Southern District of Texas
Press releases recorded for this federal judicial district.
Former official guilty in bribery schemeRead the Press Release
BROWNSVILLE, Texas – A 40-year-old former Cameron County official has entered a guilty plea to interstate travel in aid of racketeering, announced Acting U.S. Attorney Jennifer B. Lowery.
Arnoldo Romeo Flores Jr., 40, Mission, was the director of Human Resources/Civil Service for Cameron County. As part of his plea, he admitted he used his personal cellular phone and email as well as the internet to further a bribery scheme.
In those communications, Flores discussed using his influence to help someone obtain two separate contracts from Cameron County in exchange for bribes.
Flores provided inside information, such as the amounts of other bids. In one instance, Flores told an individual to make sure the bid was under $8,900 to be successful. In return, Flores received $3,000. He accepted another $1,500 for his assistance in securing a second Cameron County bid.
According to the plea agreement, the use of his cell phone assisted and led to the bribe payments.
U.S. District Judge Fernando Rodriguez accepted the plea today and set sentencing for June 15. At that time, Flores faces up to five years in prison and a possible $250,000 maximum fine. He has also agreed to pay restitution.
The FBI conducted the investigation with assistance from the Cameron County District Attorney’s Office and Brownsville Police Department. Assistant U.S. Attorneys Jody Young, Robert S. Johnson and Israel Cano are prosecuting the case.
Texas woman sent to prison for importing over $1M of methRead the Press Release
McALLEN, Texas – A 21-year-old woman from Houston has been ordered to federal prison following her conviction for attempting to import approximately 55 kilograms of meth, announced Acting U.S. Attorney Jennifer B. Lowery.
Heidy Jackaline Diaz pleaded Nov. 6, 2020.
Today, U.S. District Judge Micaela Alvarez ordered Diaz to serve a 70-month sentence to be immediately followed by three years of supervised of release. At the hearing, the court noted the large amount of meth involved its potential harm to the community .
On May 23, 3020, Diaz arrived at the Hidalgo Port of Entry driving a Ford truck and applied for admission into the United States from Mexico. During inspection, authorities conducted an X-ray examination which showed anomalies in the gas tank area of the vehicle. A K-9 also altered to the presence of narcotics.
Law enforcement ultimately extracted more than 120 pounds of meth with an approximate street value of over $1 million.
Diaz admitted she knowingly imported the meth into the United States from Mexico with the intent to deliver them to another individual in McAllen. She expected to be paid $3,000.
She has been and will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the future.
Immigration and Customs Enforcement’ s Homeland Security Investigations and Customs and Border Protection conducted the investigation. Assistant U.S. Attorneys Frances E. Blake and Eliza Carmen prosecuted the case.
Man admits role in smuggling 149 undocumented aliens from LaredoRead the Press Release
LAREDO, Texas – A 54-year-old resident of Fort Meade, Florida, has pleaded guilty in Laredo federal court to conspiracy to transport undocumented aliens, announced Acting U.S. Attorney Jennifer B. Lowery.
Joseph Winslow entered a guilty plea today, admitting he had agreed to drive a tractor-trailer from Laredo to San Antonio in return for $10,000.
On Dec. 30, 2020, Winslow arrived at the Border Patrol checkpoint on Interstate Highway 35 approximately 29 miles north of Laredo. Authorities conducted an X-ray of the trailer he was driving and discovered it was full of people. They ultimately identified a total of 149 undocumented aliens.
U.S. District Judge Marina Garcia Marmolejo will impose sentencing June 15. At that time, Winslow faces up to 10 years in prison.
He was permitted to remain on bond pending that hearing.
Immigration and Customs Enforcement’s Homeland Security Investigations conducted the investigation with the assistance of Border Patrol. Assistant U.S. Attorney David Fawcett is prosecuting the case.
2 get combined 197 years in federal prisonRead the Press Release
McALLEN, Texas – Two men have been ordered to federal prison for decades following their more than a dozen convictions of drug crimes, carjacking, robbery and firearms offenses, announced Acting U.S. Attorney Jennifer B. Lowery along with Special Agent in Charge Christopher Combs of the FBI - San Antonio Division and Special Agent in Charge Daniel C. Comeaux of the Drug Enforcement Administration (DEA).
A McAllen jury deliberated for five hours before convicting Mexican citizen Marin Macrin Cerda aka Filtro, 34, and Jose Miguel Montemayor aka El Mickey, 30, Mission, Sept. 6, 2019, following a seven-day trial.
Today, U.S. District Judge Micaela Alvarez handed Montemayor and Cerda a total of 84 and 113 years in prison, respectively.
At the hearing, the court learned the two men victimized over 35 people – through 13 carjackings, three home invasions and the corrupt actions of two former law enforcement officers. The victims included 11 children as young as 5 and with one with disabilities. Additional evidence also detailed how the men were directly involved in the attempted or successful theft of approximately 100 kilograms of cocaine valued at approximately $2 million. They were also involved in the theft of over $100,000 in suspected drug proceeds and 300 kilograms of marijuana worth approximately $200,000.
While imposing the sentences, Judge Alvarez noted that while she does not remember every single case before her, this one was memorable in the way the rip crew indiscriminately targeted drug traffickers and innocent civilians. The court heard details of their violent crimes which included several discharges of firearms on highways and neighborhoods. Judge Alvarez further mentioned that when first sworn as a federal judge, these kind of violent actions were more often seen in Mexico, but have become more common on the border.
“These defendants were the leaders of Los Mickies, a violent criminal organization that supported drug trafficking activities by engaging in multiple carjackings, home invasions and a neighborhood shootout,” said Combs. “The significant sentences imposed today send a strong message to anyone who thinks they can conduct violent acts in our neighborhoods. We will not tolerate those who violate the peace and safety of our communities and recklessly endanger the public.”
“This investigation highlights the positive impact of multiple agencies joining together to target a violent drug trafficking organization,” said Comeaux. “These criminals routinely resorted to lethal violence in furtherance of their drug trafficking ambitions. DEA will continue to join forces with our federal, state and local law enforcement partners to target and remove those violent organizations who prey on our communities.”
Cerda and Montemayor were convicted of conspiracy to possess with intent to distribute more than five kilograms of cocaine, conspiracy to possess a firearm in furtherance of a drug trafficking offense and a crime of violence, two counts of carjacking, four counts of Hobbs Act robberies, two counts of brandishing a firearm in furtherance of a crime of violence and/or a drug trafficking offense and three counts of discharging a firearm in furtherance of a crime of violence and/or a drug trafficking offense. Cerda was also convicted of conspiracy to possess with intent to distribute more than 100 kilograms of marijuana, an additional count of carjacking, an additional count of Hobbs Act robbery, two additional counts of brandishing a firearm in furtherance of a crime of violence or drug trafficking offense and one additional count of discharging a firearm in furtherance of a drug trafficking offense or crime of violence in relation to events he participated in without Montemayor.
The investigation began after discovering a local rip crew was responsible for multiple carjackings and home invasions in Hidalgo County in order to steal controlled substances or drug proceeds.
During trial, testimony revealed Cerda and other crew members utilized law enforcement officials to further their drug trafficking activities. Two of those included former Donna Independent School District police officer Juan F. Mata and former Hidalgo County Court at Law No. 6 Bailiff Oscar De La Cruz. Jurors heard Mata conducted fraudulent traffic stops in order to allow members of the organization to steal cocaine and marijuana hidden in load vehicles. De La Cruz produced fictitious federal search warrants forging former U.S. Magistrate Judge Dorina Ramos’ signature and queried sensitive law enforcement and judicial databases the organization would provide to sources of supply in order to retain and steal controlled substances in their possession.
Also during trial, the jury heard about multiple crimes involving Cerda, Montemayor or both between 2016-2017. Three of those crimes were carjackings in McAllen and Pharr involving both men in an attempt to steal cocaine. In the second and third instances, rip crew members discharged firearms at the vehicles in order to obtain the controlled substances. Testimony further revealed Cerda and Montemayor were involved in a robbery which resulted in a shoot-out in a McAllen neighborhood. Another crime involved a home invasion, during which the criminals entered the wrong residence seeking drugs and terrorizing a family, including a female who was eight months pregnant. Cerda and Montemayor also served as scouts for a drug transaction involving more than 20 kilograms of cocaine Feb. 1, 2017, in McAllen.
Jurors heard the rip crew continued their activities when they also attempted to rob multiple kilograms of cocaine from a vehicle traveling through Mission and McAllen on Feb. 27, 2017. Cerda and Montemayor discharged firearms at the targeted load vehicle in an attempt to steal the cocaine. Testimony revealed a bullet struck an occupant of the vehicle who required significant medical attention. Cerda was further involved in the carjacking of a tractor trailer in rural Mission July 7, 2016, and a car chase and shootout Jan. 6, 2017. In the first instance, the rip crew threatened a family, including several juveniles, in order to steal a tractor trailer believed to conceal drug proceeds. During the car chase incident, the crew discharged firearms and rammed their vehicles into a vehicle before it ultimately crashed.
Jurors also heard testimony relating to a home invasion conducted in Mission April 3, 2017, when rip crew members, including Cerda, entered the residence of a suspected drug trafficker armed with firearms and successfully stole more than $100,000 in drug proceeds. Casings recovered from three of the crimes were fired from firearms found in Cerda’s vehicle.
The defense attempted to convince the jury that although the crimes had been committed, co-conspirators fabricated Cerda’s and Montemayor’s involvement. They did not believe those claims and convicted both men as charged.
Both Cerda and Montemayor have been and will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
To date, more than 30 co-conspirators have been convicted in connection with the investigation. Mata and De La Cruz also pleaded guilty and have been sentenced to 130 and 60 months, respectively. Others to date have received sentences up to 240 months with nine receiving sentences in excess of 10 years.
The FBI and DEA conducted the investigation with assistance from Border Patrol, U.S. Marshals Gulf Coast Regional Fugitive Task Force, Immigration and Custom’s Enforcement’s Homeland Security Investigations, Texas Department of Public Safety’s Highway Patrol and Regional Crime Laboratories, Hidalgo County Sheriff’s Office, Hidalgo County District Attorney’s Office and Police Departments in McAllen, Mission, Pharr and San Juan.
Assistant U.S. Attorneys Roberto Lopez Jr. and K. Alejandra Andrade are prosecuting the case.
Victoria man sentenced for receiving sexually-explicit images of young childrenRead the Press Release
CORPUS CHRISTI – A 40-year-old Texan has been ordered to federal prison following receipt of more than 5,000 images of child pornography, announced Acting U.S. Attorney Jennifer B. Lowery.
Paul Thomas Rosales pleaded guilty Sept. 8, 2020, to receipt of child pornography.
Today, U.S. District Judge David S. Morales ordered Rosales to serve a 176-month sentence. At the hearing, the court also heard about the 5,84 confirmed images on his digital devices which included child victims approximately 2-3 years old and younger. One involved an infant child. Rosales also had admitted he possessed approximately 50,000 child pornographic images, many involving children between 5-16 years of age.
In handing down the sentence, the court noted the need for punishment. Rosales will also serve 15 years on supervised release during which time the court can impose a number of special conditions designed to protect children and prohibit the use of the internet. He is also required to register as a sex offender.
“Today we are reminded of how heinous crimes against children are, as some of Rosales' youngest victims were infants,” said Special Agent in Charge Perrye K. Turner of FBI. “The FBI will continue to work tirelessly to protect children from sexual exploitation and bring these reprehensible predators to justice.”
Authorities had linked Rosales to explicit materials found on a peer-to-peer network. The area task force investigation soon led them to his residence in Victoria.
They conducted a search and seized numerous digital devices. Forensic analysis ultimately revealed over 5,000 images of children engaged in sexually explicit conduct, some of which included children under the age of 5.
At the time of his plea, Rosales admitted to receiving the pornographic images.
Previously released on bond, he was taken into custody following the sentencing today where he will remain pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The FBI – Corpus Christi Resident Agency and Victoria Police Department conducted the investigation along with the Houston Metro Internet Crimes Against Children Task Force.
Assistant U.S. Attorney Reid Manning prosecuted the case, which was brought as part of Project Safe Childhood (PSC), a nationwide initiative the Department of Justice (DOJ) launched in May 2006 to combat the growing epidemic of child sexual exploitation and abuse. U.S. Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section leads PSC, which marshals federal, state and local resources to locate, apprehend and prosecute individuals who sexually exploit children and identifies and rescues victims. For more information about PSC, please visit DOJ’s PSC page. For more information about internet safety education, please visit the resources tab on that page.
Houston man admits to attempting to distribute meth from RGVRead the Press Release
CORPUS CHRISTI, Texas – A 34-year-old Houston resident has entered a guilty plea in Corpus Christi federal court to transporting nearly 40 kilograms of pure meth with the intent to distribute, announced Acting U.S. Attorney Jennifer B. Lowery.
On Dec. 24, 2020, Christopher Schulgen approached the Javier Vega Jr. checkpoint near Sarita driving a Toyota Camry. Upon arrival, a K-9 alerted to his vehicle. Authorities referred him to secondary inspection where they discovered 44 bundles of a white powdery substance. They were located under the back seat, in factory voids of the door panels and the rear quarter panels of the vehicle.
Law enforcement determined the content of the bundles to be 39.58 kilograms of pure meth with an estimated street value of $800,000.
