Southern District of Texas
Press releases recorded for this federal judicial district.
Houston Real Estate Developer Heads to Federal Prison for Disaster FraudRead the Press Release
HOUSTON – Jon August Holverson, the owner of Bayou City Properties, will be spending nine years in federal prison for conspiring to obtain approximately $1 million in disaster relief funds by fraudulent means, United States Attorney Kenneth Magidson announced today. Holverson, 52, of Bellaire, pleaded guilty in December 2011 to conspiracy to commit fraud in connection with a benefit authorized pursuant to a presidentially declared disaster and a substantive count of fraud.
Holverson had his bond revoked by U.S. District Judge Melinda Harmon in May 2012 following a pre-sentencing hearing that determined he committed obstruction of justice involving a local appraiser and the value of his properties allegedly damaged by Hurricane Ike. Today, Judge Harmon sentenced Holverson to five years imprisonment for conspiracy and nine years imprisonment for the substantive FEMA fraud count, to be served concurrently. He was also fined $30,000. He was further ordered to serve a three-year-term of supervised release following completion of his prison term.
Holverson admitted he conspired with his brother, Jeffrey Holverson, 49, of Tomball, and Timothy Berges, 55, of Pasadena, to commit disaster fraud between Sept. 26, 2008, and Feb. 16, 2011. Jon Holverson filed an application for a Small Business Administration (SBA) commercial disaster loan in the aftermath of Hurricane Ike, requesting more than $1 million. In order to get the SBA to disburse the loan funds, he admitted he submitted more than $850,000 in false invoices and cancelled checks purporting to show payments to his brother’s company, Quality Construction. When he was contacted by representatives of the SBA, Jeffrey Holverson falsely affirmed he had performed the work and been paid the money.
At the hearing today, the court took note that Holverson’s fraud and manipulation continued throughout the pendency of his sentencing in voluminous filings containing receipts and invoices unrelated to the SBA loan in an attempt to artificially lower his sentence. During court proceedings and in filings, it was pointed out that U.S. District Judge Lynn Hughes made similar findings against Holverson. In May 2010, Judge Hughes found that Holverson’s claim against insurance company was brought in bad faith and in a naked grasp for someone else’s money relating to a property he claimed was damaged in Hurricane Ike.
Jeffrey Holverson and Timothy Burges also pleaded guilty to the conspiracy and both were sentenced to three years probation.
The investigation leading to the charges was conducted by special agents of the SBA – Office of Inspector General and Department of Homeland Security – Office of Inspector General. Assistant United States Attorney (AUSA) Ed Gallagher and Former AUSA Andino prosecuted the case.
The United States Attorney's Office for the Southern District of Texas is a member of the Department of Justice's Disaster Fraud Task Force, established to deter, detect and prosecute instances of fraud related to hurricanes and other types of disasters. Comprised of federal, state and local law enforcement investigating agencies, the Task Force combats all types of fraud relating to disasters and their aftermath, with an emphasis on charity fraud, emergency-benefit fraud, identity theft, insurance fraud, and procurement fraud.
Anyone suspecting criminal activity involving disaster assistance programs can make an anonymous report by calling the toll-free fraud hotline, 1-866-720-5721 or contacting the Disaster Fraud Fax at 1-225-334-4707 or the Disaster Fraud e-mail at [email protected], 24 hours a day, seven days a week until further notice. Information can also be sent by surface mail, with as many details as possible, to:
National Center for Disaster Fraud
Baton Rouge, LA 70821-49097th Person Convicted in Conspiracy to Transport CocaineRead the Press Release
LAREDO, Texas – Juan Ramon Ibarra Jr., 30, of Laredo, has been convicted for his role in a conspiracy to transport five kilograms or more of cocaine and international money laundering, United States Attorney Kenneth Magidson announced today.
Ibarra was named in a sealed indictment returned by a grand jury on Aug. 28, 2012, which alleged a drug trafficking organization had transported more than five kilograms of cocaine since 2008. The organization transported cocaine from Nuevo Laredo, Mexico, to Houston and Miami, Fla., on a regular basis. With the guilty plea today, all seven individuals named in the indictment have now been convicted.
In his plea, Ibarra admitted he participated in the transportation of cocaine to Miami since 2004. He and his father, Juan Ramon Ibarra Sr. coordinated with Rene Cardenas and other co-conspirators to transport the drugs in aftermarket compartments installed in the rear wheel axles of tractor-trailers. Once the cocaine was delivered to Miami, the compartment was loaded with large amounts of United States currency destined for Nuevo Laredo. One such load was intercepted in March 2010 when agents recovered approximately $422,000 in the compartment with a drug ledger.
In 2010, Ibarra Sr. pleaded guilty to his role in the drug conspiracy and was sentenced by U.S. District Judge Micaela Alvarez to 130 months in federal prison. Following Ibarra Sr.’s arrest, Ibarra Jr. assumed the role of his father and continued the transportation of cocaine for the drug trafficking organization.
Ibarra Jr. faces a mandatory minimum sentence of 10 years and up to life in prison and a $10 million fine for the drug conspiracy as well as a maximum of 20 years and a substantial fine for the conspiracy to commit international money laundering. The United States is also seeking a money judgment in the amount of $2,408,204. U.S. District Judge Marina Garcia Marmolejo, who accepted the plea today, has set sentencing forApril 30, 2013.
The case is the result of a two-year Organized Crime Drug Enforcement Task Force Investigation dubbed Silver Fox Hunt led by the Drug Enforcement Administration with the assistance of Homeland Security Investigations. Assistant United States Attorneys James Hepburn and Elizabeth Rabe are handling the case.
Houston Area Man Handed 45 Years for Multiple Child Pornography ConvictionsRead the Press Release
Defendant calls himself a “monster” during the hearing
HOUSTON - DJ Christopher Lowe, 37, has been sentenced to a total of 540 months in federal prison for his convictions of possession, distribution as well as production of child pornography, United States Attorney Kenneth Magidson announced today. Lowe pleaded guilty Dec. 2, 2011, admitting he exploited six different children in order to produce child pornography.
Just moments ago, U.S. District Judge Ewing Werlein Jr. handed Lowe the statutory maximum of 360 months for each of three counts of sexual exploitation of children (production of child pornography) and 120 months for the possession charge all to run concurrently with each other and to the 240-month sentence for the distribution conviction. He was further ordered to serve 180 months for three additional charges of sexual exploitation of children which will run concurrently to one another but consecutively to the other sentences imposed today for a total sentence of 540 months. Lowe will also have to serve the rest of his life on supervised release following completion of that prison term and pay an $8000 fine.
Lowe spoke at the hearing and called himself a monster.
In handing down the sentence, U.S. District Judge Ewing Werlein Jr. noted that someone who victimizes half a dozen children requires a sentence that would deter others from becoming the monster as Lowe described himself to be. He called Lowe’s conduct “reprehensible,” and noted that each child should be considered of independent worth. He further noted that Lowe’s collection of pornographic images and videos was one of the largest he had ever seen.
The production and distribution charges occurred as far back as 2009 and June 2010, respectively, while he possessed the child pornography as recently as Aug. 13, 2010.
