Southern District of Texas
Press releases recorded for this federal judicial district.
Former Employee Charged with Attempted ExtortionRead the Press Release
HOUSTON – A 28-year-old former employee of BP Corporation North America Inc. has been charged with five counts of wire fraud, announced Acting U.S. Attorney Abe Martinez.
On Nov. 29, 2017, a federal grand jury in Houston returned a five-count indictment against George Koutsostamatis, of Chicago.
He was taken into custody in Chicago last week. He made his appearance in Houston federal court this morning before U.S. Magistrate Judge Dena Palermo. Trial has been set for Jan. 29, 2018, before U.S. District Sim Lake.
According to the indictment, Koutsostamatis was an employee of BP. While employed there, Koutsostamatis allegedly emailed BP and falsely represented to them that he had infiltrated BP’s computer network system. He then allegedly demanded payment or he would release information stored on the computer network.
If convicted of wire fraud, he faces up to 20 years in prison and a possible $250,000 fine.
The FBI Houston Cyber Task Force investigated this case. The FBI Houston Cyber Task Force is a multi-agency task force responsible for investigating, pursuing and defeating cyber criminals who seek to exploit our nation’s most significant computer systems, networks and critical infrastructure. The Houston field office of the FBI led the investigation with assistance from U.S. Attorney’s Offices in Houston and Chicago, FBI – Chicago field office and the National Crime Agency in the United Kingdom.
An indictment is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.
Federal Judge Imposes Sentence for Attempted Meth ImportationRead the Press Release
LAREDO, Texas – A 34-year-old Kansas man has been ordered to federal prison for organizing an attempt to import more than five kilograms of heroin through the Lincoln Juarez Bridge in Laredo, announced Acting U.S. Attorney Abe Martinez. Misael Segovia pleaded guilty
Today, U.S. District Judge Diana Saldana imposed a 140-month term of imprisonment to be immediately followed by five years of supervised release.
On Sept. 27, 2016, Amy Leigh Housholder, 31, of Emporia, Kansas, applied for admission into the United States at the Lincoln Juarez Bridge in downtown Laredo. At that time, a search of her vehicle uncovered false compartments in the battery containing approximately five kilograms of heroin.
The Investigation uncovered Segovia as the individual who had arranged for the drugs to be imported into the United States and ultimately transported to Chicago. When confronted with this information, Segovia admitted he had helped Householder by translating between her and the individuals in Mexico supplying the heroin.
Segovia had taken Householder from Emporia, Kansas, to Wichita where he purchased a bus ticket for her to travel to Laredo. Housholder was previously sentenced 50 months in federal prison for her role in the scheme.
Segovia was permitted to remain on bond and voluntarily surrender to a U.S. Bureau of Prisons facility to be determined in the near future.
Customs and Border Protection and Immigration and Customs Enforcement’s Homeland Security Investigations conducted the investigation. Assistant U.S. Attorneys Alfredo De La Rosa and Christopher Dale Howard are prosecuting the case.
Houston Man Taken into Custody on Charges of TerrorismRead the Press Release
Kaan Sercan Damlarkaya, an 18-year-old U.S. citizen from Houston, has been charged with unlawfully distributing explosive making information and attempting to provide material support to Islamic State of Iraq and al-Sham (ISIS), a designated foreign terrorist organization.
Acting Assistant Attorney General for National Security Dana J. Boente, Acting U.S. Attorney Abe Martinez and Special Agent in Charge Perrye K. Turner of the FBI’s Houston Field Office made the announcement.
Authorities arrested Damlarkaya late Friday, Dec. 8, upon the filing of a sealed criminal complaint. It was unsealed this morning as he made his initial appearance before U.S. Magistrate Judge Dena H. Palermo, at which time he was temporarily ordered into custody pending a detention hearing set for Dec. 14.
According to the charges, beginning in or about early August 2017, Damlarkaya engaged in online communications with undercover FBI agents and other sources. During those conversations, he allegedly shared his intentions to travel overseas to fight for ISIS or, if unable, to commit an attack in the United States. The charges also indicate Damlarkaya asked if he could provide a farewell video to be published should he follow through with an attack resulting in his death in order to inspire others. Damlarkaya further provided instructions on how to build an AK-47 or AR-15 assault rifle from readily available parts in order to avoid detection from authorities, according to the criminal complaint.
Additionally, Damlarkaya provided a formula to alleged ISIS supporters for the explosive, Triacetone Triperoxide (TATP), and instructions on how to use TATP in a pressure cooker device that contained shrapnel, according to the allegations. He also discussed the use of a machete or Samurai sword as an alternative to a gun or explosive. The criminal complaint further indicates he claimed to carry a knife in the event he was stopped by law enforcement and that he slept with a machete under his pillow in case his house was ever raided.
In early November 2017, according the court documents, Damlarkaya explained “if I buy a gun or supplies for a bomb, they [presumably law enforcement] will heat up pressure [j]ust like a few months ago when I was trying an operation but they found out.” The criminal complaint further alleges that Damlarkaya claims to have attempted to get to Syria on two other occasions, but failed.
If convicted of unlawfully distributing explosives information or attempting to provide material support to a designated foreign terrorist organization, Damlarkaya faces a possible 20-year-maximum term of imprisonment. A criminal complaint is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless convicted through due process of law. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes. If convicted of any offense, the sentencing of the defendant will be determined by the court after considering the advisory Sentencing Guidelines and other statutory factors.
The FBI’s Joint Terrorism Task Force conducted the investigation. Assistant U.S. Attorneys Alamdar Hamdani and Rob Jones of the Southern District of Texas are prosecuting the case along with Trial Attorneys Gregory Gonzalez and Kevin Nunnally of the Counterterrorism Section of the Justice Department’s National Security Division.
Owner of Home Health Agency Sentenced in Absentia to 80 Years in Prison for Involvement in $13 Million Medicare Fraud Conspiracy and for Filing Fraudulent Tax ReturnsRead the Press Release
The owner of a Houston home health agency was sentenced today to 80 years in prison for his role in a $13 million Medicare fraud scheme and for filing false tax returns.
Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, Acting U.S. Attorney Abe Martinez 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’s (HHS-OIG) Dallas Region and Special Agent in Charge D. Richard Goss of the Houston Field Office of the Internal Revenue Service Criminal Investigation (IRS-CI) made the announcement.
Ebong Tilong, 53, of Sugarland, Texas, was sentenced by U.S. District Judge Melinda Harmon of the Southern District of Texas. In November 2016, after the first week of trial, Tilong pleaded guilty to one count of conspiracy to commit healthcare fraud, three counts of healthcare fraud, one count of conspiracy to pay and receive healthcare kickbacks, three counts of payment and receipt of healthcare kickbacks, and one count of conspiracy to launder monetary instruments. In June 2017, Tilong pleaded guilty to two counts of filing fraudulent tax returns. Tilong failed to appear for his original sentencing, which was scheduled for Oct. 13, 2017.
According to the evidence presented at trial and Tilong’s admissions in connection with his guilty plea, from February 2006 through June 2015, Tilong and others conspired to defraud Medicare by submitting over $10 million in false and fraudulent claims for home health services to Medicare through Fiango Home Healthcare Inc. (Fiango), owned by Tilong and his wife, Marie Neba, 53, also of Sugarland, Texas. The trial evidence showed that using the money that Medicare paid for such fraudulent claims, Tilong paid illegal kickbacks to patient recruiters for referring Medicare beneficiaries to Fiango for home health services. Tilong also paid illegal kickbacks to Medicare beneficiaries for allowing Fiango to bill Medicare using beneficiaries’ Medicare information for home health services that were not medically necessary or not provided, the evidence showed. Tilong falsified medical records and directed others to falsify medical records to make it appear as though the Medicare beneficiaries qualified for and received home health services. Tilong also attempted to destroy evidence, blackmail a witness, and suborn perjury from witnesses, including a co-defendant while in the federal courthouse, the evidence showed.
According to the evidence presented at trial and his admissions to the tax offenses, from February 2006 to June 2015, Tilong received more than $13 million from Medicare for home health services that were not medically necessary or not provided to Medicare beneficiaries.
In connection with his guilty plea to the tax offenses, Tilong admitted that to maximize his gains from the Medicare fraud scheme, he created a shell company called Quality Therapy Services (QTS) to limit the amount of tax that he paid to the IRS on the proceeds that he and his co-conspirators stole from Medicare. According to his plea agreement, in 2013 and 2014, Tilong wrote almost a million dollars in checks from Fiango to QTS, purportedly for physical-therapy services that QTS provided to Fiango’s Medicare patients. The evidence showed that QTS did not provide those services. According to his plea agreement, in 2013 and 2014, Tilong’s fraudulent tax scheme caused the IRS a tax loss of approximately $344,452.
To date, four others have pleaded guilty or been convicted based on their roles in the fraudulent Medicare scheme at Fiango. Nirmal Mazumdar, M.D., of Houston, Texas, the former medical director of Fiango, pleaded guilty to a scheme to commit health care fraud for his role at Fiango. Daisy Carter, 58, of Wharton, Texas, and Connie Ray Island, 49, of Houston, Texas, two patient recruiters for Fiango, pleaded guilty to conspiracy to commit health care fraud for their roles at Fiango. Neba was convicted after a two-week jury trial of one count of conspiracy to commit health care fraud, three counts of health care fraud, one count of conspiracy to pay and receive health care kickbacks, one count of payment and receipt of health care kickbacks, one count of conspiracy to launder monetary instruments and one count of making health care false statements.
On Aug. 11, Neba was sentenced to 75 years in prison and Island was sentenced to 33 months in prison. On Oct. 3, Mazumdar was sentenced to time served with three years of home confinement. Carter is awaiting sentencing.
The case was investigated by the FBI, IRS-CI and HHS-OIG under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Texas. The case is being prosecuted by Trial Attorney William S.W. Chang, Senior Trial Attorney Jonathan T. Baum, and Trial Attorney Andrew Pennebaker of the Fraud Section.
The Fraud Section leads the Medicare Fraud Strike Force, which is part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. The Medicare Fraud Strike Force operates in nine locations nationwide. Since its inception in March 2007, the Medicare Fraud Strike Force has charged over 3,500 defendants who collectively have falsely billed the Medicare program for over $12.5 billion.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to www.stopmedicarefraud.gov.
Man Pleads Guilty to Tax Avoidance ConspiracyRead the Press Release
HOUSTON – A local bar owner has entered a guilty plea to conspiring with others to defraud the United States by failing to pay taxes on income he received from vending machines located in the bars he owned, announced Acting U.S. Attorney Abe Martinez.
In the plea agreement filed in the record of the case, Matthew J. Mitchell admitted he had partial ownership of multiple bars in the Houston area that operated under the name “On the Rox.” Mitchell conspired with others to conceal the cash income from vending machines located in the bars from the IRS.
According to the plea agreement, Mitchell admitted he failed to report to the IRS a total of $276,806 in income for tax years 2010, 2011 and 2012. Mitchell’s failure to pay taxes on this income resulted in a tax loss to the United States of $63,386.
U.S. District Judge Sim Lake accepted the plea and has set sentencing for March 15, 2018. At that time, Mitchell will face up to five years in federal prison and a possible $250,000 maximum fine. Mitchell was permitted to remain on bond pending that hearing.
IRS-Criminal Investigation conducted the investigation. Assistant U.S. Attorney Justin R. Martin is prosecuting the case.
Houston Bounty Hunter and Others Indicted in International Sex Trafficking ConspiracyRead the Press Release
HOUSTON – Two U.S. defendants are in custody on allegations of conspiracy to commit sex trafficking by force, fraud and coercion, as well as visa fraud, announced Acting U.S. Attorney Abe Martinez.
A grand jury in Houston returned an indictment against purported Houston bounty hunter Luis De Jesus Rodriguez aka Htown Hunter, 26, and his girlfriend Helen Leon Mesa, 28, yesterday, which was unsealed today upon their arrests. They are expected to make their initial appearances before U.S. Magistrate Judge Dena Palarmo on Monday, Dec. 11, 2017 at 10:00 a.m. The indictment remains sealed as to another charged but not as yet in custody.
According to the partially-unsealed indictment, this international criminal network targeted, recruited and exploited young women in Colombia and the United States. They were allegedly given false promises of a better life by working for Rodriguez and Mesa as dancers at a Houston nightclub. During the victims’ recruitment, the defendants also directed them to watch YouTube videos portraying Rodriguez as a bounty hunter, creating the false impression that he was a law enforcement officer, according to the allegations.
The indictment further alleges that once the victims arrived in the United States, Rodriguez and Mesa placed the victims in a strip club in Houston and forced them into signing debt bondage contracts, ranging from $13,200 to $25,000. Rodriguez and Mesa also allegedly required victims to make daily payments of approximately $250 towards their debt. The charges also allege that to compel the victims into paying this daily quota, Rodriguez and Mesa engaged in a coercive scheme which involved threats to harm the victims and their families, constant monitoring and surveillance of their locations and cellphones and the ultimately forcing them into engaging in commercial sex acts.
According to the indictment, the defendants also engaged in widespread visa fraud to facilitate the international transportation of the victims. The traffickers and their conspirators allegedly assisted the victims in obtaining fraudulent visas by creating fictitious background and occupations to increase the likelihood that their visa applications would be approved. They also coached the victims as to what to say during the visa application interviews, according to the indictment.
If convicted of sex trafficking, the defendants face a minimum of 15 years and up to life imprisonment. The visa fraud charges carry a maximum of 10 years of federal imprisonment.
The Department of State - Diplomatic Security Service, Houston Police Department Vice Division – Human Trafficking Unit and IRS - Criminal Investigation conducted the investigation with assistance from the FBI as part of the Human Trafficking Rescue Alliance (HTRA). The General Attorney’s Office of Colombia, Harris County Sheriff’s Office and Harris County District Attorney’s Office also assisted with the overall investigative effort.
Established in 2004, the United States Attorney’s office in Houston formed the HTRA to combine resources with federal, state and local enforcement agencies and prosecutors, as well as non-governmental service organizations to target human traffickers while providing necessary services to those that the traffickers victimized. Since its inception, HTRA has been recognized as a national model in identifying and assisting victims of human trafficking and prosecuting those engaged in trafficking offenses. In 2016, the Human Trafficking Rescue Alliance received $1.5 million in federal funds from the Bureau of Justice Assistance and the Office for Victims of Crime through the Enhanced Collaborative Model Anti-Human Trafficking Task Force Program, which provides funding to investigate and prosecute cases of human trafficking and provide services to victims.
Assistant U.S. Attorneys Eun Kate Suh and Zahra Jivani Fenelon are prosecuting the case with assistance from the Department of Justice Civil Rights Division, including the Human Trafficking Prosecution Unit.