U.S. District Judge David S. Morales will impose sentencing June 2. At that time, Schulgen faces a mandatory minimum of 10 years and up to life in federal prison and a possible $10 million maximum fine.
He has been and will remain in custody pending sentencing.
Drug Enforcement Administration and Customs and Border Protection conducted the investigation. Assistant U.S. Attorney Sara Popejoy is prosecuting the case.
Meth trafficker gets over 10 years in prisonRead the Press Release
CORPUS CHRISTI, Texas - A 48-year-old Corpus Christi resident has been ordered to federal prison following his conviction of conspiring to distribute 243 grams of meth, announced Acting U.S. Attorney Jennifer B. Lowery.
Willie James Sorrell III pleaded guilty Nov. 12, 2020.
Today, U.S. District Judge Nelva Gonzales Ramos ordered Sorrell to serve a 121-month sentence to be immediately followed by five years of supervised release. In handing down the sentence, the court noted Sorrell’s previous criminal conduct, to include aggravated sexual assaults, drug possessions and unlawful possession of firearms.
On May 30, 2019, Sorrell and Jennifer Saldana were traveling on a Greyhound bus from McAllen to the Corpus Christi area. Authorities conducted a search while at the Border Patrol checkpoint near Falfurrias where they discovered a backpack near Sorrell’s feet. It contained nearly 250 grams of meth and a loaded semi-automatic firearm.
The investigation established Sorrell and Saldana traveled to the Rio Grande Valley to obtain the meth for potential distribution in Corpus Christi.
Saldana, 38, Rockport, had also pleaded guilty and is set for sentencing March 24.
Sorrell has been and will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The Drug Enforcement Administration conducted the investigation along with the assistance of Customs and Border Protection and Texas Department of Public Safety. Assistant U.S. Attorney Reid Manning is prosecuting the case.
Meth conviction lands man in prison for 14 yearsRead the Press Release
McALLEN, Texas – A 27-year-old Mexican citizen has been ordered to federal prison following his conviction for attempting to import approximately 23 kilograms of meth, announced Acting U.S. Attorney Jennifer B. Lowery.
Brian Alan Herrera-Valenzuela pleaded guilty Oct. 18, 2019.
Today, U.S. District Judge Micaela Alvarez ordered Herrera to serve a 168-month sentence. At the hearing, Judge Alvarez informed Herrera that his actions troubled the court because, as a non-citizen, he was willing to cause harm by engaging in criminal activity that brought drugs into our community.
On April 14, 2019, Herrera attempted to gain entry into the United States via the Hidalgo port of entry. Upon his arrival, an X-ray revealed anomalies in the tires. Authorities conducted a search and discovered 40 packages of meth weighing approximately 23 kilograms.
Herrera admitted he knowingly imported the drugs into the United States from Mexico with the intent to deliver them to Dallas. He acknowledged this was his second trip after successfully transporting drugs the previous month. Herrera expected to be paid $7,000.
The drugs had an approximate street value of $115,000.
He has been and will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the future.
Immigration and Customs Enforcement’ s Homeland Security Investigations and Customs and Border Protection conducted the investigation. Assistant U.S. Attorney M. Alexis Garcia prosecuted the case.
Local woman charged with fraudulently receiving millions under CARES ActRead the Press Release
HOUSTON – A 37-year-old Houston resident is set to appear in federal court for her alleged submission of two Paycheck Protection Program (PPP) loan applications pursuant to the Coronavirus Aid, Relief and Economic Security (CARES) Act, announced Acting U.S. Attorney Jennifer B. Lowery.
The criminal indictment, filed Feb. 24, charges LaDonna Wiggins with bank fraud, making a false statement to a bank and money laundering. She is set to appear before U.S. Magistrate Judge Peter Bray today at 2 p.m..
Wiggins allegedly submitted two PPP loan applications for businesses known as Wiggins & Graham Enterprise LLC and Pink Lady Line, resulting in the receipt of $3,648,145. The charges allege Wiggins used these funds to make personal purchases such as for two homes, multiple vehicles and luxury goods - rather than for any legitimate business purposes.
The CARES Act is a federal law enacted March 27, 2020, to provide emergency financial assistance to the millions of Americans who are suffering the economic effects caused by the COVID-19 pandemic. One source of relief the CARES Act provides is the authorization of up to $349 billion in United States Small Business Administration (SBA)-guaranteed and forgivable loans to small businesses through the PPP.
Businesses must use PPP loan proceeds for certain permissible expenses, such as payroll costs, interest on mortgages, rent and utilities. Interest and principal on PPP loans can be entirely forgiven if the business spent the loan proceeds on these expense items within a designated period of time.
If convicted, Wiggins faces up to 30 years in federal prison and a possible $1 million maximum fine.
The Secret Service conducted the investigation. Assistant U.S. Attorney Zahra Jivani Fenelon is prosecuting the case.
A criminal indictment is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless convicted through due process of law.
Houston man gets lengthy sentence for 2019 carjacking and robberyRead the Press Release
HOUSTON - A 24-year-old Houston resident has been ordered to federal prison for 24 years, announced Acting U.S. Attorney Jennifer B. Lowery.
Jonathan Soto pleaded guilty Dec. 2, 2020, to aiding and abetting carjacking and two counts of discharging a firearm during and in relation to a crime of violence.
Today, U.S. District Judge George C. Hanks Jr. ordered him to serve 48 months for the carjacking. He was further sentenced to 120 months on each of the firearms charges to be served consecutively to each other and the underlying offense. The total 288 months will be automatically followed by five years of supervised release.
On Feb. 7, 2019, Soto and others approached a vehicle on the 7500 block of Corporate Drive in Houston and asked if the passengers were in a gang. He ordered them to get out of the car, but they refused. They were subsequently pulled from the vehicle and forced to lay on the ground, face-down. Soto punched one of them in the face. Another victim was able to run away as shots were fired in his direction.
Less than an hour later, Soto acted as a look-out driver during the armed robbery of the Old Irish Pub on the 2300 block of Kirkwood. The robber said “you think this is a joke?” and fired his gun into the ceiling. He then ordered a victim to give him money from the register and safe.
Soto admitted to being the look-out driver for this robbery as well as taking part in the carjacking.
Law enforcement was able to use National Integrated Ballistic Information Network to link shell casings from the carjacking and the robbery,
Soto has been and will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The Bureau of Alcohol, Tobacco, Firearms and Explosives and Houston Police Department conducted the investigation. Assistant U.S. Attorney Jill Stotts is prosecuting the case.
Four charged in $32 million health care fraud schemeRead the Press Release
HOUSTON - A medical director, operator and two unlicensed practitioners at a Texas medical clinic are now in custody on charges related to their alleged participation in a $32 million health care fraud scheme.
Farrah Forough Farizani, D.O., 57, Hamid Reza Razavi, 60, Elie Hanna Hajjar, 48, and Juan Acuña, 64, all of Houston, made their appearances today before U.S. Magistrate Judge Christina Bryan.
Farizani and Razavi are the medical director and operator, respectively, of Hillcroft Physicians, while Hajjar and Acuña were former unlicensed practitioners there.
The indictment, unsealed today, charges all four with one count of conspiracy to commit health care fraud. Farizani, Razavi and Hajjar are also charged with five counts of making false statements relating to health care matters.
The indictment alleges the defendants participated in a health care fraud scheme. They allegedly submitted false and fraudulent claims to Medicaid and Medicare for services that were not provided as billed or were not provided by a licensed, qualified and enrolled provider. Farizani, Razavi, Hajjar,and Acuña allegedly misled patients and staff to believe that Hajjar and Acuña were licensed to practice medicine in Texas.
According to the indictment, Farizani and Razavi directed Hajjar and Acuña to pose as licensed medical professionals. Hajjar and Acuña then allegedly examined, diagnosed, treated, referred and prescribed drugs for patients, many of whom were non-English speaking Medicaid clients unfamiliar with the American medical system. Farizani and Razavi allegedly directed Hillcroft Physicians’ billing staff to submit false claims to Medicaid and Medicare as though Farizani had seen and treated the patients, even when Farizani was out of the country.
The indictment alleges that the defendants submitted or caused the submission of approximately $31 million in claims to Medicaid for which Medicaid paid approximately $12.2 million. They also submitted approximately $600,000 in claims to Medicare for which Medicare paid approximately $250,000.
The FBI, Department of Health and Human Services (DHHS) - Office of Inspector General and Texas Attorney General’s Medicaid Fraud Control Unit conducted the investigation. Immigration and Customs Enforcement’s Homeland Security Investigations assisted with the arrests.
Trial Attorney Devon Helfmeyer of the Criminal Division’s Fraud Section and Special Assistant U.S. Attorney Kathryn Olson of the Southern District of Texas are prosecuting the case.
The Fraud Section leads the Health Care Fraud Strike Force. Since its inception in March 2007, the Health Care Fraud Strike Force, which maintains 15 strike forces operating in 24 districts, has charged more than 4,200 defendants who have collectively billed the Medicare program for nearly $19 billion. In addition, the DHHS Centers for Medicare & Medicaid Services, working in conjunction with DHHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
An indictment is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless convicted through due process of law.
Four Charged in $32 Million Health Care Fraud SchemeRead the Press Release
A medical director, operator and two unlicensed practitioners at a Texas medical clinic are now in custody on charges related to their alleged participation in a $32 million health care fraud scheme.
Farrah Forough Farizani, D.O., 57, Hamid Reza Razavi, 60, Elie Hanna Hajjar, 48, and Juan Acuña, 64, all of Houston, made their appearances today before U.S. Magistrate Judge Christina Bryan.
Farizani and Razavi are the medical director and operator, respectively, of Hillcroft Physicians, while Hajjar and Acuña were former unlicensed practitioners there.
The indictment, unsealed today, charges all four with one count of conspiracy to commit health care fraud. Farizani, Razavi and Hajjar are also charged with five counts of making false statements relating to health care matters.
The indictment alleges the defendants participated in a health care fraud scheme. They allegedly submitted false and fraudulent claims to Medicaid and Medicare for services that were not provided as billed or were not provided by a licensed, qualified and enrolled provider. Farizani, Razavi, Hajjar, and Acuña allegedly misled patients and staff to believe that Hajjar and Acuña were licensed to practice medicine in Texas.
According to the indictment, Farizani and Razavi directed Hajjar and Acuña to pose as licensed medical professionals. Hajjar and Acuña then allegedly examined, diagnosed, treated, referred and prescribed drugs for patients, many of whom were non-English speaking Medicaid clients unfamiliar with the American medical system. Farizani and Razavi allegedly directed Hillcroft Physicians’ billing staff to submit false claims to Medicaid and Medicare as though Farizani had seen and treated the patients, even when Farizani was out of the country.
The indictment alleges that the defendants submitted or caused the submission of approximately $31 million in claims to Medicaid for which Medicaid paid approximately $12.2 million. They also submitted approximately $600,000 in claims to Medicare for which Medicare paid approximately $250,000.
Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division; Acting U.S. Attorney Jennifer B. Lowery of the Southern District of Texas; Special Agent in Charge Perrye K. Turner of the FBI’s Houston Field Office; Special Agent in Charge Miranda Bennett of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Dallas Region; and Stormy Kelly of the Texas Attorney General’s Medicaid Fraud Control Unit (MFCU) made the announcement.
The FBI, HHS-OIG and Texas Attorney General’s MFCU conducted the investigation. U.S. Immigration and Customs Enforcement’s Homeland Security Investigations assisted with the arrests.
Trial Attorney Devon Helfmeyer of the Criminal Division’s Fraud Section and Special Assistant U.S. Attorney Kathryn Olson of the Southern District of Texas are prosecuting the case.
The Fraud Section leads the Health Care Fraud Strike Force. Since its inception in March 2007, the Health Care Fraud Strike Force, which maintains 15 strike forces operating in 24 districts, has charged more than 4,200 defendants who have collectively billed the Medicare program for nearly $19 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
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 Breakfast Klub agrees to remove ADA violationsRead the Press Release
HOUSTON — A local Houston restaurant has settled allegations under Title III of the Americans with Disabilities Act (ADA) and agreed to remove barriers and greatly improve physical accessibility, announced Acting U.S. Attorney Jennifer B. Lowery.
Individuals with disabilities had complained that they were unable to gain access to the restaurant. A follow-up investigation revealed several physical barriers existed on restaurant access points preventing individuals with disabilities from gaining entry to the restaurant. Authorities also found additional violations inside the restaurant.
The settlement agreement requires The Breakfast Klub to remove and remedy all ADA violations the United States has identified.
Under the ADA, persons with disabilities shall be afforded the opportunity to participate in or benefit from the goods, services, facilities, privileges, advantages or accommodations equal to that afforded to other individuals. Title III mandates that no individual shall be discriminated against on the basis of a disability by any person who owns, leases or operates a place of public accommodation.
Under Title III, The Breakfast Klub is a place of public accommodation. As such, the property owner and tenant are subject to its requirements.
Assistant U.S. Attorneys Elizabeth Karpati and Keith Edward Wyatt handled this investigation with the assistance of Paralegal Specialist Raymond Babauta.
Corpus Christi bank robber sent to prisonRead the Press Release
CORPUS CHRISTI, Texas – A 44-year-old felon has been ordered to federal prison for robbing the Kleberg Bank in Corpus Christi and brandishing a firearm during the robbery, announced U.S. Attorney Ryan K. Patrick.
Jesse Lemmons pleaded guilty Dec. 1, 2020.
