police, and was prosecuted by Assistant U.S. Attorney Jeffrey Sweet.
Grants Pass Sex Offender Sentenced to 188 Months in Federal Prison for Possessing FirearmsRead the Press Release
MEDFORD, Ore. — U.S. District Judge Owen M. Panner today sentenced Norman Bruce Spencer, 59, of Grants Pass, Oregon to 188 months in federal prison for felon in possession of a firearm, followed by five years of supervised release.
In September 2010, the Josephine County Sheriff’s Office responded to a complaint that Spencer, an employee of the Whitehorse Country Store in Grants Pass, had sexually molested an 8-year old girl. The responding deputy determined that Spencer had multiple aliases and several felony convictions, including three prior convictions for child molestation, and that he had not registered as a sex offender in at least five years. Spencer was eventually arrested for sexual abuse of a minor and for failure to register as a sex offender. During the investigation, the deputies also discovered that Spencer possessed a Smith and Wesson .44 caliber revolver and a Norinco 12- gauge shotgun, which defendant kept at the store. An ATF agent traced the revolver and shotgun back to their original owners, who indicated they had sold the firearms to Spencer. He was eventually charged and convicted of sex abuse I in Josephine County Circuit Court and was sentenced to life in prison.
In imposing the federal sentence, Judge Panner found that Spencer was an armed career criminal. Under the federal Armed Career Criminal Act, any person who possesses a firearm or ammunition faces a 15-year mandatory minimum prison sentence if the person has three prior convictions for violent felonies or drug trafficking offenses. Spencer has previous felony convictions for attempted injury to a child (Idaho 2001); robbery in the second degree (California 2000); lewd acts upon a child under 14-years old (California 1993); aggravated assault in the third degree (Florida 1991), lewd acts upon a child under 14-years old (California 1986), and forgery (California 1982). In addition, Spencer was also convicted in Josephine County Circuit Court of three counts of felony sex abuse I of a minor, and was sentenced to life without parole. His federal sentence will run concurrent with the state sentence.
This case was investigated by the Josephine County Sheriff’s Office and the Bureau of Alcohol, Tobacco and Firearms. The prosecution was handled by Assistant U.S. Attorney Douglas W. Fong.
Portland Man Sentenced in Online Threat CaseRead the Press Release
The Creator of Malicious Websites is Sentenced to Federal PrisonPORTLAND, Ore. – The creator of websites that facilitated the posting of malicious and defamatory information about people was sentenced to federal prison today for making a threatening communication. United States District Judge Marco A. Hernandez sentenced Cyrus Andrew Sullivan to 24 months in federal prison for making a threatening communication to a victim of one of Sullivan’s websites. Sullivan, 30, resided in Portland, Oregon before his arrest in the case.
The case arose from an investigation involving websites created by Sullivan, which facilitated the posting of malicious and defamatory information about people. The people about whom such information had been posted were informed they could pay a fee to another website created by Sullivan to have some of the information removed. Sullivan’s conduct gained so much notoriety that he was the subject of a national television show hosted by Anderson Cooper in March of 2012.
One of Sullivan’s victims, a woman from Portland, Oregon, demanded that Sullivan remove false and malicious information about her on one of the websites. When Sullivan refused to remove the information unless she paid him $10,000, she fought back. She aggregated publicly available information about Sullivan and posted it online for other people, including other victims, to see. On June 4, 2012, when Sullivan realized what the victim had done, he threatened to kill her. On June 7, 2012, Sullivan was arrested by detectives with the Portland Police Bureau, and has been in custody since that time. He has prior convictions for criminal mischief in the second degree, assaulting a public safety officer, harassment, and recklessly endangering other persons.
The defendant was initially charged in Multnomah County Circuit Court with coercion, but that case was dismissed in favor of federal prosecution. On April 15, 2013, Sullivan pleaded guilty to making a threatening communication. In pleading guilty, he admitted that he sent an email message via the Internet containing a threat to kill another person, which a reasonable person would take as a serious expression of an intention to inflict bodily harm. His sentence was enhanced because he made multiple threats. His sentence was also enhanced because he engaged in obstructive conduct which involved threatening the victim and a judge during a release hearing, and threatening an investigator with the Oregon Consumer Protection Section of the Oregon Department of Justice.
Upon release from custody, Sullivan will serve a three year period of supervised release. During his supervised release he must abide by a number of conditions which include mental health counseling, and restricted access to computers and the Internet.
The case was investigated by the Portland Police Bureau, the Oregon Consumer Protection Section of the Oregon Department of Justice, and the Federal Bureau of Investigation, with the assistance of the Multnomah County District Attorney’s Office. The case was prosecuted by Assistant U. S. Attorney Sean B. Hoar.