Northern District of Texas
Press releases recorded for this federal judicial district.
Flower Mound Hospital to Pay $18.2 Million to Settle Federal and State False Claims Act Allegations Arising from Improper Inducements to Referring PhysiciansRead the Press Release
Flower Mound Hospital Partners LLC (Flower Mound Hospital), a partially physician-owned hospital in Flower Mound, Texas, has agreed to pay $18.2 million to resolve allegations that it violated the False Claims Act by knowingly submitting claims to the Medicare, Medicaid and TRICARE programs that resulted from violations of the Physician Self-Referral Law and the Anti‑Kickback Statute.
The Physician Self‑Referral Law, commonly known as the Stark Law, prohibits a hospital from billing for certain services referred by physicians with whom the hospital has a financial relationship, unless that relationship satisfies one of the law’s statutory or regulatory exceptions. The Anti‑Kickback Statute prohibits offering or paying remuneration to induce the referral of items or services covered by Medicare, Medicaid and other federally funded programs. Both the Stark Law and the Anti-Kickback Statute are intended to ensure that medical judgments are not compromised by improper financial inducements.
The settlement resolves allegations that Flower Mound Hospital violated the Stark Law and the Anti-Kickback Statute when it repurchased shares from physician-owners aged 63 or older and then resold those shares to younger physicians. The United States alleges that Flower Mound Hospital impermissibly took into account the volume or value of certain physicians’ referrals when it (1) selected the physicians to whom the shares would be resold and (2) determined the number of shares each physician would receive.
“Improper financial arrangements between hospitals and physicians can distort physician decision-making and drive up health care costs for everybody,” said Acting Assistant Attorney General Brian M. Boynton of the Justice Department’s Civil Division. “Patients deserve the independent and objective judgment of their health care professionals”
“The Stark Law and the Anti-Kickback Statute are designed to ensure that physician financial considerations can never influence patient care,” said U.S. Attorney Chad E. Meacham for the Northern District of Texas. “The system relies in part on whistleblowers who come forward to report financial improprieties at their workplaces. We urge anyone with concerns to reach out. The Justice Department is committed to enforcing laws that safeguard patient interests.”
“To deliver optimal patient care and protect the integrity of federal health care programs, providers should dutifully operate in accordance with the Stark Law and Anti-Kickback Statute,” said Special Agent in Charge Miranda Bennett of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG). “Providers are expected to deliver and bill for services based on their medical appropriateness and necessity, not their potential profitability. HHS-OIG and our partners are committed to enforcing these safeguards for HHS programs and beneficiaries.”
“Today’s outcome highlights the commitment of the Department of Defense Office of Inspector General, Defense Criminal Investigative Service (DCIS) and our law enforcement partners to protecting the integrity of our federal healthcare programs, including the Department of Defense’s healthcare program, TRICARE,” said Special Agent in Charge Michael C. Mentavlos of the DCIS Southwest Field Office. “DCIS will aggressively investigate companies and individuals that attempt to defraud taxpayer-funded healthcare programs, particularly those programs intended to care for our warfighters, their family members and our military retirees.”
Medicaid is funded jointly by the states and the federal government. The State of Texas paid for a portion of the Medicaid claims at issue and will receive a total of approximately $500,000 from the settlement with Flower Mound Hospital.
In connection with the settlement, Flower Mound Hospital entered into a five-year Corporate Integrity Agreement (CIA) with the HHS-OIG. The CIA requires, among other things, that Flower Mound Hospital maintain a compliance program and hire an Independent Review Organization to review arrangements entered into by or on behalf of the hospital. It also increases individual accountability by requiring compliance-related certifications from key executives.
The civil settlement includes the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act by Leslie Jennings, M.D., a physician-owner at Flower Mound Hospital. Under those provisions, a private party can file an action on behalf of the United States and receive a portion of any recovery. Dr. Jennings will receive approximately $3 million as his share of the recovery in this case. The qui tam case is captioned United States ex rel. Jennings v. Flower Mound Hospital Partners, LLC, et al., Civil Action No. 3-19-CV-02676-B (N.D. Tex.).
The resolution obtained in this matter was the result of a coordinated effort between the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section, and the U.S. Attorney’s Office for the Northern District of Texas with assistance from HHS-OIG and DCIS.
The investigation and resolution of this matter illustrates the government’s emphasis on combating healthcare fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse and mismanagement can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).
The matter was handled by Trial Attorney Jonathan Thrope and Assistant U.S. Attorney Kenneth Coffin.
The claims resolved by the settlement are allegations only and there has been no determination of liability.
UT Southwestern to Pay $4.5 Million to Resolve Alleged Controlled Substance Act Violations That Permitted Drug Diversion by StaffRead the Press Release
The University of Texas Southwestern Medical Center has agreed to pay $4.5 million to resolve allegations that its violations of the Controlled Substances Act allowed hospital staff to divert fentanyl and other dangerous drugs from the hospital, announced U.S. Attorney for the Northern District of Texas Chad E. Meacham.
The civil settlement – which also includes an extensive corrective action plan – is the culmination of a three-year-long joint DEA and U.S. Attorney’s Office investigation of UTSW’s handling of controlled substances, which began in December 2018 after two UTSW nurses overdosed on fentanyl and died at UTSW’s Clements University Hospital. This marks the largest settlement involving allegations of drug diversion at a hospital in the state of Texas and the second largest in the nation.
“For years prior to our investigation, U.T. Southwestern exhibited an almost shocking disregard for its obligations under the Controlled Substance Act, enabling some employees to steal and abuse prescription narcotics – including powerful synthetic opioids such as fentanyl. We felt that the serial compliance failures we uncovered warranted a multi-million-dollar penalty and a stringent corrective action plan,” said U.S. Attorney Chad Meacham. “In this settlement agreement, we’re doing everything in our power to mitigate the threat of opioid diversion by outlining protocols above and beyond what’s required by law.”
“U.T. Southwestern has an obligation to keep the highest standard of care for their patients. They also have an obligation of internal safeguards to keep controlled substances from being diverted,” said DEA Dallas Special Agent in Charge, Eduardo A. Chávez. “Opioids, like fentanyl, do not discriminate in its addictive properties when diverted or taken outside the direction and supervision of medical professionals. In this time of record overdose deaths, health care systems must be held to compliance with the Controlled Substances Act. This is not only their legal responsibility, but also a matter of public trust and public safety. DEA Dallas pledges that we will tirelessly work with our law enforcement and regulatory partners to ensure these rules and regulations are followed to combat the opioid epidemic.”
In settlement documents, the government contends that UTSW violated multiple provisions of the Controlled Substances Act (CSA) over a five-year period, and that as a result UTSW employees were able to divert controlled substances – including fentanyl — from UTSW’s Clements University Hospital and Zale Lipshy Pavilion.
As a DEA registrant, UTSW had certain recordkeeping and reporting obligations which included monitoring all controlled substance activity within its facilities and promptly notifying the DEA whenever a theft or significant loss occurred. The DEA determined that UTSW’s failure to meet certain of these recordkeeping and reporting obligations, along with the medical center’s failure to maintain effective controls to consistently detect and monitor suspected diversion, contributed to the health system’s overall failure to “guard against the theft and diversion of controlled substances.”
During its investigation, the DEA identified incidents in which registered nurses diverted controlled substances from UTSW over significant periods of time. Tragically, two such diversions resulted in fatal overdoses.
On Dec. 15, 2016, a UTSW nurse overdosed on fentanyl diverted from UTSW’s Clements University Hospital and was found deceased in a hospital bathroom. Roughly 16 months later, on April 16, 2018, another UTSW nurse overdosed on diverted opioids, including fentanyl, and was found deceased in a different Clements Hospital bathroom.
According to the settlement documents, although UTSW did report certain instances of theft and loss to the DEA, it did not do so in a timely manner. It also failed to properly document the dispensing and “wasting” of controlled substances – an essential safeguard against diversion – and made errors in forms documenting the ordering, receipt, and distribution of controlled substances – all violations of the CSA.
As part of the settlement, the medical center agreed to take significant steps to mitigate its diversion issues. These steps, outlined in a three-year memorandum of agreement between UTSW and the DEA, include:
- Hiring an external auditor to conduct unannounced audits of controlled substances dispensed via pyxis machines (with a particular focus on auditing fentanyl), with any resulting deficiencies or discrepancies resolved in thirty days, signed off on by the Pharmacist-in-Charge, and provided to DEA;
- Instituting a training program designed to help employees identify symptoms of addiction and signs of diversion, and to understand the threat diversion poses to patient care and professional reputation;
- Creating an employee compliance hotline that permits anonymous reporting of suspected drug diversion or drug impairment;
- Installing security cameras at pyxis machines and providing footage to the DEA upon request;
- Establishing a database of employees who have been discharged or resigned because of drug diversion, and disclosing relevant information to requesting health facilities conducting pre-employment inquiries; and
- Permitting DEA personnel to enter UTSW facilities at any time, without prior notice and without a warrant, to verify compliance.
Much of the conduct outlined in the settlement agreement is merely alleged; the agreement does not constitute an admission of liability by UTSW. However, UTSW does publicly acknowledge and admit that theft and significant loss of controlled substances occurred at Clements University Hospital and Zale Lipshy Pavilion; that UTSW failed to notify the DEA of these thefts and losses in a timely manner; and that some of UTSW’s policies and procedures were not consistent with the requirements of the CSA.
UTSW cooperated with the DEA’s investigation. After the agency launched its probe into the medical center’s compliance program in December 2018, UTSW began working with the DEA to address deficiencies and strengthen its controls for handling controlled substances. A number of changes were instituted well before the settlement agreement was signed.
A main objective of the CSA, 21 U.S.C. §§ 801–904, is controlling illegitimate traffic in controlled substances. To prevent the diversion of controlled substances, the CSA regulates persons, companies and other entities that manufacture, distribute, and dispense controlled substances. With more than 100,000 Americans dying last year from drug overdose, the Justice Department and the DEA are committed to using every resource available to prevent overdose deaths and hold accountable those responsible for the opioid crisis. The government’s rigorous investigation and resolution of this matter illustrates the government’s ongoing dedication to stem the prescription opioid crisis by ensuring that opioids are not diverted and abused.
This matter was investigated by the DEA’s Dallas Diversion Squad and Assistant U.S. Attorneys Andrew Robbins and Kenneth Coffin, with oversight from the Northern District of Texas First Assistant Scott Hogan.
A copy of the Settlement Agreement, which includes the Memorandum of Agreement, is attached below. Medical workers with concerns about prescription drug abuse or diversion can report it to the DEA here.
- Hiring an external auditor to conduct unannounced audits of controlled substances dispensed via pyxis machines (with a particular focus on auditing fentanyl), with any resulting deficiencies or discrepancies resolved in thirty days, signed off on by the Pharmacist-in-Charge, and provided to DEA;
San Angelo Man Receives Maximum Sentence in Child Sexual Exploitation CaseRead the Press Release
A San Angelo man has been sentenced to 30 years in federal prison for producing sexually explicit images of children – the statutory maximum sentence for that crime, announced U.S. Attorney for the Northern District of Texas Chad E. Meacham.
Justin Del Rio, 29, pleaded guilty in July to production of child pornography. He was sentenced Monday by U.S. District Judge James Wesley Hendrix.
Agents initiated the case in November 2020 after a Kik user calling himself “justback92” posted photographs of an underage female that appeared to have been taken with a hidden camera. An undercover agent messaged the user, who said that the photographs were of a 12-year-old relative.
Agents traced the username back to Mr. Del Rio and executed a search warrant at his residence. Inside, they seized a smartphone that contained 51 photographs and 12 videos of child pornography. The majority of the images and videos depicted a 12-year-old or a two-year-old. One of the images depicted the two-year-old girl performing sex acts on the defendant.
In plea papers, Mr. Del Rio admitted that he enticed or coerced both children to engage in sexually explicit conduct for the purpose of producing a visual depiction.
“HSI special agents are committed to putting away those who prey on the innocent,” said acting HSI Dallas Special Agent in Charge Christopher Miller. “Working alongside our law enforcement partners, we will do everything possible to protect the innocence of children by stopping predators responsible for this horrific abuse and helping to ensure they are brought to justice.”
Homeland Security Investigation’s Dallas Field Office, San Angelo Division investigated the case with the assistance of Homeland Security Investigation’s Detroit Field Office. Assistant U.S. Attorney Juanita Fielden prosecuted the case with the help of Assistant U.S. Attorney Stephen Rancourt.
Texas Vape Shop Owner Pleads Guilty to Unlawful Importation of Counterfeit Vaping ProductsRead the Press Release
A Texas vape shop owner pleaded guilty Tuesday to a felony charge relating to the importation of counterfeit vaping products, the Department of Justice announced. Muhammad Uzair Khalid (Uzair), 36, of Garland, Texas, pleaded guilty in the U.S. District Court for the Northern District of Texas to one count of trafficking in counterfeit goods, in violation of 18 U.S.C. § 2320(a)(1). Uzair admitted that, from October 2017 to November 2019, he intentionally and unlawfully imported counterfeit vaping-related items from China, including counterfeit vaping atomizers, labels, boxes and bags for vaping-related products.
Since August 2019, the Centers for Disease Control and Prevention (CDC), the Food and Drug Administration (FDA), state and local health departments and other clinical and public health partners have been investigating a 2019 to 2020 national outbreak of E-cigarette or Vaping Product Use-Associated Lung Injury (EVALI) that involved more than 1,000 reports of lung injuries — including some resulting in deaths — following the use of vaping products. As the public health investigation has continued, authorities have warned that the injuries may be linked to the use of vaping products containing Vitamin E acetate, as well as tetrahydrocannabinol (THC).
During a November 2019 search of a Texas vape shop owned by Uzair, Homeland Security Investigations (HSI) special agents seized counterfeit vaping-related items, as well as a machine used to fill vape cartridges, several items that tested positive for THC and an injector mechanism with an amber substance containing Vitamin E acetate.
In pleading guilty, Uzair admitted that he regularly communicated with Chinese manufacturers about the production and sale of counterfeit vaping products. In particular, Uzair consulted with Chinese manufacturers on methods to imitate the branding and logos of well-known American vape companies and imported and sold imitation vaping devices, labels and packaging. Uzair further admitted that he adopted and used those counterfeit marks to boost his sales. Uzair also sold numerous other counterfeit goods at his vape shop.
“The Department of Justice takes counterfeiting seriously,” said Acting Assistant Attorney General Brian M. Boynton of the Justice Department’s Civil Division. “We will continue working with our law enforcement partners to take these products off the market.”
“Our investigation made clear that we needed to take swift action against counterfeit vaping-related items,” said U.S. Attorney Chad E. Meacham for the Northern District of Texas. “The Justice Department will not tolerate the importation of black-market goods.”
“HSI is committed to enforcing the nation’s intellectual property rights laws to help safeguard American consumers said Acting Special Agent in Charge Christopher Miller of HSI Dallas. “We strive to protect legitimate U.S. businesses from financial harm caused by criminal organizations that profit from trafficking in counterfeit goods, including counterfeit vaping products.”
U.S. Magistrate Judge Renee Harris Toliver took the defendant’s guilty plea in federal court in Dallas.
Assistant U.S. Attorney Phelesa M. Guy of the U.S. Attorney’s Office for the Northern District of Texas and Trial Attorneys Speare Hodges and Patrick Runkle of the Department of Justice Civil Division’s Consumer Protection Branch are prosecuting the case. This matter was primarily investigated by the U.S. Department of Homeland Security.
Nigerian Email Scammers Sentenced to Combined 22+ Years in Federal PrisonRead the Press Release
Two Nigerian fraudsters arrested in DOJ’s Operation reWired have been sentenced to a combined 22 ½ years in federal prison, announced acting U.S. Attorney Chad E. Meacham.
Opeyemi Abidemi Adeoso, 46, pleaded guilty in June of 2020 to 17 counts of wire fraud, eight counts of money laundering, six counts of use of a false passport, one count of conspiracy to commit wire fraud, and one count of conspiracy to commit money laundering. He was sentenced Thursday by Chief U.S. District Judge Barbara M.G. Lynn to 151 months in federal prison and ordered to pay $9.3 million in restitution.
His coconspirator, Benjamin Adeleke Ifebajo, 47, pleaded guilty in March 2020 to seven counts of wire fraud, six counts of money laundering, four counts of use of a false passport, one count of conspiracy to commit wire fraud, and one count of conspiracy to commit money laundering. He was sentenced in June to 120 months in federal prison and ordered to pay $2.1 million in restitution.
“These defendants utilized multiple tactics to deceive unsuspecting businesses out of their money. By assuming fictitious identities they defrauded dozens, which risks business health and in turn, erodes overall economic health,” said FBI Dallas Special Agent in Charge Matthew J. DeSarno. “Along with our federal law enforcement partners, we will continue to hold fraudsters accountable for their crimes and the harm they cause.”
Agents initiated an investigation into the pair in August 2018, after receiving a report of a business email compromise scheme from a victim who had transferred more than $504,000 into a bank account registered to a “Daniel Sammy Campbell.” Using the address associated with the account, they traced it back to Mr. Adeoso. Agents then reviewed bank surveillance footage and traced funds to identify Mr. Adeoso and Mr. Ifebajo, Nigerian nationals in the U.S. on non-immigrant vias.
According to court documents, the defendants admitted they used fraudulent passports to open individual bank accounts under assumed names. Other members of the conspiracy then sent phishing emails – which spoofed the email addresses of victims’ employers, supervisors, and other known business contacts – to numerous individuals prompting them to initiate wire transfers from their personal bank accounts or from their employer’s bank accounts.
Once the money hit the defendants’ accounts, they withdrew the money, often tens of thousands of dollars at a time, in cash, via cashiers’ checks, or through electronic transfer, then deposited the funds into other alias accounts. Occasionally, they made purchases with the money.
Mr. Adeoso is believed to have used aliases including, but not limited to: Peter Kuffor, George Macharty, Nelson Johnson, Braheem Larke, Michael Albert, Michael Jaden Sean, Michael Jeff Brown, and Benjamin Zee Brown. Mr. Ifebajo is believed to have used aliases including, but not limited to: Joseph Eric Johnson, Jeremiah Alex Malcom, Tidwell Anthony Wilson, and Andrew James Williams.
A third co-conspirator, Temitope Aminat Folorunsho, 35, pleaded guilty in July 2020 to multiple counts of wire fraud, money laundering, use of false passport, and conspiracy and was sentenced in July 2021 to 37 months in federal prison and ordered to pay roughly $221,000 in restitution. Ms. Folorunsho used aliases Terri L. Brown, Michelle Angel Cole, Robyn L. Granell, and Deborah Kiki Philip.
The Federal Bureau of Investigation’s Dallas Field Office, the U.S. Department of State’s Diplomatic Security Service (DSS), and Homeland Security Investigations’ Dallas Field Office conducted the investigation. Assistant U.S. Attorney Tiffany H. Eggers prosecuted the case.
Church Employee Sentenced to 5 ½ Years for EmbezzlementRead the Press Release
A former church bookkeeper has been sentenced to five and a half years in federal prison for using church funds for personal enrichment, announced Acting U.S. Attorney for the Northern District of Texas Chad E. Meacham.
Lisa Dawn Stabeno, 52, pleaded guilty in May to two counts of bank fraud. She was sentenced Thursday by U.S. District Judge James Wesley Hendrix, who lamented her “brazen thefts” and ordered her to pay $450,000 in restitution.
According to court documents, Ms. Stabeno embezzled more than $450,000 from Church on the Rock, a non-denominational religious institution serving more than 3,400 parishioners in Lubbock.
In plea papers, Ms. Stabeno admitted that she began embezzling from the church in November 2013, just four months after assuming accounting responsibilities.
She began by using two credit cards – one assigned to a church employee and one assigned to a pastor – to pay personal expenses, including a car loan she co-financed with her daughter, medical and dental expenses, clothing, salon services, and restaurant meals. She also used the credit cards to purchase supplies for a bakery she co-owned with her daughters.