Today, U.S. District Judge Drew B. Tipton handed Lemmons a 31-month sentence for the bank robbery. He also received a consecutive seven years for the firearms charge which must be served consecutively to the other sentence imposed. The total 117-month term of imprisonment will be immediately followed by five years of supervised release.
On Jan. 10, 2020, Lemmons entered the Kleberg Bank at 3945 Crosstown SH #286 in Corpus Christi. He proceeded directly to the teller stations where he demanded cash while holding bank employees at gunpoint. He yelled repeatedly at bank employees to hurry and threatened to shoot several of them during the robbery.
Authorities apprehended him shortly after attempting to flee the scene with the money.
Lemmons will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The Corpus Christi Police Department and FBI conducted the investigation. Assistant U.S. Attorney Joel Dunn prosecuted the case.
Final Defendant Sentenced in $7 Billion Investment Fraud SchemeRead the Press Release
The former chief of Antigua’s Financial Services Regulatory Commission (FSRC) was sentenced today to 10 years in prison for his role in connection with a $7 billion Ponzi scheme involving the Stanford International Bank (SIB).
Leroy King, 74, of Dickerson Bay, Antigua, pleaded guilty on Jan. 30, 2020, to one count of conspiracy to obstruct justice and one count of obstruction of justice for his role in obstructing the Securities and Exchange Commission (SEC) investigation into SIB. He was extradited to the United States in November 2019. King is a dual citizen of the United States and Antigua. Beginning in approximately 2002, he served as the administrator and CEO of the FSRC, an agency of the Antiguan government. As part of his duties, he was responsible for Antigua’s regulatory oversight of Stanford International Bank Limited’s (SIBL) investment portfolio, including the review of SIBL financial reports and responses to requests by foreign regulators, including the SEC, for information and documents about SIBL’s operations.
In or about 2005, the SEC began investigating R. Allen Stanford and Stanford Financial Group (SFG) and made official inquiries with the FSRC regarding the value and content of SIBL’s purported investments.
King admitted that Stanford’s cash payments to King totaled approximately $520,963.87 over the course of the conspiracy. Stanford also provided King tickets to both Super Bowl XXXVIII in Houston (2004) and Super Bowl XL in Detroit (2006). In addition, Stanford provided King with repeated flights on private jets Stanford or SFG entities owned. King later denied the SEC’s request for help, and he wrote that the FSRC “had no authority to act in the manner requested and would itself be in breach of law if it were to accede to your request.” In reality, the FSRC did have this authority and failed to exercise it because of the payments and other benefits Stanford gave to King.
A federal jury found Stanford guilty in June 2012 for his role in orchestrating a 20-year investment fraud scheme in which he misappropriated $7 billion from SIB to finance his personal businesses. He is serving a 110-year prison sentence. Five others were also convicted for their roles in the scheme and received sentences ranging from 3 to 20 years in federal prison.
Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division and U.S. Attorney Ryan K. Patrick of the Southern District of Texas made the announcement.
The Houston Field Offices of the FBI, IRS-CI, and U.S. Postal Inspection Service investigated the case.
Trial Attorney Brittain Shaw of the Criminal Division’s Fraud Section and Assistant U.S. Attorney John Pearson of the Southern District of Texas prosecuted the case.
The Justice Department extends its gratitude to the government of Antigua for its cooperation and assistance.
Federal officer charged with helping undocumented nanny into the countryRead the Press Release
LAREDO, Texas – A 40-year-old Customs and Border Protection (CBP) officer is set to appear in federal court on charges of conspiring to transport an illegal alien and making false statements, announced U.S. Attorney Ryan K. Patrick.
Laredo resident Rhonda Lee Walker is set to appear for a detention hearing before U.S. Magistrate Judge Christopher Dos Santos today at 1:30 p.m.
The criminal complaint alleges that on Jan. 2, 2021, Walker used her official position to assist a foreign national into the country. According to the charges, Walker improperly used another officer’s computer login information to help the Mexican woman to enter the United States through the Laredo Port of Entry. The woman allegedly had no legal status to reside or work in the United States. However, Walker intended for the woman to illegally enter the country and work for her as a housekeeper and nanny, according to the complaint. The charges also allege she had sent money to the woman in Mexico to facilitate her arrival.
Walker also allegedly lied to authorities. The complaint alleges she falsely claimed the woman was her aunt and denied ever sending her money.
Walker faces up to 20 years in prison if convicted of the conspiracy or knowingly transporting undocumented aliens. The penalty for knowingly making a materially false statement is a maximum five-year-term of imprisonment.
CBP - Office of Professional Responsibility is conducting the investigation. Assistant U.S. Attorney Francisco J. Rodriguez is prosecuting the case.
A criminal complaint is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless convicted through due process of law.
Patrick announces resignationRead the Press Release
HOUSTON – U.S. Attorney Ryan K. Patrick has announced he will resign as chief law enforcement officer for the Southern District of Texas (SDTX) effective midnight Feb. 28.
“It has been the honor of a lifetime to serve our nation and our state as United States Attorney,” said Patrick. “The Southern District is staffed with amazing career men and women who wake up every day ready to represent the United States, and I consider it a high honor that I was able to do the same alongside them for the past three years.”
Patrick was the 23rd presidentially-appointed U.S. Attorney for the Southern District of Texas (SDTX). He was responsible for prosecuting and defending the interests of the United States in one of the largest districts in the country - covering 44,000 square miles and representing nearly nine million people. He oversaw over 450 employees, including approximately 210 Assistant U.S. Attorneys who cover the seven offices across the district.
In just over three years as U.S. Attorney, prosecutors in his office charged nearly 25,000 defendants in almost 22,000 cases consistently ranking as the top or second highest district nationally in overall criminal prosecutions. In fact, felony prosecutions increased 39% in fiscal year 2019 from the previous 12% increase, setting a new case record. Overall, criminal matters referred to the office increased 121% in his first year. The office maintained a 95-96% conviction rate while Patrick served as U.S. Attorney.
Patrick began serving as U.S. Attorney Jan. 8, 2018. In his first year alone, his office found itself at the forefront of a nationwide immigration debate, in the middle of investigating one of the deadliest school shootings and dealing with the complexities associated with an almost unprecedented budget sequestration.
Soon after his arrival to the office in 2018, Patrick emerged as a prominent leader of the ever-increasing immigration debate. He frequently discussed and addressed challenging border issues and protecting people from the harms associated with illegal immigration and human smuggling.
In May 2018, the district also saw the tragedy of the deadly school shooting in Santa Fe. Patrick witnessed the aftermath firsthand. He communicated with parents and others and worked with federal, state and local law enforcement, pledging office resources wherever needed.
Also in 2018, Patrick significantly starting increasing staffing in what is now the busiest criminal docket in the country. The office hired more than 80 attorneys and 80 support staff during his tenure to meet increasing caseloads in South Texas and Houston – due in part to the rising number of illegal entrants and reentrants in Laredo, McAllen and Brownsville, spiking violent street crime in Houston and Corpus Christi and the need for a cadre of civil prosecutors for border fence construction projects along the Rio Grande.
During his administration, the district saw the arrest, conviction and sentencing of a unique case against a local couple who committed international kidnapping of their grandson. Similarly, Patrick fought for the rights of victims, as evidenced by the unprecedented check presented to a woman subjected to labor trafficking. “This woman now has a better chance at a fresh start,” he said.
Particular emphasis in Houston was placed on prosecuting violent crime, with significant prosecutions for bank and armored robberies as well as firearms offenses. In 2019, the SDTX increased violent crime prosecutions by 57%. That year, a judge granted to government’s request for an upward variance and sent a Houston man to prison for 540 months for the killing of a postal worker and another imposed life sentences for an armored car murder crew. The office also pursued similar crimes in other divisions, such as a Laredoan who was ordered to serve 300 months for carjacking and other violent crimes.
The district also saw the first increase in drug prosecutions in five years thanks to a renewed emphasis on local impact drug cases including deadly synthetic drugs and the growing opioid epidemic. In Brownsville, for example, a local man is now serving life in prison for his conviction of meth distribution. Corpus Christi also saw the conviction and sentencing of eight people involved in the deadly distribution of synthetic cannabinoids.
Fraud has also been a consistent problem SDTX prosecutors have battled. One notable case diligently pursued under his administration involved a woman who swindled professional athletes out of millions. She later received the maximum sentence under federal law.
Patrick also placed a significant emphasis on matters of public corruption, believing that those in positions of public trust must be held to the highest levels of integrity. Under Patrick’s leadership, former Houston police officers now face federal civil rights charges. A former Texas judge himself, Patrick was also particularly incensed with a state judge ultimately sent to prison for bribery and obstructing justice, noting “He didn’t just tip the scales of justice, he knocked it over with a wad of cash and didn’t look back.”
Patrick also noted “The protection of life is the most sacred job law enforcement has.” Two notable matters of national security that began under his administration remain pending – one against a Sugar Land man who is pending trial and the other who was convicted of attempting to provide material support to a foreign terrorist organization.
Not to be forgotten is the large caseload of civil litigation in some of the most difficult and important cases the government faces, including resolution of the border fence issues, defending serious medical malpractice claims and recovering millions in criminal debt and civil fraud. Of note, a Laredo doctor Laredo eye doctor paid over $3M to resolve fraud claims. The division’s civil rights group also helped resolve numerous claims such as an employment discrimination matter on behalf of U.S. Army National Guard reservist.
Additionally, the SDTX continued to consistently rank as one of highest in terms of federal health care fraud prosecutions throughout the nation. Continuing its partnership with the Health Care Fraud Strike Force, the district successfully convicted durable medical equipment owners, doctors, billers and many more to include a Texas rheumatologist for a $325 million health care fraud scheme. Patrick noted “Patients were put through unneeded anxiety and pain so the doctor could make millions. He won’t need it where he’s headed.”
Under his leadership, prosecutors also continued the fight in bringing criminals to justice and protecting the most vulnerable members of our society through the efforts of Project Safe Childhood. In addition to speaking at annual Children’s Assessment Center’s kickoff events, he was also proud to open the new Human Trafficking Rescue Alliance offices. The SDTX convicted, on average, one defendant each week charged with these types of crimes during his tenure. Notable matters included men who are now serving life in federal prison for stealing the childhood of their young victims - one who exploited a barely teenage girl he met via social media and another who trafficked a 10-year-old girl for three years.
During his tenure, Patrick also lead other efforts, such as hosting roundtables on sexual harassment in housing and in the workplace and helped SDTX become part of the Transnational Elder Fraud Task Force.
Patrick is also a strong advocate of our law enforcement partners, placing an emphasis on outreach to them and making sure every chief, sheriff and constable had his phone number. He strongly conveyed that federal law enforcement was willing to assist any agency with any problem, to include cases he cited as “white collar storm looting” in relation to Hurricane Harvey.
Patrick began his career as an Assistant District Attorney in Harris County. During that time, he prosecuted all types of criminal cases, including spending three years as an on-call prosecutor and investigator with the Vehicle Crimes Section focusing on drunk driving fatalities. He finished his time at the office as a member of the Major Offenders Division.
In 2012, then Texas Governor Rick Perry appointed Patrick Presiding Judge of the 177th state district court. He was elected to a full four-year-term later in 2012.
Immediately prior to serving as U.S. Attorney, Patrick was in private practice.
Patrick graduated from Baylor University in 2001 and South Texas College of Law in 2006. He is married with four children.
Father and son cocaine traffickers ordered to prisonRead the Press Release
McALLEN, Texas – A 65-year-old Mexican national has received a federal prison sentence following his conviction in a conspiracy to possess with intent to distribute approximately two kilograms of cocaine, announced U.S. Attorney Ryan K. Patrick.
Jorge Luis Perez-Cortez pleaded guilty Dec. 3, 2020.
Today, U.S. District Judge Micaela Alvarez upwardly departed from the U.S. Sentencing Guidelines and ordered Perez-Cortez to serve 80 months in prison. Not a U.S. citizen, he is expected to face removal proceedings following his sentence. At the hearing, Judge Alvarez rebuked Perez-Cortez for returning to the United States soon after his prior removal and involving himself and his son in cocaine trafficking. He further noted Perez-Cortez's criminal history.
His son - Jorge de Jesus Perez, 31, of Mission – was also convicted in the scheme and previously sentenced to 24 months to be immediately followed by three years of supervised release.
On May 22, 2020, Perez-Cortez and his son picked up two kilograms of cocaine and traveled to a McDonald’s near Edinburg. Law enforcement approached, after which Perez-Cortez admitted he was the one responsible for coordinating the drug transaction, while his son was just his means of transportation. They had intended for it to be delivered to Houston.
The investigation revealed several incriminating messages on Perez-Cortez’s cell phone linking him to a drug trafficking ring.
Perez-Cortez has been and will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The Drug Enforcement Administration conducted the investigation. Assistant U.S. Attorney Matthew Redavid prosecuted the case.
Local man sent to prison for enticing minor via social mediaRead the Press Release
McALLEN, Texas — A 34-year-old Mercedes resident has been ordered to federal prison after admitting he intended to engage in sexual activity with a young female, announced U.S. Attorney Ryan K. Patrick.
Jason Hernandez pleaded guilty Dec. 2, 2020.
Today, U.S. District Judge Micaela Alvarez sentenced him to 140 months in federal prison. In handing down the sentence, the court noted that unlike many other crimes, Hernandez was not motivated by the desire to make money, instead by his own immoral purposes and desires. The court further noted Hernandez clearly intended to engage in sexual activity with a minor as he had arrived at the meeting location with condoms in his possession.
