District of Utah
Press releases recorded for this federal judicial district.
Crump Sentenced to 18 Months in Federal Prison for Wire Fraud ConvictionRead the Press Release
SALT LAKE CITY – Kent Crump, 54, of Heber City, Utah, will serve 18 months in federal prison followed by 36 months of supervised release after pleading guilty to wire fraud in federal court. In the plea agreement, Crump admitted that while he was working as the comptroller for Park City Dry Cleaning and Linen Corporation, that he defrauded the business out of $672,081 between 2012 and 2018. Crump admitted that he carried out the fraud by stealing a large portion of the cash receipts received by the business’ various retail locations each day, and depositing the cash in his and his wife’s personal bank accounts. Crump used the proceeds of this scheme to purchase a non-financed home in his wife’s name, and prosecutors were able to forfeit the proceeds from the sale of the home on behalf of Park City Dry Cleaning and Linen as a part of the prosecution. Crump has also been ordered to pay $217,289 to the victims, which represents the remainder of the amount taken from the business during his scheme.
Assistant U.S. Attorneys in the Utah U.S. Attorney’s Office prosecuted the case. Special agents of the FBI conducted the investigation.
Utah Business Owner Charged with Failing to Pay Taxes Withheld from Employees’ WagesRead the Press Release
SALT LAKE CITY – A federal grand jury returned an indictment Wednesday afternoon charging an Ogden, Utah, business owner, who owned and operated four healthcare related limited liability companies, with 27 counts of failing to pay over trust fund taxes totaling $146,856 to the IRS, between 2014 and 2016.
According to the indictment, Daniel Fry, who owned and operated four limited liability companies, including Burch Creek Homecare and Hospice LLC, Medical Billing Advantage LLC, Scrub World, and Country Niche LLC, caused trust fund taxes to be withheld from the wages paid to the employees of each of these businesses, and that Fry failed to pay over to the IRS all of the taxes owing to the United States on behalf of the employees of these businesses.
The indictment alleges that employers are required to withhold, account for, and pay over to the IRS, a variety of taxes from employee wages, including federal income taxes and FICA taxes- which include Medicare and Social Security taxes. These taxes are referred to as “trust fund taxes” because employers are required to hold them in trust for their employees and pay them over to the IRS.
Fry faces up to five years in federal prison if convicted of failure to pay over trust fund taxes. The case is being investigated by IRS Criminal Investigation.
Indictments are not findings of guilt. Individuals charged in an indictment are presumed innocent unless or until proven guilty beyond a reasonable doubt in a court of law.
A summons has been issued for Fry to appear in federal court. This case is being prosecuted by the U.S. Attorney’s Office in Utah.
Project Safe Childhood: Comprehensive Strategy Combatting Child Sexual Exploitation Operating at Full Speed in UtahRead the Press Release
SALT LAKE CITY – Project Safe Childhood, a unified and comprehensive strategy to combat child sexual exploitation, continues to operate at full speed in Utah. Initiated in May 2006, Project Safe Childhood (PSC) in Utah continues to bring together statewide law enforcement partners to investigate and prosecute cases and raise the level of public awareness and accountability of sexual predators in our communities.
“We have very serious problems with child sexual exploitation in Utah. Fortunately, a strong team of experienced prosecutors and investigators remain committed to protecting child victims and holding perpetrators accountable,” U.S. Attorney John W. Huber said today.
“While the pandemic has exacerbated the challenges in protecting children, there has been no slowdown in our efforts. Our investigations and prosecutions of new exploitation cases continue to move forward with determination,” Huber said.
Huber said that as a result of the pandemic, prosecutors have also been engaged in opposing the early release of PSC defendants, who are serving lengthy federal prison sentences based upon egregious offense conduct. These compassionate release motions, if granted, could result in significant reductions in the sentences imposed in the case.
Over the last several years, the U.S. Attorney’s Office in Utah has prosecuted approximately 55 cases a year involving the production, possession, and distribution of child pornography and coercion and enticement of minors in Utah. These cases result from investigations conducted by members of the FBI’s Child Exploitation and Human Trafficking Task Force. This task force was formed in June 2016 to ensure a rapid, effective response to federal crimes against children and the victimization of children by online predators. These investigations, including chat operations conducted by the task force, account for the majority of cases charged by the U.S. Attorney’s Office. The U.S. Attorney’s Office also takes cases referred by the Utah Internet Crimes Against Children Task Force.
“Sadly, when it comes to the sexual exploitation and sex trafficking of children, there's never a shortage of work for our special agents and partners. The FBI's Child Exploitation and Human Trafficking Task Force in Utah, Idaho, and Montana receives and responds to hundreds of cases each year. As more kids are spending time online, the case load is even greater right now,” said Special Agent in Charge Paul Haertel of the Salt Lake City FBI. “Parents and guardians need to keep a close eye on their kids’ online activities because any child, no matter the age or demographic, can be a victim. Keeping our children safe will always be a top priority for the FBI and our task force."
Members of the task force include Adult Probation and Parole, Clearfield, Layton, Lehi, Park City, Roy, Salt Lake City, Syracuse, and Tooele police departments, the Davis County Sheriff’s Office, the Davis County Attorney’s Office, the Salt Lake District Attorney’s Office, the Weber County Sheriff’s Office, the Weber County Attorney’s Office, the Utah Department of Public Safety, the Dixie State University Police Department, and the U.S. Department of Homeland Security.
State and federal prosecutors routinely coordinate on prosecutions when cases are referred by agents or law enforcement officers. Generally, state prosecutors handle the hands-on sexual abuse portion of the investigation while the U.S. Attorney’s Office in Utah undertakes the prosecution of any connected production, distribution and possession of child pornography or enticement of a minor. This coordination is effective because federal sentencing guidelines allow for enhanced sentences of repeat sex offenders and prosecutors can seek imposition of lifetime supervision of a defendant once they finish their prison sentence.
PRODUCTION OF CHILD PORNOGRAPHY:
2016: United States vs. Lyman Dale Black
Black was sentenced to 300 months in prison, followed by lifetime supervised release, after pleading guilty to one count of production of child pornography and one count of distribution of child pornography. Black traded child sexual abuse material and through live stream chats Black sexually abused his 14-month-old victim. Black was also convicted in state court for the sexual abuse of the victim. This case is an example of the coordinated efforts with our state partners in holding offenders accountable for all conduct involved in the exploitation of children in our community. This case was prosecuted by the U.S. Attorney’s Office in St. George.
2017: United States vs. Geoffrey James Cheney
Cheney was sentenced to 300 months in prison, followed by lifetime supervised release, after pleading guilty to production of child pornography. Cheney sexually abused an infant child and then distributed images of the sexual abuse to law enforcement during an undercover online operation.
2018: United States vs. Nathan Ward
Ward was sentenced to 262 months in prison, followed by lifetime supervised release, after pleading guilty to production of child pornography. Ward, an obstetrician-gynecologist, live streamed the sexual abuse of his victim, who was between 12 and 14-years-old, with another sex offender, Robert Edwin Francis, who was also identified and convicted in federal court. Ward was also convicted for the sexual abuse of the same victim in state court. This case is an excellent example of the close working relationship the U.S. Attorney’s Office has with our state prosecuting agencies. A prosecutor in the Davis County Attorney’s Office, cross-designated as a Special Assistant U.S. Attorney, played a significant role in this case.
2019: United States vs. Dennis Andreasen
Andreasen was sentenced to 180 months in prison, followed by lifetime supervised release, after pleading guilty to production of child pornography. Andreasen recorded the sexual abuse he perpetrated on his 6-year-old victim. This case is an example of our coordinated efforts with state prosecuting agencies. Andreasen was also convicted of the sexual abuse in state court.
2020: United States vs. Eduardo Ponce:
Ponce was sentenced to 300 months in prison, followed by lifetime supervised release, after pleading guilty to production of child pornography. Ponce recorded the sexual abuse of his victim. Ponce was also convicted of the sexual abuse in state court where he was sentenced to an indeterminate sentence of 25 years to life.
2020: United States vs. Michael Travers
Travers was sentenced to 210 months in prison, followed by lifetime supervised release, after pleading guilty to production of child pornography. Travers, a long haul truck driver from Mississippi, participated in the production of sexually explicit images of an 8-year-old child.
POSSESSION OF CHILD PORNOGRAPHY:
2017: United States vs. Donald Ray Fritcher
Fritcher was sentenced to 330 months in prison, followed by lifetime supervised release, after pleading guilty to distribution of child pornography. Fritcher, a previously twice convicted sex offender, distributed child sexual abuse material that included images and videos of Fritcher sexually abusing two minor girls. This investigation was a coordinated effort with Homeland Security Investigations and the Royal Canadian Mounted Police.
2018: United States vs. Jason David Lott
Lott was sentenced to 132 months in prison, followed by 240 months of supervised release, after pleading guilty to possession of child pornography. Lott, who had two previous sex offender convictions, was found to be in possession of child sexual abuse material of infants, toddlers, and prepubescent children.
2020: United States vs. Aaron Scott Smith
Smith was sentenced to 120 months imprisonment, followed by lifetime supervised release, after pleading guilty to possession of child pornography. Smith, a prior convicted sex offender, possessed child sexual abuse material.
COERCION AND ENTICEMENT OF A MINOR:
2018: United States vs. Christopher Lambert
Lambert was sentenced to 80 months in prison, followed by 120 months of supervised release, after pleading guilty to travel with the intent to engage in illicit sexual conduct. Lambert traveled from New Mexico to Utah to meet a 15-year-old female he met online with the intent to engage in sexual activity. He then transported the female minor back to New Mexico where Lambert engaged in illegal sexual activity with her.
2018: United States vs. Skyler Mark Hansen
Hansen was sentenced to 150 months imprisonment, followed by 120 months of supervised released, after pleading guilty to sex trafficking of a minor. Hansen, a long haul truck driver, admitted that over a two-year period, he coerced a minor to engage in sexual acts with him in exchange for money.
2019: United States vs. Sean Timothy O’Neill
O’Neill was sentenced to 120 months in prison, followed by 240 months supervised release, after pleading guilty to attempted enticement of a minor and possession of child pornography. O’Neill, via Facebook, attempted to entice a minor under the age of 18 to engage in illegal sexual activity. O’Neill moved from Michigan to Utah and continued in his efforts to persuade the minor to engage in illegal sexual activity. O’Neill was also found to be in possession of child sexual abuse material during the course of this investigation. This case was prosecuted in federal court in St. George.
2020: United States v. Lyle Reveral Leifson
Leifson was sentenced to 120 months in prison, followed by lifetime supervised release, after pleading guilty to attempted coercion and enticement of a minor. Leifson, a prior convicted sex offender, arranged to meet with someone he believed was a 13-year-old minor to engage in illegal sexual activity. This is an example of the proactive efforts of law enforcement in undercover online operations in our communities.
COMPASSIONATE RELEASE CASES
United States vs. John Dennis Bowen
Bowen was sentenced to 120 months in prison, followed by 180 months supervised release, in February 2020 after pleading guilty to possession of child pornography. Bowen possessed a large amount of child pornography, distributed child pornography on his YouTube account, and live streamed a video feed of female children being sexually assaulted by adult men. U.S. District Judge Richard Shelby denied relief because Bowen had not demonstrated the existence of extraordinary and compelling reasons despite Bowen claiming he had several underlying medical conditions that put him at risk if infected with COVID-19. However, even if Bowen had demonstrated the existence of extraordinary and compelling reasons, Judge Shelby found that Bowen was a danger to the community based upon the conduct in this case and his criminal history, which included prior sexual abuse convictions.
United States vs. Aaron Elliott
Elliott was sentenced to 72 months in prison, followed by 60 months supervised release, in 2015 after pleading guilty to sex trafficking of children. Elliott advertised and arranged for a female minor to engage in commercial sex acts with clients of his escort service in exchange for money. Elliott sought relief claiming he had serious health conditions that put him at risk if infected with COVID-19. Judge David Nuffer found that Elliott had failed to demonstrate that his circumstances constituted extraordinary and compelling reasons to justify compassionate release. In addition, U.S. District Judge Nuffer found that the conduct of the offense and Elliott’s criminal history also did not support granting the relief.
United States vs. Darin Fronk Clark
Clark was sentenced to 180 months in prison, followed by 120 months of supervised release, in 2013 after pleading guilty to Production of Child Pornography. Clark induced his victim into engaging in sexually explicit conduct for the purpose of producing sexually explicit material. Although Clark claimed to suffer from several chronic medical conditions that put him at risk if infected with COVID-19, the medical conditions did not constitute extraordinary and compelling reasons to warrant relief. In addition, relief was denied because Clark was found to be a danger to the community if released.
United States vs. Chad Ryan Huntsman
Huntsman was sentenced to 270 months in prison, followed by lifetime supervised release, in 2016 after pleading guilty to production of child pornography. Although Huntsman sought release based on his health condition and the COVID-19 pandemic, Judge Ted Stewart found that Huntsman had not exhausted all of his administrative remedies. However, even if Huntsman had exhausted his administrative remedies, Judge Stewart found that Huntsman was a danger to the community and he would not be released.
U.S. Department of Justice Recognizes Ogden Police Chief for His Work with Targeted Project Safe Neighborhood AreaRead the Press Release
SALT LAKE CITY – The U.S. Department of Justice is recognizing the leadership success of Ogden Police Chief Randy Watt in the city’s Project Safe Neighborhoods (PSN) Target Enforcement Area. Each year, the Department of Justice recognizes outstanding efforts to restore safety in communities through annual PSN Achievement Awards.
U.S. Attorney John W. Huber presented the Outstanding Individual Contribution to the PSN Program award to Chief Watt Tuesday in Ogden. PSN is a critical piece of the Department’s crime reduction efforts. Generally, the awards are presented at a national ceremony. However, with the pandemic, local presentations are being done this year.
The U.S. Attorney’s Office in Utah has been one of the highest performing offices in the PSN initiative for almost 20 years, using the initiative goals to reduce violent crime in Utah communities. PSN, which fosters using local solutions to solve local problems, focuses investigation and prosecution resources on those individuals who most significantly drive violence in our communities. It also promotes partnerships between law enforcement and schools, the faith community, and local community leaders to prevent and deter future criminal conduct. For example, 255 cases PSN cases were filed by federal prosecutors in 2018; 215 in 2019, and, as of November, 169 in 2020.
The U.S. Attorney’s Office nominated Chief Watt for the award in recognition of his decades of leadership in law enforcement and his efforts to lead a PSN targeted enforcement effort in Ogden, partnering with federal law enforcement agencies.
Chief Watt was the architect of a program to develop a Targeted Enforcement Area (TEA) in Ogden. He selected a 4.86 square mile area, located primarily within Ogden, for enhanced targeted enforcement. The TEA initiative started in April 2018 with support from DOJ PSN grants. Partners adopted a zero tolerance position for anyone committing firearms or narcotics violations in the targeted area. Offenders are screened for federal or state prosecution as a part of a coordinated prosecution strategy. The federal cases are often prosecuted by Weber County Attorneys cross-designated as Assistant U.S. Attorneys. This partnership and geographic surge of resources has resulted in a significant reduction in Type 1 crimes.
“Chief Watt deserves this high honor for his efforts in the Target Enforcement Area. His forward thinking leadership in defining and targeting a specific area, combined with his willingness to partner with the PSN program and federal law enforcement, has made the TEA the success is. His success in crime suppression and prevention has made Ogden a model for other cities to use in addressing violent crime issues,” Huber said today.
As a part of the Ogden TEA initiative, 181 firearms have been seized. The firearms include one grenade launcher, 128 pistols, 15 revolvers, 23 rifles, and 14 shotguns. These are firearms no longer in the hands of criminals in the community.
Huber said prosecutors have even heard from offenders, arrested as a part of the initiative, promoting a crime-prevention mantra: Don’t get caught in the Box.
Chiropractor and Related Practice to Pay $175,000 as A Part of False Claims Act Liability Settlement AgreementRead the Press Release
SALT LAKE CITY, UT – U.S. Attorney John Huber announced today that Chiropractor Matthew Wood and his practice, Life Health Medical Center (“LHMC”), have agreed to pay $175,000 to resolve liability under the False Claims Act for allegations he improperly billed Medicare for the use of electro-acupuncture devices.
From November 3, 2018 through February 28, 2020, Dr. Wood and LHMC billed Medicare for an implantable neurostimulator device, a device that typically requires a surgical procedure and is performed by a surgeon in an operating room.
STIVAX® is a percutaneous auricular electro-acupuncture device. Pursuant to the manufacturer’s instructions, the device is affixed behind a patient’s ear using an adhesive. Needles are inserted into the patient’s ear and affixed using another adhesive. Once activated, the device then provides intermittent stimulation by electrical pulses. It is a single-use, battery-powered device designed to be worn for approximately four days until its battery runs out, at which time the device is thrown away. Other brand names for this device include NeuroStim, ANSiStim, E-Pulse, and NSS-2 Bridge.
Medicare does not reimburse for electro-acupuncture devices as implantable neurostimulators nor acupuncture.
LHMC also agreed to enter into an Integrity Agreement with the Office of Inspector General of the U.S. Department of Health and Human Services that will require regular monitoring of its billing practices for a period of three years.
"Health care professionals who inappropriately bill Medicare do so at a disservice to this vital program,” said Special Agent in Charge Curt L. Muller, U.S. Department of Health and Human Services Office of Inspector General. "Working with our law enforcement partners, we will continue to protect taxpayer-funded health care programs as well as the patients who rely on them."
This settlement agreement is one of many of its kind involving electro-acupuncture billing that U.S. Attorneys’ Offices across the United States have worked diligently to resolve.
The settled civil claims are allegations only. There has been no determination of civil liability. This case was investigated by the Office of Inspector General of the U.S. Department of Health and Human Services. Assistant U.S. Attorney Sandra L. Steinvoort, Chief of the Affirmative Civil Enforcement section in the Utah U.S. Attorney’s Office, handled the matter.
Utah Pharmacy Accused of Unlawfully Dispensing Thousands of Opioids, Other Controlled Substances in Civil LawsuitRead the Press Release
SALT LAKE CITY – A Utah pharmacy is accused of dispensing thousands of highly addictive controlled substances in violation of the Controlled Substances Act (CSA) in a newly filed federal lawsuit, U.S. Attorney John W. Huber announced today. The complaint was filed Friday in U.S. District Court in Salt Lake City.
Ridley’s Family Markets, Inc., a corporate-owned supermarket and pharmacy chain, is accused of failing to recognize “red flags” of improper and illegitimate prescriptions. Ridley’s operates 31 grocery stores and two stand-alone pharmacies in Utah, Idaho, Wyoming, Colorado, and Nevada.
A pharmacy owned by Ridley’s in Morgan, Utah, became the subject of a DEA investigation after it was discovered that Ridley’s filled 160 forged and fraudulent prescriptions for two of its regular customers. The United States alleges in its complaint that the customers’ actions were so obviously fraudulent that any reasonable pharmacist would have prevented the illegal diversion of dangerous opioids and other controlled substances by properly following the provisions set forth by the CSA.
The Morgan location is the second pharmacy owned by Ridley’s to be accused of this conduct. A Ridley’s pharmacy located in Casper, Wyoming, is also alleged to have filled more than 200 illegitimate prescriptions written by a now convicted pill-pushing doctor.
The actions sought in this complaint are part of the ongoing efforts made by the U.S. Attorney’s Office in Utah and its federal law enforcement partners to combat the opioid crisis through criminal prosecutions and civil actions.
The lawsuit alleges Ridley’s shirked its responsibility as the “last line of defense between powerful controlled substances with high potential for abuse and the people seeking them.” In addition to overlooking obviously altered paper prescriptions, Ridley’s turned a blind eye to numerous “red flag” warnings of drug abuse and diversion, including: 1) filling prescriptions not within the scope of the prescriber’s practice; 2) unusual levels of cash sales; 3) prescriptions for the same drugs in multiple strengths; 4) prescriptions for daily doses higher than medically necessary; 5) similar or duplicate prescriptions written for more than one family member residing at the same address; and 6) prescriptions for drug combinations well-known in the medical and pharmacy community as carrying a high risk for drug abuse, the lawsuit alleges.
The lawsuit alleges that Ridley’s employees not only failed to comply with CSA protocol, they failed to follow their own minimal safeguards. Following this protocol would have prevented the diversion of thousands of dangerous opioids.
Dispensing drugs in violation of the CSA carries a civil penalty of up to $67,627 per violation. The complaint alleges “hundreds” of violations by Ridley’s with just these two customers. In addition to civil penalties, the United States seeks injunctive relief to restrain Ridley’s violations of the CSA.
The claims asserted against the defendants are allegations only and there has been no determination of liability.
Hansen Sentenced to 48 Months in Federal Prison After Pleading Guilty to Financial Fraud SchemeRead the Press Release
SALT LAKE CITY – Theodore Lamont Hansen, age 50, of Highland, Utah, who pleaded guilty to money laundering and bank fraud in May in connection with a financial fraud scheme, will serve 48 months in federal prison. U.S. District Judge Robert L. Shelby imposed the sentence Thursday afternoon in U.S. District Court.
Hansen was ordered to pay $1,435,913.44 in restitution as a part of the sentence.
“Another Utah fraudster has come to justice in federal court. In this case, a repeat offender ignored a merciful opportunity to separate from a life of crime given to him by a state court. It is unfortunate that more victims had to pay such a steep price for this swindler’s federal crimes after he ignored the state court’s orders in his previous conviction. There are far too many fraudsters in Utah who are truly wolves in sheep’s clothing, and Utah investors must be more mindful when parting with their hard-earned savings,” U.S. Attorney John W. Huber said today.