An indictment is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.
Wisconsin Man Sentenced for Enticing and Traveling to Have Sex with a MinorRead the Press Release
HOUSTON – A 42-year-old Wisconsin man has been ordered to prison following his convictions of traveling to Texas with intent to engage in illicit sexual conduct and enticement of a four-year-old child, announced Acting U.S. Attorney Abe Martinez. Benjamin David Sherwood pleaded guilty Aug. 23, 2017.
Today, Chief U.S. District Judge Lee H. Rosenthal took into consideration that Sherwood had a prior juvenile adjudication for third degree sexual assault from Wisconsin as well as the fact that he has been battling a long-term sexual interest in children. She then sentenced Sherwood to 135 months for the traveling and enticement convictions that will run concurrently. Sherwood was further ordered to be placed on supervised release for the rest of his life following completion of his prison term, 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.
The investigation into Sherwood began on Aug. 10, 2015, when an agent with Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) participated in an undercover operation. The agent entered a chat room that was dedicated to the discussion and promotion of child abuse that focused on infants and toddlers. She portrayed herself as a mother of a two-year-old female.
From August 2015 through May 2017, Sherwood and the undercover agent communicated via chats, emails, text messages and phone conversations in which they discussed Sherwood wanting to have sex with the toddler. Sherwood admitted he was very “turned on” by the fact that the child wore a diaper and used a pacifier.
On May 12, 2017, Sherwood was arrested in Houston after traveling from Wisconsin to meet the undercover agent and whom he believed was her four-year-old daughter. Sherwood had rented a hotel room, brought the child clothes and a stuffed animal, and arranged the room in anticipation of having sex with the child.
HSI conducted the investigation.
Assistant U.S. Attorney 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."
Six Plead Guilty to Conspiracy to Transport Undocumented AliensRead the Press Release
LAREDO, Texas – Six Texas residents have entered guilty pleas related to a human smuggling operation, announced Acting U.S. Attorney Abe Martinez.
Those pleading guilty today include brothers Lucio Segundo, 31, and Christopher Segundo, 23, of Giddings. On Monday, Francisco Segura, 29, also of Giddings; Alex De La Rosa, 23, of San Marcos; Jesus Perez, 24, of La Grange; and David Cedillo, 46, of Austin, entered their respective pleas of guilty. All admitted to a conspiracy to transport illegal aliens.
During the conspiracy, the defendants at times smuggled the undocumented aliens in the trunks of rental vehicles. More often, they were transported in trailers that had been specifically modified with false bottoms under vehicle floorboards. As many as a dozen aliens could be transported at one time lying down in those false compartments. Construction materials would be placed on the trailers to make it appear that the trailers were carrying legitimate loads.
Various drivers were recruited to transport the aliens northbound from Laredo through Border Patrol checkpoints between Nov. 1, 2015, and July 1, 2017.
U.S. Magistrate Judge Guillermo Garcia accepted the pleas today. All will remain in custody pending their sentencing hearings which will set in the near future before U.S. District Judge Diana Saldaña.
Immigration and Customs Enforcement’s Homeland Security Investigations conducted the investigation. Assistant U.S. Attorneys Michael Bukiewicz and Alfredo De La Rosa are prosecuting the case.
Several Local Residents in Custody in Operation City ShieldRead the Press Release
CORPUS CHRISTI, Texas – A total of 12 Corpus Christi men are now in custody following enforcement actions resulting from Operation City Shield, a joint venture to identify violent offenders, stop gun violence and protect the community, announced Acting U.S. Attorney Abe Martinez.
Each defendant has been charged in separate and unrelated indictments for federal firearms and/or narcotics violations.
A federal grand jury charged Adam Flores, 36, Joe Parker, 30, Justin Moreno, 27, Jessie Zuniga, 36, Cruz Gonzalez, 29, Fred Corona, 24, Akeem Olajuwon Edwards, 30, Gavino Flores, 24, and Adam Rodriguez, 35, for being felons in possession of firearms and ammunition.
In a separate indictment, Andrew Hernandez, 34, is charged with knowingly and intentionally possessing with intent to distribute a synthetic cannabinoid mixture and a substance containing a detectable amount of a schedule I controlled substance analogue. Hernandez is also charged with using a firearm in furtherance of a drug trafficking crime and with being a felon in possession of a firearm and ammunition.
Zuniga, Parker, Andrew Hernandez, Moreno, Adam Flores and Corona were taken into custody yesterday and made their initial appearance before U.S. Magistrate Judge Jason Libby. At that time, they were ordered temporarily into custody pending detention hearings set for Friday, Dec.. 8, at 9:00 a.m. Edwards, Gavino Flores, Rodriguez and Gonzalez had already been in custody and are expected in federal court on the new charges in the near future.
Both Cody Hernandez, 27, and Timothy Allen, 38, were indicted previously for being felons in possession of a firearm and ammunition. Allen was also charged with possessing with intent distribute methamphetamine. Allen has already pleaded guilty to both of his charges and is pending sentencing in January 2018. Cody Hernandez’s case is still pending.
The felon in possession of firearms charge carries a maximum penalty of 10 years imprisonment and a possible $250,000 maximum fine. Those charged with possession with intent to distribute controlled substances face up to 20 years of imprisonment and a possible $1 million maximum fine. Hernandez and Allen further face up to five years in prison for using a firearm in furtherance of a drug trafficking crime which must be served consecutively to any other prison term imposed.
The Bureau of Alcohol, Tobacco, Firearms and Explosives; Corpus Christi Police Department; Immigration and Customs Enforcement’s Homeland Security Investigations; U.S. Marshals Service and Texas Department of Public Safety conducted the investigation. Assistant U.S. Attorney Lance Watt 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.
Corpus Christi Man Sent to Prison on Child Pornography ChargeRead the Press Release
CORPUS CHRISTI, Texas – A 46-year-old local man has been sentenced to prison for his conviction of distribution of child pornography, announced Acting U.S. Attorney Abe Martinez. Ronald Eugene Lowrey Jr. pleaded guilty July 6, 2017.
Today, U.S. District Judge Nelva Gonzalez Ramos handed Lowrey a sentence of 90 months in federal prison. In handing down the sentence, Judge Ramos took into consideration the total number of images and videos of child pornography found in both Lowrey’s computer and external hard drive device. Additionally, the court considered Lowrey’s lack of criminal history and his compliance while out on bond pending sentencing. Lowrey will serve five years of supervised release following completion of his prison term, during which time he will have to comply with numerous requirements designed to restrict his access to children and the Internet and Lowrey will also be ordered to register as a sex offender.
Lowrey came to the attention of law enforcement when the Texas Attorney General’s Office conducted an investigation into a peer-to-peer file sharing network in 2014. Through that investigation, authorities identified a specific computer with suspected child pornography. Authorities later downloaded a total of eight such files that were being distributed via that device. The computer was later linked to Lowrey in Corpus Christi.
Law enforcement executed a search warrant at his residence, at which time he admitted to using the file sharing program and to viewing child pornography. A forensic examination of the items seized during execution of the search warrant revealed approximately 37 images and 246 videos of child pornography, including those that authorities had previously downloaded.
Lowrey was permitted to remain on bond and voluntarily surrender to a U.S. Bureau of Prisons facility to be determined in the near future.
Texas Attorney General’s Office, Corpus Christi Police Department’s Internet Crimes Against Children Task Force and the FBI conducted the investigation.
This case, prosecuted by Assistant U.S. Attorney Elsa Salinas, 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."
4 Sentenced for Roles in Local Meat Market Armed RobberiesRead the Press Release
HOUSTON – Four Houston area men have been sentenced for their involvement in a string of robberies of La Michoacana establishments that occurred during the Christmas 2015 season, announced Acting U.S. Attorney Abe Martinez. Billie Hawkins, and Laroderick Martin, both 21, Jirron Curtis, 22, and Marcus Malbro, 19, pleaded guilty at varying times between November 2016 and May 2017 to aiding and abetting two robberies and one count of either discharging or brandishing a firearm.
Today, U.S. District Judge Gray Miller ordered Hawkins to serve a total of 330 months in federal prison - 210 months for the two robberies and 120 months for discharging a firearm during the commission of a crime of violence which will be served consecutively. In imposing the sentence, Judge Miller considered Hawkins role as a leader in the robberies. Curtis and Martin received 60 and 50 months, respectively, for the robbery convictions, in addition to consecutive sentences of 120 months for discharging a firearm during the commission of a crime of violence for a total of 180 and 170 months in prison. Malbro was ordered to serve a 154-month term of imprisonment, which includes 70 months for the two robberies and a consecutive 84 months for brandishing a firearm during the commission of a crime of violence. In handing down the sentences, Judge Miller considered the roles in the offense, the facts that firearms were used and the way the victims were treated. Each will also serve three years of supervised release following completion of their prison terms and were further ordered to pay restitution to La Michoacana Meat Markets and Barri Financial Group.
The men robbed Houston Area La Michocana Meat Markets, to include the Barri Financial Group Kiosks within the store, from Dec. 21, 2015, though Dec. 30, 2015. In each robbery, they were armed, masked and often fired shots as they entered the store. The defendants usually scouted the stores prior to the robbery to ensure there were no guards or security. They would typically drive a stolen vehicle to commit the robbery and then meet a co-conspirator to depart in a “switch” vehicle.
All have been and will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The Bureau of Alcohol, Tobacco, Firearms and Explosives; FBI; Houston Police Department and the Harris County Sheriff’s Office conducted the investigation. Assistant U.S. Attorney Celia Moyer is prosecuting the case.
Trucker Sent to Prison for Trafficking 33 Kilograms of CocaineRead the Press Release
CORPUS CHRISTI, Texas – A 46-year-old Edinburg man has learned his fate following his involvement in a conspiracy to possess with the intent to distribute cocaine, announced Acting U.S. Attorney Abe Martinez. Hugo Morales pleaded guilty Aug. 3, 2017, admitting he conspired with others to distribute 33 kilograms of cocaine.
Today, Senior U.S. District Judge Janis Graham Jack handed Morales a 70-month sentence to be immediately followed by five years of supervised release.
On Feb. 11, 2017, authorities conducted a roadside inspection of the tractor-trailer Morales was driving. At that time, more than 33 kilograms of cocaine was found hidden inside tarps strapped on his flatbed trailer.
As part of his plea, Morales also agreed to the forfeiture of five vehicles including a Hummer H2, a Chevrolet Corvette, a Chevrolet Camaro and a Harley Davidson Motorcycle as well as cash and jewelry.
Morales 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 Drug Enforcement Administration conducted the investigations with assistance of the Texas Department of Public Safety. Assistant U.S. Attorney Robert D. Thorpe Jr. is prosecuting the case.
Texas Resident Pleads Guilty to Providing Material Support to ISISRead the Press Release
Asher Abid Khan, 23, of Spring, Texas, pleaded guilty today to providing material support to the Islamic State of Iraq and al-Sham (ISIS), a designated foreign terrorist organization.
Acting Assistant Attorney General for National Security Dana J. Boente, Acting U.S. Attorney Abe Martinez and Special Agent in Charge Perrye K. Turner of the FBI’s Houston field office made the announcement.
The investigation began in 2014 when Khan and his friend, who was living in South Texas, devised a plan to travel to Turkey and then to Syria for the purpose of fighting on behalf of ISIS. Khan had been living with a relative in Australia. Prior to leaving for Turkey from there, Khan told Mohamed Zuhbi, a Turkish-based foreign terrorist fighter facilitator, that he wanted to join ISIS.
Khan provided instructions to his friend on travel and how to reach him once Khan arrived in Turkey. During this part of the planning phase, it was Khan - not his friend - who was in touch with Zuhbi. On Feb. 24, 2014, Khan and his friend met in Istanbul, Turkey. At that time, Khan gave his South Texas friend money, knowing he intended to travel to Syria and join and fight with ISIS.
Khan then departed from the Istanbul Airport in Turkey and returned to the United States after his family tricked him into coming home to Houston because of an alleged hospitalization of his mother.
As soon as Khan returned to the U.S., he contacted Zuhbi with the purpose of introducing him to his friend so he could enter Syria and join ISIS as a fighter with Zuhbi’s help. Khan then provided to his friend a Turkish cell phone number for reaching Zuhbi. The following day, Khan’s friend sent an electronic message to Khan indicating he had “been delivered :),” by Zuhbi, but that he was not with ISIS yet. Over the next few months, the friend attended fighter training camps and stayed in touch with Zuhbi and Khan. During that time, Khan offered his friend money and instructed him to try to get to ISIS.
On Aug. 11, 2014, the friend finally made it to ISIS with Khan and Zuhbi’s assistance. After September 2014, he had ceased all forms of communications. On Dec. 25, 2014, the friend’s mother received an electronic message explaining that her son had died while fighting.
Zuhbi is still at large and is believed to be residing in either Turkey or Syria. There are pending criminal charges in the Southern District of Texas against Zubhi. Anyone with information about his whereabouts is asked to contact the FBI at 713-693-5000.
U.S. District Judge Lynn N. Hughes accepted the guilty plea today and has set sentencing for March 5, 2018 at 1:30 p.m. At that time, Khan faces up to 15 years in federal prison and a maximum fine of $250,000. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes. If convicted of any offense, the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
The FBI’s Joint Terrorism Task Force conducted the investigations. Assistant U.S. Attorneys Carolyn Ferko, Alamdar Hamdani and Steve Mellin of the Southern District of Texas are prosecuting the case with the assistance of the Counterterrorism Section of the Justice Department’s National Security Division.
Texas Resident Convicted of Providing Material Support to ISISRead the Press Release
HOUSTON – Asher Abid Khan, 23, of Spring, pleaded guilty today to providing material support to the Islamic State of Iraq and al-Sham (ISIS), a designated foreign terrorist organization.
Acting U.S. Attorney Abe Martinez, Acting Assistant Attorney General for National Security Dana J. Boente and Special Agent in Charge Perrye K. Turner of the FBI’s Houston Field Office made the announcement.
“We aggressively investigate and prosecute persons who provide material support to terrorist organization like ISIS,” said Martinez. “Khan provided ISIS a battlefield soldier to further the terrorist organization’s violent agenda. Khan’s guilty plea is indicative of the priority this office has placed on those who would give aid and comfort to terrorists operating in the United States and abroad. ”
The investigation began in 2014 when Khan and his friend, who was living in South Texas, devised a plan to travel to Turkey and then to Syria for the purpose of fighting on behalf of ISIS. Khan had been living with a relative in Australia. Prior to leaving for Turkey from there, Khan told Mohamed Zuhbi, a Turkish-based foreign terrorist fighter facilitator, that he wanted to join ISIS.