Beginning in 2014, Ms. Stabeno began making payments to herself with church credit cards using Square, a digital point-of-sale payment system which processes payments from credit cards run through a port connected to a cell phone.
In 2015, Ms. Stabeno opened two credit cards, one in her own name and one in her daughter’s name, which she used for personal expenses. She then paid off hundreds of thousands of dollars in credit card debt on the cards using money from church bank accounts, including its general operating account, and its “Dream Center” ministry account.
She also used the personal credit cards to make “purchases” and payroll at her bakery, then paid off the cards with money from the church accounts, thus boosting the bakery’s sales and profits and raising her daughters’ salaries.
The church discovered Ms. Stabeno’s fraud in the summer of 2018 and terminated her employment.
The Federal Bureau of Investigation’s Dallas Field Office, Lubbock Resident Agency, conducted the investigation. Assistant U.S. Attorney Ann Howey prosecuted the case.
Fort Worth Jury Convicts Whitt Drug TraffickerRead the Press Release
A longtime drug dealer has been convicted of drug and gun crimes, announced Acting U.S. Attorney for the Northern District of Texas Chad E. Meacham.
Following a two-day trial, a federal jury convicted Jerome Thomas Watkins, 44, of conspiracy to possess with intent to distribute cocaine, fentanyl, methamphetamine, and heroin; possession with intent to distribute fentanyl; and possession of a firearm by a felon.
According to evidence presented at trial, officers executed a search warrant at Mr. Watkins’ residence on April 26. Inside, they found more than 4,000 pills laced with fentanyl, methamphetamine, and heroin, along with seven firearms and approximately $17,000 in cash.
They also seized roughly 20 phones, 11 of which were linked to the defendant and contained evidence of his extensive drug trafficking activities.
Mr. Watkins had previously been convicted of two drug crimes: in 1996, he pleaded guilty to possession of intent to distribute crack cocaine and was sentenced to 72 months in federal prison, and in 2002, he pleaded guilty of possession with intent to distribute cocaine and was sentenced to 135 months in federal prison.
While the jury convicted Mr. Watkins of three crimes on Tuesday, they acquitted him of a fourth crime, possession of a firearm in furtherance of a drug trafficking crime.
Mr. Watkins now faces 25 years to life in federal prison. His sentencing has been set for March 18.
The Drug Enforcement Administration’s Dallas Field Division, the Federal Bureau of Investigation’s Dallas Field Office, Fort Worth Resident Agency, and the Parker County Sheriff’s Office conducted the investigation with the assistance of the and the Bureau of Alcohol, Tobacco, Firearms & Explosives’ Dallas Field Division and the Benbrook Police Department. Assistant U.S. Attorneys Laura Montes and Shawn Smith prosecuted the case. U.S. District Judge Reed C. O’Connor presided over the trial.
Mexican Meth Trafficker Sentenced to 15 Years in Federal PrisonRead the Press Release
A Mexican drug trafficker was sentenced today to 15 years in federal prison for drug crimes, announced Acting U.S. Attorney Chad E. Meacham.
Hector Burgos Saucedo, a 49-year-old citizen of Mexico in the U.S. unlawfully, pleaded guilty in March to possession with intent to distribute methamphetamine. He was sentenced Friday by U.S. District Judge Sam A. Lindsay.
According to his plea papers, Mr. Saucedo admitted that in October 2020, he delivered 10 kilograms of methamphetamine, packed inside a brown U-Haul box, to an individual at a meat market on Spring Valley Road in Dallas. He was arrested before he could collect his $65,000 fee.
Mr. Saucedo will face deportation proceedings after serving his sentence.
The Texas Department of Public Safety conducted the investigation with assistance from the Federal Bureau of Investigation’s Dallas Field Office. Assistant U.S. Attorney George Leal prosecuted the case.\
Dallas Real Estate Developer Sentenced to 8 Years in Prison for BriberyRead the Press Release
UPDATE: In an opinion handed down on Aug. 23, 2022, the Fifth Circuit Court of Appeals vacated the below conviction and remanded it for further proceedings.
A Dallas real estate developer was sentenced today to eight years in federal prison for bribing two former Dallas City Council members, Carolyn Davis and Dwaine Caraway, Acting U.S. Attorney for the Northern District of Texas Chad E. Meacham announced.
In June, a federal jury convicted Ruel Hamilton, the president of AmeriSouth Realty Group, of one count of conspiracy and two counts of bribery of an agent of a local government receiving federal funds. Mr. Hamilton was sentenced Tuesday by Chief U.S. District Judge Barbara M.G. Lynn, who also ordered him to pay a $150,000 fine.
“Even as he extoled his own generosity, Mr. Hamilton bought and paid for his influence at City Hall. He used money to ingratiate himself to lawmakers, subverting the democratic processes we hold dear,” said Acting U.S. Attorney Chad Meacham. “As my predecessors have said, the U.S. Attorney’s Office will not allow a kickback culture to fester at City Hall. Our prosecutors will not hesitate to pursue anyone involved in public corruption.”
“Today’s sentencing reaffirms the FBI’s commitment to holding those who pay bribes, accept bribes, and facilitate bribe payments fully accountable. Mr. Hamilton learned that there are consequences to circumventing a system that is in place to protect taxpayers,” said FBI Dallas Special Agent in Charge Matthew J. DeSarno. “Public corruption remains one of the FBI’s top criminal priorities and we will continue working with our law enforcement partners to pursue anyone involved in this type of scheme.”
According to evidence presented at trial, from 2013 to 2015, Mr. Hamilton shelled out tens of thousands of dollars in bribes to Carolyn Davis, who was then serving as chair of the city’s Housing Committee.
In return, Ms. Davis – who pleaded guilty to her role in the scheme prior to her death in 2019 – supported Mr. Hamilton’s Royal Crest housing project, voting to authorize a real estate development loan and resolutions supporting an award of a 9 percent tax credit for Royal Crest. Ms. Davis supported the Royal Crest housing project, despite the fact that it failed to meet the city’s enumerated multifamily housing priorities.
In an attempt to disguise the bribe payments, Mr. Hamilton funneled payments to Ms. Davis through a not-for-profit intermediary run by Jeremy “Jay” Scroggins. Mr. Scroggins – who also previously pleaded guilty – testified at trial that he cashed thousands of dollars’ worth of checks, solicited by Ms. Davis and made out to him personally or to his not-for-profit, “Hip Hop Government. Mr. Scroggins testified that he used $15,000 for a Freedom Ride Tour in November 2014, and cashed the remainder of the checks, turning most of the money over to Ms. Davis. The councilwoman told Mr. Scroggins payments would not pose a problem, because people “don’t go to prison for $2,000,” according to a recorded phone call played in court.
Evidence showed that Mr. Hamilton also paid Ms. Davis directly. Over the course of the conspiracy, Mr. Hamilton forked over cash, and on at least one occasion he invited her to accompany him to the bank to make a cash withdrawal. At Ms. Davis’ urging, Mr. Hamilton also directed campaign contributions to a political protégé. Further, Mr. Hamilton promised Ms. Davis a job once she was off the counsel. Evidence showed that Mr. Hamilton paid Ms. Davis in excess of $145,000, once she left the council.
At one point, Mr. Hamilton became concerned that a former city council member was going through their financial dealings with a “fine tooth comb,” telling Ms. Davis, “she scares me.” Even so, he continued to bribe Ms. Davis.
Three years later, in 2018, Mr. Hamilton paid a $7,000 bribe to councilman Dwaine Caraway, who Mr. Hamilton believed could persuade the mayor to put a paid sick leave referendum on the city council’s agenda. Mr. Hamilton hoped the referendum would increase turnout in the polls, advantaging his preferred political candidates.
Video admitted into evidence at trial shows the pair meeting at Mr. Caraway’s office on August 3, 2018:
“I want to do that, so… what can I do for you, right now, today?” Mr. Hamilton asks.
“You can answer that bill I just threw out there for about 62 [$6,200] today,” Mr. Caraway responds.
“Okay,” Mr. Hamilton says. “Can you follow through with the mayor?”
The pair then discuss what Mr. Hamilton should put in the memo line “for posterity” so that “if somebody ever asks, I can come up with a reference.”
The defendant was instructed to report to the Bureau of Prisons in February.
The Federal Bureau of Investigation’s Dallas Field Office conducted the investigation with the assistance of Internal Revenue Service - Criminal Investigations. Assistant U.S. Attorneys Tiffany H. Eggers, Joe A. Magliolo, Andrew Wirmani (fmr.), and Marcus Busch prosecuted the case with support from their appellate liaison, Assistant U.S. Attorney Stephen S. Gilstrap.
Ukrainian Arrested and Charged with Ransomware Attack on KaseyaRead the Press Release
The Justice Department announced today recent actions taken against two foreign nationals charged with deploying Sodinokibi/REvil ransomware to attack businesses and government entities in the United States, amnounced Attorney General Merrick Garland, Deputy Attorney General Lisa Monaco, and Acting U.S. Attorney Chad E. Meacham.
An indictment unsealed today charges Yaroslav Vasinskyi, 22, a Ukrainian national, with conducting ransomware attacks against multiple victims, including the July 2021 attack against Kaseya, a multi-national information technology software company.
The department also announced today the seizure of $6.1 million in funds traceable to alleged ransom payments received by Yevgeniy Polyanin, 28, a Russian national, who is also charged with conducting Sodinokibi/REvil ransomware attacks against multiple victims, including businesses and government entities in Texas on or about Aug. 16, 2019.
According to the indictments, Vasinskyi and Polyanin accessed the internal computer networks of several victim companies and deployed Sodinokibi/REvil ransomware to encrypt the data on the computers of victim companies.
“Cybercrime is a serious threat to our country: to our personal safety, to the health of our economy, and to our national security,” said Attorney General Garland. “Our message today is clear. The United States, together with our allies, will do everything in our power to identify the perpetrators of ransomware attacks, to bring them to justice, and to recover the funds they have stolen from their victims.”
“Our message to ransomware criminals is clear: If you target victims here, we will target you,” said Deputy Attorney General Monaco. “The Sodinokibi/REvil ransomware group attacks companies and critical infrastructures around the world, and today’s announcements showed how we will fight back. In another success for the department’s recently launched Ransomware and Digital Extortion Task Force, criminals now know we will take away your profits, your ability to travel, and – ultimately – your freedom. Together with our partners at home and abroad, the Department will continue to dismantle ransomware groups and disrupt the cybercriminal ecosystem that allows ransomware to exist and to threaten all of us.”
“Ransomware can cripple a business in a matter of minutes. These two defendants deployed some of the internet’s most virulent code, authored by REvil, to hijack victim computers,” said Acting U.S. Attorney Chad E. Meacham for the Northern District of Texas. “In a matter of months, the Justice Department identified the perpetrators, effected an arrest, and seized a significant sum of money. The Department will delve into the darkest corners of the internet and the furthest reaches of the globe to track down cyber criminals.”
“The arrest of Yaroslav Vasinskyi, the charges against Yevgeniy Polyanin and seizure of $6.1 million of his assets, and the arrests of two other Sodinokibi/REvil actors in Romania are the culmination of close collaboration with our international, U.S. government and especially our private sector partners,” said FBI Director Christopher Wray. “The FBI has worked creatively and relentlessly to counter the criminal hackers behind Sodinokibi/REvil. Ransomware groups like them pose a serious, unacceptable threat to our safety and our economic well-being. We will continue to broadly target their actors and facilitators, their infrastructure, and their money, wherever in the world those might be.”
According to court documents, Vasinskyi was allegedly responsible for the July 2 ransomware attack against Kaseya. In the alleged attack against Kaseya, Vasinskyi caused the deployment of malicious Sodinokibi/REvil code throughout a Kaseya product that caused the Kaseya production functionality to deploy REvil ransomware to “endpoints” on Kaseya customer networks. After the remote access to Kaseya endpoints was established, the ransomware was executed on those computers, which resulted in the encryption of data on computers of organizations around the world that used Kaseya software.
Through the deployment of Sodinokibi/REvil ransomware, the defendants allegedly left electronic notes in the form of a text file on the victims’ computers. The notes included a web address leading to an open-source privacy network known as Tor, as well as the link to a publicly accessible website address the victims could visit to recover their files. Upon visiting either website, victims were given a ransom demand and provided a virtual currency address to use to pay the ransom. If a victim paid the ransom amount, the defendants provided the decryption key, and the victims then were able to access their files. If a victim did not pay the ransom, the defendants typically posted the victims’ stolen data or claimed they sold the stolen data to third parties, and victims were unable to access their files.
Vasinskyi and Polyanin are charged in separate indictments with conspiracy to commit fraud and related activity in connection with computers, substantive counts of damage to protected computers, and conspiracy to commit money laundering. If convicted of all counts, each faces a maximum penalty of 115 and 145 years in prison, respectively.
The $6.1 million seized from Polyanin is alleged to be traceable to ransomware attacks and money laundering committed by Polyanin through his use of Sodinokibi/REvil ransomware. The seizure warrant was issued out of the Northern District of Texas. Polyanin is believed to be abroad.
On Oct. 8, Vasinskyi was taken into custody in Poland where he remains held by authorities pending proceedings in connection with his requested extradition to the United States, pursuant to the extradition treaty between the United States and the Republic of Poland. In parallel with the arrest, interviews and searches were carried out in multiple countries, and would not have been possible without the rapid response of the National Police of Ukraine and the Prosecutor General’s Office of Ukraine.
An indictment is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
The FBI’s Dallas and Jackson Field Offices are leading the investigation. Substantial assistance was provided by the Justice Department’s Office of International Affairs and the National Security Division’s Counterintelligence and Export Control Section.
Assistant U.S. Attorney Tiffany H. Eggers of the U.S. Attorney’s Office for the Northern District of Texas and Senior Counsel Byron M. Jones from the Justice Department’s Computer Crime and Intellectual Property Section are prosecuting the case.
The U.S. Attorney’s Office for the Northern District of Texas, the FBI’s Dallas and Jackson Field Offices, and the Criminal Division’s Computer Crime and Intellectual Property Section conducted the operation in close cooperation with Europol and Eurojust, who were an integral part of coordination. Investigators and prosecutors from several jurisdictions, including: Romania's National Police and the Directorate for Investigating Organised Crime and Terrorism; Canada’s Royal Canadian Mounted Police; France’s Court of Paris and BL2C (anti-cybercrime unit police); Dutch National Police; Poland’s National Prosecutor’s Office, Border Guard, Internal Security Agency, and Ministry of Justice; and the governments of Norway and Australia provided valuable assistance.
The U.S. Department of the Treasury Financial Crimes Enforcement Network (FinCEN), Department of Homeland Security's Cybersecurity and Infrastructure Security Agency (CISA), Germany’s Public Prosecutor’s Office Stuttgart and State Office of Criminal Investigation of Baden-Wuerttemberg; Switzerland’s Public Prosecutor’s Office II of the Canton of Zürich and Cantonal Police Zürich; United Kingdom’s National Crime Agency; U.S. Secret Service; Texas Department of Information Resources; BitDefender; McAfee; and Microsoft also provided significant assistance.
This case is part of the Department of Justice’s Ransomware and Digital Extortion Task Force, which was created to combat the growing number of ransomware and digital extortion attacks. As part of the task force, the Criminal Division, working with the U.S. Attorneys’ Offices, prioritizes the disruption, investigation, and prosecution of ransomware and digital extortion activity by tracking and dismantling the development and deployment of malware, identifying the cybercriminals responsible, and holding those individuals accountable for their crimes. The department, through the task force, also strategically targets the ransomware criminal ecosystem as a whole and collaborates with domestic and foreign government agencies as well as private sector partners to combat this significant criminal threat.
For more information about the Ransomware and Digital Extortion Task Force, read the Deputy Attorney General’s recent guidance memo on related investigations and cases. For more resources on ransomware prevention and response, visit StopRansomware.gov.
Ukrainian Arrested and Charged with Ransomware Attack on KaseyaRead the Press Release
The Justice Department announced today recent actions taken against two foreign nationals charged with deploying Sodinokibi/REvil ransomware to attack businesses and government entities in the United States.
An indictment unsealed today charges Yaroslav Vasinskyi, 22, a Ukrainian national, with conducting ransomware attacks against multiple victims, including the July 2021 attack against Kaseya, a multi-national information technology software company.
The department also announced today the seizure of $6.1 million in funds traceable to alleged ransom payments received by Yevgeniy Polyanin, 28, a Russian national, who is also charged with conducting Sodinokibi/REvil ransomware attacks against multiple victims, including businesses and government entities in Texas on or about Aug. 16, 2019.
According to the indictments, Vasinskyi and Polyanin accessed the internal computer networks of several victim companies and deployed Sodinokibi/REvil ransomware to encrypt the data on the computers of victim companies.
“Cybercrime is a serious threat to our country: to our personal safety, to the health of our economy, and to our national security,” said Attorney General Garland. “Our message today is clear. The United States, together with our allies, will do everything in our power to identify the perpetrators of ransomware attacks, to bring them to justice, and to recover the funds they have stolen from their victims.”
“Our message to ransomware criminals is clear: If you target victims here, we will target you,” said Deputy Attorney General Monaco. “The Sodinokibi/REvil ransomware group attacks companies and critical infrastructures around the world, and today’s announcements showed how we will fight back. In another success for the department’s recently launched Ransomware and Digital Extortion Task Force, criminals now know we will take away your profits, your ability to travel, and – ultimately – your freedom. Together with our partners at home and abroad, the Department will continue to dismantle ransomware groups and disrupt the cybercriminal ecosystem that allows ransomware to exist and to threaten all of us.”
“The arrest of Yaroslav Vasinskyi, the charges against Yevgeniy Polyanin and seizure of $6.1 million of his assets, and the arrests of two other Sodinokibi/REvil actors in Romania are the culmination of close collaboration with our international, U.S. government and especially our private sector partners,” said FBI Director Christopher Wray. “The FBI has worked creatively and relentlessly to counter the criminal hackers behind Sodinokibi/REvil. Ransomware groups like them pose a serious, unacceptable threat to our safety and our economic well-being. We will continue to broadly target their actors and facilitators, their infrastructure, and their money, wherever in the world those might be.”
“Ransomware can cripple a business in a matter of minutes. These two defendants deployed some of the internet’s most virulent code, authored by REvil, to hijack victim computers,” said Acting U.S. Attorney Chad E. Meacham for the Northern District of Texas. “In a matter of months, the Justice Department identified the perpetrators, effected an arrest, and seized a significant sum of money. The Department will delve into the darkest corners of the internet and the furthest reaches of the globe to track down cyber criminals.”
According to court documents, Vasinskyi was allegedly responsible for the July 2 ransomware attack against Kaseya. In the alleged attack against Kaseya, Vasinskyi caused the deployment of malicious Sodinokibi/REvil code throughout a Kaseya product that caused the Kaseya production functionality to deploy REvil ransomware to “endpoints” on Kaseya customer networks. After the remote access to Kaseya endpoints was established, the ransomware was executed on those computers, which resulted in the encryption of data on computers of organizations around the world that used Kaseya software.
Through the deployment of Sodinokibi/REvil ransomware, the defendants allegedly left electronic notes in the form of a text file on the victims’ computers. The notes included a web address leading to an open-source privacy network known as Tor, as well as the link to a publicly accessible website address the victims could visit to recover their files. Upon visiting either website, victims were given a ransom demand and provided a virtual currency address to use to pay the ransom. If a victim paid the ransom amount, the defendants provided the decryption key, and the victims then were able to access their files. If a victim did not pay the ransom, the defendants typically posted the victims’ stolen data or claimed they sold the stolen data to third parties, and victims were unable to access their files.
