Southern District of Texas
Press releases recorded for this federal judicial district.
Texas Doctor and Hospital Owner Convicted in Multimillion Dollar Health Care Fraud SchemeRead the Press Release
A federal jury found an internal medicine doctor and hospital owner guilty today for their roles in a multimillion health care fraud scheme, announced Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division and U.S. Attorney Ryan K. Patrick of the Southern District of Texas.
Following a two-week trial, Harcharan Narang, 50, of Houston, Texas, and Dayakar Moparty, 47, of Houston, Texas,were found guilty of one count of conspiracy to commit health care fraud, 17 counts of health care fraud and three counts of money laundering. Sentencing is set for June 20, before U.S. District Judge Sim Lake of the Southern District of Texas, who presided over the trial.
Narang is a physician who owned and practiced at North Cypress Clinical Associates in Cypress, Texas. Moparty managed and operated Red Oak Hospital (Red Oak) in Houston, Texas. During the trial, evidence was admitted showing that Narang and Moparty unlawfully enriched themselves by submitting false and fraudulent claims for medical tests that were not medically necessary and/or not provided and then billed at Red Oak Hospital at a higher reimbursement rate.
Additionally, Narang and his co-conspirators falsified diagnostic referral forms to make the beneficiaries appear sicker on paper than they actually were, to receive higher reimbursement rates from health care benefit programs such as Blue Cross Blue Shield, Cigna and Aetna, the evidence showed. Moparty also instructed his employees to falsely bill the medical services at Red Oak and other entities associated with Moparty, when in fact the patients never received services at Red Oak and the other entities.
At trial, patients testified that they had merely bought a Groupon for weight loss shots, but after meeting with Narang, they all received the same battery of medical tests that were not needed or provided. According to the trial evidence, health care benefit programs paid Red Oak approximately at least $3.2 million, and Moparty then covertly paid Narang approximately $3 million dollars to various corporate entities owned by Narang.
Narang and Moparty’s co-conspirator, Gurnaib Sidhu, M.D., 67, of Houston, previously pleaded to conspiracy to commit health care fraud and is awaiting sentencing.
The investigation was conducted by the FBI and the U.S. Office of Personnel Management Office of Inspector General. Trial Attorney Drew Pennebaker of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Tina Ansari of the Southern District of Texas are prosecuting the case.
The Fraud Section leads the Medicare Fraud Strike Force. Since its inception in March 2007, the Medicare Fraud Strike Force, which maintains 14 strike forces operating in 23 districts, has charged nearly 4,000 defendants who have collectively billed the Medicare program for more than $14 billion.
Sweeny Man Convicted of Sex Trafficking of MinorsRead the Press Release
GALVESTON, Texas - A 33-year-old resident of Sweeny has admitted he employed sexually-oriented websites advertising three minors as young as 15 for commercial sex, announced U.S. Attorney Ryan K. Patrick.
Joseph Church pleaded guilty today on the first day trial was set to begin before U.S. District Judge George C. Hanks Jr.
The young girls were induced into posing for pictures used in online advertisements for sex and engaged in commercial sex acts for money. Church and others collected all of the money the girls earned. Church transported victims to commercial sex dates and used motels to harbor the minors. Cell phone applications were used to monitor the victims and post on-line advertisements featuring the minors. Church and his co-defendants were aware that the victims were under the age of 18 when they were caused to engage in commercial sex.
Church, the leader of the group, was the last of seven to plead guilty in this case.
Several others have pleaded guilty for their respective roles on the conspiracy, gun charges, and the posting of the commercial sex ads - Angela Marks, 25, of Sweeny; Jamaal Crane, 26, of Angleton; Norris Moon, 25, and Christopher Walton, 24, both of Brazoria; Alisa Kimbler, 26, of Freeport; and Eric Page, 20 of Sherman.
Church has been detained since his arrest and will remain in custody until his sentencing scheduled for May 15,2019.
Church faces at least 10 years and up to life in prison. Potentially, he could also be ordered to pay a $250,000 fine and serve at least five years and up to life on supervised release. He will be required to register as a sex offender.
The FBI and Texas Department of Public Safety conducted the investigation with assistance of sheriff’s offices in Brazoria and Galveston Counties and police departments in Galveston, Sherman, Wharton, La Marque and the University of Texas Medical Branch. Assistant U.S. Attorneys Sherri Zack and Sebastian Edwards prosecuted the case.
LPR Indicted for Smuggling More than $1 MillionRead the Press Release
McALLEN, Texas – A 50-year old resident of Hidalgo has been charged with bulk cash smuggling, announced U.S. Attorney Ryan K. Patrick.
A federal grand jury has returned an indictment against legal permanent resident Alberto Hernandez Gallegos Feb. 12, 2019. He was originally charged by criminal complaint Jan. 26, 2019, and has remained in custody since that time. He is expected to make his appearance on the indictment before U.S. Magistrate Judge Juan Alanis at 8:30 a.m. today.
The indictment alleges that on Jan. 25, 2019, Gallegos attempted to exit the United States via vehicle at the Hidalgo Port of Entry. Customs and Border Protections Officers (CBP) conducted an outbound inspection which allegedly led to the discovery of approximately $1,081,375.00 in bulk U.S. currency concealed in a speaker box in the trunk of the vehicle.
The charges allege Gallegos was aware of the currency in the vehicle but not the total amount. He allegedly planned to smuggle the currency for others in return for $1000.
It is not a crime to carry more than $10,000, but it is a federal offense not to declare currency or monetary instruments totaling $10,000 or more to a CBP officer upon entry or exit from the U.S. or to conceal it with intent to evade reporting requirements.
If convicted, Gallegos faces up to five years in federal prison along with a possible $250,000 fine. Gallegos could also lose his status as an LPR.
Immigration and Customs Enforcement’s Homeland Security Investigations conducted the investigation along with CBP. Assistant U.S. Attorney Andrew Henning 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.Justice Department Files Lawsuit Alleging Disability-Based Discrimination in Housing in Galveston, TexasRead the Press Release
The Justice Department today filed a federal civil rights lawsuit against TFT Galveston Portfolio LTD (Galveston Portfolio), the owners of the Seasons Resort, an apartment complex located in Galveston, Texas, as well as against James W. Gartrell Jr., a licensed engineer whose primary place of business is Texas City, Texas. The lawsuit alleges that defendants Galveston Portfolio and Gartrell failed to design and construct an eight-building addition and associated rental office at the Seasons Resort to make them accessible to persons with disabilities in compliance with the Fair Housing Act (FHA) accessibility requirements and the Americans with Disabilities Act (ADA).
“The Department of Justice is committed to eliminating disability-based discrimination in housing,” said Assistant Attorney General Eric Dreiband for the Civil Rights Division. “This lawsuit is the latest step in the Department of Justice’s efforts to ensure equal accessibility for persons with disabilities, including making multifamily housing FHA compliant.”
“The United States Attorney’s Office is committed to working with the Civil Rights Division in enforcing the Fair Housing Act and the Americans with Disabilities Act,” said U.S. Attorney Ryan K. Patrick. “We are fully devoted to protecting the rights of persons with disabilities in the Southern District of Texas.”
The suit, filed in U.S. District Court in Galveston, Texas, alleges that the eight-building addition and rental office designed and built by the defendants have significant accessibility barriers that inhibit access to the 24 ground-floor units and the associated public and common-use areas at the property. Those barriers include: multiple steps on walkways throughout the property; multiple steps leading to ground-floor unit entrances; barriers at property amenities such as the mail centers, the pool, the rent drop box at the rental office, and the trash dumpster; inaccessible parking, bathrooms, kitchens, thermostats and electrical outlets; and door knobs at all unit entrances that make those entrances inaccessible to many people with disabilities.
The lawsuit arises from a complaint by a former tenant with physical disabilities who was compelled to move from the property because she could not get from her apartment to the parking area unassisted.
The lawsuit seeks a court order prohibiting the defendants from designing or constructing future residential properties in a manner that discriminates against persons with disabilities. The lawsuit also seeks an order requiring the defendants to bring the portions of the Seasons Resort that they have designed and constructed since 1991 into compliance with the FHA and the ADA, as well as monetary damages for persons harmed by the lack of accessibility.
The Justice Department, through the U.S. Attorney’s Offices and the Civil Rights Division, enforces the FHA, which prohibits discrimination in housing based on race, color, religion, national origin, sex, disability and familial status. Among other things, the FHA requires all multifamily housing constructed after March 12, 1991, to have basic accessibility features, including accessible routes without steps to all ground-floor units. The full and fair enforcement of the ADA and its mandate to integrate individuals with disabilities is a major priority of the Civil Rights Division. The ADA protects individuals with disabilities from discrimination in public accommodations, including the rental office at issue in this case.
More information about the Civil Rights Division and the laws it enforces is available at www.usdoj.gov/crt. Individuals who believe that they may have been victims of housing discrimination can call the Justice Department at 1-800-896-7743, email the Justice Department at [email protected], or contact HUD at 1-800-669-9777, or through its website at https://www.hud.gov/program_offices/fair_housing_equal_opp.
The complaint is an allegation of unlawful conduct. The allegations in the complaint must still be proven in court.
Justice Department Files Lawsuit Alleging Disability-Based Discrimination in Galveston HousingRead the Press Release
GALVESTON, Texas - The Justice Department has filed a federal civil rights lawsuit against TFT Galveston Portfolio LTD (Galveston Portfolio), the owners of the Seasons Resort, an apartment complex located in Galveston as well as against James W. Gartrell Jr., a licensed engineer whose primary place of business is Texas City. The lawsuit alleges Galveston Portfolio and Gartrell failed to design and construct an eight-building addition and associated rental office at the Seasons Resort to make them accessible to persons with disabilities in compliance with the Fair Housing Act (FHA) accessibility requirements and the Americans with Disabilities Act (ADA).
“The Department of Justice is committed to eliminating disability-based discrimination in housing,” said Assistant Attorney General Eric Dreiband for the Civil Rights Division. “This lawsuit is the latest step in the Department of Justice’s efforts to ensure equal accessibility for persons with disabilities, including making multifamily housing FHA compliant.”
“The United States Attorney’s Office is committed to working with the Civil Rights Division in enforcing the Fair Housing Act and the Americans with Disabilities Act,” said U.S. Attorney Ryan K. Patrick. “We are fully devoted to protecting the rights of persons with disabilities in the Southern District of Texas.”
The suit, filed in U.S. District Court in Galveston, alleges the eight-building addition and rental office designed and built by the defendants have significant accessibility barriers that inhibit access to the 24 ground-floor units and the associated public and common-use areas at the property. Those barriers include multiple steps on walkways throughout the property; multiple steps leading to ground-floor unit entrance; barriers at property amenities such as mail centers, pool, rent drop box at the rental office and the trash dumpster; inaccessible parking, bathrooms, kitchens, thermostats and electrical outlets; and door knobs at all unit entrances that make those entrances inaccessible to many people with disabilities.
The lawsuit arises from a complaint by a former tenant with physical disabilities who was compelled to move from the property because she could not get from her apartment to the parking area unassisted.
The lawsuit seeks a court order prohibiting the defendants from designing or constructing future residential properties in a manner that discriminates against persons with disabilities. The lawsuit also seeks an order requiring the defendants to bring the portions of the Seasons Resort that they have designed and constructed since 1991 into compliance with the FHA and the ADA, as well as monetary damages for persons harmed by the lack of accessibility.
The Justice Department, through the U.S. Attorney’s Offices and the Civil Rights Division, enforces the FHA, which prohibits discrimination in housing based on race, color, religion, national origin, sex, disability and familial status. Among other things, the FHA requires all multifamily housing constructed after March 12, 1991, to have basic accessibility features, including accessible routes without steps to all ground-floor units. The full and fair enforcement of the ADA and its mandate to integrate individuals with disabilities is a major priority of the Civil Rights Division. The ADA protects individuals with disabilities from discrimination in public accommodations, including the rental office at issue in this case.
More information about the Civil Rights Division and the laws it enforces is available at www.usdoj.gov/crt. Individuals who believe that they may have been victims of housing discrimination can call the Justice Department at 1-800-896-7743, email the Justice Department at [email protected], or contact HUD at 1-800-669-9777, or through its website at https://www.hud.gov/program_offices/fair_housing_equal_opp.
The complaint is an allegation of unlawful conduct. The allegations in the complaint must still be proven in court.
Illegal Alien Pleads Guilty to Striking Federal AgentRead the Press Release
CORPUS CHRISTI, Texas - A 26-year-old undocumented alien from Guatemala has admitted he assaulted a Border Patrol (BP) agent and illegally entered the country, announced U.S. Attorney Ryan K. Patrick.
Edison Sory Velasquez-Velasquez entered a guilty plea today before U.S. Magistrate Judge Jason B. Libby.
On Dec. 18, 2018, a group of illegal aliens were spotted walking on the east side of highway 281 on the Viboras Pasture in the King Ranch in Encino. BP tracked the group, but as they closed in, the aliens began to run in all directions.
As one of the agents was apprehending two of the illegal aliens, Velasquez-Velasquez appeared from a thick group of trees. The agent grabbed him and gave commands to stop and get on the ground. Velasquez-Velasquez turned on the agent and swung a plastic bag that contained canned foods and hit the agent in the face.
Velasquez-Velasquez continued to run, was given verbal commands to stop, but refused. The injured agent was able to catch up to him and attempted to subdue him. Velasquez-Velasquez continued to resist and swung at the agent again. The agent was able to evade the second attack and gained control and arrested Velasquez-Velasquez.
In total, agents arrested eight illegal aliens, all of whom were transported to the Falfurrias BP Checkpoint for processing.
U.S. District Judge Nelva Gonzales Ramos will impose sentencing May 16, 2019. At that time, Velasquez-Velasquez faces up to eight years imprisonment and a maximum $250,000 fine.
He has been and will remain in federal custody pending the sentencing hearing.
BP and the FBI conducted the investigation. Assistant U.S. Attorney Cody Barnes is prosecuting the case.
Conroe Man Ordered to Prison for Making “Ghost Guns”Read the Press Release
HOUSTON – A 30-year-old resident of Conroe has been sentenced to federal prison for possessing and selling homemade machine guns, announced U.S. Attorney Ryan K. Patrick. Michael Lee Price pleaded guilty Oct. 5, 2018, admitting he illegally possessed machine guns, possessed unregistered machine guns and engaged in the business of selling firearms without a license.