Khan provided instructions to his friend on travel and how to reach him once Khan arrived in Turkey. During this part of the planning phase, it was Khan - not his friend - who was in touch with Zuhbi. On Feb. 24, 2014, Khan and his friend met in Istanbul, Turkey. At that time, Khan gave his South Texas friend money, knowing he intended to travel to Syria and join and fight with ISIS.
Khan then departed from the Istanbul Airport in Turkey and returned to the United States after his family tricked him into coming home to Houston because of an alleged hospitalization of his mother.
As soon as Khan returned to the U.S., he contacted Zuhbi with the purpose of introducing him to his friend so he could enter Syria and join ISIS as a fighter with Zuhbi’s help. Khan then provided to his friend a Turkish cell phone number for reaching Zuhbi. The following day, Khan’s friend sent an electronic message to Khan indicating he had “been delivered :),” by Zuhbi, but that he was not with ISIS yet. Over the next few months, the friend attended fighter training camps and stayed in touch with Zuhbi and Khan. During that time, Khan offered his friend money and instructed him to try to get to ISIS.
On Aug. 11, 2014, the friend finally made it to ISIS with Khan and Zuhbi’s assistance. After September 2014, he had ceased all forms of communications. On Dec. 25, 2014, the friend’s mother received an electronic message explaining that her son had died while fighting.
Zuhbi is still at large and is believed to be residing in either Turkey or Syria. There are pending criminal charges in the Southern District of Texas against Zubhi. Anyone with information about his whereabouts is asked to contact the FBI at 713-693-5000.
U.S. District Judge Lynn N. Hughes accepted the guilty plea today and has sentencing for March 5, 2018, at 1:30pm. At that time, Khan faces up to 15 years in federal prison and a maximum fine of $250,000. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes. If convicted of any offense, the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
The FBI’s Joint Terrorism Task Force conducted the investigations. Assistant U.S. Attorneys Carolyn Ferko, Alamdar Hamdani and Steve Mellin of the Southern District of Texas are prosecuting the case along with the Counterterrorism Section of the Justice Department’s National Security Division.
Suburban Man Convicted in Second Federal CaseRead the Press Release
HOUSTON – A 54-year-old Kingwood man has entered a guilty plea to failing to appear in federal court for his conviction related to a Houston-area mortgage fraud scheme, announced Acting U.S. Attorney Abe Martinez.
Oscar Cantalicio Ortiz was previously convicted of conspiring to commit bank, mail and wire fraud. He had been permitted to remain on bond pending his sentencing, but was ordered to wear a GPS monitoring device secured around his leg as a condition of his release. On April 21, 2017, the device was cut off and left on the side of the road in southwest Houston. His vehicle was later found abandoned in a parking lot in the same area of town.
On April 24, 2017, Ortiz was set to appear before U.S. District Judge Kenneth M. Hoyt for sentencing in the mortgage fraud scheme. He failed show for that hearing.
On Aug. 23, 2017, he turned himself in to the U.S. Embassy in Mexico City, Mexico. Ortiz told the FBI at the Embassy that he was a fugitive from the United States and had decided to flee because he wanted more time to work on a project. He was flown back to Houston the following day.
Upon his arrival, agents noted that Ortiz had changed his appearance by growing facial hair and dying it and his hair red. Ortiz admitted he had purchased a second car to replace the one he abandoned and drove across the border into Mexico where he stayed until his arrest.
While a fugitive, Judge Hoyt imposed a 262-month term of imprisonment for the conspiracy charge in absentia.
He is set for sentencing on the failure to appear charge Feb. 12, 2018. At that time, he faces another possible 10 years in prison. He will remain in prison pending that hearing.
The FBI conducted the investigation of both cases. Assistant U.S. Attorney Melissa Annis is prosecuting the cases.
Mexican National Sentenced for Possession with Intent to Distribute MarijuanaRead the Press Release
CORPUS CHRISTI, Texas – A 30-year-old citizen and national of Mexico has been ordered to federal prison for Marijuana trafficking, announced Acting U.S. Attorney Abe Martinez. Ismael Padron-Garcia pleaded guilty Aug. 3, 2017.
Today, U.S. District Judge Janis Graham Jack sentenced Padron to a total of 24 months imprisonment. Not a U.S. citizen, he is expected to face deportation proceedings following his release from prison.
On May 15, 2017, law enforcement learned of suspected illegal aliens on a train stopped approximately two miles north of the Refugio county line on Highway 77. Authorities responded to the scene and witnessed Padron-Garcia jump off of a gondola car. He was apprehended shortly thereafter in a nearby cornfield.
Inside of the train, they discovered several bundles later confirmed to contain marijuana, totaling 205.66 kilograms. The investigation later linked Padron to the bundles.
Padron-Garcia has been and will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
Border Patrol, Drug Enforcement Administration, the Union Pacific Railroad Police and the Refugio County Sheriff’s Office conducted the investigation. Assistant U.S. Attorney Amanda L. Gould is prosecuting the case.
Mexican National Pleads Guilty to Importing MethRead the Press Release
LAREDO, Texas – A Mexican man has pleaded guilty to a conspiracy charge for his role in importing methamphetamine into the United States, announced Acting U.S. Attorney Abe Martinez.
On Oct. 8, 2017, Omar Martinez-Cervantes, 34, arrived at the Lincoln Juarez Bridge port of entry in Laredo driving a Chevrolet Cruze. At that time, he claimed to be driving to Houston to visit his family. However, agents soon discovered 20.48 kilograms of methamphetamine within the rocker panels of his vehicle. He initially claimed to have no knowledge of the drugs, however he later stated to agents that he thought he knew who may have put the drugs in the car.
At today’s hearing, he admitted he knowingly imported the methamphetamine into the United States.
Sentencing will be set at a later date before U.S. District Judge Diana Saldana. At that time, Hernandez faces a mandatory minimum of 10 years in federal prison and a possible $10 million fine. He will remain in custody pending that hearing.
Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) conducted the investigation. Assistant U.S. Attorney Christopher A. dos Santos is prosecuting the case.
Mexican National Pleads Guilty in Deadly Transporting CaseRead the Press Release
LAREDO, Texas – A Mexican man has pleaded guilty to a conspiracy charge for his role in an alien transporting event which resulted in the deaths in three persons, announced Acting U.S. Attorney Abe Martinez.
Omar Gonzalez-Herrera, 25, of Nuevo Laredo, Mexico, admitted during this re-arraignment today that he was hoping to be paid $1,500 in exchange for guiding a group of 14 persons across the Rio Grande River and into the United States.
Gonzalez-Herrera was originally arrested Aug. 2, 2017, upon the filing of a criminal complaint. On that date, Border Patrol (BP) agents in Laredo encountered footprints near the riverbanks of the Rio Grande River. After following the foot signs, agents encountered a group of 14 people who were all undocumented aliens.
The investigation led to the discovery that three people were swept away by the river current and ultimately died. One of the victims was a five-year-old boy.
Sentencing will be set at a later date before U.S. District Judge Diana Saldana. At that time, Gonzalez-Herrera faces up to life in federal prison and a possible $250,000 fine. He will remain in custody pending sentencing.
BP and Immigration and Customs Enforcement’s Homeland Security Investigations conducted the investigation. Assistant U.S. Attorney Christopher A. dos Santos is prosecuting the case.
Last of 13 Pleads Guilty to Alien SmugglingRead the Press Release
LAREDO, Texas – A 26-year-old El Cenizo man has entered a guilty plea for his role in a conspiracy to smuggle undocumented aliens, announced Acting U.S. Attorney Abe Martinez. Jose Francisco Morales Jr. is the last of 13 to be convicted in the conspiracy in which illegal aliens were smuggled past Border Patrol checkpoints between September 2015 and June 2017.
Previously pleading guilty were the leaders of the organization - Jose Andres Gongora Jr., 34, Sandra Nelly Chapa-Gongora, 33, and Carlos Enrique Reyna-Garcia, 29, all of Laredo.
Other members of the organization acted as scouts, transporters and stash house operators and had also previously pleaded guilty. Those included Jose Andres Alberto Gongora Sr., 46, Maria De Lourdes Gongora, 36, Mario Adalberto Ramirez, 34, Juan Antonio Luna, 47, all of El Cenizo; Jose Garcia III, 36, Abraham Garza, 24, and Guillermo Valdovinos-Rios, 55, all of Laredo; Luis Rodriguez Jr., 19, of Dallas; and Joseph Graves, 25, of Savannah, Georgia.
Members of the smuggling organization would drop undocumented aliens off in the brush and then guide them around Border Patrol checkpoints. They would then pick up the aliens once they passed the checkpoints and transport them further north.
“The dismantlement of the organization resulted from a joint investigation between the Joint Task Force – West (JTF-W) South Texas Campaign Joint Targeting Team, U.S. Marshals Service and state and local law enforcement partners,” said JTF-W STC Chief of Staff Robert Duff. “Enhanced collaborations have reinforced our commitment to pursue dangerous criminal organizations.”
U.S. Magistrate Judge Diana Song Quiroga accepted the plea today. Sentencing will be set for a later date before U.S. District Judge Marina Garcia Marmolejo. At that times, each defendant faces up to 10 years in federal prison and a possible $250,000 maximum.
Border Patrol and Immigration and Customs Enforcement’s Homeland Security Investigations conducted the investigation. Assistant U.S. Attorney (AUSA) Alfredo De La Rosa and Special AUSA Andrew Hunt are prosecuting the case.
Pharmacy Owner Pleads Guilty in Connection with Health Insurance Fraud SchemeRead the Press Release
McALLEN, Texas ‐ The 45-year-old owner of Penitas Family Pharmacy has pleaded guilty in connection with a scheme to defraud Blue Cross Blue Shield of Texas, announced Acting U.S. Attorney Abe Martinez. Omar Espericueta, of Palmhurst, pleaded guilty today, joining co-defendant Oscar Elizondo, 47, of Pharr, who pleaded guilty on Wednesday.
Both men conspired to submit more than $1.7 million in fraudulent claims through Penitas Family Pharmacy aka Riverside Pharmacy to Blue Cross Blue Shield of Texas for expensive pain patches and scar creams.
Espericueta employed marketers, such as Elizondo, to target employees of entities throughout the Rio Grande Valley with health insurance through Blue Cross and other private insurance carriers. 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 Blue Cross. Other employees saw a doctor, but it was a doctor with whom Espericueta had made arrangements to sign fraudulent prescriptions. Espericueta admitted to providing the doctor with prescription pain medication as well as cash “loans” that the doctor never repaid.
Employees were never told that Espericueta’s Pharmacy planned to use their health insurance information to bill Blue Cross for several thousand dollars worth of prescriptions for each employee, many of whom stated they did not want or need the patches or creams. In many instances, Espericueta’s Pharmacy billed Blue Cross for prescriptions that were never delivered to employees, including multiple refills that were never requested.
Both men face up to 10 years in federal prison and a $250,000 maximum fine. Sentencing has been set for Feb. 7, 2018, before U.S. District Judge Randy Crane.
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.
SBM Offshore N.V. and US-Based Subsidiary Resolve Foreign Corrupt Practices Act Case Involving Bribes in Five CountriesRead the Press Release
HOUSTON – SBM Offshore N.V. (SBM), a Netherlands-based company specializing in the manufacture and design of offshore oil drilling equipment, and its wholly owned U.S. subsidiary, SBM Offshore USA Inc. (SBM USA), have agreed to resolve criminal charges and pay a criminal penalty of $238 million in connection with schemes involving the bribery of foreign officials in Brazil, Angola, Equatorial Guinea, Kazakhstan and Iraq in violation of the Foreign Corrupt Practices Act (FCPA). SBM USA pleaded guilty today in connection with the resolution.
Acting U.S. Attorney Abe Martinez, Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division and Special Agent in Charge Mark Dawson of Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI) Houston Field Office made the announcement.
“This corrupt scheme involved some of the highest-level executives within the company, spanned five countries, and lasted for more than a decade,” said Cronan. “The resolution announced today demonstrates the Criminal Division’s continuing commitment to work closely with our foreign partners to hold both companies and individuals accountable for their actions as we continue to level the playing field for ethical and honest businesses to compete in the marketplace.”
“Deterring corporate crime requires enforcing the law on multiple fronts,” said Martinez. “These cases involve both individual and corporate misconduct, which the guilty pleas reflect. We will continue to aggressively investigate and prosecute individuals and corporations who violate the FCPA and those who misuse our financial system to do so.”
“This case exemplifies how HSI works diligently with our foreign law enforcement partners to promote and protect international trade practices, ensuring a fair and equal playing field for U.S. companies and consumers,” said Dawson.
SBM entered into a deferred prosecution agreement in connection with a criminal information filed today in the Southern District of Texas charging the company with conspiracy to violate the anti-bribery provisions of the FCPA. The case is assigned to U.S. District Judge David Hittner. In addition, SBM USA pleaded guilty and was sentenced by Judge Hittner on a one-count criminal information charging the company with conspiracy to violate the anti-bribery provisions of the FCPA. Pursuant to its agreement with the Department, SBM agreed to pay a total criminal penalty of $238 million to the United States, including a $500,000 criminal fine and $13.2 million in criminal forfeiture that SBM agreed to pay on behalf of SBM USA.
According to the companies’ admissions and court documents, beginning by at least 1996 and continuing until at least 2012, SBM conspired to violate the FCPA by paying more than $180 million in commissions to intermediaries, knowing that a portion of those commissions would be used to bribe foreign officials in Brazil, Angola, Equatorial Guinea, Kazakhstan and Iraq. SBM made these payments in order to influence those officials, for the purpose of securing improper advantages and obtaining or retaining business with state-owned oil companies in the five named countries. SBM acknowledged that it gained at least $2.8 billion from projects it obtained from these state-owned oil companies.
The Justice Department resolution follows guilty pleas by two former SBM executives. On Nov. 9, Anthony Mace, the former CEO of SBM and a former member of the board of directors of SBM USA, pleaded guilty to one count of conspiracy to violate the FCPA. On Nov. 6, Robert Zubiate, a former SBM USA executive, pleaded guilty to one count of conspiracy to violate the FCPA. Mace and Zubiate are awaiting sentencing.
In 2014, SBM settled with the Dutch Public Prosecutor’s Office (Openbaar Ministerie) over related conduct and paid the Netherlands a total $200 million in disgorged profits and a $40 million fine. SBM has paid a combined worldwide total in criminal penalties in excess of $475 million.