"Fraudsters are very good at what they do. They are extremely convincing and will work hard to gain your trust. Driven by greed, many reoffend," said Special Agent in Charge Paul Haertel of the Salt Lake City FBI. "The FBI will aggressively investigate these crimes, but we urge the public to do their part too. When considering investment opportunities, do your due diligence and ask some tough, detailed questions about a person’s financial history. The public is also encouraged to check court records and the state’s White Collar Crime Offender Registry online at utfraud.com."
“Mr. Hansen has made a lifestyle of fraud – whether it was fraud against investors or fraud against a financial institution. The IRS, working with our law enforcement partners, have finally put an end to his lifestyle of fraud,” IRS Special Agent in Charge Tara Sullivan said.
As a part of a plea agreement reached with federal prosecutors, Hansen admitted that he devised a scheme to defraud an individual of $1 million using fraudulent promises and omitting material facts. Hansen convinced the victim of the scheme, identified as E.L. in the plea agreement, to give him the money by representing he would use the funds to purchase full ownership of Seven Peaks Water Park in Provo. Hansen told E.L. he would return the money if the transaction could not be completed within 24 hours. In exchange for the investment, E.L. was promised $23.5 percent ownership in the waterpark.
Hansen admitted that he used the $1 million for things inconsistent with his representations and never returned the money to E.L. For example, he used $28,000 for a purchase from RC Automotive.
The bank fraud conviction stems from a large check-kiting scheme involving Bank of the West and Deseret First Credit Union. The check-kiting involved at least 10 different companies and got so complicated in the end that Hansen and a colleague would go to Bank of the West every morning to sort out each transaction. The bank, according, to the sentencing memo, discovered the kite and put an end to it. Bank of the West was left with a loss of more than $1.6 million. Hansen asked an elderly friend to cover the loss, but the friend would only agree to pay a portion of the amount, taking the loss amount down to $585,913.44.
In a sentencing memorandum, federal prosecutors told the court that “Hansen is a prodigious fraudster whose only real occupation is convincing others to give him money and property.” Hansen was convicted by the State of Utah for selling unregistered securities and placed on probation for 36 months. As a part of his conditions of release, Hansen was required to disclose to any prospective investor in writing that he had approximately $45 million in outstanding judgments against him – some thing he did not do in the case prosecuted by federal prosecutors.
Unsealed 14-Count Indictment Charges Six Individuals in Connection with Bluetooth Gas Skimming SchemeRead the Press Release
SALT LAKE CITY – A federal indictment unsealed Tuesday morning charges six individuals with conspiracy to steal money from customers at various gas stations in Utah and elsewhere. The indictment alleges the defendants and their co-conspirators executed the conspiracy by using Bluetooth enabled skimming equipment that they installed on the motherboard of the internal computer that controls the gas pumps. Victims of the alleged scheme lost at least $200,000.
Charged in the indictment are Yosbel Delgado-Valdes, age 40, Iraldo Pereda-Mendez, 32, Emmanuel Nina-Perez, 28, Jandry Artigas-Reyes, 35, and Yarislani Padron-Cruz, 35, all of Salt Lake City, and Yofre Napoleon Almonte, 47, a citizen of the Dominican Republic currently being held in the Davis County Jail on unrelated charges. In addition to Almonte, who is not a U.S. citizen, three defendants are legal permanent residents of the United States, one is a naturalized U.S. citizen, and one has an application pending for legal permanent resident status.
The skimming equipment contains a Bluetooth card reader/recorder that records information – such as customers’ credit card numbers and the name and zip code associate with the card – from the magnetic strip of customers’ cards as the customers insert the cards into gas pumps, according to the indictment. The defendants and their co-conspirators only needed to get within the necessary range of the Bluetooth skimming device to initiate a wireless Bluetooth connection to the device still inside the gas pump.
The indictment alleges the defendants then downloaded the digital credit card or debit card information that had been captured and stored in their skimming devices. They were then able to use the captured data to create duplicate “cloned” cards encoded with the same data as the customers’ authentic credit or debit cards.
After making the cloned cards, the defendants and their co-conspirators tested the cards by attempting small transactions – typically $1 – to identify which of the cloned cards were viable and could be used to make larger purchases.
After testing the cards, the defendants and their co-conspirators moved to what the indictment calls the “cash out” phase. The “cash out” phase generally involved large purchases of fuel, though they did make other purchases at gas stations and other retail stores. The fuel purchases were typically for vehicles they were driving, or for trusted associates/purchasers the defendants would meet, using the cloned cards to fill up their tanks. The defendants further used the cloned cards to fill external fuel tanks installed in the beds of their pickup trucks – later offloading that fuel into the tanks of semi trucks or into larger storage containers for future use or resale.
In furtherance of the scheme, the indictment alleges the defendants committed several overt acts. For example, on April 30, 2020, Artigas-Reyes and Pereda-Mendez visited the Tesoro gas station in Sunset, Utah, just after midnight and installed a Bluetooth skimmer in the pump. On May 21, 2020, they installed a Bluetooth skimmer in a pump at a Texaco station in Scipio. The indictment alleges the acts were for the purpose of committing bank fraud.
Using the cloned credit or debit cards, the defendants obtained at least $200,000 in funds from multiple financial institutions, the indictment alleges. For instance, on May 5, 2020, Almonte made a $100 purchase at Exxon Mobil Common Cents in Bountiful using a cloned JP Morgan Chase credit card. On May 27, 2020, Artigas-Reyes made an $89.41 purchase at the Exxon Mobile Common Cents in Salt Lake City using a cloned Capital One credit card. Nina-Perez made a $100 purchase at Murphy Express in Riverton using a cloned PNC bank credit card and Delgado-Valdes made a $99.84 purchase at the Home Depot in West Jordan using a cloned Wells Fargo credit card.
“Utah is a hotbed of fraud schemes. I have directed prosecutors and investigative partners to pull out all of the stops in our combined efforts to take on those who victimize Utah residents with their fraud schemes. In this bank fraud ring, allegations suggest persistence, sophistication and organization on the part of the charged conspirators. Investigators and prosecutors have tried to match and surpass those characteristics in their efforts to bring this matter to justice in federal court,” U.S. Attorney John W. Huber said today.
“We all routinely fill up our gas tanks, which means any one of us could have been victims of this alleged crime,” said Special Agent in Charge Paul Haertel of the Salt Lake City FBI. “While the financial losses are significant, the victims are also left with the burden of taking the necessary steps to recover from the damage of identity theft. The FBI is committed to holding the alleged perpetrators accountable. We encourage the public to regularly check their bank statements and report fraud to local law enforcement or the FBI."
Each defendant is charged with conspiracy to commit bank fraud in the lead count of the indictment. Each defendant is also charged with one count of bank fraud and one count of aggravated identity theft. Almonte, who has three previous deportations from the country, is also charged with illegally entering the country after deportation. The potential maximum penalty for the conspiracy to commit bank fraud and bank fraud counts is 30 years in federal prison. Aggravated re-entry has a maximum penalty of 10 years in prison. An aggravated identity theft conviction carries a two-year mandatory sentence, which runs consecutive to any other sentence.
Indictments are not findings of guilt. Individuals charged in an indictment are presumed innocent unless or until proven guilty in court.
Padron-Cruz, Artigas-Reyes, Nina-Perez, and Delgado-Valdes were arrested in Utah on Nov. 20. During the execution of search warrants in connection with the arrests, agents and law enforcement officers found more than $40,000 as well as skimming equipment and what agents believe to be hundreds of cloned credit cards.
These four defendants, along with Almonte, had an initial appearance on the charges in the indictment Tuesday and Wednesday. Almonte has been in custody on an unrelated charge. A federal arrest warrant is pending for Pereda-Mendez.
Assistant U.S. Attorneys in the U.S. Attorney’s Office in Utah are prosecuting the case. It is being investigated by agents and task force officers working with the FBI’s Cyber Task Force and the Salt Lake City Police Department.
Three Individuals Charged with Firearms Violations; Firearms Purchased for Individuals Unable to Legally Buy GunsRead the Press Release
SALT LAKE CITY – Three individuals are charged with travel within the United States with intent to deal firearms without a license in a complaint unsealed Thursday. The charges allege the defendants were involved in purchasing or attempting to purchase 27 firearms in Utah between Aug. 1, 2020, and Nov. 4, 2020.
Charged in the complaint are Erick Lopez, age 20, Christopher Lopez, 22, and Bryan Rodriguez, 21, all of California.
According to the complaint, an ATF special agent was contacted by a federal firearms licensee (FFL) regarding the suspicious attempted purchase of five pistols on Aug. 2, 2020, by a person referred to as Person A in the charging document. Person A was observed with two Hispanic males in a rental car with California plates. Ultimately, the FFL canceled the purchase and the sale was not completed.
Between Aug. 1 and Aug. 27, 2020, Person A made three separate purchases for a total of 12 pistols from three different FFLs. According to the complaint, the Person A paid cash for all of the purchases.
In late October, ATF learned that one of the firearms, a Glock pistol, had been recovered during a traffic stop in Arizona involving a convicted felon.
Investigators linked the rental car used during the attempted firearms purchase on Aug. 2, 2020, to an individual. Further investigation revealed Christopher and Erick Lopez were associated with the individual.
On Nov. 4, 2020, ATF agents learned Person A was attempting to purchase 10 Glock pistols from an FFL. The agent observed the individual fill out the paperwork to buy the weapons and provide cash for the firearms. However, the firearms were not transferred to Person A at that time, according to the complaint. Person A left the store and got into a car with a California license plate parked in a nearby alley. The vehicle left at that point.
Later that evening, the ATF investigator spoke with Person A. Person A admitted he/she had purchased or attempted to purchase 27 firearms in Utah since Aug. 1, 2020. The complaint alleges Person A indicated that all of the firearms were purchased for three males, who lived in California and were unable to legally purchase firearms in Utah. According to the complaint, prior to each transaction, the three males provided instructions to Person A as to the quantity and type of firearms to purchase and provided the individual with cash for each transaction.
Person A identified Erick and Christopher Lopez as two of the three males. Rodriquez was later identified by law enforcement officers. The three are believed to be related to each other.
Law enforcement officers located the three defendants. None of the defendants possessed a valid federal firearms license to deal, transport, or ship firearms. A federal arrest warrant was issued for their arrest.
Initial appearances for the three were held Thursday. Detention hearings were set for Dec. 4, 2020, for Bryan Rodriquez and Christopher Lopez. U.S. District Magistrate Judge Dustin Pead found Erick Lopez to be an unmanageable risk for non appearance and a risk of danger to the community. He will remain in the custody of the U.S. Marshals pending resolution of the case.
The potential maximum penalty for the charge in the complaint is 10 years, a fine of $250,000, and three years of supervised release following the completion of the sentence.
Complaints are not findings of guilt. Individuals charged in a complaint are presumed innocent unless or until proven guilty in court.
Hallows Sentenced to 46 Months in Federal Prison After Pleading Guilty to Possession of Child PornographyRead the Press Release
SALT LAKE CITY – Timothy James Hallows, age 62, of Kaysville, who pleaded guilty to possession of child pornography in July, will spend 46 months in federal prison. U.S. District Judge Howard C. Nielson, Jr., imposed the sentence Wednesday morning in U.S. District Court in Salt Lake City.
Local authorities arrested Hallows on Oct. 16, 2019. Federal prosecutors filed a Felony Information in May 2020 charging him with possession of material containing an image of child pornography involving a minor who had not attained 12 years of age. Local charges were dismissed following the filing of the federal charges.
As a part of a plea agreement reached with federal prosecutors, Hallows admitted that in 2019 he knowingly possessed sexually explicit images of children on his cell phone. The images included depictions of prepubescent children being sexually assaulted by adults.
Federal prosecutors agreed to recommend Hallows be given credit for acceptance of responsibility in the case and be sentenced to 46 months in federal prison, the low end of the federal sentencing guidelines in the case. There is no parole in the federal prison system. When he finishes his sentence, he will be on supervised release for five years. He was ordered to pay a $5,000 assessment under the Justice for Victims Trafficking Act as well as a $100 assessment for the count of conviction.
Local and federal law enforcement agencies and prosecutors coordinated the investigation and prosecution of this case, including members of the FBI’s Child Exploitation Task Force, the Davis County Sheriff’s Office, the Davis County Attorney’s Office and the U.S. Attorney’s Office. This coordination happens regularly in child exploitation cases because of the significant penalties available in the federal system. Law enforcement task force officers investigating these cases work seamlessly with prosecutors in either venue.
“These are cases that motivate all prosecutors because they involve the victimization and exploitation of children,” U.S. Attorney John W. Huber said today. “My office regularly partners with the Office of the Davis County Attorney on child exploitation cases such as this one, as we do with other county attorney offices throughout the state. Together, we seek the best court system to achieve justice for child victims and their families. We recognize and appreciate the significant work Davis County officers and prosecutors contributed to the successful prosecution of this case.”
Federal judges consider a number of factors when imposing a sentence for possession of child pornography. They include the number of images, use of a computer, distribution of the images, the defendant’s abuse of a position of trust to conceal the offense, the ages of the children in the images, the defendant’s criminal history, the nature and circumstances of the offense, and the characteristics of the defendant. Multiple counts do not change the sentence because the court is aware of each image possessed by the defendant regardless of how many counts are charged.
Utah Man and His Company Indicted for Wildlife TraffickingRead the Press Release
A Utah man and his company were charged in an indictment today with violating the Endangered Species Act and Lacey Act for their role in illegal wildlife trafficking, announced Principal Deputy Assistant Attorney General Jonathan D. Brightbill of the Justice Department’s Environment and Natural Resources Division and U.S. Attorney John W. Huber of the District of Utah.
Jean-Michel Arrigona, 58, and his company Natur, Inc. in Midvale, Utah, sell wildlife in the forms of art, taxidermy mounts, bones, and skeletons. The indictment alleges that Arrigona imported wildlife into the United States without declaring it to U.S. Fish and Wildlife Service or customs authorities. He later resold the wildlife from the Natur store and its website.
The Lacey Act is the nation’s oldest wildlife trafficking statute and prohibits, among other things, selling wildlife that had been illegally brought into the country. The Endangered Species Act and federal regulations require importers to declare wildlife when it enters the country. Between December 2015 and September 2020, Arrigona imported approximately 460 wildlife items without declaring them. The wildlife, primarily from Indonesia, included bats, lizards, turtles, insects, starfish, and mollusks. Arrigona did not import any live animals. Some of the wildlife, such as the flying fox (Pteropus sp.) and monitor lizard (Varanus sp.) are protected by the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), which regulates trade in endangered or threatened species through permit requirements. The United States and 182 other countries are signatories to the CITES treaty.
The U.S. Fish and Wildlife Service’s Office of Law Enforcement in Redmond, Washington, conducted the investigation as part of Operation Global Reach. The operation focused on the trafficking of wildlife from Indonesia to the United States. Trial Attorney Ryan Connors of the Environment and Natural Resources Division’s Environmental Crimes Section and Assistant U.S. Attorney Melina Shiraldi for the District of Utah are prosecuting the case.
An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
Salt Lake City Man Pleads Guilty to Attempting to Provide Material Support to ISISRead the Press Release
SALT LAKE CITY – Murat Suljovic, age 23, of Salt Lake City, pleaded guilty to one count of attempting to provide material support to a designated foreign terrorist organization in U.S. District Court in Salt Lake City Tuesday morning. U.S. Magistrate Judge Dustin B. Pead presided at the plea hearing.
According to the plea agreement, Suljovic admitted that in January 2019, while living in Utah, he corresponded with an individual, identified as Person A in the court document, who he believed was a follower of ISIS. He admitted he believed Person A was interested in performing an attack for ISIS. He also believed Person A was assisting another individual, referred to as Person B in the plea agreement, who was also interested in performing an attack for ISIS.
Suljovic admitted that in his correspondence with Person A, he pretended to be an ISIS leader through an online persona, and he believed Person A and Person B believed he was an ISIS leader. Suljovic provided advice about potential targets for a terrorist attack and advice about how to plan an attack. Suljovic admitted he provided a bomb-making tutorial video to Person A in the correspondence to share with Person B for purposes of training and assisting Person B in carrying out an attack, according to the plea agreement.
By providing the bomb-making tutorial video to Person A, Suljovic admitted he knowingly attempted to provide material support to ISIS, knowing that ISIS has engaged and does engage in terrorism.
Suljovic was charged with providing material support to a designated foreign terrorist organization in a Felony Information filed in May.
As a part of the plea agreement, Suljovic agreed to forfeit a variety of computer and electronic equipment used to facilitate his criminal conduct or acquired from his conduct.
The maximum potential penalty for the conviction is 20 years in prison and a fine of $250,000. A sentencing date for Suljovic, who remains in custody, will be scheduled later.
The case is being investigated by the FBI and members of its Joint Terrorism Task Force and prosecuted by Assistant U.S. Attorneys Carl D. LeSueur and Tyler L. Murray of the Utah U.S. Attorney’s Office with the assistance of National Security Division Counterterrorism Section Trial Attorney Michael Dittoe.
Nine Individuals Face Federal Drug Trafficking Charges, Involved in Network Distributing Methamphetamine, HeroinRead the Press Release
SALT LAKE CITY – A status conference is set for Nov. 23, 2020, for nine individuals charged in what the indictment alleges were conspiracies to distribute methamphetamine and heroin in the Salt Lake Valley and Idaho. A federal grand jury returned a four-count indictment earlier this month. The investigation, led by DEA Metro Narcotics Task Force and IRS Criminal Investigation, started in March 2020.
The lead defendant in the case is Toulon Mattox, 41, of Taylorsville, who was arrested after a federal judge signed a complaint alleging the conspiracies. According to the indictment, Mattox has a previous conviction for conspiracy to distribute controlled substances in federal court in Idaho. He was sentenced to 33 months in federal prison and 60 months of supervised release in that case. He started his supervised release in October 2015 and moved to Utah. He filed a motion for early termination of his supervised release in November 2017, which was granted, according to a complaint filed in the case.
Mattox, according to the complaint, owned a restoration company that repairs and restores homes contaminated by methamphetamine. Mattox provided drugs to employees of his business, specifically methamphetamine, the complaint alleges.
Mattox is charged with conspiracy to distribute methamphetamine in the first count of the indictment. Also charged in that count are Lupe Gene Sandoval, 41, of West Valley City, Jerod B. Meyer, 34, of South Salt Lake City, Kelly Ann Cockrell, 43, of Salt Lake City, Michael Kermitt Nugent, 46, and James Walker Taylor, 46, both of Idaho Falls, Idaho, Fred James Schaffer, 56, of West Valley City, and Whitney Carter, 31, of Provo.
Mattox is charged with conspiracy to distribute heroin in the second count of the indictment. Sandoval, Meyer, Cockrell and Jose Armenta-Sanchez, 30, a citizen of Mexico living in Salt Lake City, are also named in that count.
Mattox, Taylor, and Carter are charged with conspiracy to commit money laundering in the third count of the indictment and Armenta-Sanchez is charged with possession of heroin with intent to distribute in the final count of the indictment.
Acting on a tip, the DEA Metro Narcotics Task Force initiated an investigation of Mattox and others in March 2020 using court-authorized investigative tools. Information shows Mattox had a source for drugs who resided in California and that many of Mattox’s drug customers lived in Idaho. The investigation resulted in the charges in the federal indictment, including the conspiracies to distribute methamphetamine and heroin. The charges allege that between April 2019 and September 28, 2020, the defendants conspired to distribute of up to 4 pounds of heroin and up to 17 pounds of methamphetamine.
Mattox has been detained pending resolution of the case. U.S. Magistrate Judge Daphne A. Oberg found that although he did well on supervision after his previous drug conviction, just 18 months after Mattox was released from supervision early, he apparently became involved in drug trafficking behavior as the ringleader of the conspiracy. Judge Oberg found him to be an unmanageable risk of danger to the community.
Magistrate Judge Oberg found Cockrell poses an unmanageable risk of danger to the community as well as a risk of nonappearance based on the significant number of times she has failed to appear in previous criminal cases.
Meyer did not contest detention at his initial appearance and Carter was released on conditions of supervised release. Sandoval had an initial appearance last week and Magistrate Judge Oberg found he posed a danger to the community and a risk of non-appearance and ordered him detained pending resolution of the case. Nugent, who was arrested in Idaho, has an initial appearance Thursday before Magistrate Judge Oberg. Armenta-Sanchez is scheduled for an arraignment and detention hearing on Oct. 28, 2020. Taylor and Schaffer have not appeared on the charges.
The potential maximum penalty for conspiracy to distribute methamphetamine is life in prison with a 10-year mandatory minimum. The potential maximum penalty for conspiracy to distribute heroin is 20 years in prison. Conspiracy to commit money laundering has a potential penalty of 20 years in prison. Possession of heroin with intent to distribute heroin carries a potential 40-year sentence with a five-year mandatory minimum.
Indictments are not findings of guilt. Individuals charged in indictments are presumed innocent unless or until proven guilty in court.
Assistant U.S. Attorneys in the U.S. Attorney’s Office are prosecuting the case. Members of the DEA Metro Narcotics Task Force and special agents of IRS Criminal Investigation are conducting the investigation.
