Southern District of Texas
Press releases recorded for this federal judicial district.
Houston Doctor Sentenced to Prison for Distributing Prescription NarcoticsRead the Press Release
HOUSTON – A 72-year-old doctor has been ordered to federal prison for distributing large amounts of oxycodone and hydrocodone, announced U.S. Attorney Kenneth Magidson. A federal jury convicted Richard Arthur Evans, of Houston, July 27, 2016, on all 19 counts as charged following approximately eight hours of deliberation. Co-defendant David Devido, 78, of Houston, pleaded guilty on the first day of trial.
Today, U.S. District Judge Kenneth Hoyt handed Evans a total sentence of 60 months in federal prison to be immediately followed by three years of supervised release. Evans was also ordered to pay a $250,000 fine and forfeit $268,000 in assets. In handing down the sentence, Judge Hoyt noted that Evans had previously surrendered his medical license and he had no previous criminal record. He was also ordered to serve three years of supervised release following completion of the prison term.
At the hearing, additional evidence was presented including the testimony of former patients who explained that they drove for six hours from the Baton Rouge, Louisiana, area to see Evans to obtain prescriptions for oxycodone and others drugs. The evidence also showed that Evans met patients at Winrock Clinic and New Haven Clinic in Houston. He invited patients to come to his office for oxycodone prescriptions after those clinics were closed.
Devido will be sentenced tomorrow.
During the trial, the jury heard testimony for 14 days from 15 witnesses, including other doctors who appeared as expert witnesses. The government presented more than 175 exhibits during the course of the trial.
The two defendants conspired to distribute oxycodone, a highly addictive and highly abused pain medication. Oxycodone is a semi-synthetic opiate which can be only acquired legally by prescription and dispensed by a pharmacist. As a physician, Evans wrote prescriptions and Devido, a pharmacist, dispensed the drugs. Witnesses testified these pill are sold for approximately $40 each on the street.
Evans distributed these drugs outside the course of professional practice and not for a legitimate medical purpose. He saw patients from Louisiana and other states, prescribed oxycodone and hydrocodone products and directed patients to the pharmacy Devido had owned.
Some of the patients testified as to lax procedures at the clinic and the ease with which they were able to obtain prescriptions. Evans charged patients $200-$240 cash for an initial office visit, at which time they would obtain a first prescription. Refills are not permitted for narcotics. However, the jury heard that patients were told they could obtain a new prescription in 30 days without an office visit as long as the patient sent a money order to Evans for $200-$240. Patients were also told they could obtain a third prescription without an office visit as long as they again sent the payment to Evans.
Once the patients sent in their money orders, Evans and his staff delivered the prescriptions to Devido at Briargrove Pharmacy. Devido and his staff would then send these drugs through the U.S. mail and FedEx to patients in Louisiana and other states.
The jury saw an undercover video depicting Evans signing off on prescriptions the nurse wrote without any examination or questioning of the patient. The jury also saw an undercover video depicting Evans signing off on prescriptions the nurse wrote without any examination or questioning of the patient. They also heard from a defense expert witness physician who testified he was surprised that more than 800 of the patients were from the Baton Rouge, Louisiana, area. The expert could only bring himself to say that a doctor who pre-signs prescriptions is practicing “poorly.”
As a result of the conspiracy, Evans prescribed and Devido dispensed approximately 1.6 million dosage units of oxycodone in a two-year-period. The jury heard that the total money attributed to the diversion scheme was approximately $2.4 million.
The jury convicted Evans on one count of conspiracy, five counts of illegal distribution of narcotics, eight counts of mail fraud and five counts of money laundering.
Evans 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, Internal Revenue Service – Criminal Investigation, U.S. Postal Inspection Service, Department of Health and Human Services and the Texas State Board of Pharmacy conducted the investigation, which was dubbed Operation Oxy Overload. Assistant U.S Attorneys Cedric L. Joubert and Quincy L. Ollison prosecuted the case.
Former Harris County Deputy Ordered into Custody on Federal Child Pornography ChargesRead the Press Release
HOUSTON – The 30-year-old former law enforcement official taken into federal custody last week has been ordered detained on allegations of production and possession of child pornography, announced U.S. Attorney Kenneth Magidson. Andrew Craig Sustaita, who resided in Spring, was previously a Harris County deputy sheriff, but is no longer employed there.
A federal grand jury indicted Sustaita Feb. 1, 2017, on charges of possession and production of child pornography. He was taken into federal custody Thursday, Feb. 9. Today, he appeared before U.S. Magistrate Judge Frances H. Stacy who found he was a danger to the community and a risk of flight and ordered him to remain in custody pending further criminal proceedings. In making that determination. Judge Stacy noted the characteristics of the defendant, the substantial prison sentence he potentially faces as well as the nature and strength of the evidence. She found no condition or set of conditions that would assure the safety of the community and his continued appearances in court. She also noted that the crimes he is charged with committing would constitute a crime of violence.
During the hearing, the government contended that Sustaita has access to weapons, is dangerous and believes he is above the law. The court heard that Sustaita allegedly used his position of trust to abuse at least two children. The court heard arguments that he is facing at least 15 years in prison and, with his law enforcement training, he could be in a position to avoid capture and possible flee.
The court considered arguments from the prosecution that contended Sustaita posted images to a known child pornography website that are believed to be child erotica and that he had commented on other images on that same site. According to the information presented in court today, the investigation into the user name allegedly belonging to Sustaita found items on the Internet in various places including a pay-to-play bestiality website. Further information presented to the court included discussions of the amount and types of images authorities have discovered on two devices believed attributable to Sustaita. The court heard that one video includes a known young girl showering. Other images contain adult male genitalia allegedly of the defendant placed on or near another known young female’s head while she appears to be sleeping and others that include allegedly the same male attempting to expose that child’s genitalia.
If convicted of the sexual exploitation of a child charge (aka production of child pornography), Sustaita faces a mandatory minimum sentence of 15 and up to 30 years in federal prison. He also faces an additional 10-year-maximum sentence upon conviction of possessing child pornography. The charges are also punishable by a $250,000 maximum possible fine. Upon completion of any prison term imposed, Sustaita could also face up to life on supervised release during which the court can impose a number of special conditions designed to protect the children and prohibit the use of the Internet. Sustaita would also be required to register as a sex offender upon conviction.
The Harris County Sheriff’s Office and Immigration and Customs Enforcement’s Homeland Security Investigations 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."
An indictment is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.
Military Man Sent to Prison for Human SmugglingRead the Press Release
CORPUS CHRISTI, Texas – An active duty Army soldier has been ordered to federal prison following his conviction for smuggling two illegal aliens through a U.S. Border Patrol (BP) checkpoint, announced U.S. Attorney Kenneth Magidson along with Special Agent in Charge Mark Dawson of Immigration and Customs Enforcement's Homeland Security Investigations (HSI). Joseph Edmond Cleveland, 25, of El Paso, pleaded guilty Nov. 29, 2016.
Today, Senior U.S. District Judge Janis Graham Jack sentenced Cleveland to a 15-month-term of federal imprisonment. In handing down the sentence, Judge Jack noted an aggravating factor that Cleveland attempted to use his status as a serviceman to avoid detection. Cleveland will also be required to serve three years of supervised release following completion of his prison term.
Cleveland and co-defendant Marco Antonio Nava Jr., 20, also of El Paso, admitted they smuggled two Illegal aliens through the BP checkpoint in Falfurrias. They claimed they were approached by a man who offered to give them $1,500 if they came to the valley to drive two illegal aliens through the checkpoint. On June 19, 2016, the defendants approached the checkpoint with the two illegal aliens in the rear passenger seats of the vehicle. The BP agent asked one of the passengers if he had documents to be in the United States legally to which he said no. Both passengers were ultimately found to be aliens unlawfully present in the U.S. and taken into custody.
Upon questioning, the illegal aliens stated they crossed into the country eight days prior and had been moved to two different trailer homes. On the day of their arrest, they were told by a person in the trailer home that someone was going to come to pick them up and take them Houston. Nava was driving and told them to get into the vehicle. Once inside, the illegal aliens were told they were going to go through an immigration checkpoint and were coached as what to answer to the agent's questions at the checkpoint.
Cleveland was permitted to remain on bond and voluntarily surrender to the U.S. Marshals Service a date to be determined in the near future.
Nava also pleaded guilty for his role and will be sentenced at a later date.
HSI conducted the investigation. Assistant U.S. Attorney Jeffrey S. Miller is prosecuting the case.
Former Harris County Deputy Arrested on Federal Child Pornography ChargesRead the Press Release
HOUSTON, Texas – A 30-year-old man who was residing in Spring has been taken into federal custody on charges of production of child pornography, announced U.S. Attorney Kenneth Magidson. Andrew Craig Sustaita was previously a Harris County deputy sheriff, but is no longer employed there.
A federal grand jury indicted Sustaita Feb. 1, 2017, on charges of production of child pornography. He was taken into custody today and is expected to make his initial appearance before U.S. Magistrate Judge Dena Hanovice Palermo tomorrow at 10:00 a.m.
If convicted, he faces a mandatory minimum sentence of 15 and up to 30 years for producing child pornography. The charge is also punishable by a $250,000 maximum possible fine. Upon completion of any prison term imposed, Sustaita could also face up to life on supervised release during which the court can impose a number of special conditions designed to protect the children and prohibit the use of the Internet. Sustaita would also be required to register as a sex offender upon conviction.
The Harris County Sheriff’s Office and Immigration and Customs Enforcement’s Homeland Security Investigations 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."
An indictment is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.
Two Men Sentenced for Smuggling $4.6 Million in CocaineRead the Press Release
CORPUS CHRISTI, Texas - Two San Antonio residents have been ordered to federal prison following their convictions of smuggling 59 kilograms of cocaine, announced U.S. Attorney Kenneth Magidson. Darin Josep Fox, 24, and Jacob Escalante, 25, pleaded guilty Oct. 31, 2016, to conspiracy to possess with intent to distribute cocaine.
Today, Senior U.S. District Judge Hayden Head ordered both Fox and Escalante to each serve 120 months in federal prison immediately be followed by five years of supervised release. In handing down the sentence, Judge Head noted that the amount of cocaine seized in this case would have had a significant impact and harm on the community.
On June 13, 2016, Fox was driving a Kenworth Tractor with Escalante as passenger. They were towing a flatbed trailer into the Sarita checkpoint on Highway 77 for primary inspection, at which time a service K9 alerted to the presence of contraband. Upon examination, agents discovered and removed 59 square bundles wrapped in black tape containing cocaine from a void located between the frame rails. The cocaine had a total weight of 59 kilograms with an estimated value of approximately $4.6 million.
Fox and Escalante 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 and Border Patrol conducted the investigation. Assistant U.S. Attorney Lance Watt is prosecuting the case.
Arizona Man Sentenced to Prison for Trafficking in Pet Products with Counterfeit LabelsRead the Press Release
An Arizona man was sentenced today to serve 37 months in prison for trafficking in pet products with counterfeit labels into the United States.
Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division; U.S. Attorney Kenneth Magidson of the Southern District of Texas; Special Agent in Charge E. Spencer Morrison of the Food and Drug Administration – Office of Criminal Investigations (FDA-OCI) Kansas City, Kansas, Field Office and Special Agent in Charge Mark Dawson of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations’ (ICE-HSI) Houston Office made the announcement.
Allen Smith, 50, of Phoenix, Arizona, was sentenced today by U.S. District Judge David Hittner of the Southern District of Texas. In addition to his prison term, Smith was ordered to pay $867,150 in restitution and to forfeit $42,269 worth of illicit proceeds.
According to admissions made in connection with his plea, Smith was responsible for aiding and abetting the trafficking of over $1 million worth of veterinary products that were not manufactured for the U.S. market into the United States for distribution under false labels, including Frontline and Frontline Plus products manufactured by Merial Pharmaceutical Company (Merial) and Advantage and K9 Advatix products manufactured by Bayer. Smith intentionally trafficked in the products to deceive retail stores and consumers into believing that the products had received necessary Environmental Protection Agency (EPA) authorization to be manufactured for and approved for sale in the United States.
The FDA-OCI, HSI and the EPA investigated the case. Assistant Deputy Chief John H. Zacharia of the Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS) and Assistant U.S. Attorney Jennifer Lowery of the Southern District of Texas are prosecuting the case. The U.S. Attorney’s Office of the Central District of California and the CCIPS Cybercrime Lab provided significant assistance.
Arizona Man Sentenced for Trafficking in Pet Products with Counterfeit LabelsRead the Press Release
HOUSTON - An Arizona man was sentenced today to serve 37 months in prison for trafficking in pet products with counterfeit labels into the United States.
U.S. Attorney Kenneth Magidson, Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division; Special Agent in Charge E. Spencer Morrison of the Food and Drug Administration – Office of Criminal Investigations (FDA-OCI) Kansas City, Kansas, Field Office 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.