Vasinskyi and Polyanin are charged in separate indictments with conspiracy to commit fraud and related activity in connection with computers, substantive counts of damage to protected computers, and conspiracy to commit money laundering. If convicted of all counts, each faces a maximum penalty of 115 and 145 years in prison, respectively.
The $6.1 million seized from Polyanin is alleged to be traceable to ransomware attacks and money laundering committed by Polyanin through his use of Sodinokibi/REvil ransomware. The seizure warrant was issued out of the Northern District of Texas. Polyanin is believed to be abroad.
On Oct. 8, Vasinskyi was taken into custody in Poland where he remains held by authorities pending proceedings in connection with his requested extradition to the United States, pursuant to the extradition treaty between the United States and the Republic of Poland. In parallel with the arrest, interviews and searches were carried out in multiple countries, and would not have been possible without the rapid response of the National Police of Ukraine and the Prosecutor General’s Office of Ukraine.
The FBI’s Dallas and Jackson Field Offices are leading the investigation. Substantial assistance was provided by the Justice Department’s Office of International Affairs and the National Security Division’s Counterintelligence and Export Control Section.
Assistant U.S. Attorney Tiffany H. Eggers of the U.S. Attorney’s Office for the Northern District of Texas and Senior Counsel Byron M. Jones from the Justice Department’s Computer Crime and Intellectual Property Section are prosecuting the case.
The U.S. Attorney’s Office for the Northern District of Texas, the FBI’s Dallas and Jackson Field Offices, and the Criminal Division’s Computer Crime and Intellectual Property Section conducted the operation in close cooperation with Europol and Eurojust, who were an integral part of coordination. Investigators and prosecutors from several jurisdictions, including: Romania's National Police and the Directorate for Investigating Organised Crime and Terrorism; Canada’s Royal Canadian Mounted Police; France’s Court of Paris and BL2C (anti-cybercrime unit police); Dutch National Police; Poland’s National Prosecutor’s Office, Border Guard, Internal Security Agency, and Ministry of Justice; and the governments of Norway and Australia provided valuable assistance.
The U.S. Department of the Treasury Financial Crimes Enforcement Network (FinCEN), Department of Homeland Security's Cybersecurity and Infrastructure Security Agency (CISA), Germany’s Public Prosecutor’s Office Stuttgart and State Office of Criminal Investigation of Baden-Wuerttemberg; Switzerland’s Public Prosecutor’s Office II of the Canton of Zürich and Cantonal Police Zürich; United Kingdom’s National Crime Agency; U.S. Secret Service; Texas Department of Information Resources; BitDefender; McAfee; and Microsoft also provided significant assistance.
This case is part of the Department of Justice’s Ransomware and Digital Extortion Task Force, which was created to combat the growing number of ransomware and digital extortion attacks. As part of the task force, the Criminal Division, working with the U.S. Attorneys’ Offices, prioritizes the disruption, investigation, and prosecution of ransomware and digital extortion activity by tracking and dismantling the development and deployment of malware, identifying the cybercriminals responsible, and holding those individuals accountable for their crimes. The department, through the task force, also strategically targets the ransomware criminal ecosystem as a whole and collaborates with domestic and foreign government agencies as well as private sector partners to combat this significant criminal threat.
For more information about the Ransomware and Digital Extortion Task Force, read the Deputy Attorney General’s recent guidance memo on related investigations and cases. For more resources on ransomware prevention and response, visit StopRansomware.gov.
An indictment is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Nightclub Magnate Convicted of Drug CrimesRead the Press Release
A DFW nightclub magnate and two of his managers have been convicted of operating an empire of clubs in which drugs were sold openly, announced Acting U.S. Attorney for the Northern District of Texas Chad E. Meacham.
Following six weeks of trial and four days of deliberation, a federal jury on Friday found OK Corral/ Far West owner Alfredo Hinojosa, general manager Miguel Casas, and noted promoter Martin Salvador Rodriguez guilty of managing drug premises, conspiracy to manage drug premises, and conspiracy to possess with intent to distribute cocaine. The jury also convicted a lower-level bathroom dealer, Cesar Mendez, of possession with intent to distribute and conspiracy to possess with intent to distribute.
The overall case included more than 30 defendants, all of whom have been convicted, including former Dallas Police Officers Eddie Villarreal and Craig Woods.
According to evidence presented at trial, Mr. Hinojosa, Mr. Casas, and Mr. Rodriguez ran a conglomeration of businesses that brought in revenue of more than $107 million over a four-year period.
The defendants allowed cocaine to be sold in the bathrooms of their nightclubs on a daily basis, because such drug sales attracted customers and provided them with a competitive edge over rival clubs. These drugs sales increased revenue at the clubs between $9 million and $12 million.
“These defendants made millions by explicitly allowing cocaine trafficking in nightclubs across DFW. They assumed that permitting bathroom drug deals would be their ‘competitive edge.’ Instead, it was their downfall,” said Acting U.S. Attorney Chad Meacham. “The United States Attorney’s Office and the FBI will not permit nightclub owners – or anyone else – to willfully turn a blind eye to drug trafficking happening on their premises.”
“This conspiracy was designed to elevate the status of the defendants at a very high cost to our society,” said FBI Dallas Special Agent in Charge Matthew J. DeSarno. “Their extensive plans to conceal nightly high-volume drug sales included the recruitment of law enforcement officers as employees. We will continue to work with our local, state, and federal partners to protect the integrity of the profession, uphold the public’s trust, and prevent access to illicit drugs in our greater Dallas-Fort Worth communities.”
At trial, prosecutors presented evidence of 17 controlled drug buys that occurred at the OK Corral Dallas, OK Corral Fort Worth, and Far West nightclubs between 2013 and 2016. Half a dozen informants, all under the supervision of FBI agents, bought bag after bag of cocaine from traffickers operating out of club bathrooms.
Multiple security guards who worked inside the clubs testified at trial that Mr. Hinojosa, Mr. Casas, and Mr. Rodriguez knew the drug trafficking was occurring and openly ordered security personnel to allow it. Drug traffickers, previously charged and convicted in the case, also testified that they were allowed to operate freely.
At trial, FBI agents explained that in 2015, they installed court-ordered microphones and a camera in Mr. Hinojosa’s office, unbeknownst to the defendants. Agent also sought and obtained more a dozen wiretaps in the case. During these recorded calls and intercepted communications, Mr. Hinojosa could be heard saying, “we can’t really clean it because then we lose business,” and “we need cocaine, man.”
Mr. Hinojosa, Mr. Casas, and Mr. Rodriguez eventually confessed to knowing that the drug sales were ongoing and allowed. Prosecutors played Mr. Hinojosa’s 45-minute recorded interview for the jury. Other agents recounted statements made by Mr. Casas and Mr. Rodriguez.
According to one agent’s notes, Mr. Casas told a task force officer that when club management realized the business was “tanking,” they told bouncers to allow the drug sales to resume and leave drug dealers alone as long as they were “discreet.”
Mr. Hinojosa, Mr. Casas, and Mr. Rodriguez now face a mandatory minimum sentence of 10 years and up to life in in federal prison. Mr. Mendez also faces 10 year mandatory minimum. Sentencing dates have not been set yet.
The Federal Bureau of Investigation’s Dallas Field Office and the Dallas Police Department conducted the investigation, which was dubbed “Operation Closing Time.” The Texas Alcoholic Beverage Commission's Enforcement Division provided valuable assistance. Assistant U.S. Attorneys P.J. Meitl, Nicole Dana, and Melanie Smith prosecuted the case. U.S. District Judge Sam A. Lindsay presided over trial.
Tax Preparer Sentenced for Filing Fraudulent Client ReturnsRead the Press Release
A tax return preparer who filed fraudulent client tax returns was sentenced yesterday to almost two years in federal prison, announced Acting U.S. Attorney for the Northern District of Texas Chad E. Meacham.
Carlos Hinojosa, 37, Mario Jose Sanchez, 48, and Magda Lopez-Sanchez, 51, pleaded guilty this summer to assisting in the preparation of false and fraudulent tax returns. Mr. Hinojosa was sentenced Wednesday by U.S. District Judge Ed Kinkeade to 22 months in federal prison. Mr. Sanchez and Ms. Lopez-Sanchez were each sentenced to three years’ probation. Judge Kinkeade ordered each of the defendants to pay more than $6 million in restitution, joint and severally, to the IRS.
From 2012 through 2016, Mr. Hinojosa, Mr. Sanchez, and Ms. Lopez-Sanchez worked as tax return preparers at Miguelitos Tax Service, a tax preparation service located in Carrolton, Texas.
According to plea papers, while at Miguelitos, the defendants prepared tax returns that included, among other false statements, false tuition expenses to make the clients appear eligible for education credits that they knew the clients were not eligible to receive. Mr. Hinojosa admitted that he generally included these false expenses on his clients' tax returns without the clients’ knowledge.
To conceal the falsity of the returns, the defendants attempted to have clients sign forms justifying the expenses. Mr. Hinojosa admitted he did not explain the forms to clients and most had no idea what they were signing. He further admitted that he charged clients cash for preparing their returns – sometimes as much as $2,000 – without informing them that Miguelitos would also deduct a tax preparation fee from their tax refunds.
Mr. Hinojosa, Mr. Sanchez, and Ms. Lopez-Sanchez agreed their actions, along with the conduct of coconspirators at Miguelitos, resulted in a tax loss to the Internal Revenue Service of $7,306,191 for tax years 2010 through 2016.
IRS Criminal Investigation conducted the investigation. Assistant U.S. Attorneys Douglas Brasher and Andrew Wirmani (fmr.) prosecuted the case.
Motorcycle Club President Involved in Shootout Sentenced to 7 Years for Gun CrimeRead the Press Release
The president of a motorcycle club involved in a shootout at a Lubbock bar was sentenced today to seven years in federal prison for a firearm offense, announced Acting U.S. Attorney Chad E. Meacham.
Danny Lee Gollihugh, the 42-year-old president of the local chapter of the Kinfolk Outlaw Motorcycle Club, pleaded guilty in July to possession of an unregistered firearm. He was sentenced Thursday by U.S. District Judge James Wesley Hendrix.
In plea papers, Mr. Gollihugh admitted that he built a short-barrel rifle using an Aero Precision lower receiver, a Magpul carbine stock, and the “shortest barrel that Sharp Shooters had.” A records check revealed that the weapon was not registered to Mr. Gollihugh in the National Firearms and Transfer Records, which is required by the National Firearms Act.
At his sentencing hearing, prosecutors introduced evidence that proved Mr. Gollihugh was involved in a shootout against members of the Bandidos Outlaw Motorcycle Club at the 50th Street Caboose restaurant and bar in Lubbock on November 12, 2020.
Surveillance video admitted into evidence during the hearing shows several members of the Bandidos approaching the defendant and his associates at a pool table. Mr. Gollihugh, clad in a leather vest and backwards baseball cap, then whipped out a pistol and pulled the slide back, while another Kinfolk Outlaw member fired a round in the Bandidos direction. The defendant later admitted that he’d attempted to fire the handgun, but it jammed.
Agents discovered the unregistered short-barrel rifle, along with the pistol used in the shooting, during Mr. Gollihugh’s arrest two days later. He is currently facing pending state charges for engaging in organized criminal activity.
The Bureau of Alcohol, Tobacco, Firearms & Explosives’ Dallas Field Division, Lubbock Resident Agency, the Lubbock Police Department, and the United States Marshals Service conducted the investigation. Assistant U.S Attorneys Ryan Redd and Matt McLeod prosecuted the case.
Garland Man Sentence to 13 Years for ‘Mystery Shopper’ Mail FraudRead the Press Release
A Garland man has been sentenced to 13 years in federal prison for his role in a so-called “mystery shopper” mail fraud, announced Acting U.S. Attorney for the Northern District of Texas Chad E. Meacham.
John Lewis Davis, II, 45, of Garland, pleaded guilty in April to one count of conspiracy to commit mail fraud and two counts of mail fraud. He was sentenced Monday by U.S. District Judge Sam A. Lindsay.
According to court documents, between August 2014 and January 2018, the defendant conspired with others to send counterfeit U.S. Postal money orders and checks to unwitting individuals, who would then cash the money orders at banks and other financial institutions and send a portion of the money back to the defendant and his co-conspirators.
As part of the fraud, the defendant and his co-conspirators caused two packages from Nigeria to be sent to the defendant. Both packages were intercepted by law enforcement prior to reaching the recipients. Upon opening the packages, law enforcement found approximately 3,400 counterfeit money orders between the two parcels.
Trial Attorney Matthew P. Mattis of the Justice Department’s Organized Crime and Gang Section and Assistant U.S. Attorneys Nick Bunch (fmr.) and Katherine Miller of the Northern District of Texas prosecuted the case.
Postal Contractors Charged Following Seizure of 8,000+ Pieces of MailRead the Press Release
Two Lubbock postal contractors have been charged with possession of stolen mail, announced Acting U.S. Attorney Chad E. Meacham.
The investigation – which culminated in the recovery of more than 8,000 pieces of mail worth more than $4 million – marks the largest ever seizure of stolen mail in Northern District of Texas history.
Joe Roy Rivas, III, 22, and Jessica Lynn Solomon, 35, were indicted on Oct. 13 on one count of conspiracy to possess stolen mail and eight counts of possession of stolen mail. Ms. Solomon was arrested in Slaton, Texas the following day and made her initial appearance in federal court on Oct. 15; Mr. Rivas was arrested in Slaton on Oct. 27 and made his initial appearance in federal court yesterday afternoon.
According to the indictment, Mr. Rivas and Ms. Solomon were former co-workers at Cargo Force, Inc., a company that contracts with the United States Postal Service to load mail into and out of air containers destined for flights to and from the Lubbock International Airport.
During their shifts, the defendants allegedly sifted through mail looking for items containing cash, gift cards, checks, and money orders. They allegedly stole that mail and stashed it in 55-gallon trash bags at their residences. Among the checks they stole were a $25,728 check made payable to a telecom co-op, a $15,000 check to a consulting group, and a $241,1863 check to a facilities management and food services company.
An indictment is merely an allegation of criminal conduct, not evidence. Like all defendants, Mr. Rivas and Ms. Solomon are presumed innocent until proven guilty in a court of law.
If convicted on all counts, they face up to 45 years in prison.
The U.S. Postal Inspection Service and Slaton Police Department conducted the investigation. Assistant U.S. Attorney Ann Howey is prosecuting the case.
Man Who Claimed He Gave Guns to Children Sentenced to 10 Years in PrisonRead the Press Release
An Amarillo man who said he gave guns to children has been sentenced to 10 years in federal prison for a firearm crime, announced Acting U.S. Attorney Chad E. Meacham.
Roaryrious “Buddy” Perkins, 31, was convicted in June of being a felon in possession of a firearm. He was sentenced Thursday by U.S. District Judge Matthew J. Kacsmaryk.
According to court documents, in September 2018, law enforcement officers found a Smith & Wesson .45 caliber handgun in the wall of a hotel room occupied by Mr. Perkins and two associates. A National Integrated Ballistic Information Network (NIBIN) examination of the gun revealed that it had been used in four different drive-by shootings in Amarillo. A lab test of the weapon indicated a 1 in 1.2 trillion chance that one of the four DNA profiles found on the gun belonged to Mr. Perkins.
Four months later, in January 2019, law enforcement arrested Mr. Perkins at the scene of a trespass in progress. Inside the home, they found a Springfield 9mm pistol. During a subsequent interview with police, Mr. Perkins admitted that he’d purchased the Springfield pistol, claiming he’d had a “white dude” buy the gun for him in order to give it to his girlfriend for protection.
Mr. Perkins – who was previously convicted of robbery and possession of a controlled substance – admitted that he handled the pistol in spite of federal laws that prohibit convicted felons to possess firearms.
At his sentencing hearing, prosecutors read from a statement Mr. Perkins made to law enforcement in September 2018, in which he claimed he provided firearms and money to “young kids” to commit shootings on his behalf. He even admitted he offered the children money to shoot at a particular individual.
“They got no momma, no house, no money. You give them a $1,000 and a gun – what do you think they are going to do?” Mr. Perkins told law enforcement.
It is unclear what, if anything, the minors did with the weapons Mr. Perkins said he provided to them.
The Federal Bureau of Investigations’ Dallas Field Office, the United States Marshal Service, and the Amarillo Police Department conducted the investigation with the assistance of the Bureau of Alcohol, Tobacco, Firearms & Explosives. Assistant U.S. Attorney Anna Marie Bell prosecuted the case.
Convicted Sex Offender Sentenced to Life in Prison for Abusing Teenage GirlRead the Press Release
A Lubbock sex offender has been sentenced to life in federal prison for abusing a 15-year-old girl, announced Acting U.S. Attorney for the Northern District of Texas Chad E. Meacham.
Jason Lee Guthrey, who was already a registered sex offender at the time of the crime, pleaded guilty in June to enticement of a minor. He was sentenced Thursday by U.S. District Judge James Wesley Hendrix.
“Today’s life sentence is a commitment from law enforcement that we will not allow the defendant to intimidate, coerce or assault a child again,” said Dallas FBI Special Agent in Charge Matthew J. DeSarno. “I am grateful for the work of the investigative team on this specific case, and their continued pursuit for justice as they work to protect the most vulnerable members of our community.”
According to plea papers, a truck driver discovered the young girl sitting on the side of the road in freezing weather on Nov. 30, 2020. Jane Doe later told law enforcement she’d left her home to get away from Mr. Guthrey, who was dating one of her relatives and who had sexually assaulted her in her sleep on several occasions.
In text messages, Mr. Guthrey, then 44, pleaded with the girl not to reveal the abuse:
“l'm am [sic] truly sorry for that I don't want you to be mad at me,” he wrote in a series of texts in early November. “Please keep this between you and me please.”
“I’m sorry about the things that I have wanted to do with you but I will never do anything that will hurt you. I am sure that I can be a great guy,” he continued a few weeks later. "And please keep this between us.”
At his sentencing hearing, prosecutors argued that Mr. Guthrey was a dangerous child predator who refused to take responsibility for his actions. In fact, as an attempt to excuse his behavior at the hearing, Mr. Guthrey claimed he was “still friends” with a prior minor victim of his, and further claimed his advances on the current victim were simply the result of drug use.
The Federal Bureau of Investigation’s Dallas Field Office, Lubbock Resident Agency and the Lubbock Police Department conducted the investigation. Assistant U.S. Attorney Callie Woolam prosecuted the case.
Nocona Man Sentenced to 30 Years for Sexual Exploitation of Missing BoyRead the Press Release
A Nocona man named a person of interest in the 2015 disappearance of a local 18-year-old was sentenced today to 30 years in federal prison for preying on the boy when he was a minor, announced Acting U.S. Attorney for the Northern District of Texas Chad E. Meacham.
In July, just hours after the court declared a mistrial due to juror injury, Ricky Dale Howard, 59, pleaded guilty to sexual exploitation of a child. He was sentenced Wednesday by U.S. District Judge Reed C. O’Connor.
“The vast majority of sexually exploited children were victimized by an adult they know and trust – and the young man in this case was no different. While we may never know what happened to him in the moments before his disappearance, we know he spent many months enduring the unthinkable,” said Acting U.S. Attorney Chad Meacham. “We continue to pray that one day, he will be found. In the meantime, we hope today’s sentence brings a measure of solace to the family and friends who loved him. We are proud to put this sexual predator behind bars.”
“Mr. Howard exploited his position of trust with the victim’s family and will now be held accountable for his actions,” said Dallas FBI Special Agent in Charge Matthew J. DeSarno. “We will continue to use our combined law enforcement resources to seek justice for victims, their families and other vulnerable members of our community.”
According to evidence presented in court before the mistrial was declared, law enforcement obtained several of Mr. Howard’s computers during an investigation into the disappearance of a high school senior who was reported missing on April 1, 2015, just two weeks after his 18th birthday.
