District of Utah
Press releases recorded for this federal judicial district.
Statement of U.S. Attorney John W. HuberRead the Press Release
“The Joint Terrorism Task Force (JTTF) model is exactly the right tool as we investigate potential violations of federal law during the riots in Salt Lake City this weekend, or any similar uprisings in the future. The JTTF brings together highly trained investigators from federal, state, and local law enforcement agencies. These are already strong relationships in Utah, with a proven track record. It makes sense to take advantage of these relationships and this expertise already in place.
“We recognize and support the rights we all enjoy to peacefully demonstrate, protest and advocate for our beliefs. These are some of the most important rights we have as Americans.
“However, we have zero tolerance for those who hijack peaceful protests to violate federal law. In particular, our eyes are on those who use fire and arson to destroy property and any who may have traveled to Utah from out of state to riot in Salt Lake City. We will hold accountable those who violate federal law.”
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(U.S. Attorney Huber’s statement follows a press release issued by the U.S. Department of Justice Sunday morning saying that “to identify criminal organizers and instigators, and to coordinate federal resources with our state and local partners, federal law enforcement is using our existing network of 56 regional FBI Joint Terrorism Task Forces (JTTF).” There is a regional JTTF in Salt Lake City.)
Lead Defendant in Elder Fraud Scheme Sentenced to 10 Years in Federal Prison, Ordered to Pay $273,849.20 in RestitutionRead the Press Release
ST. GEORGE, UT – Frank Gene Powell, age 51, of Hurricane, Utah, the lead defendant in a significant federal elder fraud case targeting an 80-year-old widow in Washington, Utah, will serve 10 years in federal prison and pay $273,849.20 in restitution to the victim of the fraud scheme. U.S. District Judge David Nuffer imposed the sentence Thursday morning in St. George.
Powell pleaded guilty in March to conspiracy to commit wire fraud, money laundering, two counts of destruction of records in a federal investigation, concealment of a document or object in an attempt to impair the object’s integrity or availability for use in an official proceeding, and tampering with a witness.
Powell, who is in custody, will also forfeit two vehicles and be on supervised release for three years following his release from federal prison.
Powell was on state parole at the time of his federal crimes after serving nearly 30 years in state prison for murder. While he was in prison, he received a 1-to-15 year sentence for sexually assaulting an inmate.
As a part of his plea agreement, Frank Powell admitted that from around March 2019 and continuing until about Feb. 6, 2020, he conspired with others to devise a fraud scheme with the specific intent to obtain money or property by means of fraudulent representations or promises. He agreed with his codefendants to engage in a scheme to defraud the victim by soliciting money and assets in exchange for false promises to perform work for the victim. He also admitted he engaged in a fake romantic relationship with the victim as a part of his scheme to defraud her.
He admitted that he purchased a 2019 GMC Sierra using money he received as a part of his scheme to defraud the victim. Using money derived from criminal conduct is money laundering. Several of the counts he pleaded guilty to relate to efforts he took to impede and obstruct the investigation of the case, including concealing cellular phones and money.
Powell also pleaded guilty to witness tampering admitting that in November 2019, he attempted to stop the victim from communicating with law enforcement officers investigating the case. Through written correspondence and phone calls, Powell and his codefendant, Faye Renteria, age 42, of Hurricane, made misleading statements and attempted to get the victim to assist them in avoiding prosecution.
“Powell is a career criminal who has fended off decades of rehabilitative attempts in the Utah state criminal justice system. He’s a convicted murderer and sexual predator, who has now turned his criminal efforts to elder fraud while on state parole,” U.S. Attorney for Utah John W. Huber said today. “With these guilty pleas, he stands convicted of unconscionable crimes against a senior member of the St. George community. A 10-year sentence is very appropriate in this case and will help ensure that Utah will not fall victim to his crimes again.”