U.S. District Judge David Hittner of the Southern District of Texas sentenced Allen Smith, 50, of Phoenix, Arizona, today. Smith was also ordered to pay $867,150 in restitution and to forfeit $42,269 worth of illicit proceeds.
According to admissions made in connection with his plea, Smith was responsible for aiding and abetting the trafficking of more than $1 million worth of veterinary products that were not manufactured for the U.S. market into the United States for distribution under false labels. These included Merial Pharmaceutical Company (Merial) manufactured-products Frontline and Frontline Plus and others Bayer manufactured, such as Advantage and K9 Advantix. Smith intentionally trafficked in the products to deceive retail stores and consumers into believing that the products had received necessary Environmental Protection Agency (EPA) authorization to be manufactured and approved for sale in the United States.
The FDA-OCI, HSI and the EPA investigated the case. Assistant U.S. Attorney Jennifer Lowery of the Southern District of Texas and Assistant Deputy Chief John H. Zacharia of the Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS) are prosecuting the case. The U.S. Attorney’s Office of the Central District of California and the CCIPS Cybercrime Lab provided significant assistance.
Former Goodwill Employee and Another Man Sentenced for Stealing Grant Money Destined for Homeless VeteransRead the Press Release
HOUSTON – Two area men have been ordered to federal prison following their convictions of conspiracy and wire fraud, announced U.S. Attorney Kenneth Magidson. A federal jury sitting in Houston convicted Aaron Matthew Pierce, 37, of Houston, following a five-day trial Nov. 14, 2016, while Darrell Demond Arline, 37, of Pearland, pleaded guilty on the first day of trial to all counts as charged - conspiracy to commit wire fraud and 14 counts of wire fraud.
Today, U.S. District Judge Alfred H. Bennett, who presided over the trial, handed Arline a 48-month sentence, while Pierce was ordered to serve a sentence of six months in federal prison, each to be followed by three and two years, respectively. Arline was further ordered to pay a $316,512.13 in restitution and Pierce’s restitution amount was set at $18,016. In handing down the sentence, Judge Bennett noted that the victims of this crime were the military veterans of this country.
Airline was Goodwill’s program manager for U.S. Department of Veteran Affairs (VA) Supportive Services for Veteran Families (SSVF) grants. These were multi-million dollar grants which were awarded to Goodwill Industries of Houston to aid Veterans and their families with housing.
Arline recruited his friend, Pierce, to cash fraudulently issued SSVF grant checks by allowing his name and a sham sole proprietorship to be used to represent to Goodwill that he was providing emergency housing assistance to veterans and their families who were either homeless or about to become homeless.
Between Jan. 3, 2013, and Aug. 28, 2014, Pierce and Arline entered into a conspiracy to steal money from the grant by submitting fraudulent purchase orders resulting in the theft of grant monies. The SSVF grants were intended to provide supportive services to very low-income military veteran families who were residing in permanent housing, were homeless and scheduled to become residents of permanent housing within 90 days and after exiting permanent housing or were seeking other housing that was responsive to such very low-income military veteran family’s needs.
Previously released on bond, Arline 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. Pierce 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 VA - Office of Inspector General, Criminal Investigations Division conducted the investigation. Assistant U.S. Attorneys Daniel C. Rodriguez and Adam L. Goldman prosecuted the case.
Kansas Man Indicted on Child Pornography and Sex Tourism ChargesRead the Press Release
A 70-year-old Kansas native who was residing in Panama was indicted today and charged with multiple crimes involving sexual conduct with minors in a foreign country, announced Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division and U.S. Attorney Kenneth Magidson of the Southern District of Texas.
Jebediah Dishman, 70, of Fredonia, Kansas, was arrested in Houston on Nov. 8, 2016, and originally charged by criminal complaint. He later appeared before U.S. Magistrate Judge Mary Milloy who found him to be a flight risk and ordered him into custody. Today, a grand jury in the U.S. District Court for the Southern District of Texas indicted him on one count each of engaging in illicit sexual conduct with a minor in a foreign country, production of child pornography, sex trafficking of children, and obtaining custody and control of a minor for the purpose of producing sexually explicit visual depictions of the minor.
According to the indictment, from September 2014 through March 2015, Dishman traveled from the United States to the Republic of Indonesia and engaged in illicit sexual conduct with minors. While in Indonesia in February 2015, Dishman allegedly used a minor to produce visual depictions of the minor engaging in sexually explicit conduct. In addition, the indictment alleges that between September 2014 and March 2015, Dishman attempted to recruit and entice minors in the Republic of Indonesia and other countries outside of the territorial jurisdiction of the United States to engage in commercial sex acts.
The charges contained in the indictment are only allegations. The defendant is presumed innocent unless and until he is proven guilty beyond a reasonable doubt in a court of law.
The FBI is investigating this case with the cooperation of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations. Trial Attorney Elly M. Peirson of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) and Assistant U.S. Attorney Sherri Zack of the Southern District of Texas are prosecuting the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Kansas Man Indicted on Child Pornography and Sex Tourism ChargesRead the Press Release
HOUSTON – A 70-year-old Kansas native who was residing in Panama was indicted today and charged with multiple crimes involving sexual conduct with minors in a foreign country, announced U.S. Attorney Kenneth Magidson and Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division.
Jebediah Dishman, of Fredonia, Kansas, was arrested in Houston on Nov. 8, 2016, and originally charged by criminal complaint. He later appeared before U.S. Magistrate Judge Mary Milloy who found him to be a flight risk and ordered him into custody. Today, a grand jury in the U.S. District Court for the Southern District of Texas indicted him on one count each of engaging in illicit sexual conduct with a minor in a foreign country, production of child pornography, sex trafficking of children and obtaining custody and control of a minor for the purpose of producing sexually explicit visual depictions of the minor.
According to the indictment, from September 2014 through March 2015, Dishman traveled from the United States to the Republic of Indonesia and engaged in illicit sexual conduct with minors. While in Indonesia in February 2015, Dishman allegedly used a minor to produce visual depictions of the minor engaging in sexually explicit conduct. In addition, the indictment alleges that between September 2014 and March 2015, Dishman attempted to recruit and entice minors in the Republic of Indonesia and other countries outside of the territorial jurisdiction of the United States to engage in commercial sex acts.
The FBI is investigating this case with the cooperation of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations. Assistant U.S. Attorney Sherri Zack of the Southern District of Texas and Trial Attorney Elly M. Peirson of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) are prosecuting the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
An indictment is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.
Teller Supervisor Convicted of Concealing Theft of Bank FundsRead the Press Release
McALLEN, Texas – A McAllen woman has entered a guilty plea to falsifying bank records in order to conceal theft of $1.25 million in bank funds, announced U.S. Attorney Kenneth Magidson.
Jill Marie Myers, 42, was employed as the teller supervisor at the Edinburg branch of First National Bank, later PlainsCapital Bank. Among her duties, she was responsible for verifying the amount of U.S. currency maintained by the bank in its various “cash vaults” and then entering those amounts at the end of each day into the general ledger of the bank.
An investigation into these records revealed that from approximately June 2004 until June 2014, U.S. currency belonging to the bank began to disappear from the vault at an average of $10,000 per month. Myers admitted she created fraudulent entries in bank records in order to conceal theft of $1.25 million in U.S. currency.
The scheme was uncovered in June 2014 after PlainsCapital Bank acquired the Edinburg location of First National Bank.
U.S. District Judge Micaela Alvarez accepted the plea today and has set sentencing for April 26, 2017. At that time, Myers faces up to 30 years in federal prison and a possible $1 million fine. She has also agreed to pay restitution. Myers was permitted to remain on bond pending her sentencing hearing.
The FBI conducted the investigation with the assistance of the Federal Deposit Insurance Corporation. Assistant U.S. Attorney Robert L. Guerra Jr. is prosecuting the case.
Smuggler Gets Enhanced Sentence for Raping Undocumented Honduran AlienRead the Press Release
McALLEN, Texas – A 30-year-old Mexican national has been ordered to federal prison for harboring undocumented aliens, announced U.S. Attorney Kenneth Magidson. Adan Hernandez-Nunez pleaded guilty Sept. 29, 2016.
Today, U.S. District Judge Micaela Alvarez sentenced Hernandez-Nunez to 50 months imprisonment. The sentence was enhanced because he raped one of the undocumented aliens. Upon imposing the sentence, the court noted that the sentence was warranted due to the rape and the harm that Hernandez-Nunez put these individuals in by engaging in this crime.
From June 7 to July 14, 2016, Hernandez-Nunez harbored undocumented aliens in a residence in Palmhurst. During this time, he sexually assaulted one undocumented alien and threatened to kill her if she reported the assault to anyone.
On July 15, 2016, an undocumented Honduran alien advised Border Patrol agents that another female undocumented alien had previously escaped from the same stash house. The victim further advised agents that Hernandez-Nunez had accused her of encouraging the female undocumented alien to escape and threatened her, saying she “was going to pay for it.” Subsequently, on July 11, 2016, Hernandez-Nunez raped the undocumented Honduran alien.
He will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
Border Patrol, Immigrations and Customs Enforcement’s Homeland Security Investigations and the Hidalgo County Sheriff’s Office conducted the investigation.
Assistant U.S. Attorneys Alex Benavides and Jimmy Leo prosecuted the case.
Seven Sentenced in $6 Million Health Care Fraud SchemeRead the Press Release
HOUSTON – The final seven of eight convicted in a $6 million fraudulent Medicare billing scheme have been ordered to federal prison, announced U.S. Attorney Kenneth Magidson.
A Houston federal jury has returned guilty verdicts June 28, 2016, against Giam Nguyen, D.O.,47, of Houston; Benjamin Martinez, M.D., 35, of Dallas; Donovan Simmons, M.D., 43, of Austin; and Anna Bagoumian, 44, of Glendale, California, following an eight-day trial and approximately 13 hours of deliberation. Zaven Pogosyan, 38, Edvard Shakhbazyan, 41, and Seryan Mirzakhanyan, 32, all of Glendale, California; and Frank Montgomery, 67, of Houston; pleaded guilty prior to trial.
At a hearing that concluded late yesterday, U.S. District Judge Lynn N. Hughes handed Nguyen, Edvard Shakhbazyan and Pogosyan all sentences of 87 months in prison and ordered they pay restitution in the amount of $3.3 million. Martinez, Montgomery and Simmons were ordered to serve respective sentences of 28, 17 and 15 months, while Bagoumian will serve a 51-month-term of imprisonment. All were also ordered to pay varying terms of restitution ranging from $6,200 to $2.6 million.
Seryan Mirzakhanyan, 32, was sentenced earlier this month to a 28-month-term of imprisonment and ordered to pay restitution of $1.48 million.
The scheme involved fraudulent billing for diagnostic testing done at three different clinics from September 2008 to May 2010. Patients were paid to come to the clinics, and the clinics then billed for tests that were either not performed or not medically necessary.
Pogosyan and Edvard Shakhbazyan were the former owners of medical clinics located at 2110 Jefferson, 2112 Pease and 6892 Southwest Freeway, Suite 2A, in Houston. Both admitted they opened the three clinics with the intention to defraud Medicare. The majority of the diagnostic tests allegedly performed there were either not done or not medically necessary. Further, the medical equipment, patient files and doctors were all there only to make it appear legitimate. The men also admitted hiring doctors for that purpose and that they paid marketers to bring patients to the fraudulent clinics.
Pogosyan hired Nguyen, who was the only doctor working at the clinics. Pogosyan also hired Martinez and Simmons to travel to Houston once a month to review patient files at the clinic located on Pease Street.
Patients were brought to the clinics by recruiters/marketers like Montgomery who were paid for each patient they delivered. Seryan Mirzakhanyan and Edvard Shakhbazyan paid the marketers for the patients as did Pogosyan and Bagoumian. Mirzakhanyan and Montgomery testified at trial about receiving the cash payments. The court also heard that Bagoumian participated in shredding all of the patient and business records of the Jefferson clinic.
Some of the Medicare beneficiaries also testified as to being paid approximately $100 to go to the clinics. They had primary care physicians, but they reported that they were not referred to the clinics by their physicians nor did they receive any of the test results.
During trial, a law enforcement agent testified about reviewing patient files seized during the searches of the Pease and Southwest Freeway clinics. The jury heard that 730 of the 1229 patients reported their chief complaint as back pain. Nevertheless, those patients were given ultrasounds of their kidneys, abdomens, thyroids, carotid arteries as well as allergy tests and anorectal tests. His testimony also revealed that not one of the files contained a plan of treatment or any indication that the test results were discussed with the patient.
Further, an expert witness told the jury that the anorectal manometry and EMG of the anal or urethral sphincter test results in the patient files were physiologically impossible and therefore could not have been done. He also said there was no medical justification in any of the files to do either of the tests.
The court also heard that Simmons had admitted being paid $40,000 for reviewing 20-30 patient files in less than four hours. Bagoumian received checks totaling $183,000 and cashed every one of them, according to testimony.