The Department reached this resolution based on a number of factors, including the fact that while SBM brought the conduct to the attention of the Criminal Division’s Fraud Section and Dutch authorities, it did not provide a complete disclosure for approximately one year; that SBM did cooperate with the Department’s investigation, including an accelerated investigation into bribery conduct related to Kazakhstan and Iraq; and that SBM has undertaken significant remedial measures, including terminating and demoting employees who were involved in the criminal conduct, terminating longstanding agency agreements and implementing a new and enhanced system of internal controls to address and mitigate corruption and compliance risks. Therefore, SBM was entitled to a 25 percent reduction off of the bottom of the U.S. Sentencing Guidelines range. In addition, the Department considered SBM’s inability to pay a fine.
In calculating its fine, the Department credited SBM’s payment of penalties to the Openbaar Ministerie and the payment of penalties likely to be paid to the Brazilian Ministério Público Federal (MPF).
The Department of Justice is grateful to Brazil’s MPF, the Netherlands’ Dutch Public Prosecutor’s Office (Openbaar Ministerie) and Switzerland’s Office of the Attorney General and Federal Office of Justice for providing substantial assistance in gathering evidence during this investigation.
ICE-HSI investigated the case. Assistant U.S. Attorney Suzanne Elmilady of the Southern District of Texas and Trial Attorney Dennis R. Kihm and Assistant Chief Tarek Helou of the Fraud Section are prosecuting the case. The Criminal Division’s Office of International Affairs also provided substantial assistance in this matter. The FBI’s International Corruption Squad and the IRS - Criminal Investigation assisted with portions of the investigation of this 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/foreign-corrupt-practices-act.
More than a Dozen Charged in Large-Scale Conspiracy Involving Local Aryan Brotherhood RingRead the Press Release
CORPUS CHRISTI, Texas – A total of 14 Corpus Christi residents are now in custody and face up to life in prison for their alleged roles related to the activities of the Aryan Brotherhood of Texas (ABT), announced Acting U.S. Attorney Abe Martinez.
The charges include conspiracy to participate in racketeering activity involving the activities of the ABT, violent crimes in aid of racketeering activity and conspiracy to possess with the intent to distribute methamphetamine.
A federal grand jury returned the indictment on Nov. 29, 2017, against James Randall Ross aka Silver, 45, 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, and Allen Saunders, 35. The indictment was unsealed today.
Ross made his initial appearance this morning, at which time he was ordered detained pending trial set for Jan. 8, 2018. With the exception of Voiles, who is not as yet in custody, the remaining defendants are expected to make their initial appearances before U.S. Magistrate Judge B. Janice Ellington at 2:00 p.m. today.
Voiles is believed to be in the Houston area. Anyone with information about his whereabouts is asked to contact Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) at 1-866-347-2423.
The indictment charges Ross, Frost, Craig, Pennington, Campbell and Voiles in with conspiracy to participate in racketeering activity involving ABT activities between 1995 and November 2017. The indictment alleges they 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 weapon and other acts of violence and intimidation. They allegedly operated throughout Texas, including the Corpus Christi Division of the Southern District of Texas and elsewhere. In addition, one of the purposes of the criminal enterprise was allegedly 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 and Craig are also charged with violent crimes in aid of racketeering activity in September 2015.
All 14 arrested today are charged with conspiracy to possess with the intent to distribute methamphetamine between July 2012 to November 2017.
All face up to life in prison. The racketeering charges also carry a possible $250,000 maximum fine, while the drug trafficking conviction carries a possible maximum $10 million fine, upon conviction.
HSI; 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 investigation. Assistant U.S. Attorneys Lance Watt and Julie K. Hampton 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.
SBM Offshore N.V. and United States-Based Subsidiary Resolve Foreign Corrupt Practices Act Case Involving Bribes in Five CountriesRead the Press Release
SBM Offshore N.V. (SBM), a Netherlands-based company specializing in the manufacture and design of offshore oil drilling equipment, and its wholly owned U.S. subsidiary, SBM Offshore USA Inc. (SBM USA), have agreed to resolve criminal charges and pay a criminal penalty of $238 million in connection with schemes involving the bribery of foreign officials in Brazil, Angola, Equatorial Guinea, Kazakhstan and Iraq in violation of the Foreign Corrupt Practices Act (FCPA). SBM USA pleaded guilty today in connection with the resolution.
Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, Acting U.S. Attorney Abe Martinez of the Southern District of Texas and Special Agent in Charge Mark Dawson of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI) Houston Field Office made the announcement.
“This corrupt scheme involved some of the highest-level executives within the company, spanned five countries, and lasted for more than a decade,” said Acting Assistant Attorney General Cronan. “The resolution announced today demonstrates the Criminal Division’s continuing commitment to work closely with our foreign partners to hold both companies and individuals accountable for their actions as we continue to level the playing field for ethical and honest businesses to compete in the marketplace.”
“Deterring corporate crime requires enforcing the law on multiple fronts,” said Acting U.S. Attorney Martinez. “These cases involve both individual and corporate misconduct, which the guilty pleas reflect. We will continue to aggressively investigate and prosecute individuals and corporations who violate the FCPA and those who misuse our financial system to do so.”
“This case exemplifies how HSI works diligently with our foreign law enforcement partners to promote and protect international trade practices, ensuring a fair and equal playing field for U.S. companies and consumers,” said HSI Special Agent in Charge Dawson.
SBM entered into a deferred prosecution agreement in connection with a criminal information filed today in the Southern District of Texas charging the company with conspiracy to violate the anti-bribery provisions of the FCPA. The case is assigned to U.S. District Judge David Hittner. In addition, SBM USA pleaded guilty and was sentenced by Judge Hittner on a one-count criminal information charging the company with conspiracy to violate the anti-bribery provisions of the FCPA. Pursuant to its agreement with the Department, SBM agreed to pay a total criminal penalty of $238 million to the United States, including a $500,000 criminal fine and $13.2 million in criminal forfeiture that SBM agreed to pay on behalf of SBM USA.
According to the companies’ admissions and court documents, beginning by at least 1996 and continuing until at least 2012, SBM conspired to violate the FCPA by paying more than $180 million in commissions to intermediaries, knowing that a portion of those commissions would be used to bribe foreign officials in Brazil, Angola, Equatorial Guinea, Kazakhstan and Iraq. SBM made these payments in order to influence those officials, for the purpose of securing improper advantages and obtaining or retaining business with state-owned oil companies in the five named countries. SBM acknowledged that it gained at least $2.8 billion from projects it obtained from these state-owned oil companies.
The Justice Department resolution follows guilty pleas by two former SBM executives. On Nov. 9, Anthony Mace, the former CEO of SBM and a former member of the board of directors of SBM USA, pleaded guilty to one count of conspiracy to violate the FCPA. On Nov. 6, Robert Zubiate, a former SBM USA executive, pleaded guilty to one count of conspiracy to violate the FCPA. Mace and Zubiate are awaiting sentencing.
In 2014, SBM settled with the Dutch Public Prosecutor’s Office (Openbaar Ministerie) over related conduct and paid the Netherlands a total $200 million in disgorged profits and a $40 million fine. SBM has paid a combined worldwide total in criminal penalties in excess of $475 million.
The Department reached this resolution based on a number of factors, including the fact that while SBM brought the conduct to the attention of the Criminal Division’s Fraud Section and Dutch authorities, it did not provide a complete disclosure for approximately one year; that SBM did cooperate with the Department’s investigation, including an accelerated investigation into bribery conduct related to Kazakhstan and Iraq; and that SBM has undertaken significant remedial measures, including terminating and demoting employees who were involved in the criminal conduct, terminating longstanding agency agreements and implementing a new and enhanced system of internal controls to address and mitigate corruption and compliance risks. Therefore, SBM was entitled to a 25 percent reduction off of the bottom of the U.S. Sentencing Guidelines range. In addition, the Department considered SBM’s inability to pay a fine.
In calculating its fine, the Department credited SBM’s payment of penalties to the Openbaar Ministerie and the payment of penalties likely to be paid to the Brazilian Ministério Público Federal (MPF).
The Department of Justice is grateful to Brazil’s MPF, the Netherlands’ Dutch Public Prosecutor’s Office (Openbaar Ministerie) and Switzerland’s Office of the Attorney General and Federal Office of Justice for providing substantial assistance in gathering evidence during this investigation.
ICE-HSI investigated the case. Trial Attorney Dennis R. Kihm and Assistant Chief Tarek Helou of the Fraud Section and Assistant U.S. Attorney Suzanne Elmilady of the Southern District of Texas are prosecuting the case. The Criminal Division’s Office of International Affairs also provided substantial assistance in this matter. The FBI’s International Corruption Squad and the Internal Revenue Service’s Criminal Investigation Division assisted with portions of the investigation of this 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/foreign-corrupt-practices-act.
Laredo Man Indicted for Unlawful Possession of More Than 100 FirearmsRead the Press Release
LAREDO, Texas – A 72-year-old resident of Laredo has appeared in court on allegations he possessed more than 100 firearms, even though he was a convicted felon, announced Acting U.S. Attorney Abe Martinez.
A federal grand jury returned the indictment against Javier J. Trevino on Nov. 21, 2017. He was taken into custody yesterday and made his initial appearance before U.S. Magistrate Judge Diana Song Quiroga today.
According to the indictment, Trevino was found in possession of 123 firearms on Aug. 20, 2016. Trevino is a convicted felon and thereby prohibited from possessing a firearm per federal law. These firearms allegedly included handguns, rifles with high capacity magazines and shotguns.
If convicted, Trevino faces up to 10 years in federal prison as well as a $250,000 maximum fine.
The Bureau of Alcohol, Tobacco, Firearms and Explosives conducted the investigation with the assistance of the Webb County Sheriff’s Department.
Assistant U.S. Attorney Christopher dos Santos 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.
Former City Commissioner Convicted in Health Insurance Fraud SchemeRead the Press Release
McALLEN, Texas ‐ A 47-year-old former Pharr city commissioner has been convicted in connection with a scheme to defraud Blue Cross Blue Shield of Texas, announced Acting U.S. Attorney Abe Martinez.
Oscar Elizondo participated in a conspiracy to submit more than $1.7 million in fraudulent claims to Blue Cross Blue Shield of Texas for expensive pain patches and scar creams.
As a marketer for Penitas Family Pharmacy (aka Riverside Pharmacy) in Penitas, Elizondo targeted employers that carried employee health insurance through Blue Cross, such as the City of Pharr, Frontera Produce and Point Isabel Independent School District, among others. Working with contacts at those entities, Elizondo and other marketers offered meals, drinks and promises of “free” prescription pain patches and scar creams to entice employees to turn over their insurance information.
Elizondo’s co-conspirators then used the insurance information, along with fraudulent prescriptions, to submit fraudulent and medically unnecessary claims to Blue Cross. The insurance company was billed for prescriptions for individuals who never received pain patches or scar creams or who never saw a doctor to obtain a valid prescription. Other employees saw a doctor, but it was a doctor involved in the scheme who received kickbacks, including prescription pain medication, to write prescriptions for all patients Elizondo and other co-conspirators brought him.
In addition, Penitas Family Pharmacy billed Blue Cross for prescription refills that were never requested by, or delivered to, patients.
Elizondo faces up to 10 years in federal prison and a $250,000 maximum fine. Sentencing has been set for Feb. 7, 2018, before U.S. District Judge Randy Crane.
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.
Another Hit with Significant Sentence in Hostage Taking ConspiracyRead the Press Release
McALLEN, Texas – A 21-year-old Mission area man has been ordered to federal prison for his involvement in an illegal alien hostage taking scheme, announced Acting U.S. Attorney Abe Martinez.
Juan Perez-Alcoser pleaded guilty to a conspiracy to commit hostage taking, joining Luis Aguilar Jr., 19; brothers Alhan Sanchez, 20, and Aaron Sanchez, 21, and Ricardo Renteria, 26, all of Mission; and Renteria’s nephew Ricardo Renteria-Rivera, 23, a Mexican citizen illegally present in the United States, who had previously pleaded guilty to a conspiracy to commit hostage taking change in the same case.
Today, U.S. District Judge Micaela Alvarez sentenced Perez-Alcoser to 160 months in federal prison. At the hearing, Judge Alvarez noted that his behavior was slightly less culpable than the other defendants but that it was still a serious matter. “People were stolen like merchandise,” she noted. “You’re selling people to make money,” she added when comparing the criminal behavior to that of slavery.
On Sept. 5, 2017, the court ordered Aguilar to serve 350 months in federal prison, while brothers Alhan and Aaron Sanchez received 324 and 195 months, respectively. Renteria-Rivera was ordered to serve a 290-month-sentence, while his uncle will serve a sentence of 300 months imprisonment.
Aguilar Jr.’s father, Luis Aguilar, 64, and Jose Luis Rodriguez-Melchor, 30, both pleaded guilty to being an illegal alien unlawfully present in the United States after deportation and to harboring an illegal alien and were sentenced to 97 and 105 months, respectively. They and Renteria-Rivera are expected to face deportation proceedings following their release from prison, while the remaining defendants, including Perez-Alcoser, were further ordered to serve three years of supervised release following their release from prison.
The investigation revealed that a group of illegal aliens had been held at a stash house awaiting further transportation north. On the night of May 2, 2016, a home invasion crew that included an armed Aguilar Jr. came into the stash house and demanded the aliens leave with them. The caretaker of the stash house was on the ground with a gun to his head. The aliens were then taken to another location where their cell phones and most of their belongings were taken from them.
Some of the undocumented aliens were taken to Aguilar Jr.’s residence which he shared with his father. While there, Aguilar Jr. told them that their initial smuggling arrangements were no good anymore and they had to make new arrangements with him. Aguilar Jr. held them at gunpoint and demanded the aliens give him the names and phone numbers of family members whom he then called to demand $2,000 for their release.
After receiving the money, Aguilar Jr. turned the aliens over to Rodriguez-Melchor to arrange smuggling the aliens further north. Instead, however, Rodriguez-Melchor sold the aliens to Renteria-Rivera for $200 each. Again, family members were called and told they must send additional monies to secure their release. The Renterias carried weapons and threatened to shoot the aliens if anyone tried to escape. Perez-Alcoser was living at the Renteria residence during this time and watched over the aliens while the Renterias were not home, at times carrying a pistol or a rifle. Renteria helped pick up the money and then took the aliens to a parking lot in McAllen where they were supposed to sneak into the air dams of tractor-trailers.
Instead of doing so, three of the aliens turned themselves in to Border Patrol. On May 18, 2016, authorities executed three search warrants. At that time, they seized firearms from the Aguilar, Sanchez and Renteria residences. All of the defendants were eventually located and arrested.
Perez-Alcoser has been in federal custody since his June 22, 2017, arrest and will remain in custody pending transfer to the Bureau of Prisons facility to be determined in the near future.