Hernandez was further ordered to serve 10 years on supervised release following completion of his prison term, during which time he will have to comply with numerous requirements designed to restrict his access to children. He will also be ordered to register as a sex offender.
“With ever increasing access to communication platforms, we must continue to stay a step ahead of those who exploit technology to facilitate some of the worst crimes in modern society. The defendant in this case will serve the next several years in prison for his unfathomable acts,” said Acting Special Agent in Charge Craig Larrabee of Immigration and Customs Enforcement’s Homeland Security Investigations (HSI). “ HSI will continue to dedicate law enforcement resources to identify and bring to justice child predators who traumatize and victimize children.”
Between the months of August and September 2020, Hernandez enticed an individual he believed to be a 13-year-old female on a social media application. In their communications, Hernandez had graphically described sexual acts he desired to perform with the minor and expressed his desire to impregnate her.
Hernandez then requested to meet the alleged minor in person at an agreed upon location at a park in Harlingen, at which time he expected to engage in sexual activity with her. However, law enforcement took him into custody upon his arrival.
HSI’s Rio Grande Valley Child Exploitation Task Force conducted the investigation.
Assistant U.S. Attorney Michael Mitchell prosecuted the case. This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to locate, apprehend and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Houston scientist settles grant fraud allegationsRead the Press Release
HOUSTON – A local scientist and his southwest Houston invention and technology company have agreed to pay nearly $150,000 to resolve allegations they defrauded the National Science Foundation (NSF) and the Navy, announced U.S. Attorney Ryan K. Patrick.
Dr. Rouzbeh Shahsavari, 40, is the owner and chief scientist at C-Crete Technologies Ltd. in Stafford. Today, he has paid $147,589 to settle allegations they violated the False Claims Act.
“Fraud targeting grants and loans for small business development has an outsized impact on recipients and those left out,” said Patrick. “Some deserving and legitimate small business missed out because this man lied. The taxpayer is now being made right.”
Shahsavari and C-Crete allegedly made material misrepresentations to NSF and the Navy in applications for Small Business Technology Transfer (STTR) and Small Business Innovation Research (SBIR) awards in 2015 and 2016. STTR and SBIR programs are highly competitive federal programs. They are designed to encourage small, independent and domestically owned businesses through the investment of federal funds to conduct research and development in areas that further United States interests, including those concerning national health, welfare and defense. Only qualified small businesses that meet strict program requirements are eligible for awards.
STTR and SBIR award applicants are required to designate an employee as the principal investigator for the proposed research. His/her qualifications and credentials are a key component of award decisions. STTR award applicants must also have a subaward agreement with a collaborating research partner.
C-Crete and Shahsavari represented they had the mandatory agreement with Rice University. However, the investigation revealed they did not. They also failed to notify Navy personnel that their designated principal investigator had stopped working for C-Crete almost three months before the award was granted.
In both circumstances C-Crete was ineligible, but still accepted grant funds.
“It is imperative that federal award recipients provide true and accurate representations and certifications during all phases of the grant process,” said NSF Inspector General Allison Lerner. “The SBIR/STTR program is a valuable tool in advancing NSF’s mission to promote the progress of science by increasing opportunities for innovative research by small businesses. It is essential to protect the integrity of this program.”
NSF-Office of Inspector General and Naval Criminal Investigative Service conducted the coordinated investigation with the assistance of the U.S. Attorney’s Office. Assistant U.S. Attorney Julie Redlinger handled the matter.
The claims resolved by this settlement are allegations only. There has been no determination of liability.
South Texas woman indicted for smuggling firearms, ammunition and cash into MexicoRead the Press Release
LAREDO, Texas – A grand jury sitting in Laredo had returned an indictment charging an Austin woman for illegally smuggling defense articles and approximately $100K, announced U.S. Attorney Ryan K. Patrick.
On Jan. 18, 2021, authorities apprehended Lizzette Jaimes at the Lincoln Juarez Bridge port of entry in Laredo attempting to travel into Mexico, according to the charges. The indictment alleges she appeared nervous at primary inspection. Law enforcement referred her for a more thorough inspection, at which time they allegedly searched her luggage and other items in the rear seat of the truck.
The charges allege one of the items was a black duffle bag containing women’s clothing. Authorities allegedly felt a square object in the bottom of the bag, moved the clothing and found several stacks of U.S. currency wrapped in duct tape. It totaled $95,000, according to the allegations.
Law enforcement continued to search the truck and also allegedly found 240 rounds of handgun ammunition, an additional $4,747 in cash, three GPS devices wired in difference locations and nine handguns.
If convicted, Jaimes faces up to 10 years in prison and a possible $250,000 maximum fine.
Immigration and Customs Enforcement’s Homeland Security Investigations and Customs and Border Protection conducted the investigation. Assistant U.S. Attorney Michael Makens 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.
Houston man indicted in Laredo for smuggling 119 illegal aliensRead the Press Release
LAREDO, Texas – A 32-year-old man has been charged with conspiracy to transport illegal aliens, announced U.S. Attorney Ryan K. Patrick.
Originally charged by criminal complaint, a Laredo grand jury returned an indictment today against Brodrick Keith Rhodes. He will appear before U.S. a magistrate judge in the near future.
The charges allege that on Jan. 12, authorities stopped Rhodes after he approached the Freer Border Patrol checkpoint driving a semi-truck and refrigerated trailer. He had claimed he was hauling lettuce and produced a bill of lading, according to the complaint.
However, law enforcement allegedly noticed discrepancies and that Rhodes appeared nervous. Further, the refrigerated trailer was set to 30 degrees but the internal temperature was at 68, according to the charges.
After a K-9 alerted to possible presence of contraband in the cargo area of the trailer and a subsequent inspection, authorities ultimately discovered 119 illegal aliens, according to the complaint.
Rhodes allegedly claimed he worked for a business in La Porte, but the bill of lading indicated he was transporting lettuce from a Laredo produce company to a location in Sugar Land. The business indicated Rhodes had never been employed with them nor do they transport outside the Houston area, according to the charges. Further, the complaint alleges the other two companies confirmed they had no record of the shipment.
According to the charges, some of the transported aliens said they had been taken to and told to get in the truck. It left soon after and did not stop until it reached the checkpoint, according to the allegations.
If convicted, Rhodes faces up to 10 years in prison and a maximum possible $250,000 fine.
Immigration and Customs Enforcement’s Homeland Security Investigations conducted the investigation with the assistance of Border Patrol. Assistant U.S. Attorney Paul A. Harrison is prosecuting the case.
An indictment is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless and until convicted through due process of law.
Cruise ship passenger sentenced for attempting to strangle intimate partner while at seaRead the Press Release
GALVESTON, Texas – A 45-year-0ld resident of Watford City, North Dakota, has been ordered to prison for his conviction of assault within the special maritime and territorial jurisdiction of the United States, announced U.S. Attorney Ryan K. Patrick.
Hector Fernando Blanco pleaded guilty Jan. 17, 2020.
Today, U.S. District Judge Jeffrey Brown ordered Blanco to serve a total of 36 months in federal prison to be immediately followed by two years of supervised release.
At the time of his plea, Blanco admitted he attempted to strangle and suffocate a woman while aboard a cruise ship off the coast of Galveston. He acknowledged he had been dating and intimate with the victim.
“No excuse can justify Hector Blanco’s violent actions that turned a dream vacation into a dreadful nightmare for his victim,” said Special Agent in Charge Perrye K. Turner of the FBI. “I am extremely proud of FBI special agents in the Texas City Resident Agency and our victim specialists who provided compassionate support to the brave survivor who reported this crime.”
On Nov. 18, 2018, Blanco intentionally assaulted the victim in his cabin aboard a Royal Caribbean cruise ship. He placed his hand and then a bath towel over her mouth, then twisted a towel around her neck and dragged her on the floor of the cabin. Blanco tripped and she was able to run out of the cabin and report the incident to security personnel aboard the ship.
The assault occurred aboard the Liberty of the Seas, which at the time was a foreign vessel registered in the Bahamas. At the time of the assault, the cruise ship was located approximately 45 miles from Galveston in the Gulf of Mexico.
Blanco was permitted to remain on bond and voluntarily surrender to a U.S. Bureau of Prisons facility to be determined in the near future.
The FBI conducted the investigation. Assistant U.S. Attorney Kenneth Cusick is prosecuting the case.
Alleged shooter set to appear in federal courtRead the Press Release
VICTORIA, Texas – A 19-year old Bloomington man has been charged with assault on a federal officer and discharging a firearm in furtherance of a crime of violence, announced U.S. Attorney Ryan K. Patrick.
Jose Luis Vazquez is expected to make his initial appearance before U.S. Magistrate Judge Jason B. Libby at 10 a.m. today in Corpus Christi.
The criminal complaint, filed Feb. 4, alleges law enforcement had attempted to arrest Vazquez at his residence on the afternoon of Feb. 3. They announced their presence and called out to him, according to the allegations.
The complaint alleges Vazquez then exited the location and immediately started firing a weapon at authorities before retreating inside the home. He appeared again with a pistol in his hand, according to the charges.
Law enforcement allegedly then returned fire, injuring Vazquez.
During the exchange, fragments of Vasquez’s gunfire allegedly hit the body of one of the authorities as well as the vehicle they were using for cover.
The complaint alleges Vazquez had fired a Smith and Wesson M&P40, .40 caliber semi-automatic pistol during the altercation.
If convicted, Vazquez faces up to 20 years in Federal Prison.
The FBI; Bureau of Alcohol, Tobacco, Firearms and Explosives; Texas Rangers and U.S. Marshals Service are conducting the investigation with assistance from the Victoria County Sheriff’s Office and Victoria County District Attorney’s Office. Assistant U.S. Attorney Patti Hubert Booth is prosecuting this case.
A criminal complaint is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless convicted through due process of law.
Foreign national sent to prison for distributing multiple kilograms of methRead the Press Release
CORPUS CHRISTI, Texas – A 29-year-old legal permanent resident of McAllen has been sentenced following his conviction in Corpus Christi federal court of conspiring to possess and distributing over 21 kilos of meth, announced U.S. Attorney Ryan K. Patrick.
Adrian Lechuga Rievoles pleaded guilty Dec. 30, 2019.
Today, Senior U.S. District Judge Janis Graham Jack ordered him to serve a total of 168 months in federal prison to be followed by five years of supervised release. At the hearing, the court found he was not truthful about his role in the conspiracy.
On Feb. 9, 2019, authorities discovered disconnected speaker boxes in the trunk of a Ford Focus at the U.S. Border Patrol checkpoint near Falfurrias which appeared to be usually heavy. They ultimately found multiple bundles of meth weighing over 21.53 kilograms with a value of more than $1 million.
The investigation led to Rievoles. Law enforcement confirmed his involvement as an organizer in a vast meth distribution network which covered all major Texas cities and included multiple states along the Gulf Coast.
Authorities apprehended Rievoles July 29, 2019, as he attempted to enter the United States from Mexico. He has been and will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The Drug Enforcement Administration conducted the investigation. Assistant U.S. Attorney Neel Kapur is prosecuting the case.
Ex-oil exec who stole more than $2 million sent to prisonRead the Press Release
HOUSTON – A 46-year-old Katy man has been ordered to federal prison after he admitted to embezzling over $2 million from a local oil services company, announced U.S. Attorney Ryan. K. Patrick.
Robert Andrew Bishop pleaded guilty Oct. 14, 2020.
Today, U.S. District Judge Keith Ellison ordered him to serve a 41-month sentence to be immediately followed by two years of supervised release. At the hearing, the court heard additional testimony from the victim that detailed the extent and length of his theft, along with the devastating effects it had on her business. In handing down the sentence, Judge Ellison noted the length of the theft and Bishop’s violation of his employer’s trust.
Bishop was the vice president of resource management at International Professional Management (IPM), an oil services company located in Houston. As part of his duties, he was in charge of securing short term loans to cover IPM’s monthly operating capital.
At the time of his plea, he admitted he would inflate the loan amount needed and then divert the excess money to fake vendor accounts he controlled.
Over the span of approximately six years, Bishop diverted roughly $2.1 million from the company’s operating expenses.
The owners of IPM discovered his fraud scheme in August 2019.
Bishop was permitted to remain on bond and voluntarily surrender to a U.S. Bureau of Prisons facility to be determined in the near future.
The FBI conducted the investigation. Assistant U.S. Attorney Thomas Carter prosecuted the case.
Texas hospice CEO sentenced for $150M health care fraud and money laundering schemeRead the Press Release
McALLEN, Texas – A 50-year-old executive is headed to prison for falsely telling patients they had mere months to live and increasing revenue by enrolling them in hospice programs for which they were not qualified nor needed.
A federal jury in Brownsville convicted Henry McInnis, 50, Harlingen, in November 2019 of one count each of conspiracy to commit health care fraud, conspiracy to commit money laundering, obstruction of justice as well as six counts of health care fraud.
Today, U.S. District Judge Rolanda Olvera ordered him to serve a total of 15 years in federal prison.
McInnis’s co-conspirator and owner of the hospice and home health entities, Rodney Mesquias, 50, San Antonio, was also convicted following the November 2019 trial. He was later sentenced to 240 months imprisonment. Two others have pleaded guilty and are awaiting sentencing.