With the exception of Bagoumian and Montgomery, who were ordered into custody for violating the terms of their pre-trial release, all had been on bond. Nguyen was taken into custody following the sentencing where he will remain pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future. The remaining defendants were permitted to remain on bond and voluntarily surrender to a U.S. Bureau of Prisons facility to be determined in the near future.
Multiple agencies conducted the investigation to include The Texas Attorney General’s Office – Medicaid Fraud Control Unit, IRS - Criminal Investigation, FBI, Department of Health and Human Services - Office of Inspector General. Assistant U.S. Attorneys Al Balboni and Rodolfo Ramirez prosecuted the case.
San Benito Man Heads to Prison for Posing as Licensed Vocational NurseRead the Press Release
McALLEN, Texas ‐ A San Benito man has been ordered to federal prison following his conviction of aggravated identity theft, announced U.S. Attorney Kenneth Magidson. Juan Manuel Perez, 36, pleaded guilty Nov. 3, 2016.
Today, U.S. District Judge Micaela Alvarez handed Perez a mandatory 24-month sentence imprisonment in connection with his misappropriation of the identity of a Licensed Vocational Nurse (LVN) of the same name. In handing down the sentence, Alvarez noted that Perez’s misappropriation of the LVN’s identity had denied patients the right to receive health care from a licensed professional.
In December 2014, Perez obtained employment with Cleveland Health Care LLC in McAllen, claiming to be an LVN. The license number presented by Perez, however, belonged to another individual of the same name. Perez is not licensed by the Texas Board of Nursing and is not an LVN.
Perez, posing as the LVN, conducted patient home visits and provided medical services from December 2015 through July 2016 while employed with Cleveland Health Care.
Previously released on bond, Perez 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 Department of Health and Human Services‐Office of Inspector General, FBI and the Health and Human Services Commission conducted the investigation. Assistant U.S. Attorneys Andrew Swartz and Michael Day are prosecuting the case.
McAllen Man Heads to Prison for Downloading Hundreds of Child Pornography Videos and ImagesRead the Press Release
McALLEN, Texas – A 27-year old resident of McAllen has been ordered to federal prison following his conviction of receipt of child pornography, announced U.S. Attorney Kenneth Magidson along with Special Agent in Charge Shane Folden of Immigration and Customs Enforcement’s Homeland Security Investigations (HSI). Jorge Trevino-Blanco pleaded guilty Sept. 28, 2016.
Today, U.S. District Judge Micaela Alvarez took into consideration the number of videos and images involved in the offense as well as the harm to the victims and handed Trevino-Blanco a sentence of 120 months in federal prison. The sentence will be immediately followed by 10 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. Additional information was also presented today, including testimony regarding the fact that certain videos involved children under three years of age and children engaged in acts of bondage. The court further ordered restitution for one of the victims involved in the offense in the amount of $10,000. Trevino-Blanco will also be ordered to register as a sex offender.
Trevino-Blanco came to the attention of law enforcement following an investigation which began Oct. 16, 2015, into persons using the Internet to traffic in child pornography. A special agent with HSI was able to locate and identify a computer as offering to participate in the receipt of child pornography movies and images through the peer-to-peer network on the Internet. Through the investigation, it was determined that the computer was located in a residence in McAllen.
On July 8, 2016, authorities executed a federal search warrant at that residence, during which time they seized two laptop computers and an external hard drive. A forensic examination on the devices revealed a total of 123 videos and 282 images of child pornography involving clearly young children engaged in sexually explicit conduct. These videos and images included children under the age of 12 engaged in sadistic conduct and acts of violence. Some of the videos and images are of known victims as identified through the National Center for Missing and Exploited Children.
Trevino-Blanco admitted he downloaded child pornography from the Internet, thereby receiving the child pornography found on his computers and external hard drive. He further admitted he had been doing so for approximately four years.
He will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
HSI conducted the investigation.
This case, prosecuted by Assistant U.S. Attorney Alex Benavides, 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."
Corpus Christi Man Gets 27 Years for Producing Child PornographyRead the Press Release
CORPUS CHRISTI, Texas – A 29-year-old man has been ordered to federal prison following his conviction of sexual exploitation of a child, announced U.S. Attorney Kenneth Magidson. Edward Lopez Jr. pleaded guilty Oct. 17, 2016.
Today, Senior U.S. District Judge John D. Rainey took into consideration the testimony of a psychologist and the nature of the crime committed against the most vulnerable, an eight-year-old child, and handed Lopez a sentence of 326 months in federal prison. Additional information was also presented today, including a letter the victim had written to Lopez which was read in open court. In handing down the sentence, Judge Rainey stated that the crime Lopez committed was, indeed, a heinous crime. Lopez was further ordered to serve the rest of his life on supervised release following completion of his prison term, during which time he will have to comply with numerous sex offender prohibitions designed to restrict his access to children. He will also be ordered to register as a sex offender.
Lopez came to the attention of law enforcement after authorities learned of the sexual assault of a minor female child. The child was identified and confirmed the abuse and Lopez was identified as the perpetrator.
Authorities executed a search warrant at Lopez’s residence and seized several electronic media storage devices. Forensic examination of his cellular telephone resulted in the discovery of a video of the minor female child involved in sexually explicit conduct with the Lopez. Photographs of a minor female child involved in sexually explicit conduct were also found on his cellular telephone.
Lopez was arrested on the federal charges in February 2016 and has been in federal custody since that time where he will remain pending
transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The FBI and Corpus Christi Police Department’s Internet Crimes Against Children Task Force conducted the investigation.
This case, prosecuted by Assistant U.S. Attorneys Elsa Salinas and Brittany Jensen, was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to locate, apprehend and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Former Bank Employees Ordered to PrisonRead the Press Release
LAREDO, Texas – Two former employees of IBC Bank in Laredo have been ordered to federal prison for conspiracy to commit bank fraud and ordered to pay more than $200,000 in restitution, announced U.S. Attorney Kenneth Magidson. Antonieta De La Cruz, 36, and Anaiza Morales, 38, both of Laredo, pleaded guilty to the charges in December 2015 and February 2016, respectfully.
Today, U.S. District Judge Diana Saldaña, who accepted the guilty pleas, handed both De La Cruz and Morales 27-month-terms of federal imprisonment. Both were further ordered to pay restitution in the amount of $219,720.11 to IBC Bank. In handing down the sentences, the court noted that IBC Bank tries to promote from within and has an interest in their employees reaching their full potential which is why this (breach of trust) is such a shame.
From 2011 to July 2014, De La Cruz and Morales misused their positions as IBC Sales Associates to execute 31 unauthorized loans and loan advances by falsifying bank records, forging signatures and endorsements and pledging customers’ certificate of deposits as collateral without their knowledge or consent.
As a result of the scheme, IBC suffered a total loss of approximately $219,720.11.
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. De La Cruz has been and will remain in custody.
The U.S. Secret Service conducted the investigation. Assistant U.S. Attorney Christopher S. Coker is prosecuting the case.
League City Woman Convicted on Child Pornography ChargeRead the Press Release
GALVESTON, Texas - A 46-year-old woman has entered a guilty plea to one count of receipt of child pornography, announced U.S. Attorney Kenneth Magidson.
Tracey Lynn Bautista came to the attention of law enforcement after investigators found evidence she was receiving child pornography from an individual who had been arrested for the promotion of child pornography. Investigators found several child pornography images and videos which were sent to Bautista via text messaging and the online messaging application known as Kik Messenger. Bautista acknowledged receipt of these images by responding “nice” and “[w]ow. [g]ood pic.”
Additionally, investigators found text messages in which Bautista discusses a minor relative with this individual. Bautista offered to get pictures of the minor relative for him and later sent a photo of a 16-year-old female relative who is topless with her breasts exposed for the camera’s viewing.
U.S. District Judge George C. Hanks Jr. accepted the plea and set sentencing is set for April 29, 2017. At that time, Bautista faces a minimum of five and up to 20 years in federal prison as well as a possible $250,000 maximum. She was permitted to remain on bind pending that heating.
Immigration and Customs Enforcement’s Homeland Security Investigations and the Montgomery County Precinct 1 Constable’s Office conducted the investigation.
This case, prosecuted by Assistant U.S. Attorney Kimberly Ann Leo, 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."
Convicted Felon Sentenced to Prison After Taking Law Enforcement Official’s GunRead the Press Release
LAREDO, Texas – A Laredo man has been sentenced to federal prison after he took a firearm from a Webb County Sheriff’s officer inside her home in the course of a domestic dispute, announced U.S. Attorney Kenneth Magidson. Jose Genaro Contreras pleaded guilty Oct. 6, 2016, admitting to being a felon in possession of a firearm.
Today, U.S. District Judge Diana Saldana handed Contreras a 60-month sentence. He was further ordered to serve a three-year-term of supervised release following completion of the prison term. In handing down the sentence, Judge Saldana noted the defendant’s “horrible record” and described his conduct as “egregious.”
On May 29, 2016, Contreras became angry at his girlfriend, who was then a deputy with the Webb County Sheriff’s Office. Contreras pushed the woman to the floor, took the .40 caliber gun out of her purse and, according to her written statement, took her into a back restroom and locked the door. Two children were also inside the home.
Authorities later responded to a 911 call from the woman’s sister who stated that Contreras had a gun and she was worried he was going to kill her sister. When police arrived and questioned Contreras, he denied that any firearms were inside the residence. At the time Contreras possessed the firearm, he was a convicted felon who was prohibited from possessing any firearms.
Contreras will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The Bureau of Alcohol, Tobacco, Firearms and Explosives conducted the investigation with the assistance of the Laredo Police Department. Assistant U.S. Attorney Chris Howard is prosecuting the case.
Marine Pilot Sentenced for Possession of Child PornographyRead the Press Release
CORPUS CHRISTI, Texas – A 44-year-old Corpus Christi man has been sentenced to federal prison for possessing child pornography, announced U.S. Attorney Kenneth Magidson. Jason Michael Ehret, an active duty Marine Corps major serving as an aviation flight instructor, pleaded guilty Nov. 15, 2016.
Today, Senior U.S. District Judge Janis Graham Jack handed Ehret a sentence of 87 months in federal prison. He was further ordered to pay a $10,000 fine and will serve the rest of his life on supervised release, during which time he will have to comply with numerous requirements designed to restrict his access to children and the Internet. He will also be ordered to register as a sex offender.
At the time of the plea, the court heard that authorities used peer-to-peer software and were able to successfully download various files containing child pornography from an IP address that was associated with Ehret.
In March 2016, agents executed a search warrant at Ehret’s residence, at which time they seized various electronic devices. Forensic analysis on those devices revealed more than 180 images and approximately four videos of child pornography. Authorities also discovered more than 570 images of child erotica.
Ehret was arrested on the federal charges in September 2016 and has been in custody since that time where he will remain pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
Immigration and Customs Enforcement’s Homeland Security Investigations conducted the investigation with the assistance of Naval Criminal Investigative Service and the Corpus Christi Police Department—Internet Crimes Against Children Task Force.
This case, prosecuted by Assistant U.S. Attorney Hugo R. Martinez, 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."
Jury Convicts Local Man of Bank RobberyRead the Press Release
HOUSTON – A 24 year-old Houston man has been found guilty for the armed robbery of a Capital One Bank and for using a firearm during and in relation to a crime of violence, announced U.S. Attorney Kenneth Magidson. A Houston federal jury convicted Trent Davis today following two days of trial and approximately an hour of deliberation.
On April 26, 2016, Davis and co-defendant Derrick Muhammad, 28, of Houston, robbed the Capital One Bank located at 1514 West Sam Houston South in Houston. The men entered the facility, at which time Davis jumped the counter, pointed a pink gun at the teller and demanded he open the vault. Upon fleeing the bank, two dye packs exploded within the bag holding the money which was then thrown from the car. A witness in a nearby building saw the two masked men exiting the bank and photographed the vehicle as the dye pack exploded.
Davis used his sister’s car during the robbery. During trial, an FBI chemist testified that a substance found in that vehicle had chemicals found only in dye packs.
The lead teller on the date of the robbery told the jury how he was forced to empty the vault at gunpoint. He testified that the robbers were wearing hoodies and that one of them used a pink gun in the robbery.
Davis was apprehended approximately a month after the robbery in possession of a pink gun that had been painted black.
Two witnesses testified about jail house conversations they had with Davis and claimed Davis confessed to the crime, that he used his sister’s car and about the pink gun being painted. The jury also heard from Muhammad who testified about the details of the robbery. He previously pleaded guilty and will be sentenced in March 2017.
U.S. District Judge David Hittner presided over the trial and has set sentencing for April 19, 2017. At that time, Davis faces up to 25 years for the bank robbery as well as another seven years for the use and carrying of a firearm which must be served consecutively to any other prison term imposed.