"This crime is especially heinous because Frank Powell not only deceived and defrauded the victim, he made it a family affair," said Special Agent in Charge Paul Haertel of the Salt Lake City FBI. "As a society, we should be looking out for the elderly, not exploiting them. Crimes like this will be aggressively investigated, and we encourage the public to immediately report any fraud to law enforcement or the FBI."
Eight defendants were charged in a 10-count superseding indictment returned by a federal grand jury in January. The indictment alleged the defendants, who have family relationships, conspired to obtain money and assets from the victim in exchange for false promises to perform work on her property.
The indictment alleges that starting around March 2019 through October 2019, several of the defendants began soliciting payments from the victim by offering to perform routine repairs and odd jobs on her property. The victim created a list of requested repairs, such as painting the exterior of the house, resurfacing the driveway, doing yard work, hammering protruding nails on the roof, fixing a door handle on a car, removing grease spots on the driveway, and installing carpet on an outdoor deck. To further advance the scheme, Frank Powell engaged in romance fraud by enticing the victim to enter into a romantic relationship. He used the romantic relationship to manipulate the victim into giving him money and assets.
According to the indictment, most of the jobs they promised to do were never completed or the quality of work was extremely poor and fell well below any expectation of professionally done work. The victim paid the defendants at least $273,849.20, both indirectly and directly, for this work.
The indictment included one count of wire fraud conspiracy, five counts of money laundering conspiracy – spending, two counts of destruction or concealment of records and tangible objects in a federal investigation, one count of concealment of a document or object, and one count of tampering with a witness or victim.
Frank Powell’s mother and codefendant, Gloria Jean Powell, age 74, of St. George, was sentenced to time served on May 1, 2020, after pleading guilty to one count of concealment of a document or object, admitting she concealed or attempted to conceal U.S. currency with the intent to impair an FBI investigation. She admitted she aided and abetted her son, Frank Powell, and her daughter, Angela McDuffie, age 53, of Lehi, in the conduct. She also agreed to forfeit a 2010 Toyota Venza as a part of the resolution of her case.
Sentencing is set for July 15, 2020, for Renteria, who pleaded guilty May 7, 2020, to conspiracy to commit wire fraud, wire fraud, two counts of money laundering, two counts of destruction of records or tangible objects designed to impede the FBI’s investigation in the case, and witness tampering. Among other things, she admitted she engaged in misleading conduct involving the victim in the case in an attempt to prevent or delay her from communicating with law enforcement regarding the commission of a federal crime.
Renteria faces sentences of up to 20 years for conspiracy to commit wire fraud, up to 10 years for each count of money laundering, up to 20 years for each count of destruction of records or tangible objects in a federal investigation, and up to 10 years for the witness tampering conviction. Renteria is in custody.
Bubby Mern Shepherd, age 58, of Lodi, California, and Rocky James Powell Mott, age 40, of Hurricane, also have entered guilty pleas. Shepherd pleaded guilty last week to one count of conspiracy to commit wire fraud. Mott pleaded guilty Wednesday to the same count. Plea agreements for Shepherd and Mott, who are both in custody, include a stipulated sentence of 21 months in prison for the conviction. The sentence is subject to the approval of the court.
Cases are pending against McDuffie, Terrence Quincy Powell, age 24, of St. George, and Martell Taz Powell, age 25, of Cedar City. A Sept. 22, 2020, trial date is set in the case.
Combatting elder abuse and financial fraud targeted at seniors is a key priority of the U.S. Department of Justice and the U.S. Attorney’s Office in Utah. Elder abuse is a serious crime against some of our nation’s most vulnerable citizens, affecting at least 10 percent of older Americans every year. Together with federal, state, local and tribal partners, the Department of Justice is committed to combatting all forms of elder abuse and financial exploitation through enforcement actions, training and resources, research, victim services, and public awareness. This holistic and robust response demonstrates the Department’s unwavering dedication to fighting for justice for older Americans.
Assistant U.S. Attorneys in Utah are prosecuting the case. The FBI is investigating the case. Agents with Utah Adult Probation and Parole have made signification contributions to the investigation.