Lowe’s activities were discovered when an individual was arrested on similar charges in Italy. On that man’s computer, were child pornography images and chats between he and Lowe, including child pornography images/videos of Lowe’s own relatives. Based on the information obtained in Italy, a federal search warrant was executed on Lowe’s home in Houston on Aug. 13, 2010, at which time, more than 17,000 images and hundreds of videos of child pornography were found. All of the children used in the production of child pornography have been identified and were, at the time of Lowe’s arrest, as young as two years old.
At the time the warrant was executed, Lowe was interviewed and admitted to downloading, possessing and distributing child pornography. He acknowledged his communication with the Italian individual and exchanging digital images and videos of child pornography with him.
Lowe will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The charges against Lowe are the result of an investigation conducted by members of the Innocent Images Unit of the Houston FBI, which focuses its attention on investigating offenses involving the exploitation of children via the Internet.
This case, prosecuted by Assistant U.S. Attorney Sherri L. Zack, was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to locate, apprehend and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Former Bank Employee Pleads Guilty to Armed Bank RobberyRead the Press Release
LAREDO, Texas – Ansel Cruz, 30, a life-long resident of Laredo, has entered a guilty plea to one count of armed bank robbery of the Laredo Federal Credit Union where he was formerly employed, United States Attorney Kenneth Magidson announced today.
Cruz admitted to robbing the bank on Corpus Christi Street on Jan. 6, 2012, forcing former co-workers at gunpoint to enter the bank’s vault.
On that date, employees were working after hours. Cruz, wearing black clothing and black face covering, forced employees to give him access through a rear door into the building where the gained entry into the Credit Union’s vault. As one employee exited the rear door, Cruz approached him, tied him up and left him outside the building’s rear entry. Another employee, not realizing the first employee had been restrained, also exited and was forced to let him into the bank. Cruz threatened to shoot both employees with a pistol if they did not cooperate.
After entering the bank, Cruz similarly restrained and threatened two custodians, took their car keys and locked them in a closet. Cruz took the money, exited through the same back door and drove off in the custodians’ vehicle, which was later found abandoned a few blocks away from the bank, close to Cruz’s residence.
Other employees reviewing the surveillance recordings a few days later immediately identified Cruz as the perpetrator, recognizing him as being a former employee who had worked with the Credit Union through 2011. After securing a search warrant for Cruz’s home, FBI agents and officers with the Laredo Police Department (LPD) retrieved the money from various locations, including his home, the stolen vehicle and other persons to whom he gave money. Agents and officers also secured additional items of physical evidence linking Cruz to the robbery, including a bag containing black clothing and gloves, rolls of tape, a pistol slide and ammunition magazine as well as several money bands used by the credit union. Relatives and friends of Cruz informed federal agents and investigators that Cruz admitted having committing the robbery.
The FBI Laboratory was able to confirm Cruz’s fingerprints on the bank bands found with the money in his home, as well as linking fibers on his clothing to the fibers found on the tape used to bind the employees. Blood found on the clothing was also matched to Cruz.
Cruz has been in federal custody since his arrest on Jan. 11, 2012, where he will remain pending his sentencing hearing to be set at a later date. At that time, he faces up to 25 years in federal prison and a possible $250,000 fine.
The matter was investigated by the FBI and LPD. Assistant United States Attorney Homero Ramirez prosecuted the case.
Felon in Possession Sentenced to More Than 13 Years in PrisonRead the Press Release
CORPUS CHRISTI, Texas - Joshua Wallace, 39, of Corpus Christi, has been handed a 160-month sentence for his conviction of possession of a firearm by a convicted felon, United States Attorney Kenneth Magidson announced today along with Melvin King Jr., special agent in charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). Wallace entered a plea of guilty on Thursday, Sept. 27, 2012.
Today, Senior U.S. District Judge Hayden Head sentenced Wallace to the 160-month-term which will be followed by a five-year-term of supervised release.
At the plea hearing, Wallace admitted that in September 2011, he sold three handguns to an undercover agent with the ATF. The undercover purchases were made on Sept. 13, Sept. 14 and Sept. 27, 2011, in Corpus Christi and were captured by concealed audio and video recording devices. Wallace has four previous burglary convictions and one conviction of possession of heroin.
Wallace has been in custody since his arrest on Aug. 28, 2012, where he will remain pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
This case was investigated by the ATF and prosecuted by Assistant United States Attorney Sam Brown IV.
Sprint Cell Phone Fraud Lands Final Defendant in Federal PrisonRead the Press Release
HOUSTON – Four Houston area residents have been sentenced for conspiring to commit mail fraud involving the theft of Sprint cellular phone customer data and telephones, United States Attorney Kenneth Magidson announced today. Frederick Sears, 38, Lakreshia Shana Smith, 28, and Vernon R. Parker Jr., aka PJ or Chad, 33, all of Houston, each pleaded guilty July 20, 2012, to one count of conspiracy to commit mail fraud. Troy Alexander Tipton, 21, of Tomball, pleaded guilty Aug. 2, 2012, to aiding and abetting access device fraud.
Today, Judge Lee H. Rosenthal handed Parker a sentence of 51 months to be followed by a three-year-term of supervised release. Last month, Judge Rosenthal sentenced Smith and Tipton each to three years of probation while Sears was ordered to serve 18 months in federal prison. Restitution was also ordered in the amount of 131,789.44 for all defendants.
Beginning in April 2011 through Oct. 7, 2011, Tipton, an employee of Modern Wireless, sold at least 400 customer accounts, including their access information, to Parker. Parker then directed Sears, Smith and others to make claims for replacement or additional cellular telephones valued at $400-500 each using the stolen customer accounts.
Sears and Smith were arrested after agents followed them around the Houston area where they picked up packages containing fraudulently obtained cellular telephones. Conspirators had placed phone and Internet orders for either replacement phones (claiming phones were lost or stolen) or additional phones to be charged to unknowing customers of Sprint. The packages were mailed from Sprint locations outside of Texas to various hotels and apartments as directed by the conspirators. The total loss to Sprint is estimated at more than $136,000 attributable to the Parker organization.
Parker will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The convictions are the result of an investigation conducted by the Secret Service. Assistant U.S. Attorney Martha Minnis is prosecuted the case.
Reserve Deputy Constable Arrested for Aiding Cocaine LoadRead the Press Release
HOUSTON – Tomas Roque, a reserve deputy constable with Harris County Precinct 6, has been arrested following the return of an indictment alleging charges of aiding the possession of a controlled substance and a violation of the Hobbs Act, United States Attorney Kenneth Magidson announced today.
Roque, 26, of Houston was arrested this morning and is expected to appear before U.S. Magistrate Judge Frances H. Stacy later today or tomorrow.
The two-count indictment, returned Jan. 8, 2013, and unsealed upon his arrest today, alleges Roque aided in the delivery of cocaine in the Houston area and accepted money for the protection service.
Roque is alleged to have aided in the possession of cocaine on or about Dec. 6, 2012, and allegedly received a payment of $2000 for the protection he provided.
If convicted of possession with the intent to distribute, he faces no less than 10 years and up to life in prison as well as a possible $10 million fine. For extortion under color of law (Hobbs Act violation), he could also receive up to 20 years imprisonment and a $250,000 fine, if convicted.
The operation was a combined public corruption task force effort conducted by the FBI, the Texas Rangers, the Houston Police Department. Homeland Security Investigations Human Smuggling and Trafficking Unit and Harris County Precinct 6 Constable’s Office assisted the investigation. The case is being prosecuted by Assistant United States Attorney James McAlister.