The FBI Violent Crime Task Force conducted the investigation, which included agents and officers of the FBI, Harris County Sheriff’s Office and Houston Police Department Assistant U.S. Attorneys Celia Moyer and Jill Stotts are prosecuting the case.
Jury Convicts Local Doctor in $13 Million Health Care Fraud SchemeRead the Press Release
HOUSTON – The final defendant charged in a $13 million Medicare and Medicaid health care fraud case has been found guilty on all eight counts as charged, announced U.S. Attorney Kenneth Magidson. A federal jury convicted Dr. Faiz Ahmed, 64, of Houston, today following a six-day trial and approximately five hours of deliberations.
Ahmed and eight co-defendants engaged in a conspiracy to falsely bill Medicare and Medicaid for medically unnecessary diagnostic tests. At trial, the jury heard that Ahmed agreed to approve the testing and allowed his physician number to be used in the Medicare billing process to support the tests.
The lead defendant in the case - Mkrtich “Mike” Yepremian, 59, of Houston, paid marketers to bring patients to the clinics. He also, among others, paid the patients to submit to the tests. He pleaded guilty March 4, 2016, to conspiracy to commit health care fraud and paying kickbacks to marketers of Medicare and Medicaid patients.
Seven others have also pleaded guilty for their respective roles - Bompa Mbokoso Mompiere, 57, Michael Wayne Wilson, 47, Jermaine Doleman, 39, Harding Dudley Ross, 62, Eric Johnson, 62, Ann Marie Rocha, 49, and Eddie Wayne Taylor, 57, all of Houston. These defendants and Yepremian are set for sentencing in April 2017.
Yepremian ran several false clinics in Houston and Conroe. He paid marketers, including Wilson, Doleman, Johnson and Taylor, to bring patients to the clinics for a battery of diagnostic tests and blood work, regardless of medical need. Yepremian paid the marketers approximately $100 for each patient brought to his clinics. In turn, the marketers paid the patients approximately $50 each.
Ahmed approved the medically unnecessary diagnostic testing. He ordered testing for approximately 400 patients, 80 percent of which included an EKG and PFT (series of breathing tests). Ahmed was not even their regular treating physician. The jury heard that no one was referred to these clinics, there was no appointment book, they did not collect any copays and that the patients usually arrived all at the same time along with marketers.
The jury heard from some of the paid patients who testified they were paid to submit to the testing and knew it was wrong. The jury also heard testimony from the office manager – Rocha – and other co-conspirators about the overall scheme. The jury also saw video and heard phone calls, during which Ahmed had agreed to the scheme.
As a result of the overall conspiracy, Medicare and Medicaid were billed approximately $13 million and paid out approximately $9 million in false claims.
The defense attempted to convince the jury that Ahmed did not order unnecessary tests and said he had no idea the patients were paid. He argued that someone else must have added the tests and billed them to Medicare. The jury did not believe his claims and found him guilty for the underlying conspiracy and for committing health care fraud.
U.S. District Judge Gray Miller presided over the trial and has set sentencing for April 6, 2017. At that time, Ahmed faces up to 10 years imprisonment and a possible $250,000 fine on all eight counts of conviction. Previously released on bond, Ahmed was permitted to remain on bond pending his sentencing hearing.
The Texas Attorney General’s Medicaid Fraud Control Unit, Department of Health and Human Services - Office of Inspector General (Office of Investigations) and the FBI conducted the investigation. Special Assistant U.S. Attorney Suzanne Bradley and Trial Attorney Jason Knutson are prosecuting the case.
Freeport Man Enters Guilty Plea to Three Child Pornography ChargesRead the Press Release
GALVESTON, Texas – A 21-year-old Freeport man has been convicted of distribution, receipt and possession of child pornography, announced U.S. Attorney Kenneth Magidson.
Miguel Jimenez Jr. came to the attention of authorities after they believed he was uploading and storing child pornography into a virtual storage account. A search warrant was executed at his residence, at which time law enforcement located and seized various computers and cellular phones. Forensic analysis of the phones, computers and virtual storage accounts revealed 658 child pornography images and 634 child pornography videos. The images and videos included minors under the age of 12 engaging in sexual activity, instances of sadism, masochism, bondage involving the penetration of the minor, as well as masturbation and the lewd and lascivious display of the children’s genitals.
Today, Jimenez admitted he possessed, received and distributed numerous images child pornography. Jimenez chatted with unidentified users who shared his sexual interest in children. Further, Jimenez used several different on-line applications to chat with underage girls all over the country. He had an online relationship with one minor female whom he had threatened by saying she had to continue the relationship or he would send naked pictures of her to her friends.
The forensic analysis results indicated that Jimenez searched the Internet using the phrase, “how much trouble can you be in for sending naked photos of ex.”
Jimenez has been detained since his arrest on May 5, 2016, at which time U.S. Magistrate John R. Froeschner found him to be a flight risk and danger to the community.
U.S. District Judge George C. Hanks accepted the plea and set sentencing for May 17, 2017. For distribution and receipt of child pornography, Jimenez faces a mandatory minimum sentence of five and up to 20 years in federal prison. He also faces another maximum term of 10 years for the possession conviction. All charges are also punishable by a $250,000 maximum possible fine. Upon completion of any prison term imposed, the court could impose any number of years and up to life on supervised release and he will also be required to register as a sex offender.
Immigration and Customs Enforcement’s Homeland Security conducted the investigation.
This case, prosecuted by Assistant U.S. Attorney Sherri Zack, was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to locate, apprehend and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Former Energy Company Executives Convicted in Embezzlement SchemeRead the Press Release
HOUSTON - The former president of Chase Power Development has entered a guilty plea to conspiracy to commit mail and wire fraud, announced U.S. Attorney Kenneth Magidson. Kathleen Smith entered her plea today, while co-defendant and former CEO John Upchurch entered his plea earlier this month.
Houston-based Quintana Capital Group created Chase Power in order to head start an energy project in Corpus Christi. In July 2008, Upchurch was hired as CEO and Smith as president of that company.
From about June 2008 to about June 2012, Upchurch and Smith embezzled a significant amount of money from Chase Power. Throughout their employment with Chase Power, they submitted false invoices for fake projects in order to receive company funds for their own personal expenses, such as personal travel, hotels, country club memberships, personal car restoration, fishing equipment and a hunting trip. Smith and Upchurch either mailed the company checks upon issuance or personally took the checks to the merchants.
In addition, the defendants used their company American Express credit cards for their own personal purchases. Upchurch and Smith would segregate their illegitimate American Express expense account summaries and self-approve them for payment on personal items and expenditures.
U.S. District Judge Sim Lake accepted the pleas and has set sentencing for April 2017. At that time, both face up to five years in federal prison and/or a maximum possible $250,000 fine. They were permitted to remain on bond pending sentencing.
The FBI conducted the investigation. Assistant U.S. Attorney Suzanne Elmilady is prosecuting this case.
Laredo Man Sentenced for Possessing Nearly 164 Kilos of MarijuanaRead the Press Release
LAREDO, Texas – A 29-year-old Laredoan has been ordered to federal prison following his convictions of conspiracy and possession with intent to deliver marijuana, announced U.S. Attorney Kenneth Magidson. A federal jury convicted Daniel Elizondo March 16, 2016.
Today, U.S. District Judge Diana Saldana, who presided over the trial, handed Elizondo a 46-month sentence to be followed by three years of supervised release. At the hearing, Elizondo admitted his involvement in the marijuana smuggling event and apologized to the court and his family. In handing down the sentence, the court noted that Elizondo took responsibility for his part in the crime. Elizondo was also ordered to complete 50 hours of community service.
At trial, several Border Patrol (BP) agents testified that Elizondo was the driver of a pickup truck involved in a marijuana smuggling event. On the night of Dec. 11, 2015, authorities saw several individuals crossing the Rio Grande River carrying bundles of suspected narcotics. They watched the individuals as they hid in a brushy area next to a roadway on the Laredo side of the river.
Approximately an hour and a half later, Elizondo arrived along with two other vehicles. Bundles were then loaded into Elizondo’s truck. He then began to drive away from the scene when he was stopped by BP agents. At that time, they discovered four bundles of marijuana in the bed of the pickup truck and one bundle that had been dropped nearby.
In total, Elizondo was convicted of possessing 163.9 kilograms of marijuana. The value of the drugs at the time of the event was approximately $70,000.
Elizondo was taken into custody following the return of the verdict where he will remain pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The Drug Enforcement Administration and BP conducted the investigation. Assistant U.S. Attorney (AUSA) Sarah Ellison and Special AUSA Lisa Ezra prosecuted the case.
Rio Grande Valley Area Doctor Charged in Illegal Kickback SchemeRead the Press Release
McALLEN, Texas ‐ A Rio Grande Valley area doctor has been taken into custody for his scheme to solicit and obtain illegal kickbacks in exchange for Medicare patient referrals, announced U.S. Attorney Kenneth Magidson.
A grand jury in McAllen returned the sealed indictment Jan. 17, 2017, against Dr. Jose de Jesus Martinez, 51, of Palmhurst. Authorities arrested him today, at which time the indictment was unsealed. He is scheduled to make his initial appearance before U.S. Magistrate Judge Peter Ormsby this morning.
The indictment alleges Martinez solicited and obtained cash in exchange for referrals of Medicare beneficiaries to prospective home health agencies. The home health agencies would then submit claims with Medicare based on the referrals furnished by Martinez for the illegal kickback payments, according to the charges.
Martinez allegedly received cash payments as illegal kickbacks for the referral of Medicare beneficiaries. The indictment alleges instructed others to alter patient records in order to enable the home health agencies to submit claims for the home health services initiated through the illegal kickback payments.
Martinez is charged with one count of conspiracy to solicit or receive Illegal remunerations, three counts of illegal remunerations and one count of obstruction of criminal investigations of health care offenses. All offenses carry a maximum five years in federal prison.
The FBI, Department of Health and Human Services‐Office of Inspector General, Texas Attorney General’s Medicaid Fraud Control Unit and the Texas Health and Human Services Commission-Office of the Inspector General conducted the investigation. Assistant U.S. Attorneys Andrew Swartz and Michael Day are prosecuting the case.
An indictment is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.
Two Companies to Pay Nearly $2.5 Million to Settle Claims Related to Manufacture of Military Container SystemsRead the Press Release
HOUSTON - Houston-based Advanced Containment Systems Inc. (ACSI) and Boh Environmental LLC,(Boh) have agreed to pay $2,483,000 to settle allegations that Boh sold the Department of Defense (DoD) steel storage containers that were not manufactured according to contractual requirements, announced U.S. Attorney Kenneth Magidson. Boh, the DoD contractor, will pay the United States $783,000, while ACSI, the manufacturer and Boh’s subcontractor, will pay $1.7 million. The claims resolved by this settlement are allegations only, and there has been no determination of liability.
The allegations were brought to the attention of the United States through a whistleblower complaint brought by a former employee of ACSI. The allegations centered on a requirement in the DoD contract that Boh’s products, including expandable wall command center (EWCCs) and field pack-up systems (FPUs), be produced in accordance with International Organization for Standardization (ISO) standards. These standards are intended to provide a framework for businesses to use to continuously improve the quality of their products. Only certain organizations, called registrars, are authorized to review a company’s quality management system and certify that they meet ISO standards.
“Companies that provide supplies to our men and women in uniform must be held to a high standard,” said Magidson. “This settlement indicates our resolve in these matters for those that contract with the United States.”
The FPUs and EWCCs are used by American soldiers throughout the world and in the continental United States. Many were used in the Iraq war. The EWCCs are used as portable command centers, while the FPUs are used to store hardware, weapons and other heavy equipment.
The complaint alleged that in 2008, ACSI and Boh provided the Department of Defense ISO certifications that were not legitimate and that ISO quality standards were not, in fact, met. It also alleged numerous quality deficiencies associated with ACSI’s manufacturing process, such as the use of outdated engineering drawings, water leaks and door sealing problems.
ACSI and Boh later obtained legitimate ISO certification.
The investigation was conducted by the Defense Criminal Investigative Service, U.S. Army Criminal Investigation Command’s Major Procurement Fraud Unit and the Air Force Office of Special Investigations - Office of Procurement Fraud. Assistant U.S. Attorney Michelle Zingaro handled the matter for the Southern District of Texas.
Three Valley Men Charged in Mortgage Fraud SchemeRead the Press Release
McALLEN, Texas – Three Rio Grande Valley men have been arrested on federal wire fraud charges involving a fraudulent mortgage lending scheme, announced U.S. Attorney Kenneth Magidson.
A criminal complaint was filed under seal Jan. 12, 2017, against Guadalupe Artemio Gomez, 31, Luis Antonio Rodriguez, 36, and Rogelio Ramos Jr., 36. Authorities arrested Gomez and Ramos the following day, at which time they made their initial appearances before U.S. Magistrate Judge Ignacio Torteya. Today, the case was unsealed in its entirety as Rodriguez, who was previously incarcerated on unrelated charges, was taken into federal custody. He made his initial appearance before Peter Ormsby this morning and ordered to remain in custody pending further criminal proceedings.