Today, U.S. District Judge Ewing Werlein Jr. ordered price to serve a total of 37 months in prison to be immediately followed by three years of supervised release. In handing down the sentence, the court noted the seriousness of his crime in making fully automatic machine guns and selling to criminal elements given the amount of death and destruction they can cause.
From June 18, 2018, to July 17, 2018, Price negotiated with an undercover officer to sell fully automatic M-16 style machine guns that he made from gun parts he bought online. The evidence showed Price was in the business of purchasing the gun parts to construct an M-16 style rifle then used his own machinery and templates to make the rifles fully automatic machine guns.
Such machine guns are known as “ghost guns” because they have no identifying information and are hard to trace.
Price sold a total of 14 fully automatic machine guns to the undercover officer. Authorities seized all of the machine guns and confirmed to be fully-automatic machine guns.
Price 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 conducted the investigation. Assistant U.S. Attorney Richard Bennett prosecuted the case.
Texas Man Sentenced for Engaging in Illicit Sexual Conduct in Foreign Places with a MinorRead the Press Release
BROWNSVILLE, Texas – A 63-year-old resident of Dallas has been ordered to federal prison following his multiple convictions related to his sexual conduct with a minor in foreign places, announced. U.S. Attorney Ryan Patrick.
Donald Frederic Bollinger pleaded guilty June 13, 2018, to engaging in illicit sexual conduct in foreign places with an individual less than 18 years of age, transportation of a minor with intent to engage in criminal sexual activity, coercion and enticement of a minor to travel in interstate and foreign commerce to engage in illicit sexual activity and travel in foreign commerce as well as engaging in illicit sexual activity with a minor.
Today, U.S. District Judge Rolando Olvera Jr. sentenced Bollinger to 121 months for his crimes. Bollinger was further ordered to pay a $30,000 fine and special assessments of $100 per count of conviction as well as $30,000 pursuant to the 2015 Justice for Victims Trafficking Act of 2015. Following the completion of his prison term, Bollinger will serve the rest of his life on supervised release during which time he will have to comply with numerous requirements designed to restrict his access to children and the internet. Bollinger will also be ordered to register as a sex offender.
In July 2016, a minor had crossed into the U.S. illegally and reported continuous sexual abuse that took place in Honduras and Mexico at the hands of Bollinger, a registered sex offender. The investigation led the agents to two other Honduran minors, also in the United States, that Bollinger victimized in Honduras.
The investigation revealed flight records, credit card information and money order records showing that Bollinger traveled to Honduras consistently for a period of two years from 2012 to 2014. The investigation demonstrated that Bollinger traveled to Reynosa, Mexico, and stayed at a hotel in the area at the end of March 2016 which corroborated one of the victim’s statements. Bollinger maintained a sexual relationship with the minors throughout this time period.
He was arrested Sept. 21, 2017, at the Hidalgo International Port of Entry in McAllen. 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.
Immigration and Customs Enforcement’s Homeland Security Investigations Brownsville - Rio Grande Valley Child Exploitation Task Force conducted the investigation.
Assistant U.S. Attorneys Ana C. Cano and Jason Corley 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 Projects Safe Childhood, please visit www.usdoj.gov/psc.
Thief Who Helped Steal Nearly $800,000 from the City of Bryan Sent to PrisonRead the Press Release
HOUSTON - A 40-year-old resident of Atlanta, Georgia, resident has been sentenced to prison for conspiracy to commit wire fraud, announced U.S. Attorney Ryan K. Patrick. Derrick Ervin pleaded guilty Nov. 19, 2018.
Today, U.S. District Judge Lynn N. Hughes sentenced Ervin to 77 months in federal prison to be immediately followed by three years of supervised release. He was also ordered to pay restitution in the amount of $998,188.50. In handing down the sentence, the court noted that the prison term would give Ervin the chance to live Also, Judge Hughes stated, “Prison will give you the opportunity to live “without temptation.”
At the time of his guilty plea, Ervin admitted that in March 2018, conspirators sent fraudulent emails to the City of Bryan posing as the city’s vendors. In them, conspirators directed the city to send money to what were purportedly the vendors’ “new” bank accounts.
In reality, however, the conspirators controlled those accounts.
Three payments were sent, totaling $779,807.50.
Ervin participated in the conspiracy by opening a bank account under a stolen identity to receive much of the stolen money and distributing it amongst the conspirators.
As part of his guilty plea, Ervin also admitted to participating in other frauds including receiving at least $50,000 in October 2017 as part of a romance fraud scheme, as well as more than $90,000 as part of a business email compromise.
Ervin 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 FBI and the Bryan Police Department jointly conducted the investigation. Assistant U.S. Attorney Michael Chu prosecuted the case.
Katy Man Sent to Prison in Fatal Shooting During Drug DealRead the Press Release
HOUSTON – A 34-year-old Katy man has been ordered to prison after discharging a firearm in the hallway of an apartment building while conducting a drug trafficking offense resulting in the death of the buyer, announced U.S. Attorney Ryan K. Patrick. James Michael Curtis Johnson pleaded guilty Feb. 6, 2017, to discharging a firearm as well as aggravated identity theft as part of a separate fraud scheme.
Today, U.S. District Judge Lynn N. Hughes handed Johnson a 120-month sentence for the firearms charge plus a mandatory and consecutive 24 months for identity theft. The total 144-month prison term will be immediately followed by three years of supervised release. At the hearing, Judge Hughes noted Johnson had a gun to perpetuate your drug deal. “That’s not self-defense,” he said. That’s defending your wrong.” He also addressed Johnson’s family. “I want y’all to love him, but don’t make excuses for him.” Hughes commented. “He knew what he was doing.”
At the time of his guilty plea, Johnson admitted that on Oct. 1, 2014, he and a friend received a request to sell narcotics at an apartment building on the 2600 block of Woodland Park in Houston. Johnson was worried that something might go wrong at the drug sale meeting, so he also brought a pistol, checking before he left to ensure it was loaded.
During the sale, an altercation arose in the hallway and one of the buyers drew a gun. Johnson ducked, drew his own pistol, fired several rounds at the buyer with the gun and fled. Authorities arrived on scene and discovered the hallway pockmarked with bullets, a partially-opened box of narcotics and a trail of blood leading to the body of the victim who was deceased.
For his participation in a conspiracy to steal money from online bank accounts, Johnson was also convicted of aggravated identity theft. In that case, Johnson and his co-conspirators possessed and unlawfully used the identification of two victims to fraudulently induce their bank to send blank checks to the conspirators. As part of this conspiracy, the conspirators wrote a fraudulent check for $91,256.73 and deposited it at BBVA Compass Bank in Houston. They withdrew the money before the bank could stop the payment.
Johnson will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The FBI’s Houston Area Cyber Task Force, IRS-Criminal Investigation and Houston Police Department conducted the investigation. Assistant U.S. Attorney Michael Chu prosecuted the case.
Illegal Aliens Hidden in Furniture During Attempt to Circumvent Border Patrol CheckpointRead the Press Release
ORPUS CHRISTI, Texas – A 23-year-old legal permanent resident of Katy has been convicted of transporting illegal aliens, announced U.S. Attorney Ryan K. Patrick.
On Dec. 10, 2018, Yabar Ayan Portes-Arevalo approached the primary inspection lane of the Border Patrol (BP) checkpoint near Sarita. He was driving a Ford F-150 pickup with a couch and dresser loaded in the bed of the truck wrapped in plastic. During a routine inspection, Portes-Arevalo became visibly nervous, at which time BP conducted an x-ray examination of the vehicle which showed abnormalities inside the furniture.
BP agents removed the plastic and discovered three undocumented aliens hidden in the couch and three more inside the dresser. The dresser had been nailed shut.
Porters-Arevalo entered a guilty plea today to transporting illegal aliens within the United States. Sentencing has been set for May 20, 2019, before Senior U.S. District Judge John Rainey. At that time, Portes-Arevalo faces up to five years imprisonment and a $250,000 maximum possible fine. He could also lose his status as a legal permanent resident.
He was permitted to remain on bond pending that hearing.
BP conducted the investigation. Assistant U.S. Attorney Cody Barnes is prosecuting the case.
Chinese National Sentenced to Prison for Selling Counterfeit Computer PartsRead the Press Release
A Beijing, China man was sentenced today to 54 months in federal prison for directing the shipment of counterfeit computer-networking equipment into the Southern District of Texas.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division and U.S. Attorney Ryan K. Patrick for the Southern District of Texas made the announcement.
Ruiyang Li, 40, was sentenced today to serve 54 months in federal prison by U.S. District Judge Ewing Werlein Jr. The court reserved the determination of restitution to the victims of Li’s trademark counterfeiting—including Cisco Systems Inc., The Hewlett-Packard Company and Intel Corporation—until a later date. Because Li is not a U.S. citizen, he is expected to be deported after serving his prison sentence.
From at least 2007 until in or about June 2017, Li directed the shipment of counterfeit computer-networking equipment into the Southern District of Texas, first when selling to a retailer in Magnolia, Texas, and eventually when selling to law enforcement acting in an undercover capacity. Over this time period, Li sold counterfeit networking products through several business entities, often hiding behind layers of personal and corporate aliases to evade detection by law enforcement. Li also used various means to conceal his unlawful conduct, including by sending and receiving payments using accounts that did not appear connected, at least publicly, to companies trafficking in illicit products. Li and his customers would also agree to mislabel packages, break up shipments into separate components, alter destination addresses and use multiple forwarding companies based in the United States. These methods, in Li’s mind, made shipping counterfeit parts “safer,” which in practice meant delaying or complicating detection by U.S. authorities.
State and local governments rely on complex computer networking technology, including the transceivers and other parts that were trafficked in this case, to manage critical data and operations. This same technology is also prominent in banks, hospitals, air traffic control installations, power plants and other essential infrastructure. Because counterfeit parts are often not subject to stringent manufacturing requirements, they present a significant health and safety risk to communities across the United States.
The case was investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, with significant assistance from U.S. Customs and Border Protection. The case was prosecuted by Senior Trial Attorney Timothy C. Flowers of the Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Jay Hileman.
Chinese National Sentenced for Selling Counterfeit Computer PartsRead the Press Release
HOUSTON – A Beijing, China, man was sentenced to federal prison today for directing the shipment of counterfeit computer-networking equipment into the Southern District of Texas.
U.S. Attorney Ryan K. Patrick and Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division made the announcement.
U.S. District Judge Ewing Werlein Jr. sentenced Ruiyang Li, 40, to serve 54 months in federal prison. The court reserved the determination of restitution to the victims of Li’s trademark counterfeiting—including Cisco Systems Inc., The Hewlett-Packard Company and Intel Corporation—until a later date. Because Li is not a U.S. citizen, he is expected to face deportation proceedings after serving his prison sentence.
From at least 2007 until in or about June 2017, Li directed the shipment of counterfeit computer-networking equipment into the Southern District of Texas, first when selling to a retailer in Magnolia and eventually when selling to law enforcement acting in an undercover capacity. Over this time period, Li sold counterfeit networking products through several business entities, often hiding behind layers of personal and corporate aliases to evade law enforcement detection. Li also used various means to conceal his unlawful conduct, including by sending and receiving payments using accounts that did not appear connected, at least publicly, to companies trafficking in illicit products. Li and his customers would also agree to mislabel packages, break up shipments into separate components, alter destination addresses and use multiple forwarding companies based in the United States. These methods, in Li’s mind, made shipping counterfeit parts “safer,” which in practice meant delaying or complicating detection by U.S. authorities.
State and local governments rely on complex computer networking technology, including the transceivers and other parts that were trafficked in this case, to manage critical data and operations. This same technology is also prominent in banks, hospitals, air traffic control installations, power plants and other essential infrastructure. Because counterfeit parts are often not subject to stringent manufacturing requirements, they present a significant health and safety risk to communities across the United States.
Immigration and Customs Enforcement’s Homeland Security Investigations conducted the investigation with significant assistance from Customs and Border Protection. Assistant U.S. Attorney Jay Hileman and Senior Trial Attorney Timothy C. Flowers of the Computer Crime and Intellectual Property Section prosecuted the case.
Federal Court Sentences Business Owner for $20 Million Tax FraudRead the Press Release
HOUSTON - A man who had owned Stat Source, Inc., has been ordered to prison for willfully failed to truthfully account for and pay over employment taxes to the IRS, announced U.S. Attorney Ryan K. Patrick along with Special Agent in Charge D. Richard Goss of IRS - Criminal Investigation (CI). Jonathan Adam Van Pelt pleaded guilty Nov. 8, 2018.
Today, U.S. District Judge Alfred H. Bennett handed Van Pelt a 30-month sentence to be immediately followed by three years of supervised release. Judge Bennett also ordered Van Pelt to pay restitution to the United States of more than $20 million.
In handing down its sentence, Judge Bennett noted many factors to include Van Pelt’s medical condition as well as the size of the tax loss and the fact that Van Pelt knew he had a degenerative disease prior to commission of his crime.
In the plea agreement filed in the record of the case, Van Pelt admitted the total employment taxes he failed to pay to the IRS for Stat Source Inc., was more than $20 million, the amount owed for 18 employment tax quarters running from the third quarter of 2011 through the fourth quarter of 2015. Van Pelt also admitted he spent the money owed on the unpaid employment taxes on various luxury items, such as luxury automobiles, expensive furniture, leather goods, jewelry, an expensive home, lavish vacations and various entertainment venues.
Judge Bennett allowed Van Pelt to remain on bond pending his voluntary surrender to a U.S. Bureau of Prisons facility to be determined in the near future.
IRS-CI conducted the investigation. Assistant U.S. Attorney Charles J. Escher is prosecuting the case.
Undocumented Alien Sent to Prison for Illegally Entering the United StatesRead the Press Release
CORPUS CHRISTI, Texas - A 38-year-old Mexican national has been sentenced to federal prison following his conviction of illegal re-entry into the United States after deportation, announced U.S. Attorney Ryan K. Patrick. Isidro Rodriguez-Toscano pleaded guilty Oct. 23, 2018.
“We must have secure borders,” said Patrick. “Foreign nationals previously deported or that have a criminal history are not permitted entry into our country. We have been and will continue to be a leader in prosecuting these types of cases and thank our hard-working law enforcement partners who bring illegal re-entry cases to us for prosecution.
At the hearing today, U.S. District Judge Hilda G. Tagle ordered Rodriguez-Toscano to prison for 46 months in federal prison. The court heard evidence of his convictions for aggravated robbery, felony theft and assault. He was also previously convicted for the same offense - illegal re-entry - in December 2009 and was sentenced to 70 months, later deported and not permitted to return to the United States.