“McInnis, as CEO of the company, directly oversaw a reprehensible criminal scheme that involved the submission of over $150 million in fraudulent bills, the falsification of patients’ medical records, and the payment of unlawful kickbacks,” said Acting Assistant Attorney General Nicholas L. McQuaid, of the Justice Department’s Criminal Division. “The defendant preyed upon some of the most vulnerable members of our society, including many who suffered from diminished mental capacity and who were falsely and cruelly told by co-conspirators that they had only months to live. Today’s significant sentence demonstrates the department’s continued commitment to pursuing individuals, at all levels of corporate management, who engage in criminal schemes that prioritize profits over patient care.”
“Families seek to give comfort and support to their ailing loved ones when all other medical options are gone,” said Special Agent in Charge Christopher Combs of the FBI’s San Antonio Field Office. “It is unconscionable and evil to prey upon the most vulnerable in our community to commit fraud against government-funded programs. The FBI is committed to protecting our communities from those who may not have the strength to protect themselves.”
From 2009 to 2018, McInnis, Mesquias and others orchestrated a scheme that involved the submission of over $150 million in false and fraudulent claims for hospice and other health care services. McInnis served as the top corporate officer and administrator and oversaw the day-to-day operations of the Merida Group, a large health care company that operated dozens of locations throughout Texas.
According to evidence presented at trial, McInnis, Mesquias and Merida Group adopted a strategy to market their hospice programs as providing medical benefits “you don’t have to die to use.” They aggressively enrolled patients with long-term incurable diseases, such as Alzheimers and dementia, as well as patients with limited mental capacity who lived at group homes, nursing homes and in housing projects. In some instances, Merida Group marketers falsely told patients they had less than six months to live. They even sent chaplains to the patients based on the false pretense they were near death. The chaplains would discuss last rites and other preparations for imminent death with the patients.
In order to receive reimbursement for hospice services, Medicare requires patients to be suffering from a terminal illness expected to result in death within six months. Not only were some of the patients not expected to die within that timeframe, they were walking, driving, working and, in some instances, even coaching athletic sporting events. However, McInnis and his co-conspirators kept patients on hospice services for multiple years in order to increase revenue from Medicare. Placing patients on such palliative hospice care meant the patients were unable to obtain medical coverage for curative medical services.
In addition to placing unqualified patients on hospice care, McInnis and his co-conspirators also endeavored to keep patients who did qualify for hospice care alive for as long as possible for their own monetary gain. At trial, a co-conspirator testified and explained “the way you make money is by keeping them alive as long as possible.” The jury heard that this included engaging in surgical and other medical interventions designed to extend life through the use of medical technologies, even when such interventions were not consistent with the goals of hospice care.
McInnis had no medical training and worked previously as an electrician. However, he acted as the de facto director of nursing for the Merida Group. Witnesses at trial testified McInnis directed employees to admit unqualified patients to hospice and home health, keep unqualified patients on services for long periods of time and fired and reprimanded employees who refused to participate in the scheme.
McInnis also oversaw and enforced a company-wide practice of falsifying medical records to conceal the scheme. Multiple witnesses testified McInnis ordered employees to alter medical records to make it appear patients were terminally ill. In reality, some were employed or even participating in sporting events. The jury also heard that McInnis explained the purpose of the falsified records was to allow the Merida Group to pass insurance company audits.
As CEO, McInnis also adopted a policy that paid illegal kickbacks. They directed bribes to physicians under the guise of medical director fees to certify unqualified patients for hospice and home health. In some cases, they improperly offered payoffs to marketers in exchange for recruitment of patients who could be placed on extremely expensive hospice services.
The evidence further established McInnis and Mesquias obstructed justice by causing the creation of false and fictitious medical records that allegedly showed patients needed the hospice services. McInnis and others tried to provide these to a federal grand jury in a failed attempt to avoid indictment. The records added false diagnostic information, making it appear patients were dying and eligible for hospice services when, in fact, they were not.
The Department of Health and Human Service – Office of Inspector General (DHHS-OIG); FBI and Texas Health and Human Services Commission conducted the investigation. Assistant Chief Jacob Foster and Trial Attorney Kevin Lowell of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Andrew Swartz of the Southern District of Texas are prosecuting the case.
The Fraud Section leads the Health Care Fraud Strike Force. Since its inception in March 2007, the Health Care Fraud Strike Force, which maintains 15 strike forces operating in 24 districts, has charged more than 4,200 defendants who have collectively billed the Medicare program for nearly $19 billion. In addition, DHHS Centers for Medicare & Medicaid Services, working in conjunction with the DHHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
CEO Sentenced for $150 Million Health Care Fraud and Money Laundering SchemeRead the Press Release
The CEO of a Texas-based group of hospice and home health entities was sentenced today to 15 years in prison for falsely telling thousands of patients with long-term incurable diseases they had less than six months to live in order to enroll the patients in hospice programs for which they were otherwise unqualified, thereby increasing revenue to the company.
Henry McInnis, 50, of Harlingen, Texas was convicted by a federal jury in Brownsville, Texas, in November 2019 of one count each of conspiracy to commit health care fraud, conspiracy to commit money laundering, obstruction of justice, as well as six counts of health care fraud.
McInnis’s co-conspirator, Rodney Mesquias, 50, the owner of the hospice and home health entities, was also convicted following the November 2019 trial. He was sentenced to 240 months in prison in December 2020. Two other co-conspirators have pleaded guilty and are awaiting sentencing.
“McInnis, as CEO of the company, directly oversaw a reprehensible criminal scheme that involved the submission of over $150 million in fraudulent bills, the falsification of patients’ medical records, and the payment of unlawful kickbacks,” said Acting Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division. “McInnis preyed upon some of the most vulnerable members of our society, including many who suffered from diminished mental capacity and who were falsely and cruelly told by co-conspirators that they had only months to live. Today’s significant sentence demonstrates the department’s continued commitment to pursuing individuals, at all levels of corporate management, who engage in criminal schemes that prioritize profits over patient care.”
“Families seek to give comfort and support to their ailing loved ones when all other medical options are gone,” said Special Agent in Charge Christopher Combs of the FBI’s San Antonio Field Office. “It is unconscionable and evil to prey upon the most vulnerable in our community to commit fraud against government-funded programs. The FBI is committed to protecting our communities from those who may not have the strength to protect themselves.”
“McInnis and his co-conspirator’s reprehensible and deceitful actions to defraud Medicare weren’t without harm: vulnerable beneficiaries were unnecessarily enrolled in hospice care, preventing them from accessing needed curative care,” said Special Agent in Charge Miranda L. Bennett, U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Dallas Region. “With our law enforcement partners, we will continue to investigate those who put ill-gotten profits above the well-being of patients in our health care system.”
From 2009 to 2018, McInnis, Mesquias and others orchestrated a scheme that involved the submission of over $150 million in false and fraudulent claims for hospice and other health care services. McInnis served as the top corporate officer and administrator and oversaw the day-to-day operations of the Merida Group, a large health care company that operated dozens of locations throughout Texas.
McInnis had no medical training and worked previously as an electrician. However, he acted as the de facto director of nursing for the Merida Group. Witnesses at trial testified McInnis directed employees to admit unqualified patients to hospice and home health, keep unqualified patients on services for long periods of time and fired and reprimanded employees who refused to participate in the scheme.
McInnis also oversaw and enforced a company-wide practice of falsifying medical records to conceal the scheme. Multiple witnesses testified McInnis ordered employees to alter medical records to make it appear patients were terminally ill. In reality, some were employed or even participating in sporting events. The jury also heard that McInnis explained the purpose of the falsified records was to allow the Merida Group to pass insurance company audits.
As CEO, McInnis also adopted a policy that paid illegal kickbacks. They directed bribes to physicians under the guise of medical director fees to certify unqualified patients for hospice and home health. In some cases, they improperly offered payoffs to marketers in exchange for recruitment of patients who could be placed on extremely expensive hospice services.
HHS-OIG, FBI and Texas Health and Human Services Commission conducted the investigation. Assistant Chief Jacob Foster and Trial Attorney Kevin Lowell of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Andrew Swartz of the Southern District of Texas are prosecuting the case.
The Fraud Section leads the Health Care Fraud Strike Force. Since its inception in March 2007, the Health Care Fraud Strike Force, which maintains 15 strike forces operating in 24 districts, has charged more than 4,200 defendants who have collectively billed the Medicare program for nearly $19 billion. In addition, HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
South Texas woman sent to prison for trying to drive across border with drugs hidden in car doorsRead the Press Release
LAREDO, Texas – A 42-year-old Brownsville resident has been sentenced following her conviction in Laredo federal court to conspiring with others to import more than 10 kilograms of meth from Mexico, announced U.S. Attorney Ryan K. Patrick.
Ana Lisa Lopez pleaded guilty Dec. 3, 2020, to importing meth and conspiracy to do so.
Today, U.S. District Judge Marina Garcia Marmolejo ordered Lopez to serve a 63-month sentence to be immediately followed by three years of supervised release. In handing down the sentence, the court noted the serious nature and amount of narcotics she attempted to smuggle.
On Nov. 8, 2019, Lopez approached the Juarez-Lincoln International Bridge in Laredo driving a Chevrolet Aveo. At that time, authorities conducted an inspection of the vehicle and found 21 bundles of meth concealed within the door frames.
The drugs weighed approximately 10.5 kilograms and have a street value of approximately $73,500.
She was permitted to remain on bond and surrender to a U.S. Bureau of Prison facility to be determined in the near future.
The Drug Enforcement Administration conducted the investigation with assistance from Customs and Border Protection. Assistant U.S. Attorney Yoona Lim is prosecuting the case.
Corporate insider sent to prisonRead the Press Release
CORPUS CHRISTI, Texas – A 42-year-old San Antonio man has been ordered to federal prison after he admitted to wire fraud that resulted in a loss of $1,878,615.84, announced U.S. Attorney Ryan K. Patrick.
Robert Morales Munguia Jr. pleaded guilty July 28, 2020.
Today, U.S. District Judge David Morales handed Munguia a 24-month sentence to be immediately followed by three years of supervised release. He was further ordered to pay a $1,878,615.84 in restitution. At the hearing, the court heard additional testimony from the victim describing the effect of the fraud on the corporation.
Munguia knowingly submitted false work orders to his company in order to receive gifts and payments from outside vendors. He also admitted he knew the work would never be completed.
From Feb. 27, 2015, until April 12, 2018, Munguia worked as an environmental specialist at a Texas-based corporation. During that time, he conspired with outside contractors to bill for 68 false work orders that were never completed. In return, he received various gifts and cash.
As a result of the scheme, the company paid almost $2 million.
Mungui was permitted to remain on bond and voluntarily surrender to a U.S. Bureau of Prisons facility to be determined in the near future.
The Secret Service conducted the investigation. Assistant U.S. Attorney (AUSA) Robert Thorpe and former AUSA Jeremy C. Fugate prosecuted the case.
Bandidos member gets enhanced federal sentence after obstructing justiceRead the Press Release
McALLEN, Texas – A 53-year-old Los Ebanos resident has been ordered to federal prison for his role in a conspiracy to transport undocumented aliens, announced U.S. Attorney Ryan K. Patrick along with Acting Special Agent in Charge Craig Larrabee of Immigration and Customs Enforcement’s Homeland Security Investigations (HSI).
Benito Lopez III aka Chamuco, identified as a member of the Bandidos Outlaw Motorcycle Organization, pleaded guilty Feb. 3, 2020.
Today, U.S. District Judge Micaela Alvarez handed him an 82-month term of imprisonment to be immediately followed by three years of supervised release. The court found Lopez responsible for smuggling 25-99 undocumented aliens over the course of a four-month conspiracy. Additionally, he had created a substantial risk of death or serious bodily injury based on the conditions in which he housed the undocumented aliens. Judge Alvarez enhanced the sentence, finding Lopez obstructed justice by providing detailed confidential information to co-conspirators regarding the investigation. He was also in possession of firearms and used minors during and in furtherance of the conspiracy.
At the hearings, which took place over the course of two days – Nov. 3, 2020, and today - the court heard how Lopez seriously jeopardized an ongoing investigation into an organization capable of smuggling hundreds of undocumented aliens through the Los Ebanos area. The court also heard testimony regarding the extensive surveillance system he utilized to conduct counter-surveillance of law enforcement in order to further the conspiracy.
In handing down the sentence, Judge Alvarez noted how Lopez endangered others, both during the conspiracy and while on bond. She stated she needed to impose a sentence to promote respect for the rule of law and deter his future criminal conduct.
“HSI is dedicated to working closely with all of our law enforcement partners to effectively identify, arrest and prosecute individuals involved in exploiting people,” said Larrabee. “Criminals who illegally smuggle people into and throughout the country place personal profit ahead of public safety. For this reason, HSI will continue to utilize its broad authorities to dismantle human smuggling organizations."
On Oct. 1, 2019, authorities conducted surveillance on what they suspected to be an alien stash house located across the street from the Rio Grande river in Los Ebanos. There, they observed several suspected undocumented aliens fleeing from the location. Law enforcement quickly apprehended a total of seven of the individuals, all determined to be aliens illegally present in the United States.
At that time, they identified Lopez as the caretaker of the stash house where he held them in a 5-by-8 foot dilapidated bathroom with no electricity, anything to eat or drink or running water for approximately 12 hours before they managed to escape.