An indictment is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.Mexican Man Sent to Prison for Bribery of A Public OfficialRead the Press Release
McALLEN, Texas - Jose Luis Huerta-Aguilar, 32, of Rio Bravo, Tamaulipas, Mexico, has been ordered to federal prison for bribery of a public official, United States Attorney Kenneth Magidson announced today. Huerta-Aguilar pleaded guilty Monday, Nov. 5, 2012.
Today, U.S. District Judge Micaela Alvarez, who accepted the guilty plea, handed Huerta-Aguilar an 18-month sentence. As an illegal alien, Huerta-Aguilar is expected to face deportation proceedings following his release from prison.
On June 14, 2012, a Customs and Border Protection (CBP) agent began communicating with via radio with Huerta-Aguilar who was requesting assistance in obtaining entry for himself and two other undocumented aliens. On June 16, 2012, Huerta-Aguilar met with the agent at the Progreso Port of Entry at which time Huerta-Aguilar delivered United States and Mexican currency to the agent as payment to permit Huerta-Aguilar and the aliens entry into the United States without inspection.
Huerta-Aguilar will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The investigation leading to the charges against Huerta-Aguilar was conducted through a joint effort with The Department of Homeland Security-Office of Inspector General, Office of Professional Responsibility, Customs and Border Protection - Office of Internal Affairs and Customs and Border Protection. Assistant United States Attorney Juan Villescas prosecuted the case.
Assistant Branch Manager Indicted for Bank EmbezzlementRead the Press Release
HOUSTON – Hannah Gonzales, 24, of Houston, has been arrested following the return of an 11-count indictment alleging she embezzled from International Bank of Commerce (IBC), United States Attorney Kenneth Magidson announced today.
Gonzales was arrested this morning without incident. She is expected to make her initial appearance before U.S. Magistrate Judge Frances Stacy at 2:00 today.
According to the indictment returned Wednesday, Jan. 9, 2013, Gonzales was an assistant branch manager at IBC. During 2010-11, Gonzales allegedly began withdrawing money from CD accounts of customers without their authorization. The indictment further alleges she chose customers who were either elderly or out of the country in order to reduce the chance she would get caught. By the time she was fired in July 2011, Gonzales had allegedly withdrawn almost $100,000.
The indictment also indicates she took money from her teller boxes without authorization. Gonzales allegedly conducted transactions in which there was no customer in addition to simply taking customer’s cash deposits without placing the cash into her teller box. On the day she was fired, IBC’s audits revealed she was short approximately an additional $24,000.
The indictment also includes notice of the government’s intent to seek a forfeiture of approximately $124,000.
If convicted, she faces up to 30 years on each count of conviction as well as a possible $1 million fine.
The investigation was conducted by the U.S. Secret Service. Assistant United States Attorney Sharad S. Khandelwal is prosecuting the case.
An indictment is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.Five Laredoans Convicted in Conspiracy to Transport CocaineRead the Press Release
LAREDO, Texas – Alberto Sauceda, 38, Salvador Rodriguez-Fajardo, 38, Ricardo Garza, 39, Moises Andrade, 20, and Laura Rodriguez, 42, all of Laredo, have been convicted for their roles in a cocaine conspiracy, United States Attorney Kenneth Magidson announced today.
All five were named in a sealed indictment returned by a grand jury on Aug. 28, 2012, which alleged the drug trafficking organization transported five kilograms or more of cocaine since 2008. The organization transported cocaine from Nuevo Laredo, Mexico, to Houston and Miami on a regular basis. Last week, Rene Cardenas, 36, of Miami, Fla., also pleaded guilty to the conspiracy.
In the guilty plea today, Sauceda admitted to the possession of more than four kilograms of cocaine in his Ford F-150 in January 2010. That same vehicle, as well as another vehicle registered to Sauceda, were utilized in the delivery of two to three kilograms of cocaine by Garza on three occasions in July 2011 to Rodriguez-Fajardo at a Home Depot parking lot. Rodriguez-Fajardo stored the cocaine in a secret compartment located behind a stove in the house he shared with his wife, Rodriguez.
Rodriguez assisted Rodriguez-Fajardo in carrying out the conspiracy. On one occasion, she traveled to St. Augustine Square in Laredo to collect money for him and another person as payment for their services.
Andrade admitted to his role in the transportation of one cocaine load on Aug. 7, 2011, for which he received $500.
Each defendant faces a mandatory minimum sentence of 10 years and up to life in prison and a $10 million fine. The United States is also seeking a money judgment in the amount of $2,408,204. U.S. District Judge Marina Garcia Marmolejo accepted the pleas and has set sentencing for April 30, 2013.
The case is the result of a two-year Organized Crime Drug Enforcement Task Force Investigation dubbed Silver Fox Hunt led by the Drug Enforcement Administration with the assistance of Homeland Security Investigations. Assistant United States Attorneys James Hepburn and Elizabeth Rabe are handling the case.
Former Harris County Deputy Convicted for Aiding Ecstasy LoadsRead the Press Release
HOUSTON - Former Harris County Deputy Sheriff Jesus Martinez, of Humble, has been convicted of aiding possession of a controlled substance, United States Attorney Kenneth Magidson announced today.
According to the factual summary in support of the plea today, a public corruption task force conducted a sting operation in which an informant asked Martinez, 30, to provide protection for a delivery of money or marijuana.
On July 23, 2012, the informant met with an undercover police officer, who appeared to be engaged in a drug transaction. At that time, Martinez drove his Harris County Sheriff’s Office (HCSO) patrol car through the parking lot as protection. The informant contacted Martinez after the delivery and stated that the deal resulted in “X” (3,4 Methylenedioxy-methamphetamine or MDMA), a Schedule I Controlled Substance which is also known as “X” or Ecstasy. The informant then asked Martinez to follow him out of the parking lot.
U.S. District Judge David Hittner, who accepted the plea today, has set sentencing for April 8, 2013, at which time Martinez faces up to 20 years in federal prison and a possible $1 million fine.
The operation was conducted by the FBI-led public corruption task force which included the Houston Police Department and the Texas Rangers. Also assisting in the overall investigation was Drug Enforcement Administration and the HCSO among others.
Assistant United States Attorney Jim McAlister is prosecuting the case.
Former Attorney Sent to Prison for A Decade in $7 Million Ponzi SchemeRead the Press Release
HOUSTON - Billy Frank Davis, aka Bill F. Davis, a former attorney residing in Houston, has been sentenced to 10 years in federal prison for perpetrating a decade-long investment fraud scheme that victimized more than 20 investors of approximately $7.8 million, United States Attorney Kenneth Magidson announced today.
Davis pleaded to one count of wire fraud Oct. 15, 2012. Today, U.S. District Judge David Hittner, who accepted the guilty plea, handed Davis a 120-month sentence to be followed by a three-year-term of supervised release before a courtroom packed with victims who were all wearing red ribbons as a sign of solidarity. Although Davis pleaded guilty to a single count, he had admitted to the entirety of his fraudulent scheme and agreed to be held accountable for all of the losses incurred by his victims. He was also ordered to pay $7.8 million in restitution.