Intersection of Domestic Violence and Guns in Utah: Using Federal Toolbox to Target Domestic Violence in UtahRead the Press Release
SALT LAKE CITY – Federal prosecutors and their law enforcement partners, concerned about how domestic violence disproportionately impacts Utah’s homicide rate, are targeting offenders who attempt to buy guns illegally and are prohibited under federal law from possessing them. In some years, more than half of Utah homicides have a connection to domestic violence.
Many of Utah’s domestic violence homicides involve firearms. Studies show that the presence of a gun in a domestic violence situation increases the risk of homicide. Prosecutors are also concerned about the impact of COVID-19 on domestic violence cases in Utah. COVID-19 presents a perfect storm of conditions for victims of domestic violence that requires concern and immediate action. What could be worse for a domestic violence victim than isolation with an abuser coupled with reduced access to shelter, resources, lawyers, advocates, and court proceedings?
In Utah, increased calls for police assistance with domestic violence incidents have been reported along the Wasatch Front during stay-at-home directives. In some areas around the country, police leaders are concerned that reported domestic violence crime is actually under reporting what is happening behind closed doors.
Last November, Attorney General William Barr launched Project Guardian with the goal of stopping violence before it starts. Federal prosecutors and law enforcement officers are using federal firearms laws as a “homicide prevention” tool in Utah. For example, under federal law those who are subject to a protective order or who have been convicted of a domestic violence misdemeanor are prohibited from possessing a gun. Tragedies happen when these restricted persons possess firearms, and in Utah, that tragedy too often involves a domestic violence homicide.
According to FBI statistics, 157,414 individuals with a misdemeanor crime of domestic violence conviction were denied firearms purchases between Nov. 30, 1998 and April 30, 2020. Another 65,032, subject to a protection or restraining order for domestic violence, were denied firearms purchases.
“Project Guardian – launched by Attorney General Barr – will get Utah law enforcement to the next level in fighting gun violence. Our intent is to spot the potential for violence, and address it before the violence occurs. If we can prevent even one domestic violence homicide, we are on our way to making a significant impact in Utah,” U.S. Attorney John W. Huber said today. “It’s the victims who motivate my partners and me to pursue these cases using federal law.”
U.S v Kelly
On April 13, 2020, several Emery County Sheriff’s Deputies responded to a possible domestic violence incident based on a report that Vincent Mac Kelly had destroyed part of the interior of a family member’s home and fired several rounds from a firearm into a trailer and in the front yard of his residence in Huntington, Utah.
According to federal charging documents, as the deputies approached the residence, Kelly ran into the trailer. While officers were trying to speak to him, Kelly opened the door and threw a knife at them. He later threw a revolver and a lemon at the officers. A live round of ammunition was in the revolver he threw at officers along with seven spent cartridge casings.
Kelly, according to the complaint, eventually came to the door and was taken into custody. Officers found five live.357 rounds of ammunition in his pocket. They also found drugs, large knives and speed loaders containing .357 ammunition in his trailer. Speed loaders are used to quickly reload revolvers with all the ammunition at once rather than one cartridge at a time.
The complaint charges Kelly, age 46, with possession of a firearm by a convicted felon and possession of a firearm and ammunition while subject to a protective order. He faces up to 10 years in federal prison for each count if he is convicted of the charges.
U.S. v King
James Albert King, age 71, of Magna, is charged with making a false statement during the acquisition of a firearm and possession of a firearm while subject to a protective order in a complaint filed Tuesday.
On Dec, 6, 2019, King went to Federal Firearms Licensee (FFL) store and selected a semi-automatic pistol (essentially an AR-15). According to a complaint filed in the case, as King filled out an ATF form to buy the gun, he answered “no” to the question asking if he was subject to a court order restraining him from harassing, stalking, or threatening your child or an intimate partner or child of such partner. Based on the information King provided, the FFL submitted the ATF form. A background check indicated that King was prohibited and the purchase should have been denied.