Immigration and Customs Enforcement’s Homeland Security Investigations and Border Patrol conducted the investigation. Assistant U.S. Attorney Joseph Leonard is prosecuting the case.
Man Pays Price for Trafficking Box Turtles to Corpus ChristiRead the Press Release
CORPUS CHRISTI, Texas - A 34-year-old Louisiana man has been convicted and fined for violating the Lacey Act, announced Acting U.S. Attorney Abe Martinez along with Acting Assistant Director Edward Grace of the U.S. Fish and Wildlife Service (FWS).
Byron Paul Pitre pleaded guilty before Senior U.S. District Judge John D. Rainey today. The court then ordered him to serve three years of probation and pay a $2,500 fine. “Our wildlife and environment are a precious natural resource that we need to protect,” said Judge Rainey.
"One of the primary objectives of the FWS - Office of Law Enforcement is to combat the illegal trafficking of wildlife,” said Grace. “The special agents and federal prosecutors work hard to bring defendants to justice, and hopefully this case provides a deterrence to others that want to profit from the illegal sales of protected wildlife.”
The Lacey Act prohibits people from importing, exporting, transporting, selling, receiving, acquiring or purchasing any fish or wildlife or plant taken, possessed, transported or sold in violation of any law, treaty or regulation of the United States or in violation of any tribal law.
During the hearing today, the court heard that in February 2017, Pitre sold and shipped three wild Louisiana box turtles (Terrapene Carolina) to an undercover agent in Corpus Christi. The sale and transportation of wild box turtles from Louisiana to Texas is illegal under Louisiana state law.
In May 2017, agents executed a search warrant at Pitre’s residence in Louisiana. At that time, he admitted to obtaining turtles that were unlawfully caught in the wild and selling them to individuals in Texas, Nevada and New Jersey. Agents also seized more than 230 box turtles, 119 map turtles, 45 leopard tortoises, 20 Sulcata tortoises and 88 tortoise eggs.
The FWS conducted the investigation. Assistant U.S. Attorney Hugo R. Martinez prosecuted the case.
Local Man Heads to Prison on Multiple Drug and Firearms ChargesRead the Press Release
CORPUS CHRISTI, Texas – A 45-year-old Kingsville man has been ordered to prison following his convictions of trafficking more than a kilogram of cocaine as well as being a felon in possession of both a firearm and ammunition, announced Acting U.S. Attorney Abe Martinez. A federal jury convicted Elias Gonzalez Alvarez Aug. 10, 2017, following a one-day trial and approximately 40 minutes of deliberations.
Today, Senior U.S. District Judge John D. Rainey, who presided over the trial, handed Alvarez a 120-month sentence for his drug trafficking conviction and 108 months each for the felon in possession of a firearm and felon in possession of ammunition convictions. All of the sentences are to be served concurrently and followed by eight years of supervised release.
Authorities had learned that Alvarez had been engaged in trafficking cocaine and, on May 12, 2015, conducted surveillance on his apartment in Corpus Christi. Authorities stopped him for a traffic violation as he left his residence. His license was found to be suspended and Alavarez was arrested. At that time, authorities conducted a search of his vehicle and discovered a box with a bag inside that contained 1.01 kilograms of cocaine.
A search warrant was also executed on his residence where authorities found a .38 caliber handgun and ammunition. Alvarez is a previously convicted felon who is prohibited from possessing firearms or ammunition per federal law.
At trial, the jury also heard that Alvarez is a member of the Calaveras Outlaw motorcycle gang. Today, the court prohibited any further membership with any gang as a condition of his supervised release.
Alavarez had attempted to convince the jury the drugs found in his vehicle and the gun and ammunition discovered in his apartment did not belong to him. They did not believe his claims and found him guilty as charged.
Alvarez was taken into custody following the return of the verdicts in August 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; Bureau of Alcohol, Tobacco, Firearms and Explosives; Texas Department of Public Safety; and the Corpus Christi Police Department conducted the investigation.
Honduran Man Ordered to Prison for Assaulting Federal OfficerRead the Press Release
BROWNSVILLE, Texas – A 35-year-old illegal alien from Honduras has been sentenced to federal prison for assaulting a U.S. Border Patrol (BP) agent, announced Acting U.S. Attorney Abe Martinez. A federal jury returned a guilty verdict Aug. 17, 2017, against Hernan Cortez-Mazariegos following a one-day trial and approximately two hours of deliberations.
Today, U.S. District Judge Andrew S. Hanen handed Cortez-Mazariegos an 18-month sentence. Not a U.S. citizen, Cortez-Mazariegos is expected to face deportation proceedings following his release from prison.
On Nov. 15, 2016, BP agents responded to illegal alien traffic south of the border fence near Azucena street in Brownsville. A BP agent attempted to apprehend Cortez-Mazariegos, but he fled. The agent followed and attempted to arrest him, at which time Cortez-Mazariegos struck him on the side of his face, sustaining minor injury. Cortez-Mazariegos was eventually subdued and apprehended with the assistance of another BP agent.
Cortez-Mazariegos will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The FBI and U.S. Customs and Border Protection conducted the investigation. Assistant U.S. Attorneys David Coronado and Jody Young prosecuted the case.
Former Postal Employee Federally Charged in Case Related to Death of Co-WorkerRead the Press Release
HOUSTON - A 30-year-old Houston man is set to appear in federal court on charges of kidnapping of an employee with the U.S. Postal Service (USPS), announced Acting U.S. Attorney Abe Martinez. The victim was later found deceased.
A criminal complaint was filed under seal Nov. 20, 2017, charging Don Gaines, 30, with kidnapping. Federal authorities arrested him today, at which time the complaint was unsealed. He is expected to appear before U.S. Magistrate Judge Frances Stacy at 10:00 a.m. tomorrow.
The charges allege that Gaines did unlawfully seize, confine, kidnap, abduct and carry away the victim without her consent from Texas to Louisiana for the purpose of killing her or disposing of her body. The victim had been reported missing after she had not shown up for work for two days.
According to the criminal complaint, Gaines worked at the same location as the victim at the time of the alleged crime and was the father of her two children.
On or about Sept. 11, 2017, Gaines allegedly choked the victim in her car and he believed she was dead. However, while transporting her, the woman regained consciousness, according to the charges. Gaines allegedly continued to transport her against her will. The criminal complaint alleges that during the trip, Gaines stopped the car along the feeder road of Interstate 10, took the victim into the woods where he shot her in the head and abandoned her body.
If convicted, Gaines could potentially face the death penalty.
The U.S. Postal Inspection Service conducted the investigation along with the Calcasieu Parish, Louisiana, and Harris County Sheriff’s Offices; Louisiana State University; Louisiana State Police and the Houston Police Department. Assistant U.S. Attorneys John Jocher and Jim McAlister are 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.
5-Time Illegal Alien Handed Significant Sentence for Trafficking MethRead the Press Release
BROWNSVILLE, Texas – A 44-year-old undocumented alien from Matamoros, Tamaulipas, Mexico, has been ordered to federal prison for possession with intent to distribute 4.4 pounds of methamphetamine at the time he attempted an illegal entry into the United States, announced Acting U.S. Attorney Abe Martinez. Juan Francisco Lopez-Hernandez pleaded guilty to both charges Aug. 23, 2016.
Today, U.S. District Judge Andrew S. Hanen ordered Lopez-Hernandez to serve a 137-month-term of imprisonment for the drug charges as well as 120 months for being an alien unlawfully found in the United States after deportation. The sentences will run concurrently. He was also ordered to serve an additional 12 months, three of which three will be served consecutively, for committing the offenses while on supervised release for a previous conviction of being an alien illegally in the country. At the hearing, the court heard evidence indicating Lopez-Hernandez had been previously convicted three other times for being an alien unlawfully found in the United States after deportation. He is again expected to face deportation proceedings following his total 140-month sentence.
On April 3, 2016, a Cameron County Sheriff’s Office deputy attempted to conduct a traffic stop in Brownsville. However, Lopez-Hernandez sped away and eventually crashed his vehicle and fled on foot. He was soon apprehended. Authorities conducted an inspection of his vehicle which resulted in the discovery of 4.4 pounds of methamphetamine. They also learned that Lopez-Hernandez was an undocumented alien who had previously been deported.
Immigration and Customs Enforcement’s Homeland Security Investigations conducted the investigation. Assistant U.S. Attorney Angel Castro is prosecuting the case.
Vitamin Shop Owner Sentenced for Misbranded Drugs and Controlled Substance ConvictionRead the Press Release
CORPUS CHRISTI, Texas – A 33-year-old resident of Corpus Christi has been ordered to federal prison following his convictions of possessing a controlled substance with the intent to distribute and receiving a misbranded drug in interstate commerce, announced Acting U.S. Attorney Abe Martinez along with Special Agent in Charge Spencer E. Morrison of the Food and Drug Administration - Office of Criminal Investigations’ Kansas City Field Office. Elias Trevino Jr. pleaded guilty May 15, 2017.
Today, Senior U.S. District Judge John D. Rainey handed Trevino a 12-month term of imprisonment. In handing down the sentence, Judge Rainey noted that FDA regulations are in place to protect the public which Trevino repeatedly violated. “The is egregious conduct that I can’t ignore” he said. Trevino will also be required to serve three years of supervised release following completion of the prison term.
“Drugs labeled as natural dietary supplements that contain undeclared, dangerous ingredients present a serious risk to consumers’ health,” said Morrison. “We will continue to pursue and bring to justice criminals who endanger the public by offering and distributing such falsely labeled and dangerous drugs.”
Trevino was one of the owners of X2Zero, a store selling dietary supplements online and through stores located in Corpus Christi. The Food and Drug Administration (FDA) determined a number of products sold there as “herbal weight loss supplements” were found to contain misbranded or unapproved foreign drugs.
In 1997, the (FDA) approved a prescription drug containing sibutramine under the trade name Meridia for the management of obesity. In October 2010, the FDA requested the Meridia marketer to withdraw the drug from the United States market due to the health risks associated with sibutramine, including an increased risk of heart attack, stroke and death. On Dec. 21, 2010, at the request of the manufacturer, the FDA withdrew its approval of Meridia. Since that time, no drug containing sibutramine has been approved for human use in the United States.
At the time of his guilty plea, Trevino admitted he knowingly possessed and sold diet drugs containing sibutramine. He acknowledged he imported the drugs from China and sold them through both the X2Zero store in Corpus Christi and on the Internet in violation of the federal Food, Drug and Cosmetic Act.
Previously released on bond, Trevino was taken into custody following the sentencing today where he will remain pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The FDA - Office of Criminal Investigations conducted the investigation. Assistant U.S. Attorney Robert D. Thorpe Jr. is prosecuted the case.
Texas Man Sentenced for Receipt and Possession of Child PornographyRead the Press Release
HOUSTON – A 33-year-old man from Duncanville has been ordered to prison following his convictions for receipt and possession of child pornography, announced Acting U.S. Attorney Abe Martinez. William Sonak pleaded guilty June 26, 2017.
Today, U.S. District Judge David Hittner imposed a total 96-month term of imprisonment. Following completion of his prison term, he 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.
This case originated in September 2015 when the FBI received information from a general manager at a Computer Hospital store located in Houston that a laptop computer had been submitted for repairs that contained child pornography. While performing repairs, the technician came across multiple images of child pornography.
A forensic examination of the computer later revealed the laptop contained approximately 2,640 images and 811 videos of child pornography.
At the time of his plea, Sonak said that he was sorry for his actions.
Sonak will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The FBI conducted the investigation.
Assistant U.S. Attorney Julie N. Searle 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."
Selling Meth Lands Corpus Men in Federal PrisonRead the Press Release
CORPUS CHRISTI, Texas – Two local men have been ordered to federal prison following their convictions of selling methamphetamine, announced Acting U.S. Attorney Abe Martinez. Carlos Cantu, 39, and Steven Douglas Schad, 29, previously pleaded guilty to one count of conspiracy to possess with intent to distribute methamphetamine.
Today, Senior U.S. District Judge John Rainey sentenced Cantu to 138 months imprisonment. Shad was sentenced in September to 120 months imprisonment. Both were also ordered to serve five years of supervised release.
As part of an investigation that began in March 2017, Cantu arranged for the sale of methamphetamine to an undercover federal agent. Over several weeks, the agent made three different purchases of pure methamphetamine from Cantu and others in amounts totaling approximately 153 grams.
Cantu will remain in custody pending transfer to a U.S. Bureau of Prisons to be designated in the near future.
The Bureau of Alcohol, Tobacco, Firearms and Explosives conducted the investigation.
Assistant U.S. Attorney Lance Watt is prosecuting the case.
Numerous Alleged Members of Narcotics Trafficking Organization Taken into CustodyRead the Press Release
BROWNSVILLE, Texas – A total of nine men have been arrested following multiple enforcement actions in Brownsville, Corpus Christi and Crowley, Louisiana, announced Acting U.S. Attorney Abe Martinez.
During enforcement actions on Thursday, law enforcement arrested Jesus Hector Garza Jr., 29, of Rancho Viejo; Gelacio Flores-Flores, 31, and Mayra Rodriguez, 39, both of Los Fresnos; and Silvia Sarai Cruz, 26, and Ramon Martin Arambula, 46, both of Brownsville. They made their initial appearances last week and will appear before U.S. Magistrate Judge Igancio Torteya on Nov. 22, 2017.
Ramon Montoya, 42, of Brownsville, was previously taken into custody in Memphis, Tennessee. Rubaldino Pecina, 36, of San Benito, was arrested in Corpus Christi, on Friday afternoon, while Juana Alcocer, 38, of Matamoros, Tamaulipas, Mexico, was taken into custody Saturday as she entered the United States at the Veterans Bridge Port of Entry from Mexico. Today, law enforcement arrested John Fontenot, 46, of Crawley, Louisiana. Those four defendants are expected to appear in Brownsville in the near future.
On Oct. 31, 2017, a federal grand jury in Brownsville returned a 14-count indictment against Montoya – allegedly the leader of the organization and the others, alleging drug trafficking crimes related to marijuana, crack cocaine and methamphetamine. They allegedly transported marijuana for resale and sold crack cocaine in Cameron County. The charges also include delivering cocaine to Houston and methamphetamine to Louisiana.
The charges carry varying terms of imprisonment up to life depending on the counts charged as well as possible fines up to $10 million.
This was an Organized Crime Drug Enforcement Task Force operation spanning two years. The FBI and the Drug Enforcement Administration led the investigation with assistance from Immigration and Customs Enforcement’s Homeland Security Investigations, U.S. Marshals Service, Border Patrol, Cameron County District Attorney’s Office, and police departments in Brownsville, Harlingen and Raymondville. Assistant U.S. Attorney Karen Betancourt 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.