Law enforcement arrested Lopez at the stash house on Oct. 4 for his role in the conspiracy. He he was paid for each undocumented alien successfully crossed from Mexico and out of the Los Ebanos area.
Lopez has been in custody since he violated his conditions of release where he will remain pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
HSI and Border Patrol conducted the investigation. Assistant U.S. Attorney Matthew Redavid prosecuted the case.
Houston man ordered to prison for more than 40 years for multiple Christmas week robberiesRead the Press Release
HOUSTON – A 43-year-old local man has been sentenced to nearly 42 years for the robberies of multiple phone and others stores during Christmas week in 2017, announced U.S. Attorney Ryan K. Patrick.
A Houston federal jury deliberated for two hours before returning guilty verdicts against Robert Charles Wooten following a two-day trial. He was convicted of five counts of interference with commerce by robbery and five related charges of using, carrying or brandishing a firearm during and in relation to a crime of violence.
Today, U.S. District Lynn H. Hughes handed Wooten a combined 80-month sentence for the robberies. He also received an additional 420 months for the firearms charges which must be served consecutively to the other sentence imposed. At the hearing, the court noted that although his prior offenses were not violent in nature, Wooten is a menace to society.
“This investigation shows the impact that law enforcement has against violent criminals who use firearms,” said Special Agent in Charge Fred Milanowski of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).
Wooten was convicted of the armed robbery of the Walgreens on Little York on Christmas Day in 2017. Over the course of the next five days, he also committed the robberies of three Metro PCS stores, Bayou Pawn on Shepherd and Family Dollar on Tidwell, all located near his residence.
At trial, the jury heard Wooten has numerous tattoos on his face, but would enter the commercial businesses wearing make-up, cream or bandages to aid in covering them. He would then show a gun to the employees and demand money.
Testimony revealed that during the Dec. 25 Walgreens robbery, he waited in line before approaching the victim. He then showed a firearm and demanded the cashier place money and cigarettes into a duffle bag he had brought with him into the store.
He then committed similar robberies of the Metro PCS on North Shepherd and W. Little York, Dec. 27 and 28, respectively, during which time employees were frightened and complied with his demands.
Then, on Dec. 29, Wooten entered the Bayou Pawn – a shop where he would frequently conduct business. Upon his arrival, he initially acted as though he wanted to sell a bicycle. Once the employee was near him, Wooten pushed a firearm into her side and demanded money. The employee was afraid.
The manager of the store testified that he had been watching from the back. He saw Wooten put his hands on the employee and came out to confront him, not knowing Wooten was actually trying to rob the store. Wooten acted as if nothing was wrong and asked the manager to come outside and look at the bicycle. The victim then called the police.
The same day, Wooten asked his son to drive him to a separate Metro PCS. He did so and went door to Family Dollar. Soon after, Wooten stuck his head inside the store and told his son they needed to leave immediately. Wooten’s son got in the car, but noticed people taking photos of him, his dad and his vehicle. He asked Wooten about it, but he just ordered his son to drive.
The son later learned his dad had robbed the Metro PCS and alerted authorities.
Authorities identified Wooten based on the make-up and similar items he used in the robberies. Several victims also testified and identified him as the one who terrorized them during the robberies.
The defense attempted to convince the jury that the witnesses had misidentified Wooten. They did not believe those claims and found him guilty as charged.
Wooten has been and will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
ATF and Houston Police Department conducted the investigation.
Assistant U.S. Attorneys Jill Stotts and Erin Epley are prosecuting the case.
Former natural gas trader pleads guilty for role in commodities insider trading schemeRead the Press Release
HOUSTON – A former natural gas trader pleaded guilty today to conspiracy to commit commodities fraud and wire fraud for his role in an insider trading scheme.
John Ed James, 51, Katy, pleaded guilty to one count of conspiracy to commit commodities fraud and wire fraud before U.S. District Judge Vanessa Gilmore. Sentencing has been scheduled for April 26.
“That executives continue to use inside nonpublic information for their own gain, illustrates that prosecutors must investigate and pursue these cases,” said U.S. Attorney Ryan K. Patrick. “These conspirators cooked the books and shared the loot - plain and simple.”
“When individuals engage in deceptive trade practices and manipulate the commodities market for their personal gain, they undermine the public’s confidence in the U.S. markets and stack the deck against other traders and investors,” said Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division. “The department and our law enforcement partners will continue to pursue and prosecute those who engage in such activity.”
“Commodities fraud and insider trading undermine the integrity of the markets, in this case the energy market which plays a key role in the Houston area economy,” said Special Agent in Charge Perrye K. Turner of the FBI’s Houston Field Office. “The FBI will continue to combat criminal violations of the commodities laws to eliminate unscrupulous activity and protect market participants so that the public will continue to have trust in the system.”
As part of his guilty plea, James admitted he conspired with others to misappropriate material, nonpublic information and to use that information to engage in fraudulent, pre-arranged trades in natural gas futures contracts. These pre-arranged trades generated approximately $966,403 in illicit proceeds. He further admitted the net profits from these fraudulent trades were split between himself and others involved in the fraudulent trading scheme. James also admitted he and others agreed to falsely document certain proceeds as income on IRS forms in part to conceal the true nature of the funds and to make the illicit profits appear to be legitimate income paid.
In a related case, Marcus Schultz, 41, previously pleaded guilty before Judge Gilmore July 20, 2020, to a one-count information charging him with conspiracy to commit wire fraud and to violate various provisions of the Commodity Exchange Act including 17 C.F.R. § 180.1. Sentencing is scheduled for June 14.
This matter marks the Department of Justice’s first effort to prosecute insider trading in the commodity markets under Section 180.1.
The FBI’s Houston Field Office and IRS-Criminal Investigation’s Houston Field Office conducted the investigation. Assistant U.S. Attorney Suzanne Elmilady is prosecuting the case along with Trial Attorneys Jennifer Farer, Drew Bradylyons and Della Sentilles of the Criminal Division’s Fraud Section.
The Criminal Division’s Fraud Section plays a pivotal role in the Department of Justice’s fight against white collar crime around the country and is the national leader in prosecuting fraud and manipulation in the U.S. commodity markets.– A former natural gas trader pleaded guilty today to conspiracy to commit commodities fraud and wire fraud for his role in an insider trading scheme.
Former Natural Gas Trader Pleads Guilty for Role in Commodities Insider Trading SchemeRead the Press Release
A former natural gas trader pleaded guilty today to conspiracy to commit commodities fraud and wire fraud for his role in an insider trading scheme.
John Ed James, 51, of Katy, Texas, pleaded guilty to one count of conspiracy to commit commodities fraud and wire fraud before U.S. District Judge Vanessa Gilmore of the Southern District of Texas. Sentencing has been scheduled for April 26, 2021, before Judge Gilmore.
“When individuals engage in deceptive trade practices and manipulate the commodities market for their personal gain, they undermine the public’s confidence in the U.S. markets and stack the deck against other traders and investors,” said Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division. “The department and our law enforcement partners will continue to pursue and prosecute those who engage in such activity.”
“That executives continue to use inside nonpublic information for their own gain illustrates that prosecutors must investigate and pursue these cases,” said U.S. Attorney Ryan K. Patrick of the Southern District of Texas. “These conspirators cooked the books and shared the loot – plain and simple.”
“Commodities fraud and insider trading undermine the integrity of the markets, in this case the energy market which plays a key role in the Houston area economy,” said Special Agent in Charge Perrye K. Turner of the FBI’s Houston Field Office. “The FBI will continue to combat criminal violations of the commodities laws to eliminate unscrupulous activity and protect market participants so that the public will continue to have trust in the system.”
As part of his guilty plea, James admitted that he conspired with others to misappropriate material, nonpublic information and to use that information to engage in fraudulent, pre-arranged trades in natural gas futures contracts. These pre-arranged trades generated approximately $966,403 in illicit proceeds. He further admitted that the net profits from these fraudulent trades were split between himself and others involved in the fraudulent trading scheme. James also admitted that he and others agreed to falsely document certain proceeds as income on IRS forms in part to conceal the true nature of the funds and to make the illicit profits appear to be legitimate income paid.
In a related case, Marcus Schultz, 41, previously pleaded guilty before Judge Gilmore on July 20, 2020, to a one-count information charging him with conspiracy to commit wire fraud and to violate various provisions of the Commodity Exchange Act, including 17 C.F.R. § 180.1. Sentencing is scheduled for June 14, 2021. This matter marks the Department of Justice’s first effort to prosecute insider trading in the commodity markets under Section 180.1.
This case is the result of an ongoing investigation by the FBI’s Houston Field Office and the IRS-CI’s Houston Field Office. Trial Attorneys Jennifer Farer, Drew Bradylyons, and Della Sentilles of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Suzanne Elmilady of the Southern District of Houston are prosecuting the case.
The Criminal Division’s Fraud Section plays a pivotal role in the Department of Justice’s fight against white collar crime around the country and is the national leader in prosecuting fraud and manipulation in the U.S. commodity markets.
Mexican woman arrested for harboring aliens in LaredoRead the Press Release
LAREDO, Texas – A 43-year-old Mexican national who illegally resided in Laredo has been charged with harboring undocumented aliens at her residence and conspiracy to do so, announced U.S. Attorney Ryan K. Patrick.
Maria San Juana de Hoyos is set to make her initial appearance before U.S. Magistrate Judge Diana Song Quiroga at 1:30 p.m. today. Law enforcement took her into custody Jan. 27.
The criminal complaint alleges that authorities had believed de Hoyos was operating a stash house for undocumented aliens at her residence on the 3800 block of Alexandra Court in Laredo.
Law enforcement later conducted a search and found 10 individuals hiding inside the residence, according to the charges. The investigation revealed all were Mexican nationals illegally present in the United States.
If convicted, de Hoyos faces up to 20 years in federal prison.
Immigration and Customs Enforcement Homeland Security Investigations, Border Patrol and Webb County Constable’s Office conducted the investigation.
Assistant U.S. Attorney Francisco J. Rodriguez is prosecuting the case.
A criminal complaint is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless convicted through due process of law.
Registered sex offender sent to prison for child pornographyRead the Press Release
CORPUS CHRISTI, Texas – A 34-year-old Orange Grove man has been ordered to federal prison after he admitted to receiving child pornography, announced U.S. Attorney Ryan K. Patrick.
Cameron Michael Pittman pleaded guilty Sept. 9.
Today, U.S. District Judge Drew B. Tipton upwardly departed from the sentencing guidelines and ordered Pittman to serve a 204-month sentence. At the hearing, the court heard additional information including Pittman’s criminal history which detailed his prior conviction for indecency with a child. The court noted the guidelines did not adequately reflect Pittman’s character and history nor the seriousness of the offense. In imposing the sentence, the court noted the way Pittman’s actions have demonstrated his tendency to target children – the most vulnerable.
Pittman was further ordered to serve 10 years on supervised release during which time the court can impose a number of special conditions designed to protect children. He was also again ordered to register as a sex offender
The investigation began when the National Center for Missing and Exploited Children alerted authorities that images of child pornography were being uploaded through an IP address originating in Orange Grove. The investigation led to Pittman as the one using the e-mail and IP address.
Law enforcement conducted a search, at which time they seized multiple electronic devices from Pittman’s residence. A forensic examination later revealed images and videos of child pornography.
Pittman admitted to receiving the images. The large majority of the images and videos located on Pittman’s devices depicted the sexual exploitation of children under the age of 10.
At the time of his arrest, he was a registered sex offender and on probation for the 2nd degree felony offense of indecency with a child.
He has been and will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The Corpus Christi Police Department Internet Crimes Against Children Task Force; Jim Wells County Sheriff’s Office and Probation Department; Bureau of Alcohol, Tobacco, Firearms and Explosives and Immigration and Custom’s Enforcement’s Homeland Security Investigations conducted the investigation.
Assistant U.S. Attorney Sara Popejoy prosecuted the case which 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 PSC, please visit DOJ’s PSC page. For more information about internet safety education, please visit the resources tab on that page.
Mexican national indicted for using deceased American’s identityRead the Press Release
CORPUS CHRISTI, Texas – A 76-year-old Mexican national has been charged with making false statements in an application for a U.S. passport and theft of Social Security benefits, announced U.S. Attorney Ryan K. Patrick.
Alberto Betancourth Valdes allegedly used the identity of an American citizen for more than two decades. A federal grand jury returned the indictment today. He is expected to make his initial appearance before a U.S. magistrate judge in the near future.
The criminal complaint originally filed in the case indicates Valdes submitted a renewal application for a U.S. passport by representing himself as a U.S. citizen from Texas. The passport application and documents were sent to the National Passport Center in Irving and subsequently referred to the fraud prevention unit, according to the charges. The documents were valid, according to the allegations, but the actual person had passed away in 1952.
According to the indictment, Valdes had previously been deported in 1975. He allegedly used the citizen’s identity to obtain Social Security benefits he would not have been entitled to receive under his true identity. Authorities took him into custody when he attempted to re-enter the United States using the fraudulently-obtained U.S. passport issued in the victim’s name, according to the charges.
If convicted, Valdez faces up to 10 years in federal prison for making a false statement in an application for a passport as well as five years for Social Security benefits fraud. Each count also carries a possible $250,000 fine, upon conviction.
Social Security Administration - Office of the Inspector General, Customs and Border Protection and Department of State’s Diplomatic Security Service conducted the investigation. Assistant U.S. Attorneys Christopher Marin and Robert Thorpe are 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.