However, in August 2018, A Texas Department of Public Safety (DPS) trooper had conducted a traffic stop for a defective taillight near Riviera. Rodriguez-Toscano was the driver of that vehicle and determined to be illegally present in the country.
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.
Customs and Border Protection and DPS conducted the investigation. Assistant U.S. Attorney Reid Manning is prosecuting the case.
Six Convicted for Roles in Multi-Million Dollar Black Market Peso Exchange Money-Laundering SchemeRead the Press Release
A federal jury in Laredo, Texas found four men and two women guilty for their roles in a two-year multi-million dollar black market peso exchange money-laundering scheme, the Justice Department announced.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Ryan Patrick of the Southern District of Texas, Special Agent in Charge Will R. Glaspy of the U.S. Drug Enforcement Administration (DEA) and Special Agent in Charge D. Richard Goss of the IRS Criminal Investigation (IRS-CI) made the announcement.
Adrian Arciniega-Hernandez, 36, of Nuevo Laredo, Mexico; Adriana Alejandra Galvan-Constantini, 36, and Luis Montes-Patino, 57, both of Irving, Texas, and Ravinder Reddy Gudipati, 61; Harsh Jaggi, 54; and Neeru Jaggi, 51, all of Laredo, Texas, were each convicted of a money laundering conspiracy following a five-week jury trial. In addition, Harsh Jaggi and Adrian Arcinieg-Hernandez were each convicted of two counts of money laundering and Neeru Jaggi was convicted of one count of money laundering. Gudipati was convicted of two counts of money laundering, two counts of causing a trade or business to fail to file a Form 8300, and one count of causing a trade or business to file a Form 8300 containing a material omission and misstatement of facts. Arciniega-Hernandez was found not guilty of a third count of money laundering. Sentencing before U.S. District Judge Marina Garcia Marmalejo of the Southern District of Texas, Laredo Division, who presided over the trial, has not yet been scheduled.
Arciniega-Hernandez, Galvan-Constantini, Montes-Patino, Gudipati, Harsh Jaggi, and Neeru Jaggi were part of a complex money laundering scheme whereby money derived from the sale of drugs in the United States were laundered through businesses in Laredo, in order to return these proceeds to Mexican drug dealers.
According to the evidence presented at trial, from 2011 through 2013, Galvan-Constantini, Montes-Patino and other co-conspirators helped to move millions of dollars derived from the sale of drugs throughout the United States, including New York, Kentucky, North Carolina, Illinois, Mississippi, and multiple cities in Texas to Laredo, Texas. The U.S. currency was moved by couriers, including Galvan-Constantini and Montes-Patino, via cars, commercial buses, commercial planes, and a private plane in bulk cash amounts of up to hundreds of thousands of dollars at a time. The money, in heat sealed packs, uneven rubber-banded money stacks, or loose U.S. currency, arrived in plastic bags, cloth bags, suitcases, backpacks, and even cereal boxes. The money was then distributed among downtown Laredo, Texas perfume stores, including El Reino International Inc., and NYSA Impex LLC. The owner of NYSA Impex LLC, Gudipati, and the owners of El Reino International Inc., Harsh Jaggi, and Neeru Jaggi, accepted loose bulk-cash, even after being told it was “narco dinero.” The store owners also failed to file Form 8300s which are required when more than $10,000 in cash is received by a business, or filed Form 8300s which omitted pertinent information such as the name of the courier who brought the bulk cash.
Co-defendant Carlos Velasaquez, 55, of Laredo, pleaded guilty to conspiracy to launder money on Nov. 7, 2018, and is pending sentencing.
This case was investigated by the DEA and IRS-CI. Trial Attorneys Keith Liddle and Stephanie Williamson of the Criminal Division’s Money Laundering and Asset Recovery Section (MLARS) and Assistant U.S. Attorney José Angel Moreno of the Southern District of Texas are prosecuting the case, with the support and assistance of MLARS Trial Attorney Kerry Blackburn.
Six Convicted for Roles in Multi-Million Dollar Black Market Peso Exchange Money Laundering SchemeRead the Press Release
LAREDO, Texas - A federal jury in Laredo has found four men and two women guilty for their roles in a two-year multi-million dollar money-laundering scheme.
U.S. Attorney Ryan Patrick, Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, Special Agent in Charge Will R. Glaspy of the Drug Enforcement Administration (DEA) and Special Agent in Charge D. Richard Goss of the IRS - Criminal Investigation (CI) made the announcement.
Adrian Arciniega-Hernandez, of Nuevo Laredo; Adriana Alejandra Galvan-Constantini and Luis Montes-Patino, both of Irving; and Ravinder Reddy Gudipati, Harsh Jaggi and Neeru Jaggi, all of Laredo, were each convicted of a money laundering conspiracy following a five-week jury trial. In addition, Harsh Jaggi and Adrian Arciniega-Hernandez were convicted of two counts of money laundering, while the jury convicted Neeru Jaggi of one count of money laundering. Gudipati was convicted of two counts of money laundering, two counts of causing a trade or business to fail to file a Form 8300 and one count of causing a trade or business to file a Form 8300 containing a material omission and misstatement of facts.
Sentencing before U.S. District Judge Marina Garcia Marmalejo, who presided over the trial, has not yet been scheduled.
Arciniega-Hernandez, Galvan-Constantini, Montes-Patino, Gudipati, Harsh Jaggi and Neeru Jaggi were part of a complex money laundering scheme whereby money derived from the sale of drugs in the United States were laundered through businesses in Laredo in order to return these proceeds to Mexican drug dealers.
According to the evidence presented at trial, from 2011 through 2013, Galvan-Constantini, Montes-Patino and other co-conspirators helped to move millions of dollars derived from the sale of drugs throughout the United States, including New York, Kentucky, North Carolina, Illinois, Mississippi and multiple cities in Texas to Laredo. Couriers moved the currency, including Galvan-Constantini and Montes-Patino, via cars, commercial buses, commercial planes and a private plane in bulk cash amounts of up to hundreds of thousands of dollars at a time. The money, in heat sealed packs, uneven rubber-banded money stacks or loose U.S. currency, arrived in plastic bags, cloth bags, suitcases, backpacks and even cereal boxes. The money was then distributed among downtown Laredo perfume stores, including El Reino International Inc., which Harsh and Neeru Jaggi owned, and NYSA Impex LLC, owned by Gudipati. Gudipati, Harsh Jaggi and Neeru Jaggi accepted loose bulk-cash even after being told it was “narco dinero.”
The store owners also failed to file Form 8300s which are required when a business receives more than $10,000 in cash, or they filed those forms which omitted pertinent information such as the name of the courier who brought the bulk cash.
Co-defendant Carlos Velasaquez, 55, of Laredo, pleaded guilty to conspiracy to launder money on Nov. 7, 2018, and is pending sentencing.
DEA and IRS-CI conducted the investigation. Assistant U.S. Attorney José Angel Moreno and Trial Attorneys Keith Liddle and Stephanie Williamson of the Criminal Division’s Money Laundering and Asset Recovery Section (MLARS) are prosecuting the case, with the support and assistance of MLARS Trial Attorney Kerry Blackburn.
Seven Defendants Convicted in Securities Fraud ConspiracyRead the Press Release
HOUSTON – The last defendant charged in relation to a more than $40 million securities fraud “pump and dump” conspiracy has now been convicted, announced U.S. Attorney Ryan K. Patrick. With the guilty plea of John David Brotherton, 59, of League City, today, all seven defendants charged in the case now stand convicted.
Andrew Ian Farmer, 40, Thomas Galen Massey, 48, Eddie Douglas Austin Jr., 68, Carolyn Price Austin 64, and Charles Earl Grob, 38, all of Houston, and Scott Russell Sieck, 60, of Winter Park, Florida, all had previously entered pleas of guilty for their respective roles in the case.
Farmer, Massey, Eddie Austin, Brotherton, Sieck and Grob admitted they participated in a conspiracy to commit fraud in microcap securities. During the course of the conspiracy, these six defendants obtained control of the stock of numerous companies, then “pumped up” the price of the stock through false and misleading press releases and fraudulent trading techniques. They then “dumped” their shares of stock onto the market for a significant profit.
As part of her plea agreement, Carolyn Austin admitted she knew of the intended manipulation of the stock prices and acted to conceal this fact from law enforcement.
U.S. District Judge Vanessa D. Gilmore has set Brotherton’s sentencing for June 3, 2019, along with Sieck, Grob and Massey. Eddie and Carolyn Austin are set for June 17, while Farmer will be sentenced June 24. Farmer faces up 10 years in prison, while Carolyn Austin’s conviction carries a possible three-year-term of imprisonment. The remaining defendants face a maximum of five years.
All seven defendants could also be ordered to pay up to a $250,000 fine.
With the exception of Brotherton, who is in now in custody following violations of his conditions of release, the remaining defendants were permitted to remain on bond pending their respective sentencing hearings.
The FBI conducted the investigation with the assistance of the Securities and Exchange Commission and Financial Industry Regulatory Authority. Assistant U.S. Attorneys Justin R. Martin and Michael Chu are prosecuting the case.
Houston Resident Convicted of Fraud Scheme Linked to Hurricane HarveyRead the Press Release
HOUSTON ‐ A Houston area resident has entered a guilty plea to fraud in connection with a major disaster for her scheme to defraud the Federal Emergency Management Agency (FEMA), announced U.S. Attorney Ryan K. Patrick.
Patricia Rodriguez, 38, of Houston, entered her guilty plea today before U.S. District Judge Vanessa Gilmore.
As part of that plea, Rodriguez admitted she submitted a false or fraudulent application to FEMA for government assistance in reference to property damage sustained in Hurricane Harvey. The property was located in Houston but which investigators determined not to have sustained any damage.
Rodriguez admitted the application was fraudulent as it contained a falsified letter purporting to be from her landlord. The letter claimed Rodriguez bought the damaged dwelling for $7,000 on Feb. 9, 2013, and would thereafter lease the lot for $300 per month. The landlord’s name was misspelled and was drafted without his authorization and consent.
As a result of her scheme, Rodriguez received $33,300 from FEMA, all of which was sent to into her personal bank account.
Sentencing has been set for April 29, 2019, before U.S. District Judge Vanessa Gilmore. At that time, Rodriguez faces a maximum of 30 years in federal prison a possible $250,000 fine. She was permitted to remain on bond pending that hearing.
The Department of Homeland Security - Office of Inspector General (OIG) and the Small Business Administration – OIG conducted the investigation. Assistant U.S. Attorney Michael Day is prosecuting the case.
Members of the public are reminded to apply a critical eye and do their due diligence before trusting anyone purporting to be working on behalf of disaster victims and before giving contributions to anyone soliciting donations on behalf of disaster victims as well as being extremely cautious before providing personal identifying or financial information to anyone, especially those who may contact you after a natural disaster. Solicitations can originate from e-mails, websites, door-to-door collections, mailings and telephone calls, and similar methods. Members of the public who suspect fraud, waste, abuse or allegations of mismanagement involving disaster relief operations, or believe they have been the victim of fraud from a person or organization soliciting relief funds on behalf of disaster victims, should contact the National Disaster Fraud Hotline toll free at (866) 720-5721. The telephone line is staffed by live operators 24 hours a day, seven days a week. You can also fax information to the Center at (225) 334-4707 or email it to [email protected] (link sends e-mail). Learn more about the NCDF at www.justice.gov/disaster-fraud and watch a public service announcement here. Tips for the public on how to avoid being victimized of fraud are at https://www.justice.gov/opa/pr/tips-avoiding-fraudulent-charitable-contribution-schemes.
Associate of Former Border Patrol Agent Pleads Guilty to Conspiracy to Commit BriberyRead the Press Release
An associate of a former U.S. Border Patrol Agent (BPA) pleaded guilty to conspiring to accept money in return for helping to smuggle marijuana and other illegal drugs into the United States.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney for the Southern District of Texas Ryan K. Patrick, Special Agent in Charge Perrye Turner of the FBI’s Houston Field Office and Special Agent in Charge Juan Benavidez of the Department of Homeland Security Customs and Border Protection Office of Professional Responsibility (CBP OPR)’s Houston Field Office made the announcement.
Daniel Hernandez, 46, of Roseville, California, pleaded guilty on Feb. 5 to one count of conspiracy to bribe a public official before U.S. Magistrate Judge Nancy K. Johnson in the Southern District of Texas. Sentencing has been scheduled for May 9, before U.S. District Judge Gray H. Miller, who accepted the plea on Feb. 8.
According to the plea documents, between 2013 and May 2014, Hernandez and the BPA agreed, and took overt acts, to facilitate the trafficking of illegal drugs, including marijuana, into the United States from Mexico on behalf of a drug trafficking organization (DTO). In exchange for cash payments, they provided an individual they believed to be a member of the DTO with CBP sensor locations, the locations of unpatrolled roads at or near the U.S.-Mexico border, the number of BPAs working in a certain area, keys to unlock CBP locks located on gates to ranch fences along the border, and CBP radios. In total, Hernandez accepted approximately $5,000 in cash in return for facilitating shipments of illegal narcotics into Texas without law enforcement detection.
The FBI with the assistance of CBP OPR, investigated the case. Trial Attorneys Rebecca Moses and Peter M. Nothstein of the Criminal Division’s Public Integrity Section, and Assistant U.S. Attorneys John Pearson and Arthur R. Jones of the Southern District of Texas are prosecuting the case.
McAllen Woman Charged in Multi-Million Dollar Kickback ConspiracyRead the Press Release
McALLEN, Texas – A local marketer has been charged for her role in a multi-million dollar illegal kickback conspiracy involving a pharmacy in the Rio Grande Valley and doctors throughout Texas, announced U.S. Attorney Ryan K. Patrick.
Victoria Renee Guerra, 35, of McAllen, made her initial appearance before U.S. Magistrate Judge Scott Hacker this morning.
According to the criminal information, Guerra was a licensed pharmacist and worked as a marketer for a pharmacy - identified as “Pharmacy A.”
In her role as a purported marketer, Guerra allegedly recruited physicians to write prescriptions for expensive compound drugs to be filled by Pharmacy A, and for which the pharmacy would bill federal health care programs.
During an approximately two-year period starting in late 2014, the owner of Pharmacy A paid Guerra approximately $7.5 million in return for compound drug prescriptions physicians written whom Guerra recruited. In turn, Guerra allegedly paid a cut of the payments from Pharmacy A to the prescribing physicians. For example, the complaint alleges Guerra paid approximately $2.1 million in kickbacks to just a physician for sending prescriptions to Pharmacy A.