However, an employee at the business missed the denial indicator, and King was allowed to purchase the weapon for $1,037.09. A short time later, the FFL realized the purchase should have been denied. A manager made several calls to King to request he bring the firearm back to the store. In a conversation Dec. 13, 2019, King told the manager that he could not return the firearm because it had been stolen from his vehicle in a Walmart parking lot.
Agents with the Utah Department of Public Safety’s State Bureau of Investigation and FBI special agents took King into custody Thursday night. During the execution of a search warrant, agents recovered the semi-automatic weapon he purchased in December along with two other handguns. He was booked into jail on the federal warrant and two Class A protective order violations. ($25,000 bail set Friday morning by state judge).
Each of the two counts in the complaint, false statement during the acquisition of a firearm, and possession of a firearm while subject to a protective order, carry potential 10-year sentences.
US v Lowery
Shane Curtis Lowery, age 55, of Hurricane, was charged with possession of a firearm and ammunition by a person subject to a domestic violence protective order in a complaint filed in November. On Nov. 2, 2019, Hurricane Police Department officers responded to a report of a family fight. According to the complaint, witnesses told officers that Lowery had been seen leaving the property of his wife. Among other things, all four tires on her rental car had been punctured.
A district court judge in St. George issued a protective order for his wife in June 2019 that prohibits the defendant from being within 500 feet of his wife and her residence. It also prohibits him from trying to commit or threatening to commit any form of violence and prohibits him from possessing firearms or ammunition.
Officers located Lowery later on Nov. 2, 2019, in LaVerkin and placed him under arrest for the protective order violation and domestic violence related charges. Individuals approached the officers and told them Lowery had threatened to harm to his wife. They also told officers he had a firearm in his truck.
With a court-authorized search warrant, Lowery’s truck was searched and a Hi-Point 9mm handgun with a magazine containing eight bullets was located. Two additional magazines for the handgun and an additional box of ammunition were also located in the truck. The LaVerkin Police Department assisted with the case.
A federal grand jury returned an indictment charging Lowery in December 2019.
Lowery pleaded guilty to the charge and was sentenced to 13 months in federal prison and three years of supervised release on May 1, 2020.
US v Tatton
Sentencing is set for July 13, 2020, for David Lynn Tatton, age 50, of Nephi, who pleaded guilty in February to making a false statement during an attempted acquisition of a firearm. Tatton admitted that on Nov. 29, 2019, he made a false statement in an attempt to purchase two shotguns. As a part of the purchase process, Tatton indicated on an ATF form that he was not subject to a court order restraining him from harassing, stalking, or threatening an intimate partner – a statement he knew was false. The Utah State Bureau of Investigation is investigating the case.
US v Shaw
Daniel Wayne Shaw, age 37, of Tooele, is charged with making a false statement in an indictment returned Jan. 22, 2020. According to the indictment, in an attempt to buy a handgun, Shaw made a false statement on an ATF form. He falsely answered “no” to a question asking whether he had been convicted of a misdemeanor count of domestic violence in any court. The answer was untrue, the indictment alleges. A trial is set for June 16, 2020, in federal court in St. George. The trial date may be changed based on the coronavirus outbreak.
West Valley City, Midvale Receive Emergency DOJ Funding to Support Law Enforcement, First RespondersRead the Press Release
SALT LAKE CITY – Two Utah more cities are receiving U.S. Department of Justice funding to support a broad range of activities as they respond to the coronavirus. The funding is coming from DOJ’s Bureau of Justice Assistance through the Coronavirus Emergency Funding Program.
West Valley City will receive $333,508 and Midvale is getting $46,274. West Jordan and Murray received grants last week.
“The Department of Justice is providing communities with funding to use for critical public safety needs they have for police officers and medical personnel as they work on the front lines to keep us safe through this challenging crisis,” U.S. Attorney John W. Huber said today. “These aren’t one-size-fits all grants. Each city has flexibility to use these dollars to support the challenges they are facing in their communities.”