On the computers, investigators found sexually explicit images that appeared to show Mr. Howard sexually abusing the missing boy. In pleading guilty, Mr. Howard admitted that he enticed the minor into engaging in sexually explicit conduct for the purpose of creating a visual depiction.
At trial, the boy’s mother testified she and her children had been close with the Howard family since the boys were children. Tami Diehl said her son began performing odd jobs for Mr. Howard during middle school.
Law enforcement officers testified that following the boy’s disappearance, Mr. Howard told police the last time he’d seen the victim was the weekend before he went missing, when the pair attempted to repair his broken-down truck. Several days into the missing person investigation, an officer observed a burn pit with several incinerated computers on Mr. Howard’s property.
Two years after the disappearance, Ms. Diehl discovered a small handheld tape recorder hidden in the back of a bathroom cabinet. The tape recorder contained audio of Mr. Howard asking himself polygraph questions pertaining to his sexual interest in young boys.
Shortly thereafter, investigators re-examined the missing persons case. Recalling the incinerated computers, officers asked Mr. Howard’s ex-wife and later his daughter for the computers, which were examined by analysts at the FBI’s North Texas Regional Computer Forensic Lab. Ms. Diehl, one of Mr. Howard’s sons, and Mr. Howard’s ex-wife all identified the missing victim in redacted versions of photographs extracted from the computers.
“My family is broken, I know we will never have a gathering where there isn't a sense of wrongness and of a huge, important part being missing,” Ms. Diehl testified at Mr. Howard’s sentencing hearing. “It has now been almost seven years since [my son] disappeared. Years of searching, waiting, and praying for answers to get to this day – and still to not truly have the answer our hearts require. But I am so thankful to the investigators and prosecutors for not giving up and at least making sure that Ricky Howard can hurt no one else.”
The Federal Bureau of Investigation’s Dallas Field Office, Wichita Falls Resident Agency, the Montague County Sheriff’s Office, and the Nocona Police Department conducted the investigation with the assistance of the Montague County District Attorney’s Office and the Texas Rangers. Assistant U.S. Attorneys Brandie Wade and Nancy Larson prosecuted the case.
Liberian National Pleads Guilty to $23 Million COVID-19 Relief FraudRead the Press Release
A Liberian national who orchestrated a fraudulent scheme to secure more than $23 million in forgivable Paycheck Protection Program (PPP) loans pleaded guilty today to a federal financial crime, announced Acting U.S. Attorney for the Northern District of Texas Chad E. Meacham.
Steven Jalloul, a 43-year-old tax consultant from the Dallas area, was first charged via criminal complaint in September 2020 and indicted later that month. He pleaded guilty on Tuesday to a superseding information charging him with one count of engaging in monetary transactions using property derived from unlawful activity.
“The Paycheck Protection Program was designed to help hardworking businesspeople keep their companies afloat during the pandemic – not to line the pockets of unscrupulous accountants,” said Acting U.S. Attorney Chad Meacham. “The Justice Department will prosecute anyone who attempts to exploit pandemic-era financial programs. There are countless businesses ravaged by COVID-19 that deserved this money; Mr. Jalloul did not.”
According to plea papers, Mr. Jalloul admitted he defrauded lenders participating in the Paycheck Protection Program — a measure authorized by Congress in the early days of the pandemic to award forgivable loans to small business impacted by COVID-19 — while awaiting sentencing in a separate tax fraud case.
In court documents, he admitted that he submitted roughly 170 falsified PPP loan applications to lenders (including through a fintech company) seeking more than $23 million on behalf of over 160 clients of his tax preparation business, Royalty Tax & Financial Services LLC.
Mr. Jalloul admitted he inflated clients’ employee rosters and monthly payroll expenses in order to increase the amount of PPP funds for which their businesses would be eligible. He generally charged clients a 2 to 20 percent commission on the PPP loans they received and even listed his ex-wife as Royalty Tax’s authorized representative, without her consent, when seeking an inflated PPP loan for his own business.
In total, 97 false PPP loan applications were ultimately approved, and Mr. Jalloul’s clients were awarded more than $12 million in PPP money. Those clients paid him at least $972,114 in fees.
Mr. Jalloul now faces up to 10 years in federal prison for the PPP fraud. His sentencing date has not yet been set.
He is already behind bars at FCI-Seagoville, having pleaded guilty to tax fraud in the separate case in January 2020; in that case, he was sentenced to six years in federal prison.
The Dallas Field Offices of the Federal Deposit Insurance Corporation, Office of Inspector General, and the Internal Revenue Service, Criminal Investigation conducted the investigation. Assistant U.S. Attorneys Fabio Leonardi and Marty Basu are prosecuting the case. Assistant U.S. Attorney Dimitri Rocha is handling the asset-forfeiture component of the case.
The Paycheck Protection Program was authorized under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, a federal law enacted on March 29, 2020, to provide emergency financial assistance to Americans suffering economic hardship due to the COVID-19 pandemic. The PPP initially provided for up to $349 billion in forgivable loans to small businesses for payroll costs and certain other expenses, including rent; in April 2020, Congress authorized more than $300 billion in additional PPP funding. The PPP allows qualifying small businesses to receive loans with a maturity of two years and an interest rate of 1 percent. In addition, the PPP allows both the interest and principal on the loans to be forgiven if the business spends the money on qualifying expenses within a designated period of time.
Reagor Dykes Owner Found Guilty of Lying to BankRead the Press Release
Reagor Dykes Auto Group owner Bart Reagor was convicted today of lying to a bank about his company's prospects, announced Acting U.S. Attorney for the Northern District of Texas Chad Meacham.
After 12 hours of deliberation, a federal jury found Bart Wade Reagor, 55, guilty of making false statements to a bank insured by the FDIC. Mr. Reagor, whose trial lasted four days, now faces up to 30 years in federal prison.
“Bart Reagor’s greed and insatiable need to flaunt his wealth led him to lie to a federally-insured bank and ultimately resulted in that bank suffering a loss of over $20 million dollars.” said Acting U.S. Attorney Chad Meacham. “He’s now bracing for a possibly decades-long sentence. The Department of Justice will not permit this kind of abuse of our nation’s financial institutions and the funds of its hard-working depositors.”
“This multi-year investigation was extremely complicated and required dedicated complex financial crimes resources and today’s outcome demonstrates the government’s commitment to protecting the best interests of the American people,” said Dallas FBI Special Agent in Charge Matthew J. DeSarno. “The resulting loss caused by false statements has the potential to harm the U.S. economy and investor confidence, and we will continue to work alongside the U.S. Attorney’s Office and our law enforcement partners to ensure that justice is served.”
According to evidence presented at trial, in 2017, Mr. Reagor told International Bank of Commerce (IBC) that the auto group was experiencing tremendous growth and expected to go public. He claimed the company needed a cash infusion to sustain its upward trajectory and maintain a cash cushion for each of the dealerships to operate.
Relying on that information, IBC granted Reagor Dykes a $10 million working capital loan, which was distributed in two tranches: $5,000,000 in July 2017 and another $5,000,000 in February 2018, to be disbursed to the various RDAG entities.
Instead of investing all of the money into the business as he’d said he would, Mr. Reagor diverted more than $1.7 million to his personal account at Prosperity Bank – $766,277 in July 2017, following IBC’s disbursement of the first tranche of money, and $1 million in February 2018, following IBC’s disbursement of the second tranche of money.
Reagor Dykes’ CFO, Shane Smith, testified that Mr. Reagor and his partner, Rick Dykes, routinely drew money out of the business. Over a 10-year-period, Mr. Smith estimated, the pair withdrew more than $25 million.
While the jury convicted Mr. Reagor of lying to an FDIC-insured bank, they acquitted him of bank fraud. His sentencing date has not yet been set.
Fifteen of Mr. Reagor’s employees previously pleaded guilty to various crimes involving dummy flooring and check kitting at Reagor Dykes, including:
- Shane Andrew Smith, Reagor Dykes’ CEO, who pleaded guilty in June 2019 to conspiracy to commit wire fraud
- Diana Urias, an office manager in Reagor Dykes’ used car mall in Levelland, who pleaded guilty in September 2019 to conspiracy to commit bank fraud.
- Sheila Miller, an RDAG group controller, who pleaded guilty in September 2019 to conspiracy to commit bank fraud
- Paige Johnston, an office manager in Reagor Dykes’ Chevrolet store in Floydada, who pleaded guilty in October 2019 to conspiracy to commit wire fraud
- Lindsay Williams, and RDAG group accounting manager, who pleaded guilty in October 2019 to conspiracy to commit bank fraud
- Sherri Wood, an office manager at Reagor Dykes’ Ford store in Plainview, who pleaded guilty in October 2019 to conspiracy to commit wire fraud
- Pepper Rickman, an accounting controller at Reagor Dykes’ Toyota store in Plainview, who pleaded guilty in October 2019 to conspiracy to commit wire fraud
- Brad Fansler, an RDAG group administrative director, who pleaded guilty in November 2019 to conspiracy to commit wire fraud
- Ashley Dunn, executive assistant to the CEO, who pleaded guilty in December 2019 to conspiracy to commit bank fraud
- Whitney Maldonado, an office manager at Reagor Dykes’ Mitsubishi store in Lubbock, who pleaded guilty in December 2019 to conspiracy to commit wire fraud
- Elaina Cabral, an office manager at Reagor Dykes’ Toyota store in Plainview, who pleaded guilty in December 2019 to conspiracy to commit wire fraud-
- Mistry Canady, an office manager at Reagor Dykes’ Ford store in Lamesa, who pleaded guilty in January 2020 to conspiracy to commit wire fraud
- Andrea Kate Phillips, an office manager at Reagor Dykes’ Ford store in Plainview, who pleaded guilty in February 2020 to misprision of a felony
- Wesley Neel, RDAG Safety & Compliance Manager, who pleaded guilty in March 2020 to conspiracy to commit wire fraud
- Steven Reinhart, RDAG Legal Compliance Director, who pleaded guilty in February 2021 to misprision of a felony
The Federal Bureau of Investigation’s Dallas Field Office and Internal Revenue Services - Criminal Investigation Division conducted the investigation. Assistant U.S. Attorneys Joshua Frausto, Jeffrey Haag, and Amy Burch are prosecuting the case.
Former Boeing 737 MAX Chief Technical Pilot Indicted for FraudRead the Press Release
A federal grand jury in the Northern District of Texas returned an indictment today charging a former Chief Technical Pilot for Boeing with deceiving the Federal Aviation Administration’s Aircraft Evaluation Group in connection with their evaluation of Boeing’s 737 MAX airplane, and scheming to defraud Boeing’s U.S. based airline customers to obtain tens of millions of dollars for Boeing.
According to court documents, Mark A. Forkner, 49, formerly of Washington State and currently of Keller, Texas, allegedly deceived the FAA AEG during the agency’s evaluation and certification of Boeing’s 737 MAX airplane. As alleged in the indictment, Forkner provided the agency with materially false, inaccurate, and incomplete information about a new part of the flight controls for the Boeing 737 MAX called the Maneuvering Characteristics Augmentation System (MCAS).
Because of his alleged deception, a key document published by the FAA AEG lacked any reference to MCAS. In turn, airplane manuals and pilot-training materials for U.S.-based airlines lacked any reference to MCAS — and Boeing’s U.S.-based airline customers were deprived of important information when making and finalizing their decisions to pay Boeing tens of millions of dollars for 737 MAX airplanes.
“Forkner allegedly abused his position of trust by intentionally withholding critical information about MCAS during the FAA evaluation and certification of the 737 MAX and from Boeing’s U.S.‑based airline customers,” said Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division. “In doing so, he deprived airlines and pilots from knowing crucial information about an important part of the airplane’s flight controls. Regulators like the FAA serve a vital function to ensure the safety of the flying public. To anyone contemplating criminally impeding a regulator’s function, this indictment makes clear that the Justice Department will pursue the facts and hold you accountable.”
“In an attempt to save Boeing money, Forkner allegedly withheld critical information from regulators,” said Acting U.S. Attorney Chad E. Meacham for the Northern District of Texas. “His callous choice to mislead the FAA hampered the agency’s ability to protect the flying public and left pilots in the lurch, lacking information about certain 737 MAX flight controls. The Department of Justice will not tolerate fraud – especially in industries where the stakes are so high."
Forkner allegedly withheld crucial information about the Boeing 737 Max and deceived the FAA, showing blatant disregard for his responsibilities and the safety of airline customers and crews," said Assistant Director Calvin Shivers of the FBI. "The FBI will continue to hold individuals like Forker accountable for their fraudulent acts which undermine public safety."
“There is no excusing those who deceive safety regulators for the sake of personal gain or commercial expediency,” said Inspector General Eric J. Soskin of the U.S. Department of Transportation. “Our office works continuously to help keep the skies safe for flying and protect the traveling public from needless danger. Today’s charges demonstrate our unwavering commitment to working with our law enforcement and prosecutorial partners to hold responsible those who put lives at risk.”
According to court documents, Boeing began developing and marketing the 737 MAX in and around June 2011. The FAA AEG was responsible for determining the minimum level of pilot training required for a pilot to fly the 737 MAX for a U.S.-based airline, based on the nature and extent of the differences between the 737 MAX and the prior version of Boeing’s 737 airplane, the 737 Next Generation (NG). At the conclusion of this evaluation, the FAA AEG published the 737 MAX Flight Standardization Board Report (FSB Report), which included, among other things, the FAA AEG’s differences-training determination for the 737 MAX, as well as information about differences between the 737 MAX and the 737 NG. All U.S.-based airlines were required to use the information in the 737 MAX FSB Report as the basis for training their pilots to fly the airplane.
As Boeing’s 737 MAX Chief Technical Pilot, Forkner led the 737 MAX Flight Technical Team and was responsible for providing the FAA AEG with true, accurate, and complete information about differences between the 737 MAX and the 737 NG for the FAA AEG’s evaluation, preparation, and publication of the 737 MAX FSB Report.
In and around November 2016, Forkner discovered information about an important change to MCAS. Rather than sharing information about this change with the FAA AEG, Forkner allegedly intentionally withheld this information and deceived the FAA AEG about MCAS. Because of his alleged deceit, the FAA AEG deleted all reference to MCAS from the final version of the 737 MAX FSB Report published in July 2017. As a result, pilots flying the 737 MAX for Boeing’s U.S.‑based airline customers were not provided any information about MCAS in their manuals and training materials. Forkner sent copies of the 737 MAX FSB Report to Boeing’s U.S.-based 737 MAX airline customers, but withheld from these customers important information about MCAS and the 737 MAX FSB Report evaluation process.
On or about Oct. 29, 2018, after the FAA AEG learned that Lion Air Flight 610 — a 737 MAX — had crashed near Jakarta, Indonesia, shortly after takeoff and that MCAS was operating in the moments before the crash, the FAA AEG discovered the information about the important change to MCAS that Forkner had withheld.
Having discovered this information, the FAA AEG began reviewing and evaluating MCAS.
On or about March 10, 2019, while the FAA AEG was still reviewing MCAS, the FAA AEG learned that Ethiopian Airlines Flight 302 — a 737 MAX — had crashed near Ejere, Ethiopia, shortly after takeoff and that MCAS was operating in the moments before the crash. Shortly after that crash, all 737 MAX airplanes were grounded in the United States.
Forkner is charged with two counts of fraud involving aircraft parts in interstate commerce and four counts of wire fraud. He is expected to make his initial court appearance on Friday in Fort Worth, Texas, before U.S. Magistrate Judge Jeffrey L. Cureton of the U.S. District Court for the Northern District of Texas. If convicted, he faces a maximum penalty of 20 years in prison on each count of wire fraud and 10 years in prison on each count of fraud involving aircraft parts in interstate commerce. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
An indictment is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
The Chicago field offices of the FBI and DOT-OIG are investigating the case, with the assistance of other FBI and DOT-OIG field offices.
Trial Attorney Cory E. Jacobs, Assistant Chief Michael T. O’Neill, and Trial Attorney Scott Armstrong of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Alex Lewis of the U.S. Attorney’s Office for the Northern District of Texas are prosecuting the case.
Texas Pharmacist Pleads Guilty to Adulterating Drug Used in Cataract SurgeriesRead the Press Release
A Texas man pleaded guilty Tuesday to one count of adulterating a drug that was used in cataract surgeries.
According to court documents, Jack Randall Munn, 71, of Dallas, a licensed pharmacist and former owner of Guardian Pharmacy Services (Guardian), a Dallas pharmacy, oversaw the compounding of the drug for two outpatient Dallas surgical centers in 2016 and 2017. The drug, a combination of an antibiotic and a steroid, contained an excessive amount of an inactive ingredient that can damage sensitive eye tissue.
At the time of the events described in court documents, Munn represented to the surgical centers that Guardian could compound the drug in a manner safe for injection into patients’ eyes. However, the drug made by Guardian contained an excessive amount of the inactive ingredient, causing its purity and quality to fall below that which it was represented to possess.
Munn pleaded guilty to one misdemeanor count of distributing an adulterated drug in violation of the Federal Food Drug and Cosmetic Act. He is scheduled to be sentenced on Feb. 3, 2022 and faces a maximum penalty of one year in prison and a fine of up to $100,000. The federal magistrate judge who presided over Munn’s guilty plea will determine sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The U.S. Food and Drug Administration’s (FDA) Office of Criminal Investigations investigated the case.
Assistant Director John Claud, Senior Trial Counsel David A. Frank and Trial Attorney Sarah Williams of the Civil Division’s Consumer Protection Branch are prosecuting the case. Associate Chief Counsel for Enforcement Karen Towns with the FDA’s Office of Chief Counsel, and the U.S. Attorney’s Office for the Northern District of Texas provided valuable assistance in the case.
Founders of Crypto ICO Plead Guilty to Tax Evasion After Raising $24 Million from InvestorsRead the Press Release
The owners of a cryptocurrency company have pleaded guilty to tax evasion, announced Acting U.S. Attorney for the Northern District of Texas Chad E. Meacham.
Bitqyck founders Bruce Bise, 60, and Samuel Mendez, 65, were charged with tax evasion in August. Mr. Bise pleaded guilty on Sept. 9; Mr. Mendez pleaded guilty this morning.
According to plea papers, Mr. Bise and Mr. Mendez admitted that Bitqyck raised approximately $24 million from more than 13,000 investors. Instead of fulfilling their promises to these investors, the defendants used Bitqyck funds on personal expenses, including casino trips, cars, luxury home furnishings, art, and rent.
“Transacting in virtual currencies does not exempt businesspeople from paying income taxes,” said Acting U.S. Attorney Chad Meacham. “These crypto-savvy defendants exploited an emerging technology, lying to their investors, pocketing the proceeds, and concealing the income from the IRS. The Department of Justice is committed to ensuring that every taxpayer pays his or her fair share – and to protecting the crypto space from bad actors.”
“As digital currencies continue to emerge as an investment option for taxpayers, we must continue to increase the pressure on anyone who tries to take advantage of their investors and taxpayers through fraud and tax evasion. The great work from both the Dallas and Los Angeles IRS-CI field offices firmly puts that pressure on these two cybercriminals and serves as a warning to others,” saidChristopher J. Altemus Jr., Special Agent in Charge of IRS-CI's Dallas Field Office.
“Mr. Bise and Mr. Mendez exploited the growing appeal of digital currency and defrauded thousands of victim-investors out of millions of dollars that they used to pay their personal expenses, rent, gambling activities, and purchases of vehicles and art,” said Ryan L. Korner, Special Agent in Charge of IRS -CI's Los Angeles Field Office. “These fraudsters required investors to produce cash, and then converted the fraud proceeds to cryptocurrency to purposefully circumvent financial reporting requirements. IRS Criminal Investigation is committed to protecting Americans and pursuing financial schemes even into the crypto world. ”
In marketing materials, the pair promoted the company’s cryptocurrency, Bitqy, as a way for “those individuals who missed out on Bitcoin” to get rich. They held their initial coin offering, or ICO, in 2016. (An ICO is a process in which a company attempts to raise capital by selling a new cryptocurrency, which investors may purchase in the hope that the value of the cryptocurrency will increase.) In an attempt to legitimize Bitqy tokens – and to avoid scrutiny over selling unregistered securities – the company characterized the cryptocurrency as an “earned gift” that rewarded consumers for certain internet purchases.