During the conspiracy, Pharmacy A submitted claims totaling approximately $42.2 million to the U.S. Department of Labor, Office of Workers Compensation Program, for prescriptions that doctor had written for beneficiaries of the Federal Employee’s Compensation Act, according the charges
Guerra is charged with conspiracy to violate the federal anti-kickback statute which prohibits the payment of kickbacks to induce physicians to write prescriptions for which payment may be made in whole or in part under a federal health care benefit program. If convicted, Guerra faces up to five years in federal prison and a possible $25,000 maximum fine.
The U.S. Postal Service – Office of Inspector General (OIG), Department of Labor – OIG, FBI, Veterans Affairs – OIG, Defense Criminal Investigative Service and the Drug Enforcement Administration conducted the administration conducted the investigation. Assistant U.S. Attorney Andrew Swartz is prosecuting the case.
A criminal information is an accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.Long-Time Houston Physician Ordered to Prison for Tax EvasionRead the Press Release
HOUSTON – A local doctor who practiced in Houston for more than 30 years has been sent to federal prison following his conviction on of one count of tax evasion, announced U.S. Attorney Ryan K. Patrick along with Special Agent in Charge D. Richard Goss of IRS – Criminal Investigation. Edward J. Crouse pleaded guilty Aug. 28, 2018.
Today, U.S. District Judge Rosenthal ordered Crouse to Prison for 18 months to be immediately followed by one year of supervised release. He paid restitution of $678,103 prior to today’s hearing.
Crouse acknowledged in the plea agreement that he had not timely filed a U.S. individual income tax return since 1997. The plea agreement states that Crouse earned more than $4.4 million in years 2009 through 2012.
Crouse admitted in his signed plea agreement that he consistently committed numerous affirmative acts of tax evasion over the years to conceal his true income from the IRS, including concealing the complete business records of his medical practice for calendar years 2006 through 2012 from his bookkeeping and tax return preparation firm. Crouse also admitted he signed an IRS Collection form on or about May 1, 2010, in which he understated the amount of his income from his medical practice available for payment of taxes and household expenditures.
Crouse agreed that the total intended tax loss in his case was approximately $678,103.00, counting both unpaid U.S. Individual Income Taxes and the amounts of federal taxes and FICA that Crouse withheld from the wages of the employees of his medical practice but did not pay over to the IRS.
IRS-CI conducted the investigation. Assistant U.S. Attorney Charles J. Escher is prosecuting the case.
Child Sex Offender Charged with Illegally Re-Entering the United StatesRead the Press Release
HOUSTON – A 50-year-old Honduran citizen has been charged in federal court for illegally re-entering the country after having been convicted and deported for multiple sex offenses in California, announced U.S. Attorney Ryan K. Patrick.
Marvin Mejia Ramos aka Ricardo Morales Rodriguez and Martin Jose Romes-Ramirez was charged with illegally re-entering the United States following an aggravated felony conviction and subsequent deportation. According to court records, in 2007, he was convicted in California for continuous sexual abuse and lewd act upon a child. He was sentenced to six years imprisonment for those offenses and was deported in 2013, according to the complaint.
As such, he is not permitted to return to the United States.
However, on Jan. 30, 2019, authorities with the Precinct 4 Montgomery County Constables Office discovered him during a traffic stop in New Caney. He was subsequently charged with illegal re-entry after deportation.
At a hearing in federal court today, Assistant U.S. Attorney (AUSA) Adam Laurence Goldman argued Mejia Ramos is both a flight risk and danger to the community. U.S. Magistrate Judge Dena Hanovice Palermo then ordered Mejia Ramos into custody pending further criminal proceedings.
If convicted, Mejia Ramos faces up to 20 years in federal prison.
Immigration and Customs Enforcement – Enforcement Removal Operations conducted the investigation. AUSA Goldman 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.Laredo Man Gets Massive Sentence for Carjacking and Firearm OffenseRead the Press Release
LAREDO, Texas – A 34-year-old Laredoan has been ordered to federal prison for a carjacking and for possessing a firearm during a crime of violence which occurred in September 2017, announced U.S. Attorney Ryan K. Patrick and Special Agent in Charge Fred Milanowski of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). Rodrigo Garza-delaCruz pleaded guilty June 19, 2018.
Today, U.S. District Judge Marina Garcia Marmolejo ordered Rodrigo Garza-delaCruz to serve a total of 300 months in federal prison - 120 months for the carjacking and another 180 months for the related firearm offense to be served consecutively. The sentence will be immediately followed by five years of supervised release.
“Protecting our community from the most violent offenders is at the core of the ATF mission,” said Milanowski. “Taking criminals off the street who prey on our citizens while using firearms will continue to remain an ATF priority.”
On Sept. 14, 2017, Garza-delaCruz entered a park in Laredo where he shot and killed one individual.
He then carjacked an 81-year-old man while fleeing the scene. He approached the man in his vehicle and threatened to kill him if he did not drive him to Mexico. Garza-delaCruz fled with the vehicle before officers tracked him down to a residence in Laredo.
Garza-delaCruz engaged in a three-hour standoff with SWAT and a hostage negotiations team before he was ultimately apprehended.
He is also facing related charges in Webb County.
Garza-delaCruz will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The ATF and the Laredo Police Department conducted the investigation. Assistant U.S. Attorneys April Ayers-Perez and Alfredo DeLaRosa prosecuted the case.
UT Health Science Center Pays More than $2.3 Million to Resolve AllegationsRead the Press Release
HOUSTON – The University of Texas Health Science Center (UTHSC) at Houston has paid $2,396,769.76 to resolve allegations that its Human Genetics Center misappropriated grant funds the National Institutes of Health (NIH) provided for research related to the impact of genomic variation on individual health and the health of families and populations, announced U.S. Attorney Ryan K. Patrick. A component of UTHealth, UTHSCH is one of the largest research institutions in the United States.
“Misappropriating NIH grant funds intended to advance the health of individuals and families, as alleged here, will not be tolerated,” said Special Agent in Charge CJ Porter of U.S. Department of Health and Human Services – Office of Inspector General. “Patients can be assured the government will aggressively investigate and prosecute fraudulent use of these taxpayer funds.”
The United States began its investigation after receiving a tip that the Genetics Center had misappropriated funds under an NIH grant related to sequencing the human genome. According to the source, the center wanted to draw down a substantial portion of the money remaining on the grant before the end of the grant period so that it would not have to return unused funds to the NIH. To accomplish this, the source claimed the center placed an order for a large quantity of genetic sequencing material from Illumina Inc. just prior to the end of the subject grant. They then allegedly stopped shipment of that material and had Illumina establish a credit for the material, from which the Genetics Center then used to purchase goods and services after the close out of the grant.
A two-year investigation substantiated the information provided by the anonymous source. The evidence revealed that just prior to the end of the grant period in late September 2012, the Genetics Center placed an order for Human Omni 5 DNA Analysis Bead Chip Kits from Illumina in the amount of $1,198,384.88. The Genetics Center stopped delivery of the shipment after making payment to Illumina. This resulted in UTHSCH underreporting by that amount the unobligated federal funds remaining on the grant which were not returned to NIH.
This misappropriation of federal funds deprived NIH of grant funds to which it would have otherwise been entitled. These funds could have then been used for other grants.
Because Illumina had received payment for the shipment, it established a credit to the Genetics Center in the amount of $1,198,384.88. From October 2012 through to Dec. 31, 2017, the center used that credit to purchase goods and services from Illumina.
The Department of Health and Human Services - Office of the Inspector General conducted the investigation.
Assistant U.S. Attorney Andrew A. Bobb represented the United States.
The claims resolved by this agreement are allegations only, and there has been no determination of liability.
Justice Department Announces Multiple Charges for Price-Fixing Conspiracies in Customized Promotional Products IndustryRead the Press Release
G Nova Corporation and Its CEO Indicted for Conspiracy to Fix Prices of Insulated Beverage Containers; Netbrands Media Corporation and Two of Its Top Executives Agree to Plead Guilty to Conspiracy to Fix Prices of Wristbands, Lanyards, Temporary Tattoos, and Buttons
A federal grand jury in Houston returned an indictment yesterday against Taiwan-based G Nova Corporation and its Chief Executive Officer Yeh Fei Chu, aka Jim Chu, for participating in a conspiracy to fix prices of insulated beverage containers sold in the United States, the Department of Justice announced today.
The Department of Justice also announced that it has filed criminal charges against Netbrands Media Corporation and two of Netbrands’ top executives, Mashnoon Ahmed and Mueen Akhter, for their roles in a separate conspiracy to fix prices of wristbands, lanyards, temporary tattoos, and buttons sold in the United States. Netbrands has agreed to plead guilty and pay a criminal fine of over $6 million. Ahmed and Akhter entered guilty pleas on January 8, 2019.
Assistant Attorney General Makan Delrahim of the Department of Justice’s Antitrust Division, U.S. Attorney Ryan K. Patrick for the Southern District of Texas, and Special Agent in Charge Perrye K. Turner of the FBI’s Houston Field Division made the announcements.
“The results announced today are the latest in a series of charges against eleven defendants filed in the Division’s ongoing investigation into conspiracies that corrupted the online marketplace and deprived consumers of the benefits of competition,” said Assistant Attorney General Delrahim. “Whether the conspiracy takes place in smoke-filled rooms that are real or virtual, the Department of Justice and its law enforcement partners are committed to uncovering and prosecuting collusion.”
“We will continue to prosecute those who seek to harm consumers by conspiring to fix prices,” said U.S. Attorney Patrick. “It doesn’t matter if the products are fifty cent insulated beverage containers or million dollar pieces of oil field equipment, the U.S. Attorney’s Office is committed to protecting competition in the marketplace and protecting consumers from people who cheat the system.”
“Antitrust violations raise prices and suppress competition, hurting businesses who play by the rules as well as consumers who pay more for products or services,” said Special Agent in Charge Turner. “In these cases, people got greedy and their greed usurped the consumers’ right to choose between competitors. The defendants in these cases took advantage of the niche in the markets they created and thought they could get away it. Well, they didn’t thanks to the FBI’s unique partnership with the DOJ’s Antitrust Division and our commitment to put an end to this type of unlawful activity.”
Including the results announced today, the investigation into the customized promotional products industry has resulted in charges against five companies and six individuals.
The charges announced today against G Nova and Chu are the first that relate to a conspiracy to fix prices of insulated beverage containers.
Including Netbrands, Akhter, and Ahmed, nine defendants have been charged for their roles in a separate price-fixing conspiracy related to sales of other customized promotional products, including wristbands. All nine of those defendants have agreed to plead guilty.
The Case Against G Nova and Chu:
The indictment against G Nova and Chu, filed in the U.S. District Court for the Southern District of Texas in Houston, charges the two defendants with participating in a conspiracy to fix prices of insulated beverage containers (also known as can coolers or coolies) beginning in about May 2012 and continuing until at least February 2014. The one-count felony indictment charges that G Nova and Chu carried out the conspiracy by agreeing to fix the prices of insulated beverage containersduring meetings and other communications.
An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt.
The Cases Against Netbrands, Ahmed, and Akhter:
According to the felony charge filed against Netbrands on January 24, 2019, the felony charges filed against Ahmed and Akhter on December 3, 2018, and the plea documents filed in the cases against Ahmed and Akhter on January 8, 2019, in the U.S. District Court of the Southern District of Texas in Houston, the defendants and their co-conspirators agreed to fix the prices of customized promotional products, including wristbands, lanyards, temporary tattoos, and buttons, sold online from as early as May 2014 until at least June 2016. The defendants and their co-conspirators used social media platforms and encrypted messaging applications, such as Facebook, Skype, and Whatsapp, to reach and implement their illegal agreements.
In addition to pleading guilty, Netbrands has agreed to pay a $6,531,687 million criminal fine and cooperate with the Antitrust Division’s ongoing investigation. As part of their guilty pleas, Ahmed and Akhter also agreed to cooperate with the ongoing investigation.
A criminal violation of Section 1 of the Sherman Act carries a maximum sentence of 10 years in federal prison and a fine of $1 million for individuals, and a maximum fine of $100 million for corporations. The maximum fines may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
This prosecution arose from an ongoing federal antitrust investigation into price fixing in the customized promotional products industry, which is being conducted by the Antitrust Division’s Washington Criminal I Section and the FBI’s Houston Field Division, with assistance from the U.S. Attorney’s Office for the Southern District of Texas. Anyone with information on price fixing or other anticompetitive conduct related to other products in the customized promotional products industry should contact the Antitrust Division’s Citizen Complaint Center at 888-647-3258 or visit www.justice.gov/atr/contact/newcase.html.
**An earlier version of this release incorrectly referred to “insulated beverage containers” as “Koozies,” a trademarked term.**
Former VA Employee Pleads Guilty to Fraud in Fake Invoice SchemeRead the Press Release
HOUSTON – A 75-year-old resident of Houston has been convicted of conspiring to commit fraud, announced U.S. Attorney Ryan K. Patrick and Special Agent in Charge James Ross of the Department of Veterans Affairs Office of Inspector General (VA-OIG).
Eduora McDaniel admitted she generated purchase orders for fictitious goods and services.
“Today’s guilty plea and associated charges underscore VA-OIG’s commitment to protecting the integrity of the funds intended for veterans,” said Ross.
As a prosthetics representative for the VA, McDaniel had the authority to obtain prosthetic goods and services if a VA physician found it medically necessary. McDaniel was authorized to pay for the goods using a government-issued VISA credit card.
As part of the scheme, she created bogus purchase orders for her co-conspirator’s company and paid them using her government credit card. McDaniel and co-conspirator Angela Hunter, 54, also of Houston, then split the payments.
Hunter previously pleaded guilty as well. McDaniel and Hunter are set for sentencing April 30 and 24, respectively.
Conspiracy to commit wire fraud carries a possible sentence of five years as well as a $250,000 maximum possible fine.
VA-OIG conducted the investigation. Assistant U.S. Attorney Belinda Beek is prosecuting the case.
Two South Texas Doctors Sentenced to Prison for Roles in Separate Multi-Million Dollar Medicare Fraud SchemesRead the Press Release
Two Houston, Texas physicians were sentenced to 25 and three-year prison terms for their roles in separate schemes to defraud Medicare out of payments for medical services.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Ryan Patrick of the Southern District of Texas, Special Agent in Charge Perrye K. Turner of the FBI’s Houston Field Office, Special Agent in Charge C.J. Porter of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Dallas Region and the Texas Attorney General’s Medicaid Fraud Control Unit (MFCU) made the announcement.