The Emergency Supplemental Funding Program allows states, local governments, and federally recognized tribal governments to apply for critical funds to use as they respond to the coronavirus. Those receiving grants have considerable latitude in the use of the funds. The grant funding can support things like law enforcement overtime, equipment, hiring, supplies such as gloves, masks, and sanitizer for police officers and medical personnel, training, travel expenses, and addressing the needs of inmates in state, local, and tribal prisons, jails, and detention centers.
Funding for other Utah cities and counties is pending. Agencies that were eligible for the fiscal year 2019 State and Local Edward Byrne Memorial Justice Assistance Grant Program are candidates for this emergency supplemental funding.
Hallows Pleads Not Guilty to Possession of Child Pornography in Felony Information Filed in Federal CourtRead the Press Release
SALT LAKE CITY – Timothy James Hallows, age 62, of Kaysville, pleaded not guilty to possession of child pornography during an initial appearance in U.S. District Court in Salt Lake City Friday.
The charges, filed May 8, 2020, allege Hallows possessed material containing an image of child pornography involving a minor who had not attained 12 years of age. A change of plea hearing has been scheduled for June 30, 2020, at 3 p.m. before U.S. Magistrate Judge Dustin B. Pead. Hallows is in federal custody.
Prosecutors in the U.S. Attorney’s Office and the Davis County Attorney’s Office have worked together to determine the best venue to prosecute the case. Those discussions resulted in the filing of the Felony Information last week. This coordination happens regularly in child exploitation cases because of the significant penalties available in the federal system. Law enforcement officers working these cases are often members of the FBI’s Child Exploitation Task Force, which allows them to 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.”
“State court prosecutors and law enforcement officers are experienced and accomplished in developing cases. Unfortunately, and all too often, inadequate state court sentences fail to deliver measured justice that matches the seriousness of the offenses. Federal court convictions can typically bring more appropriate sentences for those who would collect images of sexual violence against children. In this case, state and federal law enforcement partners jointly determined that federal court offered a more appropriate venue for prosecution,” Huber said.
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.
As a part of sentencing in a case, prosecutors will ask the judge to impose a term of supervised release for the defendant following the completion of their sentence. In child exploitation cases, it can be up to life with a minimum of five years. (There is no parole in federal court cases.)
A Felony Information is not a finding of guilt. A defendant charged in a Felony Complaint is presumed innocent unless or until proven guilty in court.
Murray, West Jordan Get Emergency Supplemental Funding to Support Efforts to Respond to CoronavirusRead the Press Release
SALT LAKE CITY – Two Utah cities are receiving U.S. Department of Justice funding to support a broad range of activities as they respond to the coronavirus. The funding is coming from DOJ’s Bureau of Justice Assistance through the Coronavirus Emergency Funding Program.
Murray will receive $112,282 and West Jordan is getting $127,429.
“The Department of Justice provides communities with funding to use for critical public safety needs. Police officers and other front line responders will have access to this assistance as they keep residents and themselves safe through this challenging crisis,” U.S. Attorney John W. Huber said today. “These cities know best how to use the supplemental funds, and they are afforded considerable flexibility to use these dollars to protect and serve their neighborhoods.”
The Emergency Supplemental Funding Program allows states, local governments, and federally recognized tribal governments to apply for critical funds to use as they respond to the coronavirus. Those receiving grants have considerable latitude in the use of the funds. The grant funding can support things like law enforcement overtime, equipment, hiring, supplies such as gloves, masks, and sanitizer for police officers and medical personnel, training, travel expenses, and addressing the needs of inmates in state, local, and tribal prisons, jails, and detention centers.
Funding for other Utah cities and counties is pending. Agencies that were eligible for the fiscal year 2019 State and Local Edward Byrne Memorial Justice Assistance Grant Program are candidates for this emergency supplemental funding.