A white paper posted on the Bitqyck website promised investors that each Bitqy token came with 1/10th of a share of Bitqyck common stock. Mr. Bise and Mr. Mendez admitted, however, that they never actually distributed shares to token holders nor embedded the shares within the Ethereum Smart Contract. The only shares of common stock Bitqyck issued were to Bise and Mendez, who collectively owned 100% of Bitqyck’s common stock.
About nine months after launching Bitqy, Mr. Bise and Mr. Mendez began marketing another token, BitqyM, arbitrarily priced at $1. They claimed buying the token allowed investors to join “Bitcoin mining operations,” by paying to power a Bitqyck Bitcoin mining facility in Washington state. In reality, Mr. Bise and Mr. Mendez admitted in plea papers, no such mining facility ever existed. Unbeknownst to investors, the defendants contracted with an overseas third-party company in an attempt to mine the Bitcoin they’d promised to investors.
(Bitcoin mining involves solving complex mathematical problems in order to verify transactions on a public ledger, known as the Blockchain. The problems require computing power, which in turn requires a significant amount of electricity.)
Mr. Bise and Mr. Mendez profited from Bitqyck by diverting income from the company for their personal use at their shareholders’ expense. From 2016 to 2018, Mr. Bise and Mr. Mendez raked in roughly $4.68 million and $4.48 million, respectively.
Taxpayers transacting in virtual currency are required by law to report those transactions on their tax returns. For 2016 and 2017, Mr. Bise underreported his income to the IRS, resulting in a tax loss of $371,278. For that same period, Mr. Mendez also underreported his income to the IRS, resulting in a tax loss of $311,155. In 2018, Bitqyck failed to file any corporate tax returns at all despite netting more than $3.5 million from investors. The total tax loss joint and severally to the United States government between Mr. Bise and Mr. Mendez is more than $1.6 million dollars.
Both men now face up to five years in federal prison.
The defendants’ guilty pleas come on the heels of a civil settlement with the Securities & Exchange Commission (SEC), in which Bitqyck agreed to pay an $8.3 million penalty to resolve claims that it defrauded investors and operated an unregistered digital asset exchange. As part of that settlement, Mr. Bise and Mr. Mendez agreed to pay disgorgement and penalties of $890,254 and $850,022, respectively.
The Internal Revenue Services’ Criminal Investigations Divisions in Dallas and Los Angeles conducted the investigation. Assistant U.S. Attorney Sid Mody is prosecuting the case.
Lubbock Drug Traffickers Sentenced to Combined 106 Years in Federal PrisonRead the Press Release
A dozen Lubbock drug traffickers have been sentenced to a combined 106 years in federal prison, announced Acting U.S. Attorney for the Northern District of Texas Chad E. Meacham.
The defendants were arrested during the Drug Enforcement Administration’s Operation Los Perros De Nieve (“Operation Snow Dogs”), which also resulted in the seizure of multiple kilograms of cocaine, more than a dozen firearms, and roughly $80,000 cash from drug dealers in Lubbock.
The last of 12 in-custody defendants, Ruben Alejandro Rodriguez-Parada, was sentenced yesterday to almost four years in federal prison. A 13th charged defendant remains a fugitive.
According to court documents, DEA agents used a confidential informant to buy cocaine from several defendants. They also executed search warrants at several defendants’ residences, including their vehicles, and seized five bricks of cocaine from a storage unit in Lubbock.
One defendant, Robert Bruno, admitted that he regularly worked with a cocaine source of supply in Mexico, who delivered the drug with little advance notice and then aggressively collected on his debts.
“Cocaine extracts a terrible toll, wreaking havoc on users’ bodies and brains. We are determined to dismantle the organizations that inject this drug into our communities. The sentences announced today send a message to would-be dealers in Lubbock: The penalty for cocaine distribution is serious,” said Acting U.S. Attorney Chad Meacham.
“Cocaine is not manufactured in Lubbock nor does the coca plant, from where it is derived, grow in West Texas’ fertile land. Its prevalence and distribution in the area must be deliberate and for only one purpose: greed,” said DEA Dallas Special Agent in Charge Eduardo A. Chávez, who oversees DEA operations in Lubbock. “These sentences handed down to Mr. Rodriguez-Parada, Mr. Bruno, and their co-conspirators should send a message to all violent drug trafficking organizations operating in the area that decisions based on greed could lead to more than a collective century in prison.”
Those who’ve been sentenced include:
- Ronnie Manuel Garcia – pleaded guilty to possession of firearms in furtherance of a drug trafficking crime and unlawful user of a controlled substance in possession of firearms; sentenced to 180 months in federal prison.
- Jonathan Phillip “J.P.” Reyes – pleaded guilty to distribution of cocaine; sentenced to 240 months in federal prison (to run consecutively to any sentence imposed in the state case against him).
- Raul Perez, III – pleaded guilty to distribution of cocaine; sentenced to 235 months in federal prison (to run consecutively to any sentence imposed in the state case against him).
- Krystal Lynn Ramos – pleaded guilty to misprision (concealment) of a felony; sentenced to 21 months in federal prison.
- Amy Shawn “Evon” Rodriguez – pleaded guilty to misprision (concealment) of a felony; sentenced to 27 months in federal prison.
- Juan Moncada – pleaded guilty to possession with intent to distribute cocaine base; sentenced to 125 months in federal prison (to run consecutively to any sentence imposed in the state case against him).
- Jacob Anthony Molina – pleaded guilty to possession of firearms in furtherance of a drug trafficking crime; sentenced to 60 months in federal prison.
- Jeremy Wayne “Lil’ Jay” Beck – pleaded guilty to possession of firearms in furtherance of a drug trafficking crime; sentenced to 60 months in federal prison.
- Michael Paul Perez – pleaded guilty to possession with intent to distribute cocaine; sentenced to 63 months in federal prison.
- Robert Lee Bruno – pleaded guilty to conspiracy to distribute cocaine; sentenced to 188 months in federal prison.
- Amaris Arestin Leon – pleaded guilty to misprision (concealment) of a felony; sentenced to 30 months in federal prison (to run consecutively to any sentence imposed in state cases against him).
- Ruben Alejandro Rodriguez-Parada – pleaded guilty to money laundering; sentenced to 46 months in federal prison.
The investigation was led by the Drug Enforcement Administration’s Dallas Field Division and the Lubbock Police Department with assistance from the Lubbock County Sheriff’s Office, the Bureau of Alcohol, Tobacco, Firearms & Explosives’ Dallas Field Division, Homeland Security Investigations’ Dallas Field Office, and the Texas Department of Safety. This investigation was carried out as part of the Organized Crime Drug Enforcement Task Force (OCDETF) program with the coordination of the Lubbock HIDTA group and Texas Anti-Gang initiative. Assistant U.S. Attorney Sean Long is prosecuting the case.
Felon Charged with Unlawful Possession of 21 FirearmsRead the Press Release
A Dallas man has been charged with unlawful possession of more than 20 firearms, announced Acting U.S. Attorney for the Northern District of Texas Chad Meacham.
Kevion Deshaun Rogers, 27, was indicted Tuesday on two counts of possession of a firearm by a convicted felon, one count of possession of a firearm in furtherance of a drug trafficking crime, and one count of possession with intent to distribute a controlled substance.
According to the indictment, Mr. Rogers – who’d been previously convicted of multiple drug charges as well as evading arrest – allegedly possessed 21 weapons unlawfully, including 10 Glock pistols, three AM-15 pistols, two Smith & Wesson rifles, and a German Sports Guns Kalashnikov.
Court documents show he was arrested on Sept. 11, 2021 with an empty handgun holster strapped to his left leg. Although he denied having a weapon on him, law enforcement located two handguns, including a loaded 9mm Glock, stashed in the steering wheel column cover, and a 50 round drum magazine full of ammunition on the rear passenger floorboard.
According to the indictment, Mr. Rogers also allegedly possessed and intended to distribute marijuana.
An indictment is merely an allegation of criminal conduct, not evidence. Like all defendants, Mr. Rogers is presumed innocent until convicted in a court of law.
If convicted, he faces up to 19 ½ years in federal prison.
The Bureau of Alcohol, Tobacco, Firearms, & Explosives’ Dallas Field Division conducted the investigation with the assistance of the Dallas Police Department. Assistant U.S. Attorney Taylor Winn is prosecuting the case.
Jacksboro Man Sentenced to 25 Years for Child Sexual ExploitationRead the Press Release
A Jacksboro nurse was sentenced yesterday to 25 years in federal prison for sexually exploiting a 13-year-old girl, announced Acting U.S. Attorney for the Northern District of Texas Chad Meacham.
Stephen Russel Adams, 38, pleaded guilty in June to sexual exploitation of a child. He was sentenced Tuesday by Senior U.S. District Judge Terry R. Means.
According to court documents, Mr. Adams surreptitiously recorded nude images of his 13-year-old victim and posted them on social media. In fall 2020, an undercover agent initiated a chat with Mr. Adams, who sent the agent a nude photo of the child standing in a bathroom.
In the chats, which were introduced into evidence at his sentencing hearing, Mr. Adams claimed he had been groping the child while she slept “for almost 2 years.” He discussed drugging the child with “sleeping pills and muscle relaxers” and even asked the undercover agent if he could obtain “roofies.”
The investigation eventually led to the identification of a cloud account the defendant used to store images of his victim.
Mr. Adams, who was employed as a nurse at an adult residential care facility at the time of the crime, admitted he took surreptitious videos of the child and uploaded them to the cloud account.
“Sexual crimes against children are some of the most repulsive acts we investigate. We are determined to prevent this abuse from happening to minors and will not relent in punishing those who prey on their vulnerability,” said Christopher M. Miller, Homeland Security Investigations Deputy Special Agent in Charge of the Dallas Field Office. “It is because of our collaborative law enforcement approach in prosecuting this case that Mr. Adams is facing a lengthy sentence for his crimes of child exploitation. The conclusion of this case removes a dangerous predator off the street, and hopefully provides a measure of closure and comfort to the victim.”
Homeland Security Investigations’ Dallas Field Office conducted the investigation with the assistance of the Wise County District Attorney’s Office, the Jack County Sheriff’s Office, the Jacksboro Police Department, and Homeland Security Investigations’ Detroit Field Office. Assistant U.S. Attorney Aisha Saleem prosecuted the case.
Former Treasurer of Volunteer Fire Department Charged with Bank FraudRead the Press Release
A Kaufman County man who allegedly took out fraudulent loans in the name of his volunteer fire department has been charged with making a false statement to a bank, announced Acting U.S. Attorney for the Northern District of Texas Chad E. Meacham.
Denny C. Mackey, the 68-year-old former treasurer of the Crandall Volunteer Fire Department, was arrested at his residence in Richardson on Monday. He made his initial appearance in federal court this morning.
According to the indictment, between May 2011 and September 2013, Mr. Mackey allegedly obtained tens of thousands of dollars from financial institutions by applying for unauthorized loans purportedly to be used for fire department purposes, unbeknownst to the fire department's leadership.
For example, as alleged in the indictment, Mr. Mackey fraudulently applied for a $75,000 loan purportedly for fire department expenses in August 2013. He falsely represented to the bank that the money would be used to fund the salary of a full-time fire department employee – knowing full well that the volunteer force didn’t employ any full-time staff.
Shortly after the bank issued the loan, which he concealed from the fire department, Mr. Mackey allegedly withdrew more than $50,000 – some out in cash and the rest by writing fire department checks to a company he controlled.
The following year, as reported by local media, the fire chief appeared before the Crandall City Council to report that the fire department had been forced to sell some of its trucks and equipment in order to pay off the fraudulent loan.
An indictment is merely an allegation of criminal conduct, not evidence. Like all defendants, Mr. Mackey is presumed innocent until proven guilty in a court of law.
If convicted, he faces up to 30 years in federal prison.
The Federal Bureau of Investigation’s Dallas Field Office conducted the investigation. Assistant U.S. Attorneys Marcus Busch and Fabio Leonardi are prosecuting the case.
West Texas Gas Companies Agree to Pay $3 Million Civil Penalty in Federal Settlement Requiring $5 Million in Safety Improvements and Clean Air Act Compliance at Eight Natural Gas Processing PlantsRead the Press Release
Five subsidiaries of West Texas Gas Inc. will spend up to $5 million on compliance measures in a settlement that resolves allegations in the United States’ complaint, lodged today, that they violated federal Clean Air Act chemical accident prevention requirements at several of their natural gas processing plants. The companies will pay more than $3 million in civil penalties to resolve claims stemming from fatal chemical accidents and accident prevention program violations.
In a related criminal case, another West Texas Gas subsidiary that operated a gas plant in Big Lake, Texas, – Big Lake Gas Plant L.P. – pleaded guilty to one count of negligent endangerment and one count of violating the Clean Air Act.
The settlement requires the subsidiaries to take steps to prevent chemical accidents and improve safety at eight natural gas processing plants that the companies own and operate. Seven plants are located in Texas and one is in New Mexico. The plants use a variety of chemical processes containing toxic substances and flammable hydrocarbons, such as butane, methane and propane.
“West Texas Gas’ Clean Air Act violations cost lives,” said Assistant Attorney General Todd Kim of the Justice Department’s Environment and Natural Resources Division. “Today’s settlement sends a strong message to industry that the Justice Department will vigorously enforce Clean Air Act requirements that protect workers, neighboring communities and the environment by preventing dangerous chemical releases like these.”
“This company’s blatant disregard of clean air regulations had devastating real-world consequences,” said Acting U.S. Attorney Prerak Shah for the Northern District of Texas. “Our hearts go out to the family of the employee killed in the chemical incident at the plant in Big Lake. We are proud to hold the company criminally responsible, and hopeful that the safety measures stipulated in the civil settlement will protect against similar incidents.”
“The tragic deaths due to the failure by West Texas Gas to safely manage hazardous chemicals, as required by law, demonstrates the severe dangers that these violations pose to workers, nearby communities and the environment,” said Acting Assistant Administrator Larry Starfield of the Environmental Protection Agency’s (EPA) Office of Enforcement and Compliance Assurance. “Today’s settlement requires West Texas Gas to take concrete steps to prevent future accidents and will improve air quality in the vicinity of these facilities.”
The civil complaint alleges that WTG Gas Processing L.P., WTG South Permian Midstream LLC and Davis Gas Processing Inc. violated section 112(r) of the Clean Air Act and the related chemical accident prevention regulations. The EPA identified the Clean Air Act violations addressed in today’s settlement during a series of inspections of the companies’ natural gas processing plants. The EPA inspections were initiated after a catastrophic fire in November 2015 killed an employee at WTG Gas Processing, L.P.’s East Vealmoor Gas Plant in Coahoma, Texas. Thousands of pounds of flammable and toxic substances were also released into the air. Other serious fires, resulting in millions of dollars of damage, occurred at some of the companies’ other plants, and an August 2018 leak of toxic hydrogen sulfide resulted in the death of another company employee in Big Lake, Texas.
Under the settlement, the companies must hire an outside, independent engineering firm to recommend actions that the companies will complete to improve process safety at six of the eight plants. The six plants must also implement an environmental management system to improve their compliance with all federal, state and local air pollution related requirements, not just those dealing with preventing chemical accidents. The companies have elected to permanently shut down the remaining two plants.
Section 112(r) of the Clean Air Act and the risk management program regulations contain a comprehensive set of requirements to prevent accidental releases of hazardous air pollutants, an important objective of the Clean Air Act. These regulations require owners and operators of facilities, such as natural gas processing plants, chemical plants and petroleum refineries to perform adequate and timely equipment inspections and repairs, train employees involved in the operation and maintenance of equipment, evaluate the hazards of the chemical processing equipment and ensure that operating procedures contain clear and comprehensive instructions to safely operate process equipment.
In the related criminal case against Big Lake Gas Plant L.P. arising out of the August 2018 leak, the plant admitted that it negligently released hydrogen sulfide into the ambient air. Hydrogen sulfide is a toxic gas that can compromise the human nervous system and respiratory tract and can cause life-threatening health effects if not handled properly. One employee died as a result of exposure sustained while working at the plant, and another employee was injured. The company further admitted that it knowingly failed to properly update its risk management plan following the incident, an update required by law.
Under the terms of its plea agreement, the plant agreed to pay a $3 million fine, and acknowledged it may be ordered to pay restitution to victims, as well as the costs of supervision.
Assistant U.S. Attorney Sean Taylor prosecuted the criminal case.
Today’s settlement is part of the Justice Department and the EPA’s ongoing efforts to protect public health and the environment by preventing industrial accidents involving hazardous chemicals.
The settlement was lodged today in the U.S. District Court for the Northern District of Texas. The settlement is subject to a 30-day public comment period and final court approval.
Texas Man Sentenced to 10 Years for Plotting to Attack Data CentersRead the Press Release
A Texas man who plotted to blow up a data center in Virginia was sentenced today to 10 years in federal prison, announced Acting U.S. Attorney for the Northern District of Texas Prerak Shah.
Seth Aaron Pendley, 28, was arrested in April after attempting to obtain an explosive device from an undercover FBI employee in Fort Worth. He pleaded guilty in June to malicious attempt to destroy a building with an explosive and was sentenced today by U.S. District Judge Reed C. O’Connor.
“The Justice Department is constantly on guard for threats posed by violent domestic extremists,” said Acting U.S. Attorney Prerak Shah. “As this case shows, radicals are lurking on the internet, looking for ways to lash out – and far too often, they move their plans off of the web and into the real world. We are indebted to the FBI employee who put his life on the line to disrupt Mr. Pendley’s plot before he could inflict real harm on data center workers, and are proud of today’s sentence.”
“Seth Aaron Pendley’s sentence is an affirmation of the work the North Texas Joint Terrorism Task Force performs around the clock to disrupt threats while keeping our community safe from harm,” said FBI Dallas Special Agent in Charge Matthew J. DeSarno. “The public’s vigilance in reporting suspicious or threatening behavior is key to law enforcement’s ability to take quick action to prevent injuries and the destruction of property.”
In plea papers, Mr. Pendley admitted that he disclosed his plan to blow up an Amazon data center to a confidential source in January.
In late February, he sent the source a list of potential targets and said he hoped a successful attack could “kill off about 70% of the internet.” When the source offered to help him obtain C4 explosives to use in the attack, Mr. Pendley responded enthusiastically. He later showed the source a hand-drawn map of his chosen data center and described how he planned to disguise his car to evade detection by law enforcement.
In late March, the confidential source introduced Mr. Pendley to an individual who he claimed was his explosives supplier, but was actually an undercover FBI employee. In recorded conversations, Mr. Pendley allegedly told the employee he planned to attack web servers that he believed provided services to the FBI, CIA, and other federal agencies.
“The main objective is to f*** up the Amazon servers,” he said, adding that he hoped to anger “the oligarchy” enough to provoke a reaction that would convince the American people to take action against what he perceived to be a “dictatorship.”
During that same conversation, Mr. Pendley claimed to have been present at the Jan. 6 attack on the U.S. Capitol. He said that although he did not enter the building, he came prepared with a sawed off AR rifle, which he left in his car.
On April 8, Mr. Pendley again met with the undercover FBI employee to pick up what he believed to be explosive devices. (In actuality, however, the undercover gave Mr. Pendley inert devices.) After the employee showed Mr. Pendley how to arm and detonate the devices, the defendant loaded them into his car. He was then arrested.
A subsequent search of his residence in Wichita Falls turned up an AR-15 receiver with a sawed off barrel, a pistol painted to look like a toy gun, masks, wigs, notes, and flashcards related to the planned attack.