In handing down the sentence, Judge Hittner went above the sentence recommended by the U.S. Sentencing Guidelines. At the hearing, Judge Hittner read from a number of victim impact statements, most from victims who had known Davis for 20 years or more. One letter read as follows: “[Davis] exploited the most fundamental of human relationships and did it both knowingly and intentionally. He deserves the same level of consideration he gave his friends as he was robbing all of us – none.” Another victim described Davis as a “smooth talking parasite or predator who will do harm to more honest people if ever back on the street. He has stolen most all of my retirement cash and destroyed my marriage. I do not sleep.”
In addition to the victim letters read in open court, Judge Hittner allowed one victim to speak at the sentencing hearing. “Every cent Bill Davis stole was from a very good friend and he took advantage of that friendship on every occasion,” the victim stated. After noting Davis’s ability to maintain his image of success helped enable him to commit his crimes, the same victim closed by saying: “Mr. Davis, as for your image, the last image I want to see of you is you being led away in handcuffs in an orange jumpsuit.” After pronouncing the sentence, Judge Hittner ordered Davis to be taken immediately into custody where he will remain pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
During the past 10 years, Davis, 68, held himself out to friends and potential investors as being involved in the real estate investment business. While Davis did conduct some legitimate business activity during this time period, a substantial portion of the funds he solicited were simply part of a Ponzi scheme Davis was operating in an effort to satisfy old debts and to fund his personal lifestyle. In acknowledging his criminal conduct at the time of his guilty plea, Davis admitted to using a variety of ploys to perpetuate his Ponzi scheme, all of which involved falsely representing to investors the existence or nature of various real estate investment opportunities, accepting funds from investors under such false pretenses, and then using the investor funds in a manner other than as represented to investors.
The case was investigated by the FBI and prosecuted by Assistant United States Attorney Jason Varnado.
Los Zetas Kidnappers Plead GuiltyRead the Press Release
LAREDO, Texas – Four Laredoans have been convicted for their roles in a kidnapping ordered by Los Zetas drug trafficking organization and executed by members and associates of the Hermanos Pistoleros Latinos (HPL) gang, United States Attorney Kenneth Magidson announced today.
Pablo Cerda, 36, and Ernesto Zaragoza-Solis, 29, pleaded guilty to one count of conspiracy to kidnap and one count of using and discharging a weapon during and in relation to a crime of violence, while Grace Diaz-Martinez, 33, was convicted of one count of being an accessory after the fact to the kidnapping. Efrain Garza, 31, pleaded guilty to conspiracy to kidnap and conspiracy to use a weapon during a crime of violence.
The kidnapping was in retribution for a money load alleged to have been stolen by a subject who was to have delivered the drug proceeds to Los Zetas in Nuevo Laredo, Mexico.
On Sept. 19, 2010, at approximately 11:37 p.m., officers received a 911 call indicating that a person had been kidnapped at gunpoint from a residence on Eistetter Street in Laredo and that shots were fired. Officers met with the juvenile daughter of the victim who claimed her mother had been taken by force by several unknown subjects. The men had also attempted to take the daughter but she was able to resist and the kidnappers fled the scene with her mother. The kidnapped victim would later identify Garza as one of the kidnapers who took her by force from her residence.
The next day, Cerda received a call from Zaragoza who reported “his friends already have the mother” and that “that they will pick her up and take her over there” (a reference to Nuevo Laredo, Mexico).
Drug Enforcement Administration (DEA) agents ascertained the location of the victim shortly thereafter. On Sept. 20, 2010, agents and officers approached a residence on Piedra China, at which time the kidnapping victim immediately ran out of the house. Arrested at the scene were Zaragoza-Soliz, Diaz-Martinez, Garza and two others. It was determined the residence was the home of Garza and his parents and that Diaz-Martinez was also temporarily residing with them. Also found at the residence were three weapons to include a Smith and Wesson .38 caliber revolver, an unknown make 7.62 caliber pistol and a Norinco 7.62 caliber rifle, Model Mak-90.
Following her rescue, the victim explained that Garza was one of the subjects who grabbed her and forced her into a vehicle and she was transported against her will. Her wrists were bound with duct tape and her eyes were covered with a blindfold. During her captivity, suspects held a gun to her temple and demanded to know the whereabouts of her stepson and his friends, whom the kidnappers claimed had stolen more than $1 million from Los Zetas.
The victim was kept in a back bedroom continually with hands and eyes bound until the police came to the residence. When law enforcement arrived, Diaz-Martinez and Zaragoza-Soliz removed the blindfold and duct tape from the victim to avoid detection by the law enforcement agents at the door. Diaz-Martinez also made false statements, such as that the victim was never bound or blindfolded, that she had not been kidnapped nor held against her will. The statements were made to hinder and prevent the apprehension, trial and punishment of Garza whom Diaz-Martinez was amorously involved with at the time and has since married.
U.S. Magistrate Judge Guillermo R. Garcia accepted the pleas today, but a sentencing date has not yet been set. All will remain in custody pending that hearing.
The convictions are the result of Organized Crime Drug Enforcement Task Force Operation El Chacal is an investigation spearheaded by the DEA and assisted by the Laredo Police Department and Webb County District Attorney’s Office. The case is being prosecuted by Assistant United States Attorney Mary Lou Castillo.
Laredo Los Zetas Arms Traffickers Plead GuiltyRead the Press Release
LAREDO, Texas – Pablo Cerda, 36, and Nicolas Sanchez-Reyes, 50, have been convicted for their roles in a conspiracy to export weapons to Mexico destined for Los Zetas drug trafficking organization, United States Attorney Kenneth Magidson announced today. The two Laredoans both entered pleas to one count of conspiracy to export arms.
In November 2010, agents learned of a shipment of weapons to be delivered in Laredo from the Dallas area for transportation to Mexico. Otilo Osorio and Ranferi Osorio were identified as co-conspirators in the Dallas area who were to deliver the weapons to other co-conspirators for transportation to Laredo. Cerda and Sanchez-Reyes were tasked with receiving the shipment of weapons from Dallas in Laredo and arranging for the transportation of said weapons to the Republic of Mexico.
On Nov. 9, 2010, agents set up surveillance at the parking lot area of a Wal-Mart located near I-35 in Lancaster, at which time agents observed a tractor trailer driver meet with Ranferi and Otilio Osorio who arrived in a Ford Explorer. Two large duffel bags believed to contain weapons were removed from the Explorer and placed inside the tractor. Agents then followed the tractor-trailer.
Sanchez-Reyes and Cerda then coordinated the receipt of the weapons for ultimate transportation to Nuevo Laredo. Between Nov. 9 and 10, the men called each other regarding the logistics of the shipment and coordinated the delivery of the weapons in Laredo to another driver secured by Cerda who would transport the weapons to Mexico.
On Nov. 9, Webb County Sheriff’s deputies conducted a traffic stop in Laredo of tractor trailer transporting the weapons. At that time, Sanchez-Reyes called the driver’s phone and a deputy answered the call. Unaware of the situation, Sanchez-Reyes said he was looking for the driver who was supposed to bring him something, at which time the deputy informed the driver could not talk. After the stop, deputies located the two duffle bags and found 40 high-powered firearms consisting of various makes, models and calibers as well as 39 empty magazines. Agents then discovered that 37 of the 40 firearms recovered had obliterated serial numbers. The driver was arrested at the scene.
Sentencing has yet to be set. The defendants will remain in custody pending that hearing.Co-defendants Otilo and Ranferi Osorio were indicted in Dallas and have since pleaded guilty and sentenced to prison.