U.S. Attorney Appoints Elections Officer for UtahRead the Press Release
SALT LAKE CITY – United States Attorney John W. Huber announced today that Assistant United States Attorney Aaron Clark will lead the efforts of his office in connection with the Justice Department’s nationwide Election Day program for the upcoming November 3, 2020, general election. Clark will coordinate with election officials in Utah and at the Department of Justice to ensure that all qualified voters in Utah have the opportunity to cast their ballots and have their votes counted free of discrimination, intimidation, or fraud in the election process.
“Although Utah has a history of conducting problem-free elections, we want to make sure residents of Utah know that reports of fraud or abuse will be taken seriously,” Huber said today. “Election fraud and voting rights abuses dilute the worth of votes honestly cast. They also corrupt the essence of our representative form of government. Whether a Utah voter is mailing in a ballot or voting in person, anyone who has specific information about election fraud or discrimination should pass that information on to my office or to the FBI,” Huber said.
The Department of Justice has an important role in deterring election fraud and discrimination at the polls, and combating these violations whenever and wherever they occur. The Department’s long-standing Election Day program furthers these goals, and also seeks to ensure public confidence in the integrity of the election process by providing local points of contact within the Department for the public to report possible election fraud and voting rights violations during the election process.
Federal law protects against such crimes as intimidating or bribing voters, buying and selling votes, impersonating voters, altering vote tallies, stuffing ballot boxes, and marking ballots for voters against their wishes or without their input. It also contains special protections for the rights of voters, and provides that they can vote free from acts that intimidate or harass them. For example, actions of persons designed to interrupt or intimidate voters at polling places by questioning or challenging them, or by photographing or videotaping them, under the pretext that these are actions to uncover illegal voting may violate federal voting rights law. Further, federal law protects the right of voters to mark their own ballot or to be assisted by a person of their choice (where voters need assistance because of disability or illiteracy).
The administration of the election process is primarily a state rather than a federal function. States have the power to establish the place, time, and manner for holding elections.
Concerns about election fraud or voting rights abuses in Utah should be referred to Clark. He can be reached at 801-325-1405. In addition, the FBI will have special agents available throughout the country to receive allegations of election fraud and other election abuses on Election Day. The Utah FBI office can be reached at 801-579-1400.
Complaints about possible violations of the federal voting rights laws can be made directly to the Civil Rights Division in Washington, DC by phone at 800-253-3931 or by complaint form at https://civilrights.justice.gov/ .
In the case of a crime of violence or intimidation, please call 911 immediately and before contacting federal authorities. State and local police have primary jurisdiction over polling places, and almost always have faster reaction capacity in an emergency.
“Voting rights are core to who we are as Americans, and we expect free and fair elections. It is imperative that those who have specific information about discrimination or election fraud make that information available to my office, the FBI, or the Civil Rights Division,” Huber said
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The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
Members, Associates of White Supremacist Gangs Charged in Methamphetamine and Firearms Trafficking CasesRead the Press Release
SALT LAKE CITY – Twenty-one documented gang members and associates of several home-grown white supremacist gangs allegedly responsible for distributing drugs and firearms around the Salt Lake City and Ogden areas are charged in 15 indictments unsealed Friday morning in federal court.
The charges follow a strategic, intelligence-based Organized Crime Drug Enforcement Task Force investigation (OCDETF) of Soldiers of Aryan Culture (SAC) members, Silent Aryan Warriors (SAW) members, Noble Elect Thugs (NET) members, and associates. The joint local-federal investigation resulted in 15 unsealed indictments alleging distribution of methamphetamine, felon in possession of a firearm, and possession of a firearm during and in relation to a narcotics trafficking offense.
OCDETF is an independent component of the U.S. Department of Justice. Established in 1982, OCDETF employs strategies to reduce the availability of illicit narcotics throughout the United States using a prosecutor-led, multi-agency approach to take on complex investigations. OCDETF cases facilitate joint operations by focusing its partner agencies on priority targets, by managing and coordinating multi-agency efforts, and by leveraging intelligence across multiple investigative platforms.
Agencies assisting in the organized crime investigation include the ATF, U. S. Attorney’s Office, the Ogden Police Department, the Unified Police Department, the U.S. Marshals Service, the Salt Lake Area Metro Gang Unit, the Ogden Metro Gang Unit, the Weber Morgan Narcotics Strike Force, West Valley City Police Department, and the Utah Department of Public Safety’s State Bureau of Investigation.
The charges are the result of an investigation that started in June 2019 with the ATF and the two gang units joining together targeting drug and firearms trafficking activities throughout Salt Lake City, West Valley City, and Ogden City by SAC members. The investigation led law enforcement officers to numerous documented gang members and associates trafficking in methamphetamine and firearms. Many of the defendants have been involved in criminal conduct in Utah communities for many years. In two cases, this criminal history will allow federal prosecutors to seek a significant federal sentencing enhancement if they are convicted of the charges.
As a part of this proactive investigation, agents used a number of investigative techniques to learn about methamphetamine and firearms dealing by SAC members, SAW members, and associates. Ultimately, the targeted federal-state partnership resulting in numerous indictments of these individuals.
Around 1.65 pounds of methamphetamine were purchased during the investigation. Fifteen firearms were recovered during the investigation, including 10 during the investigation and 5 when arrest warrants were executed Wednesday.
21 DEFENDANTS CHARGED IN 15 SEPARATE INDICTMENTS
Multi-Defendant Cases
- Steven Mack Swena, Clinton Dean Spencer
- Distribution of 5 grams or more of methamphetamine
- Maximum penalty: 5 years mandatory minimum, 40 years statutory maximum, $5 million fine
- Distribution of 50 grams or more of methamphetamine
- Maximum penalty: 10 years mandatory minimum, Life maximum, $10 million fine
- Felon in Possession of Firearm
- Maximum penalty: 10 years statutory maximum, $250,000 fine
- Distribution of 5 grams or more of methamphetamine
- Richard Ryan, Amanda Lee Graham, Jared Loren Brown, Thomas Radford
- Distribution of 50 grams or more of methamphetamine (mixture) and aiding/abetting
- Maximum penalty: 5 years mandatory minimum, 40 years statutory maximum, $5 million fine
- Distribution of 50 grams or more of methamphetamine (mixture) and aiding/abetting
- Justin William Austin, Cody Kelly Wright, Jerrad Luis Colvin
- Distribution of 5 grams or more of methamphetamine (3 counts)
- Maximum penalty: 5 years mandatory minimum, 40 years statutory maximum, $5 million fine
- Distribution of 50 grams or more of methamphetamine
- Maximum penalty: 10 year mandatory minimum, life statutory maximum, $10 million fine
- Distribution of heroin (Austin)
- Maximum penalty: Up to 20 years in prison, $1 million fine
- Carry/use of a firearm during and in relation to a drug trafficking crime (Austin)Maximum penalty: 5 years mandatory minimum up to life statutory maximum, $250,000 fine
- Felon in possession of a firearm and ammunition (Austin)
- Maximum penalty: Up to 10 years statutory maximum, $250,000 fine
- Distribution of 5 grams or more of methamphetamine (3 counts)
Single Defendant Cases
- James William Broadhead
- 2 counts of Distribution of methamphetamine
- Maximum Penalty: 20 years statutory maximum, $1 million fine
- 2 counts of Possession of Firearm In Furtherance of Narcotics Trafficking
- Maximum Penalty: 5 years consecutive sentence, Life maximum
- 3 counts of Felon in Possession of Firearm and Ammunition
- Maximum Penalty: 10 years statutory maximum, $250,000 fine
- 2 counts of Distribution of methamphetamine
- Johnathan Dale Miller
- Distribution of 50 grams or more of methamphetamine
- Maximum penalty: 10 years mandatory minimum, Life maximum, $10 million fine
- Distribution of 5 grams or more of methamphetamine
- Maximum penalty: 5 years mandatory minimum, 40 years statutory maximum, $5 million fine
- Distribution of 50 grams or more of methamphetamine
- Brian Christopher Jenson
- Distribution of 50 grams or more of methamphetamine
- Maximum penalty: 10 years mandatory minimum, Life maximum, $10 million fine
- Distribution of 50 grams or more of methamphetamine
- Timothy Cox*
- Heather Brooke Hebdon
- Jesse Harris
- Bret Miller
- Distribution of 5 grams or more of methamphetamine
- Maximum penalty: 5 years mandatory minimum, 40 years statutory maximum, $5 million fine
- Distribution of 5 grams or more of methamphetamine
- Michael Byrd
- Timothy Daniel Jepsen*
- Distribution of Methamphetamine
- Maximum penalty: 20 years statutory maximum, $1 million fine
- Distribution of Methamphetamine
- Tyler William Riding
- Jordan Anderson
- Chance Robinson
- Felon in Possession of Firearm and Ammunition
- Maximum Penalty: 10 years statutory maximum, $250,000 fine
- Felon in Possession of Firearm and Ammunition
Prosecutors have filed a notice of a sentencing enhancement for defendants with * next to their names. This enhancement potentially doubles their statutory maximum sentence, or where applicable, their mandatory minimum sentence.
Eleven defendants were arrested Wednesday. Another 10 were already in custody. Defendants in the cases will make initial appearances on the indictments in the coming weeks. Several are in state custody on other state criminal charges.
Indictments are not findings of guilt. Individuals charged in indictments are presumed innocent unless or until proven guilty in court.
- Steven Mack Swena, Clinton Dean Spencer
Shamo Sentenced to Life in Prison After Conviction for Organizing, Directing Drug Trafficking OrganizationRead the Press Release
SALT LAKE CITY – Aaron Michael Shamo, the CEO of a nationwide dark net drug trafficking organization that distributed more than a half million counterfeit pills throughout the country, will serve life in federal prison after engaging in, and being convicted of, the most serious offense in the Controlled Substance Act. U.S. District Judge Dale A. Kimball imposed the sentence Thursday morning in Salt Lake City.
A federal jury found Shamo guilty of organizing and directing a drug trafficking organization that imported fentanyl and alprazolam from China and used the drugs to manufacture fake oxycodone pills made with fentanyl and counterfeit Xanax tablets following a trial in August 2019. Forty-seven witnesses testified at trial and hundreds of exhibits were received into evidence.
The jury convicted Shamo, 30, of Cottonwood Heights, Utah, of engaging in a continuing criminal enterprise, three counts of aiding and abetting the importation of a controlled substance, possession of a controlled substance with intent to distribute, manufacture of a controlled substance, and two counts of knowing and intentional adulteration of drugs while held for sale. The jury also found Shamo guilty of aiding and abetting the use of the U.S. Mail in furtherance of a drug trafficking offense, conspiracy to commit money laundering, money laundering promotion and concealment, and engaging in monetary transactions in property derived from specified unlawful activity. Shamo was found guilty on 12 of the 13 counts in the indictment. The jury did not make a decision on the aiding and abetting the distribution of fentanyl resulting in death count.
The nation’s opioid crisis was in full effect by the end of 2016, when Shamo was distributing his fentanyl-laced oxycodone around the country. Shamo distributed the controlled substances to other individuals for distribution in all 50 states using their storefront, PHARMA-MASTER, on the Dark Net marketplace AlphaBay and the U.S. mail. Federal law enforcement agents and prosecutors say an undercover purchase of 100 oxycodone pills is a substantial step in a drug investigation. Shamo sold more than half a million fentanyl-laced pills on the dark net. He also sold hundreds of thousands of fentanyl pills locally. Prosecutors told the jury that Shamo became the person he set out to be – the Pharma Master.
Evidence at trial showed Shamo did the things leader and organizers do. He was in control of the majority of the functions of the enterprise. He established the dark web store front, hired employees, took charge of marketing and product placement. He was a drug dealer to other drug dealers. He had the contacts in China and ordered the fentanyl. Most significantly, investigators were led to Shamo as they followed the proceeds of the drug trafficking organization. He had sole access to incoming bitcoin payments from customers. Shamo referred to the organization as his baby and his empire, prosecutors argued at trial.
Shamo developed the fentanyl product through a dangerous “trial and error” process as he distributed it to individuals across the country, evidence showed. Experts say 1 milligram of fentanyl in a pill can have dangerous consequences up to and including death. Shamo received messages from customers that they were getting sick. His response, prosecutors said, was to send more pills to the complaining customers. There was no shortage of fake pain pills. Co-defendants in the case, who were responsible for packaging and shipping, used a vacuum to clean up pills from the floor because they believed it was not worth their time to pick them up because of the volume of pills they were manufacturing.
“Aaron Shamo knew the nation was on fire with opioids and he poured fuel on the flames, over and over and over, never getting burned himself, but causing pain and misery wherever his fire spread. Aaron Shamo could be considered the face of the opioid epidemic. He was a profiteer, callously making millions of dollars and living a life of leisure while exploiting those suffering through opioid addiction,” Assistant U.S. Attorney Vernon Stejskal said in closing argument during the trial.
In their sentencing memorandum, federal prosecutors told the Court that the true scope of the defendant’s victims cannot be calculated. Since Shamo sold the fentanyl-laced fake oxycodone pills in bulk to redistributors, the end users of the pills could not always be located by investigators. Evidence shows that more than 90 individuals died from subsequent overdoses.
“The defendant’s history and characteristics support the imposition of a life sentence. The defendant dedicated himself to building his drug trafficking empire and becoming rich. The defendant also new about the acute dangers of fentanyl but continued to produce fentanyl-laced fake oxycodone pills at an ever-increasing rate prior to his arrest,” prosecutors wrote in a sentencing memorandum. “Dark net drug traffickers falsely operate under the assumption that they are anonymous and untouchable. Dark net drug traffickers see the immense profit potential for the highest-volume sellers of opioids online – sellers like Shamo. A life sentence would deter current and future dark net drug traffickers,” they wrote.
“Shamo’s drug trafficking organization is a graphic example of the dangers in drug trafficking and the harm it causes individuals, families, and communities. At least 90 of Shamo’s retail customers have died. Because Shamo’s organization supplied pills to other drug distributors on a wholesale basis, it is impossible to know for sure how many have perished in this illicit drug network. Most of Shamo’s profit hinged on fentanyl-laced fake pain pills, and fentanyl is an extraordinarily poisonous substance,” U.S. Attorney John W. Huber said. “Congress mandated the life sentence imposed today, which implies that a bi-partisan majority of our nation’s policymakers agreed on this significant sentence for circumstances like those found in Shamo’s conduct,” Huber said.
"In 2016, Shamo sold 1 million fentanyl-laced fake oxycodone pills to unsuspecting buyers in every state in the union. While the total harm he caused can never be measured, at least 90 of his known customers have died from overdoses. The Court’s sentence today—life imprisonment—brings justice to the families of his deceased customers and everyone else affected by his crimes. The Attorney General’s Office extends its deepest sympathies to the families of the deceased, recognizing that not even a just sentence can restore what was lost. We remain fully engaged in our effort to combat the opioid epidemic by aggressively investigating and prosecuting drug dealers who prey on the addicted," Utah Attorney General Sean D. Reyes said.
“The tragedy of the opioid crisis continues to this day, fueled in large part by those who use every method available, including the Dark Web, to sell their illicit goods to those with substance abuse addictions," said Catherine Hermsen, Assistant Commissioner for Criminal Investigations- FDA Office of Criminal Investigations. “The FDA will continue to work with its law enforcement partners to protect the public health and disrupt and dismantle illegal prescription drug manufacturing and distribution.”
“Aaron Shamo profited off of the pain and suffering of others in the hopes of becoming rich and famous. Shamo deserves to be held accountable for his actions. This investigation highlights the on-going struggle that our country faces with opioid addiction and the cooperative efforts needed to successfully dismantle criminal organizations targeting our neighborhoods,” Michael J. Tinkler, Assistant Special Agent in Charge of the DEA’s Utah District Office, said.
“Today’s sentence is the result of a collaborative investigation between federal, state and local partners and exemplifies our commitment to dismantle major narcotics and money laundering operations in Utah,” said Eric Balliet, Deputy Special Agent in Charge of U.S. Homeland Security Investigations, Denver. “As this case shows, you can’t hide on the dark net. HSI will continue to use its considerable technological expertise to investigate criminals like Shamo who push dangerous drugs into our neighborhoods and contribute to the epidemic of opioid addiction in our country.”
“Mr. Shamo put at risk countless individuals addicted to opioids, through the sale of dangerous counterfeit fentanyl-laced pills. His drug empire affected the entire nation and today Mr. Shamo and the United States people received their justice,” said IRS Criminal Investigation Special Agent in Charge, Tara Sullivan. “We will continue to work together with our law-enforcement partners to dismantle criminal enterprises like Mr. Shamo’s, who intend to financially profit from the exploitation and suffering of our communities and Americans as a whole.”
“The conviction and sentencing of Aaron Shamo is an excellent example of multiple law enforcement agencies combining their expertise and resources to work on the common goal of taking down dark web vendors. These vendors work under the belief they are anonymous, selling dangerous narcotics such as the deadly fentanyl uncovered in this investigation. U.S. Postal Inspectors are committed to continuing our work to dismantle drug trafficking operations to keep USPS customers and employees safe from greedy drug traffickers who favor profit over human lives,” stated Inspector in Charge Melisa Llosa of the U.S. Postal Inspection Service, Phoenix Division.”
A restitution hearing in the case will be held in November.
Assistant U.S. Attorney Vernon Stejskal of the U.S. Attorney’s Office and Special Assistant U.S. Attorneys Michael Gadd and Kent A. Burggraaf prosecuted the case. Gadd and Burggraaf are Assistant Attorneys General in the Utah Attorney General’s Office. Special agents of the U.S. Department of Homeland Security Investigations, DEA, IRS-Criminal Investigation, the Food and Drug Administration Office of Criminal Investigations, and Postal Inspectors with the U.S. Postal Inspection Service investigated the case.
Las Vegas Man Charged in Firearms Trafficking Case; Allegedly Made False Statements to Purchase FirearmsRead the Press Release
SALT LAKE CITY – A Las Vegas man is charged with nine counts of making a false statement during the acquisition of a firearm in a federal indictment returned by a grand jury in Salt Lake City, along with one count of dealing in firearms without a license and one count of travel within the United States with intent to violate federal law prohibiting dealing in firearms without a license.
The indictment alleges Gregory Alan Nelson, 32, knowingly made false written statements in connection with the acquisition of firearms intended to deceive the firearms dealer. Specifically, the indictment alleges Nelson falsely answered “yes” on an ATF form asking whether he was the actual buyer of the firearm. The counts in the indictment refer to a variety of firearms Hansen purchased from federal firearms licensees (FFLs) in Utah during May, June, July and August.
Charges allege Nelson purchased approximately 283 guns in Utah in 2020. Using a conservative estimate, he spent about $176,000 on the guns, including 147 Glock pistols.
“The time-to-crime evidence in this prosecution is troubling. Allegations portray hundreds of guns purchased in Utah, too many of which were later recovered in criminal investigations outside of Utah in a relatively short period of time,” U.S. Attorney John W. Huber said. “To be sure, these charges are serious as far as the potential consequences if he is found guilty of federal felonies. More serious, though, are the negative effects on public safety as a result of the conduct outlined in the allegations. Gun crime endangers our communities.”
“ATF prioritizes illegal firearms trafficking. Most firearms start out as a legal commodity but in this case multiple firearms purchased by Nelson were transferred illegally, some ending up at crime scenes. In order to help keep the public safe, ATF agents interdicted and stopped the flow of these firearms,” ATF Special Agent in Charge, Denver Field Division, David Booth said.
According to a complaint filed in the case, Nelson came to the attention of ATF agents in Salt Lake City in July after purchasing a large number of similar firearms over a short period of time throughout Utah. The ATF received information from a FFL with numerous locations in Utah that Nelson’s firearms purchases were suspicious in nature given the multiple purchases of firearms he was making and the different, potentially conflicting explanations he offered as he interacted with store employees during the transactions.
Under federal law, FFLs are required to send a report to ATF when there is a sale of multiple firearms to the same purchaser within a short period of time. ATF uses the information to investigate potential firearms trafficking cases. If one or more firearms recovered from a crime are part of a multiple purchase, this could be an indicator of potential firearms trafficking. A gun recovered from a crime shortly after being purchased in a multiple sale is known as a short time-to-crime ratio. It refers to the time between when a firearm is purchased, and when that same firearm is recovered at a crime scene.
The ATF also received a tip that Nelson was purchasing firearms in Utah and trafficking them in Las Vegas.
ATF firearms tracing shows that as of Oct. 9, 2020, 19 firearms, originally purchased by Nelson, have been recovered in California by law enforcement officers investigating various crimes. All 19 of the recovered firearms were recovered within a short time-to-crime ratio of between 2 and 91 days. One of the recovered firearms was used to commit a double murder, according to the complaint. All firearms were recovered in different areas of California and were traced to Nelson as the original purchaser.
Examples from the complaint include:
- On May 28, 2020, Nelson purchased a semi-automatic pistol from Sportsman’s Warehouse in St. George. This gun was recovered on Aug. 27, 2020 (just over 3 months time to crime) by DEA during a narcotics distribution investigation in California.
- On June 5, 2020, Nelson purchased a semi-automatic pistol from Rowdy’s Range and Supply in St. George. This gun was recovered on July 7, 2020 (29 days time to crime) by the Walnut Creek Police Department while executing a search warrant during the course of a murder investigation.
- On June 17, 2020, Nelson purchased a semi-automatic pistol from Gunnies in Orem. This gun was recovered on Aug. 2, 2020 (46 days time to crime) by the East Palo Alto Police Department during the investigation of a double murder in California.