Local Man Convicted of Bank RobberyRead the Press Release
CORPUS CHRISTI, Texas - A Corpus Christi resident has entered a guilty plea to bank robbery, announced Acting U.S. Attorney Abe Martinez.
On Dec. 20, 2016, law enforcement officers responded to a bank robbery at the navy Army Community Credit Union in the 9500 block of South Padre Island Drive in Corpus Christi. After entering the bank, a male - later identified as Johnathan Samuel Borden, 32 - handed the teller a black bag and demanded money.
During the investigation, agents were able to link Borden to an additional robbery that occurred on Jan. 6, 2017, at the Texas Bridge Credit Union in the 3100 block of Holly in Corpus Christi.
Senior U.S. District Judge John Rainey accepted the plea today and has set sentencing for Feb. 20, 2018. At that time, Borden faces up to 20 years imprisonment and a possible $250,000 maximum fine.
In federal custody since his arrest, Borden will remain in custody pending that hearing.
The FBI and the Corpus Christi Police Department conducted the investigation.
Assistant U.S. Attorney Lance Watt is prosecuting the case.
Local Man Sentenced for $5 Million Investment ScamRead the Press Release
HOUSTON - A 77-year-old Montgomery man has been ordered to federal prison following his convictions on two counts related to an investment fraud scheme involving more than 50 victims and more than $5 million, announced Acting U.S. Attorney Abe Martinez. Allan George Cooper pleaded guilty May 5, 2017.
Today, U.S. District Judge Melinda Harmon handed Cooper a 121-month sentence. At the hearing, two victims presented live testimony to the Court about the financial hardships they and their families faced because of Cooper’s fraud. In handing down the sentence, Judge Harmon noted Cooper was a danger to the community. He was further ordered to pay a $5,805,535 in restitution and will be required to serve three years of supervised release following completion of the prison term.
Cooper was president of Effective Energy Alternatives dba A.G. Cooper Associates, managing member of AG Cooper LLC and registered agent for Effective Funding Network LLC. Cooper created AG Cooper & Associates and presented himself as an investment advisor, meeting investors through a church group and through referrals from other investors. He solicited and received more than $5 million from investors, many of whom believed he was making short-term loans to small companies who could not get bank financing.
Cooper received investor funds via wire transfers or checks handed to him in person. He presented investment programs that projected more than 12% returns in a short period of time and lulled investors with false and misleading statements he mailed to their homes on a quarterly basis. On occasion, he would make monthly payments to investors with funds provided by new investors. Deceived by these monthly payments and fraudulent quarterly statements, these victims believed their money was being properly invested, and on some occasions, would re-invest more money with Cooper. However, analysis of his bank accounts revealed the majority of the monies were used to pay back other investors, pay his credit cards, fund his other companies and to enrich his own lifestyle.
Previously released on bond, Cooper was taken into custody following the sentencing today where he will remain pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The FBI conducted the investigation with assistance from the Texas State Securities Board. Assistant U.S. Attorney Suzanne Elmilady is prosecuting the case.
Corpus Christi Man Arrested for Distributing Child PornographyRead the Press Release
CORPUS CHRISTI, Texas - A 24-year-old Corpus Christi man has been charged with distribution of child pornography, announced Acting U.S. Attorney Abe Martinez.
Authorities arrested Randy Michael Ramirez today. He is expected to make his initial appearance before U.S. Magistrate B. Janice Ellington Monday at 2:00 p.m.
According to the criminal complaint filed Nov. 15, Ramirez was communicating with an undercover officer and eventually sent the detective a link which contained 76 videos of child pornography. According to the charges, law enforcement seized a cellular telephone from Ramirez’s residence which resulted in the discovery of more than 80 images and 12 videos of child pornography.
If convicted, Ramirez faces a minimum of five and up to 20 years in federal prison and a possible $250,000 maximum fine.
Immigration and Customs Enforcement’s Homeland Security Investigations conducted the investigation with the assistance of the Corpus Christi Police Department - Internet Crimes Against Children Task Force.
Assistant U.S. Attorney Hugo R. Martinez is prosecuting 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."
A criminal complaint is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.
Spring Man Hammered with 40-Year Sentence for Child Pornography ConvictionsRead the Press Release
HOUSTON – A 37-year-old man has been ordered to federal prison for 480 months following his convictions of production and possession of child pornography, announced Acting U.S. Attorney Abe Martinez. James Kelly Hilton, of Spring, pleaded guilty Aug. 14, 2017.
Today, U.S. District Judge Alfred H. Bennett imposed a 360-month sentence for the production charge as well as another 120 months for possessing child pornography. The sentences were ordered to run consecutively. Following completion of his 40-year prison term, he will be on supervised release for the rest of his life. The court further ordered Hilton to pay $62,500 in restitution to multiple victims.
In April 2017, the mother of a victim discovered an SD card with images of Hilton sexually violating her daughter. She traveled from Spring to Oklahoma where her family resided and reported the discovery to the local authorities. Hilton followed her there, where he was taken into custody.
A forensic examination of the SD card revealed 981 images and five videos of child pornography, including eight images and a video of the identified minor victim. Authorities also seized a cell phone upon his arrest and eventually discovered 444 images of child pornography, seven of which were of the same victim.
He will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The FBI conducted the investigation.
Assistant U.S. Attorney Sherri Zack is prosecuting 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."
Local Tax Return Preparer Sent to Prison for Fraudulent Refund SchemeRead the Press Release
HOUSTON – A tax return preparer who operated a local business under various names has been ordered to federal prison for willfully aiding and assisting in the preparation and presentation of a false U.S. Individual Income Tax Return, announced acting U.S. Attorney Abe Martinez. Albert Bobby Daniels Jr. pleaded guilty Aug, 3, 2017.
Today, U.S. District Judge Alfred H. Bennett handed Daniels a 21-month sentence to be immediately followed by a year of supervised release. He was further ordered to pay $257,590 in restitution to the IRS.
According to the criminal information and plea agreement filed in the record of the case, Daniels was in the business of preparing income tax returns and operated that business under various names including Home Based Business Tax Services in Houston. Daniels admitted he willfully added numerous false deductions and credits to 45 client income tax returns without their knowledge in order to inflate refunds by approximately $257,590.
The sentencing hearing today revealed that his motive was to develop a reputation for getting large client refunds, which could generate more fees.
Daniels 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 Austin office of IRS – Criminal Investigation conducted the investigation. Assistant U.S. Attorney Jimmy Sledge Jr. is prosecuting the case.
Former Attorney and Others Sent to Prison for Money Laundering and Auto Loan SchemeRead the Press Release
HOUSTON – Three people have been ordered to federal prison following their convictions of money laundering for their participation in a Houston-based bank fraud and money laundering scheme, announced Acting U.S. Attorney Abe Martinez.
Houston resident Jason Ryan Hall, 36, pleaded guilty Aug. 15, 2016, while disbarred former attorney Howard Price Johnson, 63, from Salt Lake City, Utah, and Ohio resident Anissa Lavon Burdett, 50, pleaded guilty Sept. 29, and 23, 2016, respectively.
Today, U.S. District Judge Alfred Bennett ordered Hall to serve an 18-month sentence to be immediately followed by two years of supervised release. Johnson was previously sentenced to a term of 12 months and a day, while Burdett was ordered to serve six months in prison. At the hearing today, additional evidence was presented about Hall’s role in orchestrating the scheme. He was further ordered to pay restitution to the victim banks of $484,070.76 and forfeit $21,000 to the United States.
The three individuals participated in an automobile loan fraud scheme centered in Houston spanning April through November 2011. Hall held himself out as a used car dealer who sold luxury vehicles through his alleged Houston car dealerships “EZ Auto Group” and “1st Choice Motors.” Hall’s alleged dealerships, however, existed only as websites that Hall created. They had no physical existence, owned no cars and made no actual auto sales.
Acting as “straw buyers,” Johnson, Burdett and others applied to lenders for auto loans in order to purchase used Mercedes and Lexis cars from Hall’s supposed dealerships. In reality, no vehicles were purchased and Hall had none to sell. In their auto loan applications, the straw buyers made multiple misrepresentations to prospective lenders and submitted fraudulent documents Hall created and supplied in support of the loan applications. These fraudulent documents included fake bills of sale of the cars that were the subject of the loans and fake W-2 forms that purported to show gainful employment by the straw buyers that would qualify them for the loans.
Once the auto loans funded and the funds had been deposited into the bank accounts of the alleged dealerships, Hall kicked-back a portion of the loan funds to the straw buyers. Hall delivered no vehicles to the straw buyers and delivered no vehicle titles to the lenders. The straw buyers failed to pay off their loans, causing the loans to go into default. During the scheme, straw buyers applied for a total of 16 fraudulent auto loans with a combined value of approximately $695,741.
Hall was permitted to remain on bond and voluntarily surrender to a U.S. Bureau of Prisons facility to be determined in the near future.
IRS-Criminal Investigation and U.S. Secret Service investigated. Assistant U.S. Attorney Robert S. Johnson prosecuted the case.
Firearms Smugglers SentencedRead the Press Release
LAREDO, Texas – Five Laredoans have been ordered to prison following their convictions for their roles in smuggling firearms into Mexico, announced Acting U.S. Attorney Abe Martinez.
Juan Diego Madrid, 27, Rolando Armando Madrid, 21, Erik Villasana, 20, Edward Alexander Duenas, 20, and Francisco Xavier Martinez, 25, participated in a scheme to purchase civilian variants of firearms currently issued to military forces from various local firearms dealers. Between March 2016 and November 2016, Juan Madrid directed several individuals, including Rolando Madrid, Duenas and Martinez, to purchase the firearms. The firearms were then transferred to Villasana, who arranged for the firearms to be smuggled into Mexico.
Today, U.S. District Judge Diana Saldaña sentenced Juan Diego Madrid to a term of 65 months in federal prison, while his brother - Rolando Madrid, Villasana, Duenas and Martinez received respective sentences of 51, 63, 27 and 41 months in prison.
The straw purchasers bought AR-15 and AK-47-type semiautomatic rifles, Beretta 92FS and DPMS AR-type rifles from Academy and Kirkpatrick Guns & Ammo stores in Laredo and San Antonio. Juan Madrid would then purchase the firearms from the straw purchasers and then re-sell them at a profit to Villasana who would then arrange for the firearms to be smuggled into Mexico. Juan Madrid was already a convicted felon and thereby prohibited from purchasing, owning or possessing firearms.
Juan Madrid’s brother, Ruben Arnoldo Madrid, 21, was also involved in the scheme as a straw purchaser. He will be sentenced at a later date.
The Bureau of Alcohol, Tobacco, Firearms and Explosives and Immigration and Customs Enforcement’s Homeland Security Investigations conducted the investigation. Assistant U.S. Attorney (AUSA) Homero Ramirez and Special AUSA Lisa Ezra are prosecuting the case.
Angleton Man Sentenced for Multiple Child Pornography ChargesRead the Press Release
GALVESTON, Texas – A 44-year old resident of Angleton has been ordered to federal prison following his convictions on one count each of distribution, receipt and possession of child pornography, announced Acting U.S. Attorney Abe Martinez. John Kevin Waldrip pleaded guilty June 7, 2017.
Today, U.S. District Judge George C. Hanks Jr. imposed sentences of 175, 175 and 120 months for the possession, receipt and distribution convictions, respectively. The sentences will run concurrently. Following completion of his 175-month sentence, Waldrip will be on supervised release for 10 years, 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.
Waldrip came to the attention of law enforcement following an investigation into persons using the Internet to traffic in child pornography via peer-to-peer software. A detective with Pearland Police Department (PPD) was able to locate and identify a computer as offering to participate in the receipt of child pornography videos through a peer-to-peer network on the Internet. Through the investigation, it was determined that the computer was located at a residence in Angleton.
On June 30, 2016, law enforcement executed a search warrant at the Angleton residence, during which time they seized a computer. A forensic examination on the computer revealed 81 videos and 512 images of child pornography involving minor children engaged in sexually explicit conduct. Some of the videos are of known victims as identified through the National Center for Missing and Exploited Children.
Waldrip will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
PPD and Immigration and Customs Enforcement’s Homeland Security Investigations conducted the investigation.
This case, prosecuted by Assistant U.S. Attorney Sherri L. Zack, was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to locate, apprehend and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Four Laredo Men Sentenced for Trafficking NarcoticsRead the Press Release
LAREDO, Texas – Four Laredoans have been ordered to prison for their roles in a conspiracy to traffic drugs from Laredo to the Dallas area via the use of tractor trailers, announced Acting U.S. Attorney Abe Martinez. Javier Mota-Villanueva, 34, Armando Javier Picazo Jimenez, 43, Armando Eloy Gutierrez, 38, and Leopoldo Rodriguez III, 26, each had previously pleaded guilty for their respective roles.
Today, U.S. District Judge Diana Saldaña ordered Mota-Villanueva to serve a total of 120 months in federal prison to be immediately followed by five years of supervised release. The other three were sentenced last month. Picazo Jimenez and Gutierrez each received 120 months in prison, while Rodriguez was sentenced to a 24-month term of imprisonment.
Picazo Jimenez led a drug trafficking organization responsible for the transportation and distribution of multi-kilogram quantities of marijuana from Laredo to the Dallas area. Picazo Jimenez used his ties to the Nuevo Laredo source of supply to illegally import the bulk marijuana from Mexico into the US via Laredo. He recruited the co-conspirators to assist in storing and transporting the marijuana from Laredo to the Dallas area.
Gutierrez was in charge of finding warehouses for the organization to use and then soliciting shipping companies to transport trailers with marijuana and cover with loads of merchandise. Gutierrez also acted as a scout by following drivers transporting the drug loads through Border Patrol checkpoints. After passing the checkpoints, Gutierrez would drive to the Dallas area to assist in receiving and unloading the drugs.
Mota-Villanueva worked in the organization’s warehouses, where he wrapped the marijuana, moved pallets and loaded the drugs onto trailers.
Rodriguez was tasked with wrapping marijuana and assisting with loading of narcotics onto trailers at the organization’s warehouses.
The investigation revealed three warehouses in Laredo that the organization used at different periods from on or about September 2013 to on or about July 31, 2014. They were located on the 1800 block of Aduanales, the 200 block of Corpus Christi Street and the 1600 block of West Calton. During the investigation, law enforcement agents seized three loads of marijuana with a combined weight of more than 1600 kilograms originating from these warehouses.