US v. Ramirez S.D.T.X. Docket No. 16-cr-00258
John P. Ramirez, 65, of Houston, Texas, a physician, was sentenced to serve 25 years in prison followed by three years of supervised release by U.S. District Judge David Hittner of the Southern District of Texas. Judge Hittner also ordered the defendant to pay $26,729,041.39 in restitution. John Ramirez was convicted at trial in the Southern District of Texas along with his co-defendants Ann Shepherd and Yvette Nwoko.
According to evidence presented at trial, from in or around December 2011 to in or around August 2015, John Ramirez and his co-defendants conspired and schemed to defraud Medicare out of payments for medical services. Co-defendant Ann Shepherd owned and operated Southwest Total Medical Inc., a purported medical clinic doing business as Amex Medical Clinic in Houston. Shepherd, along with Nwoko, sold medical orders and other documents Dr. Ramirez signed to home-health agencies in and around Houston. Dr. Ramirez falsely certified in these medical orders information about the patient’s medical condition and need for medical services. Co-conspirators at home-health agencies then used the false and fraudulent paperwork signed by Dr. Ramirez and sold by Ann Shepherd and Yvette Nwoko to bill to, and receive payment from, Medicare for medical services that were not medically necessary or not provided.
In all, Dr. Ramirez and his co-defendants caused Medicare to pay approximately $17 million on false and fraudulent claims submitted during the charged conspiracy.
Ann Shepherd, 62, of Houston, Texas was also sentenced to 30 years in prison on Jan. 24, by the Honorable David Hittner. Judge Hittner also ordered Shepherd to pay $20.928 million in restitution and to forfeit $250,000. Nwoko will be sentenced on April 18.
U.S. v. Do S.D.T.X. Docket No. 17-cr-00417
Anh Do, M.D., 78, of Houston, Texas was sentenced to serve 36 months in prison followed by three years of supervised release by U.S. District Judge Andrew Hanen of the Southern District of Texas. Judge Hanen also ordered the defendant to pay $1,875,219.00 in restitution and to forfeit $274,213.46. Do pleaded guilty to one count of conspiracy to commit healthcare fraud on Aug. 28, 2018.
As part of his guilty plea, Do admitted to fraudulently signing Plans of Care and other medical documents that falsely and fraudulently certified and re-certified patients for home-health services. Do and his co-conspirators made it appear as if patients qualified for and received home-health services under Medicare when those services were not medically necessary, not provided or both. Medicare paid approximately $10 million on claims for home-health services in which Do was listed as the patient’s attending physician.
Do and his co-conspirators also billed Medicare for diagnostic tests that they knew were not medically necessary, not provided or both. Do and his co-conspirators falsely and fraudulently signed medical documents to make it appear as if the patients both needed and received the diagnostic tests. Medicare paid approximately $2 million on claims for these diagnostic tests.
The FBI, HHS-OIG and the Texas Attorney General’s MFCU conducted both investigations. Trial Attorney Scott Armstrong of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Tina Ansari of the Southern District of Texas are prosecuting the Ramirez case. Trial Attorneys Devon Helfmeyer, Scott Armstrong and Drew Pennebaker of the Criminal Division’s Fraud Section are prosecuting the Do case.
The Criminal Division’s Fraud Section leads the Medicare Fraud Strike Force. Since its inception in March 2007, the Medicare Fraud Strike Force, which maintains 14 strike forces operating in 23 districts, has charged nearly 4,000 defendants who have collectively billed the Medicare program for more than $14 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.
Former CBP Officer Ordered to PrisonRead the Press Release
McALLEN, Texas – A former Customs and Border Protection (CBP) officer has been ordered to federal prison for accepting a bribe in exchange for issuing an I-94 permit, announced U.S. Attorney Ryan K. Patrick. Jose Javier “J.J.” Gonzalez, 38, of Mission, pleaded guilty Feb. 28, 2018.
Today, U.S. District Judge Randy Crane ordered Gonzalez to serve 30 months in federal prison, noting he had accepted a $500 bribe in exchange for issuing an I-94 permit to an individual in Pharr in 2014. The sentence will be immediately followed by three years of supervised release. At the hearing, Gonzalez claimed that he had served as a dedicated CBP officer for more than 10 years and had only made one mistake. The court noted, however, that another individual had made similar allegations against Gonzalez.
“The defendant not only betrayed the citizens he was sworn to protect, he also betrayed the thousands of honest, hard-working CBP and other law enforcement officers who risk their lives every day to keep us safe,” said FBI Special Agent in Charge Christopher Combs. “The FBI is committed to working with our partners to pursue corruption wherever it lies. Together, we will ensure those who tarnish the badge are held accountable.”
An I-94 permit is a travel permit that allows an individual to travel further into the interior of the United States.
The court heard that from July 2015 through November 2016, Gonzalez exceeded his law enforcement access to conduct improper queries on the Treasury Enforcement Communications System (TECS) that CBP officers use at the ports of entry. Gonzalez ran queries of a Spanish music artist, a music promoter and another individual. Despite seeing negative law enforcement information for their association to money laundering and drug trafficking, he continued to associate and communicate with them.
In addition, Gonzalez ran queries on another individual within days of his arrest at a San Diego port of entry for a drug trafficking offense and another individual who was subsequently arrested for conspiring to traffic fentanyl. Gonzalez did not have a legitimate law enforcement purpose to query either person.
Upon his arrest, authorities conducted a search warrant at his residence, at which time they found bottles of steroids and hard drives of pirated music.
Judge Crane permitted Gonzalez to remain on bond and surrender in February 2019.
The FBI conducted the investigation along with CBP - Office of Professional Responsibility. Assistant U.S. Attorney Roberto Lopez Jr. is prosecuting the case.
Texas Man Arrested for Attempting to Provide Material Support to a Designated Foreign Terrorist OrganizationRead the Press Release
A former Sugar Land, Texas, resident has been arrested and detained for attempting to provide material support to the Islamic State of Iraq and al-Sham (ISIS), announced Assistant Attorney General for National Security John C. Demers, U.S. Attorney Ryan K. Patrick and Special Agent in Charge Perrye K. Turner of the FBI’s Houston Field Office.
A federal grand jury returned a sealed indictment against Warren Christopher Clark, 34, on Jan. 23, 2019. It was unsealed today following his initial appearance in federal court before U.S. Magistrate Judge Peter Bray in Houston.
Clark was captured in Syria by the Syrian Democratic Forces, transferred to U.S. law enforcement custody this week and arrived yesterday in the Southern District of Texas.
"The arm of American Justice has a lengthy reach,” said Patrick. “The number one priority of the Southern District of Texas, along with the FBI and our other national security partners, is to keep America safe. The protection of life is the most sacred job law enforcement has."
Clark is charged with attempting to provide himself as material support to ISIS, which the Secretary of State designated as a foreign terrorist organization pursuant to Section 219 of the Immigration and Nationality Act.
“The FBI continues to aggressively pursue individuals who attempt to join the ranks of ISIS’s foreign fighters or try to provide support for other terrorist organizations. This fight against terrorism is not one we can combat alone,” said Turner. “The FBI relies on our domestic counterparts and foreign law enforcement agencies, as well as the public. Anyone who has information about individuals who have traveled or are planning to travel overseas to support terrorist groups should report it immediately to their local FBI office.”
The charged material support violation carries a possible penalty of up to 20 years in federal prison and a maximum $250,000 fine, upon conviction.
The FBI Joint Terrorism Task Force and police departments in Houston and Sugar Land conducted the investigation. Assistant U.S. Attorneys Stephen Mark McIntyre and Craig M. Feazel and Trial Attorney Michael J. Dittoe of the Justice Department’s Counterterrorism Section 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.
Fort Bend County Man Arrested for Attempting to Provide Material Support to a Designated Foreign Terrorist OrganizationRead the Press Release
HOUSTON – A former Sugar Land resident has been arrested and detained for attempting to provide material support to the Islamic State of Iraq and al-Sham (ISIS), announced U.S. Attorney Ryan K. Patrick, Assistant Attorney General for National Security John Demers and Special Agent in Charge Perrye K. Turner of the FBI’s Houston Field Office.
A federal grand jury returned a sealed indictment against Warren Christopher Clark, 34, Jan. 23, 2019. It was unsealed today following his initial appearance in federal court before U.S. Magistrate Judge Peter Bray in Houston. He is set for a detention hearing Wednesday.
Clark was captured in Syria by the Syrian Democratic Forces, transferred to U.S. law enforcement custody this week and arrived yesterday in the Southern District of Texas.
"The arm of American Justice has a lengthy reach,” said Patrick. “The number one priority of the Southern District of Texas, along with the FBI and our other national security partners, is to keep America safe. The protection of life is the most sacred job law enforcement has."
Clark is charged with attempting to provide himself as material support to ISIS, which the Secretary of State designated as a foreign terrorist organization pursuant to Section 219 of the Immigration and Nationality Act.
“The FBI continues to aggressively pursue individuals who attempt to join the ranks of ISIS’s foreign fighters or try to provide support for other terrorist organizations. This fight against terrorism is not one we can combat alone,” said Turner. “The FBI relies on our domestic counterparts and foreign law enforcement agencies, as well as the public. Anyone who has information about individuals who have traveled or are planning to travel overseas to support terrorist groups should report it immediately to their local FBI office.”
The charged material support violation carries a possible penalty of up to 20 years in federal prison and a maximum $250,000 fine, upon conviction.
The FBI Joint Terrorism Task Force and police departments in Houston and Sugar Land conducted the investigation. Assistant U.S. Attorneys Stephen Mark McIntyre and Craig M. Feazel and Trial Attorney Michael J. Dittoe of the Justice Department’s Counterterrorism Section 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.Three Foreign Nationals Face up to Life Imprisonment for Drug Smuggling on the High SeasRead the Press Release
HOUSTON – The final defendant in a maritime smuggling venture involving nearly 1300 kilograms of cocaine has pleaded guilty, announced U.S. Attorney Ryan K. Patrick.
Herman Julio Cuenu Valencia, a 34-year-old Columbian national pleaded guilty today, while Ricardo Alberto Parraga Mendoza, a 31-year-old Ecuadoran national, and Jose Luis Landazuri Valdes, a 24-year-old Colombian national, entered their pleas in November. .
On July 3, 2018, while on routine patrol off the Pacific Coast of Colombia and Ecuador, the U.S. Coast Guard (USCG) Cutter Mohawk detected a 47-foot low profile go-fast boat 300 nautical miles northeast of the Galapagos Islands. USCG launched its small boat which approached and stopped the vessel. Officers boarded the boat and discovered three crewmen on board.
The vessel had no flag, no registration documents, no homeport name and no indicia of identification on the hull of the vessel. Parraga Mendoza identified himself as the captain of the boat.
Officers discovered 38 bales of cocaine weighing approximately 1,280 kilograms in the hold of the boat and five sophisticated satellite communication and global positioning devices.
The three crewmen were taken into custody and transported to Florida.
They were charged with conspiracy to possess with intent to distribute more than five kilograms of cocaine on a vessel in the high seas in violation of the Maritime Drug Law Enforcement Act and the Drug Trafficking Vessel Interdiction Act of 2008. This is the first such prosecution in the Southern District of Texas following a change in the law allowing any jurisdiction in the United States to prosecute such smugglers. The law gives the United States jurisdiction over vessels without nationality found on the high seas with contraband as Congress found that “trafficking in controlled substances aboard vessels is a serious international problem and is universally condemned… Such trafficking presents a specific threat to the security and societal well-being of the United States.”
All three defendants remain in custody pending their sentencing hearings. set for April 26, 2019, before U.S. District Judge Ewing Werlein. At that time, each defendant faces a minimum of 10 years and up to life in federal prison and a possible $10 million fine.
The Drug Enforcement Administration and USCG conducted the investigation. Assistant U.S. Attorneys Edward Gallagher and Jimmy Leo are prosecuting the case.
RGV Company Owner Charged with Submitting False Claims to MedicaidRead the Press Release
McALLEN, Texas – A 47-year old resident of Rio Grande City has been indicted based on false statements he manufactured in connection with the operation of his Texas Medicaid-based durable medical equipment (DME) business, announced U.S. Attorney Ryan K. Patrick.
A federal grand jury returned the sealed indictment against Omar Cuate Canales on Dec. 18, 2018. It was unsealed today as authorities took him into custody. Canales is expected to make his initial appearance before U.S. Magistrate Judge Juan Alanis Friday morning.
The indictment alleges Canales, the owner and operator of Bluebonnet DME located in Roma, committed one count of conspiracy to submit false statements relating to health care matters, eight counts of false statements relating to health care matters and five counts of aggravated identity theft of local physicians’ names, medical license numbers and national provider identifier numbers.
From on or about January 2010 to on or about October 2016, Canales allegedly billed Texas Medicaid in excess of $1 million for claims that were supported by either false documentation Canales created or documentation that did not exist in Bluebonnet DME records. Canales is alleged to have deliberately destroyed patient records to conceal his false claims to Medicaid.
Each of the counts of false statements related to health care matters carries a maximum punishment of five years in federal prison and a $250,000 possible fine, upon conviction. If convicted of aggravated identity theft, Canales will also face an additional and mandatory two years in federal prison which must be served consecutively to any other prison sentence imposed.
Texas Attorney General’s Medicaid Fraud Control Unit, FBI and Department of Health and Human Services – Office of Inspector General conducted the investigation. Special Assistant U.S. Attorney Marian Swanberg and Assistant U.S. Attorney Andrew Swartz 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.Two Former Local Credit Union Employees Charged in Million-Dollar Embezzlement ScamRead the Press Release
HOUSTON – An ex-employee at a local credit union has been charged with embezzlement and making false entries into the credit union’s books and records, announced U.S. Attorney Ryan K. Patrick. Another ex-employee was also charged with embezzlement related to the scam.
A federal grand jury charged Susanna Guajardo, 42, of Pearland in a five-count superseding indictment returned under seal Dec. 12, 2018. She was taken into custody today, at which time the indictment was unsealed, and is expected to make her initial appearance before U.S. Magistrate Judge Frances Stacy today at 10:00 a.m.
Grace Garza aka Grace Valencia, 48, of Pasadena, was originally charged last month with two counts of embezzlement and was released on bond. She is expected to appear again in court on these charges in the near future.