The charges allege they all operated a “second chance” financing business under the names of T.G. and Wealth, Infinite Properties and Me In 3D, focusing on individuals who were financially unable to apply for traditional home financing. The defendants allegedly offered these individuals financing at a rate of 8.5 percent interest on the principle for a 20-year-term if they could afford a 10 percent down payment on the house of their choice.
Gomez, Rodriguez and Ramos allegedly conducted business in the area of San Antonio by recruiting realtors to funnel prospective home buyers to Infinite Properties. According to the charges, part of the scheme involved sending fraudulent bank account information through email correspondence to the realtors in order to create the appearance that Infinite Properties had millions of dollars in its accounts to finance the purchase of houses. Based on these false accounts, realtors allegedly introduced home buyers in need of second chance financing to Infinite Properties.
The criminal complaint alleges buyers entered fraudulent purchase agreements for properties they selected. These buyers made down payments to Infinite Properties to be used toward the purchase of their intended properties and were told closings would occur within 45-60 days, according to the charges.
The charges allege, however, that closings did not occur and the payments were never used for the purchases of the properties. In August 2016, Infinite Properties allegedly ceased to do business and the victims never received their money back.
If convicted, the defendants all face up to up to 30 years in federal prison and a possible $1 million fine.
The FBI investigated the case along with police departments in McAllen, Mission and Edinburg. Assistant U.S. Attorney Robert L. Guerra Jr. is prosecuting the case.
A criminal complaint is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.
Another RGV Durable Medical Equipment Company Owner Indicted for Health Care FraudRead the Press Release
McALLEN, Texas ‐ The owner of a Rio Grande Valley area durable medical equipment (DME) company has been arrested for her scheme to defraud Texas Medicaid through fraudulent billings, announced U.S. Attorney Kenneth Magidson.
A federal grand jury in McAllen indicted Anna Ramirez Ambriz, 55, of McAllen, on Jan. 17, 2017. Authorities arrested her today. She is scheduled to make her initial appearance before U.S. Magistrate Judge Peter Ormsby tomorrow at 9:00 a.m.
Ambriz was the owner and/or operator of Compassionate Medical Supply. The indictment alleges Ramirez-Ambriz and the company submitted false and fraudulent claims to Texas Medicaid for DME that was not provided. According to the indictment, Compassionate Medial Supply billed for incontinence supplies that were either not delivered or only partially delivered to Texas Medicaid recipients. Ramirez-Abmriz also allegedly used identities of Medicaid recipients in submitting unlawful billings to Texas Medicaid.
Based on allegations in the indictment, from on or about Jan. 5, 2007, through Nov. 19, 2013, Ramirez-Ambriz and Compassionate Medical Supply sent false and fraudulent claims totaling approximately $4,536,152.26 to Texas Medicaid for DME allegedly provided to Texas Medicaid recipients. The billings were false and fraudulent because the DME was not delivered as claimed, according to the charges. Texas Medicaid allegedly paid out $3,143,149.41 on the false and fraudulent claims.
According to the indictment, Ramirez-Ambriz also submitted or caused others to submit false or fraudulent claims with Texas Medicaid for DME not authorized by a physician. Additionally, Compassionate Medical Supply allegedly billed for more incontinence supplies than it purchased from distributors.
She is charged with six counts of health care fraud for which she faces a maximum punishment of 10 years in federal prison and a $250,000 fine upon conviction. She is also charged with three counts of aggravated identity theft which carries a mandatory 24 months in prison which must be served consecutively to any other prison sentence imposed.
The Texas Attorney General’s Medicaid Fraud Control Unit, FBI and Department of Health and Human Services‐Office of Inspector General conducted the investigation. Assistant U.S. Attorneys Andrew Swartz and Michael Day 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.
Pakistani Man Convicted of Defrauding FedEx of Nearly $300,000Read the Press Release
HOUSTON ‐ A 32-year-old Pakistani national who resided in the local area has pleaded guilty to six counts of mail fraud, announced U.S. Attorney Kenneth Magidson. Babar Butt resided in multiple locations in Houston and Spring and operated an electronics export business, routinely shipping items to Dubai, United Arab Emirates.
Beginning in February 2015, Butt devised a scheme whereby he defrauded FedEx by opening various shipping accounts. He would ship one or more packages of cell phones and electronics to Dubai and elsewhere until the charges were declined and he could no longer ship on that account. He would then open new accounts to continue his scheme and would again not pay his shipping invoices, causing significant losses to FedEx.
U.S. District Judge Keith P. Ellison accepted the plea today and set sentencing for April 4, 2017. At that time, Butt faces up to 20 years in federal prison as well as a possible $250,000 maximum fine. He could also be ordered to pay restitution in the amount of $287,679. He will remain in custody pending that hearing.
The FBI conducted the investigation. Assistant U.S. Attorney Heather Winter is prosecuting the case.
Home Health Agency Administrator Pleads Guilty in $7.8 Million Medicaid FraudRead the Press Release
Largest Provider Attendant Services Fraud in Texas History
The administrator of five Houston-area home health agencies pleaded guilty today to conspiring to defraud the State of Texas’ Medicaid-funded Home and Community-Based Service and the Primary Home Care Programs of more than $7.8 million. These programs provide qualified individuals with in-home attendant and community-based services that are known commonly as “provider attendant services” (PAS), and this case marks the largest PAS fraud case charged in Texas history.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Kenneth Magidson 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 Department of Health and Human Services Office of the Inspector General’s (HHS-OIG) Dallas Regional Office, Special Agent in Charge D. Richard Goss of the Houston Field Office of Internal Revenue Service Criminal Investigation’s (IRS-CI) Houston Field Office and the Texas Attorney General’s Medicaid Fraud Control Unit (MFCU) made the announcement.
Idia Oriakhi, 33, of Richmond, Texas, pleaded guilty before U.S. District Judge Sim Lake of the Southern District of Texas to one count of conspiracy to commit health care fraud. She is scheduled to be sentenced by Judge Lake on April 20, 2017.
From 2009 through 2016, Idia Oriakhi’s parents owned and operated Aabraham Blessings, LLC; Baptist Home Care Providers, Inc.; Community Wide Home Health, Inc.; Four Seasons Home Healthcare, Inc. and Kis Med Concepts, Inc., all of which were home health agencies located in and around Houston. Idia Oriakhi admitted that she, her father Godwin Oriakhi and others obtained patients for her family’s home health agencies by paying illegal kickback payments to patient recruiters and physicians for referring and certifying Medicaid patients for PAS services that were medically unnecessary and often not provided. PAS services are for qualified individuals with intellectual disabilities or who have an approved medical need for assistance with personal care tasks. In total, Idia Oriakhi admitted that she and her family submitted approximately $8,372,991 in fraudulent PAS claims to Medicaid and received approximately $7,894,135 on those claims.
In addition to the PAS services fraud scheme, Idia Oriakhi admitted that she and others engaged in a scheme to defraud Medicare through the submission of fraudulent claims for home health care services. Idia Oriakhi admitted that as a result of both the home healthcare and PAS services fraud schemes, she and others submitted over $10 million in fraudulent claims to Medicare and Medicaid.
To date, Jermaine Doleman, a patient recruiter, has pleaded guilty and is awaiting sentencing for his role in the home healthcare fraud scheme. Godwin Oriakhi and Charles Esechie, a registered nurse, were charged previously with conspiracy, health care fraud, paying illegal kickbacks and money laundering offenses for their roles in the home health care and PAS services fraud schemes. They are scheduled for trial on Feb. 6, 2017. The charges are merely accusations, and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The case was investigated by the FBI, HHS-OIG, IRS-CI and MFCU and brought by the Medicare Fraud Strike Force, 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 Senior Trial Attorney Jonathan T. Baum and Trial Attorneys William S.W. Chang and Aleza S. Remis of the Fraud Section.
The Fraud Section leads the Medicare Fraud Strike Force. Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged over 3,000 defendants who collectively have billed the Medicare program for over $10 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to www.stopmedicarefraud.gov.
Mexican National Sentenced for Trafficking Multiple DrugsRead the Press Release
McALLEN, Texas – A Mexican man who had been residing in Pasadena has been ordered to prison for importing methamphetamine, cocaine and heroin into the United States from Mexico, announced U.S. Attorney Kenneth Magidson. Gustavo Rivera-Morales pleaded guilty Jan. 28, 2016.
Today, U.S. District Judge Randy Crane ordered Rivera-Morales to serve 72 months in federal prison. He is expected to face deportation proceedings following his release from prison.
At the time of his guilty plea, Rivera-Morales admitted that on Nov. 30, 2015, he had driven a vehicle from Mexico into the United States through the Pharr port of entry, knowing the vehicle contained a controlled substance. Upon inspection, Customs and Border Protection (CBP) officers discovered methamphetamine, cocaine and heroin hidden within the passenger and driver side rear panels of the vehicle. Agents seized numerous bricks of drugs weighing approximately 18 kilograms of methamphetamine, four kilograms of cocaine and three kilograms of heroin.
Rivera has been in custody without bond since his arrest in November 2015 where he will remain pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
Immigration and Customs Enforcement’s Homeland Security Investigations and CBP conducted the investigation. Assistant U.S. Attorney Linda Requénez prosecuted the case.
Crack Cocaine Sends Local Man to PrisonRead the Press Release
CORPUS CHRISTI, Texas – A 31-year-old Corpus Christi man has been ordered to federal prison following his conviction of possession with intent to distribute cocaine base, commonly known as crack cocaine, announced U.S. Attorney Kenneth Magidson. Gilbert Bustamante pleaded guilty Aug. 4, 2016.
Today, U.S. District Judge Nelva Gonzalez Ramos handed Bustamante a 77-month sentence to be immediately followed by four years of supervised release.
On March 2, 2016, law enforcement officers were attempting to locate and arrest a wanted individual at Bustamante’s residence in Corpus Christi. When Bustamante opened the door, officers detected the odor of marijuana inside the residence. Based on the odor, law enforcement officers obtained and executed a search warrant. During that search, officers discovered 47 grams of cocaine base, a digital scale, approximately $5,000 in U.S. currency and a .38 caliber handgun.
In federal custody since his arrest, Bustamante will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The Bureau of Alcohol, Tobacco, Firearms and Explosives and the Corpus Christi Police Department conducted the investigation. Assistant U.S. Attorney Lance Watt prosecuted the case.
Two Businessmen Plead Guilty to Foreign Bribery Charges in Connection with Venezuela Bribery SchemesRead the Press Release
A former general manager and partial owner of a Florida-based energy company and an owner of multiple Texas-based energy companies each pleaded guilty today to foreign bribery charges for their roles in a scheme to corruptly secure contracts from Venezuela’s state-owned and state-controlled energy company, Petroleos de Venezuela S.A. (PDVSA).
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Kenneth Magidson of the Southern District of Texas, Special Agent in Charge Mark Dawson of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI) in Houston and Special Agent in Charge Richard Goss of Internal Revenue Service-Criminal Investigation’s (IRS-CI) Houston Field Office made the announcement.
Juan Jose Hernandez Comerma (Hernandez), 51, of Weston, Florida, pleaded guilty in federal court in Houston to one count of conspiracy to violate the Foreign Corrupt Practices Act (FCPA) and one count of violating the FCPA. Charles Quintard Beech III, 46, of Katy, Texas, pleaded guilty to one count of conspiracy to violate the FCPA. U.S. District Judge Gray H. Miller of the Southern District of Texas accepted the guilty pleas. Sentencing for both defendants is scheduled for July 14, 2017.
According to admissions made in connection with Hernandez’s plea, Hernandez conspired with U.S.-based businessmen Abraham Jose Shiera Bastidas (Shiera) and Roberto Enrique Rincon Fernandez (Rincon) to pay bribes and other things of value to PDVSA purchasing analysts. This ensured that Shiera’s and Rincon’s companies were placed on PDVSA bidding panels, which enabled the companies to win lucrative energy contracts with PDVSA. From 2008 until 2012, Hernandez admitted that, while general manager and later partial owner of one of Shiera’s companies, he provided recreational travel and entertainment and offered bribes to PDVSA officials, including Alfonzo Eliezer Gravina Munoz (Gravina), based on a percentage of contracts the officials helped to award to Shiera’s companies. Rincon, Shiera and Gravina have all also pleaded guilty in the case.
According to admissions made in connection with Beech’s plea, from 2011 to 2012, Beech paid bribes to multiple PDVSA officials, including Gravina, in exchange for their assistance in placing Beech’s companies on PDVSA bidding panels and assisting Beech’s company or companies in receiving payment for previously awarded PDVSA contracts. Beech also admitted that he agreed with others, including PDVSA officials, to engage in financial transactions to conceal the nature, source and ownership of the bribe proceeds.