Local men charged with CVS and Randalls pharmacy burglariesRead the Press Release
HOUSTON – Four men are in custody and two are at large in relation to the theft of various opioids and stimulants such as OxyContin and Adderall, respectively, announced U.S. Attorney Ryan K. Patrick.
A federal grand jury returned the sealed indictment Oct. 20, 2020, which was unsealed today, charging Houston residents Drexel Andre Ferguson, 32, Tyshawndre Dameion Mathis, 23, Frederick Bernard Eli, 28, Kenneth Ray Griffin, 33, Latrell Rayshod Phillips, 25, and Devon Lee Hailey, 42. With the exception of Hailey and Griffin, the others have already made appearances and remain in custody pending further criminal proceedings.
Griffin and Hailey are considered fugitives and warrants remain outstanding for their arrests. Anyone with information about their whereabouts is asked to contact the FBI at 713-693-5000.
The seven-count indictment alleges three pharmacy burglaries, possession with intent to distribute Schedule II opioids and stimulants and conspiracy to do so.
Ferguson, Mathis, Eli and Phillips allegedly burglarized two Randalls pharmacies Nov. 4, and 11, 2017, respectively. The indictment also charges Ferguson, Griffin and Hailey with the burglary of a CVS pharmacy April 10, 2018.
The charges allege the theft of various Schedule II opioids such as Hydrocodone, Hydromorphone, Oxycodone and OxyContin in addition to stimulants including Amphetamine, Adderall, Dextroamphetamine, Mydayis, Lisdexamfetamine and Vyvanse.
Each man is charged with possession with intent to distribute the opioids and stimulants stolen from the pharmacies, respectively, as well as conspiracy to possess and distribute the substances collectively stolen from all three pharmacies.
For his charges, Hailey could be sentenced up to 30 years in prison, while the others face a potential 20-year-sentence.
The FBI’s multi-agency gang task force conducted the investigation which included police departments in Houston and Baytown and Harris County Sheriff’s Office. Assistant U.S. Attorneys Michael Kusin and Christine Lu are 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.
Texan sentenced for attempting to smuggle over 80 people on multiple occasionsRead the Press Release
LAREDO, Texas – A 45-year-old Rio Bravo resident has been ordered to federal prison following his conviction for conspiring to transport aliens within the country for a profit, announced U.S. Attorney Ryan K. Patrick.
Jose Reyes Ipina Jr. pleaded guilty Feb. 3, 2020.
Today, U.S. District Judge Marina Garcia Marmolejo handed Ipina a 57-month term of imprisonment to be immediately followed by three years of supervised release. At the hearing, the court heard additional information including evidence detailing his involvement in prior alien smuggling trips and his role as a recruiter/organizer in the alien smuggling organization.
The investigation revealed that on Nov. 8, 2019, a smuggling operation was taking place at a truck yard of Texas Highway 359 near Ranch Road in Laredo. Authorities spotted Ipina in his truck at a nearby store around the same time of the potential smuggling event. They also noticed a white tractor-trailer combination departing the truck yard and heading north on Interstate Highway 35 until stopping at a Border Patrol (BP) checkpoint for inspection.
There, a K-9 alerted to the presence of contraband. The driver – later identified as Alfredo Gutierrez Jr. – and the tractor-trailer were referred to secondary inspection where law enforcement found 29 illegal aliens hidden in the rear of his trailer.
A search of Gutierrez’s phone revealed he had been in contact with Ipina.
The ensuing investigation later tied Ipina a prior smuggling event in June 2019 at the Interstate Highway 35 BP checkpoint. At the time of that offense, authorities discovered a total of 52 aliens hidden inside the tractor-trailer.
On June 30, Gutierrez, 43, Laredo, was sentenced to 57 months in federal prison for his role in the conspiracy.
Ipina has been and will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
Immigration and Customs Enforcement’s Homeland Security Investigations conducted the investigation with the assistance of BP. Assistant U.S. Attorney Paul A. Harrison prosecuted the case.
Local man charged with coercing minor to engage in sexual conductRead the Press Release
HOUSTON – A 42-year-old former Conroe resident is set to appear in federal court on charges of sexual exploitation of children as well as distributing, receiving and possessing child pornography, announced U.S. Attorney Ryan K. Patrick.
Timothy Lee Tyler is scheduled to appear today at 10 a.m. before U.S. Magistrate Judge Frances H. Stacy.
The indictment, returned Jan. 13, alleges that in 2016 Tyler did or attempted to employ, use, persuade, induce, entice and coerce a minor victim to engage in sexually explicit conduct for the purpose of producing a visual depiction of it. On various dates in September 2020, Tyler also allegedly distributed, received and possessed material containing child pornography.
The FBI conducted the investigation with the assistance of Montgomery County Internet Crimes Against Children Task Force which is comprised of several local and federal agencies.
Assistant U.S. Attorneys Stephanie Bauman and Sherri Zack are prosecuting the case, which was brought as part of Project Safe Childhood (PSC), a nationwide initiative the Department of Justice (DOJ) launched in May 2006 to combat the growing epidemic of child sexual exploitation and abuse. U.S. Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section leads PSC, which marshals federal, state and local resources to locate, apprehend and prosecute individuals who sexually exploit children and identifies and rescues victims. For more information about PSC, please visit DOJ’s PSC page. For more information about internet safety education, please visit the resources tab on that page.
An indictment is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless convicted through due process of law.
SDTX mourns loss of longest-tenured attorneyRead the Press Release
HOUSTON – The Southern District of Texas (SDTX) has lost a valued Assistant U.S. Attorney (AUSA) with 40 years of service spanning eight presidential administrations, announced U.S. Attorney Ryan K. Patrick.
Hays Jenkins, 71, Missouri City, passed way over the weekend. He was the most senior attorney in the SDTX and one of only approximately three dozen with similar years of service among U.S. Attorney’s Offices throughout the nation.
Jenkins began his federal career in 1967 with NASA. He later worked as a Harris County Assistant District Attorney before joining the U.S. Attorney’s Office (USAO) in 1980. In Summer 2020, the office celebrated his 40 years of service to the Department of Justice during a celebration via Zoom.
During his tenure, Jenkins had many different assignments throughout the office and was involved in a variety of cases. He also served as the chief of the Civil Division and as senior litigation counsel. Most recently, he was assigned to the Human Rights and Organized Crime Section primarily prosecuting immigration-related offenses. Over the years, Jenkins consistently worked tirelessly and produced outstanding results.
“Hays will be missed,” said Patrick. “I did not meet a kinder man in the office since I have been here, and he always had a positive thing to say to me.”
Jenkins was a dedicated professional. He could have retired many years prior to his passing, but loved what he did and continued his work to ensure the fulfillment of, and his contribution to, the overall USAO mission.
Jenkins, a long-time Houston-area resident, was a graduate of Grand Prairie High School and University of Houston. He later earned his juris doctor degree from Thurgood Marshall School of Law at Texas Southern University.
SDTX personnel, to include numerous AUSAs and support staff past and present, who have been blessed to know and work with Jenkins over his long career mourn his loss to the community. Patrick and his leadership also send heartfelt condolences to his family and friends.
Registered sex offender heads to prison after distributing child pornographyRead the Press Release
CORPUS CHRISTI, Texas – A 28-year-old Corpus Christi man has been ordered to federal prison after he admitted to sending photos depicting the sexual exploitation of children, announced U.S. Attorney Ryan K. Patrick.
Daniel Ellsworth Janssen pleaded guilty Oct. 22, 2020.
Today, U.S. District Judge David S. Morales ordered him to serve a 204-month sentence. At the hearing, the court heard that Janssen had been on probation for attempted indecency with a child when he was arrested for this federal crime. Following his 17-year federal prison term, Janssen will serve 15 years on supervised release during which time the court can impose a number of special conditions designed to protect children and prohibit the use of the internet. Again, he has been ordered to register as a sex offender. He must also pay $3,000 in restitution for each of the three identified victims.
Authorities had linked Janssen to an e-mail and IP address that was accessing child pornography. Law enforcement conducted a search, at which time they seized multiple electronic devices from Janssen’s Corpus Christi residence. A forensic examination later revealed over 1,500 images and videos of child pornography on those devices. Some he had distributed using his cell phone. The majority of the images and videos located on Janssen’s devices depicted the sexual exploitation of children under the age of 10.
He has been and will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The Corpus Christi Police Department Internet Crimes Against Children Task Force and Immigration and Custom’s Enforcement’s Homeland Security Investigations conducted the investigation.
Assistant U.S. Attorney Sara Popejoy prosecuted the case which was brought as part of Project Safe Childhood (PSC), 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, PSC 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 PSC, please visit DOJ’s PSC page. For more information about internet safety education, please visit the resources tab on that page.
Former elementary teacher imprisoned for explicit sexual conversations originating via CraigslistRead the Press Release
CORPUS CHRISTI, Texas – A 28-year-old Odom man has been ordered to federal prison after he admitted to transferring obscene materials to a minor, announced U.S. Attorney Ryan K. Patrick.
Lazaro Benito Rocha pleaded guilty Oct. 22, 2020.
Today, U.S. District Judge David S. Morales found Rocha to be in a position of trust and varied above the guideline range which resulted in a 36-month federal prison sentence. At the hearing, the court heard additional information, including details regarding the sexually explicit communications Rocha had with someone he believed to be a 14-year-old girl living in Corpus Christi. In handing down the sentence, Judge Morales noted Rocha was a teacher when he sent the text messages and photographs and that he took photographs of himself while he was inside his classroom.
At the conclusion of the hearing, the court asked Rocha whether he believed he had a problem with his sexual interests in children. Rocha responded with “I believe so.”
Rocha was further ordered to serve three years on supervised release following his incarceration during which time the court can impose a number of special conditions designed to protect children and prohibit the use of the internet. He will also be ordered to register as a sex offender.
“Today’s sentencing is the result of outstanding collaboration between Homeland Security Investigations (HSI), the Corpus Christi Police Department’s (CCPD) Internet Crimes Against Children Task Force (ICAC) and the Texas Department of Public Safety (DPS),” said Brad Scott, assistant special agent in charge, HSI Corpus Christi. “Working together we were able to identify this child predator and remove him from his position of trust where he had access to minors.”
At part of his plea, Rocha admitted that he had responded to an ad on Craigslist advertising a “good time” with a teenage girl. He continued communicating with whom he thought was a 14-year-old female which soon escalated into conversations of an explicit sexual nature via text messaging.
Using his cell phone, he eventually sent a photograph of his genitals.
The investigation revealed he was a part-time elementary music teacher at the Incarnate Word Academy in Corpus Christi.
Previously released on bond, Rocha was taken into custody following the sentencing today where he will remain pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
HIS, CCPD-ICAC and DPS conducted the investigation.
Assistant U.S. Attorney Sara Popejoy prosecuted the case, which was brought as part of Project Safe Childhood (PSC), a nationwide initiative the Department of Justice (DOJ) launched in May 2006 to combat the growing epidemic of child sexual exploitation and abuse. U.S. Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section leads PSC, which marshals federal, state and local resources to locate, apprehend and prosecute individuals who sexually exploit children and identifies and rescues victims. For more information about PSC, please visit DOJ’s PSC page. For more information about internet safety education, please visit the resources tab on that page.
Texan sent to prison for involvement in distribution of child pornography via DropboxRead the Press Release
GALVESTON, Texas - A 51-year-old resident of Angleton has been ordered to federal prison following his convictions of receipt, possession and distribution of child pornography, announced U.S. Attorney Ryan K. Patrick.
Joe Dean Spradlin pleaded guilty March 11, 2020.
Today, U.S. District Judge Jeffrey V. Brown ordered him to serve a total of 155 months in federal prison. Following his prison term, Spradlin will serve 10 years on supervised release, during which time he will have to comply with numerous conditions that restrict his access to children and the internet. He will also be required to register as a sex offender.
In 2017, law enforcement learned of a Dropbox account that contained what was suspected to be child exploitation material. The investigation revealed some of the material in that account depicted nude, minor children exposing their genitals and engaged in sexual activity.
Authorities traced the account to an IP address registered to a residential address in Angleton. Spradlin was living there.
Law enforcement executed a search warrant and seized Spradlin’s HP laptop, which was found to contain thousands of images and thousands of videos of child pornography. Spradlin admitted to acquiring child exploitative material over Tumblr and Kik as well as storing that material on Dropbox. He even paid extra to increase the storage capacity of his account.
Spradlin’s collection included videos of unusual length. One video was over two hours long.
Spradlin has been and will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
Immigration and Customs Enforcement’s Homeland Security Investigations -Galveston conducted the investigation with the assistance of the Houston Metro Internet Crimes Against Children Task Force and Pearland Police Department.
Assistant U.S. Attorneys Sherri Zack and Stephanie Bauman prosecuted the case, which was brought as part of Project Safe Childhood (PSC), a nationwide initiative the Department of Justice (DOJ) launched in May 2006 to combat the growing epidemic of child sexual exploitation and abuse. U.S. Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section leads PSC, which marshals federal, state and local resources to locate, apprehend and prosecute individuals who sexually exploit children and identifies and rescues victims. For more information about PSC, please visit DOJ’s PSC page. For more information about internet safety education, please visit the resources tab on that page.
Hospice, home health agency and owners pay over $1.8M to resolve claims concerning physician paymentsRead the Press Release
McALLEN, Texas – The founders of an Edinburg hospice and related home health agency have paid to resolve allegations they submitted claims to Medicare that resulted from unlawful referrals, announced U.S. Attorney Ryan K. Patrick.