Guajardo is alleged to have committed embezzlement of $1,154,876 and three counts of making false entries into the books and records of a federal credit union between at least 2010 and 2018. The indictment alleges Garza committed two counts of embezzlement – the $1,154,876 along with Guajardo as well as a separate embezzlement of $110,000.
If convicted of any of the charges, each faces up to 30 years in federal prison and a possible $1 million fine.
The FBI conducted the investigation. Assistant U.S. Attorney Belinda Beek 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.McAllen Man Sent to Prison in Health Care Fraud ConspiracyRead the Press Release
McALLEN, Texas – An operator of a durable medical equipment (DME) company was ordered to federal prison following his admission of defrauding Medicaid, announced U.S. Attorney Ryan K. Patrick. George Louis Moreno, 59, of McAllen, pleaded guilty Jan. 24, 2018.
Today, U.S. District Judge Micaela Alvarez handed Moreno a 36-month sentence to be immediately followed by three years of supervised release. Moreno was also ordered to pay approximately $1.5 million in restitution to the Texas Medicaid Program.
Moreno was the owner and operator of MARS DME Inc. located in McAllen. From August 2008 to January 2016, Moreno submitted numerous false and fraudulent claims for incontinence supplies, resulting in approximately $1.5 million loss to Medicaid. Specifically, Moreno submitted claims for incontinence supplies that were not delivered to beneficiaries. In many instances, Moreno billed Medicaid for large quantities of higher-reimbursing incontinence supplies, when in fact the company was delivering smaller quantities of inexpensive supplies to recipients. Moreno also paid cash to some beneficiaries in lieu of delivering supplies.
Moreno was permitted to remain on bond and voluntarily surrender Jan. 2, 2019.
The Texas Attorney General’s Medicaid Fraud Control Unit, Department of Health and Human Services‐Office of Inspector General, FBI and Texas health and Human Services Commission conducted the investigation. Assistant U.S. Attorney (AUSA) Andrew Swartz and Special AUSA Marian Swanberg are prosecuting the case.
Local Man Gets 25 Years for Recruiting Individual to Transport MethRead the Press Release
BROWNSVILLE, Texas – A 25-year-old resident of Brownsville has been ordered to prison for 300 months for his role in recruiting a female to carry almost four kilograms of “ice” to Louisiana, announced U.S. Attorney Ryan K. Patrick. Emmanuel Ravell pleaded guilty Oct. 31, 2017.
Today, U.S. District Judge Fernando Rodriguez Jr. imposed the sentence noting the serious nature of the trafficking in methamphetamine as well as the defendant’s prior lengthy criminal history. Ravell was further order to serve five years of supervised release following the sentence. He was also was sentenced to a concurrent 120 months for being a felon in possession of more than three firearms.
In 2016, Ravell was contacted by a local drug trafficking organization to find a drug “mule” to get a load of methamphetamine to Louisiana. Ravell recruited a young female from Brownsville to carry the load on a commercial bus line. Law enforcement intercepted the woman carrying the approximately-four kilograms of methamphetamine on her person. Ravell had strapped the drugs to her. .
Ravell was a convicted felon ineligible to purchase a firearm. However, in 2017, he purchased three firearms, including an AR-15, GGI rifle and .50 caliber Desert Eagle pistol.
Ravell remains in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The Drug Enforcement Administration, FBI and Bureau of Alcohol, Tobacco, Firearms and Explosives conducted the joint investigation. Assistant U.S. Attorneys Karen Betancourt and Angel Castro prosecuted the case.
Former City Commissioner Heads to Prison for Health Insurance Fraud SchemeRead the Press Release
McALLEN, Texas ‐ A former Pharr City Commissioner has been ordered to prison in connection with a scheme to defraud Blue Cross Blue Shield of Texas, announced U.S. Attorney Ryan K. Patrick. Oscar Elizondo, 48, of Pharr, pleaded guilty to conspiracy to commit health care fraud Nov. 29, 2017.
Elizondo was charged with conspiring with the owner of Penitas Family Pharmacy aka Riverside Pharmacy, located in Penitas, to submit more than $1.7 million in fraudulent claims to Blue Cross Blue Shield of Texas (BCBS) for expensive pain patches and scar creams.
Today, U.S. District Judge Randy Crane imposed a 22-month prison sentence to be followed by a three-year term of supervised release. Elizondo was also ordered to pay more than $1.4 million in restitution to BCBS, the amount they paid based on the fraudulent claims.
In handing down the sentence, Judge Crane characterized the scheme as “blatant fraud” and a “complete ruse.” Crane further noted that although the fraudulent claims were submitted to BCBS, the scheme also defrauded local school districts, municipalities and small businesses, who had self-funded health insurance programs through BCBS.
Co-defendant Omar Espericueta, 46, of Palmhurst, pleaded guilty Dec. 1, 2017, and is set for sentencing in May 2019.
During an approximately five-month period starting in late 2015, Elizondo and his co-conspirators recruited marketers to target employees of entities throughout the Rio Grande Valley with BCBS insurance. The marketers solicited employees with meals, drinks and promises of “free” prescription pain patches and scar creams in order to obtain their health insurance information. The co-conspirators then used the insurance information, along with fraudulent prescriptions, to submit hundreds of fraudulent and medically unnecessary claims to BCBS. Prescriptions were written for individuals who never saw a doctor and did not want or need pain patches or scar creams. Other individuals were taken to a doctor, but it was a doctor with whom Elizondo and his co-conspirators had made arrangements to sign fraudulent prescriptions in exchange for cash, fake loans and prescription pain killers.
Employees who were targeted in the scheme were falsely told that the prescription medication was “free,” when in reality Penitas Pharmacy planned to use their health insurance information to bill BCBS for several thousand dollars worth of prescriptions for each employee. In many instances, the defendants billed BCBS for prescriptions that were never delivered to employees, including multiple refills that were never requested.
Elizondo 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, Mission Police Department, Texas Department of Insurance – Fraud Unit and Texas Health and Human Services Commission conducted the investigation. Assistant U.S. Attorney Andrew Swartz is prosecuting the case.
Nigerian Ringleader of International Investment Scam Charged with Fraud, Money Laundering and Identity TheftRead the Press Release
HOUSTON - A Nigerian national was charged in court documents unsealed today for his role as the alleged ringleader of an international advance-fee scheme.
The scam allegedly involved false promises of investment funding by individuals who impersonated U.S. bank officials in person and over the internet to victims around the world who were told they had to make certain payments before they could supposedly receive their funding. Proceeds of the scheme were allegedly laundered through U.S. bank accounts and diverted back to the scheme’s perpetrators in Nigeria.
U.S. Attorney Ryan Patrick, Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, Special Agent in Charge Perrye K. Turner of the FBI’s Houston Field Office and Special Agent in Charge Robert Smolich of the U.S. Department of State - Office of Inspector General (DOS-OIG) made the announcement.
Osondu Victor Igwilo, 49, of Lagos, Nigeria, was charged in a complaint filed in the Southern District of Texas in December 2016 and unsealed today. The complaint charges Igwilo with one count of wire fraud conspiracy, one count of money laundering conspiracy and one count of aggravated identity theft. Igwilo remains a fugitive.
As alleged in the complaint, Igwilo was the leader of a criminal network of “catchers,” who sent phishing emails to potential victims falsely offering investment funding on behalf of BB&T Corporation, a U.S. bank headquartered in North Carolina. When victims were interested in the supposed investment funding, Igwilo allegedly dispatched U.S. citizens whom he had recruited over the internet to pose as “representatives” of BB&T to meet in person with the victims and sign a supposed investment agreement on behalf of BB&T. When traveling to the countries where the victims resided, these representatives, at Igwilo’s direction, would visit the local U.S. embassy or consulate and employ fake documents with fraudulent seals of the U.S. government to deceive the victims into believing that the investment agreement was sponsored by the U.S. government, according to the complaint. Igwilo then allegedly used the representatives and catchers to convince victims to make wire payments to bank accounts in the United States on the false belief that such payments were necessary to effectuate the investment agreements. The complaint further alleges the holders of the U.S. bank accounts were “money movers” who disposed of the funds as directed by Igwilo, including by purchasing luxury vehicles from brands such as Mercedes Benz and Range Rover and shipping them to Nigeria.
Uche Diuno, 52, also of Lagos, was charged in a separate case in a second superseding indictment filed Oct. 3, 2018, with one count of wire fraud conspiracy, one count of money laundering conspiracy and one count of concealment money laundering. Diuno was arrested in Paris, France, on Sept. 29, 2018, and is awaiting extradition.
As alleged in the second superseding indictment, Diuno was a “chairman” or leader in the scheme who operated his own network of catchers and money movers alongside Igwilo’s which he used in furtherance of the same BB&T investment scam.
Seven other individuals have been charged to date as part of the same investigation including Uju Okigbo, 49, and Chioma Okafor, 29, both of Houston and alleged money movers; Tochukwu Nwosisi, 47, of Indianapolis, Indiana, also an alleged money mover; and Marita Ranalan Underwood, 62, of Manila, Philippines, John Christian Rutledge, 65, of Yaphank, New York, Osa May Martin, 69, of Carthage, Missouri, and Tiffany Sourjohn, 48, of Miami, Oklahoma, all alleged representatives.
Okigbo, Okafor, Rutledge and Sourjohn have pleaded guilty and are awaiting sentencing. Underwood remains a fugitive. Martin and Nwosisi are pending trial.
The FBI and DOS-OIG conducted the investigation. Assistant U.S. Attorney (AUSA) Suzanne Elmilady of the Southern District of Texas and Trial Attorney William E. Johnston of the Criminal Division’s Fraud Section are prosecuting the case. AUSA Kristine Rollinson is handling forfeiture aspects of the case.
The charges in the complaint and second superseding indictment are merely allegations.
Defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Local Nurse Heads to Prison for Healthcare Fraud and Kickback ConvictionsRead the Press Release
HOUSTON – A 51-year old nurse from Sugar Land is headed to federal prison following his convictions of conspiracy to commit health care fraud, six counts of health care fraud and conspiracy to violate the anti-kickback statute, announced U.S. Attorney Ryan K. Patrick. A federal jury returned the guilty verdicts against John Dubor May 17, 2018, after deliberating less than six hours following a three-day trial.
Today, U.S. District Judge Andrew Hanen handed Dubor a 109-month sentence to be immediately followed by three years of supervised release. At the hearing, the court heard arguments regarding the loss to the Medicare program and ordered Dubor to pay $3,534,972 in restitution.
Dubor owned and operated Care Committers Health Services home health agency in Richmond. During the trial, the jury heard evidence that Dubor paid marketers and group home owners for Medicare beneficiary information and subsequently billed Medicare and Medicaid for home health services for which the beneficiaries did not qualify and/or did not receive.
Additionally, Dubor personally falsified home health patient assessment forms to make the beneficiaries appear sicker on paper to receive higher reimbursement rates from Medicare. Dubor also instructed his employees to falsify home health certifications and forge physician signatures. The beneficiaries, some of whom, resided in Nacogdoches, had no recollection of ever being treated by the Houston physicians listed on their home health orders. Medicare paid Dubor approximately $3.5 million.
Dubor was taken into custody following the jury trial where he will remain pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The Department of Health and Human Services – Office of Inspector General and the Texas Attorney General’s Medicaid Fraud Control Unit conducted the investigation. Special Assistant U.S. Attorney (AUSA) Justin Blan and AUSA Tina Ansari are prosecuting the case.
Houston Man Gets 30 Years for Trafficking Children for Commercial SexRead the Press Release
HOUSTON – A 41-year-old Houston man is headed to prison after for trafficking children for commercial sex and attempting to do so during the 2012 Olympics, announced U.S. Attorney Ryan K. Patrick.
A federal jury convicted Jason Daniel Gandy July 23, 2018, on four counts of sex trafficking of minors, one count of transportation of minors, one count of sexual exploitation of a child and one count of transportation of child pornography following a three-day trial and less than three hours of deliberations.
Today, Chief U.S. District Judge Lee H. Rosenthal ordered Gandy to serve a total of 360 months in prison. Following his incarceration, Gandy will be on supervised release for the rest of his life, during which time he will have to comply with numerous requirements designed to restrict his access to children and the internet. He will also be ordered to register as a sex offender.
At the hearing, three young men provided testimony about how Gandy victimized them and how it impacted, and continues to influence, their lives. They stated that Gandy had made them feel worthless and stole their innocence and that they have struggled with substance abuse and thoughts of suicide since their victimizations.
The court gave Gandy the opportunity to address the court, at which time he continued his attempts at manipulating the victims. He showed no remorse and attempted to cast himself in the role of victim.
In imposing the sentence, Judge Rosenthal called Gandy “an abuser of vulnerable human beings.” “You are evil,” she said, “and most evil are those who willingly exploit others for their own gratification.” The court noted the need for restitution for the victims outweighed the need for a fine and therefore waived it. That restitution will be addressed at a later date.
United Kingdom immigration officers stopped Gandy in July 2012 after he and a minor male child arrived in London on a flight which originated in Houston. The officials in London believed something was amiss about someone of his age traveling with a 15-year-old male who are not related. Both individuals were returned to Houston on separate airplanes.
Upon arrival in Houston, Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) met them. Their investigation revealed Gandy ran a massage business out of his home and was using the young boy to give massages. During the massages, paying customers were allowed to fondle the child. He was also required to sexually gratify customers by masturbating them.
Gandy paid for the trip to London and the child’s passport fees. Gandy’s intent was for the child to perform massages in London during the 2012 Olympics. The investigation also revealed Gandy molested the child on more than one occasion and intended to continue to do so.
After authorities had detained Gandy on the original transportation of minor charge, further investigation revealed there were multiple young men who Gandy victimized, some as minors and some as adults. During trial, four of the identified victims - all minors at the time of the exploitation - testified as to how Gandy manipulated them into performing massages on men which culminated in the sexual gratification of the client.
Gandy has been and will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
HSI conducted the investigation.
Assistant U.S. Attorneys Sherri L. Zack and Kimberly Ann Leo 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 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."
Man Convicted of Robbing Local WhataburgerRead the Press Release
CORPUS CHRISTI, Texas – A 22-year-old Corpus Christi man has entered a guilty plea to robbery and brandishing a firearm in furtherance of a crime of violence, announced U.S. Attorney Ryan K. Patrick.
On March 14, 2018, the Corpus Christi Police Department (CCPD) responded to an aggravated robbery at the Whataburger located in the 4100 block of South Staples. Upon their arrival, officers discovered that a male – later identified as Dveaunta Montez Hall, 22 - had entered the business and pointed an assault rifle employees and customers while demanded money from the register. He then fled the location on foot.