In addition to Hernandez and Beech, the Justice Department has announced the guilty pleas of six other individuals as part of a larger, ongoing investigation by the U.S. government into bribery at PDVSA.
ICE-HSI is conducting the ongoing investigation with assistance from the FBI and IRS-CI. Trial Attorneys Aisling O’Shea and Jeremy R. Sanders of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys (AUSA) John Pearson and Robert S. Johnson of the Southern District of Texas are prosecuting the case. AUSAs Kristine Rollinson and Vincent Carroll of the Southern District of Texas are handling the forfeiture aspects of the case.
The Criminal Division’s Office of International Affairs and the Swiss Federal Office of Justice also provided assistance.
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.
Two Businessmen Plead Guilty to Foreign Bribery Charges in Connection with Venezuela Bribery SchemesRead the Press Release
HOUSTON – A former general manager and partial owner of a Florida-based energy company and an owner of multiple Texas-based energy companies each pleaded guilty today to foreign bribery charges for their role in a scheme to corruptly secure contracts from Venezuela’s state-owned and state-controlled energy company, Petroleos de Venezuela S.A. (PDVSA).
U.S. Attorney Kenneth Magidson, Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Special Agent in Charge Mark Dawson of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI) in Houston and Special Agent in Charge Richard Goss of Internal Revenue Service-Criminal Investigation’s (IRS-CI) Houston Field Office made the announcement.
Juan Jose Hernandez Comerma (Hernandez), 51, of Weston, Florida, pleaded guilty in federal court in Houston to one count of conspiracy to violate the Foreign Corrupt Practices Act (FCPA) and one count of violating the FCPA. Charles Quintard Beech III, 46, of Katy, pleaded guilty to one count of conspiracy to violate the FCPA. U.S. District Judge Gray H. Miller of the Southern District of Texas accepted the guilty pleas. Sentencing for both defendants is scheduled for July 14, 2017.
According to admissions made in connection with Hernandez’s plea, Hernandez conspired with U.S.-based businessmen Abraham Jose Shiera Bastidas (Shiera) and Roberto Enrique Rincon Fernandez (Rincon) to pay bribes and other things of value to PDVSA purchasing analysts. This ensured Shiera’s and Rincon’s companies were placed on PDVSA bidding panels, which enabled the companies to win lucrative energy contracts with PDVSA. As part of their pleas, Shiera and Rincon admitted they worked together to submit bids to provide equipment and services to PDVSA through their various companies. From 2008 until 2012, Hernandez admitted that while general manager and later partial owner of one of Shiera’s companies, he provided recreational travel and entertainment and offered bribes to PDVSA officials, including Alfonzo Eliezer Gravina Munoz (Gravina), on a percentage of contracts the officials helped to award to Shiera’s companies. Rincon, Shiera and Gravina have all also pleaded guilty in the case.
According to admissions made in connection with Beech’s plea, from 2011 to 2012, Beech paid bribes to multiple PDVSA officials, including Gravina, in exchange for their assistance in placing Beech’s companies on PDVSA bidding panels and assisting Beech’s company or companies in receiving payment for previously awarded PDVSA contracts. Beech also admitted that he agreed with others, including PDVSA officials, to engage in financial transactions to conceal the nature, source and ownership of the bribe proceeds.
Including Hernandez and Beech, eight individuals have pleaded guilty as part of a larger, ongoing investigation by the U.S. government into bribery at PDVSA. Shiera and Rincon pleaded guilty before Judge Miller to multiple FCPA charges in March and June of 2016, respectively. Gravina pleaded guilty in December 2015 to conspiracy to commit money laundering and making false statements on his federal income tax return by failing to report the bribe payments he received. As part of their plea agreements, all defendants agreed to forfeit proceeds from their criminal activity.
ICE-HSI is conducting the ongoing investigation with assistance from the FBI and IRS-CI. Assistant U.S. Attorneys (AUSA) John Pearson and Robert S. Johnson of the Southern District of Texas and Trial Attorneys Aisling O’Shea and Jeremy R. Sanders of the Criminal Division’s Fraud Section are prosecuting the case. AUSAs Kristine Rollinson and Vincent Carroll of the Southern District of Texas are handling the forfeiture aspects of the case.
The Criminal Division’s Office of International Affairs and the Swiss Federal Office of Justice also provided assistance.
The Fraud Section is responsible for investigating and prosecuting all FCPA matters. Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.
Trafficking Nearly 10 Kilos of Meth Lands Man Hefty Prison SentenceRead the Press Release
CORPUS CHRISTI, Texas - A U.S. citizen who was living in Matamoros has been ordered to federal prison following his conviction of possession with intent to distribute methamphetamine, announced U.S. Attorney Kenneth Magidson. Francisco Moreno, 22, pleaded guilty Oct. 3, 2016.
Today, United States District Judge Nelva Gonzalez Ramos handed Moreno a 78-month sentence to be immediately followed by five years of supervised release.
On July 20, 2016, Moreno drove a motor vehicle to the Sarita checkpoint. During primary inspection, a service K9 alerted to the presence of contraband coming from the vehicle. After the vehicle was examined, agents discovered and removed 10 vacuum-sealed bundles of methamphetamine from the door panels. Laboratory analysis determined the methamphetamine weighed 9.9 kilograms and had a purity level of 96%.
In federal custody since his arrest, Moreno 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 and Border Patrol conducted the investigation. Assistant U.S. Attorney Lance Watt is prosecuting the case.
Jury Convicts Alien SmugglerRead the Press Release
BROWNSVILLE, Texas – A federal jury sitting in Brownsville has convicted a 37-year-old undocumented alien from Oaxaca, Mexico, who had been living in Brownsville on immigration charges that led to death, announced U.S. Attorney Kenneth Magidson. The jury returned its verdicts against Galdino Jose Ruiz-Hernandez after a two-day trial.
Evidence presented at the trial showed that on April 24, 2015, Ruiz-Hernandez reported to Port of Brownsville authorities that a “friend” told him saw a female body floating in the Brownsville ship channel. Law enforcement located the body and noticed injuries. Ruiz-Hernandez was initially arrested for illegally re-entering the U.S. after having been previously deported and later charged with alien smuggling as well.
Investigators learned Ruiz-Hernandez had actually been guiding the female illegal alien at midnight in the water across the ship channel when they were struck by a Coast Guard boat. Evidence presented at trial showed he guided her on behalf of Gabriel Sanchez-Aburto, 46, who had taken him to Mexico to pick up the woman. Ruiz-Hernandez and the victim entered the U.S. illegally, walked to the Port of Brownsville ship channel and began crossing the water in darkness. While in the water, a Coast Guard boat struck them. The autopsy revealed the boat’s propeller caused the injuries that resulted in her death.
As part of the investigation, agents with Immigrations and Customs Enforcement’s Homeland Security Investigation (HSI) arrested Sanchez-Aburto on a warrant for the alien smuggling death incident on Oct. 27, 2015. He and others were in the process of smuggling other aliens at the time. Authorities found and detained seven undocumented aliens and arrested three brothers - Lazaro Comunidad-Hernandez, 48, Pablo Comunidad-Hernandez, 25, and Luciano Comunidad-Hernandez, 39, all from Puebla, Mexico.
The brothers were later sentenced to terms from 10-15 months and are expected to face deportation proceedings following their release from prison.
Sanchez-Aburto entered a guilty plea to both alien smuggling charges and his sentencing is scheduled for Feb. 6, 2017.
U.S. District Judge Hilda Tagle presided over the trial and set sentencing for Ruiz-Hernandez for April 10, 2017. At that time, he faces up to life imprisonment. He will remain in custody pending that hearing.
HSI conducted the investigation. Assistant U.S. Attorneys Oscar Ponce and Jason Corley are prosecuting the case.
Another Sentenced in $23 Million Fraud SchemeRead the Press Release
HOUSTON – Another person has been ordered to federal prison in relation to a $23 million nonexistent commercial accounts receivable scheme, announced U.S. Attorney Kenneth Magidson along with Special Agent in Charge Rick Goss of IRS-Criminal Investigation (CI).
Stefano Guido Vitale, 40, of Scottsdale, Arizona, pleaded guilty March 21, 2016. Co-defendants Alan Leschyshyn, 53, of Cave Creek, Arizona; Bree Ann Davis, 40, of Lakewood, Colorado, and Tammie Roth Hanania, 59, and Edward Peter Hanania, 64, both of Folsom, California, all had previously entered their respective guilty pleas. All were convicted of conspiring to engage a scheme to defraud and conspiracy to commit money laundering. Vitale and Leschyshyn were also convicted of eight additional counts of wire fraud.
Today, U.S. District Judge Vanessa Gilmore sentenced Vitale to serve a total of 262 months in federal prison immediately followed by three years of supervised release. The court also ordered he pay restitution of $6,177,069.11.
In November 2016, Leschyshyn was ordered to serve 235 months followed by five years of supervised release. Tammie and Edward Hanania were ordered to serve 12 months and one day in prison and two years of supervised release. Davis will be sentenced later this month.
The scheme produced approximately $6.4 million in fraudulently obtained proceeds which the defendants agreed to launder through various bank accounts. They executed the scheme to defraud by using and establishing various business entities to sell, at a discount, nonexistent commercial accounts receivable. The defendants would approach factoring companies as sellers of customized gaming vault bundles and present fabricated invoices as evidence the defendants were owed a certain amount of money for goods provided to another one of their business entities. To establish creditworthiness of these companies and to convince the factoring company the credit risk was minimal, the defendants fabricated and/or altered documents and provided them to the factoring company.
The fraud conspiracy also proved that Vitale and Leschyshyn defrauded BOKF, NA, doing business as Bank of Arizona, when they applied for and received a $1 million line of credit secured by the Export Import Bank of the United States.
Vitale will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
IRS-CI conducted the investigation. Assistant U.S. Attorney Melissa Annis is prosecuting the case.
Corpus Christi Man Convicted of Production of Child PornographyRead the Press Release
CORPUS CHRISTI, Texas – A 29-year-old Corpus man has entered a guilty plea to two counts of production of child pornography, otherwise known as sexual exploitation of a child, announced U.S. Attorney Kenneth Magidson.
Authorities identified Mark Anthony Hamauei as the perpetrator of a sexual assault of two juvenile females in July 2016.
A search warrant was executed at his residence and in his vehicle, at which time authorities seized various electronic devices. A forensic analysis on those devices led to the discovery of two videos of the young victims that were sexually explicit in nature. Law enforcement also located more than 1,400 images and 230 videos of child pornography.
U.S. Magistrate Judge B. Janice Ellington accepted the guilty plea today. Sentencing is set before U.S. District Judge Nelva Gonzales Ramos on May 3, 2017. At that time, Hamauei faces a minimum of 15 and up to 30 years in federal prison and a possible $250,00 maximum fine on each count. Upon completion of any prison term imposed, Hamauei also faces a maximum of life on supervised release during which time the court can impose a number of special conditions designed to protect children and prohibit the use of the Internet.
Hamauei was arrested on federal charges in October 2016 and has been in custody since that time where he will remain pending his sentencing hearing.
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.
This case, prosecuted by Assistant U.S. Attorney Hugo R. Martinez, 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."
New York Oil Futures Trader Sent to PrisonRead the Press Release
HOUSTON – A 33-year-old resident of the Bronx, New York, has been ordered to federal prison following his convictions of wire and mail fraud, announced U.S. Attorney Kenneth Magidson. A federal jury convicted Christopher Donrick Daley Sept. 21, 2016, following a two-day trial.
Today, U.S. District Judge Lynn Hughes, who presided over the trial, handed Daley a total sentence of 120 months in prison. He was further ordered to pay restitution in the amount of $614,950 and will serve three years of supervised release following completion of the prison term. In handing down the sentence, the court noted that Daley tried to appear as a family man when he ate with his victims. “You actually sat down with their children when you knew you were stealing them blind,” Hughes said.
Daley devised a scheme to defraud investors by falsely representing he operated a commodity pool which invested in oil futures contracts which would pay investors return of at least 20% per month and had never had a losing month. The evidence at trial showed that Daley received more than $1.4 million in investor funds, but he only invested approximately $195,000.
Daley lost all the investors funds he did invest.
The evidence also proved that Daley emailed monthly statements to his investors showing significant monthly returns when there were none. Daley also used money from the investor funds to purchase a new BMW and Range Rover.
Judge Hughes ordered Daley into custody immediately after the verdict was returned 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. Assistant U.S. Attorneys John Braddock and Charles Escher prosecuted the case.
Four Businessmen and Two Foreign Officials Plead Guilty in Connection with Bribes Paid to Mexican Aviation OfficialsRead the Press Release
Charges were unsealed against six individuals, all of whom have pleaded guilty for their involvement in schemes to bribe Mexican officials in order to secure aircraft maintenance and repair contracts with government-owned and controlled entities, and two for conspiring to launder the proceeds of the schemes.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Kenneth Magidson of the Southern District of Texas, Special Agent in Charge Mark Dawson of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI) in Houston, Special Agent in Charge Shane Folden of ICE-HSI in San Antonio and Special Agent in Charge Rick Goss of Internal Revenue Service-Criminal Investigation’s (IRS-CI) Houston Field Office made the announcement.