- As of Aug. 28, 2020, the investigation shows Nelson purchased firearms recently from 29 FFLS in Utah and paid for them with cash. Nelson made one purchase in excess of $13,000. He also made purchases around $11,000, and three in excess of $7,000. During the months of July and August, Nelson purchased 171 firearms.
Nelson has no known employment for 2020 and, according to the complaint, does not have the monetary means to purchase the quantity of firearms he has to date – an indication Nelson is buying the pistols at the direction of and through the financing of another individual. Nelson has repeatedly purchased duplicate models of handguns that are not typically considered to be of collector value, including the 147 Glock pistols, which is an indication of straw purchases, investigators say.
Nelson was arrested on the Utah complaint in Las Vegas in August. He was released on conditions of supervised release imposed by a federal magistrate in Las Vegas. He had an initial appearance before U.S. Magistrate Judge Cecilia M. Romero on Sept. 21, 2020, in Salt Lake City. He was arraigned on charges in the indictment Thursday.
Each count of making a false statement during the acquisition of a firearm carries a potential sentence of 10 years in federal prison. Count 10, dealing in firearms without a license, has a potential five-year sentence. The final count of the indictment, travel within the United States with intent to violate federal law prohibiting dealing in firearms without a license, has a maximum sentence of 10 years.
Indictments are not finding of guilt. Individuals charged in indictments are presumed innocent unless or until proven guilty in court.
Assistant U.S. Attorneys in the Utah U.S. Attorney’s Office are prosecuting the case. Special agents with the ATF are conducting the investigation.
Convicted Fraudster Pleads Guilty to New Fraud Scheme, Plea Agreement Includes Stipulated 10-Year SentenceRead the Press Release
SALT LAKE CITY – Christopher D. Hales, 39, of Lehi pleaded guilty to wire fraud conspiracy and money laundering conspiracy in connection with a financial fraud scheme he and other co-conspirators devised while Hales was in a halfway house serving a sentence for another federal fraud case. The scheme resulted in a loss to investors of at least $7 million.
The plea agreement includes a stipulated 10-year sentence, subject to the Court’s approval. Federal prosecutors asked for detention following the change of plea. Hales did not contest detention at this time. U.S. Magistrate Judge Daphne A. Oberg presided over the hearing last week.
“Utah has an outsized fraud problem, and these allegations illustrate the conduct of a serial schemer. Utahns must diligently consider investment pitches and their risks before parting with hard-earned savings,” U.S. Attorney John W. Huber said today.
“A judge once told Christopher Hales he was addicted to defrauding people,” said Special Agent in Charge Paul Haertel of the Salt Lake City FBI. “The reality is that most fraudsters have no remorse or conscience, and they often reoffend. That's why it's so important for the public to do their due diligence when looking to invest and immediately report fraud to police or the FBI.”
“Hales is a bad apple that has continuously fed his greed and preyed on others too many times,” said IRS-Criminal Investigation Special Agent in Charge Tara Sullivan, “IRS-Criminal Investigation is proud to work with our partners to help protect Utah residents from scammers like Hales. Please remember, if it sounds too good to be true, it probably is.”
Hales was convicted of bank fraud in April 2011 as a part of a mortgage fraud case. He was sentenced to 90 months in federal prison and ordered to pay $12,719,236 in restitution. He violated terms of his supervised release in 2016 and he was sentenced to another 30 months in federal prison.
According to a Felony Information filed in the current case, Hales was released from federal prison on Feb. 8, 2018, and resided at a halfway house in Salt Lake City until around Aug. 8, 2018. Nevada Secretary of State records show Sindakit Software LLC was formed on Aug. 6, 2018, by a co-conspirator (CC1) known to federal prosecutors. CC1 was listed as the sole officer. CC1 was listed on the Sindakit Software bank account as the manager and was the only authorized signor.
The Information alleges Hales and CC1 conspired to defraud investors and potential investors by inducing them to purchase investments in a sports betting software. Hales purported to own a sports betting software that “beat the house” to convince investors to give him money to place sports bets. In furtherance of the conspiracy, the indictment alleges Hales made a variety of false statements of material facts to investors and potential investors, including representing that 100 percent of investor funds would be used to place sports bets when, in fact, Hales diverted nearly all investor funds received to his and CC1’s personal use, and to make payments to other investors.
Hales also told them he was Chris Christian, when in fact, he was Christopher Hales, a convicted felon on supervised release. Investors were also told Hales would match all investor funds, when in reality he would take out a line of credit with the sports betting website and use the line of credit to hedge bets. Hales also told investors that the sports betting was producing a rate of return for investors of around 10 percent a week – an amount made up by Hales to entice investors to provide funds. He also represented that there were potential buyers willing to purchase the software he developed for tens of millions of dollars, when there were actually no buyers, according to the Felony Information.
In furtherance of the conspiracy, Hales failed to disclose to investors that they did not actually own an algorithm or a sports betting software and that they were laundering investor funds through transfers in and out of the Sindakit Software account. Sports betting account statements provided to investors were false and were inflated based on Hales’ line of credit and his ability to manipulate the statements. They also did not disclose that part of the investors’ money was used to pay commissions to those introducing investors to Sindakit or that they were using investment money from newer investors to pay promised winnings to earlier investors in what is commonly recognized as a Ponzi scheme.
Assistant U.S. Attorneys in the Utah U.S. Attorney’s Office are prosecuting the case. Special agents of IRS Criminal Investigation and the FBI are conducting the investigation.
Utah Receiving $994,943 in Department of Justice Funding to Enhance State Victim Assistance ProgramsRead the Press Release
SALT LAKE CITY – U.S. Attorney John W. Huber announced Wednesday morning that Utah is receiving almost $1 million in Department of Justice grant awards to support crime victims in Utah. The grants, awarded by the Department’s Office of Justice Programs, are part of more than $144 million distributed nationwide to enhance the response to victims of crime throughout the United States.
“The Department of Justice is steadfast in its commitment to protecting public safety and bringing justice to those who have been victimized,” said Attorney General William P. Barr. “The investments we are making today will support service providers as they work to secure the legal rights of victims and put survivors of criminal acts on the road to recovery.”
“The Department of Justice underscores its commitment to victim rights by dedicating resources like those announced today. These awards will help shore up gaps that may exist in the state, and provide substantial assistance to better serve Utah communities,” Huber said today.
Utah State University in Logan, Utah, will receive $196,335 as a part of the Law Enforcement-Based Victim Specialist program. This funding allows recipients to better support victims of crime through the criminal justice process.
The Utah Office for Victims of Crime is receiving two awards.
The Utah office is one of seven states to receive funding under the Crime Victim Compensation Assessment Program. The $348,608 award will support the states in assessing victims’ access to compensation programs and implementing recommendations to increase the number of victims aware of this resource.
The Utah Office for Victims of Crime is also one of 10 states receiving $450,000 through the State Victim Liaison Project to place one or more experienced crime victim liaisons within selected Victims of Crimes Act state administrating agencies to act as a bridge between state and other state-based nongovernmental organizations to identify gaps in victim services and improve access to resources for crime victims in rural and tribal areas, older victims of crime, and victims of violent crime.
Pennsylvania Man Pleads Guilty to Possession of Methamphetamine with Intent to Distribute, Firearms ChargeRead the Press Release
ST. GEORGE, UT – Channing L. Allen, 36, of Stroudsberg, Pennsylvania, pleaded guilty to one count of possession of methamphetamine with intent to distribute and one count of possession of a firearm in furtherance of a drug trafficking crime in federal court in St. George Thursday morning. U.S. Magistrate Judge Paul Kohler conducted the hearing.
A Utah Highway Patrol trooper initiated a traffic stop on I-15 in Iron County on Oct. 7, 2019, after observing traffic violations. Allen, who was driving the vehicle, did not have a current registration for the vehicle. After noticing other issues, the Trooper became suspicious of Allen’s conduct and began an investigation that ultimately led to 47 packages of methamphetamine in after-market compartments installed in the vehicle. The packages weighed approximately 86 pounds.
Allen admitted that he possessed the methamphetamine with intent to distribute and, in furtherance of the drug trafficking crime, he was in possession of a Glock 27 handgun.
U.S. District Judge David Nuffer will impose sentencing in the case Dec. 17, 2020. The plea agreement includes a stipulated sentence of 144 months followed by 60 months of supervised release. The sentence is subject to the approval of the Court.
Assistant U.S. Attorneys in the St. George U.S. Attorney’s Office are prosecuting the case. UHP troopers and agents with the Utah State Bureau of Investigation are investing the case.
Matalolo Sentenced to 18 Months in Prison for Possessing Firearm While Subject to Domestic Violence Protective OrderRead the Press Release
ST. GEORGE, UT – Rashaan Mamao Matalolo of St. George, Utah, will spend 18 months in federal prison after pleading guilty to one count of possession of a firearm while subject to a domestic violence protective order. Under federal law, individuals subject to a domestic violence protective order are prohibited from possessing a firearm. U.S. District Judge David Nuffer imposed the sentence Wednesday morning in federal court in St. George.
Matalolo, 25, pleaded guilty to the charge in a Felony Information at a hearing in July before U.S. Magistrate Judge Paul Kohler. He admitted that he possessed a Smith & Wesson .40 caliber pistol on May 8, 2020. He also stipulated that he knew he was subject to domestic violence protective order that prohibited him from possessing firearms.
“Cases that allow us to get firearms out of the hands of domestic violence abusers are always a priority. Law enforcement officers around the state are watching for such violations and refer the cases to us. If anyone knows of someone in possession of a firearm while subject to a domestic violence protective order, please reach out to your local police department,” U.S. Attorney John W. Huber said today.
“This is critically important as we work to protect victims of domestic violence during this time of COVID-19. Many stressors are exacerbated during the pandemic, including isolation and financial strain. Victims are in danger if they are isolated with an abuser or fear retaliation if they separate from the abuser,” Huber said. “With these types of prosecutions, we have a valuable tool to help protect victims.”
Matalolo came to the attention of officers with the St. George Police Department about 12:15 a.m. on May 8, 2020. Officers made contact with three individuals, including Matalolo, in the parking lot of the Clarion Suites in St. George. According to a complaint filed in the case, officers smelled the odor of marijuana and observed that an underage individual had an open can of beer.
An officer observed a handgun holstered on the side of a fanny pack Matalolo was wearing on his hips. As officers attempted to detain the three individuals, Matalolo fled on foot. An officer chasing him observed him drop the fanny pack and the firearm on the ground. Matalolo was able to escape and was not apprehended by officers that day.
Officers found the firearm Matalolo dropped. It did not contain ammunition and was later determined to be stolen. The gun holster was still attached to the fanny pack. Officers found identification documents belonging to Matalolo inside the fanny pack. Officers determined that Matalolo is subject to a valid protective order. He was arrested May 24, 2020, on an unrelated drug offense and booked into the Washington County jail.
The case is being prosecuted by Assistant U.S. Attorneys in the St. George Office of the U.S. Attorney’s Office in Utah. Officers with the St. George Police Department and special agents of the DEA are investigating the case.
Convicted Fraudster Charged with Devising New Scheme While Serving Federal Sentence for Another SchemeRead the Press Release
SALT LAKE CITY – A Felony Information filed in federal court charges Christopher D. Hales, 39, of Lehi with wire fraud conspiracy and money laundering conspiracy in connection with a financial fraud scheme he and other co-conspirators devised while Hales was in a halfway house serving a sentence for another federal fraud case.
The charges allege the new scheme resulted in a loss to investors of at least $7 million. An initial appearance and change of plea hearing for Hales is scheduled for Oct. 6, 2020, before U.S. Magistrate Judge Daphne A. Oberg.
Hales was convicted of bank fraud in April 2011 as a part of a mortgage fraud case. He was sentenced to 90 months in federal prison and ordered to pay $12,719,236 in restitution. He violated terms of his supervised release in 2016 and he was sentenced to another 30 months in federal prison.
“Utah has an outsized fraud problem, and these allegations illustrate the conduct of a serial schemer. Utahns must diligently consider investment pitches and their risks before parting with hard-earned savings,” U.S. Attorney John W. Huber said today.
According to the Felony Information, Hales was released from federal prison on Feb. 8, 2018, and resided at a halfway house in Salt Lake City until around Aug. 8, 2018. Nevada Secretary of State records show Sindakit Software LLC was formed on Aug. 6, 2018, by a co-conspirator (CC1) known to federal prosecutors. CC1 was listed as the sole officer. CC1 was listed on the Sindakit Software bank account as the manager and was the only authorized signor.
The Information alleges Hales and CC1 conspired to defraud investors and potential investors by inducing them to purchase investments in a sports betting software. Hales purported to own a sports betting software that “beat the house” to convince investors to give him money to place sports bets. In furtherance of the conspiracy, the indictment alleges Hales made a variety of false statements of material facts to investors and potential investors, including representing that 100 percent of investor funds would be used to place sports bets when, in fact, Hales diverted nearly all investor funds received to his and CC1’s personal use, and to make payments to other investors.
Hales also told them he was Chris Christian, when in fact, he was Christopher Hales, a convicted felon on supervised release. Investors were also told Hales would match all investor funds, when in reality he would take out a line of credit with the sports betting website and use the line of credit to hedge bets. Hales also told investors that the sports betting was producing a rate of return for investors of around 10 percent a week – an amount made up by Hales to entice investors to provide funds. He also represented that there were potential buyers willing to purchase the software he developed for tens of millions of dollars, when there were actually no buyers, according to the Felony Information.
In furtherance of the conspiracy, Hales failed to disclose to investors that they did not actually own an algorithm or a sports betting software and that they were laundering investor funds through transfers in and out of the Sindakit Software account. Sports betting account statements provided to investors were false and were inflated based on Hales’ line of credit and his ability to manipulate the statements. They also did not disclose that part of the investors’ money was used to pay commissions to those introducing investors to Sindakit or that they were using investment money from newer investors to pay promised winnings to earlier investors in what is commonly recognized as a Ponzi scheme.
Assistant U.S. Attorneys in the Utah U.S. Attorney’s Office are prosecuting the case. Special agents of IRS Criminal Investigation and the FBI are conducting the investigation.
Park City Man Charged with Scheme to Sell N95 Masks, Claimed to Be Representative of 3M CompanyRead the Press Release
SALT LAKE CITY – A Park City man, who claimed to have access to millions of N95 masks made by 3M and made allegedly fraudulent representations in an effort to sell them, is charged with wire fraud in an indictment unsealed Tuesday in Salt Lake City.
John Anthony Taylor, 46, did not have the masks, was not an authorized representative of 3M, and attempted to sell the masks to an undercover FBI agent, charging documents allege.
“Rooting out pandemic-related fraud is one the highest priorities for the Department of Justice and my office. Experienced investigators and prosecutors are dedicated to holding accountable those who would use this challenging environment to pad their own pockets,” U.S. Attorney John W. Huber said today.
Taylor is the founder and owner of Positive Marketing, LLC and Wasatch Promotional Products, LLC. 3M Company is Delaware Corporation with its principal place of business in St. Paul, Minn. 3M sells a wide range of products, including N95 masks.
According to documents filed in court as a part of the case, in April 2020, the FBI in Houston, Texas, was contacted by an attorney representing a medical company concerned about an entity purporting to have access to one billion 3M N95 masks. At the time, publicly available information indicated the global production numbers of N95 masks was well below a billion a month.
The FBI opened an investigation that ultimately resulted in an introduction to Taylor in Utah. According to charging documents, an undercover agent made contact with Taylor and asked for documents proving Taylor actually had the masks. Taylor sent an email with a fake purchase order from 3M. 3M has confirmed it has no relationship with Taylor.
According to the indictment, Taylor made a variety of other alleged false representations as a part of his scheme including:
- He was a representative for the 3M company and was authorized to sell its 1860 N95 masks
- Because of the COVID-19 pandemic, he had recently started to focus on selling masks through his business, Wasatch Promotional Products
- He had contracts for “a million, 30 million, 60 million [masks] for a couple different state governments”
- He had completed several shipments of 3M 8210 masks
- He could broker a deal for 3 million 1860 N95 masks for $5.49 per mask
- He would receive “lot numbers” and show “proof of life” to prove that the order was legitimate
- He had successfully brokered deals with 3M previously
- A purchase order he attached to an email was from 3M
Taylor was initially arrested on a complaint and had an initial appearance in federal court in Salt Lake City on May 4, 2020. He was released on special conditions of supervised release. He was arraigned on the indictment Tuesday and entered a plea of not guilty to the wire fraud charge. A three-day trial is set for Nov. 23, 2020, before U.S. District Judge David Sam.The potential maximum penalty for the charge in the indictment is 20 years in federal prison. Indictments are not findings of guilt. Individuals charged in indictments are presumed innocent unless or until proven guilty in court.
Assistant U.S. Attorneys in the Utah U.S. Attorney’s Office in Salt Lake City are prosecuting the case. Special agents of the FBI in Houston, with the assistance of the FBI in Salt Lake City, are conducting the investigation.Magna Man Charged with Alleged Threat to Federal Officer Arrested in Magna Tuesday MorningRead the Press Release
SALT LAKE CITY – A Magna, Utah, man is charged with threatening to assault and murder a Department of Veterans Affairs police officer while he was engaged in the performance of his official duties and with intent to retaliate against the officer on account of the performance of his official duties. The officer’s teenage daughter found the threat in the victim’s mail box on June 7, 2020.
Ryan David Lucero, 33, is charged with one count of influencing a federal officer by threat in an indictment unsealed Wednesday morning. He was arrested Tuesday at a home in Magna. The FBI, U.S. Postal Inspectors, U.S. Marshals Service and the Unified Police Department (UPD) executed the arrest warrant.
“Police officers and their families make great sacrifices to keep our communities safe. They have the right to live safely in their own homes, as we all do, and should not have to endure the threat that has been alleged in this indictment. We will bring to justice those who harm or threaten law enforcement officers in violation of federal law,” U.S. Attorney John W. Huber said today.
The alleged threat to the officer came about a week after a May 30, 2020, riot in Salt Lake City destroyed a police vehicle, injured police officers, and damaged the Salt Lake City Police Department building. Prior to the Salt Lake City riot, the victim in this case wore his VA uniform to and from work. He retired from the UPD two years ago and parked his UPD patrol car in his drive way for many years.
The potential penalty for the charge in the indictment is 10 years in prison.
An initial appearance for Lucero has been set for Friday at 2:30 p.m. before U.S. Magistrate Judge Cecilia M. Romero. Based on current information, federal prosecutors will be seeking detention for Lucero based on a risk of flight. The victim and his family are also concerned about their safety if the defendant is released.
In a filing outlining the United States’ position regarding detention, prosecutors are asking the magistrate judge to consider the defendant’s use of aliases or false documents in previous situations. In one instance, the defendant provided a false name and date of birth to law enforcement to avoid detection of multiple arrest warrants. He has also failed to appear for court proceedings on several occasions in the Salt Lake valley.
An indictment is not a finding of guilt. Individuals charged in an indictment are presumed innocent unless or until proven guilty in court.
Assistant U.S. Attorneys in the Utah U.S. Attorney’s Office are prosecuting the case. It is being investigated by inspectors with the U.S. Postal Inspection Service and special agents of the FBI.
Three Utah School Districts Awarded Cops Grant Funding to Improve School SafetyRead the Press Release
SALT LAKE CITY – U.S. Attorney John W. Huber announced today that three Utah school districts are receiving funding through the Department of Justice’s Office of Community Oriented Policing Services (COPS Office) School Violence Prevention Program (SVPP). SVPP provides up to 75 percent funding for school safety measures in and around primary and secondary schools and school grounds.
Provo and Nebo school districts are each receiving $500,000 in program grant funding. The Ogden School District is receiving $393,332. Nationally, the COPS Office awarded nearly $50 million in school safety funding.
“With the new school year underway, the safety of our nation’s students remains paramount,” said COPS Office Director Phil Keith. “Although this school year may look different at the start, now is the ideal time to make preparations to enhance school safety for when all of our children are back in the classroom.”
“This funding will support efforts in these three school districts to significantly improve school safety for children in their communities,” U.S. Attorney John W. Huber. “The school districts can use their funding for a variety of projects that address specific local needs.”
The Students, Teachers, and Officers Preventing School Violence Act of 2018 (STOP School Violence Act of 2018) gave the COPS Office authority to provide awards directly to states, units of local government, Indian tribes, and public agencies (such as school districts and law enforcement agencies) to improve security at schools and on school grounds in the jurisdiction of the grantee through evidence-based school safety programs.
The three awards can be used for coordination with law enforcement; training for local law enforcement officers to prevent student violence; metal detectors, locks, lighting, and other deterrent measures; technology for expedited notification of local law enforcement during an emergency; and other measures that provide a significant improvement in security. The full list of SVPP awards can be found here: https://cops.usdoj.gov/pdf/2020AwardDocs/svpp/Award_List.pdf.
In addition to the school safety grants, the COPS Office School Safety Working Group, which is composed of representatives from eight national law enforcement organizations, has identified 10 essential actions that can be taken by schools, school districts, and law enforcement agencies to help prevent critical incidents involving the loss of life or injuries in our nation's schools and to respond rapidly and effectively when incidents do occur. The Ten Essential Actions to Improve School Safety are applicable to school shootings as well as to other areas of school safety, including natural disasters and traumatic events such as student suicide. Adopting policies and practices based on the recommendations in this publication can help make school communities safer and save lives.