Pandemic Shutdown Not Stopping Child Exploitation Cases, According to Utah Federal Prosecutors, FBIRead the Press Release
SALT LAKE CITY – While many Utahns have spent the last two months staying home and staying safe as a result of COVID-19, online predators are threatening the safety of our children as they continue to exploit children in Utah and around the country.
Federal prosecutors and the FBI saw the potential risk coming in March. “Due to school closings as a result of COVID-19, children will potentially have an increased online presence and/or be in a position that puts them at an inadvertent risk. Due to this newly developing environment, the FBI is seeking to warn parents, educators, caregivers, and children about the dangers of online sexual exploitation and signs of child abuse,” an FBI national press release cautioned.
“During the pandemic, parents have taken on more and more during stay at home directives. Work, school, and parenting blend into demanding days. With everyone at home together, we may expect that the threat of child sexual exploitation would diminish. Unfortunately, that does not appear to be the case,” U.S. Attorney John W. Huber said today.
As a parent himself, Huber understands parents are focused on many things. However, it is important for them to remain vigilant in protecting their children from sexual predators. “I can also assure parents, who are feeling the strain in many areas that my office and our law enforcement partners are working as aggressively as ever to target these criminals and keep them away from our children,” Huber said.
"Kids should be aware that the idea of "stranger danger" also applies when they go online because predators will misrepresent themselves to gain their trust," said Paul Haertel, Special Agent in Charge of the FBI in Salt Lake City. "When a child is sexually exploited, there can be life-long consequences, but the crime is preventable. The FBI will do our part to go after those who hurt society's most vulnerable, and we urge parents and caregivers to do their part too through education and awareness."
Online sexual exploitation comes in many forms, according to the FBI national release. Individuals may coerce victims into providing sexually explicit images or videos of themselves. Other offenders may make casual contact with children online, gain their trust, and introduce sexual conversation that increases in egregiousness over time. Ultimately, this activity may result in maintaining an online relationship and the exchange of illicit images, the release says. Others may try to entice minors to meet them for sexual activity. A list of recommendations for parents and guardians is included with this press release.
Examples of recent cases:
Michael L. Travers, age 53, a long-haul trucker from Diberville, Mississippi, was sentenced Tuesday to 17½ years in federal prison by U.S. District Judge Ted Stewart in Salt Lake City. Travers pleaded guilty to one count of production of child pornography in December. As a part of the plea agreement, he admitted that between January and April of 2019, he produced sexually explicit images of Minor A, who was 8 years old at the time. Distribution of child pornography, coercion and enticement, and possession of child pornography counts were dismissed Tuesday as a part of the plea agreement.
The Travers case was investigated by the West Valley City Police Department.
Federal complaints filed on April 27, 2020, charge three individuals with possession of child pornography. The cases include:
Scott Andrew Clark, age 44, of Ogden faces possession of child pornography charges following an investigation by the Riverdale Police Department, the Weber County Sheriff’s Office, and a special agent with the U.S. Department of Homeland Security Investigations, who is assigned to the FBI’s Child Exploitation Task Force (CETF) and the Utah Internet Crimes Against Children Task Force (ICAC).
Clark came to the attention of law enforcement officers on April 7, 2020, when officers of the Riverdale Police Department responded to a call reporting a suspicious individual sitting in a parked vehicle next to a retail business. An employee of the business made the call after observing the same individual and vehicle the previous day. Officers approached the car and identified Clark, who admitted he was a registered sex offender. He also admitted he was in possession of child pornography. A forensic analysis conducted by the Weber County Sheriff’s Office revealed child pornography on two of the six devices located in Clark’s vehicle. The complaint alleges that there were more than 5,000 images and 200 videos of child pornography recovered on the devices, including images of infants and other children. Clark has a 2003 state court conviction in Utah for attempted sexual abuse of a minor.
Michael W. Fritchen, age 64, of North Salt Lake City, also charged with possession of child pornography, came to attention of law enforcement through a tip from the National Center for Missing and Exploited Children (NCMEC). The CyberTip reported an image depicting the sexual exploitation of a child approximately 4-6 years old.