The case was investigated by agents of the Drug Enforcement Administration and the Bureau of Alcohol, Tobacco, Firearms and Explosives and prosecuted by Assistant United States Attorney Mary Lou Castillo.
Seven Arrested in Federal Drug Trafficking, Money Laundering ConspiracyRead the Press Release
CORPUS CHRISTI, Texas – A three-count indictment was partially unsealed following the arrests of several Corpus Christi residents and their appearances in federal court on various drug trafficking and money laundering charges, United States Attorney Kenneth Magidson announced today.
Rocky Bazaldua aka “Rock,” 31; David Pete Dominguez aka “Buda,” 30; Juliann Gutierrez, 24, and Jose Fidel Guajardo aka “Garfield,” 40, made their appearance in federal court yesterday and are set for an arraignment and detention hearing on Friday, Jan. 11, 2013, at 11:00 a.m. Ignacio Pena aka “Nacho,” 44; Manuel Pena aka “Super,” 47; and Raul Leal Martinez aka “Indio” aka “Wahoo,” 36, appeared today and are set for their arraignment and detention hearing Monday, Jan. 14, at 10:00.
The indictment remains sealed as to those charged but not yet taken into custody.
The defendants are charged with conspiring from Dec. 1, 2008, to Dec. 12, 2012, to possess with intent to distribute more than 50 grams of methamphetamine. A second count alleges Manuel Pena, Ignacio Pena, Martinez, Guajardo and Bazaldua conspired during that same time period to possess with intent to distribute more than five kilograms of cocaine. If convicted, the defendants face a minimum of 10 years up to life in prison as well as a maximum $10 million fine.
Manuel Pena, Martinez and Guajardo are also charged with conspiring to launder the proceeds of distributing controlled substances. If convicted of that offense, they face another 20-year term of imprisonment and a possible $500,000 fine.
The government also gave notice in the indictment of the intention to seek forfeiture of five properties owned by Manuel Pena, Martinez or Guajardo.
This case was investigated by the Organized Crime Drug Enforcement Task Force which included Drug Enforcement Administration, Internal Revenue Service – Criminal Investigation, Bureau of Alcohol, Tobacco, Firearms and Explosives, U.S. Customs and Border Protection, Texas Department of Public Safety, the Nueces and Kleberg County Sheriff’s Offices and the Corpus Christi, Aransas Pass and Portland Police Departments. The case is being prosecuted by Assistant United States Attorney Michael Hess.
Former “Panama Unit” Officers IndictedRead the Press Release
McALLEN, Texas – A federal grand jury has returned a six-count indictment against Jonathan Trevino, Alexis Rigoberto Espinoza, Fabian Rodriguez and Gerardo Mendoza-Duran, United States Attorney Kenneth Magidson announced today.
The indictment includes one count of conspiracy to possess with the intent to distribute more than five kilograms of cocaine, which charges all four men, as well as five substantive counts of attempting to aid and abet the possession with the intent to distribute cocaine. Espinoza and Duran are charged with four of the substantive counts, while Trevino and Rodriguez were indicted on one of those charges.
Trevino, 28, Espinoza, 29, Rodriguez, 28, and Mendoza-Duran, 30, were previously charged by criminal complaint last month and subsequently arrested following a multi-agency investigation conducted in 2012.
The indictment alleges Trevino and Espinoza, former officers with the Mission Police Department, along with Rodriguez and Duran, former deputies with the Hidalgo County Sheriff’s Office, attempted to utilize their positions as law enforcement personnel in order to assist drug traffickers with the distribution of cocaine. On several occasions in October and November 2012, the defendants allegedly provided protective escorts for suspected loads of cocaine as they traveled throughout Hidalgo County.
If convicted, the four face a minimum of 10 years imprisonment and a maximum of life in prison, along with a potential fine up to $10 million.
The case is being investigated by the FBI, Immigration and Customs Enforcement – Office of Professional Responsibility, Drug Enforcement Administration, Homeland Security Investigations, the Texas Rangers and Department of Justice – Office of the Inspector General. Assistant United States Attorneys Anibal Alanis and James Sturgis are prosecuting the case.
Three Convicted for Unlawful Manufacturing of FirearmsRead the Press Release
CORPUS CHRISTI, Texas – Two men and one woman, all of Corpus Christi, have entered guilty pleas to charges relating to their unlawful manufacture of AK-47 type firearms, United States Attorney Kenneth Magidson announced today.
Michael Yarbrough, 22, Ashley Yarbrough aka Ashley Phillips, 24, and Stephen Atkinson, 29, were indicted in July 25, 2012, and arrested shortly thereafter. Set for trial next week, Michael and Ashley Yarbrough entered their guilty pleas before U.S. District Judge Nelva Gonzales Ramos just a short time ago. Atkinson previously entered a plea of guilty in September 2012.
Michael Yarbrough and Atkinson were convicted of one count of unlawful manufacturing of firearms between Jan. 1, 2011, and July 2012. Michael Yarbrough also pleaded guilty to one count of transferring firearms knowing that a felony was to be committed. Ashley Yarbrough entered a plea of guilty to one count of making a materially false statement to federal agents regarding the gun activity going on at her residence.
This investigation began on Aug. 15, 2011, with the discovery of an AK-47 manufacturing business at a residence during the execution of an arrest warrant by United States Marshals in Corpus Christi. At that time, deputies encountered several individuals employed by Michael Yarbrough at a Corpus Christi residence. After agents obtained a search warrant, several fully assembled AK-47 firearms were seized along with multiple handguns, gun parts and firearms in various stages of completion. Agents also discovered duffle bags full of fully assembled AK-47 firearms, ammunition magazines and bandoliers. None of the seized firearms had serial numbers and none of the individuals present has a Federal Firearms License.
Agents have also uncovered a great deal of information regarding Michael Yarbrough and the people he employed to build AK-47 firearms for him. Agents discovered Michael Yarbrough sold fully assembled AK-47 firearms with no serial numbers in McAllen, at least 11 of which have been traced in Mexico by the unique tool markings on the firearms and other unique identifiers.
Michael Yarbrough faces up to 10 years imprisonment for transferring the firearm knowing that a felony was to be committed and five years on the manufacturing conviction. Atkinson and Ashley Yarbrough each face a potential penalty of up to five years imprisonment. Sentencing is set for April 3, 2013. Michael and Ashley Yarbrough have both agreed the forfeiture of 74 firearms, which are also the subject of a civil lawsuit pending in the Southern District of Texas.
The Organized Crime Drug Enforcement Task Force investigation leading to the criminal charges was conducted in Corpus Christi lead by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Corpus Christi Police Department, the Texas Department of Public Safety, the Nueces County Sheriff’s Office, the Nueces County Probation Department and the United States Marshals Service. This case is being prosecuted by Assistant United States Attorney Julie K. Hampton.
Robstown Career Offender Heads to Federal Prison for Cocaine DistributionRead the Press Release
CORPUS CHRISTI, Texas – Rene Olivarez, 45, of Robstown, has been sentenced as a career offender for more than 15 years for his involvement in a conspiracy to distribute cocaine in Kingsville, United States Attorney Kenneth Magidson announced today. Olivarez pleaded guilty Sept. 6, 2012.