Onder Ari, 49, Edinburg, and Sedat Necipoglu, 48, McAllen, founded Allstate Hospice LLC and Verge Home Care LLC. They and their companies have now paid $1,847,279.36 following an investigation into improper payments to physicians for referrals.
The investigation began in 2016 and revealed Ari and Necipoglu offered compensation to physicians who were responsible for a significant majority of their patient referrals. Specifically, they provided physicians with monthly payments pursuant to medical directorship agreements with Allstate and Verge. Those payments were in excess of fair market value for the services the physicians actually provided.
Ari and Necipoglu also sold interests in Allstate to five different physicians which ultimately netted them substantial quarterly dividends. They also provided physicians other gifts and benefits, such as travel and tickets to sporting events.
The Physician Self‑Referral Law, commonly known as the Stark Law, prohibits specified entities from billing Medicare for certain services referred by physicians with whom the entity 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 Medicare, Medicaid and other federally-funded programs cover. Both the Stark Law and the Anti-Kickback Statute are intended to ensure the best interests of the patient and that improper financial incentives do not compromise medical decision-making.
“The FBI is committed, along with its partners, to taking action to eliminate improper relationships and inducements that can corrupt the integrity of physician decision-making and increase health care costs,” said Special Agent in Charge Christopher Combs, FBI San Antonio Division. “Along with criminal prosecution, the FBI will also pursue administrative and civil remedies with the U.S. Attorney’s Office (USAO) and our partner investigative agencies, to prevent, deter and recover government losses sustained by fraud, waste and abuse.”
“Paying physicians to steer patients to one provider over another unacceptably subverts patient choice,” said Special Agent in Charge Miranda Bennett of the Department of Health and Human Services – Office of Inspector General (DHHS-OIG). “We will continue to work with our law enforcement partners to investigate improper payments to physicians to protect patients and the integrity of the programs from unscrupulous acts.”
The FBI and DHHS-OIG conducted the investigation along with the USAO. Assistant U.S. Attorney Brad Gray handled the matter.
The claims resolved by this agreement are allegations only, and there has been no determination of liability.
DuPont and former employee charged in 2014 fatal La Porte incidentRead the Press Release
HOUSTON – A Houston federal grand jury has indicted E. I. du Pont de Nemours and Company Inc. (DuPont) and a former employee for knowingly violating requirements of federal safety regulations and negligently releasing an extremely hazardous substance, U.S. Attorney Ryan Patrick announced today.
Kenneth Sandel, 49, Friendswood, along with representatives of DuPont are set to appear today before U.S. Magistrate Judge Frances Stacy at 10 a.m.
The indictment stems from the Nov. 15, 2014, incident at the LaPorte plant when 24,000 pounds of methyl mercaptan - a highly toxic, flammable gas - were released. The incident resulted in the deaths of four plant employees and injured others, according to the charges.
According to the charges, returned Jan. 7, DuPont is headquartered in Wilmington, Delaware, and owns chemical manufacturing plants around the world, including the La Porte facility. Sandel ran the Insecticide Business Unit (IBU) at that location and was responsible for ensuring IBU employees followed applicable federal safety regulations.
The IBU has since been demolished, but at the time, allegedly produced pesticides called Lannate and Vydate, among other products. The indictment alleges Lannate and Vydate generated annual net income for DuPont of approximately $123 million during 2014.
The safety regulations are part of the Environmental Protection Agency’s (EPA) Risk Management Plan, created following 1990 amendments to the Clean Air Act. Congress had directed the EPA to create reasonable regulations to prevent the release of certain hazardous chemicals after such events had resulted in the death or injury to many people in the United States and abroad.
The indictment alleges DuPont and Sandel knowingly failed to implement certain DuPont procedures federal regulations required. Specifically, Sandel and DuPont engineers allegedly devised a plan to divert a large volume of methyl mercaptan gas into a waste gas pipe system during the day before and night of the fatal incident. However, Sandel failed to implement necessary procedures to evaluate safety aspects of that plan and to prohibit workers from opening the pipe to the atmosphere, according to the charges.
If convicted of the federal safety regulations violations, Sandel faces up to five years in federal prison while the negligence charge could result in an additional one-year term. Both convictions also carry a potential fine of $250,000.
The company itself faces potential fines of the greater of $500,000 or twice the gross gain derived from the offense.
The EPA’s Criminal Investigation Division conducted the investigation with assistance from the Texas Environmental Enforcement Task Force. The indictment is part of an EPA initiative titled Reducing Risks of Accidental Releases at Industrial and Chemical Facilities. Assistant U.S. Attorneys John R. Lewis and Belinda Beek and Special Assistant U.S. Attorney Kristina Gonzales are 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.
Texas man admits to smuggling over 3 dozen in refrigerated truckRead the Press Release
LAREDO, Texas – A 41-year-old resident of San Antonio has entered a guilty plea to conspiracy to transport illegal aliens, announced U.S. Attorney Ryan K. Patrick.
On Oct. 20, 2020, Rodrigo Sanchez approached the I-35 Border Patrol checkpoint driving a refrigerated box truck with “JJ Produce” on the side. Soon after, a K-9 alerted to the presence of contraband in the cargo area. Authorities opened the back of the truck and discovered 37 aliens, including an unaccompanied minor, concealed behind a false wall blocked by stacks of produce.
Sanchez claimed he traveled to Laredo from San Antonio to work as a delivery driver for “AA Produce.” He stated he was to be paid $100 to drive the truck to San Antonio.
U.S. District Judge Marina Garcia Marmolejo will impose sentencing May 5, at which time Sanchez faces up to 10 years in federal prison. He has been and will remain in custody pending that hearing.
Immigration and Customs Enforcement’s Homeland Security Investigations conducted the investigation with the assistance of Border Patrol. Assistant U.S. Attorney Paul A. Harrison is prosecuting the case.
U.S. Attorneys warn of charges against potential violent protestersRead the Press Release
HOUSTON - The U.S. Attorneys representing the four districts in Texas have announced intent to prosecute any crimes committed at the state capitol or otherwise in violation of federal law ahead of upcoming presidential inauguration.
“As I’ve said from the beginning, the rioters at the U.S. Capitol should be arrested, charged and incarcerated,” said U.S. Attorney Ryan K. Patrick. “I will continue to work with my D.C. area colleagues proving any assistance for leads that come back to my district. And the four Texas US Attorneys will work together to investigate and prosecute any federal crimes that may occur at the state capitol. We cherish the free expression and ability to assemble, but it must be done peacefully as stated in the Constitution.”
U.S. Attorney Patrick joins his counterparts – U.S. Attorneys Gregg N. Sofer and Stephen J. Cox and Acting U.S. Attorney Prerak Shah of the Western, Eastern and Northern Districts of Texas, respectively – to warn those planning to cross state lines to commit crimes in Texas or at the state capitol.
As the chief law enforcement officers in each of the federal districts, the U.S. Attorneys will be working with federal, state and local law enforcement throughout the state to aggressively identify crimes that violate federal law. The plan is to ensure that anyone who is arrested for committing looting, violence or any other crime related to protests or similar events on or about inauguration day will be processed and held in federal custody pending further criminal proceedings.
The U.S. Attorney’s Office (USAO) in the District of Columbia (DC) is prosecuting those that have been or will be identified as allegedly committing crimes during the riots at the U.S. Capitol last week. The Texas U.S. Attorneys will also be working with Department of Justice (DOJ) officials and necessary law enforcement in those prosecutions. Any questions regarding those matters should be directed to DOJ Office of Public Affairs or to the USAO in D.C.
Texas Woman Indicted for Transporting Minor for Female Genital MutilationRead the Press Release
A Texas woman has been indicted for transporting a minor from the United States to a foreign country for the purpose of female genital mutilation (FGM).
Zahra Badri, 39, of Houston, who is originally from the United Kingdom, is charged in an indictment with knowingly transporting a minor from the United States in foreign commerce for the purpose of FGM from about July 10, 2016 through Oct. 14, 2016.
“The brutal practice of female genital mutilation not only subjects victims to the immediate trauma of the violent act, but also often condemns them to suffer a lifetime of physical and psychological harms,” said David P. Burns, Acting Assistant Attorney General of the Justice Department’s Criminal Division. “This indictment represents the first time the Department has brought charges against a defendant for transporting a child outside U.S. borders to facilitate this abhorrent form of gender-based violence and demonstrates that we will not rest in pursuing and holding to account those who engage in this cruelty.”
Title 18, United States Code, Section 116(d), defines FGM as circumcision, excision, or infibulation of “the whole or any part of the labia majora or labia minora or clitoris of another person who has not attained the age of 18 years.” Since 1996, the United States has prohibited the practice of female genital mutilation. In 2013, Congress amended the statute to add section 116(d), which prohibits the transportation of a person from the United States to another country for purposes of having female genital mutilation performed upon them. This is the first such indictment under section 116(d).
“Female genital mutilation is child abuse,” said Ryan K. Patrick, U.S. Attorney for the Southern District of Texas. “The long-term damage, both physically and physiologically, is well documented. Unnecessary medical procedures on children will not be tolerated.”
“It is rare this type of crime is brought to the attention of law enforcement,” said Perrye K. Turner, Special Agent in Charge of the FBI’s Houston Field Office. “We want the American people to know it is the FBI's responsibility to investigate allegations of Human Rights violations, like female genital mutilation. This is an example of our commitment to protect Human Rights.”
“Female genital mutilation is a human rights violation,” said Andre Watson, Assistant Director of U.S Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), National Security Investigations Division, which oversees the Human Rights Violators and War Crimes Center. “This indictment reflects the gravity of FGM and the on-going commitment of the Human Rights Violators and War Crimes Center to investigate this heinous crime.”
This case is being investigated by FBI’s Houston Field Office, with the support of the Human Rights Violators and War Crimes Center (HRVWCC). Established in 2009, the HRVWCC furthers the government’s efforts to identify, locate and prosecute human rights abusers in the United States, including those who are known or suspected to have participated in persecution, war crimes, genocide, torture, extrajudicial killings, female genital mutilation and the use or recruitment of child soldiers. The HRVWCC leverages the expertise of a select group of agents, lawyers, intelligence and research specialists, historians and analysts who direct the government’s broader enforcement efforts against these offenders. The HRVWCC is comprised of ICE HSI Human Rights Violators and War Crimes Unit, ICE’s Human Rights Law Division, FBI’s International Human Rights Unit and the Criminal Division’s Human Rights and Special Prosecutions Section (HRSP).
The case is being prosecuted by HRSP Trial Attorneys Rami S. Badawy, Susan Masling, and Christian Levesque and Assistant U.S. Attorneys Kimberly Leo and Sherri Zack of the Southern District of Texas.
The charges contained in the indictment are merely allegations and the defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Local woman indicted for transporting a minor for the purpose of female genital mutilationRead the Press Release
HOUSTON – A federal grand jury has returned the first-ever indictment regarding the specific allegation of circumcision, excision or infibulation of a minor’s labia majora, labia minora or clitoris.
Zahra Badri, 39, a resident of Houston originally from the United Kingdom, is set to appear before a U.S. magistrate judge in the near future.
“Female genital mutilation is child abuse,” said U.S. Attorney Ryan K. Patrick. “The long term damage, both physically and physiologically, is well documented. Unnecessary medical procedures on children will not be tolerated.”
“The brutal practice of female genital mutilation not only subjects victims to the immediate trauma of the violent act, but also often condemns them to suffer a lifetime of physical and psychological harms,” said Acting Assistant Attorney General David P. Burns of the Justice Department’s Criminal Division. “This indictment represents the first time the Department has brought charges against a defendant for transporting a child outside U.S. borders to facilitate this abhorrent form of gender-based violence and demonstrates that we will not rest in pursuing and holding to account those who engage in this cruelty.”
“It is rare this type of crime is brought to the attention of law enforcement,” said FBI Houston Special Agent in Charge Perrye K. Turner. “We want the American people to know it is the FBI's responsibility to investigate allegations of Human Rights violations, like female genital mutilation. This is an example of our commitment to protect Human Rights.”
The indictment alleges from on or about July 10 through Oct. 14, 2016, Badri knowingly transported a minor from the United States in foreign commerce for the purpose of female genital mutilation.
The FBI’s Houston Field Office conducted the investigation with the support of the Human Rights Violators and War Crimes Center (HRVWCC).
Established in 2009, the HRVWCC furthers the government’s efforts to identify, locate and prosecute human rights abusers in the United States, including those who are known or suspected to have participated in persecution, war crimes, genocide, torture, extrajudicial killings, female genital mutilation and the use or recruitment of child soldiers. The HRVWCC leverages the expertise of a select group of agents, lawyers, intelligence and research specialists, historians and analysts who direct the government’s broader enforcement efforts against these offenders. The HRVWCC is comprised of Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations Human Rights Violators and War Crimes Unit, ICE’s Human Rights Law Section, FBI’s International Human Rights Unit and the Criminal Division’s Human Rights and Special Prosecutions Section (HRSP).
Assistant U.S. Attorneys Kimberly Leo and Sherri Zack of the Southern District of Texas and HRSP Trial Attorneys Rami S. Badawy, Susan Masling and Christian Levesque are jointly prosecuting the case.
The charges contained in the indictment are merely allegations and the defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.