The FBI’s Dallas Field Office, Wichita Falls Resident Agency and FBI’s North Texas Joint Terrorism Task Force conducted the investigation. Assistant U.S. Attorneys Robert Boudreau and Jay Weimer of the Northern District of Texas are prosecuting the case with the assistance of Trial Attorney Alexandra Hughes of the National Security Division.
Instagram Drug Trafficker Sentenced to 19+ YearsRead the Press Release
A drug trafficker who advertised narcotics on Instagram and Telegram was sentenced yesterday to more than 19 years in federal prison, announced Acting U.S. Attorney for the Northern District of Texas Prerak Shah.
Ricardo Rosas Garcia, the 24-year-old leader of an Irving drug trafficking ring, pleaded guilty in April to conspiracy with intent to distribute controlled substances and possession of a firearm by a convicted felon. He was sentenced Thursday to 235 months in federal prison by U.S. District Judge Jane J. Boyle.
According to plea papers, Mr. Rosas admitted his organization used the social media handles “Ricky Rosas,” “rickyrosastv3,” and “rickyrosastc6” to hawk controlled substances and firearms.
After receiving numerous complaints from Irving-area high schools, the Irving Police Department identified Mr. Rosas and conducted 14 undercover buys of cocaine, methamphetamine, LSD, TCH and other drugs advertised on his account, including one from Mr. Rosas himself. They also negotiated with Mr. Rosas to purchase a black .40 caliber Beretta handgun, which an associate delivered to an undercover agent.
Mr. Rosas was arrested on Aug. 1, 2020, with a two-tone green and black Glock in his pocket. After his arrest, he made numerous phone calls to coconspirators, providing them with his account passwords to continue the advertisement and sale of illegal narcotics.
Three of Mr. Rosas’ coconspirators also pleaded guilty:
- Anthony Isaac Ventura, 20, pleaded guilty in March to conspiracy to possess with intent to contribute controlled substances and was sentenced in August to 57 months in federal prison.
- Addiel Isaias Portillo, 25, pleaded guilty in April to conspiracy to possess with intent to contribute controlled substances and was sentenced in yesterday to 36 months in federal prison.
- Uziel Hernandez, 26, pleaded guilty in April to conspiracy to possess with intent to contribute controlled substances. His sentencing hearing has been set for Oct. 7.
At sentencing, prosecutors presented evidence that this group had been tied to violent crime in Irving and was involved in illegal firearm sales. They also knowingly employed several juveniles as young as 15 years old to sell drugs for them around the metroplex, and put the lives in danger by publishing on social media the names of individuals they believed to be cooperating with the government.
Irving Police Detectives testified at sentencing about the negative impact Mr. Rosas and his coconspirators had on the community and the importance of these arrests to the citizens of Irving.
The Irving Police Department conducted the investigation with assistance from the Bureau of Alcohol, Tobacco, Firearms & Explosives’ Dallas Field Division. Assistant U.S. Attorney Myria Boehm prosecuted the case.
Former Lubbock Private School President Sentenced to 5 ½ Years for Child PornographyRead the Press Release
A former Lubbock Christian School president was sentenced today to 5 1/2 years in federal prison for possessing sexually explicit images of a child, announced Acting U.S. Attorney for the Northern District of Texas Prerak Shah.
Larry Tye Rogers, 56, pleaded guilty in June to possession of child pornography. He was sentenced Thursday by U.S. District Judge James Wesley Hendrix.
According to plea papers, Rogers admitted that in October 2020, his wife caught him surreptitiously taking photographs of a 15-year-old girl as she was naked in the bathroom preparing to shower. Rogers, who was found on his hands and knees holding his iPhone under the opening at the bottom of the door, admitted to his wife that he’d taken several photos and videos of the child in the bathroom. He later admitted his intended focus was the child’s genitals and pubic area, and that the images were designed to elicit a sexual response in Rogers.
Shortly thereafter, a colleague confronted him about his conduct. Rogers dropped his head and confirmed that he had taken photos of a minor female, and suggested that he should resign his position as president of Lubbock Christian School.
In addition to his sentence, Mr. Rogers will have to have to register as a sex offender.
The Lubbock Police Department, Federal Bureau of Investigation’s Dallas Field Office – Lubbock Resident Agency, and Homeland Security Investigations conducted the investigation. Assistant U.S. Attorneys Stephen Rancourt and Callie Woolam prosecuted the case.
So-Called ‘Frack Master’ Sentenced to 15 Years in Federal PrisonRead the Press Release
Texas oil-and-gas mogul Christopher A. Faulkner has been sentenced to 15 years in federal prison for bilking investors out of millions of dollars and concealing money from the IRS, announced Acting U.S. Attorney for the Northern District of Texas Chad Meacham.
A frequent media commentator and self-proclaimed “frack master,” Faulkner, now 44, was arrested in June 2018 at the Los Angeles International Airport. He entered his first guilty plea in October 2018. After the judge declined to impose the binding 12-year sentence stipulated in the plea agreement, Faulkner withdrew his guilty plea. He entered a second guilty plea in December 2020 and was sentenced in September 2021 to 15 years in federal prison for securities fraud and attempted tax evasion. U.S. District Judge Jane Boyle also ordered him to pay $92.4 million in restitution to his victims.
According to plea papers, from 2011 to 2016, Faulkner raised more than $71 million from working interest investors, who took on a fixed portion of projected drilling costs in exchange for a share in his oil and gas profits.
But in marketing materials distributed to these investors, Faulkner inflated the estimated drilling costs by as much as 800 percent, allowing his three companies – Breitling Energy Corp., Crude Energy, LLC and Patriot Energy, Inc. – to pocket the difference between his projections and the actual cost of the wells.
He also gave would-be investors a “Geology Report,” ostensibly prepared by an independent expert, estimating future production for each well. Unbeknownst to them, the report was generated by a geologist on Faulkner’s payroll who consistently overstated the wells’ potential.
Faulkner routinely oversold shares, then transferred investment funds into comingled accounts despite promising investors their money would be deposited in a segregated bank account used only to pay for drilling activities.
Over a five-year period, he admits, he diverted approximately $23 million for his own personal benefit, shelling out hundreds of thousands of dollars at a time for luxury travel, professional concierge services, maintenance of multiple residences, and at least seven vehicles, including an Aston Martin, a Bentley, and a Mercedes Benz. During that time, his companies paid out just $6.2 million to investors, according to the criminal complaint filed in June.
Moreover, in 2014, Faulkner says, he concealed at least $3.7 million in taxable income from the federal government, failing to file a return or pay income tax.
Faulkner previously settled with the Securities & Exchange Commission (SEC), which filed a complaint in June 2016 alleging multiple violations of federal securities laws. Faulkner’s settlement with the SEC ordered him to disgorge $23.8 million; permanently enjoins him from violating, among other things, the antifraud provisions of the federal securities laws and from participating in any unregistered securities transactions; and, bars him from serving as an officer or director of any SEC-reporting company and from participating in any offering of a penny stock.
The Internal Revenue Service – Criminal Division, Federal Bureau of Investigation, and U.S. Postal Inspection Service conducted the criminal investigation. Assistant U.S. Attorneys Marcus Busch, Katherine Miller, Mark Tindall (now a Western District of Texas AUSA), Christopher Stokes (fmr) and Ryan Raybould (fmr) prosecuted the criminal case.
Jennifer Lynne Faith Charged with Murder-For-Hire in Husband’s DeathRead the Press Release
Jennifer Lynne Faith, the Oak Cliff woman whose boyfriend allegedly shot her husband to death, has been charged with orchestrating the murder, Acting U.S. Attorney for the Northern District of Texas Prerak Shah announced today.
Ms. Faith, 49, was charged Tuesday via superseding indictment with use of interstate commerce in the commission of murder-for-hire, a charge that carries a potential death penalty. She was previously charged with obstruction of justice, to which she entered a plea of not guilty.
Ms. Faith’s boyfriend, Darrin Ruben Lopez, 49, allegedly gunned down her husband, American Airlines technology director Jamie Faith, on Oct. 9, 2020 in front of his home in Oak Cliff. Mr. Lopez was previously charged by the state with murder and by the feds with a gun crime, to which he also entered a plea of not guilty.
Court documents unsealed today allege that Ms. Faith used two phony email accounts to correspond with Mr. Lopez, assuming the identities of her own husband and one of her friends in order to falsely convince Mr. Lopez that her husband was physically and sexually abusing her.
“Ms. Faith’s alleged murder-for-hire scheme was depraved and calculated. She preyed on her boyfriend’s protective instinct and his pocketbook in order to convince him to execute her husband,” said Acting U.S. Attorney Prerak Shah. “Jamie Faith’s brutal murder was a tragedy. His death has been a double blow to his family and friends, who had just begun to absorb the news of his murder when they were confronted with evidence of his wife’s alleged involvement. We are committed to getting justice for Jamie – and to holding both Ms. Faith and Mr. Lopez accountable for their alleged crimes.”
“Although the indictment of Ms. Faith is a win for law enforcement, I can’t help but think of the pain associated with so many others in this investigation. ATF is grateful to the Dallas Police Department for their dogged efforts in bringing this case to justice. ATF will not waver in its fight against violent crime in North Texas and beyond,” stated ATF Dallas Special Agent in Charge Jeffrey C. Boshek II.
According to the superseding indictment, Ms. Faith allegedly created the fake Gmail account in her husband’s name on April 9, 2020. Posing as Mr. Faith, Ms. Faith emailed Mr. Lopez multiple times during the spring and summer of 2020, taunting Mr. Lopez with details of extreme physical and sexual abuse that had never actually occurred. (Investigators have found absolutely no evidence of domestic or sexual violence by Jamie Faith.) Ms. Faith repeatedly attached fake photos of injuries as bogus proof of the abuse.
“I am telling you to stay away from my family,” she wrote in an email to Mr. Lopez on April 10 while posing as Mr. Faith.
“Enjoy knowing you can’t do a [expletive] thing about it,” she wrote in another email to Mr. Lopez on May 9, attaching close-up photos of purported injuries.
Ms. Faith allegedly created the fake Gmail account in her friend’s name on May 13. Posing as that friend, Ms. Faith sent multiple emails to Mr. Lopez’s personal email account falsely claiming that Mr. Faith was physically and sexually abusing her. Ms. Faith downloaded stock images of injuries from the internet and attached those images to her emails.
“Jamie slapped Jen … then he sent the pic of him choking her,” she wrote in an email to Mr. Lopez on May 13 while posing as her friend. “I am asking if you are willing to get involved and help Jen get out of this situation.”
“Jamie is abusing Jen today,” she wrote in another email to Mr. Lopez. “Any ideas how we can help her?”
“I know I won’t feel better about her situation until she is out of the house away from him or she lets me put a bullet in Jamie’s head,” Mr. Lopez replied by email on May 20.
“I am also very concerned and if it were up to me, I would tell you to go for it with your idea --- lol; I’ll give you an alibi,” Ms. Faith responded, still posing as her friend.
“Darrin, I talked to Jenn – he’s burning her, among other things,” she continued in another email sent to Mr. Lopez on July 26.
On Oct. 8, Mr. Lopez allegedly drove from his home in Cumberland Furnace, Tennessee, to the Faiths’ home in Dallas, where he laid in wait until the early morning hours of Oct. 9. When Mr. and Ms. Faith emerged from their home to walk the family dog, Mr. Lopez allegedly approached Mr. Faith from behind and shot him seven times – three times in the head, three times in the torso, and one time in the groin – before fleeing the scene in his black Nissan Titan pickup truck with a distinctive “T” decal on the back window.
In the days following the murder, the pair exchanged multiple text messages about removing the decal from Mr. Lopez’s truck – messages they later attempted to delete.
On Oct. 10, an associate of Ms. Faith created a GoFundMe account to raise money for the deceased’s family. Ms. Faith allegedly withdrew approximately $58,000 from the fund, which she used to pay for purchases made on two credit cards she gave to Mr. Lopez. She also used the credit cards to pay for expenses for Mr. Lopez and his family, purchase airline tickets for Mr. Lopez and his daughters, and pay FedEx to ship Mr. Lopez a large screen television.
On Nov. 11, Ms. Faith initiated a life insurance claim seeking approximately $629,000 in death benefits from Met Life. She repeatedly updated Mr. Lopez as to the status of the claim:
“Ok, so life insurance. They aren’t processing the claim yet because when they spoke to Det Walton in November, he told them I couldn’t be ruled out as a suspect,” she texted Mr. Lopez (as herself) on Dec. 29.
“Oh no,” Mr. Lopez texted back.
On Jan. 10, 2021, law enforcement agents asked Ms. Faith to come in for an interview. She immediately texted Mr. Lopez in Tennessee:
“Detective called. He wants me in for an interview tomorrow. He said he wants to go over the investigation and go through some things to start moving things forward. I’m a ball of nerves now,” she wrote.
“You don’t need to be,” Mr. Lopez responded. “Just keep saying what you have been … you will be fine.”
“If asked about you, you are an old friend going through a divorce,” Ms. Faith replied. “Don’t text me Monday, I am going to factory reset my phone on Sunday night after deleting texts. Just thinking in case they pulled phone records and ask.”
On Jan. 11, Mr. Lopez was arrested in Cumberland Furnace, Tennessee. Law enforcement agents located the .45 caliber handgun used to kill Jamie Faith inside a satchel in Mr. Lopez’s residence. Jamie Faith’s blood was recovered on the firearm.
The following week, Ms. Faith allegedly transferred a total of $118,00 from her checking account into an account belonging to a third party. A few days later, she asked another individual to transmit a message to Mr. Lopez:
“I’ve just needed to be cautious because every communication is being monitored,” she said. “Please tell him ASAP that I will always be his.”
“Please stay strong for US,” Mr. Lopez, who was in custody, responded via the individual. “Your knight always.”
Indictments are merely allegations of criminal conduct, not evidence. Like all defendants, both Ms. Faith and Mr. Lopez are presumed innocent until proven guilty in a court of law.
If convicted, Ms. Faith faces up to life in federal prison, and could be subject to the death penalty. Mr. Lopez faces up to 10 years in federal prison on the firearm charge and up to life in a state penitentiary on the Dallas County murder charge.
The Bureau of Alcohol, Tobacco, Firearms & Explosives’ Dallas Field Division and the Dallas Police Department’s Homicide Unit conducted the investigation with the assistance of the Federal Bureau of Investigation’s Dallas Field Office, Homeland Security Investigations, the Tennessee Bureau of Investigation, and the U.S. Attorney’s Office for the Middle District of Tennessee. NDTX Assistant U.S. Attorney Rick Calvert, Assistant U.S. Attorney Andrew Briggs and Assistant U.S. Attorney Brian McKay are prosecuting the case.
Dallas Attorney Pleads Guilty to Laundering Purported Drug MoneyRead the Press Release
A Dallas lawyer pleaded guilty today to conspiring to launder money he believed was linked to narcotics trafficking, announced Acting U.S. Attorney Prerak Shah.
Rayshun Jackson, the 52-year-old defense attorney at the helm of The Jackson Law Firm, was arrested in April. On Wednesday, he pleaded guilty to conspiracy to launder money before Chief U.S. District Judge Barbara M.G. Lynn.
“As an attorney, Mr. Jackson swore an oath to uphold the rule of law – an oath he violated completely when he conspired with purported drug traffickers to commit a federal offense,” said Acting U.S. Attorney Prerak Shah. “Street-level dealers may be the most conspicuous sign of our nation’s drug epidemic, but the men and women who launder the profits are no less culpable. The drug trade would die if it weren’t lucrative. Mr. Jackson attempted to profit off the backs of addicted individuals, and we are gratified to bring him to justice.”
“Money launderers, like Mr. Jackson, complete the circle of drug trafficking by returning ill-gained profits to criminal organizations,” said DEA Dallas Special Agent in Charge Eduardo A. Chávez. “As a defense attorney, Mr. Jackson disregarded his oath to promote respect and confidence in the legal profession. Today’s plea reflects that nobody is above DEA’s reach, especially those who swore to defend the rule of law.”
In plea papers, Mr. Jackson admitted to laundering $380,000 for an individual he believed was a drug trafficker, but was actually an undercover DEA agent.
He was introduced to the agent on Sept. 3, 2020 by “Person A,” the leader of a large-scale opioid distribution ring known to deal in illegally diverted narcotics. After Person A vouched for each individual’s credibility, Mr. Jackson and the undercover agent discussed how the attorney could “clean” the agent’s “dope money.”
Mr. Jackson advised the agent that he could launder around $500,000 a month by funneling it through non-traceable cash businesses (i.e., coin laundries, car washes) and shell corporations. He agreed to use his firm’s bank accounts, as well as charitable bank accounts established for providing legal services to indigent persons, to transfer the money into and out of the undercover agent’s bank account.
“Ray is the bomb... He’s a thug, he’s just got a law degree,” Person A told the undercover agent after the meeting, according to court documents.
Three weeks later, the undercover agent delivered a black backpack stuffed with $100,000 cash to Mr. Jackson at his office. The attorney agreed to launder the money in return for 5% cash up front. After depositing the remaining $95,000 into his various bank accounts in various amounts on various days, he eventually transferred the entire sum into the DEA’s undercover bank account.
The next month, the undercover agent delivered an additional $300,000 cash to Mr. Jackson at his office. Again, the attorney agreed to a 5% up-front fee in return for laundering the money. After depositing the remaining $285,000 into his various bank accounts in various amounts on various days, he eventually transferred the same amount into the DEA’s undercover bank account.
In plea papers, Mr. Jackson admitted he knew of the unlawful purpose of the agreement and joined in it willingly.
Per his plea agreement, he now faces five years in federal prison and a forfeiture money judgment of $20,000 (an amount equal to the amount he collected in fees from the undercover agent). According to the Texas State Bar’s compulsory discipline policy, he will likely be stripped of his law license.
The Drug Enforcement Administration’s Dallas Field Office conducted the investigation with the assistance of IRS – Criminal Investigations and the Dallas Police Department. Assistant U.S. Attorney Courtney Coker, the Northern District of Texas’ Deputy Criminal Chief, is prosecuting the case along with Assistant U.S. Attorneys Juanita Fielden and Nashonme Johnson.
Three Alleged Drug Traffickers Arrested, Charged in PampaRead the Press Release
Three alleged drug traffickers in Pampa, Texas – including the alleged local president of the Bandidos motorcycle gang – have been charged with gun and drug crimes, announced Acting U.S. Attorney Prerak Shah.
Tracey Dylan Cain, 31, Jason Mulenax, 43, and Erik Gutierrez, 23, were charged via criminal complaint with possession with intent to distribute controlled substances and possession of firearms in furtherance of drug trafficking crimes. All three defendants made their initial appearances before U.S. Magistrate Judge Lee Ann Reno in Amarillo Monday afternoon. The federal government has moved to detain them based upon dangerousness and risk of flight.
According to court documents, the men were arrested Friday during searches of their respective residences.
Inside Mr. Cain’s home, law enforcement recovered large amounts of cocaine, methamphetamine, LSD, ecstasy, and marijuana, large amounts of U.S. currency, and numerous firearms, including a gold-plated .50 caliber pistol with a handmade suppressor. Prior to the search, Mr. Cain barricaded himself inside his home and refused to cooperate with officers.
Inside Mr. Gutierrez’s home, law enforcement recovered a powdery substance believed to be cocaine, a 10mm Glock pistol, and approximately $6,000 in cash. Inside Mr. Mulenax’s home, they recovered a green leafy substance believed to be marijuana, seven firearms, drug paraphernalia, and approximately $1,098 in cash.
During interviews, both Mr. Gutierrez and Mr. Mulenax admitted to selling drugs and named their supplier as Mr. Cain.
Law enforcement previously identified Mr. Mulenax as the alleged local president of the Bandidos, one of the nation’s most dangerous organized motorcycle gangs. The organization’s former national president, Jeffrey Fay Pike, was convicted of drug trafficking, racketeering, and other violent crimes in federal court in San Antonio in 2018 and later sentenced to life plus ten years in federal prison.