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The COPS Office is the federal component of the Department of Justice responsible for advancing community policing nationwide. Since 1994, the COPS Office has invested more than $14 billion to advance community policing, including grants awarded to more than 13,000 state, local and tribal law enforcement agencies to fund the hiring and redeployment of more than 134,000 officers and provide a variety of knowledge resource products including publications, training and technical assistance.
The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
Sampson Sentenced to 24 Months in Federal Prison for Fraud Scheme with $250,000 LossRead the Press Release
ST. GEORGE, UT – A St. George man will serve 24 months in federal prison after pleading guilty to wire fraud and money laundering in connection with a financial fraud scheme that took advantage of the trust of a couple who were members of a church congregation he attended. The sentence includes an enhancement for causing substantial hardship to the victim.
U.S. District Judge David Nuffer, who imposed the sentence Thursday, also ordered Gregory Moats Sampson, age 46, to pay $250,000 in restitution to the couple and to serve 36 months of supervised release when he finishes the prison sentence.
“Affinity fraud continues to hurt Utahns. Scammers will use any social connection available to gain your trust and take your money,” said Chris Parker, Executive Director of the Utah Department of Commerce. “We are grateful to the U.S. Attorney’s Office for the cooperative effort with our Division of Securities.”
“Many of our federal fraud prosecutions focus on losses in the millions. With this case, Utah fraudsters should take note of the stiff penalties that await them in smaller cases, as well. There is no sweet spot in fraud loss where schemers can fly under the radar and get away with it,” U.S. Attorney John W. Huber said today. “Once again, we remind Utah investors to beware of the risks associated with big promises from purported friends and neighbors.”
According to documents filed in court by federal prosecutors and a plea agreement reached in the case, Sampson met the victims, identified as J.S. and K.S., around 2012 when he was their real estate agent. J.S. had $250,000 to invest after selling a home in Australia. Sampson, according to the court documents, told them he had invested funds for others in the past and he could help them invest the $250,000.
J.S. and K.S. were not sophisticated investors and believed they could trust Sampson based on other relationships they had with them. He told them that by investing with him, they could realize a return of $1 million in 8 to 10 years and that they would receive stock certifications in a company. He told them that since they were friends, he would not charge them for their investment.
The victims trusted Sampson and in February 2014, they wrote him a check for $250,000 to Sampson’s business account as an investment for retirement.
Sampson spent the money for his own personal use rather than investing it as promised. He used $98,320.19 to pay off a personal loan; transferred $82,000 to a company owned by his brother, and transferred $20,000 to a company he owned that had nothing to do with an investment. In fact, Sampson used all of the $250,000 of the victims’ investment within one month, federal prosecutors said.
When the victims sought documentation showing a portfolio of investments, Sampson did not provide any. However, he consistently told them their investment was performing well. According to documents filed in court, when J.S. and K.S. eventually confronted Sampson and demanded documentation or their money back, he told them “And you know who gets screwed in the deal? You do…and it’s not to say that I’m trying to protect my own ass because I’m not going anywhere, I promise you, if I need to disappear, I would have already been gone. I’ve got enough money that I can disappear if I need to…”
Assistant U.S. Attorneys in the Utah U.S. Attorney’s Office prosecuted the case. Investigators with the Utah Division of Securities investigated the case.
Indictment Charges Man with Using His Position at Hurricane Business to Solicit and Obtain Kickbacks from Chinese CompaniesRead the Press Release
SALT LAKE CITY – A federal indictment unsealed Friday morning charges Nan Ma, 37, of Washington, Utah, with using his position and authority as the officer in charge of production and sourcing at a home audio products company in Hurricane, Utah, to solicit and obtain kickbacks for his personal benefit from Chinese companies. Ma is a Chinese citizen with legal permanent resident status in the United States.
In exchange for the kickbacks, the indictment alleges Ma awarded lucrative contracts to these companies to manufacture and sell products to his employer. Ma used a portion of the kickback money to purchase a luxurious house and expensive cars. Ma concealed the source of the funds he was getting through the alleged kickbacks by making false representations to his employer, according to the indictment.
Ma received approximately $2.1 million in kickbacks in exchange for awarding approximately $12.4 million in contracts to the Chinese companies, all of which he concealed from his employer, identified in the indictment by the initials SVT, the indictment alleges.
After Ma purchased a home for approximately $450,000, SVT’s CEO, who knew Ma’s salary, asked Ma how he was going to pay for the home. Ma responded that the money came from his ailing father in China, who was trying to get money out of China to avoid having the Chinese government take it upon his death. The indictment alleges Ma’s explanation about the source of the funds was false.
The indictment charges Ma with three counts of wire fraud and six counts of money laundering. It also seeks the forfeiture of five properties in St. George and one in Washington along with two vehicles.
According to the indictment, SVT produces home audio products and purchases most of its component parts from suppliers in China. SVT hired Ma, who has a master’s degree in electronic marketing, in May 2011 as vice president of production/sourcing. His responsibilities included taking SVT’s engineering drawings, ideas, and designs to Chinese factories and obtaining bids from the factories to manufacture SVT’s component parts. His responsibilities also included establishing and maintain good relationships with Chinese suppliers to ensure SVT obtained quality products and favorable prices, the indictment alleges.
SVT took steps, including paying $18,000 in legal fees, to help secure Ma’s immigration status so he could live and work in the United States as well as travel to China on behalf of the business. The company later raised Ma’s salary so he could qualify for a professional work visa, and later petitioned to have Ma’s immigration status adjusted again so he could be a permanent resident immigrant with the designation of “professional holding an advanced degree.”
The indictment alleges that in his capacity as an officer at SVT assigned to establish and maintain relationships with suppliers, Ma owed a fiduciary duty of loyalty to SVT. The business was entitled to have Ma evaluate and select suppliers without being secretly rewarded for his decision through payments from the suppliers he selected. It was a violation of Ma’s duty, and of SVT’s right to honest services, for Ma to accept kickback payments from SVT’s suppliers, particularly when Ma was responsible for determining which suppliers SVT would contract with to manufacture its products, the indictment alleges.
The indictment alleges Ma provided personal bank account information to the suppliers he selected, including the seven suppliers identified in the indictment as suppliers A through G, so they could pay him after they received payments for products from SVT. After receiving funds from the suppliers, Ma transferred the money among various accounts, banks, and investment companies, according to the indictment.
Ma also told suppliers that funds for repairs to products SVT had purchased should be routed to an account he or his wife held. It was contrary to SVT policies for employees to have funds from a supplier sent to personal accounts.
Ma was arrested Thursday. He had an initial appearance this morning in federal court in St. George. He is detained pending a detention hearing Wednesday in St. George.
The potential maximum penalty for each of the three wire fraud counts is 20 years in federal prison. The six money laundering counts each have a potential maximum penalty of 10 years in prison. Indictments are not findings of guilt. Individuals charged in an indictment are presumed innocent unless or until proven guilty in court.
Assistant U.S. Attorneys in the U.S. Attorney’s Office are prosecuting the case. Special agents of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and IRS-Criminal Investigation are investigating the case.
Man Tat Le Sentenced to 84 Months in Federal Prison for Distribution of MethamphetamineRead the Press Release
SALT LAKE CITY – Man Tat Le, aka Asian Le, pleaded guilty to distribution of methamphetamine Wednesday morning and was sentenced to 84 months in federal prison. U.S. District Judge Dale A. Kimball imposed the sentence.
Le, 45, of West Valley City, was charged with distribution of methamphetamine in January after law enforcement officers received information indicating Le was engaged in narcotics trafficking. Special agents of the Utah State Bureau of Investigation (SBI), in conjunction with the FBI’s Safe Street Task Force, conducted a controlled purchase of methamphetamine from Le on Jan. 22, 2020, utilizing a confident human source (CHS). Le sold the CHS approximately 3 ounces of methamphetamine.
Le was arrested in January after leading members of the law enforcement officers on a chase. A West Valley City police officer tried to pull Le over. Le sped away from the officer and a 20-minute chase began. He was taken into custody in Salt Lake City after officers spiked his tires, he crashed his car, and officers captured him as he attempted to flee the scene.
This is Le’s third federal conviction for possession of methamphetamine with intent to distribute. Previous convictions were in June 2012 and September 2018.
Le is affiliated with the Oriental Laotian Gang in Utah. Federal prosecutors, partnering with local, state, and federal law enforcement agencies and county attorneys in Utah, have filed 476 gang cases since January 2018. A substantial majority of these cases include multiple defendants.
“Far too many offenders cannot leave their criminal conduct behind and continue to negatively impact the peace and safety of Utah communities. This conviction and prison sentence will ensure a seven year respite from this offender’s reckless actions that orbit around gang affiliation and drug distribution,” U.S. Attorney John W. Huber said today. “He will be out of our state since there are no federal prisons in Utah, and there is zero chance of parole in the federal system.”
"The public shouldn't have to deal with violent offenders like Man Tat Le, who repeatedly brought dangerous drugs into our communities," said Special Agent in Charge Paul Haertel of the Salt Lake City FBI. "The purpose of the FBI's Safe Streets Task Force is to keep our communities safe from criminals like Le, who mistakenly believe they are above the law and won't face tough consequences for their crimes."
Assistant U.S. Attorneys in the Utah U.S. Attorney’s Office are prosecuting the case. Agents and officers with the FBI’s Safe Streets Task Force, Utah SBI, and West Valley City and Salt Lake City police departments are investigating the case.
Salt Lake City Man Pleads Guilty to Fraud Counts in Connection with Getting A Paycheck Protection Program (PPP) LoanRead the Press Release
SALT LAKE CITY – A Salt Lake City resident pleaded guilty to charges in a five-count Felony Information in U.S. District Court Friday in connection with fraudulent representations he made to get a loan under the Paycheck Protection Program (PPP).
Michael Leroi Douros, 64, was charged with two counts of bank fraud, two counts of making a false statement to a bank, and money laundering in the Felony Information. Douros has a previous felony conviction.
“The President and Congress dedicated taxpayer funds to offer relief and hope during this extraordinarily challenging time for our nation. It is disappointing, to say the least, to see an individual use fraud and selfish motives to acquire hundreds of thousands of dollars,” U.S. Attorney John W. Huber said today. “This money could have been used to help reduce the strain on other employers and their employees, who would have qualified for the funds.”
The CARES Act is a federal law enacted on March 29, 2020, designed to provide emergency financial assistance to millions of Americans suffering from the economic effects caused by the COVID-19 pandemic. One source of relief provided by the CARES Act was the authorization of up to $249 billion in forgivable loans to small businesses for job retention and certain other expenses, through the PPP. In April 2020, Congress authorized more than $300 billion in additional PPP funding. Convicted felons and their businesses are not eligible to receive PPP loans.
The PPP allows qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of 1 percent. PPP loan proceeds must be used by businesses on payroll costs, interest on mortgages, rent, and utilities. The PPP allows the interest and principal on the PPP loan to be entirely forgiven if the business spends the loan proceeds on these expense items within a designated period of time after receiving the proceeds and uses a certain amount of the PPP loan proceeds on payroll expenses. The PPP application process requires applicants to submit an application form through an SBA-approved financial entity.
According to court documents filed as a part of his plea agreement, Douros made false representations to two banks in an effort to get a PPP loan for his business, Epic Rentals UT LLC. The business was registered with the Utah Division of Corporations on June 5, 2019, with Zach Douros listed as the registered agent.
The false statements included misrepresentations about Epic Rentals’ monthly payroll and the number of employees the business had; claims that his son owned 50 percent of Epic Rentals when, in fact, his son was a straw owner and did not own any portion of the business; and failure to disclose that he had been convicted of a felony in Utah and was on probation in the last five years.
Douros first filled out and submitted an application through Zions Bank. Zions Bank initially funded the PPP loan of $198,000. However, upon further inspection of the representations in the loan application, the bank cancelled the loan transfer. Douros submitted a second PPP loan application through Cache Valley Bank, which was funded at $239,091.67.
The money laundering conviction relates to a $20,000 payroll check made payable to the defendant from an Epic Rentals bank account.
Sentencing in the case will be Nov. 17, 2020, at 2 p.m. before U.S. District Judge Howard C. Nielson Jr. The potential penalty for the two bank fraud counts and the two false statement to a bank counts is 30 years per count. The potential penalty for money laundering is 10 years in federal prison. He faces a potential $1 million fine.
Assistant U.S. Attorneys in the Utah U.S. Attorney’s Office are prosecuting the case. FBI special agents are investigating the matter.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
Riverton Man Pleads Guilty to Operating Unlicensed Money Transmitting BusinessRead the Press Release
SALT LAKE CITY – Justin Peck, 47, of Riverton, entered a plea of guilty to one count of operating an unlicensed money transmitting business in federal court in Utah recently, admitting that he owned several companies that were operating as unlicensed money transmitting businesses from as early as 2012 through sometime in 2019.
As a part of a plea agreement reached with federal prosecutors, Peck stipulated that his companies that did not comply with federal law and regulations for money transmitting business registration requirements.
Specifically, Peck admitted he received checks from general contractors for drywall labor. He cashed those checks and deliver the money to subcontractors or other individuals who were responsible for paying the laborers. For his services, Peck would keep a fee of 6-10% of the contractor’s check. From 2012 through 2019, Peck transmitted at least $58,248,103.38.
Investigators believe the purpose of the business was to avoid employment taxes and higher workers compensation premiums.
Peck waived indictment and was charged in a Felony Information filed in July 2020.
Peck earned significant income through his business and failed to report it on his personal taxes. As a part of his plea agreement, Peck agreed to file accurate and complete personal tax returns for the tax years 2012-2017. He also agreed to forfeit his interest in property.
He faces up to five years in prison when he sentenced Nov. 5, 2020, by U.S. District Judge Howard C. Nielson, Jr.
Assistant U.S. Attorneys in the Utah U.S. Attorney’s Office are prosecuting the case. Special agents with IRS-Criminal Investigation are investigating the case.
Park City Man Faces Fraud, Money Laundering Charges in Connection with Alleged Fraud SchemeRead the Press Release
SALT LAKE CITY – A federal grand jury returned a five-count indictment late Wednesday afternoon charging Timothy Andrew Nemeckay, 60, of Park City, Utah, with securities fraud, making false statements to the Security Exchange Commission (SEC), wire fraud, and money laundering in connection with an alleged fraud scheme.
According to the indictment, Nemeckay was the founder and manager of Mine Shaft Brewing, a Park City business. The indictment alleges Nemeckay represented to investors that Mine Shaft was raising funds to develop a brewery and restaurant in Park City and later in Santa Clarita, California. Nemeckay collected approximately $2.7 million from approximately 100 investors from across the United States in connection with the Mine Shaft investment offering, the indictment alleges. The indictment alleges the fraud scheme started in early 2013 and continued until around July 6, 2020.
“Far too many Utah headlines report homegrown fraud schemes. There are disproportionate numbers of wolves in sheep’s clothing in our state. In this indictment, the alleged offender was even under the thumb of securities regulators when he persuaded investors to pay into his scheme, and he purportedly used investor money to pay off previously ordered restitution,” U.S. Attorney John W. Huber said today. “Once again, we encourage those considering investment opportunities to do their due diligence before handing over their life savings to someone who doesn’t have their interests at heart.”
Nemeckay made a series of representations to investors in connection with the investment offering, including telling them that Mine Shaft was offering Series A Preferred Equity shares totaling $9.4 million and that Mine Shaft had already raised or had sizeable commitments for the funding needed. Investors were told, the indictment alleges, that the minimum investment amount was $20,000 and that the investment would earn 8 percent annual interest. Investors were also told that Mine Shaft would use funds to acquire and develop a brewery in Park City and that the location would produce thousands of barrels of alcohol for distribution. He represented that the location would operate as a restaurant and event center and become a top craft brewer in five years and that investors would receive the first right of refusal on additional investment rounds – among other things.
The indictment alleges Nemeckay issued and sent “investor newsletters” to convince investors to invest and that their investments were succeeding.
In furtherance of the scheme, the indictment alleges Nemeckay also made a variety of other false misrepresentations to investors, including telling them that Mine Shaft was seeking capital to fund the launch of the brewery when, in fact, he was seeking funding for his personal use. The indictment alleges Nemeckay used approximately $1.7 million of Mine Shaft investor funds for his own personal use. Less than $550,000 of investment funds were used toward developing a brewery in Park City and later Santa Clarita.
Interest payments were usually not made to investors, the indictment alleges, and when they were, the payments came from new investor money.
The indictment also alleges Nemeckay reported to investors that he had provided information to the SEC regarding his involvement with Mine Shaft’s fundraising efforts and the SEC had expressed no concern. In fact, he was in violation of State of Utah and federal orders not to participate in the purchase and sale of securities. Nemeckay was the subject of an administrative action with the Utah Division of Securities for selling unregistered securities.
On July 7, 2014, the defendant entered into a Stipulation and Consent Order with the Utah Division of Securities. The sanctions barred Nemeckay from associating with a broker-dealer and from being licensed in any capacity in the securities industry in Utah. It also included a fine of $350,000 with $313,710 offset by restitution to investors.
Nemeckay used Mine Shaft investor funds to pay $312,266.47 in restitution following the sanctions by the Utah Division of Securities.
A summons will be issued for Nemeckay to appear for an initial appearance on the charges. The maximum potential penalty for securities fraud is 25 years in federal prison. The two counts of making false statements to the SEC and the wire fraud count each carry 20-year potential sentences. The potential penalty for money laundering is 10 years.
Indictments are not findings of guilt. Individuals charged in indictments are presumed innocent unless or until proven guilty in court.
Assistant U.S. Attorneys in the U.S. Attorney’s Office are prosecuting the case. Special agents of the Utah Division of Securities and the FBI are investigating the case.
Fifth Defendant Faces Federal Charges for Alleged Role in Salt Lake City Police Department Vehicle Arson CaseRead the Press Release
SALT LAKE CITY – A federal complaint unsealed Wednesday charges a fifth individual with one count of using fire and explosives to damage and destroy a Salt Lake City Police Department patrol car during May 30, 2020, riots in Salt Lake City.
Larry Raynold Williams, Jr., 22, of West Haven was arrested at his home Wednesday morning on the arson charge by the FBI and members of its Joint Terrorism Task Force. The Air Force Office of Special Investigations at Hill Air Force Base (HAFB) assisted the FBI. According to the complaint, Williams is an Airman First Class in the U.S. Air Force. He is stationed at HAFB in northern Utah.
During the afternoon of May 30, 2020, a peaceful protest in downtown Salt Lake City transitioned into acts of destruction, property damage, arson, and other criminal conduct. During the riot, a Salt Lake City police officer, driving a police vehicle, became boxed-in and immobilized by surrounding protestors. Fearing for her safety, the officer fled from her patrol car. Her patrol vehicle was subsequently overturned, vandalized, looted, and then set on fire. Video footage from the event shows individual rioters using fire and explosives to damage and destroy the police vehicle. Federal prosecutors in Utah have filed arson charges against five individuals allegedly responsible for burning the patrol vehicle.
“Since May 30, investigators and prosecutors have engaged in a determined investigation of those who were responsible for burning the police patrol car in downtown Salt Lake City. Our intent has been to bring consequence to the lawlessness that we witnessed. While available video and photographs played a prominent role in the investigation, solid investigative efforts by agents and detectives made the difference in these arrests,” U.S. Attorney John W. Huber said today.
According to the complaint, video footage from the afternoon of May 30, 2020, shows a white male, later identified by law enforcement as Christopher Isidro Rojas, standing next to an African American male. This individual, subsequently identified by law enforcement as Williams, was dressed in a black Nike hoodie, black Nike sweatpants, black shoes, and a black gas mask.
Rojas was observed holding a blue cigarette lighter in his hands while Williams held a white combustible fabric material, similar to a tablecloth or bedsheet, according to the complaint. Rojas used the cigarette lighter to ignite the fabric. Once the fabric began to burn, the complaint alleges Williams threw the material into the window of the overturned patrol car. The burning material landed partially within the interior of the patrol car and partially on the street.
Williams was wearing a gasmask. Investigators subsequently identified the gas mask worn by Williams as an M50 Joint Service General Protective Mask. Clarified photographs of Williams wearing the mask revealed lettering on its attached M61 filter canister, written in what appeared to be white marker, which stated, “TRNG ONLY.” A lot number was also observed on the canister, according to the complaint.
Williams was also observed unmasked at the riot. Law enforcement officers were able to use several photographs to identify Williams.
Williams was identified as an Airman First Class in the U.S. Air Force, stationed at Hill Air Force Base. He was issued an M50 gas mask by his unit for training purposes in March 2020. Markings on the mask are consistent with the markings applied at HAFB. On Aug. 13, 2020, the readiness squadron at HAFB conducted a general inventory check of equipment issued to Williams and other members of his group during an exercise. According to the complaint, serial/lot numbers were documented for each inventoried item. The lot number for one of the gas canisters assigned to Williams was identical to the number observed on the gas mask as depicted in pictures taken at the riot.
Williams will make an initial appearance on the arson charge at 3 p.m. Thursday before U.S. Magistrate Judge Dustin Pead.
Federal arson charges in the case are pending against Jackson Stuart Tamowski Patton, 26, Latroi Devon Newbins, 28, Christopher Rojas, 28, and Lateesha Richards, 24, all of Salt Lake City, who were charged earlier. Patton and Richards are in custody. Newbins and Rojas have been released on conditions of pretrial release. Previous complaints filed against Patton, Newbins, Rojas, and Richards have been consolidated in a one-count indictment returned by a federal grand jury on July 23, 2020.