A short while later, responding officers located Hall, who still had the assault rifle in his possession, near the location. During the investigation, officers discovered Hall had stolen the assault rifle from a nearby apartment shortly before committing the robbery.
Senior U.S. District Judge John D. Rainey accepted Hall’s plea today and set sentencing for March 17, 2019. At that time, he faces up to 20 years imprisonment and a maximum $250,000 fine for the robbery and a minimum and mandatory seven years for brandishing a firearm during a crime of violence, which must be served consecutively to any other prison term imposed.
He has been and will remain in custody pending that hearing.
CCPD and the Bureau of Alcohol, Tobacco, Firearms and Explosives conducted the investigation. Attorney Lance Watt is prosecuting the case.
Leader and Others Sent to Federal Prison in Cocaine and Meth Trafficking OperationRead the Press Release
GALVESTON, Texas – A 41-year-old Mexican national who illegally resided in Houston has been ordered to prison following his conviction of conspiracy to possess with intent to distribute cocaine and methamphetamine, announced U.S. Attorney Ryan K. Patrick. Agusto Lazo-Aguirre pleaded guilty March 2, 2018.
Today, U.S. District Judge George C. Hanks Jr. ordered him to prison for 325 months. Not a U.S. citizen, he is expected to face deportation proceedings following his release. At the hearing, Lazo-Aguirre was found to be a leader, manager and organizer of the group and was found to have distributed or been responsible for the distribution of more than five kilograms of cocaine and more than 50 grams of actual methamphetamine during the course of the conspiracy between July 1, 2015, and Feb. 22, 2016.
Previously sentenced were Tony Perez, 24, of Dickinson and Carlos Chayane Morales, 27, of Galveston. Perez received a 168-term of imprisonment, while Morales was ordered to serve a sentence of 120 months.
The investigation began in September 2014. It revealed Lazo-Aguirre purchased cocaine and methamphetamine from several sources in the Houston area and worked with known co-conspirators, such as Perez and Morales. They facilitated the distribution of cocaine and methamphetamine in the Houston-Galveston area and to other destinations throughout the United States.
Those that participated in the conspiracy obtained drugs from or through Lazo-Aguirre and delivered or sold the same drugs in the Houston-Galveston area. They obtained payments in cash for the drugs and returned it to Lazo-Aguirre. Lazo-Aguirre paid these other persons in cash or with drugs.
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 Kenneth Cusick is prosecuting the case.
Chinese National Who Threatened to Shoot School Children Pleads Guilty to Gun and ID Theft ChargesRead the Press Release
HOUSTON - A 22-year-old Chinese national who resided in La Marque has admitted to possessing a firearm while being an illegal alien and to aggravated identity theft, announced U.S. Attorney Ryan Patrick along with Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) Special Agent in Charge Mark Dawson and Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Special Agent in Charge Fred Milanowski.
Xiangyu Zhang remained in the United States two years after his visa expired. He came to law enforcement’s attention in July 2018 when he entered an internet chat session on the Department of Veteran’s Affairs (VA) Crisis Line and threated to kill school children by using firearms. Zhang is a not a U.S. veteran.
“We believed that this individual presented a real danger to the community based on the threats that he made to the Veteran’s Crisis Hotline,” said Dawson. “Within days of being alerted to those threats, our special agents were able to conduct their investigation, secure an arrest warrant and locate and arrest the subject before he had the opportunity to harm anyone.”
Law enforcement arrested him at a gas station located close to his residence. At that time, he was sitting in a vehicle in possession of two firearms, including an AM-15 rifle. Both firearms had rounds in the chamber.
“Holding people responsible for unlawfully being in possession of firearms and fighting violent crime remains at the forefront of the ATF mission,” said Milanowski. “Working with our partners at HSI to become a force multiplier will ensure our community is safe.”
Upon Zhang’s arrest, law enforcement also found a passport belonging to a woman who lived in the Dallas area. Zhang had stolen the woman’s purse containing the passport in August 2017 after he served as her Uber driver. Within hours of stealing her purse, Zhang, while using the woman’s identity without her permission, attempted to purchase several high end items online from Apple.
Law enforcement also found a picture of a fake U.S. passport page with Zhang’s picture and the woman’s passport number on Zhang’s phone.
A few months after stealing the purse, Zhang defrauded Bank of America in March 2018 for more than $11,000. In late June 2018, and a few days before making those threats on the VA chat line, Zhang stole an IRS refund check from his neighbor’s mailbox and deposited it into his bank account.
U.S. District Judge Gray Miller accepted Zhang’s pleas today and set sentencing for March 19, 2019. At that time, he faces up to 10 years imprisonment and a maximum $250,000 fine for the firearm possession charge. He also faces a mandatory two years for the identity theft which must be served consecutively to any other prison term imposed.
He has been and will remain in custody pending that hearing.
HSI and ATF conducted the investigation. Assistant U.S. Attorney Alamdar Hamdani is prosecuting the case.
Brazilian Couple Sentenced for International Kidnapping of GrandsonRead the Press Release
HOUSTON - An international businessman and his wife have learned their fate for international parental kidnapping, announced U.S. Attorney Ryan K. Patrick and Special Agent in Charge Perrye K. Turner of the FBI. A federal jury deliberated for more than two days following a 10-day trial before convicting Carlos Otavio Guimaraes, 68, and Jemima Guimaraes, 66.
Today, U.S. District Judge Alfred Bennett heard arguments from both the prosecution and defense teams. The government requested the court impose a term of imprisonment advised by the sentencing guidelines or slightly higher, while the defense asked for a non-custodial sentence. Ultimately, the court imposed a three-month sentence for Carlos Guimaraes, while Jemima was ordered to serve one month. Both will also be ordered to serve one year of supervised release following their terms of imprisonment during which time they will be required to remain in the United States. The court continued its order that both their U.S. and Brazilian passports remain surrendered and they cannot obtain new ones. The court also ordered the defendants may not have any contact with their fugitive co-defendant daughter, but placed no prohibition on communicating with their grandson.
Each was also ordered to pay a $75,000 fine. Restitution will be determined at a later date, but could be in excess of $400,000.
At the hearing, the judge also heard from the victim – the child’s father – who gave impassioned testimony about how this has impacted him and how much he misses his son. He stated that he has been “emotionally crippled by this experience. What my family and I have endured at the hands of these defendants has been so painful that I cannot imaging inflicting it on another human soul. How do you take away a parent’s right to have their child in their life?” He further noted that he has been consumed by grief. “My boy was just gone,” he said. “For years, I have begged and begged and begged them to bring my boy back, but they refused.”
The father also told the court the court that each trip to Brazil to see his son for even a short time cost him close to $20,000 and that, for years, he had been working an enormous amount of hours - averaging 100 a week - just to finance his fight to try to get his son back.
He also noted that what these defendants did was devoid of any concern for the child’s well-being, that the decision was motivated by greed, power, control and fear – fear not of him, but that he would get in the way of them taking the child for themselves. “They sought to enforce their own brand of vigilante justice,” he said, adding that the couple had undermined orders, lied to the court and succeeded in obtaining full custody of the child, noting they had stripped him of his parental rights, “making a mockery of the United States judicial system.”
At trial, the jury heard that the child’s grandparents helped illegally retain the child in Brazil away from his father in Houston. The mother and minor child traveled to Brazil to attend a family event in July 2013, but were supposed to return to Houston no later than July 20, 2013. The child was never returned to the United States.
The jury also heard how the child’s mother allegedly orchestrated a plan to travel to Brazil for her brother’s wedding via an agreed travel agreement as part of the pending divorce. While in Brazil, she went to a Brazilian state court and obtained custody of the minor. From that moment forward, the father of the child was limited in his ability to visit with his son. The visits he did have were supervised by a guard hired by the child’s mother. Currently, despite a Harris County divorce ruling in 2015 favorable to the father, his ability to maintain a relationship with his son has been incredibly difficult. The child no longer speaks English, and the father had to learn Portuguese to navigate the Brazilian legal system and communicate with his son.
The child’s father testified and told the jury that all he ever wanted was for his son to return to Houston so he could be a constant presence in his life.
Evidence was also presented which included the fact that the grandparents support their daughter by providing housing and employment as well as attorney fees. Additionally, when the father would visit Brazil, Jemima was present for most of the exchanges of the child. Video evidence showed both Carlos, Jemima, the hired guard and their Brazilian attorney at one of the exchanges.
The defense attempted to convince the jury that the Brazilian court rulings should be respected despite the fact they disregard the father’s position. The rulings found the United States was not the place to raise a child in the “egotistical profile of the American family.”
The defense provided an expert on the Hague Convention to testify, but that expert was unable to give even one example of a child that has been returned from Brazil when the abducting parent was alive and domiciled in Brazil. Further, the expert acknowledge the U.S. State Department has found Brazil to be non-compliant with the provisions of the Hague Convention on the Civil Aspects of International Child Abduction since 2005.
The defendants claimed the mother was fleeing from domestic violence, but the jury rejected that defense. The jury ultimately found Carlos and Jemima Guimaraes aided and abetted their daughter in the international parental kidnapping of their grandson.
They were permitted to remain on bond and voluntarily surrender to a U.S. Bureau of Prisons facility to be determined in the near future.
The child’s mother - Marcelle Guimaraes, 40 - is also charged but remains a fugitive in Brazil. She is presumed innocent unless and until convicted through due process of law.
The FBI conducted the investigation. Assistant U.S. Attorneys Sherri L. Zack and Kimberly Ann Leo are prosecuting the case.
If you are a parent or legal custodian who has been deprived of your child through abduction, please see the Department of Justice’s International Parental Kidnapping webpage for more information.
16 Convicted in Large-Scale Conspiracy Involving Local ABT Gang RingRead the Press Release
CORPUS CHRISTI, Texas – A total of 16 South Texas residents have been convicted of charges including conspiracy to participate in racketeering activity involving the Aryan Brotherhood of Texas (ABT) which also involved methamphetamine distribution, announced U.S. Attorney Ryan K. Patrick.
Today, U.S. District Judge Nelva Gonzales Ramos sentenced James Randall Lee Ross, 45, OF Corpus Christi, aka “Silver” to 292 months in federal prison followed by five years of supervised release.
Previously sentenced were Corpus Christi residents David Wayne Frost aka Spider, 47, Michael Lee Craig aka Rooster, 44, Mark Clairborne Pennington aka Shiloh, 59, Brian Russell Campbell aka Iceman aka Loyalty, 35, Johnny Glenn Voiles aka Panhead, 47, Jimmy Curtis Mullenax III aka Curt, 40, Kenneth Brandenburh aka K-Dog, 44, Matthew Jay Thompson aka Pie Face, 33, Pedro Campos aka Pete, 59, Abby Telge, 28, Johnny Hagensick, 49, Randy Stasney, 60, Allen Saunders, 35, Blanca Blanche Sandoval, 40, and Sue Campbell, 34.
They received terms of imprisonment ranging from 120 to 292 months in federal prison.
All defendants and others known and unknown, were members and associates of the ABT, a criminal organization whose members and associates engaged in the illegal trafficking of controlled substances, extortion, murder, attempted murder, assault with a dangerous weapons and other acts of violence. The organization operated throughout Texas, including Corpus Christi.
One of the purposes of the criminal enterprise was to keep victims in fear of the enterprise and in fear of its leaders, members and associates through threats of violence and actual violence. Ross, Frost, Craig, Pennington, Campbel, and Voiles were convicted of conspiracy to participate in racketeering activity involving ABT between 1995 and 2017. Ross, Frost and Craig were also convicted of violent crimes in aid of racketeering activity occurring in September 2015. All 16 were also convicted of conspiracy to possess with the intent to distribute methamphetamine between July 2012 to 2017.
Evidence was discussed and presented during the multiple plea and sentencing hearings in this case regarding the extent of this criminal organization. The ABT is a powerful race-based Texas state-wide organization operating inside and outside state and federal prisons throughout the State of Texas and the United States. ABT was established in the early 1980s within the Texas Department of Criminal Justice (TDCJ). It modeled itself after and adopted many of the precepts and writings of the Aryan Brotherhood, a California-based prison gang formed in the California prison system during the 1960s. ABT offers protection to white inmates if they join the criminal enterprise. They adhere to the motto that "God Forgives, Brothers Don't." Membership is for life. The only way out of the gang is by death. ABT members refer to the gang as the "Family" and promote "whites as the superior race."
The ABT operate with a strict chain of command and a defined militaristic ranking structure. The hierarchy of each faction is broken up into five separate TDCJ regions. Each region has the following chain of command: general, major, captain, lieutenant, sergeant-at-arms and soldier. The ranking structure remains constant; however, frequent personnel changes (promotions, demotions, terminations) occur within the rank structure. The "Wheel," a five-person steering committee, governs each faction of the ABT. Each Wheel member is a general who is responsible for appointing his subordinate within his respective regions. Each Wheel member also appoints an inside major (in-custody gang member) and outside major (referring to someone in the "free world") in each of his respective region. These majors, in turn, are responsible for appointing their subordinate captains and lieutenants who, in turn, appoint their sergeants. Wheel members typically remain in place regardless of custody status unlike other ranking members who typically lose rank when their custody status changes.
The ABT has been involved in racketeering activities almost since its inception. Identity theft, counterfeiting and check fraud constitute the most prevalent non-violent crimes committed by ABT members/prospects/associates. Through the commission of these offenses, along with the distribution of narcotics, the ABT generates income for the enterprise.
ABT members take a "blood oath" to obey superiors. Failure to obey may result in a severe beating or death, which is carried out by other ABT members/prospects/associates. ABT members/prospects/associates that cooperate with law enforcement authorities are also subject to murder.
Multiple defendants were also convicted of a large-scale drug-trafficking conspiracy involving kilogram quantities of pure methamphetamine that had been trafficking in the Corpus Christi area since at least 2012 and continuing to 2018.
Immigration and Custom’s Enforcement’s Homeland Security Investigations; Bureau of Alcohol, Tobacco, Firearms and Explosives; Drug Enforcement Administration; Texas Department of Public Safety; Nueces County Sheriff’s Office; Corpus Christi Police Department; and the U.S. Marshals Service conducted the joint investigation.
Assistant U.S. Attorneys Lance Watt and Julie K. Hampton are prosecuting the case.