“The six convictions announced today demonstrate the department’s commitment to holding accountable those who further official corruption through bribery,” said Assistant Attorney General Caldwell. “These convictions are the result of a coordinated effort by prosecutors and agents who built the cases brick by brick using traditional law enforcement techniques.”
“HSI special agents and our law enforcement partners will continue to aggressively investigate financial crimes committed by corrupt foreign officials,” said Special Agent in Charge Folden. “This case serves as a reminder that HSI will use all its resources to identify, investigate and dismantle these criminal networks wherever they operate.”
“The individuals involved in this scheme paid millions of dollars in bribes to foreign officials in exchange for aviation contracts that placed legitimate businesses at a significant competitive disadvantage,” said Special Agent in Charge Goss. “IRS-CI’s role in unraveling this scheme assisted in facilitating the guilty pleas that were announced today.”
Douglas Ray, 55, of Magnolia, Texas, and Victor Hugo Valdez Pinon, 54, a citizen of Mexico, pleaded guilty on Oct. 28 and Oct. 26, 2016, respectively, before U.S. District Judge Alfred H. Bennett of the Southern District of Texas to conspiracy to violate the Foreign Corrupt Practices Act (FCPA) and conspiracy to commit wire fraud. Kamta Ramnarine, 69, and Daniel Perez, 69, both of Brownsville, Texas, both pleaded guilty on Nov. 2, 2016, before U.S. District Judge Ricardo H. Hinojosa of the Southern District of Texas to one count of conspiring to violate the FCPA. Ramnarine and Perez are scheduled to be sentenced on Jan. 30, 2017. Ray and Valdez Pinon are scheduled to be sentenced Feb. 23, 2016.
Ernesto Hernandez Montemayor, 55, and Ramiro Ascencio Nevarez, 58, both of whom are citizens of Mexico and were previous officials of Mexican state government entities, each pleaded guilty to one count of conspiracy to commit money laundering. Hernandez Montemayor pleaded guilty before Judge Bennett on Dec. 9, 2015, and is scheduled to be sentenced on Jan. 12, 2017. Nevarez pleaded guilty before Judge Hinojosa on March 4, 2016, and was sentenced to 15 months in prison on May 27, 2016.
According to the defendants’ plea agreements, between 2006 and 2016, Ray conspired with Valdez and others to bribe Mexican officials. The defendants and their co-conspirators, who owned or were associated with companies in the United States that provided aircraft maintenance, repair, overhaul and related services to customers from the United States and Mexico, paid the bribes in order to secure parts and servicing contracts with Mexican government-owned customers. Ray agreed to pay bribes to at least seven different foreign officials, including Hernandez Montemayor, sometimes paying the bribes via wire transfer and checks to accounts in the United States controlled by the officials. As part of his guilty plea, Hernandez Montemayor admitted that while employed by a Mexican state government, he accepted bribes from Ray, Ramnarine, Perez and others in exchange for taking certain actions to assist companies they owned in winning business with Hernandez Montemayor’s state government employer. Hernandez Montemayor also admitted that he conspired with Ray, Ramnarine, Perez and others to launder the proceeds of the bribery scheme.
Ramnarine and Perez admitted that, in addition to bribing Hernandez Montemayor, they also conspired to pay bribes to several other foreign officials between 2007 and 2015 to ensure that their Brownsville-based company won aircraft parts and services contracts with Mexican government-owned customers. As part of his guilty plea, Nevarez admitted that while employed by a Mexican public university, he accepted bribes from Ramnarine and Perez in exchange for taking certain actions to assist their company in winning business with the university. Nevarez also admitted that he conspired with Ramnarine, Perez and others to launder the proceeds of the bribery scheme.
In total, Ray, Valdez Pinon, Ramnarine, Perez and their co-conspirators paid more than $2 million in bribes to Mexican officials, including Hernandez Montemayor and Nevarez, in order to secure aviation maintenance, repair and overhaul contracts.
ICE-HSI and IRS-CI are investigating the case. Trial Attorneys Christopher Cestaro and Kevin R. Gingras of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Jesse Salazar and Arthur Jones of the Southern District of Texas are prosecuting the case. The Criminal Division’s Office of International Affairs also provided significant assistance.
The Criminal Division’s Fraud Section is responsible for investigating and prosecuting all FCPA matters. Additional information about the department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.
Four Businessman and Two Foreign Officials Plead Guilty in Connection with Bribes Paid to Mexican Aviation OfficialsRead the Press Release
HOUSTON - Charges have been unsealed against six individuals, all of whom have pleaded guilty for their involvement in schemes to bribe Mexican officials in order to secure aircraft maintenance and repair contracts with government-owned and controlled entities, and two for conspiring to launder the proceeds of the schemes.
U.S. Attorney Kenneth Magidson, Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Special Agent in Charge Mark Dawson of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI) in Houston, Special Agent in Charge Shane Folden of ICE-HSI in San Antonio and Special Agent in Charge Rick Goss of Internal Revenue Service-Criminal Investigation’s (IRS-CI) Houston Field Office made the announcement.
“The six convictions announced today demonstrate the department’s commitment to holding accountable those who further official corruption through bribery,” said Caldwell. “These convictions are the result of a coordinated effort by prosecutors and agents who built the cases brick by brick using traditional law enforcement techniques.”
“HSI special agents and our law enforcement partners will continue to aggressively investigate financial crimes committed by corrupt foreign officials,” said Folden. “This case serves as a reminder that HSI will use all its resources to identify, investigate and dismantle these criminal networks wherever they operate.”
“The individuals involved in this scheme paid millions of dollars in bribes to foreign officials in exchange for aviation contracts that placed legitimate businesses at a significant competitive disadvantage,” said Goss. “IRS-CI’s role in unraveling this scheme assisted in facilitating the guilty pleas that were announced today.”
Douglas Ray, 55, of Magnolia, and Victor Hugo Valdez Pinon, 54, a citizen of Mexico, pleaded guilty on Oct. 28 and Oct. 26, 2016, respectively, before U.S. District Judge Alfred H. Bennett of the Southern District of Texas to conspiracy to violate the Foreign Corrupt Practices Act (FCPA) and conspiracy to commit wire fraud. Kamta Ramnarine, 69, and Daniel Perez, 69, both of Brownsville, pleaded guilty on Nov. 2, 2016, before U.S. District Judge Ricardo H. Hinojosa of the Southern District of Texas to one count of conspiring to violate the FCPA. Ramnarine and Perez are scheduled to be sentenced on Jan. 30, 2017. Ray and Valdez Pinon are scheduled to be sentenced Feb. 23, 2016.
Ernesto Hernandez Montemayor, 55, and Ramiro Ascencio Nevarez, 58, both of whom are citizens of Mexico and were previous officials of Mexican state government entities, each pleaded guilty to one count of conspiracy to commit money laundering. Hernandez Montemayor pleaded guilty before Judge Bennett on Dec. 9, 2015, and is scheduled to be sentenced on Jan. 12, 2017. Nevarez pleaded guilty before Judge Hinojosa on March 4, 2016, and was sentenced to 15 months in prison on May 27, 2016.
According to the defendants’ plea agreements, between 2006 and 2016, Ray conspired with Valdez and others to bribe Mexican officials. The defendants and their co-conspirators, who owned or were associated with companies in the United States that provided aircraft maintenance, repair, overhaul and related services to customers from the United States and Mexico, paid the bribes in order to secure parts and servicing contracts with Mexican government-owned customers. Ray agreed to pay bribes to at least seven different foreign officials, including Hernandez Montemayor, sometimes paying the bribes via wire transfer and checks to accounts in the United States controlled by the officials. As part of his guilty plea, Hernandez Montemayor admitted that while employed by a Mexican state government, he accepted bribes from Ray, Ramnarine, Perez and others in exchange for taking certain actions to assist companies they owned in winning business with Hernandez Montemayor’s state government employer. Hernandez Montemayor also admitted that he conspired with Ray, Ramnarine, Perez and others to launder the proceeds of the bribery scheme.
Ramnarine and Perez admitted that, in addition to bribing Hernandez Montemayor, they also conspired to pay bribes to several other foreign officials between 2007 and 2015 to ensure that their Brownsville-based company won aircraft parts and services contracts with Mexican government-owned customers. As part of his guilty plea, Nevarez admitted that while employed by a Mexican public university, he accepted bribes from Ramnarine and Perez in exchange for taking certain actions to assist their company in winning business with the university. Nevarez also admitted he conspired with Ramnarine, Perez and others to launder the proceeds of the bribery scheme.
In total, Ray, Valdez Pinon, Ramnarine, Perez and their co-conspirators paid more than $2 million in bribes to Mexican officials, including Hernandez Montemayor and Nevarez, in order to secure aviation maintenance, repair and overhaul contracts.
ICE-HSI and IRS-CI are investigating the case. Assistant U.S. Attorneys Jesse Salazar and Arthur Jones are prosecuting the case along with Trial Attorneys Christopher Cestaro and Kevin R. Gingras of the Criminal Division’s Fraud Section. The Criminal Division’s Office of International Affairs also provided significant assistance.
The Criminal Division’s Fraud Section is responsible for investigating and prosecuting all FCPA matters. Additional information about the department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.
UH Professor Convicted in Relation to Massive Synthetic Narcotics CaseRead the Press Release
HOUSTON – A 37-year-old resident of Sugar Land has entered a guilty plea to aiding and abetting an unlicensed money transmitting business, announced U.S. Attorney Kenneth Magidson.
Law enforcement identified Omar Al Nasser during a multi-year, multi-agency federal investigation into one of the largest synthetic cannabinoid trafficking enterprises in the country. The investigation revealed Al Nasser was as an associate of one of the primary distributors of synthetic cannabinoids in the Southern District of Texas. As part of his plea today, Al Nasser admitted he was paid to wire more than $200,000 in U.S. currency from a bank in the United States to accounts in the country of Jordan.
Al Nasser has a doctoral degree in business administration with an emphasis in finance which he earned from the University of Texas-Pan America in 2009. He is listed as an associate professor of finance in the University of Houston system.
U.S. District Judge Gray Miller accepted the guilty plea and set sentencing for Feb. 16, 2017. At that time, Al Nasser faces up to five years in prison and a possible $250,000 fine.
The Drug Enforcement Administration and Houston Police Department conducted the investigation along with the Bureau of Alcohol, Tobacco, Firearms and Explosives and Internal Revenue Service – Criminal Investigation with the assistance of the U.S. Postal Inspection Service, Conroe Police Department, sheriff’s offices in Harris and Polk counties, Texas Alcoholic Beverage Commission and the Montgomery County District Attorney’s Office. Assistant U.S. Attorneys John Jocher and Nancy Herrera are prosecuting the case.
Former Law Enforcement Official Sentenced to 25 years for Drug TraffickingRead the Press Release
McALLEN, Texas – A former Drug Enforcement Administration (DEA) task force officer/Mission Police Department investigator has been sentenced for his convictions of conspiracy to possess with intent to distribute and possession with intent to distribute cocaine, announced U.S. Attorney Kenneth Magidson. A federal jury sitting in McAllen convicted Hector Mendez, 46, of San Juan, on July 14, 2016, following a six-day trial and approximately three hours of deliberation.
Today, U.S. District Judge Randy Crane, who presided over the trial, handed Mendez a 300-month sentence to be followed by five years of supervised release. In handing down the sentence, the court noted that Mendez had worked with the very best members of the law enforcement community and yet abused the special trust he held as a law enforcement officer. Judge Crane stated that Mendez’s crimes were particularly reprehensible - that while working with DEA, Mendez was also profiting by stealing narcotics from the criminals he was supposed to investigate. The court hoped the serious sentence would serve as a deterrent to others.
During trial, the jury heard that Mendez conspired to steal approximately 14.9 kilograms of cocaine and stage a seizure of sham, or diluted cocaine, to cover the theft.
On July 25, 2012, Reynol Chapa-Garcia, 42, of Mission, had received a quantity of cocaine at a residence in Mission. Shortly thereafter, Mendez arrived at Chapa-Garcia’s residence and collected the bundles of cocaine. Mendez and Chapa-Garcia had agreed the cocaine would be diluted or cut, then repackaged and staged for a seizure sometime later. The remaining cocaine would then be sold.
On July 28, 2012, a Ford Taurus was staged with the diluted bundles of cocaine in Mission. Mendez and other Mission Police Department officers seized the Taurus and drugs. Chapa-Garcia made recorded calls to the person who had originally provided the drugs to conceal the fact that the cocaine had been cut and make it seem the bundles had been seized by law enforcement during the supposed transport.