Today, U.S. District Judge Nelva Gonzales Ramos handed Olivarez a 188-month sentence followed by five years of supervised release. Co-defendant Daniel Cano, 32, of Kingsville, previously pleaded guilty and was sentenced federal prison for 57 months.
Authorities became aware of the activities of Olivarez and Cano when members of the United States Marshals Fugitive Apprehension Unit discovered 2.92 kilograms of cocaine, $37,521 and 164 live marijuana plants in Cano’s Kingsville residence while executing a fugitive arrest warrant on Jan. 24, 2012.
In handing down the sentence, Judge Ramos noted that the career offender sentencing enhancement and the nearly 16-year sentence was appropriate based on the repetitive nature of Olivarez’s three prior drug trafficking offenses (which spanned approximately 20 years) and promotes respect for the law. Olivarez has been in custody where he will remain pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The case was investigated by the Drug Enforcement Administration and prosecuted by Assistant U.S. Attorney Jeffrey D. Preston.
Mexican National Convicted for Failing to Obey Coast Guard OrderRead the Press Release
BROWNSVILLE, Texas – Mexican national Pedro Morales-Hidalgo, 43, has pleaded guilty to failing to heave to a Coast Guard vessel, United States Attorney Kenneth Magidson announced today along with Rear Admiral Roy Nash, Commander, Eighth Coast Guard District.
“Vessel operators failing to 'heave to' for an at-sea boarding put themselves and nearby vessels at great risk, including innocent mariners and law enforcement officers,” said Nash. “We take this crime very seriously, and we will continue to work with our partner agencies to ensure that those who violate this law are held responsible for their actions.”
On Oct. 11, 2012, a crew aboard a U.S. Coast Guard vessel observed a Mexican fishing vessel within United States territorial waters, approximately .4 nautical miles north of the Mexican border and 4.5 nautical miles offshore. Morales-Hidalgo was the captain of the vessel. As the Coast Guard approached, the fishing vessel sped off towards the Mexican border. The Coast Guard pursued the fishing vessel and used a loud hailer to give commands in English and Spanish ordering Morales-Hidalgo to stop his vessel. The Coast Guard also used lights, sirens, hand signals and flash bang grenades to direct Morales-Hidalgo to stop, but he refused. During the pursuit, Morales-Hidalgo made several “corkscrew” maneuvers in an attempt to escape and used his vessel to ram the Coast Guard in an attempt to disable its outboard engines. The Coast Guard was finally able to stop the fishing vessel by pulling its fuel line.
Morales-Hidalgo admitted he heard the directives to stop but failed to do so because he had been fishing illegally in the United States and knew that his boat and catch would be seized as a result.
U.S. District Judge Hilda G. Tagle, who accepted the guilty plea, has set sentencing for March 27, 2013, at which time Morales-Hidalgo faces a maximum prison term of five years and/or a fine of up to $250,000. While given a bond, Morales-Hidalgo has remained in custody since his arrest.
The case was investigated by the U.S. Coast Guard Investigative Service and is being prosecuted by Assistant United States Attorney Israel Cano III.
Louisiana Man Sent to Prison for Smuggling MarijuanaRead the Press Release
CORPUS CHRISTI, Texas – Dolph Finley, 63, of Lettsworth, La., has been sent to federal prison following his convictions on two counts as charged in relation to the smuggling of marijuana through the Sarita Border Patrol Checkpoint, United States Attorney Kenneth Magidson announced today. The federal jury returned their verdict June 6, 2012, following a two-day trial and approximately 20 minutes of deliberation.
Today, U.S. District Judge Nelva Gonzales Ramos sentenced Finley to a total of 38 months in federal prison to be followed a three-year-term of supervised release.
During trial, the United States presented evidence that Finley and co-defendant Thomas Lubecke drove a rental vehicle from Baton Rouge, La., to Brownsville, Texas, where they planned to buy marijuana and transport it back to Baton Rouge. Lubecke, 34, of Denham Springs, La., pleaded guilty and testified against Finley at trial and later sentenced to six months of home confinement.
The prosecution demonstrated that once in Brownsville, Finley and Lubecke purchased large black “All Star” duffel bags and other materials to transport the marijuana through the Sarita U.S. Border Patrol checkpoint. Finley boarded an Americanos bus with the “All Star” duffel bag full of marijuana, while Lubecke followed the bus in his rental vehicle. There, a canine alerted to a small bag of cocaine and some prescription medications in his rental vehicle and Lubecke was arrested. The bus, which entered the checkpoint at the same time as Lubecke, successfully passed through the checkpoint.
Border Patrol agents testified that when they searched Lubecke’s car, they found three brand-new black duffel bags, black plastic, dryer sheets, high-temperature grease, Febreze, household cleaners and scrub pads, which are all items ordinarily used to package large amounts of marijuana. However, they found no large quantities of narcotics. One agent observed an identical “All Star” bag on the bus that had just come through the checkpoint. Other agents discovered he had been to the bus station in Brownsville and communicating with another person via text message.
Agents were notified and subsequently able to stop the bus. Finley was found to be in possession of the bag which contained 16.8 kilograms of marijuana. Once Finley was apprehended, Lubecke confessed to the scheme and agreed to cooperate with authorities.
Finley has been in custody since his arrest where he will remain pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The case was investigated by Customs and Border Protection and the Drug Enforcement Administration. The case was prosecuted by Assistant United States Attorney Jeffrey D. Preston.
El Wicho Pleads Guilty…AgainRead the Press Release
BROWNSVILLE, Texas – Jose Luis Zuniga-Hernandez, 44, of Control, Tamaulipas, Mexico, has been convicted of being an alien found within the United States after deportation and being an alien in possession of a firearm, United States Attorney Kenneth Magidson announced today. Zuniga-Hernandez aka “El Wicho” was previously convicted in January 2012, but was later permitted to withdraw that plea.
Today, he again entered a guilty plea before U.S. District Judge Andrew S. Hanen, admitting he had entered the United States illegally after he had been previously deported from the United States on Aug. 8, 1997. Prior to his deportation, Zuniga had been convicted of possession with intent to distribute marijuana on Feb. 14, 1990. Zuniga also admitted that at the time of his arrest he was in possession of a customized gold, diamond and ruby encrusted Colt 38 Super handgun.
Zuniga-Hernandez has been in jail since his arrest on Oct. 26, 2011, where he will remain pending his sentencing hearing, which Judge Hanen has set for Jan. 24, 2013. At that time, he faces up to 20 years in prison for being found in the United States after deportation conviction in addition to a 10-year-term for being an alien in possession of a firearm. Each of these two convictions also carries a maximum fine of $250,000.
The investigation leading to the charges was conducted by Homeland Security Investigations. The case is being prosecuted by Assistant U.S. Attorney Angel Castro.
Cuban National Convicted in Conspiracy to Transport CocaineRead the Press Release
LAREDO, Texas – Rene Cardenas, 36, of Miami, Fla. Has pleaded guilty for his role in a conspiracy to transport five kilograms or more of cocaine, United States Attorney Kenneth Magidson announced today.
Cardenas was named in a sealed indictment returned by a grand jury on Aug. 28, 2012, which alleged a drug trafficking organization transported five kilograms or more of cocaine since 2008. The organization transported cocaine from Nuevo Laredo, Mexico, to Houston and Miami on a regular basis. Six others also charged are currently awaiting trial.