Texas Businessman Pleads Guilty to Conspiracy to Obstruct Justice in Connection with Venezuela Bribery SchemeRead the Press Release
HOUSTON – A former procurement officer of Venezuela’s state-owned and state-controlled energy company, Petroleos de Venezuela S.A. (PDVSA), pleaded guilty today. Alfonso Eliezer Gravina Munoz (Gravina), of Katy, admitted to his role in a scheme to obstruct an investigation relating to bribes paid by the owner of U.S.-based companies to Venezuelan government officials in exchange for securing additional business with PDVSA and payment priority on outstanding invoices.
U.S. Attorney Ryan K. Patrick, Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division and Special Agent in Charge Mark Dawson of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) in Houston made the announcement.
Gravina, 56, previously worked for PDVSA in Houston. He pleaded guilty today before U.S. District Judge Kenneth M. Hoyt to one count of conspiracy to obstruct an official proceeding. Gravina is scheduled to be sentenced on Feb. 19, 2019, before Judge Gary H. Miller. He was indicted Nov. 15, 2017.
Gravina pleaded guilty to one count of conspiracy to launder money and one count of making false statements on his federal income tax return. Gravina’s plea agreement in that case was a cooperation plea agreement which contemplated the possibility the United States would make a motion to reduce his sentence based on his cooperation. Under the terms of the plea agreement, Gravina agreed to participate in interviews as requested by the United States and to provide “truthful, complete and accurate information” to government agents and attorneys.
According to admissions made in connection with Gravina’s plea in this case, Gravina met periodically with HSI special agents to provide information regarding corruption at PDVSA. Gravina knew U.S. government authorities were investigating corruption at PDVSA and that at the beginning of 2018, the government was focusing on bribes paid by companies controlled by an individual referred to as co-conspirator 1. However, Gravina concealed facts about co-conspirator 1’s bribe payments to PDVSA officials in his interviews with the government. In addition, Gravina informed co-conspirator 1 that U.S. government authorities were investigating co-conspirator 1 and provided that person with information about the investigation, including the topics discussed in Gravina’s meetings with the government. This passing of information led to co-conspirator 1 and others destroying evidence and co-conspirator 1 attempting to flee the country in July 2018.
Gravina becomes the latest individual to plead guilty as part of a larger, ongoing investigation by the U.S. government into bribery at PDVSA. Including Gravina, the Justice Department has announced the guilty pleas of a total of 15 individuals in connection with the investigation.
HSI Houston is conducting the ongoing investigation with assistance from HSI in Boston and Madrid, as well as from IRS - Criminal Investigation. Assistant U.S. Attorneys (AUSAs) John P. Pearson and Robert S. Johnson of the Southern District of Texas are prosecuting the case along with Trial Attorneys Sarah E. Edwards and Sonali D. Patel of the Criminal Division’s Fraud Section. AUSA Kristine Rollinson is handling the forfeiture aspects of the case.
The Fraud Section is responsible for investigating and prosecuting all FCPA matters. Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.
Local Man Handed Major Sentence in Drug and Money Laundering ConspiracyRead the Press Release
CORPUS CHRISTI, Texas – A 55-year-old Robstown man has been ordered to federal prison for nearly 20 years following his multiple convictions as related to a cocaine and heroin conspiracy, announced U.S. Attorney Ryan K. Patrick. A federal jury convicted Rolando Hinojosa Jan. 11, 2018, following a two-day trial of conspiracy to possess with intent to distribute cocaine and heroin, possession of 2.9 kilograms of cocaine and conspiracy to launder narcotics proceeds.
Today, U.S. District Judge Janis Graham Jack ordered him to prison for 235 months. The court also ordered the forfeiture of his interest in his residence and $96,445 seized at the time of his arrest.
At today’s hearing, Judge Jack commented that Hinojosa has been involved in moving a lot of heroin for many years.
During the trial, the jury heard that an undercover officer had begun purchasing heroin from the organization in April 2016. Members of the conspiracy testified that the organization was involved in two types of narcotics trafficking - local, large-scale heroin distribution in Nueces County and interstate distribution of kilogram quantities of cocaine. Hinojosa was the source of supply for both types of narcotics.
The jury also learned about a pre-paid telephone found on Hinojosa’s bedside table that led to authorities discovering the trail of cocaine from Hinojosa to a Kentucky distributor. From further phone analysis, authorities discovered a narcotics courier who had been arrested in August 2017 returning from Kentucky with $76,000 in narcotics currency intended for Hinojosa.
That courier testified at trial that he successfully delivered several kilograms of cocaine to Kentucky in August 2017 after receiving it from Hinojosa.
Hinojosa has been and will remain in custody where he will remain pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The Drug Enforcement Administration and the Texas Department of Public Safety conducted the investigation. Assistant U.S. Attorney Jon Muschenheim is prosecuting the case.
Local Family Sentenced for Money Laundering ConspiracyRead the Press Release
BROWNSVILLE, Texas – The final member of the Magallanes family residing in both Brownsville and Pasadena has been sentenced to conspiring to run a money laundering organization as a part of a larger human smuggling conspiracy based in the Rio Grande Valley, announced U.S. Attorney Ryan K. Patrick. All six family members had pleaded guilty to conspiracy to launder monetary instruments by funneling human smuggling proceeds through their bank accounts with various financial institutions.
Today, U.S. District Judge Fernando Rodriguez Jr. order the leading family member - Veronica Ofelia Magallanes, 41 - to 48 months in federal prison. The court also ordered a money judgment in the amount of $457,000.
Those previously sentenced were Rosa Maria Alvarado, 37, who received a 24-month-term of imprisonment; Bertha Alicia Magallanes, 35, and Paloma Garcia, 36, who were both ordered to serve 12 months in prison; Jose Alfredo Magallanes, 37, was sentenced to 18 months, while the court imposed a 27-month-term upon Jesus Magallanes, 43.
The Magallanes family members engaged in the conspiracy from approximately Jan. 3, 2007, to July 19, 2016. They used Money Gram, Western Union and their personal Wells Fargo bank accounts to launder money given to them which was later provided to human smugglers based in Mexico. The deposits into the Magallanes accounts were made in the United States and foreign countries including Canada, China, Macedonia, Eritrea, Romania, Somalia, Honduras, Guatemala, El Salvador and Mexico. Once they received payments, the Mexico-based human smugglers would later bring illegal aliens into the United States.
This operation grossed a total of approximately $1,296,268.41 over the time of the conspiracy.
Immigration and Customs Enforcement’s Homeland Security Investigations - Financial Crime Unit in Harlingen conducted the two-year investigation. Assistant U.S. Attorney Justin Schorr Dinsdale prosecuted the case.
Multiple Sentences Imposed in Massive Synthetic Narcotics Distribution NetworkRead the Press Release
HOUSTON - The five leaders and eight other co-conspirators have been sentenced for their roles in one of the largest synthetic cannabinoids distribution networks in the United States, announced U.S. Attorney Ryan Patrick. The sentences ranged from 140 months in federal prison for a leader to probation for an hourly wage clerk who sold the drugs.
The defendants were sentenced for their involvement in the manufacture, possession and distribution of synthetic cannabinoids commonly, but mistakenly, referred to as synthetic marijuana.
Today, U.S. District Judge Gray Miller ordered Khader Fahed Tanous, 52, of Manassas, Virginia, who distributed large amounts of synthetic cannabinoids to Houston area distributors, to 121 months imprisonment. Earlier this week, Judge Miller sentenced Muhammad Shariq Siddiqi, 48, of Sugar Land, to 140 months in prison. Siddiqi was a major manufacturer and distributor in the Houston area.
Also sentenced today was Ayisha Khurram, Siddiqi’s partner in manufacturing and distributing synthetic cannabinoids as was the de facto owner of the Smoke Zone Khalil Munier Khalil, 43, of Spring. The Smoke Zone was the most prolific distribution store front in the country for synthetic cannabinoids. Khalil was sentenced to a 135-month prison term while Khurram received a 95-month term of imprisonment.
Today, Judge Miller further sentenced Sayed Ali, 53, of Sugar Land; Abdalnour Izz, 33, of Houston; Steve Amira, 61, of Richmond; Mohammed Rafat Taha, 29, of Spring; and Frank Muratalla, 25, of Downey, California.
Siddiqi paid Ali to dilute, mix and apply the chemicals he supplied to the plant material. Izz delivered the drugs and collected payments for Tanous. Amira was the owner of Houston Beverage and a synthetic cannabinoids distributor. Ali received a sentence of 50 months, while Izz and Amira were each sentenced to 36 months.
Muratalla, who worked for out of state manufacturers of synthetic cannabinoids here in Houston, and Taha, a clerk at Smoke Zone, who sold packages of synthetic cannabinoids were both sentenced to four-year-terms of probation.
Also sentenced this week were other distributors and managers involved in the distribution of synthetic cannabinoids in the Houston area. Those included Salem Fahed Tannous, 58, of Houston (Khader Tanous’s brother who collected money for him from synthetic narcotics sales), Ali Tafesh, 37, of Houston, who owned and distributed the drugs from a store named Azell Cell Phones, Hazim Hisham Qadus, 34, a permanent resident alien who resided in Houston and distributed drugs from a store named Moon Mart and Azell Cell Phones and Nagy Ali, 61 of Spring, the manager of Smoke Zone. Tannous was ordered to serve 49 months in prison, while Tafesh, Qadus will both serve sentences of 97 months. Nagy Ali received a 120-month-prison term for his role.
Throughout the three days of hearings and the handing down of these sentences, the court’s repeated theme was its concern that the dangerous drugs these defendants were manufacturing were being marketed and distributed to juveniles.
Siddiqi and Qadus are not U.S. Citizens and are expected to face deportation proceedings following the completion of their prison terms.
Omar Maher Alnasser, a 37-year old resident of Sugar Land and former University of Houston professor, was previously sentenced to 12 months and one day in prison for aiding and abetting an unlicensed money transmitting business. He had admitted he was paid to wire more than $200,000 in U.S. currency from a bank in the United States to accounts in the country of Jordan.
The dismantling of this organizations and the convictions are the result of a multi-year, multi-agency federal investigation into one of the largest synthetic distribution networks in the nation and operated in the Houston area dubbed “We Can Hear You Now.”
All 13 defendants sentenced this week were convicted of conspiring to distribute a variety of synthetic cannabinoids, all Schedule I controlled substances. In committing the offense, several co-conspirators were accused in a scheme to defraud by marketing their products as though they were safe labeled the drugs as “potpourri” or “incense,” with some labels including false information such as “100% legal,” “lab certified” or “not for human consumption,” when in fact these products were dangerous drugs.
There are no standards for making synthetic cannabinoids which contain hazardous chemicals often imported from China that, when smoked or ingested, could have serious (sometimes deadly) side effects. Frequently, as in this case, various “brands” are mixed together in the same cement mixer, so two packets of a brand-named product may have the identical chemicals. Often, the same cement mixers are used for multiple batches of synthetic cannabinoids, so the “final” products may also be contaminated with other drugs or toxic chemicals from previous batches.
The amounts of synthetic cannabinoid in packages may also vary even within the same batches because the product is not mixed uniformly within the cement mixers. Therefore, “hot packages” with a higher concentration of the applied chemical are a common danger. According to the Center for Disease Control, synthetic cannabinoids may cause hallucinations, delusions, psychosis, suicidal thoughts and violent behavior. The health problems associated with the drug include heart attack, stroke, kidney failure, breathing problems and muscle damage.
The drugs the defendants admitted to having distributed were all Schedule I drugs – substances or chemicals with no currently accepted medical use, have a high potential for abuse, are the most dangerous drugs of all scheduled drugs and have potential for severe psychological or physical dependence. The packaging was also typical of synthetic cannabinoids - contained colorful illustrations that targeted not only drug abusers, but also children and adolescents.
In connection with this case, authorities are still seeking Ziad Mahmoud Alsalameh, 56, of Pearland, and Aqil Khader, 33, of Houston. They are considered fugitives and warrants remain outstanding for their arrests. Anyone with information about their whereabouts are asked to contact DEA at 713-693-3000.
The Drug Enforcement Administration, Houston Police Department, Bureau of Alcohol, Tobacco, Firearms and Explosives and IRS – Criminal Investigation conducted the four-year investigation with the assistance of the U.S. Postal Inspection Service, Conroe Police Department, sheriff’s offices in Harris and Polk counties, Texas Alcoholic Beverage Commission and the Montgomery County District Attorney’s Office. Assistant U.S. Attorneys John Jocher and Nancy Herrera prosecuted the case.
Meth Smuggler Handed Significant SentenceRead the Press Release
BROWNSVILLE, Texas – A 36-year-old Brownsville resident has been ordered to federal prison following his conviction of conspiracy and methamphetamine smuggling, announced U.S. Attorney Ryan K. Patrick. A federal jury sitting in Brownsville convicted Jesus Yzaguirre Jr. March 12, 2018, following a six-day trial and less than three hours of deliberation.
Today, U.S. District Judge Rolando Olvera handed Yzaguirre Jr. a 200-month sentence to be immediately followed by five years of supervised release. In handing down the sentence, the court noted the evidence which the government had presented to the jury and Yzaguirre’s attempts to obstruct justice by trying to get others to conceal a van and not talk to investigating agents.
The jury heard that on Feb. 25, 2017, Yzaguirre drove into the United States through the Gateway Port of Entry in Brownsville. At primary inspection, Yzaguirre said he had gone into Mexico to “borrow the van” he was driving from his uncle. He was referred for secondary inspection, at which time he then said he had gone into Mexico to pick up the van which belonged to him. Agents searched the van and discovered 29.4 kilograms of methamphetamine hidden within the floorboard and frame compartments.
Yzaguirre then gave a statement saying he thought he was bringing the van in for another person to use for alien smuggling. The person, a female friend whom he “bumped into in Matamoros,” asked him to pick up the van at a parking lot, according to his statement. She was to pay him $50 for taking it into the U.S. and parking it at a certain location. Yzaguirre said he had previously done the same thing with a different van which he parked somewhere in Brownsville.
Further investigation revealed Yzaguirre had in fact crossed a commercial van on three other occasions, each time going through the Sarita checkpoint. Agents interviewed an acquaintance of Yzaguirre who said Yzaguirre had admitted to knowing there were drugs in the van when he was arrested and that he had been working for “La Guera” who was in charge of the drug loads.
Yzaguirre was convicted of conspiracy to possess with intent to distribute 29.4 kilograms of methamphetamine, possession with intent to distribute the methamphetamine, conspiracy to import methamphetamine and importation of methamphetamine with intent to distribute
Yzaguirre 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 Customs and Border Protection. Assistant U.S. Attorneys Oscar Ponce and Angel Castro are prosecuting the case.