Testimony of witnesses at trial established that Mendez intentionally concealed facts about the seizure in DEA reports and statements to federal prosecutors, presented false statements to multiple judges in sworn court filings and intentionally altered transcripts of recorded calls in evidence against Gonzalez.
Mendez has been and will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
Chapa-Garcia pleaded guilty May 27, 2016, for his role in the conspiracy and will be sentenced at a later date.
The FBI, Department of Justice - Office of Inspector General (OIG), Department of Homeland Security – OIG and the DEA conducted the investigation. Assistant U.S. Attorneys James H. Sturgis and Kristen J. Rees prosecuted the case.
Mexican Man Sentenced for Roles in Drug Trafficking/Money Laundering Conspiracies Dating Back to 2002Read the Press Release
HOUSTON - Richard Garcia-Sanchez, 42, a member of a drug trafficking and money laundering organization operating out of Mexico from 2002-2008 has been ordered to federal prison, announced U.S. Attorney Kenneth Magidson. Garcia-Sanchez, of Mexico City, Mexico, pleaded guilty for his roles in these long-term drug trafficking and money laundering conspiracies in December 2014.
Today, U.S. District Judge Gray Miller, who accepted the guilty plea, handed Garcia-Sanchez a sentence of 106 months in federal prison. Mexican authorities arrested Garcia-Sanchez in Mexico on this case on Aug. 29, 2011, and he remained in custody there until he was extradited to the United States on Jan. 24, 2014. He is also expected to face deportation proceedings following his release from prison.
At the time of guilty plea, Garcia-Sanchez admitted that between September 2002 and continuing until on or about May 29, 2008, he engaged in a variety of activities, to include transporting controlled substances and large amounts of U.S. currency which represented the proceeds of drug trafficking.
This case began in October 2002. The Drug Enforcement Administration (DEA) began an investigation into the activities of a drug trafficking and money laundering organization based in Mexico that smuggled multi-hundred kilogram loads of cocaine from Venezuela through Mexico for eventual distribution in the U.S. The organization used several private aircraft in order to transport large drug loads from Venezuela to Mexico, money from the sale of the drugs from the U.S. back to Mexico and money to Venezuela for the purchase of more narcotics. The organization relied on several experienced pilots in order to commit these offenses, including Garcia-Sanchez.
Between September 2002 and on or about May 29, 2008, Garcia-Sanchez and his co-conspirators were involved in transporting numerous loads of cocaine from Venezuela through Mexico and other places, destined for the U.S. for further distribution. One included a 311-kilogram load which was lawfully seized by Jamaican law enforcement on Oct. 14, 2003, at an airport in Jamaica where the plane had stopped for refueling after leaving Venezuela.
Garcia-Sanchez and his co-conspirators were also involved in transporting drug trafficking proceeds to Mexico. Some of which also went to Venezuela in order to purchase additional drugs for the organization, including a large load of currency seized in Panama in November 2002.
On or about Oct. 28, 2002, a co-conspirator attempted to fly one of the organization’s airplanes to Venezuela carrying more than $3 million in drug proceeds. The plane had mechanical problems, however, and had to make an emergency landing in Panama. Shortly thereafter, Garcia-Sanchez flew from Mexico to Panama to attempt to help repair the airplane. However, he was unable to do so and left Panama to obtain the necessary parts with the intent to return.
After Garcia-Sanchez left, Panamanian officials became suspicious of the airplane and lawfully searched it, at which time they found and seized $3,151,000 in U.S. currency that was hidden on the plane. Another co-conspirator subsequently told law enforcement officers the money on the airplane belonged to the organization and was derived from the sale of drugs. He also told them it was to be utilized for the purchase of more drugs in Venezuela. The Panamanian officials then also seized the airplane.
Garcia-Sanchez will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
This prosecution is the result of a multi-year Organized Crime Drug Enforcement Task Force investigation led by the DEA and Internal Revenue Service-Criminal Investigation. Assistant U.S. Attorney (AUSA) Arthur R. Jones and former AUSA Claude Hippard prosecuted the case.
McAllen Man Sent to Federal Prison for Brokering Cocaine Transaction in ChicagoRead the Press Release
McALLEN, Texas – A 37-year-old McAllen man has been sentenced following his conviction of conspiracy to possess with intent to distribute cocaine and being unlawfully present in the country, announced U.S. Attorney Kenneth Magidson. Levi Galvan-Galvan pleaded guilty Sept. 12, 2016.
Today, U.S. District Judge Ricardo Hinojosa sentenced Galvan-Galvan to 60 months in prison for both offenses. In handing down the sentence, the court took into consideration Galvan-Galvan’s role in coordinating a drug transaction between co-conspirators and that he committed the offense after a prior conviction for possession of drugs in 2009. As an illegal alien, Galvan-Galvan is expected to face deportation proceedings following his release from prison.
Galvan-Galvan admitted to brokering a one kilogram cocaine transaction between a supplier in Mexico and a distributor in Chicago, Illinois. On Oct. 21, 2015, Galvan-Galvan coordinated the delivery of cocaine from a supplier in Mexico to a buyer in Chicago from his residence in McAllen by phone. Once delivered to the buyer in Chicago, law enforcement was able to seize the cocaine and arrest the buyer and two others. Galvan-Galvan was to receive payment via Western Union from the buyer in Chicago.
The illegal transaction not only led to this sentencing, but also the arrest and prosecution of three individuals in the Northern District of Illinois.
Galvan-Galvan will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
Immigration and Customs Enforcement’s Homeland Security Investigations conducted the investigation known as Operation Red-Eye. Assistant U.S. Attorneys Juan F. Alanis is prosecuting the case.
Texas Man Pleads Guilty to Child Sex TraffickingRead the Press Release
A Houston man pleaded guilty today in federal court to one count of sex trafficking of children, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Kenneth Magidson of the Southern District of Texas.
Deangelo Tate, 27, pleaded guilty before U.S. District Judge Gray H. Miller of the Southern District of Texas in Houston. Sentencing is scheduled for Feb. 17, 2017.
According to admissions made in connection with his guilty plea, between Jan. 13, 2015, and March 16, 2015, Tate posted classified advertisements on backpage.com promoting the prostitution of a 17-year-old minor female. Tate admitted that he also rented hotel rooms in Corpus Christi, Texas, and Houston to serve as the location for commercial sex acts between the minor female and male customers. Tate transported the minor female to the hotels, collected all of the money from the completed sex acts and became physically violent with the minor female if she did not follow Tate’s orders, he admitted. Tate was aware that the victim was a minor and stated in a conversation recorded by law enforcement that the girl had no credibility because of her age.
The FBI investigated this case with assistance from the Houston Police Department and the Corpus Christi Police Department. Trial Attorney Herbrina D. Sanders and Lauren Britsch of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) and Assistant U.S. Attorney Sherri L. Zack of the Southern District of Texas prosecuted the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Texas Man Pleads Guilty to Child Sex TraffickingRead the Press Release
HOUSTON – A Houston man pleaded guilty today in federal court to one count of sex trafficking of children, announced U.S. Attorney Kenneth Magidson and Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division.
Deangelo Tate, 27, pleaded guilty before U.S. District Judge Gray Miller of the Southern District of Texas in Houston. Sentencing is scheduled for Feb. 17, 2017.
According to admissions made in connection with his guilty plea, between Jan. 13, 2015, and March 16, 2015, Tate posted classified advertisements on backpage.com promoting the prostitution of a 17-year-old minor female. Tate admitted he also rented hotel rooms in Corpus Christi and Houston to serve as the location for commercial sex acts between the minor female and male customers. Tate transported the minor female to the hotels, collected all of the money from the completed sex acts and became physically violent with the minor female if she did not follow Tate’s orders, he admitted. Tate was aware that the victim was a minor and stated in a conversation recorded by law enforcement that the girl had no credibility because of her age.
The FBI investigated this case along with police departments in Houston and Corpus Christi. Assistant U.S. Attorney Sherri L. Zack is prosecuting the case along with Trial Attorney Herbrina D. Sanders and Lauren Britsch of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS).
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Several Charged with Trafficking Marijuana for Cartel Members in MexicoRead the Press Release
McALLEN, Texas - A total of nine people are in custody following law enforcement actions in multiple cities that began on Thursday involving a drug trafficking organization operating throughout South Texas, announced U.S. Attorney Kenneth Magidson.
Those arrested locally include Evelina Bermea, 32, of La Grulla; Wenceslao Ortiz, 62, Maggie L. Montoya, 26, Daniel Herrera, 23, and Luis Hernandez, 24, all of Rio Grande City; and Joshua Serna, 25, of Roma. All have made their initial appearances before U.S. Magistrate Judge Peter Ormsby who ordered them temporarily into custody pending a detention hearing Dec. 21, 2016. Two others - Joselyn Rivera, 24, of Rio Grande City; and Jordan Bermea, 28, of La Grulla - were arrested yesterday in Houston and Galveston, respectively. They were also temporarily ordered into custody pending a hearing Dec. 20, 2016. The ninth defendant - Jesus Alanis, 25, from Roma – was already in custody on unrelated charges.
Each are charged respectively in a total of four indictments, returned under seal Nov. 8, 2016, and unsealed upon their arrests. The indictments allege the conspiracies ran from May 2013 to February 2014. According to the indictments, this organization was specifically tasked with receiving and transporting large quantities of marijuana smuggled into the United States by cartel members to Houston.
This investigation was initiated in May 2013 and targeted the Maria Ortiz drug trafficking organization. The organization allegedly exploited illegal aliens and tasked them with carrying backpacks of marijuana from locations throughout South Texas until the organization could get the marijuana to Houston. The first indictment charged cell leaders Rosa Maria Barrera, 50, and Maria Guadalupe Ortiz, 36, both of Roma. Barrera and Ortiz have pleaded guilty for their roles and are pending sentencing.
Each of the nine announced today is charged with conspiracy to possess with intent to distribute marijuana, as well as a varying numbers of substantive drug possession charges. If convicted, they face a minimum of five and up to 40 years in prison.
The charges are the result of the Organized Crime Drug Enforcement Task Force investigation dubbed Operation Crash and Burn. The Drug Enforcement Administration led the investigation with assistance of the U.S. Marshals Service, Texas Department of Public Safety, Gulf Coast Violent Offender and Fugitive Task Force, Laredo Independent School District Police and Border Patrol.
Assistant U.S. Attorneys Pat Profit and K. Alejandra Andrade 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.
Self-styled “Financial Advisor” Charged with Defrauding Professional Athlete Victims Out of MillionsRead the Press Release
HOUSTON – A woman claiming to be a financial advisor and money manager has been arrested on allegations she defrauded former NFL football player Ricky Williams and three other professional athlete victims out of millions of dollars, announced U.S. Attorney Kenneth Magidson. Peggy Ann Fulford, 58, formerly of Houston and now residing in New Orleans, is charged with wire fraud, mail fraud, interstate transportation of stolen property and money laundering.
Fulford has been known to use several aliases, such as:
Peggy King
Peggy Williams
Peggy Simpson
Peggy Rivers
Peggy Barard
Devon Cole
Devon Barard
She was taken into custody today in New Orleans where she will make her initial appearance. She is expected to appear in Houston shortly thereafter.
A federal grand jury in Houston returned the eight-count indictment Dec. 13, 2016, which was unsealed upon her arrest today.
According to the indictment, Fulford falsely told victims she was a Harvard-educated financial advisor and money manager. She offered to manage their expenses for them and use their money exclusively to pay their bills, including their income tax payments, and/or to make retirement investments for them, according to the allegations. Instead, Fulford allegedly diverted millions of victim funds that she laundered through dozens of bank accounts to pay for her own personal expenses.
The indictment alleges Fulford falsely told victims that she graduated from Harvard Law School and Harvard Business School and that she had made millions on Wall Street, by buying and selling hospitals or on real estate in the Bahamas. She never requested a fee because she allegedly told the victims she already had millions of dollars and just wanted to protect them from losing their money.
Fulford failed to inform the victims that she used most of their money, or intended to use most of their money, for her own personal purposes, according to the allegations. Fulford allegedly communicated with victims in person, by phone and by email, inducing them to open or give her access to bank accounts which she raided and used for personal expenses such as luxury cars, real estate, jewelry and airline tickets.
In carrying out her scheme to defraud, the indictment specifically alleges victim funds were moved back and forth between various bank accounts. Fulford also allegedly purchased a cashier’s check with victim funds and sent closing documents related to the sale of some Houston real estate via federal express from Florida to Houston.
If convicted of either the mail or wire fraud charges, Fulford faces up to 20 years in federal prison. She also faces a maximum of 10 years if convicted of money laundering and interstate transportation of stolen property charge.
The FBI conducted the investigation. Assistant U.S. Attorney Belinda Beek is prosecuting the case.
An indictment is merely a charge and should not be considered as evidence of guilt.
The defendant is presumed innocent until proven guilty in a court of law.