A criminal complaint is merely an allegation of criminal conduct, not evidence. All defendants are presumed innocent until proven guilty in a court of law.
If convicted, these men face up to life in federal prison.
The Federal Bureau of Investigation’s Dallas Field Office and the Texas Department of Public Safety conducted the investigation with help from the Drug Enforcement Administration, the Pampa Police Department, and the Gray County Sheriff’s Office. Assistant U.S. Attorney Anna Marie Bell is prosecuting the case.
U.S. Attorney Seeking Victims Advertised on CityXGuide.comRead the Press Release
The United States Attorney’s Office for the Northern District of Texas is seeking individuals who were trafficked on CityXGuide, a commercial sex website shut down by the federal government in June 2020, announced Acting U.S. Attorney Prerak Shah.
Prosecutors are requesting that victims — who are afforded rights under the Crime Victims’ Rights Act (CRVA) and may be eligible for restitution — visit https://www.justice.gov/usao-ndtx/united-states-v-wilhan-martono-cityxguide to submit their information.
The U.S. Attorney’s questionnaire will allow victims to outline any physical or mental health injuries they sustained as a result of human trafficking (information that is critically important to request court-ordered victim compensation at sentencing) and to share their thoughts on the sentence the judge should impose on CityXGuide owner Wilhan Martono.
Mr. Martono, 47, was arrested on June 19, 2020, the same day his websites were seized by the U.S. Department of Homeland Security. He pleaded guilty on Aug. 24, 2021 to one count of promotion of prostitution and reckless disregard of sex trafficking and one count of conspiracy to engage in interstate transportation in aid of racketeering enterprises - facilitating prostitution. His plea is the first ever entered under the Allow States and Victims to Fight Online Sex Trafficking Act (FOSTA), a 2018 law that allows the federal government to prosecute websites that facilitate sex trafficking.
In plea papers, Mr. Martono admitted that he created, owned, and operated CityXGuide and a suite of related websites. He registered the domain names for several of the sites on April 8, 2018 — just one day after the feds shut down Backpage.com, then the internet’s leading source of commercial sex advertisements. Like Backpage, Mr. Martono’s sites allowed users, including traffickers, to post hundreds of thousands of commercial sex advertisements worldwide.
Mr. Martono admitted that he turned a blind eye to the illegal sex trafficking occurring on CityXGuide. Despite receiving numerous emails from federal, state, and local law enforcement informing him that CityXGuide and its companion websites were being used to facilitate sex trafficking and child exploitation, he continued to operate those sites in the United States and around the world. In court documents, prosecutors estimated that Mr. Martono netted more than $21 million off his websites, which users described as “taking over from where Backpage left off.”
Law enforcement has already identified numerous trafficking victims in CityXGuide advertisements, including a 13-year-old Jane Doe identified in North Texas in November 2019 and a 16-year-old Jane Doe identified in North Texas in March 2020. Prosecutors are engaged in an ongoing effort to notify all survivors of sex trafficking who were advertised on CityXGuide.
Potential victims include minors who were advertised on Cityxguide.com or a related website (including Cityxguide.net, Cityxguide.co, Cityxguide.be, Bodyrubshop.com, CAPleasures.com, or Backpage.co), as well as adults subjected to force, threats of force, fraud, and/or coercion at the time they were advertised on CityXGuide or a related website. Individuals do not need to reside in the Northern District of Texas to be considered victims in this case.
Under the CVRA, victims are entitled to reasonable, accurate, and timely notice of public court proceedings, the right to be treated with fairness and respect for their dignity and privacy, and the right to be reasonably heard at any public sentencing proceeding. For a more detailed description of victims' rights under the law, click here.
The North Texas Trafficking Task Force conducted the investigation, led by Homeland Security Investigations’ Dallas Field Office, the United States Secret Service, and the Colleyville Police Department, with assistance from HSI’s El Paso and San Jose Field Offices as well as the Texas Department of Public Safety. Assistant United States Attorneys Sid Mody, Rebekah Ricketts, and John de la Garza are prosecuting the case.
Man Sentenced to 35+ Years for Pornographic Images of Six-Year-OldsRead the Press Release
A Grand Prairie man who sexually exploited two six-year-old girls has been sentenced to 430 months in federal prison, announced Acting U.S. Attorney for the Northern District of Texas Prerak Shah.
Juan Navarro, Jr., 38, pleaded guilty in January to sexual exploitation of a child and possession of child pornography. He was sentenced Thursday by U.S. District Judge Mark Pittman.
In plea papers, Mr. Navarro admitted that in 2019, he enticed a female child into engaging in sexually explicit conduct for the purpose of producing images of such conduct. He also admitted that he stored multiple sexually explicit images of children on his cell phone.
According to court documents, the investigation began when Yahoo reported to the National Center for Missing and Exploited Children (NCMEC) that one of their email clients had uploaded child pornography. Law enforcement traced the email account in question to Mr. Navarro.
During a search of his residence, agents found a Samsung Galaxy phone containing multiple images of child pornography, including several images of little girls that appeared to have been created on the phone. In interviews with law enforcement, Mr. Navarro admitted that he sometimes emailed himself child porn, but initially denied knowing the girls.
However, the children’s mother confirmed that her daughters knew Mr. Navarro, and recognized the seat of his car in the images of her daughters, who have since received appropriate psychological and medical care.
“My girls are not physically here, but I am. I’m hear so my voice can be their voice and the voice of all of those other innocent victims,” their mother testified at sentencing. “We need our voices to be heard.”
The Federal Bureau of Investigation’s Dallas Field Office and the Grand Prairie Police Department conducted the investigation. Assistant U.S. Attorney Brandie Wade prosecuted the case.
For-Profit Trade School Sentenced to Nearly 20 Years for Defrauding VA, Student VeteransRead the Press Release
The owner of a for-profit trade school has been sentenced to more than 19 years in federal prison for bilking the U.S. Department of Veterans Affairs of $72 million and of misleading student veterans, announced Acting U.S. Attorney for the Northern District of Texas Prerak Shah.
In April, a federal jury convicted Jonathan Dean Davis, the 43 year-old owner of Retail Ready Career Center, of seven counts of wire fraud and four counts of money laundering. He was sentenced Wednesday by U.S. District Judge Brantley Starr, who also ordered him to pay $65.2 million in restitution. In addition to paying restitution, Mr. Davis will be required to forfeit $72.5 million to the federal government.
The defendant had been remanded into custody immediately following conviction, and was remanded back into custody after his sentencing hearing.
“A jury found that Mr. Davis lied to multiple government agencies, lining his pockets with veterans’ GI Bill benefits even as they were struggling to scrape by,” said Acting U.S. Attorney Prerak Shah. “Mr. Davis’ crimes were a slap in the face to the sacrifices made by our servicemembers, and we are proud to put him behind bars for such a significant period of time.”
According to evidence presented at trial, Mr. Davis marketed Retail Ready’s six-week HVAC training course to veterans whose tuition and fees would be covered by the Veteran’s Educational Assistance Act of 2008, also known as the post-9/11 GI Bill. The defendant, who was essentially broke at the time of the crime, realized that he could charge $18,000 to $21,000 per student for the six-week course, if only he could get approval from the VA to accept GI Bill payments for tuition – which required prior approvals from the Texas Workforce Commission (TWC) and the Texas Veterans Commission (TVC).
These agencies required applicants to certify that they were not personally facing any criminal or civil actions, and to prove that their schools were established educational institutions in stable financial condition. Knowing he could not meet these requirements, Mr. Davis repeatedly lied and concealed information from these agencies.
“Several decisions lie ahead that will ultimately make the difference if I succeed or if I fail. More gut-wrenching conversations, more humiliating experiences, more lying is in order,” Mr. Davis wrote in an electronic journal he kept on his computer, which was recovered by federal agents during a search of Retail Ready. The journal became a key piece of evidence at trial.
Mr. Davis assured the TWC that he was not subject to any civil actions, when, in fact, he was facing numerous civil judgments over unpaid debts. He also told the TWC that he was not facing any criminal charges, when, in fact, he had a pending felony charge for theft of services.
Mr. Davis told the TVC that Retail Ready had been operating as a school for two years, when, in fact, the company had only existed for a few months and had never trained any students. He claimed that Retail Ready was fully prepared to train veterans, when, in fact, the company lacked a building and basic supplies. He even lied to an independent accountant about the school’s financial condition, and then submitted false financial statements to both the TWC and the TVC.
Eventually, based upon Mr. Davis’ lies to the TWC and TVC, the VA accepted Retail Ready’s application, allowing Mr. Davis to charge veterans’ tuition and fees to the VA under the GI Bill.
In 2014, he began recruiting student veterans, promising to prepare them for lucrative careers in the heating and air conditioning industry. Upon entering the workforce, however, many of these veterans discovered that Retail Ready had failed to teach them many of the basic skills necessary for entry-level technician jobs.
Several veterans testified at trial that they had relied on the Retail Ready’s fraudulently obtained VA endorsement and were sorely disappointed about their post- Retail Ready career prospects and pay. They were also shocked to learn of the rate at which Retail Ready’s six-week course had drained their GI Bill benefits, testifying that they felt “used,” “taken advantage of,” “deceived,” and “bamboozled.”
Even as his veteran graduates struggled to make ends meet, Retail Ready collected more than $72 million in GI Bill benefits from the VA. Using the proceeds of his fraud, Mr. Davis purchased a $2.2 million home in Dallas, a $428,000 Lamborghini, a $280,000 Ferrari, and a $260,000 Bentley, among other things.
The VA’s Office of Inspector General conducted the investigation with the assistance of the Federal Bureau of Investigation’s Dallas Field Office and the United States Postal Inspection Service’s Fort Worth Field Office. Assistant U.S. Attorneys Douglas Brasher and Fabio Leonardi are prosecuting the case, and Assistant U.S. Attorney Dimitri Rocha is handling forfeiture. U.S. District Judge Brantley Starr presided over the trial.
Bedford Man Who Ignited Bomb Near Bridge SentencedRead the Press Release
A man who detonated an explosive device under a bridge in Bedford, Texas has been sentenced to 46 months in federal prison, announced Acting U.S. Attorney Prerak Shah.
Nicholas Lloyd Nelson, 38, pleaded guilty in June to possession of a destructive device. He was sentenced earlier this month by U.S. District Judge Reed C. O’Connor.
According to court documents, law enforcement responded to an explosion in Bedford, Texas at 4:35 p.m. on April 7, 2021.
Upon arriving at the scene, bomb technicians saw a crater beneath a bridge on Forest Ridge Drive. Next to the crater, they observed explosive components, including a speaker wire and container debris. They also found an un-detonated explosive device along the roadway and performed a controlled detonation.
Witnesses told law enforcement they’d noticed a young, white man emerge from under the bridge just after the explosion. Based on their descriptions and prior experience with the defendants, officers located Mr. Nelson.
At his home, they found components that could be used to assemble explosive devices. They also identified Mr. Nelson in dozens of YouTube videos posted by the account “Improvised Chaos” that showed him manufacturing and detonating explosive devices.
In plea papers, Mr. Nelson admitted to detonating the unregistered device under the bridge. In interviews, he told law enforcement he’d constructed the bombs with potassium perchlorate, an substance commonly used in pyrotechnics, munitions, and explosives.
The Federal Bureau of Investigation’s Dallas Field Office and the Bedford Police Department conducted the investigation with the assistance of the Bedford Fire Department and the Bureau of Alcohol, Tobacco, Firearms & Explosives’ Dallas Field Division. Assistant U.S. Attorney Jay Weimer prosecuted the case.
Acting U.S. Attorney Prerak Shah Announces DepartureRead the Press Release
Acting United States Attorney for the Northern District of Texas Prerak Shah announced today that he will be resigning from the Justice Department effective October 1.
“It has been the honor of a lifetime to serve the 8 million people of North Texas as Acting United States Attorney,” Mr. Shah said. “I was privileged to work with not only the best federal prosecutors in the nation, but to work side-by-side with peerless federal, state, and local law enforcement partners. I am proud to have played a part in this office’s proud legacy of pursuing justice and liberty for all.”
Mr. Shah was named the Acting United States Attorney on January 10, 2021, after previously serving as the First Assistant United States Attorney. The Northern District covers 100 counties, more than 96,000 square miles, and a population of approximately eight million people. Mr. Shah led a staff of approximately 250 people across five division offices and was responsible for all federal criminal prosecutions and civil litigation involving the United States in his district. Under his leadership, the office advanced a number of Justice Department priorities, from violent crime and cybersecurity to corporate fraud and False Claims Act enforcement.
Mr. Shah’s team prosecuted a would-be bomber allegedly plotting to attack Amazon, brought down an $18 million pill mill scheme, and secured a conviction against a real estate developer for bribing two members of the Dallas City Council. The office also successfully tried a trade school owner for operating a $72 million fraud scheme, convicted two men who concealed a capital murder suspect who was on the FBI’s “10 Most Wanted” list, prosecuted an ADT technician for hacking into over 200 customers’ video feeds, and obtained over $22 million through a deferred prosecution agreement with a multinational medical device corporation. They expanded their partnerships with state and local law enforcement, resulting in several successful multi-agency operations that have helped stem the rise of violent crime in North Texas.
The office ran a number of investigations involving cryptocurrency, including extraditing a Serbian national charged with duping crypto investors out of $70 million, obtaining a five-year sentence for the founder of “AriseCoin” for securities fraud, and convicting a man going by the moniker “Dr. Bitcoin” for an illegal cash-to-crypto scheme.
On the civil side, the Northern District resolved a number of False Claims Act matters, including securing a $3.3 million settlement from a hospital, obtaining a $3.1 million settlement from dental management companies, and filing a case against a dermatopathologist who allegedly accepted kickbacks from a lab company.
Prior to serving as Acting U.S. Attorney, Mr. Shah held multiple senior leadership roles at the Department of Justice in Washington, D.C., including Deputy Associate Attorney General in the office overseeing the civil and criminal work of the Department’s Antitrust, Civil, Civil Rights, Environment & Natural Resources, and Tax divisions. He also served as the Deputy Assistant Attorney General in charge of the Department’s Natural Resources Section, directly supervising approximately 75 trial lawyers in high profile environmental investigations and trials across the country. Before joining the Justice Department, Mr. Shah served as chief of staff and chief counsel to U.S. Senator Ted Cruz and served as the Senior Counsel to the Attorney General of Texas.
Mr. Shah is looking forward to his next chapter, in private practice in Texas.
Shooter Who Injured Two in Dallas Sentenced to 17+ Years in Federal PrisonRead the Press Release
A Dallas man who shot and injured two victims in Dallas has been sentenced to 17 ½ years in prison for a federal firearm offense, announced Acting U.S. Attorney for the Northern District of Texas Prerak Shah.
Quentin Alonso Cordova, 23, pleaded guilty in June to two counts of being a felon in possession of a firearm. He was sentenced Tuesday to 210 months by Chief U.S. District Judge Barbara M.G. Lynn.
According to plea papers, Mr. Cordova – who has ten prior criminal convictions, including multiple felonies – admits that he committed two shootings in Dallas.
On Aug. 12, 2020, Mr. Cordova approached his first victim in the parking lot of a restaurant off Stemmons Freeway and shot the man in the leg with a 9mm Glock. He yanked a gold and diamond chain off the victim’s neck before fleeing the scene.
Two weeks later, on Aug. 28, 2020, Mr. Cordova approached his second victim in the parking lot of a cabaret on Reeder Road in Dallas. As the victim attempted to enter his vehicle, Mr. Cordova brandished a firearm and demanded that the victim turn over his belongings. When the victim attempted to flee, Mr. Cordova shot the man multiple times with another 9mm Glock, hitting him in the right arm and the right leg. The victim fell to the ground, and Mr. Cordova made off with his Rolex and a gold bracelet.
Using the National Integrated Ballistic Information Network, or NIBIN, federal agents were able to link fired cartridge casings left at the scenes of the two shootings to the guns possessed by Mr. Cordova.
Mr. Cordova is also facing state charges for aggravated assault, aggravated assault with a deadly weapon, aggravated assault on a security officer, burglary of a vehicle, unlawful possession of a firearm by a convicted felon, theft of property, and evading arrest.
The Bureau of Alcohol, Tobacco, Firearms, and Explosives’ Dallas Field Division and the Dallas Police Department conducted the investigation. Assistant U.S. Attorney Rebekah Ricketts prosecuted the case.
CORRECTION: An earlier version of this release erroniously stated the shooting on Reeder Road occurred on Aug. 20. It actually occurred on Aug. 28. Reporters were promptly notified of the error.
Men Who Fenced Stolen Diamonds Sentenced to 15+ YearsRead the Press Release
Five men who purchased jewelry stolen from traveling diamond salesman have been sentenced to a combined 190 months in federal prison and ordered to pay more than $7 million in restitution, announced Acting U.S. Attorney for the Northern District of Texas Prerak Shah.
The men “fenced” jewels obtained in robberies committed by a so-called “South American Theft and Robbery Group (SATG)” — a violent criminal enterprise that targeted traveling jewelry salesman nationwide.
- Romelio Rivieron, 51, who pled guilty in March 2020 to engaging in a conspiracy to launder money, was sentenced to 32 months in federal prison and ordered to pay $2,321,491.61 in restitution. He has already paid back approximately $230,000 towards victims of his crime.
- Co-conspirators Elkin Acosta Lopez, 46, and Harrinson Corredor, 29, who both pled guilty in 2019 to the same charge as Mr. Riveron, were previously sentenced to 68 months and 63 months, respectively. Mr. Corredor was ordered to pay $1,753,089 in restitution while Mr. Lopez was ordered to pay $1,368,088.68.
- Rubenhay Pinkhasov, 60, who pled guilty to engaging in 2019 to conspiracy to transport stolen goods in interstate commerce, was sentenced to 27 months in federal prison and ordered to pay $1,007,823 in restitution.
- Yuri Alishaev, 49, who conspired with Mr. Pinkhasov, pled guilty to misprision (concealment) of a felony and was sentenced to probation; he has already paid the entirety of the $1,009,689 he owes in restitution.
According to court documents, the men were involved in laundering money for a band of violent jewel thieves, including several who robbed a traveling jewelry salesman at gunpoint before beating him to death in Irving, Texas.
In plea papers, Mr. Lopez admitted that he regularly flew from his hometown in Bogota, Colombia to Texas in order to meet up with the robbers to purchase stolen jewelry. He then traveled to New York City to melt down the jewelry before either arranging for its sale in the United States or returning to Colombia to sell it at his shop. In March 2018, special agents from the FBI Dallas Field Office’s Violent Crime Task Force arrested Mr. Lopez at a New York airport upon his entry into the country after his arrival from Bogota.
Mr. Corredor, a Queens, New York resident who went by the name “Mono,” admitted he connected Mr. Lopez with the robbers and helped broker the sales. On one occasion, he handed one of the robbers a bag of cash in exchange for several stolen Rolex watches. He admitted he knew the jewelry was stolen and took a portion of the illicit proceeds.
Like Mr. Lopez, Mr. Riveron admitted he traveled from his home in Miami, Florida to Texas and other states in order to purchase stolen diamonds from the robbers. Knowing he could turn a profit by reselling the jewelry, he purchased items below market value, making upfront cash down-payments to the robbers and funneling subsequent cash payments through aiders and abettors in Colombia.
Mr. Pinkhasov admitted that he helped move stolen diamonds across state lines, from Texas to Florida and to New York. Pinkhasov admitted to purchasing stolen diamonds and jewelry from Colombian SATG members twice in 2015.
Mr. Alishaev, a prominent jewelry dealer in New York City’s West 47th Street Jewelry and Diamond District, admitted that he agreed to purchase stolen diamonds from Mr. Pinkhasov, who had acquired jewels worth over $1,000,000 from Colombian SATG members.