In the guilty plea, Cardenas admitted he was one of the individuals who further distributed the cocaine once it reached Miami and was also responsible for sending payment for the cocaine back to Laredo. One such shipment was recovered on May 25, 2010, when a truck driver was stopped with $422,001 and a drug ledger concealed in a compartment in the trailer’s rear axle.
Cardenas faces a mandatory minimum sentence of 10 years and up to life in prison and a $10 million fine. The United States is also seeking a money judgment in the amount of $2,408,204. U.S. Magistrate Judge J. Scott Hacker accepted the plea today and sentencing will occur on a date yet to be determined.
The case is the result of a two-year Organized Crime Drug Enforcement Task Force Investigation dubbed Silver Fox Hunt led by the Drug Enforcement Administration with the assistance of Homeland Security Investigations. Assistant United States Attorneys James Hepburn and Elizabeth Rabe are handling the case.
Brownsville Man Convicted for Attempting to Smuggle More Than $600KRead the Press Release
BROWNSVILLE, Texas – Domingo Quesada-Hernandez, 43, of Brownsville, has been convicted of bulk cash smuggling, United States Attorney Kenneth Magidson announced today.
Quesada-Hernandez pleaded guilty in federal court earlier today to evading a currency reporting requirement in his attempt to conceal $610,535 in a vehicle while trying to take the money into Mexico. The $610,535 has been preliminarily forfeited to the United States.
Quesada-Hernandez was arrested on May 21, 2012, after he approached the southbound inspection lanes at the Gateway International Port of Entry Bridge in Brownsville driving a Ford F150. Quezada-Hernandez was referred to secondary inspection after he and his two passengers appeared nervous, at which time Quesada-Hernandez denied possession of weapons and/or money in excess of $10,000 and did not complete the appropriate customs forms.
Quesada-Hernandez indicated he was the owner of the vehicle and further claimed that he had not done any type of work on it. A cursory inspection of the vehicle revealed fresh markings on the spare tire and agents also noticed the spare tire appeared to be bigger than the tires on the vehicle. The spare tire was removed and x-rayed, which revealed anomalies inside the tire. A search of the spare tire revealed 49 duck-taped bundles containing currency totaling $610,535.
At his plea today, Quesada-Hernandez admitted he intended to evade the currency reporting requirement and that he concealed the currency within the spare tire of the vehicle. Quesada-Hernandez also admitted he intended to transport and transfer the currency from Brownsville to Mexico.
Quesada-Hernandez has been permitted to remain on bond pending his sentencing hearing, which U.S. District Judge Andrew S. Hanen has set for April 15, 2013. At that time, he faces up to five years in prison and a maximum fine of $250,000.
The investigation leading to the charges was conducted by Homeland Security Investigations. The case is being prosecuted by Assistant U.S. Attorney Angel Castro.
Woman Pleads Guilty to Preparing False Income Tax ReturnRead the Press Release
HOUSTON – Shirley M. Carrington has pleaded guilty to one count of willfully aiding and assisting in the preparation and presentation of a false U.S. Individual Income Tax Return, United States Attorney Kenneth Magidson announced today.
According to the written plea agreement filed in the record of the case, Carrington admitted she wilfully prepared a false income tax return for a husband and wife that included a claim for losses from an alleged janitorial service sole proprietorship that the taxpayers did not have. Carrington also admitted the return she prepared for the couple also claimed a false deduction for unreimbursed employee expenses and a false deduction for other miscellaneous deductions. Carrington stipulated the tax loss to the United States on the false tax return for which she was convicted was $10,962.
Carrington further admitted in the plea agreement that the eight tax returns underlying the eight counts in the indictment in the case all claimed false losses from alleged janitorial sole proprietorships that none of the taxpayers had. Her relevant conduct, which is the total tax loss in the case, for purposes of sentencing was $199,472.00.
U.S. District Judge Vanessa Gilmore, who accepted the plea today, has set sentencing for April 1, 2013, at which time she faces up to three years in prison and a $250,000 fine.
This matter was investigated by Internal Revenue Service - Criminal Investigation and is being prosecuted by Assistant U.S. Attorney Charles J. Escher.Three Sentenced in Massive Domestic Sex Trafficking CaseRead the Press Release
HOUSTON – Three men have each been ordered to federal prison for 96 months for their convictions in relation to Operation Total Exposure, the largest domestic sex trafficking case in the Southern District of Texas, United States Attorney Kenneth Magidson announced today. During the course of the investigation, at least one minor was rescued and other minors and several adults have been returned to their families.
Andre McDaniels, 42, and William Hornbeak, 36, entered guilty pleas Sept. 13, and 24, 2012, respectively, while John Butler, 51, Ronnie Presley, 38, and Jamine Lake, 30, pleaded guilty Oct. 4, 2012. The five men, all of Houston, pleaded guilty to conspiracy to commit sex trafficking. In addition to the conspiracy charge, Butler was convicted of one count of transportation. Lake was also convicted of one count of transportation as well as one count of coercion and enticement. Presley and Hornbeak were both also convicted of two counts of coercion and enticement, while Presley was also convicted of two counts of transportation. McDaniels was convicted of one count of coercion and enticement and two counts of transportation.
Today, U.S. District Judge Lynn Hughes sentenced McDaniels, Lake and Presley to 96-month-terms of federal imprisonment. They each received 60 months on the conspiracy charge and 96 months on each of their respective convictions, all to be served concurrently for a total sentence of 96 months for each defendant. They were all also ordered to serve a 10-year-term of supervised release following completion of their sentences and must each pay a $10,000 fine.
Butler and Hornbeak will be sentenced on Jan. 22.
At the hearing today, one of the victims testified about the emotional and physical abuse she suffered, noting one instance where a gun was placed in her mouth. She further discussed how she was branded with a large tattoo of a black panther on her back to mark her as property.
Court records indicated that the defendants operated commercialized sex businesses often disguised as modeling studios, health spas, massage parlors and bikini bars in Houston. Further testimony proved they also utilized sexually oriented publications and websites to advertise their illicit business.
Evidence revealed the conspirators recruited women and minors as young as 16 to work as prostitutes and perform commercial sex acts. Members of the criminal enterprise transported women and minors to and from the Houston area and had ties to Kansas, Nevada, Arizona and Florida. The females were instructed to perform certain acts to insure that the customers to whom they were providing sex acts were not law enforcement officers.
The women were routinely beaten and threatened to instill fear in them and insure their obedience. Some of the co-conspirators also had sexual intercourse with the minor females. Any proceeds the women received as a result of their sexual encounters where taken by the members of the enterprise, rendering them dependent upon the defendants for basic necessities.
McDaniels was also convicted in a separate, but related case of nine counts of witness tampering and faces up to life in prison as a result. He will be sentenced by U.S. District Judge Lee H. Rosenthal March 22, 2013, at 9:00 a.m.
All the men have been and will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The investigation leading to the charges was conducted by the Innocence Lost Task Force of the FBI and the Houston Police Department as part of the Innocence Lost National Initiative. The initiative was founded in June 2003 to address criminal enterprises involved in the domestic sex trafficking of children and is a joint effort of the FBI, the Department of Justice’s Child Exploitation and Obscenity Section, the National Center for Missing and Exploited Children and the Texas Attorney General’s Office.
The case is being prosecuted by Assistant U.S. Attorney Sherri Zack and former Special Assistant U.S. Attorney Angela Goodwin.