The Drug Enforcement Administration conducted the investigation with the assistance of task force members from the Webb County District Attorney’s Office and the Laredo Police Department. Assistant U.S. Attorneys Mary Lou Castillo and Mike Eaton are prosecuting the case.
Undocumented Alien Gets 25 Years for Trafficking MethRead the Press Release
HOUSTON – A 28-year-old Mexican citizen who illegally resided in Houston was ordered to federal prison for his conviction of trafficking nearly six kilograms of methamphetamine, announced Acting U.S. Attorney Abe Martinez. Jesus Ortiz-Flores pleaded guilty Aug. 12, 2016.
Today, Senior U.S. District Judge David Hittner sentenced Ortiz-Flores to 300 months in federal prison. Not a U.S. citizen, he is expected to face deportation proceedings following his prison term.
At the time of his plea, Ortiz-Flores admitted to playing a key role in attempting to deliver methamphetamine in the Houston area.
On June 13, 2014, a confidential source mistakenly received several bundles which contained approximately six kilograms of methamphetamine from two unknown male couriers working for him. The couriers had approached him and mistakenly threw a bag in his car containing six bundles of methamphetamine. The source quickly realized the bundles contained drugs and contacted federal agents who advised him to contact Ortiz-Flores. At that time, Ortiz-Flores advised him that drugs were supposed to go to another person who was then supposed to divide it up and provide to others.
Ortiz-Flores told him he could just sell the drugs. The source later told Ortiz-Flores he sold two kilograms of methamphetamine. Upon the direction of Ortiz-Flores, the source then delivered the remaining four kilograms to another man for him to sell. The drugs were hidden inside a spare tire and delivered as instructed.
Officers then conducted a traffic stop on a vehicle the man was driving and seized the methamphetamine. All six of the bundles of methamphetamine were subsequently sent for further analysis, which demonstrated a net weight of 5.924 kilograms and 100% purity.
The drugs had been imported from Mexico.
The evidence in the case also revealed Ortiz-Flores was involved in other methamphetamine trafficking transactions totaling more than 17 kilograms for which he was held accountable at the hearing today.
He 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, Houston Police Department and Harris County Sheriff’s Office conducted the Organized Crime Drug Enforcement Task Force investigation. Assistant U.S. Attorney Arthur R. Jones is prosecuting the case.
Prison Guard Convicted for Bribery and Smuggling ContrabandRead the Press Release
HOUSTON – A 28-year-old man from Houston has entered a guilty plea to bribery of a federal employee, announced Acting U.S. Attorney Abe Martinez along with Special Agent in Charge Perrye K. Turner of the FBI.
Jacoby Derrell Randall first came to the attention of law enforcement in early 2017. At that time, authorities had received numerous reports that prison guards were smuggling contraband into the Joe Corley Detention Facility which houses federal inmates. The investigation revealed that Randall was smuggling various contraband into the prison, including food, various electronic devices and marijuana.
During the plea today, Randall admitted he smuggled various contraband in exchange for bribes in violation of his official duties.
“The FBI is dedicated to investigating allegations of public corruption at any level,” said Turner. “Public corruption erodes the public’s confidence in our democracy and will not be tolerated.”
Sentencing has been set for Feb. 12, 2018, before U.S. District Judge Lynn Hughes. At that time, Randall faces up to 15 years in federal prison as well as a possible $250,000 maximum fine. He was permitted to remain on bond pending that hearing.
The FBI conducted the investigation. Assistant United States Attorney Julie N. Searle is prosecuting the case.
Last US Defendant Pleads Guilty in Multimillion Dollar India-Based Call Center Scam Targeting US VictimsRead the Press Release
HOUSTON – An Illinois man pleaded guilty today to money laundering conspiracy, joining six others who recently pleaded guilty to conspiracy charges for their roles in liquidating and laundering victim payments generated through a massive telephone impersonation fraud and money laundering scheme perpetrated by a network of India-based call centers responsible for defrauding U.S. residents of hundreds of millions of dollars.
Acting U.S. Attorney Abe Martinez made the announcement along with Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Acting Deputy Director Peter T. Edge of Immigration and Customs Enforcement (ICE), Inspector General J. Russell George of the Treasury Inspector General for Tax Administration (TIGTA) and Inspector General John Roth of Department of Homeland Security Office of Inspector General (DHS-OIG).
Miteshkumar Patel, 42, most recently residing in Willowbrook, Illinois; Rajesh Bhatt, 53, Sunny Joshi, 47, both of Sugar Land, Texas; and Jagdishkumar Chaudhari, 39, of Montgomery, Alabama, each pleaded guilty to one count of money laundering conspiracy. Raman Patel, 82, of Gilbert, Arizona; Praful Patel, 50, of Fort Myers, Florida; and Jerry Norris, 47, of Oakland, California, each pleaded guilty to one count of conspiracy to commit fraud and money laundering offenses. With the exception of Raman Patel, who pleaded guilty before U.S. District Judge Michelle Burns in the District of Arizona on Nov. 6, the defendants pleaded guilty on varying dates between Sept. 22 and Nov. 13, before U.S. District Judge David Hittner of the Southern District of Texas.
According to admissions made in connection with their pleas, Miteshkumar Patel, Raman Patel, Joshi, Chaudhari, Bhatt, Praful Patel, Norris and their co-conspirators perpetrated a complex scheme in which individuals from call centers located in Ahmedabad, India, impersonated officials from the IRS and U.S. Citizenship and Immigration Services (USCIS), and engaged in other telephone call scams, in a ruse designed to defraud victims located throughout the United States. Using information obtained from data brokers and other sources, call center operators targeted U.S. victims who were threatened with arrest, imprisonment, fines or deportation if they did not pay alleged monies owed to the government. Victims who agreed to pay the scammers were instructed how to provide payment, including by purchasing general purpose reloadable (GPR) cards or wiring money. Upon payment, the call centers would immediately turn to a network of “runners” based in the United States to liquidate and launder the fraudulently obtained funds.
Based on admissions in Miteshkumar Patel’s plea, beginning in or around 2013, he managed a crew of a half dozen domestic runners involved in the criminal scheme, liquidating as much as approximately $25 million in victim funds for conspirators from India-based call center and organizational co-defendant HGLOBAL. Miteshkumar Patel communicated about the fraudulent scheme with various domestic and India-based co-defendants via email, text messaging and WhatsApp messaging. He and his runners purchased reloadable GPR cards that were registered using the misappropriated personal identifying information (PII) of unsuspecting victims that were later used to receive victims’ funds. They then used those reloadable cards containing victims’ funds to purchase money orders and then deposit those money orders into bank accounts, as directed, while keeping a portion of the scam proceeds as profit. Miteshkumar Patel also trained the runners he managed on how to conduct the liquidation scheme, provided them with vehicles to conduct their activities in Illinois and throughout the country and directed a co-defendant to open bank accounts and limited liability companies for use in the conspiracy. Miteshkumar Patel further admitted to using a gas station he owned in Racine, Wisconsin, to liquidate victim funds and possessing and using equipment at his Illinois apartment to make fraudulent identification documents used by co-defendant runners in his crew to receive wire transfers directly from scam victims and make bank deposits in furtherance of the conspiracy.
According to admissions in Raman Patel’s guilty plea, from in or around 2014, he served as a domestic runner in and around south-central Arizona, liquidating victim scam funds per the instructions of a co-defendant. Raman Patel also served as a driver for two co-defendants in furtherance of their GPR liquidation and related activities and sent bank deposit receipts related to the processing of victim payments and fraud proceeds to an India-based co-defendant via email and document scan services offered at various retail stores.
Based on admissions in Joshi and Bhatt’s guilty pleas, beginning in or around 2012, Joshi and Bhatt worked together as runners in the Houston area along with a co-defendant. They admitted to extensively communicating via email and text with, and operating at the direction of, India-based conspirators from organization co-defendant CALL MANTRA call center to liquidate up to approximately $9.5 million in victim funds. They used GPR cards which were funded by co-conspirators with scam victim funds to purchase money orders which were then deposited into third party bank accounts, while keeping a percentage of the scam proceeds for themselves as profit. Joshi has also agreed to plead guilty to one count of naturalization fraud pursuant to a federal indictment obtained against him in the Eastern District of Louisiana, based on fraudulently obtaining his U.S. citizenship.
Chaudhari admitted in his plea that between April 2014 and June 2015, he worked as a member of a crew of runners operating in the Chicago area and elsewhere throughout the country at the direction of Miteshkumar Patel and others. In exchange for monthly cash payments, Chaudhari admitted to driving to hundreds of retail stores to purchase GPR cards to be loaded with victim funds by co-conspirators in India, purchasing money orders with GPR cards that had been funded with victim proceeds, depositing money orders purchased using victim scam proceeds at various banks and retrieving wire transfers sent by victims of the scheme. Chaudhari is an Indian national with no legal status in the United States and has agreed to deportation after he serves his sentence as a condition of his guilty plea.
In his plea, Praful Patel admitted that between in or around June 2013 and December 2015, he was a domestic runner who liquidated funds in and around Fort Myers, Florida, for conspirators from India-based call center and organizational co-defendant HGLOBAL. He communicated extensively via WhatsApp texts with his conspirators. For a percentage commission on transactions he conducted, Praful Patel admitted to purchasing reloadable GPR cards that were registered using the misappropriated PII of unsuspecting victims. These cards were later used to receive victims’ funds and to purchase money orders which were deposited into bank accounts as directed. He also used fake identity documents to receive wire transfers from victims.
According to Norris’ guilty plea, beginning in or around January 2013 continuing through December 2014, he was a runner who worked with conspirators associated with India-based call center and organizational co-defendant HGLOBAL, and was responsible for the liquidation of victim scam funds in and around California. Norris admitted he communicated extensively via WhatsApp and email with India-based co-defendants including Sagar “Shaggy” Thakar. He also purchased GPR cards used in the scheme, sent lead lists to conspirators in India that were then used by callers located in the call centers to target potential victims in the telefraud scheme, received scam proceeds via wire transfers using fictitious name and laundered scam proceeds from GPR cards via ATM withdrawals.
To date, Miteshkumar Patel, Raman Patel, Joshi, Chaudhari, Bhatt, Praful Patel, Norris, 49 other individuals and five India-based call centers have been charged for their roles in the fraud and money laundering scheme in an indictment returned by a federal grand jury in the Southern District of Texas on Oct. 19, 2016. Including the pleas announced today, a total of 24 defendants have pleaded guilty thus far in relation to this investigation. Defendants Bharatkumar Patel, Ashvinbhai Chaudhari, Harsh Patel, Nilam Parikh, Hardik Patel, Rajubhai Patel, Viraj Patel, Dilipkumar A. Patel, Fahad Ali, Bhavesh Patel, Asmitaben Patel, Montu Barot, Nilesh Pandya, Dipakkumar Patel, Nisarg Patel, Rajesh Kumar and Dilipkumar Ramanlal Patel previously pleaded guilty on various dates between April and September 2017.
The remaining defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
ICE – Homeland Security Investigations, DHS-OIG and TIGTA led the investigation of this case. Also providing significant support were the Criminal Division’s Office of International Affairs; Ft. Bend County Sheriff’s Office; police departments in Hoffman Estates and Naperville, Illinois, and Leonia, New Jersey; San Diego County District Attorney’s Office Family Protection and Elder Abuse Unit; U.S. Secret Service; U.S. Small Business Administration, Office of Inspector General; IOC-2; INTERPOL Washington; USCIS; U.S. State Department’s Diplomatic Security Service; and U.S. Attorneys’ Offices in the Middle District of Alabama, Northern District of Alabama, District of Arizona, Central District of California, Northern District of California, District of Colorado, Northern District of Florida, Middle District of Florida, Northern District of Illinois, Northern District of Indiana, District of Nevada and District of New Jersey. The Federal Communications Commission’s Enforcement Bureau also provided assistance in TIGTA’s investigation.
Assistant U.S. Attorneys S. Mark McIntyre and Craig M. Feazel are prosecuting the case along with Senior Trial Attorney Michael Sheckels and Trial Attorney Mona Sahaf of the Criminal Division’s Human Rights and Special Prosecutions Section (HRSP) and Trial Attorney Amanda Wick of the Criminal Division’s Money Laundering and Asset Recovery Section. HRSP’s Ann Marie Ursini and Assistant U.S. Attorney Greg Kennedy of the Eastern District of Louisiana prosecuted the naturalization fraud case against Joshi.
A Department of Justice website has been established to provide information about the case to already identified and potential victims and the public. Anyone who believes they may be a victim of fraud or identity theft in relation to this investigation or other telefraud scam phone calls may contact the Federal Trade Commission (FTC) via this website.
Anyone who wants additional information about telefraud scams generally, or preventing identity theft or fraudulent use of their identity information, may obtain helpful information on the IRS tax scams website, the FTC phone scam website and the FTC identity theft website.
Last Defendant in the United States Pleads Guilty in Multimillion Dollar India-Based Call Center Scam Targeting U.S. VictimsRead the Press Release
An Illinois man pleaded guilty today to money laundering conspiracy, joining six other defendants who recently pleaded guilty to conspiracy charges for their roles in liquidating and laundering victim payments generated through a massive telephone impersonation fraud and money laundering scheme perpetrated by a network of India-based call centers responsible for defrauding U.S. residents of hundreds of millions of dollars.
Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Acting U.S. Attorney Abe Martinez of the Southern District of Texas, Acting Deputy Director Peter T. Edge of U.S. Immigration and Customs Enforcement (ICE), Inspector General J. Russell George of the U.S. Treasury Inspector General for Tax Administration (TIGTA) and Inspector General John Roth of the U.S. Department of Homeland Security Office of Inspector General (DHS-OIG) made the announcement.
Miteshkumar Patel, 42, most recently residing in Willowbrook, Illinois; Sunny Joshi, 47, of Sugar Land, Texas; Jagdishkumar Chaudhari, 39, of Montgomery, Alabama; and Rajesh Bhatt, 53, of Sugar Land, each pleaded guilty to one count of money laundering conspiracy. Raman Patel, 82, of Gilbert, Arizona; Praful Patel, 50, of Fort Myers, Florida; and Jerry Norris, 47, of Oakland, California, each pleaded guilty to one count of conspiracy to commit fraud and money laundering offenses. The pleas were entered before U.S. District Court Judge David Hittner of the Southern District of Texas between Sept. 22 and Nov. 13, except for Raman Patel’s plea, which was entered before U.S. District Court Judge Michelle Burns in the District of Arizona on Nov. 6. Six of the men have been in federal custody since their arrests in October 2016 and will remain detained until their pending sentencing dates.