Complaints and indictments are not findings of guilt. Individuals charged in complaints or indictments are presumed innocent unless or until proven guilty in court. Arson carries a potential sentence of 20 years in prison with a minimum-mandatory five-year sentence.
Assistant U.S. Attorneys from the Utah U.S. Attorney’s Office are prosecuting the case. Investigating agencies include members of the FBI’s JTTF, the Salt Lake City Police Department, the ATF and the Utah Department of Public Safety.
St. George Woman Sentenced to 33 Months in Federal Prison After Pleading Guilty to Distribution of FentanylRead the Press Release
ST. GEORGE, UT – Lacey Nichole Crawshaw, 33, of St. George will serve 33 months in federal prison after pleading guilty to distribution of fentanyl. U.S. District Judge David Nuffer imposed the sentence Wednesday in St. George. Crawshaw will serve 36-months of supervised release when she finishes her prison sentence. There is no parole in the federal criminal justice system.
Crawshaw was charged with distribution of fentanyl after she sold counterfeit Oxycodone 30 mg pills containing fentanyl to a confidential source four times over a one-month period. Each transaction included 10 to 30 pills.
Fentanyl is a potent synthetic opioid drug approved by the U.S. Food and Drug Administration for use as an analgesic (pain relief) and anesthetic. It is approximately 100 times more potent than morphine and 50 times more potent than heroin, according to a DEA fact sheet. It is also one of the most dangerous cutting agents used by drug traffickers in making counterfeit pills, including oxycodone pills. Lacing the counterfeit pill with fentanyl makes the drug cheaper to produce and can generate large profits for drug dealers. It also increases the risk of overdose and loss of life since users may not know the pill they are buying contains fentanyl.
“Drug dealers in Utah should be on notice. If you deal in fentanyl, you will find yourself in federal prison where there is zero chance for parole. I have directed officers, agents and prosecutors that no case is too small for our review when it comes to fentanyl. It is too deadly of a substance to tolerate,” U.S. Attorney John W. Huber said today.
“This case is a perfect example of teamwork between the Washington County Drug Task Force, the DEA, and the United States Attorney’s Office. By now we’re all aware of the devastating effects fentanyl has on our communities, even in small quantities. This case illustrates the fact that it doesn’t matter the size of the case, we will collectively and tenaciously pursue drug dealers like Lacey Crawshaw,” Sgt. Sean Sparks of the Washington County Drug Task Force said today.
Crawshaw was charged in a four-counts of distribution of fentanyl in an indictment returned by a federal grand jury in December 2019. She pleaded guilty to one count of distribution of fentanyl in a plea agreement reached with federal prosecutors in April.
As a part of the plea agreement, Crawshaw, also known as Lacey Nichole Crawshaw-Leavitt and Lacey Nichole Crawshaw-Chavarria, admitted that on Sept. 24, 2019, she knowingly and intentionally distributed fentanyl. A Utah Bureau of Forensic Services senior forensic scientist determined that the tablets containing fentanyl that she distributed weighed approximately 3 grams. The plea agreement also included an understanding that relevant conduct that was either not charged or not included in the plea agreement could be taken into consideration by the court in determining a sentence in the case.
Assistant U.S. Attorneys from the St. George office of the United States Attorney’s Office prosecuted the case. The case was investigated by members of the Washington County Drug Task Force and special agents with the DEA.
New Defendant Appears on Federal Charges for Alleged Role in Salt Lake City Police Arson CaseRead the Press Release
SALT LAKE CITY – A federal complaint unsealed Tuesday charges a fourth individual with one count of arson for using fire to destroy a Salt Lake City Police Department vehicle during May 30, 2020, riots in Salt Lake City.
An arrest warrant was issued for Lateesha Richards, also known as Lateesha Kahryn Ritchards, 24, of Salt Lake City on June 18, 2020. While she has yet to turn herself in to the U.S. Marshals Service, she appeared via Zoom with her attorney for an initial appearance Wednesday afternoon. U.S. Magistrate Judge Jared Bennett found her to be a danger to the community and ordered her detained pending trial. He ordered her to turn herself in by Friday morning.
During the afternoon of May 30, 2020, a peaceful protest in downtown Salt Lake City transitioned into acts of destruction, property damage, arson, and other criminal conduct. During the riot, a Salt Lake City police officer, driving a police vehicle, became boxed-in and immobilized by surrounding protestors. Fearing for her safety, the officer fled from her patrol car. Her patrol vehicle was subsequently overturned, vandalized, looted, and then set on fire. Video footage from the event shows individual rioters using fire and explosives to damage and destroy the police vehicle.
At the detention hearing Wednesday afternoon, federal prosecutors told the court that approximately 200 rounds of ammunition for a handgun and 90 rounds of rifle ammunition were in the car when the officer was forced to it. Video shown as evidence during the detention hearing shows the ammunition exploding during the fire.
Federal authorities are filing arson charges against those allegedly responsible for burning the patrol vehicle.
Video footage from the riot shows an individual, later identified by police as Richards, holding a cell phone in her right hand as she walks toward the overturned police car. Richards is then observed taking a selfie with the burning police car as the background. Richards walked away from the patrol car momentarily and then returned to the patrol car holding what appears to be an item of clothing in her right hand. The complaint alleges she bent down facing the burning patrol car and tossed the item onto the small flames before running away.
The complaint alleges the clothing item Richards threw onto the fire acted as kindling and increased the size of flames. Shortly after, the vehicle becomes engulfed in flames. According to the complaint, Richards returned to the area with Latroi Newbins, another defendant in the arson case, to take more selfies with the burning police car in the background. Law enforcement officers identified Richards based on her driver’s license photo, a booking photo, and a neck tattoo, according to the complaint.
Federal arson charges in the case are also pending against Jackson Stuart Tamowski Patton, 26, Latroi Devon Newbins, 28, and Christopher Rojas, 28, all of Salt Lake City, who were charged earlier. Patton remains in custody. Newbins and Rojas have been released on conditions of pretrial release. In addition to complaints filed in the case, Patton, Newbins, Rojas and Richards are charged with arson in a one-count indictment returned by a federal grand jury on July 23, 2020.
Complaints and indictments are not findings of guilt. Individuals charged in a complaint or indictment are presumed innocent unless or until proven guilty in court. Arson carries a potential sentence of 20 years in prison with a minimum-mandatory five-year sentence.
Assistant U.S. Attorneys from the Utah U.S. Attorney’s Office are prosecuting the case. Investigating agencies include members of the FBI’s JTTF, the Salt Lake City Police Department, the ATF and the Utah Department of Public Safety.
Former Kane County Resident Charged in Alleged Financial Fraud Scheme That Exploited Senior CitizensRead the Press Release
ST. GEORGE, UT – A former Kane County resident, who solicited money from victims with fraudulent promises that he was on the verge of receiving hundreds of millions of dollars – even billions – and would be able to pay a large return on their investment, will be arraigned Thursday morning in federal court in St. George.
Kurt Jurgens Bauer, 56, who has also lived in Las Vegas, is charged with three counts of wire fraud and two counts of false impersonation of an employee of the United States in a recently unsealed indictment. The arraignment will be at 9 a.m. before U.S. Magistrate Judge Paul Kohler in St. George. Bauer is in custody. His continued detention status will also be considered during the Thursday hearing.
“This case involves a defendant who allegedly exploited the trust of hardworking and honest people, including elderly citizens of Southern Utah and Nevada,” U.S. Attorney John W. Huber said. “We prioritize investigations and prosecutions involving elderly victims. As I’ve said before – we revere our elders, we do not defraud them,” U.S. Attorney John W. Huber said today. “This case is also a priority for us because it includes allegations Bauer impersonated federal judges and a federal court administrator as a part of his fraud scheme.”
“Kurt Bauer is suspected of preying on some of the most vulnerable people in our community. We take fraud violations seriously, especially when these crimes are committed against the elderly who tend to be more trusting of such schemes. We will continue to work with our partners in the FBI and US Attorney’s Office to aggressively pursue, investigate and prosecute cases like the one involving Kurt Bauer,” Kane County Sheriff Tracy Glover said today.
“Kurt Bauer’s alleged crimes were based on lies that he perpetuated for many years,” said Special Agent in Charge Paul Haertel of the Salt Lake City FBI. “The hundreds of thousands of dollars he’s accused of swindling from his victims, including the elderly, didn’t go toward legitimate investments, but to pay his bills. While the victims may never see their money again, we hope the hard work of investigators and prosecutors sends a message that ultimately, crimes like this don’t pay.”
According to the indictment, beginning in 2011 and continuing until April 2020, Bauer devised an advance-fee scheme to solicit money from victims using a variety of what the indictment alleges were fraudulent representations and promises.
Bauer told victims that the United States District Court for the District of Nevada had frozen funds due to him, according to the indictment. Bauer told victims that the court required “bond” payments to secure the frozen funds, and he solicited victims to make the payments – often on a weekly basis, the indictment alleges. Bauer had various explanations for the court’s action.
Bauer represented to victim investors that the court was going to release funds to him in the near future. Once the funds were released, the victims would receive large returns in exchange for their upfront payments.
In reality, Bauer fabricated the information he provided to victims about his wealth and the court process to release funds. Bauer has relatively little wealth, the indictment says, apart from money he took from victims. He had no prospect of receiving large amounts of money and no court was holding money Bauer was entitled to. And, the indictment alleges, Bauer had no way of paying victims the promised returns.
The victims’ bond payments were not sent to a court, the indictment alleges. Bauer spent the money on himself including paying hotel bills, credit card payments, and restaurants, among other things.
The indictment alleges Bauer received more than $300,000 from victims, including at least $200,000 from victims identified as C.B., age 82, and L.B., age 80, in the indictment.
To further the scheme, Bauer created false identities of a New York attorney, a federal court employee, and a billionaire that he used to make misrepresentations to and solicit payments from victims. The indictment alleges he created phone numbers and email accounts for the false identities. Communications between the victims and the false identities were actually between the victims and Bauer or one of his accomplices.
In furtherance of the scheme, Bauer and his accomplices impersonated federal judges and a federal court administrator during communications with victims to convince them the court process was real and to persuade victims to continue making payments.
Bauer was arrested following the return of the sealed federal indictment in late July. He had an initial appearance on the charges July 30, 2020, in federal court in St. George.
He faces up to 20 years in federal prison for each count of wire fraud and up to three years for each count of false impersonation of an employee of the United States if convicted of the charges. Indictments are not findings of guilt. Individuals charged in an indictment are presumed innocent unless or until proven guilty in court.
Assistant U.S. Attorneys in the U.S. Attorney’s Office in St. George and Salt Lake City are prosecuting the case.
U.S. Attorney Huber expressed appreciation for the significant investigative efforts of the FBI and the Kane County Sheriff’s Office, who are assisting with the case.
Avalos Sentenced to 108 Months in Federal Prison After Pleading Guilty to Kidnapping JuvenileRead the Press Release
SALT LAKE CITY – An associate of drug traffickers, who assisted two others in kidnapping a 17-year-old boy from his mother’s Utah business in August 2018 while trying to collect a heroin-related drug debt, will spend 108 months in federal prison.
Nadia Carolina Avalos, 34, of Phoenix, was sentenced Tuesday morning by U.S. District Judge David Sam. Avalos will serve 36 months of supervised release when she finishes her prison sentence. There is no parole in the federal criminal justice system.
Two other defendants in the case have also pleaded guilty to kidnapping. Issa Jassim Al-Sadoon, 28, of Phoenix, pleaded guilty to kidnapping in March and was sentenced to 120 months in federal prison and 36 months of supervised release on July 8, 2020. Juan Carlos Moreno Trinidad, 43, of Phoenix, pleaded guilty to kidnapping in July. Sentencing for Moreno Trinidad is Oct. 13, 2020. His plea agreement includes a stipulated sentence of 144 months in federal prison, subject to Court approval.
“Organized crime is active in Utah. As the United States Attorney for Utah, I have made it a top priority to confront and dismantle criminal organizations. This case is a glaring example of why we must keep law enforcement pressure on drug traffickers who are drawn to our neighborhoods by an unhealthy demand for illicit drugs. A fugitive leader in a narcotics trafficking organization, operating from south of the border, directed a ransom kidnapping in an otherwise safe Utah neighborhood. As Utahns, this is something we simply cannot tolerate,” U.S. Attorney John W. Huber said today.
“As we learned in court, Ms. Avalos’s problems with the law stem from illicit drugs, which often lends itself to criminal behavior and violence,” said Special Agent in Charge Paul Haertel of the Salt Lake City FBI. “Cases like this underscore the larger issues associated with the drug trade, which is why the FBI and our partner task forces are committed to investigating activity that afflicts our communities.”
“Because of the cooperation between the FBI, Salt Lake Police Department, West Valley Police Department and the Utah County Major Crimes Task Force, a 17-year-old victim of kidnapping was safely recovered and returned to his family. Members of a drug trafficking organization, responsible for this violent act, were apprehended due to the hard work and effort of each detective, officer, and agent involved in this case. We are thankful that victim is safe and that we had a part in this outcome. We will continue our efforts to pursue other drug traffickers operating in Utah,” Lt. Jeff Bailey, Director of the Utah County Major Crimes Task Force, said today.
As a part of her plea agreement with federal prosecutors, Avalos admitted that she came with others to Utah in August 2018 to collect a drug debt owed to Oscar Rene Chacon Lopez, aka Gio, another defendant in the case, from a woman in West Valley City. According to a complaint filed in the case, the defendants conducted surveillance on a business in West Valley City, operated by the woman. After they were not successful in collecting the money from the woman, Chacon, calling from Mexico, directed them to kidnap the woman’s 17-year-old son.
According to documents filed in court, the victim was kidnapped at gunpoint by Moreno Trinidad and Al-Sadoon. Avalos, assisted by Al-Sadoon and Moreno Trinidad, kept the 17-year-old son at a hotel room in Murray while Chacon attempted to collect the drug debt from his mother.
The victim called his mother and told her he had been taken by individuals who wanted money from her. She also received a short video of the inside of her truck demonstrating the kidnappers had also stolen her truck. In the following hours, Chacon sent numerous typed text messages and recorded voice messages. He threatened her son and other children at her home with physical violence. Chacon made it clear he directed the kidnappers in Utah and that her son would be released only after he was paid at least $10,000, according to a complaint filed in the case.
FBI agents, Utah County Major Crime Task Force detectives, and West Valley City police officers were able to locate the juvenile victim later that evening at a Salt Lake County hotel room and return the juvenile unharmed to his home.
Another defendant in the case, Jeanette Mejia, 27, of Phoenix, pleaded guilty to a Felony Information in March 2020 charging her with conspiracy to distribute heroin. She faces a sentence of between 12 and 36 months when she is sentenced Oct. 13, 2020.
Chacon, 29, a citizen of Honduras, remains a fugitive.
This case is a part of an investigation the Utah County Major Crimes Task Force and the FBI in Salt Lake City started in early 2018 targeting a drug trafficking organization distributing primarily heroin. The investigation revealed that Chacon managed and directed the activities of multiple co-conspirators in Utah, Arizona, and Minnesota. In addition to this case, four other criminal cases were filed in Utah as a result of the investigation. Several kilograms of heroin and several cash seizures have been made in connection with these prosecutions. The West Valley City and Salt Lake City police departments have assisted with the investigation.
Assistant U.S. Attorneys in the U.S. Attorney’s Office in Salt Lake City and a Deputy Utah County Attorney, designated as a Special Assistant U.S. Attorney, are prosecuting the case.
Grand Jury Returns Indictment in Pipeline Drug Case Charging Pair with Possession of Marijuana with Intent to DistributeRead the Press Release
SALT LAKE CITY – A federal grand jury returned a two-count indictment Wednesday afternoon charging two individuals with possession of marijuana with intent to distribute in a pipeline drug case originating from the Utah Port of Entry off Interstate 80 near Wendover. Law enforcement officers found approximately 341 pounds of marijuana in a commercial truck they were traveling in.
“This case is unique only because of the amount of marijuana seized in a semi-truck. Every week, Utah law enforcement officers intercept loads of marijuana transiting Utah’s highways from the west coast to points east. In return, Utah officers will also intercept large bundles of drug-related cash traveling back from the east to the west coast,” U.S. Attorney John W. Huber said. “Policy makers and voters in west coast jurisdictions have created dynamics that negatively impact public safety in Utah. Simply put, these west coast marijuana havens cannot control the black market and overproduction dynamics they have created, and Utah is left to fend for ourselves in maintaining the quality of life we enjoy.
“I remind marijuana traffickers who hope to hide amidst the camouflage of state laws that allow marijuana production: federal law prohibits your conduct and I will enforce those provisions of the law in Utah. Marijuana traffickers may want to rethink their travel plans,” Huber said.
According to charging documents, an agent with the Utah Port of Entry made contact with the driver of the commercial semi-truck and trailer following an overweight reading at the Port of Entry. The driver of the truck was identified with a North Carolina driver’s license as Florin Daniel Goran, 36. Goran is a Romanian citizen. A passenger in the truck was identified as Claudia Marie De Marco, 35, of Hermosa Beach, California.
The agent at the Port of Entry conducted a commercial vehicle safety inspection. When the agent opened the door to the vehicle during the inspection, the agent detected the odor of raw marijuana coming from inside the cab. The agent requested a Utah Highway Patrol trooper be dispatched to the Port of Entry for further investigation. The trooper also detected the odor of marijuana in the cab, the complaint alleges.
A search of the cab was conducted and a black garbage bag was located behind the driver’s seat in a passenger compartment. The bag contained 11 clear bags with approximately 1-pound of suspected raw marijuana in each one of them.
As a part of the inspection, the Utah Port of Entry agent reviewed material noting the semi-trailer contained a shipment of Pedialyte headed to Columbus, Ohio. Opening the vent door to the trailer, the agent could smell marijuana. Another officer, who had arrived at the scene, looked through the vent door with a flashlight and could see large black garbage bags and unsecured boxes inside, the complaint alleges.
The truck was sealed and taken, along with the two suspects, to the Tooele County UHP office. A DEA Metro Narcotics Task Force officer responded to the office for further investigation and a search of the semi’s cab and trailer was conducted.
According the complaint, the trailer contained 330 packages of raw marijuana in clear and black vacuum-sealed bags, each appearing to be approximately 1-pound packages. Law enforcement officers also found 1,240 THC vape cartridges, 150 THC chocolate bars, and 126 packages of THC edibles in the trailer. The raw marijuana tested positive for marijuana.
Goron is charged with possession of marijuana with intent to distribute in the first count of the indictment. He faces up to 40 years in prison if convicted of the charge with a mandatory minimum of 5 years in prison. DeMarco is charged with possession of marijuana with intent to distribute in the second count of the indictment. She faces up to five years in prison if convicted of the charge.
Complaints and indictments are not findings of guilt. Defendants charged in these documents are presumed innocent unless or until proven guilty in court.
The case is being prosecuted by the U.S. Attorney’s Office in Utah and an Assistant Utah Attorney General, designated as a Special Assistant U.S. Attorney. Special agents, troopers, and officers with the DEA Metro Narcotics Task Force, the Utah Highway Patrol, the Utah State Bureau of Investigation, and the Wendover Police Department are investigating the case. An agent with the Utah Department of Transportation’s Motor Carrier Division, Wendover Port of Entry is also assisting with the case.
Marquez Pleads Guilty to Possession of Methamphetamine with Intent to Distribute, Agrees to 120-Month SentenceRead the Press Release
SALT LAKE CITY – Roberto Manuel Marquez, 43, of Tooele, pleaded guilty Monday afternoon to one count of possession of methamphetamine with intent to distribute in U.S. District Court in Salt Lake City.
Marquez, a Sureno gang member, was a fugitive from state parole when he was arrested Oct. 10, 2018, during a fugitive operation conducted by the U.S. Marshals Service’s Violent Fugitive Apprehension Team (VFAST) in the Salt Lake Valley. The Utah Board of Pardons and Parole had issued a warrant for Marquez after he removed a GPS ankle monitor and failed to report. The Tooele County Sheriff’s Office was also looking to talk to Marquez about a drive-by shooting in Middle Canyon in Tooele County on Oct. 3, 2018.
Task force officers developed information on Marquez’s location. Officers attempted to initiate a traffic stop in West Valley City, but the driver of the car fled at a high rate of speed and then attempted a U turn. After law enforcement officers tried to block the vehicle, the car hit two task force cars and came to a stop.
Marquez, who was in the passenger seat, was non-complaint, tased, and removed from the vehicle. After his arrest, officers found a key in his pocket that fit a gray lock box in the vehicle. They found meth, heroin, plastic baggies, drug paraphernalia and $3,269 in the box.
As a part of the plea agreement, Marquez admitted he possessed 346 grams of methamphetamine and $3,269. He agreed he was planning to distribute the methamphetamine to other people.
The plea agreement includes a stipulated sentence of 120 months in federal prison, subject to the approval of the Court. As a part of the plea agreement, federal prosecutors have agreed to dismiss a second count in the indictment, possession of heroin with intent to distribute, at sentencing.
While federal prosecutors cannot bind the State of Utah or Tooele County, parties to the federal plea agreement understand that the Tooele County Attorney’s Office will dismiss its pending case charging Marquez with discharge of a firearm during the drive-by shooting in Tooele after sentencing in the federal case.