Preparing A False Tax Return Lands Man in Federal PrisonRead the Press Release
HOUSTON - Kermit Woods has landed in federal prison following his conviction for willfully aiding and assisting in the preparation and presentation of a false U.S. Individual Income Tax Return, United States Attorney Kenneth Magidson announced today along with Lucy Cruz, special agent in charge of Internal Revenue Service – Criminal Investigation (IRS-CI). Woods pleaded guilty to the charge March 30, 2012, at which time he admitted he owned and operated an income tax preparation business in Houston, known as L&L Finance.
Today, U.S. District Judge Gray H. Miller, who accepted the guilty plea, sentenced Woods to a 24-month-term of federal imprisonment which will be followed by one year of supervised release. Woods had previously agreed to pay restitution to the United States in the amount of $362,340, which is the amount of the tax loss on false income tax returns he prepared at L&L Finance during years 2004 through 2008. At the hearing today, Woods proved he had paid almost all of this restitution toward the tax loss on the tax returns he had prepared for others and intends to pay the remainder shortly.
As part of his plea agreement, Woods agreed to never again aid or assist in the preparing or presenting of tax returns for any taxpayer except himself. Woods also agreed not to oppose any civil action brought by the United States seeking to enjoin Woods from preparing income tax returns for others.
Woods also agreed that the relevant conduct the court will consider at sentencing should include an additional $346,479 that Woods did not report and pay with his own originally-filed income tax returns for years 2005 through 2008. The plea agreement notes that after Woods learned that he was under a criminal tax investigation, he filed amended his income tax returns for years 2005 through 2008 and paid the $346,479 in additional taxes for those years.
Woods further admitted in the plea agreement that in an attempt to conceal his income and assets from the IRS, he placed items he purchased in another’s name, including the home that he built for himself, his investment real estate, the title to his Jaguar automobile and the title to his boat. Woods admitted that he also had another person sign an assumed name certificate in Harris County, Texas, as though that person owned the income tax preparation business he operated.
Previously released on bond, Woods was permitted to remain on bond and voluntarily surrender to a U.S. Bureau of Prisons facility to be determined in the near future.This matter was investigated by IRS-CI and is being prosecuted by Assistant U.S. Attorney Charles J. Escher and by Department of Justice Tax Division Trial Attorney Tracy Gostyla.
Spring Couple Handed Sentences for Hurricane Ike FraudRead the Press Release
HOUSTON – A local husband and wife have been sentenced to federal prison following their two convictions for defrauding the Federal Emergency Management Agency in relation to disaster assistance following Hurricane Ike, United States Attorney Kenneth Magidson announced today. LaCarsha, 40, and Andrew Goodman, 41, entered pleas of guilty on April 10 and May 17, 2012, respectively.
Today, U.S. District Judge Nancy Atlas, who accepted the guilty pleas for theft of government property and fraud In connection with major disasters, sentenced LaCarsha Goodman to a term of 27 months in prison. Andrew Goodman received a 24-month sentence on Sept. 7, 2012. Both were also ordered to pay $23,014 in restitution and serve two years of supervised release upon completion of their prison terms.
The evidence showed Goodmans perpetrated an ongoing series of frauds against the government, reporting false addresses and damage to their home in connection with Hurricane Ike. The Goodmans reported multiple home addresses as their primary residence in order to receive these benefits. In each instance, the Goodmans falsely indicated that their primary residences were damaged by Hurricane Ike and that access into their homes was restricted. As a result of their claims, the Goodmans received $23,014 in disaster relief funds from FEMA.
The case was initiated after the Department of Homeland Security, Office of Inspector General received an allegation from U.S. Housing and Urban Development, Office of Inspector General alleging the Goodmans may have defrauded FEMA by submitting a false claim for disaster assistance following Hurricane Ike, which made landfall on Sept. 13, 2008.
A review of FEMA's National Emergency Management System revealed that between Sept. 18, 2008, and Oct. 21, 2008, Andre and LaCarsha Goodman submitted two separate claims for disaster assistance. LaCarsha used two distinct Social Security numbers and, along with Andre, claimed two different addresses on the 14500 block of Vantage Parkway as their primary residence in Houston. In each of the claims, the Goodmans indicated that their primary residence was damaged by Hurricane Ike and that access to their home was restricted. On the basis of one of the claims, FEMA awarded the Goodmans a total of $23,014 in disaster related assistance payments. The investigation revealed the Goodmans did not live, own or rent one of the residences they claimed with FEMA to be their primary residence.
Previously released on bond, LaCarsha was permitted to voluntarily surrender to a U.S. Bureau of Prisons facility to be determined in the near future, while Andre was ordered into custody following his sentencing hearing.
The case was prosecuted by Assistant United States Attorney Suzanne Elmilady.
The United States Attorney's Office for the Southern District of Texas is a member of the Department of Justice's Disaster Fraud Task Force, established to deter, detect and prosecute instances of fraud related to hurricanes and other types of disasters. Comprised of federal, state and local law enforcement investigating agencies, the Task Force combats all types of fraud relating to disasters and their aftermath, with an emphasis on charity fraud, emergency-benefit fraud, identity theft, insurance fraud and procurement fraud.
Anyone suspecting criminal activity involving disaster assistance programs can make an anonymous report by calling the toll-free fraud hotline, 1-866-720-5721 or contacting the Disaster Fraud Fax at 1-225-334-4707 or the Disaster Fraud e-mail at [email protected], 24 hours a day, seven days a week until further notice. Information can also be sent by surface mail, with as many details as possible, to:
National Center for Disaster Fraud
Baton Rouge, LA 70821-4909Former La Villa Corrections Officer Sentenced to PrisonRead the Press Release
McALLEN, Texas - Jorge Luis Sandoval, 32, of Pharr, will soon be serving a federal prison sentence for smuggling two cellular telephones into the East Hidalgo Detention Center for an inmate, United States Attorney Kenneth Magidson announced today. Sandoval pleaded guilty to one count of bribery on July 3, 2012.
Today, Chief U.S. District Judge Ricardo H. Hinojosa, who accepted the guilty plea, handed Sandoval a 12-month and one-day prison term which will be followed by two years of supervised release. In handing down the sentence, Judge Hinojosa found that Sandoval was a “public official” under the law and as defined within the United States Sentencing Guidelines. The Judge noted that “by taking a bribe and facilitating the use of the phone” based on greed, Sandoval demonstrated “a total disrespect for the law.” He further noted that “one of the worst damages that comes from a situation like this,” when someone takes on the responsibilities that come with this job (correctional officer), is that “it gives the public the impression that everyone who takes on this job is willing to do the same” and “it hurts the reputation of those that work for the government and law enforcement.”
Sandoval pleaded guilty to the sole count of bribery, admitting to accepting a bribe while working as a corrections officer at the East Hildago Detention Center in La Villa under the authority of the U.S Marshals Service. Sandoval used his official position to enrich himself by accepting a cash payment from an individual acting on behalf of a federal inmate in exchange for smuggling a cellular telephone into the prison on two occasions.
Sandoval was allowed to self-surrender to the U.S. Marshals Service on January 28, 2013, to begin serving his sentence, pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The investigation leading to the charge in this case was conducted by the FBI and the U.S. Marshals Service. Assistant United States Attorney Casey N. MacDonald prosecuted the case. AUSA Linda Requenez handled the sentencing hearing today.