Mr. Pinkhasov, who owned a jewelry store in Miami, sent the diamonds to Mr. Alishaev. The two men agreed to share the profits if they were fruitful. Shortly after receiving the jewels from Mr. Pinkhasov, Mr. Alishaev sent back $500,000 in cash. However, after the pair learned the FBI was investigating, they agreed to never speak about the matter again.
Between 2016 and 2018, through multiple indictments, the U.S. Attorney’s Office for the Northern District of Texas charged a total of 20 SATG robbers who targeted traveling diamond and jewelry salesmen throughout the United States. All 20 have been convicted and sentenced.
The Federal Bureau of Investigation’s Dallas Field Office, Miami Field Office, and New York Field Office conducted the investigation. Assistant U.S. Attorneys Joe Magliolo and Ryan Raybould (fmr.) prosecuted the case against the fences with help from Assistant U.S. Attorney Keith Robinson, who prosecuted the Hobbs Act robbery case against the jewel thieves.
- Romelio Rivieron, 51, who pled guilty in March 2020 to engaging in a conspiracy to launder money, was sentenced to 32 months in federal prison and ordered to pay $2,321,491.61 in restitution. He has already paid back approximately $230,000 towards victims of his crime.
Lubbock Dentist Pleads Guilty to Production of Child PornographyRead the Press Release
A Lubbock dentist pleaded guilty in federal court today to one count of production of child pornography, announced Acting U.S. Attorney for the Northern District of Texas Prerak Shah.
Jason Paul White, 42, was charged via criminal complaint in January and indicted the following month. In August, prosecutors filed a superseding indictment against him alleging additional child pornography and enticement crimes involving seven victims over the course of 15 years. Mr. White pleaded guilty Monday before U.S. Magistrate Judge D. Gordon Bryant, Jr.According to plea papers, Mr. White admitted that in December 2009, he coerced a 17-year-old boy into engaging in sexually-explicit conduct in order to produce a video of that conduct. Over the next 11 months, Mr. White produced seven more sexually-explicit videos of the same child, which he uploaded to a Dropbox internet storage account.
Law enforcement discovered the Dropbox account in January 2021, during a search of Mr. White's business and residence. The child later identified himself in the videos. Other victims came forward as well.
Mr. White eventually admitted to producing sexually-explicit videos and enticing into sexual activity seven additional teenage boys, including one child not accounted for in the superseding indictment.
The children, who were as young as 13 at the time of the crime, told investigators that Mr. White used the ruse of running a pornography film business to lure them into sexual activity.
As a result of his plea, White faces a minimum sentence of 15 years and a maximum of 30 years in federal prison. He will also be required to forfeit his interest in his home in Lubbock and a 966-acre ranch in Garza County, where he committed his crimes. White will remain in custody pending his sentencing, which has not yet been set.
The Lubbock Police Department, the Federal Bureau of Investigation, Homeland Security Investigations, and the High Technology Investigative Unit within the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) investigated the case. Assistant United States Attorney Callie Woolam and CEOS Trial Attorney Austin Berry are prosecuting the case.Five-Time ‘Career Criminal’ Sentenced to 27 Years for Gun CrimeRead the Press Release
A five-time felon found guilty of a gun crime was sentenced today to 27 years in federal prison, announced Acting U.S. Attorney for the Northern District of Texas Prerak Shah.
Following a two-day trial in March, a jury in Fort Worth convicted Abedel Sattar Alkheqani, 27, of being a felon in possession of a firearm and ammunition. He was sentenced Tuesday afternoon by Senior U.S. District Judge Terry R. Means.
Due to his multiple prior felony convictions, Mr. Alkheqani received a sentencing enhancement under the Armed Career Criminal Act, which raises the maximum penalty for offenders with three previous convictions for a violent felony or serious drug offense.
According to evidence presented at trial, Mr. Alkheqani was arrested in March 2020, after officers with the Arlington Police Department identified him as a suspect in a shooting that occurred in a residential neighborhood in Arlington, Texas.
Witnesses told law enforcement that the suspect exited a pickup truck, pistol in hand, and fired three times as the victim tried to flee. The victim was struck multiple times and hospitalized, but ultimately recovered.
Based on witnesses’ descriptions of the suspect’s truck as well as surveillance video, officers were able to locate the truck used in the shooting approximately a half-mile from the scene. They determined the truck was registered to Mr. Alkheqani and noted that he matched witnesses’ descriptions of the shooter.
When officers pulled Mr. Alkheqani over a few hours later, they discovered marijuana in his jacket pocket and arrested him for possession. He then gave written consent for officers to search his home and vehicle.
During the search of Mr. Alkheqani's truck, law enforcement recovered a single round of 9mm caliber ammunition, which matched the manufacturer and caliber of the shell casings recovered at the shooting scene. At his residence, they recovered a .22 caliber rifle beside his bed and a magazine containing ammunition for the rifle within arm’s reach.
Mr. Alkheqani told officers that the rifle was his wife’s, but in recorded jailhouse calls, Mr. Alkheqani asked his wife, “is my rifle still there?” before correcting himself and stating, “I mean your rifle.”
Forensic analysis later revealed that gunshot residue was recovered from Mr. Alkheqani’s body on the day of the shooting.
A query of Mr. Alkheqani's criminal history revealed five prior felony convictions, including four for burglary of a habitation – all offenses that made it a federal crime for him to possess a firearm or ammunition.
The Arlington Police Department and the Bureau of Alcohol, Tobacco, Firearms & Explosives’ Dallas Field Division conducted the investigation. Assistant U.S. Attorneys Levi Thomas and Frank Gatto tried the case.
40 Charged with Gun, Drug Crimes in LubbockRead the Press Release
Forty defendants – including 15 arrested in Wednesday’s “Operation Taste the Rainbow” in Lubbock – have been charged with gun and drug crimes, announced Acting U.S. Attorney Prerak Shah.
The men and women, all allegedly tied to methamphetamine trafficking in and around Lubbock, have been charged in a series of three indictments with an array of federal crimes, primarily distribution of methamphetamine, unlawful possession of firearms, and conspiracy. They began making their initial appearances in federal court on Friday morning.
In bringing these charges, the United States Attorney’s Office focused on bringing to justice Lubbock’s most violent recidivists. Between them, the 40 defendants have been previously charged with 32 assaults, nine burglaries, three robberies, a murder, 24 firearm crimes, 69 serious controlled substance violations, three terroristic threats, a forgery, 12 frauds, and a child sexual assault.
In an effort to keep the community safe, FBI’s Dallas Field Division, the Texas Department of Public Safety, and their federal, state, and local law enforcement partners deployed nearly 200 personnel to execute Wednesday’s operation, which resulted in the arrest of 15 defendants. Meanwhile, agents served federal arrest warrants on an additional 20 defendants already behind bars. The remaining five defendants charged remain fugitives. Members of the public are encouraged to contact law enforcement at 1-800-CALL-FBI (225-5324) with tips.
Fugitives include:
• Oscar Alcala Jr. (believed to be in Lorenzo)
• Alexandra Cruz (believed to be in Lorenzo)
• Bobby Joe “Ace” Garcia (believed to be in Lubbock)
• Christopher Eldon “Skittles” Limbaugh (believed to be in Littlefield)
• Christopher Joshua Ruiz (believed to be in Lubbock)
Those arrested Wednesday morning include:
• Alexandria Unique Conner
• Kelsey Marie Applegate
• Ruby Alexis Banuelos
• David Bustos, Jr.
• Teresa Delhierro
• Sergio Lopez
• Christopher Ray Lovington
• Madison Whitney Michaels
• Katie Dshawn Montez
• Stephanie Shea Ortiz
• Adriana Pena
• Julie Ann “Juicy” Sifuentes (arrested in San Antonio)
• Colten Shane White
• Toby Mack Woods
• Michael Joseph Ybarra
Those served with federal warrants while already in custody include:
• Mark Adam “Cinco” Alonzo
• Beatrice Delgado
• Yesenia Flores
• Christopher Daniel Garcia
• James Raul Garza
• Austin Tyler Grant
• Megan Francisca Gomez
• Bobbi Jean Hendrix
• Isaac Levi Hernandez
• Jesse “J.J.” Martinez, Jr.
• Robert Rangel, Jr.
• Symon Anthony Maldonado
• Alejandro Antonio “Ace” Mendez
• Gabriel Lee Mendoza
• Megan Francisca Gomez
• Daniel Ramon, Jr.
• Edilberto “Bird” Reyes
• Samantha Denise Rodriguez
• Jessie Luciano “Lucky” Salazar
• Gerald Felipe “Gizmo” Vargas
“This was a victory for the rule of law in Lubbock. Dozens of criminals, and their guns, and their drugs were removed from the streets in a matter of hours, and the community is safer because of that,” said Acting U.S. Attorney Prerak Shah. “We zeroed in on the men and women who are driving up the city’s crime rates – the ones that are most responsible for the uptick in violent crime. Federal authorities are committed to partnering with state and local law enforcement to remove the worst criminal elements from this community, and we don’t plan to rest until we’re done.”
“The FBI’s criminal investigative focus is on targeting the overall leadership of gangs and criminal enterprises that drive violence in American communities,” said FBI Special Agent in Charge Matthew J. DeSarno. “Through our law enforcement partnerships and task forces we’re sending a loud and clear message to violent criminals that we will deploy our collective strength to ensure the safety and security of our neighborhoods and communities. In today’s world, the threats we face are too diverse, too dangerous, and too all-encompassing for any of us to tackle alone.”
“This is an excellent example of a law enforcement officer's daily commitment to fulfill their sacred duty of serving and protecting. The Texas Department of Public Safety values the importance of the teamwork displayed during this successful operation with our city, county, and federal partners in achieving the common objective of providing safer communities for the citizens of the great State of Texas,” said Texas Department of Public Safety Regional Director Joe Longway.
Indictments are merely allegations of wrongdoing, not evidence. All defendants are presumed innocent until proven guilty. If convicted, many of these defendants would face decades-long sentences.
The Federal Bureau of Investigation’s Dallas Field Division – Lubbock Resident Agency and the Texas Department of Public Safety conducted the investigation with the help of six agency partners: the Bureau of Alcohol, Tobacco, Firearms & Explosives’ Dallas Field Division, the Lubbock Police Department, the U.S. Marshals, the Lubbock County Sheriff’s Office, the Drug Enforcement Administration’s Dallas Field Division, and Homeland Security Investigations. Assistant U.S. Attorney Sean Long is prosecuting the case.
San Diego Man Indicted for Interstate Domestic Violence After Allegedly Murdering BoyfriendRead the Press Release
A San Diego man who allegedly murdered his boyfriend in Hale County, Texas is now facing a federal interstate domestic violence charge, announced Acting U.S. Attorney for the Northern District of Texas Prerak Shah.
On Wednesday, a federal grand jury returned a one-count indictment against 23-year-old Alexander Yoichui Duberek, changing interstate domestic violence. Mr. Duberek, wo is currently in state custody on a related murder charge, is expected to make his initial appearance in federal court next week.
According to the indictment, Mr. Duberek allegedly traveled across state lines with intent to kill his dating partner, identified in court documents as “John Doe,” on Oct. 31, 2020.
The state alleges that Mr. Duberek then stabbed to death his 30-year-old boyfriend, whose body was later found on the side of FM 400 the following day.
An indictment is merely an allegation of criminal conduct, not evidence. Like all defendants, Mr. Duberek is presumed innocent until proven guilty.
If convicted of the federal charges, he faces a sentence of up to life in federal prison.
The Texas Rangers and the Hale County Sheriff’s Office conducted the investigation with the assistance of the Texas Department of Public Safety and the Federal Bureau of Investigation’s Dallas Field Office. Assistant U.S. Attorney Callie Woolam is prosecuting the case.
City Employee, Firefighter Sentenced for Child Pornography, Ordered to Pay $79,000 in Restitution to VictimsRead the Press Release
A volunteer firefighter who stored child pornography on his fire department tablet was sentenced today to more than 12 ½ years in federal prison, announced Acting U.S. Attorney Prerak Shah.
Justin David Musgraves, 39, pleaded guilty in May to possession of pornography involving a prepubescent minor. He was sentenced today to 151 months in federal prison by U.S. District Judge James Wesley Hendrix, who also ordered him to pay $57,000 in restitution to eight victims identified by the National Center for Missing and Exploited Children as known victims of child sexual abuse imagery, $17,000 to the Amy, Vicky, and Andy Child Pornography Victim Assistance Act’s reserve fund, and $5,000 to the Justice for Victims of Trafficking Act’s victim services fund ($79,000 total).
According to plea papers, Mr. Musgraves, Lubbock’s Deputy Director of Emergency Management and a Shallowater Fire Department volunteer, admitted he possessed sexually explicit images of children as young as two years old.
Per court documents, the investigation began after Mr. Musgraves brought his SFD tablet to University Medical Center for a navigation software install. Concerned by the files they spotted, EMS employees immediately reached out to law enforcement.
Officers conducted a forensic examination of the tablet and found more than 5,000 photos and 1,500 videos of child pornography stored on the hard drive. Mr. Musgraves later admitted that he used the tablet to access child pornography while on the clock at the City of Lubbock Operations Center.
At his sentencing hearing, prosecutors noted that Mr. Musgraves meticulously sorted the files into folders and sub folders, mostly organized by victim. One folder was titled “TO UPLOAD.” It remains unclear how the defendant obtained his collection or where, if anywhere, he intended to upload his files.
The Texas Rangers and Homeland Security Investigations conducted the investigation with the assistance of the Federal Bureau of Investigation’s Dallas Field Office and the complete cooperation of the City of Lubbock and the Shallowater Fire Department. Assistant U.S. Attorney Callie Woolam prosecuted the case.
New Mexico Man Who Sold ‘Ghost Guns’ IndictedRead the Press Release
A New Mexico man who allegedly sold an undercover agent four “ghost guns” has been charged with drug and gun crimes, announced Acting U.S. Attorney for the Northern District of Texas Prerak Shah.
Isaiah Dante Moreno, 25, and codefendant Elias Ignacio Sisneros, 22, were indicted on September 8, 2021 for possession of unregistered firearms, possession of firearms in furtherance of a drug trafficking crime, conspiracy to distribute and possess with intent to distribute tetrahydrocannabinols (THC) and distribution of THC.
According to court documents, the defendants allegedly sold a DEA task force officer four fully-automatic, AR-style firearms and a pound of THC wax during an undercover buy in Lubbock, Texas.
During the buy, Mr. Moreno allegedly explained to the agent that he had helped manufacture the firearms, making them “ghost guns,” unregistered firearms assembled from parts. Because ghost guns lack serial numbers, they are often difficult for law enforcement to trace. Mr. Moreno allegedly informed the agent that due to some specially manufactured parts, the firearms were fully automatic, meaning they could fire more than one round of ammunition with a single depression of the trigger.
Following the undercover buy, Mr. Moreno and Mr. Sisneros, who had driven to Lubbock from New Mexico, left the scene in a black Chrysler sedan. Officers pulled them over for a traffic violation and conducted a probable-cause search of the vehicle. Inside, they found additional THC wax, two handguns, and the money received from the undercover agent. Both men were immediately arrested.
An indictment is merely an allegation of criminal conduct, not evidence. Both defendants are presumed innocent until proven guilty in a court of law.
If convicted, they face various penalties, including up to life in federal prison.
The Drug Enforcement Administration’s Dallas Field Division, Lubbock Resident Office conducted the investigation with assistance of the Bureau of Alcohol, Tobacco, Firearms, and Explosives, Caprock HIDTA, Lubbock Texas Anti-Gang Taskforce (TAG), the Lubbock County Sheriff’s Office, Lubbock Police Department and the Texas Department of Public Safety. Assistant U.S. Attorney Sean Long is prosecuting the case.
Retail Ready Owner to Forfeit $72M for VA Tuition FraudRead the Press Release
The owner of a for-profit trade school convicted of bilking the U.S. Department of Veterans Affairs will forfeit $72 million to the federal government, Acting U.S. Attorney Prerak Shah announced today.
In an order handed down Wednesday, U.S. District Judge Brantley Starr ruled that Jonathan Dean Davis, the 43-year-old owner of Retail Ready Career Center, will forfeit $72,480,225.03 – the total amount the VA paid him for military veterans’ student tuitions – to the government. The order included the specific forfeiture of more than $4.7 million in cash; numerous luxury vehicles, including a Lamborghini, a Ferrari, a Bentley, two Mercedes-Benzes, and a BMW; and real estate in Dallas and Utah worth more than $2.5 million.
Mr. Davis was found guilty of seven counts of wire fraud and four counts of money laundering following a six-day trial in April.
“This defendant attempted to argue that because the proceeds of his fraud were in his business account, rather than in a personal bank account, he should not have to give it all back. But neither the American taxpayer nor the Court recognize such a distinction. We are proud to say that $72 million in fraudulently-obtained money is headed back into U.S. coffers,” said Acting U.S. Attorney Prerak Shah.
According to evidence presented at trial, Mr. Davis marketed Retail Ready’s six-week HVAC training course to veterans whose tuition and fees would be covered by the Veteran’s Educational Assistance Act of 2008, also known as the post-9/11 GI Bill. The defendant, who was essentially broke at the time of the crime, realized that he could charge $18,000 to $21,000 per student for the six-week course, if only he could get approval from the VA to accept GI Bill payments for tuition – which required prior approvals from the Texas Workforce Commission (TWC) and the Texas Veterans Commission (TVC).
These agencies required applicants to certify that they were not personally facing any criminal or civil actions, and to prove that their schools were established educational institutions in stable financial condition. Knowing he could not meet these requirements, Mr. Davis repeatedly lied and concealed information from these agencies.
“Several decisions lie ahead that will ultimately make the difference if I succeed or if I fail. More gut-wrenching conversations, more humiliating experiences, more lying is in order,” Mr. Davis wrote in an electronic journal he kept on his computer, which was recovered by federal agents during a search of Retail Ready. The journal became a key piece of evidence at trial.
Mr. Davis assured the TWC that he was not subject to any civil actions, when, in fact, he was facing numerous civil judgments over unpaid debts. He also told the TWC that he was not facing any criminal charges, when, in fact, he had a pending felony charge for theft of services.
Mr. Davis told the TVC that Retail Ready had been operating as a school for two years, when, in fact, the company had only existed for a few months and had never trained any students. He claimed that Retail Ready was fully prepared to train veterans, when, in fact, the company lacked a building and basic supplies. He even lied to an independent accountant about the school’s financial condition, and then submitted false financial statements to both the TWC and the TVC.
Eventually, based upon Mr. Davis’ lies to the TWC and TVC, the VA accepted Retail Ready’s application, allowing Mr. Davis to charge veterans’ tuition and fees to the VA under the GI Bill.
In 2014, he began recruiting student veterans, promising to prepare them for lucrative careers in the heating and air conditioning industry. Upon entering the workforce, however, many of these veterans discovered that Retail Ready had failed to teach them many of the basic skills necessary for entry-level technician jobs.
Several veterans testified at trial that they had relied on the Retail Ready’s fraudulently obtained VA endorsement and were sorely disappointed about their post- Retail Ready career prospects and pay. They were also shocked to learn of the rate at which Retail Ready’s six-week course had drained their GI Bill benefits, testifying that they felt “used,” “taken advantage of,” “deceived,” and “bamboozled.”
Mr. Davis is set to be sentenced on Wednesday, Sept. 22. He faces up to 180 years in federal prison.
The VA’s Office of Inspector General conducted the investigation with the assistance of the Federal Bureau of Investigation’s Dallas Field Office and the United States Postal Inspection Service’s Fort Worth Field Office. Assistant U.S. Attorney Dimitri Rocha is handling forfeiture. Assistant U.S. Attorneys Douglas Brasher and Fabio Leonardi are prosecuting the case.