According to admissions made in connection with their pleas, Miteshkumar Patel, Raman Patel, Joshi, Jagdishkumar Chaudhari, Bhatt, Praful Patel, Norris and their co-conspirators perpetrated a complex scheme in which individuals from call centers located in Ahmedabad, India, impersonated officials from the IRS and U.S. Citizenship and Immigration Services (USCIS), and engaged in other telephone call scams, in a ruse designed to defraud victims located throughout the United States. Using information obtained from data brokers and other sources, call center operators targeted U.S. victims who were threatened with arrest, imprisonment, fines or deportation if they did not pay alleged monies owed to the government. Victims who agreed to pay the scammers were instructed how to provide payment, including by purchasing general purpose reloadable (GPR) cards or wiring money. Upon payment, the call centers would immediately turn to a network of “runners” based in the United States to liquidate and launder the fraudulently obtained funds.
Based on admissions in Miteshkumar Patel’s plea, beginning in or around 2013, Miteshkumar Patel managed a crew of a half dozen domestic runners involved in the criminal scheme, liquidating as much as approximately $25 million in victim funds for conspirators from India-based call center and organizational co-defendant HGLOBAL. Patel communicated about the fraudulent scheme with various domestic and India-based co-defendants via email, text messaging and WhatsApp messaging. Miteshkumar Patel and his runners purchased reloadable GPR cards that were registered using the misappropriated personal identifying information (PII) of unsuspecting victims that were later used to receive victims’ funds, and used those reloadable cards containing victims’ funds to purchase money orders and then deposit those money orders into bank accounts, as directed, while keeping a portion of the scam proceeds as profit. Miteshkumar Patel also trained the runners he managed on how to conduct the liquidation scheme, provided them with vehicles to conduct their activities in Illinois and throughout the country, and directed a co-defendant to open bank accounts and limited liability companies for use in the conspiracy. Miteshkumar Patel further admitted to using a gas station he owned in Racine, Wisconsin to liquidate victim funds, and possessing and using equipment at his Illinois apartment to make fraudulent identification documents used by co-defendant runners in his crew to receive wire transfers directly from scam victims and make bank deposits in furtherance of the conspiracy.
According to admissions in Raman Patel’s guilty plea, from in or around 2014, Patel served as a domestic runner in and around south-central Arizona, liquidating victim scam funds per the instructions of a co-defendant. Patel also served as a driver for two co-defendants in furtherance of their GPR liquidation and related activities and sent bank deposit receipts related to the processing of victim payments and fraud proceeds to an India-based co-defendant via email and document scan services offered at various retail stores.
Based on admissions in Joshi and Bhatt’s guilty pleas, beginning in or around 2012, Joshi and Bhatt worked together as runners in the Houston, Texas area along with a co-defendant. They admitted to extensively communicating via email and text with, and operating at the direction of, India-based conspirators from organizational co-defendant CALL MANTRA call center to liquidate up to approximately $9.5 million in victim funds, including by purchasing GPR cards and using those cards, funded by co-conspirators with scam victim funds, to purchase money orders and deposit them in third party bank accounts, while keeping a percentage of the scam proceeds for themselves as profit. Joshi has also agreed to plead guilty to one count of naturalization fraud pursuant to a federal indictment obtained against him in the Eastern District of Louisiana, based on fraudulently obtaining his U.S. citizenship.
Jagdishkumar Chaudhari admitted in his plea that between April 2014 and June 2015, he worked as a member of a crew of runners operating in the Chicago area and elsewhere throughout the country, at the direction of Miteshkumar Patel and others. In exchange for monthly cash payments, Jagdishkumar Chaudhari admitted to driving to hundreds of retail stores to purchase GPR cards to be loaded with victim funds by co-conspirators in India, purchasing money orders with GPR cards that had been funded with victim proceeds, depositing money orders purchased using victim scam proceeds at various banks, and retrieving wire transfers sent by victims of the scheme. Jagdishkumar Chaudhari is an Indian national with no legal status in the United States, and has agreed to deportation after he serves his sentence as a condition of his guilty plea.
In his plea, Praful Patel admitted that between in or around June 2013 and December 2015, he was a domestic runner who liquidated funds in and around Fort Myers, Florida for conspirators from India-based call center and organizational co-defendant HGLOBAL. Praful Patel communicated extensively via WhatsApp texts with his conspirators. For a percentage commission on transactions he conducted, Praful Patel admitted to purchasing reloadable GPR cards that were registered using the misappropriated PII of unsuspecting victims that were later used to receive victims’ funds, using those reloadable GPR cards containing victims’ funds to purchase money orders and depositing those money orders into bank accounts as directed, and using fake identity documents to receive wire transfers from victims.
According to Norris’ guilty plea, beginning in or around January 2013 continuing through December 2014, he was a runner who worked with conspirators associated with India-based call center and organizational co-defendant HGLOBAL, and was responsible for the liquidation of victim scam funds in and around California. Norris admitted he communicated extensively via WhatsApp and email with India-based co-defendants including Sagar “Shaggy” Thakar, purchased GPR cards used in the scheme, sent lead lists to conspirators in India that were then used by callers located in the call centers to target potential victims in the telefraud scheme, received scam proceeds via wire transfers using fictitious names, and laundered scam proceeds from GPR cards via ATM withdrawals.
To date, Miteshkumar Patel, Raman Patel, Joshi, Jagdishkumar Chaudhari, Bhatt, Praful Patel, Norris, 49 other individuals and five India-based call centers have been charged for their roles in the fraud and money laundering scheme in an indictment returned by a federal grand jury in the Southern District of Texas on Oct. 19, 2016. Including the pleas announced today, a total of 24 defendants have pleaded guilty thus far in relation to this investigation. Defendants Bharatkumar Patel, Ashvinbhai Chaudhari, Harsh Patel, Nilam Parikh, Hardik Patel, Rajubhai Patel, Viraj Patel, Dilipkumar A. Patel, Fahad Ali, Bhavesh Patel, Asmitaben Patel, Montu Barot, Nilesh Pandya, Dipakkumar Patel, Nisarg Patel, Rajesh Kumar, and Dilipkumar Ramanlal Patel previously pleaded guilty on various dates between April and September 2017.
Miteshkumar Patel is scheduled to be sentenced on March 7, 2018.
The remaining defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
ICE – Homeland Security Investigations, DHS-OIG and TIGTA led the investigation of this case. Also providing significant support were: the Criminal Division’s Office of International Affairs; Ft. Bend County, Texas, Sheriff’s Office; police departments in Hoffman Estates and Naperville, Illinois, and Leonia, New Jersey; San Diego County District Attorney’s Office Family Protection and Elder Abuse Unit; U.S. Secret Service; U.S. Small Business Administration, Office of Inspector General; IOC-2; INTERPOL Washington; USCIS; U.S. State Department’s Diplomatic Security Service; and U.S. Attorneys’ Offices in the Middle District of Alabama, Northern District of Alabama, District of Arizona, Central District of California, Northern District of California, District of Colorado, Northern District of Florida, Middle District of Florida, Northern District of Illinois, Northern District of Indiana, District of Nevada and District of New Jersey. The Federal Communications Commission’s Enforcement Bureau also provided assistance in TIGTA’s investigation.
Senior Trial Attorney Michael Sheckels and Trial Attorney Mona Sahaf of the Criminal Division’s Human Rights and Special Prosecutions Section (HRSP), Trial Attorney Amanda Wick of the Criminal Division’s Money Laundering and Asset Recovery Section, and Assistant U.S. Attorneys S. Mark McIntyre and Craig M. Feazel of the Southern District of Texas are prosecuting this case. HRSP’s Ann Marie Ursini and Assistant U.S. Attorney Greg Kennedy of the Eastern District of Louisiana prosecuted the naturalization fraud case against Joshi.
A Department of Justice website has been established to provide information about the case to already identified and potential victims and the public. Anyone who believes they may be a victim of fraud or identity theft in relation to this investigation or other telefraud scam phone calls may contact the Federal Trade Commission (FTC) via this website.
Anyone who wants additional information about telefraud scams generally, or preventing identity theft or fraudulent use of their identity information, may obtain helpful information on the IRS tax scams website, the FTC phone scam website and the FTC identity theft website.
Two Executives Plead Guilty to Role in Foreign Bribery SchemeRead the Press Release
HOUSTON – Two former executives at a Dutch oil and gas services company, Anthony “Tony” Mace and Robert Zubiate, pleaded guilty this week to conspiracy to violate the Foreign Corrupt Practices Act (FCPA) for their roles in a scheme to bribe foreign government officials in Brazil, Angola and Equatorial Guinea.
Acting U.S. Attorney Abe Martinez, Acting Assistant Attorney General Kenneth A. Blanco 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’ (ICE-HSI) Houston Field Office made the announcement.
Mace, 65, of the United Kingdom, was the Oil Services Company’s CEO from 2008 to 2011 and a former board member of one of its wholly-owned Houston subsidiaries. Zubiate, 66, of California, was a former Texas and California-based sales and marketing executive at the same subsidiary.
U.S. District Judge David Hittner of the Southern District of Texas accepted Mace’s guilty plea on Nov. 9 and Zubiate’s guilty plea on Nov. 6. Sentencing for Mace is scheduled for Feb. 2, and Zubiate for Jan. 31, 2018.
As part of his guilty plea, Mace admitted that prior to becoming CEO, other employees of the Oil Services Company entered into an agreement to pay bribes to foreign officials including at Brazil’s state-controlled oil company, Petróleo Brasileiro S.A. (Petrobras), Angola’s state-owned oil company, Sociedade Nacional de Combustíveis de Angola, E.P. (Sonangol) and Equatorial Guinea’s state-owned oil company, Petroléos de Guinea Ecuatorial (GEPetrol). Mace further admitted he joined the conspiracy by authorizing payments in furtherance of the bribery scheme and deliberately avoided learning that those payments were bribes.
Mace admitted he maintained a spreadsheet reflecting payments to five individuals. Even though he was aware there was a high risk those individuals were Equatorial Guinean officials or persons receiving money on behalf or at the direction of those officials, he nevertheless authorized Oil Services Company to make more than $16 million in payments to those individuals. Mace further admitted he continued a practice that was instituted before he became CEO by splitting payments to Oil Services Company’s Brazilian intermediary - paying a portion of the intermediary’s commission to an account in Brazil and another portion of the agent’s commission to accounts in Switzerland held in the name of shell companies. Mace admitted he deliberately avoided learning that the ultimate recipients of the payments that he authorized to the shell companies were Petrobras officials.
As part of his plea, Zubiate’s admitted that between 1996 and 2012, he and his co-conspirators used a third-party sales agent to pay bribes to foreign officials at Petrobras in exchange for those officials’ assisting the Oil Services Company and its U.S. subsidiary with winning bids. Zubiate also admitted engaging in a kickback scheme with the bribe-paying sales agent for the Oil Services Company and its U.S. subsidiary.
ICE-HSI investigated the case. Assistant U.S. Attorney Suzanne Elmilady is prosecuting the case along with Trial Attorney Dennis R. Kihm and Assistant Chief Tarek Helou of the Criminal Division’s Fraud Section. The Criminal Division’s Office of International Affairs also provided substantial assistance in this matter.
The Department of Justice is grateful to Brazil’s Ministério Público Federal, the Netherlands’ Openbaar Ministerie and Switzerland’s Office of the Attorney General and Federal Office of Justice for providing substantial assistance in gathering evidence during this investigation.
The Criminal Division’s 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/foreign-corrupt-practices-act.
Two Executives Plead Guilty to Role in Foreign Bribery SchemeRead the Press Release
Two former executives at a Dutch oil and gas services company (the “Oil Services Company”), Anthony “Tony” Mace and Robert Zubiate, pleaded guilty this week to conspiracy to violate the Foreign Corrupt Practices Act (FCPA) for their roles in a scheme to bribe foreign government officials in Brazil, Angola and Equatorial Guinea.
Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Acting U.S. Attorney Abe Martinez of the Southern District of Texas and Special Agent in Charge Mark Dawson of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations’ (ICE-HSI) Houston Field Office made the announcement.
Mace, 65, of the United Kingdom, was the Oil Services Company’s CEO from 2008 to 2011, and a former board member of one of its wholly-owned Houston subsidiaries. Zubiate, 66, of California, was a former Texas and California-based sales and marketing executive at the same subsidiary.
U.S. District Judge David Hittner of the Southern District of Texas accepted Mace’s guilty plea on Nov. 9 and Zubiate’s guilty plea on Nov. 6. Sentencing for Mace is scheduled for Feb. 2, 2018, and Zubiate for Jan. 31, 2018.
As part of his guilty plea, Mace admitted that prior to becoming CEO, other employees of the Oil Services Company entered into an agreement to pay bribes to foreign officials including at Brazil’s state-controlled oil company, Petróleo Brasileiro S.A. (Petrobras), Angola’s state-owned oil company, Sociedade Nacional de Combustíveis de Angola, E.P. (Sonangol) and Equatorial Guinea’s state-owned oil company, Petroléos de Guinea Ecuatorial (GEPetrol). Mace further admitted that he joined the conspiracy by authorizing payments in furtherance of the bribery scheme and deliberately avoided learning that those payments were bribes.
Mace admitted that he maintained a spreadsheet reflecting payments to five individuals and that even though he was aware there was a high risk those individuals were Equatorial Guinean officials or persons receiving money on behalf or at the direction of those officials, he nevertheless authorized Oil Services Company to make over $16 million in payments to those individuals. Mace further admitted that he continued a practice that was instituted before he became CEO by splitting payments to Oil Services Company’s Brazilian intermediary, that is, paying a portion of the intermediary’s commission to an account in Brazil and another portion of the agent’s commission to accounts in Switzerland held in the name of shell companies. Mace admitted that he deliberately avoided learning that the ultimate recipients of the payments that he authorized to the shell companies were Petrobras officials.
As part of his plea, Zubiate’s admitted that between 1996 and 2012, he and his co-conspirators used a third-party sales agent to pay bribes to foreign officials at Petrobras in exchange for those officials’ assisting the Oil Services Company and its U.S. subsidiary with winning bids. Zubiate also admitted engaging in a kickback scheme with the bribe-paying sales agent for the Oil Services Company and its U.S. subsidiary.
ICE-HSI investigated the case. Trial Attorney Dennis R. Kihm and Assistant Chief Tarek Helou of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Suzanne Elmilady of the Southern District of Texas are prosecuting the case. The Criminal Division’s Office of International Affairs also provided substantial assistance in this matter.
The Department of Justice is grateful to Brazil’s Ministério Público Federal, the Netherlands’ Openbaar Ministerie and Switzerland’s Office of the Attorney General and Federal Office of Justice for providing substantial assistance in gathering evidence during this investigation.
The Criminal Division’s 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/foreign-corrupt-practices-act.