There is no parole in the federal criminal justice system, so if the stipulated sentence is approved by the court, Marquez will serve 10 years in federal prison.
Assistant U.S. Attorneys in the U.S. Attorney’s Office in Salt Lake City are prosecuting the case. Special agents and task force officers with the U.S. Marshals Service’s VFAST and the DEA are investigating the case.
Utah Man Posing as Medical Doctor to Sell Baseless Coronavirus Cure Indicted on Fraud ChargesRead the Press Release
SALT LAKE CITY – Utah resident Gordon H. Pedersen has been indicted for posing as a medical doctor to sell a baseless treatment for coronavirus (COVID-19). According to the indictment returned by a federal grand jury in Salt Lake City late last week, Pedersen fraudulently promoted and sold ingestible silver-based products as a cure for COVID-19 despite having no evidence that his products could treat or cure the disease.
Pedersen is also alleged to have claimed to be a physician and worn a stethoscope and white lab coat in videos and photos posted on the Internet to further his alleged fraud scheme.
In a related matter, the company Pedersen previously co-owned, My Doctor Suggests LLC (My Doctor Suggests), has agreed to plead guilty to a one-count criminal information related to its false and misleading marketing of ingestible silver products as a drug treatment for COVID-19. The company has severed ties with Pedersen and agreed to cooperate in his prosecution. The criminal information filed Thursday in the United States District Court for the District of Utah is part of a global resolution with My Doctor Suggests that also includes a civil consent order requiring the company to cease fraudulently labeling its products and to issue full refunds to affected consumers.
“In addition to the imposition of a civil restraining order that successfully shut down fraudulent claims of a COVID-19 cure-all, Mr. Pedersen now faces criminal charges for his conduct. The federal felony allegations are serious, especially against the backdrop of this pandemic where Americans are yearning for effective relief. If proven, this conduct reveals a scheme where greed was a higher priority than conveying truth to consumers,” U.S. Attorney John W. Huber said.
“The Department of Justice will take swift action to protect consumers from those who offer phony cure-alls for the treatment and prevention of COVID-19,” said Acting Assistant Attorney General Ethan Davis. “We will continue to work closely with our partners at the Food and Drug Administration to quickly shut down schemes to promote and sell unlawful products during this pandemic.”
The indictment against Pedersen alleges that, beginning in early 2020, he conducted a scheme to defraud consumers throughout the United States, by falsely presenting himself as a medical doctor and promoting and selling silver products on the Internet based on fraudulent claims of protection against, and treatment for, COVID-19, in the midst of a worldwide pandemic.
According to the criminal information filed Friday, My Doctor Suggests made false and misleading claims that the company’s silver-based products could be ingested to protect against COVID-19 and the products lacked the necessary directions for use as a drug product. The information also allege My Doctor Suggests operated without properly registering with the Food and Drug Administration (FDA). It is anticipated My Doctor Suggests will plead guilty to a single misdemeanor count of distributing misbranded drug products in interstate commerce in violation of the Food, Drug, and Cosmetic Act.
“The FDA is actively monitoring the marketplace for fraudulent products represented as preventing, curing, or treating COVID-19. Americans expect and deserve treatments that are safe, effective and meet appropriate standards, and the agency will continue to bring to justice those who place profits above the public health during this pandemic,” said Judy McMeekin, Pharm.D., Associate Commissioner for Regulatory Affairs, U.S. Food and Drug Administration. “Today’s announcement should serve as a reminder that we will take action against those who jeopardize the health of Americans while taking advantage of a crisis.”
The Department of Justice previously sought and obtained an emergency court order in the United States District Court for the District of Utah, alleging in its civil complaint that My Doctor Suggests worked with two co-defendants, Pedersen and his company GP Silver LLC, to fraudulently promote and sell various silver products for the treatment and prevention of COVID-19. Subsequent orders temporarily enjoined Pedersen, GP Silver LLC, and My Doctor Suggests from distributing silver products as well as representing they could cure, mitigate, treat, or otherwise prevent COVID-19 or any other disease. The recent consent order permanently enjoins My Doctor Suggests LLC from making these representations, and it provides a notification and refund process for deceived consumers.
The consent order specifically requires that My Doctor Suggests LLC permanently stop any fraudulent promotions, clearly and conspicuously disavow any statement that its silver products treat or prevent COVID-19 in future marketing materials and consumer notices, implement robust compliance measures to prevent a reoccurrence, and provide full refunds upon request to any customer who purchased its silver products under fraudulent pretenses. Affected customers can contact My Doctor Suggests LLC at (1-866- 660-9868) or [email protected].
An indictment is an accusation by a federal grand jury and is not evidence of guilt. The defendant should be presumed innocent unless and until proven guilty.
The criminal action is being prosecuted by Assistant U.S. Attorney Jacob Strain from the U.S. Attorney’s Office for the District of Utah with assistance from Trial Attorney Matt Lash from the Department of Justice, Civil Division’s Consumer Protection Branch and James Smith from the FDA’s Office of Chief Counsel. The criminal case was investigated by the FDA’s Office of Criminal Investigations and the FBI’s Utah Field Office.
The civil enforcement action was handled by Trial Attorneys Speare I. Hodges and Sarah Williams of the Department of Justice, Civil Division’s Consumer Protection Branch and Assistant U.S. Attorney Joel A. Ferre, with support from FDA’s Office of Criminal Investigations.
Additional information about the Consumer Protection Branch and its enforcement efforts may be found at www.justice.gov/civil/consumer-protection-branch. For more information about the U.S. Attorney’s Office for the District of Utah, visit its website at https://www.justice.gov/usao-ut. For information about the Department of Justice’s efforts to stop illegal COVID-19-related activity, visit www.justice.gov/coronavirus. For the most up-to-date information on COVID-19, consumers may visit the Centers for Disease Control and Prevention (CDC) and WHO websites.
The public is urged to report suspected fraud schemes related to COVID-19 by calling the National Center for Disaster Fraud (NCDF) hotline (1-866-720-5721) or by e-mailing the NCDF at [email protected].
Third Defendant Arrested on Federal Arson Charges for Alleged Burning of Salt Lake City Police Patrol CarRead the Press Release
SALT LAKE CITY – A federal complaint unsealed this week charges a third individual with one count of arson for allegedly setting fire to a Salt Lake City Police Department vehicle during May 30, 2020, riots in Salt Lake City.
Christopher Isidro Rojas, 28, of Salt Lake City was taken into custody Friday by members of the FBI’s Joint Terrorism Task Force (JTTF) as he left his apartment. Law enforcement officers executed a traffic stop after he got into a car.
The complaint alleges that on the afternoon of May 30, 2020, a peaceful protest in downtown Salt Lake City transitioned into acts of destruction and violence. Rioters near the Salt Lake City library overturned a Salt Lake City Police Department patrol car. Moments later, rioters set the patrol car on fire. Video footage from the event shows individuals using fire to damage and completely destroy the car. Federal authorities are charging the arson cases.
According to the complaint, video footage from the event shows an individual, later identified by police as Rojas. The complaint alleges Rojas used a cigarette lighter to help another man, holding white fabric, light the fabric on fire. Once the fabric begins to burn, the other man threw the burning fabric toward the overturned police car. According to the complaint, the burning cloth landed partially in the interior of the patrol car and partially on the street. Rojas is later recorded on video at the riot stating “I put the cop car on fire. It didn’t blow up.”
In the weeks after the riot, the Salt Lake City Police Department, according to the complaint, sought help from the public identifying the man who claimed to have “put the car on fire.” The FBI in Salt Lake City also offered a reward of up to $25,000 for information leading to the arrest and conviction of two arson suspects – up to $12,500 per suspect. Law enforcement officers received tips identifying Rojas.
Federal arson charges in the case are pending against Jackson Stuart Tamowski Patton, 26, and Latroi Devon Newbins, 28, both of Salt Lake City, who were charged earlier. Patton remains in custody. Although federal prosecutors requested Newbins be detained as well, he has been released from custody.
A complaint is not a finding of guilt. Individuals charged in a complaint are presumed innocent and entitled to a fair trial. The charge in the complaint has a potential sentence of 20 years in prison with a minimum-mandatory sentence of five years.
U.S. Attorney John W. Huber expressed appreciation for the coordinated effort local, state, and federal law enforcement agencies are providing as a part of the investigation. “Utah law enforcement has a strong history of working together. The investigation surrounding the burning of the patrol car is an excellent example of agencies playing to their strengths, giving us the tools we need to investigate and prosecute this criminal conduct.”
Assistant U.S. Attorneys from the Utah U.S. Attorney’s Office are prosecuting the case. Investigating agencies include members of the FBI’s JTTF, the Salt Lake City Police Department, the ATF and the Utah Department of Public Safety. U.S. Marshals, who are members of the JTTF, assisted with the arrest of Rojas.
Robbins Pleads Guilty to Securities Fraud, Money Laundering, Convinced Victims to Invest Just over $10 Million in SchemeRead the Press Release
SALT LAKE CITY – Thomas Robbins, 65, of Heber City pleaded guilty to securities fraud and money laundering in U.S. District Court in Salt Lake City Wednesday afternoon, admitting he induced victims to invest in a fraudulent foreign currency day-trading business.
According to the plea agreement, as a part of his efforts to lull investors into a false sense of security about their investments, Robbins told them he had achieved high returns in his foreign day-trading business. In fact, Robbins lost millions of dollars and diverted investor money for his personal use and benefit. He solicited approximately 66 investors to invest around $10,354,700.69 in his scheme.
“This case presents a classic example of a Utah securities fraudster. Lie upon lie, he created an investment opportunity that drew in dozens of investors who ended up losing more than $10 million to Mr. Robbins – who is a swindler rather than a foreign currency day trader. For all intents and purposes, the money is gone and cannot be recovered for victims,” U.S. Attorney John W. Huber said today.
“We have no shortage of fraudsters in Utah waiting to take our money. While my partners and I can deliver justice to the offenders, as we are doing in this case, the key is to avoid victimization in the first place. I encourage everyone to apply healthy skepticism and due diligence before investing their nest eggs,” Huber said.
"Thomas Robbins did not learn his lesson from his past offenses,” said Special Agent in Charge Paul Haertel of the Salt Lake City FBI. “Unfortunately, that’s often the reality in cases like these. Fraudsters are master manipulators and have high rates of recidivism. The FBI and our partners will continue to go after those who steal people’s hard-earned money. Public education and awareness is key. When looking to invest, we urge the public to do their due diligence before investing. Please do things like checking federal court records and the state's White Collar Crime Offender Registry online at utfraud.com.”
“You have heard it before – if something sounds too good to be true, it probably is, and that is exactly what Thomas Robbins promised, something too good to be true. Mr. Robbins defrauded investors with false promises and tales of trading algorithms, all to obtain their cash and property,” said IRS-Criminal Investigation Special Agent Tara Sullivan. “This wasn’t the first time Mr. Robbins has done this. You should always check on anybody who is asking for your money for an investment and make sure you have an independent third party like an accountant, lawyer or financial advisor look over the opportunity.”
Robbins admitted that he made fraudulent representations in his communication with investors in the scheme. The false representations include telling them he had spent 11 years developing an algorithm for foreign currency trading which allowed him to average returns of 5 percent to 30 percent per month; representing to them that he worked for a bank in Germany around 2005 where he was on contract to help the bank develop algorithms for their traders to use; that he used more than 13 different brokerage firms in different countries to facilitate his foreign currency trading program; assuring them that his trading program was compliant with the laws of the Commodities Futures Trading Commission; and promising that people who invested with him would never lose more than 5 percent of the net equity in their trading account due to “stop loss” measures.
He made the false representations knowing he was not providing a legitimate investment; that he had lost nearly all of the investor money; and he was using a portion of the investor money on personal living expenses; and no significant investment returns were generated.
Robbins was charged with securities fraud and money laundering in a Felony Information filed earlier this month. Sentencing in the case is set for Nov. 30, 2020, at 2 p.m. before U.S. District Judge Dee Benson. The potential maximum sentence for securities fraud is 20 years in prison and a fine of $250,000. Money laundering carries a potential 10-year sentence and a fine of $250,000.
This is Robbins’ second federal conviction for a fraud scheme. He was sentenced to 60 months in federal prison in June 2011 and ordered to pay $2,462,207 in restitution to victim investors after pleading guilty to conspiracy in another investment fraud scheme.
Assistant U.S. Attorneys in the Utah U.S. Attorney’s Office are prosecuting the case. Special agents of the FBI and IRS-Criminal Investigation are conducting the investigation.
The Department of Justice Announces Takedown of Key MS-13 Criminal LeadershipRead the Press Release
WASHINGTON – Today, President Donald J. Trump and Attorney General William P. Barr announced significant cases related to Joint Task Force Vulcan (JTFV), an initiative launched in August 2019 aimed at disrupting, dismantling, and ultimately, destroying MS-13.
President Trump and Attorney General Barr announced a number of significant cases associated with JTFV, including the first time an MS-13 member has been charged with terrorism-related offenses, a coordinated multi-district takedown of the leadership of the Hollywood clique of MS-13, and the Attorney General’s decision to seek the death penalty against an MS-13 defendant.
“In 2017, the President directed the Department of Justice to go to war against MS-13, and we did just that,” said Attorney General Barr. “In coordination with our partners at the Department of Homeland Security, the Justice Department’s law enforcement components have successfully investigated, charged, and arrested command and control elements of MS-13 responsible for murder. Joint Task Force Vulcan’s operations have significantly degraded MS-13 capabilities. While there is still work to be done, the Department of Justice remains committed to protecting Americans threatened by MS-13, and we will not rest until we have successfully defeated this transnational criminal organization.”
“Today’s announcements are the result of tremendous teamwork and coordination between prosecutors and law enforcement officers across the United States and Central America,” said JTFV Director John Durham. “MS-13 is a violent transnational criminal organization, whose criminal activities respect no boundaries. The only way to defeat MS-13 is by targeting the organization as a whole, focusing on the leadership structure, and deploying a whole-of-government approach against a common enemy.”
“This multi-district takedown of a number of high profile MS-13 leaders and members is a blow to this violent gang throughout the United States. While we are thankful that MS-13 does not have a significant presence in Utah, we do have prosecutors with significant experience investigating and prosecuting violent gangs. We are honored to have a prosecutor from our office participating in this targeted nationwide effort,” Utah U.S. Attorney John W. Huber said today.
In an indictment unsealed yesterday, Melgar Diaz was charged in the Eastern District of Virginia with conspiring to provide material support to terrorists; conspiring to kill or maim persons overseas; conspiring to commit acts of terrorism transcending national boundaries; conspiring to finance terrorism, and; conspiring to engage in narco-terrorism, in addition to racketeering conspiracy and drug trafficking. This is the first time that an MS-13 member has been charged with terrorism-related offenses.
Alexi Saenz was indicted in 2017 in the Eastern District of New York. It is alleged that between 2016 and 2017 he committed seven murders: the Jan. 28, 2016, murder of Michael Johnson; the April 29, 2016, murder of Oscar Acosta; the Sept. 13, 2016, murders of Kayla Cuevas and Nisa Mickens; the Oct. 10, 2016, murder of Javier Castillo; the Oct. 13, 2016, murder of Dewann Stacks, and; the Jan. 30, 2017, murder of Esteban Alvarado-Bonilla. Two of the victims were Brentwood high school students killed with a machete and baseball bat. The Attorney General has filed a Notice of Intent to Seek the Death Penalty for Saenz.
In a 24-count indictment unsealed yesterday, the Eastern District of New York, charged eight MS-13 members, including leaders of the East Coast Hollywood Program, with Racketeer Influenced and Corrupt Organization (RICO) and Violent Crimes in Aid of Racketeering (VICAR) charges related to six murders, two attempted murders, kidnapping, narcotics, and related firearms offenses.
In a 21-count indictment unsealed yesterday in the District of Nevada, 13 MS-13 members, including leaders of the “Hollywood Locos” clique and “Los Angeles Program,” were charged with various offenses including Continuing Criminal Enterprise (CCE), narcotics distribution and weapons charges.
In August 2019, Attorney General Barr created JTFV to carry out the recommendations of the MS-13 subcommittee formed under the Attorney General’s Transnational Organized Crime Task Force, which was the result of President Trump’s February 2017 Executive Order directing the Departments of Justice, State, and Homeland Security, and the Office of the Director of National Intelligence, to coordinate a whole-of-government approach to dismantle transnational criminal organizations, such as MS-13, and restore safety for the American people. The principal purpose of JTFV is to coordinate and lead the efforts of the Justice Department and U.S. law enforcement agencies against MS-13 in order to dismantle the group.
JTFV has successfully implemented the whole-of-government approach to law enforcement relating to MS-13; increased coordination and collaboration with foreign law enforcement partners, including El Salvador, Mexico, Honduras, and Guatemala; designated priority MS-13 programs, cliques and leaders, who have the most impact on the U.S., for targeted prosecutions; and coordinated significant MS-13 indictments in U.S. Attorney’s Offices across the country, such as the Eastern District of New York, the Eastern District of Virginia, and the District of Nevada.
Federal prosecutors from the Department of Justice’s National Security Division and the Criminal Division, as well as 10 U.S. Attorney’s Offices have been assigned to serve JTFV in full-time capacities: the Eastern District of New York; the Eastern District of Virginia; the District of Nevada; the Southern District of California; the District of Massachusetts; the Northern District of Ohio; the District of New Jersey; the Eastern District of Texas; the District of Utah, and; the District of Columbia. In addition, all Department of Justice law enforcement agencies are involved in the effort – the Federal Bureau of Investigation; the Drug Enforcement Administration; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the U.S. Marshals Service, and; the Bureau of Prisons. The Department of Homeland Security’s Homeland Security Investigations has also played a critical role in JTFV.
Attorney General Barr would also like to thank Attorney General Raul Melara of El Salvador for the assistance of his office, as well as investigators from El Salvador’s Policia Nacional Civil, Centro Antipandilla Transnacional unit for their assistance.
Romanian Pleads Guilty to ATM Skimming Scheme, Stole Personal Identifiers of at Least 2,732 Victims at Bank ATMsRead the Press Release
SALT LAKE CITY – A Romanian citizen pleaded guilty to bank fraud in U.S. District Court in Salt Lake City Wednesday morning, admitting he and his co-conspirators devised an ATM skimming scheme that allowed them to steal the personal identifiers from at least 2,732 victims and caused a loss to the victim bank of approximately $216,157.30.
As a part of his plea agreement, Alexandru Cosmin Licsor, 38, admitted that from about Jan. 10 to about Feb. 20, 2015, he installed skimming devices equipped with magnetic card readers, data recorders, digital cameras, and batteries on some Zions Bank ATMs. The skimming equipment collected bank customer card data and the camera recorded the PIN pad as customers entered their PINs.
After collecting the data and video recordings, Licsor’s co-conspirators created counterfeit credit and debit cards. Licsor and others used or attempted to use the counterfeit cards on multiple occasions at non-Zions bank ATMs in Utah and other places. For example, in February 2015, they made an $800 ATM withdrawal from a Zions Bank account without the authorization of the account holder. The co-conspirators in the case have not been identified.
While the approximate loss amount for the scheme $216,157.30, the attempted loss amount for the fraud was $363,035.83. (The attempted loss amount includes things like attempts to withdraw more from an account that the bank would allowed.)
The plea agreement includes an agreement that the sentence imposed in the case will be between 24 months and 71 months. The ultimate sentence is subject to the approval of the Court. The judge can consider conduct Licsor engaged in which either was not charged, not pleaded to, or both in determining a sentence. Sentencing in the case is set for Sept. 23, 2020.
Licsor was charged with access device fraud, bank fraud, and aggravated identity theft in a six-count superseding indictment returned by a federal grand jury in December 2016. A warrant was issued for his arrest. After being on the run for more than two years, he was arrested in Romania and extradited to the United States in November 2019 to face the Utah charges.
The FBI’s Cyber Task Force, which includes officers with the Utah Department of Public Safety, investigated the case. The U.S. Department of Justice’s Office of International Affairs provided significant assistance in securing the defendant’s extradition from Romania.
Two Utahns Charged with Covid-Relief Fraud After Failing to Disclose Applicant Was Under Federal IndictmentRead the Press Release
SALT LAKE CITY – A federal complaint unsealed last week charges the owner of a Utah trucking company with submitting a fraudulent loan application to get a Paycheck Protection Program (PPP) loan of $210,000 through the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
Hubert Ivan Ugarte, 52, of Draper, with the assistance of Lisa Bradshaw Rowberry, 49, of Provo, Utah, submitted a loan application to the Small Business Administration (SBA) to obtain the PPP loan, according to the complaint.
The CARES Act is a federal law enacted on March 29, 2020, designed to provide emergency financial assistance to millions of Americans suffering from the economic effects caused by the COVID-19 pandemic. One source of relief provided by the CARES Act was the authorization of up to $249 billion in forgivable loans to small businesses for job retention and certain other expenses, through the PPP. In April 2020, Congress authorized more than $300 billion in additional PPP funding.
The PPP allows qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of 1 percent. PPP loan proceeds must be used by businesses on payroll costs, interest on mortgages, rent, and utilities. The PPP allows the interest and principal on the PPP loan to be entirely forgiven if the business spends the loan proceeds on these expense items within a designated period of time after receiving the proceeds and uses a certain amount of the PPP loan proceeds on payroll expenses.
According to the complaint, Ugarte, with Rowberry’s assistance, answered “no” to questions on the application asking whether he was under formal criminal charges in any jurisdiction. His answer was false because he was under federal indictment in Utah when he answered the question, the complaint alleges.
On Oct. 24, 2019, a federal grand jury in Utah returned an indictment charging Ugarte and others following a multi-year wire fraud and bribery scheme investigation in which it is alleged Ugarte bribed employees at the Salt Lake City Hub of FedEx ground to obtain preferential treatment for his trucking companies. Ugarte faces four counts of wire fraud and six counts of money laundering in the pending case.
In filling out PPP loan application documents, Ugarte also circled “no” when asked if he had ever been placed on pretrial diversion. In fact, according to the complaint, he entered into a two-year pretrial diversion in 1988 to resolve a felony drug possession charge.
Before Ugarte and Rowberry completed the Borrower Certification for the PPP loan and submitted it to the SBA, Ugarte specifically agreed that at least 75 percent of the $210,000 loan would be used for payroll costs.
According to the complaint, the original PPP loan application was rejected or declined by two banks after they had discovered Ugarte was under federal indictment. The complaint alleges Rowberry told an individual she was going to go with a friend she knew in the banking industry to re-apply for the PPP loan. On May 14, 2020, Ugarte received $210,000 from Transportation Alliance Bank.
Instead of using at least 75 percent of the loan to pay payroll costs, including bounced payroll checks, Ugarte’s business account shows an automatic withdrawal to Kenworth Sales in the amount of $126,965.27 just four days after the loan was received. The complaint alleges Ugarte’s company owed approximately $66,000 a month in lease or purchase payments to Kenworth for 13 tractors. Records show Kenworth received the money for truck payments and small amount for various truck parts. The complaint alleges Ugarte used 60 percent of the loan to pay the past due truck payments – leaving 40 percent for payroll costs.
Ugarte and Rowberry are charged with conspiracy, removal of property to prevent seizure, loan application fraud, wire fraud, and money laundering in the complaint. The conspiracy and removal of property to prevent seizure counts each carry potential 5 years sentences. Money laundering has a potential 10 year sentence and wire fraud is up to 20 years. The loan application fraud count is up to 30 years in prison and a $1 million fine.
The removal of property to prevent seizure count in the complaint alleges Ugarte received a payment of $60,957.82 for a wrecked tractor in Nevada after Rowberry submitted an insurance claim. The check should have been turned over to the FBI subject to a seizure warrant in his FedEx fraud case. Rather than turn the money over to the FBI, the complaint alleges Rowberry deposited it into one of Ugarte’s accounts.
Rowberry had an initial appearance last week in federal court and has been released on conditions of pretrial release. A preliminary hearing for her is set for July 28, 2020, at 3 p.m. before Magistrate Judge Daphne A. Oberg. An initial appearance for Ugarte, who is in custody, is set for Tuesday (July 14, 2020) at 9 a.m. before Magistrate Oberg.
Complaints are not findings of guilt. Individuals charged in complaints are presumed innocent unless or until proven guilty beyond a reasonable doubt in court.
Assistant U.S. Attorneys in the Utah U.S. Attorney’s Office are prosecuting the case. FBI special agents are investigating the matter.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
Department of Justice Awards $2.2 Million for Innovative Community Policing ProjectsRead the Press Release
SALT LAKE CITY – The Department of Justice is awarding $2.2 million in grant funding to law enforcement agencies and stakeholders through the Department’s Office of Community Oriented Policing Services (COPS Office) Community Policing Development (CPD) Microgrants Program.
Salt Lake City is one of the 29 awards announced today by COPS Office Director Phil Keith. The awards range in amounts from $15,090 to $100,000. Salt Lake City will receive $71,896 to support the Salt Lake City Youth Engagement Project.
“Community policing strategies are a vital tool in building relationships between law enforcement and community partners,” U.S. Attorney John W. Huber said today. “Congratulations to Salt Lake City on its efforts to develop this innovative project and earn the support of the COPS Office.”
“The CPD Microgrants Program is a critical resource to advance innovative community policing projects across the country,” said Director Keith. “These strategic investments from the COPS Office pay huge dividends to state and local law enforcement agencies and the communities that they serve.”
CPD Microgrants Program funds are used to develop the capacity of local, state, and tribal law enforcement agencies to implement community policing strategies. Applicants were invited to propose demonstration or pilot projects to be implemented in their agency that offer creative ideas to advance crime fighting, community engagement, problem solving, or organizational changes to support community policing in one of the following areas:
- Human Trafficking
- Meeting Rural Law Enforcement Challenges
- Officer Safety and Wellness
- Recruitment, Hiring, and Retention
- School Safety
- Staffing and Allocation Studies
- Victim-Centered Approaches
- Violent Crime
- Youth Engagement
Funding through this program is available for the first time since 2018, following the successful removal of a nationwide injunction. These awards are being announced at a critical time for our country, when community policing strategies can play a vital role in improving police and community relations.
Defendant Charged in Connection with Fraudulent Silver Trading Program Pleads Guilty to Money LaunderingRead the Press Release
SALT LAKE CITY – Denise Gunderson Rust, one of three individuals charged in connection with an alleged scheme to defraud investors by inducing them to purchase investments in a fraudulent silver trading program, pleaded guilty to money laundering in federal court late last week.
Gaylen Rust owned and managed Rust Rare Coin, Inc. (RRC), R Legacy Entertainment LLC, R. Legacy Racing Inc., R Legacy Investments LLC, R Legacy Ranch, and Legacy Music Alliance. Denise Rust was listed as the secretary of RRC and had signatory authority on several RRC bank accounts. Joshua Rust was manager of RRC from 2004 to Nov. 15, 2018. He also had signatory authority on several RRC bank accounts and managed the day-to-day operations of the RRC coin shop.
The silver trading program was offered and sold to around 700 investors throughout the United States. The defendants collected approximately $200 million.
Denise Gunderson Rust, 60, of Layton was charged in the case along with Gaylen Dean Rust, 59, of Layton and Joshua Daniel Rust, age 37, of Draper. Cases against the two men are pending.
“Denise Rust participated in one of largest and most financially destructive frauds Utah has ever seen. Based on this conduct, we have secured a conviction against her for laundering investor money for her own personal benefit,” U.S. Attorney John W. Huber said. “We remain committed to seek justice for the nearly 700 victims who have suffered catastrophic economic consequences from this fraud.”
“We are pleased at these first steps toward justice in this matter,” said Thomas Brady, Director of the Utah Division of Securities. “The U.S. Attorney’s Office has done exemplary work.
“Instead of doing the right thing, Denise Rust helped perpetuate a multi-million dollar Ponzi scheme that duped investors for more than 20 years,” said Special Agent in Charge Paul Haertel of the FBI’s Salt Lake City Field Office. “This case shows just how convincing fraudsters can be. We urge due diligence when looking to invest and immediately report fraud to the FBI.”
“Denise Rust knew that the millions of dollars of investors’ money she diverted into another business was from a Ponzi scheme,” said Las Vegas Field Office Special Agent in Charge Tara Sullivan. “People who create schemes that have no purpose other than to mislead others and defraud the IRS run the very high risk of prosecution."
Denise Gunderson Rust pleaded guilty to a Felony Information charging one count of money laundering. As a part of her plea agreement, she admitted that she conducted a money transaction using proceeds derived from unlawful activity.
She admitted that by that date, she was aware that Gaylen Rust had collected millions of dollars by offering and selling a silver trading program to many investors located throughout the United States. She admitted knowing that Rust had misrepresented to investors that their money would be used to purchase and trade significant amounts of physical silver bullion.
On Oct. 17, 2018, Denise Gunderson Rust admitted she transferred $12,000 from a bank account in Utah, where investor money was pooled, to her daughter in Alaska. The payment to her daughter was unrelated to the silver trading program.
The plea agreement includes an agreement that the Court will impose a sentence of between five years’ probation and 18 months in prison. The stipulated sentencing range is subject to the approval of the Court. She has also agreed to pay restitution in the approximate amount of $1,774,357.93. The exact amount of restitution and the schedule of payments will be determined during the sentencing hearing. She also agreed to forfeit $12,000 in money she acquired traceable to the criminal conduct. A sentencing date has not been set. Denise Rust is not in custody.
The indictment charging the Rusts alleges that from around 1996 and continuing to Nov. 15, 2018, the defendants conspired to defraud investors and potential investors by offering and inducing them to purchase investments in a silver trading program. According to the indictment, Gaylen Rust, who offered and sold investments in the program, made false and fraudulent statements regarding his scheme, both directly and indirectly, to investors and potential investors through various means including meetings, phone calls, mailings, and emails.
Among other things, the indictment alleges the defendants failed to disclose to investors that their funds would be used for purposes other than to invest in silver and trading silver; that Gaylen Rust was not licensed to sell securities, trade commodities or operate a commodity pool; that investor funds were being laundered through transfers in and out of the defendants’ personal accounts; and that investment account statements provided to investors were false and not based on actual silver trades.
In order to convince investors that their investments were profitable and to convince potential investors that the silver program was earning money, the defendants operated the trading program as a Ponzi scheme. The defendants used investment money from later investors to pay the promised returns to earlier investors, creating the false impression that the silver trading program was profitable, the investments were safe and secure, and that the promised returns were being generated. Ponzi payments of approximately $150 million were made to investors, representing those payments as profits from the operation of the silver trading program.
Gaylen Rust and Joshua Rust are charged with wire fraud and money laundering conspiracy in the case. Gaylen Rust also faces two counts of securities fraud and Joshua Rust is charged with one count of money laundering.
The potential maximum penalties for wire fraud conspiracy, securities fraud and money laundering conspiracy are up to 20 years in federal prison per count. Securities fraud has a 20-year maximum sentence sand money laundering has a potential 10-year sentence.
Indictments are not findings of guilt. Individuals charged in indictments are presumed innocent unless or until proven guilty in court.
Assistant U.S. Attorneys in Salt Lake City are prosecuting the case. Special agents with the Utah Division of Securities, the FBI, and IRS-Criminal Investigation are investigating the case. The Securities Exchange Commission, the Commodity Futures Trading Commission, and the Utah Attorney General’s Office have filed related cases.
U.S. Attorney Appoints First Missing and Murdered Indigenous Persons Coordinator for UtahRead the Press Release
SALT LAKE CITY – U.S. Attorney John W. Huber announced today the appointment of Brian Speelman as the Missing and Murdered Indigenous Persons (MMIP) coordinator in Utah.
As Utah’s first MMIP coordinator, Speelman will gather reliable data to identify MMIP cases connected to Utah; conduct outreach with tribal communities to assist in the creation and implementation of community action plans; and coordinate with tribal, local, state, and federal law enforcement in the development of protocols and procedures for responding to and addressing MMIP cases.
Speelman, who will coordinate with tribal communities and serve victims throughout Utah, will work in the U.S. Attorney’s Office in Salt Lake City.
U.S. Attorney General William Barr launched a national strategy in November to address missing and murdered Native Americans. As a part of the initiative, the Department of Justice made funding available to hire MMIP coordinators in 11 states, including Utah.
“American Indian and Alaska Native people suffer from unacceptable and disproportionately high levels of violence, which can have lasting impacts on families and communities. Native American women face particularly high rates of violence, with at least half suffering sexual or intimate-partner violence in their lifetime. Too many of these families have experienced the loss of loved ones who went missing or were murdered,” said Attorney General William P. Barr. “This important initiative will further strengthen the federal, state, and tribal law enforcement response to these continuing problems.”
“My office is fully committed to our tribal partners in Utah, and this new position will add to our combined capabilities. The position is designed to help serve crime victim families who have suffered from missing or murdered family members. It will also enable my office to better collaborate with other groups in Utah working on MMIP issues,” U.S. Attorney Huber said today. “Brian Speelman brings decades of experience, and is committed to working with our tribal communities and other stakeholders to reduce violent crime and deliver justice.”
Prior to joining the U.S. Attorney’s Office, Speelman worked as an FBI agent, retiring as a Supervisory Special Agent in 2011. Following his retirement, he was appointed Director of the Utah Statewide Information and Analysis Center (SIAC), which was recognized in 2015 with the Governor’s Award for Excellence in Public Services. Most recently, Speelman worked as an associate with the Argonne National Laboratory focusing on homeland security issues. He is a graduate of the University of Maryland.
The strategy announced in November by DOJ has three parts:
Establish MMIP coordinators: The Department of Justice is investing resources to hire 11 MMIP coordinators in 11 states to serve with all U.S. Attorney’s offices in those states, and others who request assistance. The states are Alaska, Arizona, Montana, Oklahoma, Michigan, Utah, Nevada, Minnesota, Oregon, New Mexico, and Washington. MMIP coordinators will work closely with federal, tribal, state and local agencies to develop common protocols and procedure for responding to reports of missing or murdered indigenous people.
Specialized FBI Rapid Deployment Teams: The strategy will bring needed tools and resources to law enforcement. Upon request by a tribal, state, or local law enforcement agency, the FBI will provide expert assistance based upon the circumstances of a missing indigenous persons case. FBI resources and personnel, which may be activated to assist with cases include: Child Abduction Rapid Deployment (CARD) teams, Cellular Analysis Support Teams, Evidence Response Teams, Cyber Agents for timely analysis of digital evidence/social media, Victim Services Division Response Teams, and others. MMIP coordinators will assist in developing protocols.
Comprehensive Data Analysis: The department will perform in-depth analysis of federally supported databases and analyze data collection practices to identify opportunities to improve data and share the results of this analysis with our partners in this effort.
More broadly, the MMIP Initiative will involve a coordinated effort by more than 50 U.S. Attorneys on the Attorney General’s Native American Issues Subcommittee (NAIS), the FBI, and the Office of Tribal Justice, with support from the Office of Justice Programs (OJP) and the Office on Violence Against Women (OVW).
Complaint Unsealed Charging Man with Distribution of Heroin, Possession, Distribution of Child PornographyRead the Press Release
SALT LAKE CITY – A federal complaint unsealed recently charges Andrew T. Whitehouse, age 25, of Tooele with distribution of heroin in a case where a Tooele resident, identified as J.B. in the complaint, died from a drug overdose.
According to the complaint, on Oct. 7, 2018, officers from the Tooele City Police Department responded to a residence on a call for a male who was unconscious and not breathing. The father of the victim believed he had overdosed on drugs. Officers and emergency technicians were not able to revive him.
Officers recovered a used syringe in the bathroom sink with what appeared to be heroin residue. They also found a needle mark on J.B.’s wrist. A small baggie, commonly used to store user amounts of heroin, and a digital scale were found. They also found the victim’s cell phone.
A medical examiner later determined the victim died of “mixed drug and alcohol intoxication.” The drugs included heroin metabolites (morphine and 6-monoacetylmorphine) and a by-product of heroin production (codeine).
The phone contained a text message conversation between the victim and a person identified as “Andrew” that started in the early hours of Oct. 7, 2018, with the victim asking Andrew for narcotics at 2:33 a.m. The conversation continued – with 34 messages between the victim and Whitehouse’s phone until about 4:30 a.m. There were also 11 calls back and forth.
The victim’s body was discovered about 7:15 a.m.
According to the complaint, Whitehouse told investigators when he arrived at the victim’s home, the victim only had $13. Whitehouse claimed the victim went back inside his home to find more money. While the victim was in the home, Whitehouse said he divided the heroin into a smaller amount to sell the victim $13 worth of heroin. Whitehouse claims that when victim returned without any more money, he decided to leave without selling the heroin, according to the complaint. Whitehouse claimed that at about 4:30 a.m., he told the victim to buy heroin from someone else. The victim’s phone, however, indicates he had no further contact with anyone that morning.
Whitehouse is also charged with one count of possession of child pornography and one count of distribution of child pornography in the complaint.
In June 2019, a victim disclosed to law enforcement that she had received communications from a stranger who sent her a photo of herself naked from the waist up, identified her last name, and other personal information. The individual stated that he obtained the photograph from a website. According to the complaint, the picture of the victim was posted to the website in April 2019 with the caption, “more pictures where that came from.”
The victim recognized the photo as one of several photographs taken of her engaged in sexual activity that she had sent to Whitehouse during 2012 when she was 15 years old. According to the complaint, the victim said Whitehouse knew her age at the time and asked her to pose in sexually explicit positions. The victim said she sent Whitehouse more than 50 pictures.
According to the complaint, in July 2019, law enforcement officers executed a search warrant at Whitehouse’s residence. A forensic review of the digital media seized from the house uncovered the photograph that the victim had been sent by the stranger. Investigators also found other photos of the 15-year-old victim.
The maximum potential sentence for distribution of heroin is 20 years in prison. If the defendant is convicted of that charge, federal prosecutors could seek an enhancement at sentencing for the victim’s death. Distribution of child pornography has a potential maximum sentence of 20 years in prison with a five-year minimum mandatory sentence. Possession of child pornography is up to 10 years. Whitehouse is in custody.
A complaint is not a finding of guilt. Defendants charged in a complaint are presumed innocent unless or until proven guilty in court.
Prosecutors in the Utah U.S. Attorney’s Office are prosecuting the case. Special agents and task force officers with the DEA are investigating the case, with assistance from the Tooele City Police Department.
Salt Lake City Man Arrested on Federal Arson Charges for Alleged Burning of Salt Lake City Police Patrol CarRead the Press Release
SALT LAKE CITY – A federal complaint filed in federal court Wednesday morning charges Jackson Stuart Tamowski Patton of Salt Lake City with one count of arson for allegedly setting fire to a Salt Lake City Police Department vehicle during protests in Salt Lake City Saturday.
The complaint alleges that after rioters overturned a Salt Lake City patrol car during a protest in downtown Salt Lake City Saturday, the patrol car was set on fire. According to the complaint, video footage from the riot shows Patton tossing a combustible substance onto the flames causing the flames to increase. The fire destroyed the patrol car.
Salt Lake City police officers arrested Patton, age 26, Tuesday night at a protest event in Salt Lake City. An initial appearance in federal court will be set later.
The complaint and arrest were announced today by John W. Huber, U.S. Attorney for Utah; Chief Mike Brown of the Salt Lake City Police Department; Paul H. Haertel, Special Agent in Charge of the Salt Lake City FBI; David Booth, ATF Special Agent in Charge for Utah; and Utah Department of Public Safety Commissioner Jess L. Anderson.
“We value and support the rights we all enjoy to peacefully demonstrate and advocate for our beliefs. However, we have zero tolerance for those who hijack peaceful protests and commit violations of federal law,” U.S. Attorney John W. Huber said today. “Those involved in this criminal behavior – including the conduct alleged in this complaint – should know that we will use every available tool we have to hold them accountable.”
“Our detectives worked tirelessly to ascertain the identities of numerous perpetrators of violence and destruction in our city. We too are committed to bringing to justice those who attempted to interrupt the peaceful protest,” Salt Lake City Police Chief Mike Brown said today. “We appreciate the partnerships we share with our federal agencies, to make sure that, through our shared resources, we are able to bring the correct judgment to these criminals.”
A complaint is not a finding of guilt. Individuals charged in a complaint are presumed innocent and entitled to a fair trial. The charge in the complaint has a potential sentence of 20 years in prison with a minimum sentence of five years.
Five Utah Agencies Get COPS Office Awards to Hire Full-Time Law Enforcement ProfessionalsRead the Press Release
SALT LAKE CITY – Five Utah agencies are receiving funding through the Department of Justice’s Office of Community Oriented Policing Services (COPS Office) COPS Hiring Program (CHP).
The Attorney General announced funding awards to 596 law enforcement agencies across the nation Tuesday afternoon, which allows those agencies to hire 2,732 additional full-time law enforcement professionals. The COPS Office received nearly 1,100 applications requesting more than 4,000 law enforcement positions.
The City of American Fork, the Wayne County Sheriff’s Office, and the Willard Police Department will each get $125,000 to fund one officer. The City of Orem has been awarded $375,000 to fund three officers. Salt Lake City is getting $1,250,000 to fund 10 officers.
“The Department of Justice is committed to providing the police chiefs and sheriffs of our great nation with needed resources, tools, and support. The funding announced today will bolster their ranks and contribute to expanding community policing efforts nationwide,” said Attorney General William P. Barr. “A law enforcement agency’s most valuable assets are the men and women who put their lives on the line every day in the name of protecting and serving their communities.”
“This critical funding will bring 16 new law enforcement officers to agencies in Utah where they will address local needs,” U.S. Attorney John W. Huber said today. “These agencies identified specific community issues and needs where COPS funding could be effectively applied. We appreciate the COPS Office providing funding to Utah agencies. It will be put to good use.”
The COPS Hiring Program is a competitive award program intended to reduce crime and advance public safety through community policing by providing direct funding for the hiring of career law enforcement officers. In addition to providing financial support for hiring, CHP provides funding to state, local, and tribal law enforcement to enhance local community policing strategies and tactics. In a changing economic climate, CHP funding helps law enforcement agencies maintain sufficient sworn personnel levels to promote safe communities. Funding through this program had been on hold since the spring of 2018 due to a nationwide injunction that was lifted earlier this year.
CHP applicants were required to identify a specific crime and disorder problem focus area and explain how the funding will be used to implement community policing approaches to that problem focus area. Of the awards announced today, 43 percent will focus on violent crime, while the remainder of the awards will focus on a variety of issues including school-based policing to fund school resource officer positions, building trust and respect, and opioid education, prevention, and intervention.
To learn more about CHP, please visit https://cops.usdoj.gov/chp. For additional information about the COPS Office, please visit www.cops.usdoj.gov.