An investigation by a Layton City police officer, working as a task force officer with the FBI’s task force, led law enforcement officers to Fritchen, whose criminal history includes a 1993 conviction on several counts of committing an indecent liberties on children. The case was conducted before a United States Air Force general court martial. He received a 10-year sentence.
A forensic review of a desktop seized from Fritchen’s home in North Salt Lake City uncovered more than 13,000 possible images depicting the sexual exploitation of children.
Miguel Angel Jimenez, age 24, of Magna, is charged with possession of child pornography following an investigation by a Layton City police officer working as a task force officer with the FBI’s task force. On Feb. 2, 2020, the Layton officer was conducting an undercover operation portraying himself as a 13-year-old girl when a chat began with an individual later identified as Jimenez. According to the complaint, Jimenez engaged in sexual conversation with someone he believed to be a 13-year-old child and arranged to meet the child for sex on multiple occasions; however, he never appeared at the meeting location.
The investigation continued leading law enforcement to an address in Magna where they found the defendant, a registered sex offender, who was on probation for enticing a minor and possessing child pornography in Salt Lake County. Jimenez was taken into custody when he appeared for a meeting with a probation officer. Numerous files of child pornography were found on his phone, including 773 images of child pornography and 507 videos, according to the complaint.
Clark, Fritchen, and Jimenez each face up to 20 years in prison, with a 10-year minimum mandatory sentence, if convicted of the charges in the complaint. They are currently in state custody.
Complaints are not findings of guilt. Individuals charged in complaints are presumed innocent until proven guilty in court.
Recommendations from the FBI’s National Press Office release issued March 23, 2020:
Parents and guardians can take the following measures to help educate and prevent children from becoming victims of child predators and sexual exploitation during this time of national emergency:
Online Child Exploitation
- Discuss Internet safety with children of all ages when they engage in online activity.
- Review and approve games and apps before they are downloaded.
- Make sure privacy settings are set to the strictest level possible for online gaming systems and electronic devices.
- Monitor your children’s use of the Internet; keep electronic devices in an open, common room of the house.
- Check your children’s profiles and what they post online.
- Explain to your children that images posted online will be permanently on the Internet.
- Make sure children know that anyone who asks a child to engage in sexually explicit activity online should be reported to a parent, guardian, or other trusted adult and law enforcement.
- Remember that victims should not be afraid to tell law enforcement if they are being sexually exploited. It is not a crime for a child to send sexually explicit images to someone if they are compelled or coerced to do so.
Child Abuse Awareness
- Teach your children about body safety and boundaries.
- Encourage your children to have open communication with you.
- Be mindful of who is watching your child for childcare/babysitting, playdates and overnight visits.
- If your child discloses abuse, immediately contact local law enforcement for assistance.
- Children experiencing hands-on abuse may exhibit withdrawn behavior, angry outbursts, anxiety, depression, not wanting to be left alone with a specific individual, non-age appropriate sexual knowledge, and an increase in nightmares.
Victim Reporting
Reporting suspected sexual exploitation can help minimize or stop further victimization, as well as lead to the identification and rescue of other possible victims. If you believe you are—or someone you know is—the victim of child sexual exploitation:
- Contact your local law enforcement agency.
- Contact your local FBI field office or submit a tip online at tips.fbi.gov.
- File a report with the National Center for Missing & Exploited Children (NCMEC) at 1-800-843-5678 or online at www.cybertipline.org.
When reporting, be as descriptive as possible in the complaint form by providing as much of the following as possible:
- Name and/or user name of the subject.
- Email addresses and phone numbers used by the subject.
- Websites used by the subject.
- Description of all interaction with the subject.
- Try to keep all original documentation, emails, text messages, and logs of communication with the subject. Do not delete anything before law enforcement is able to review it.
- Tell law enforcement everything about the online encounters—we understand it may be embarrassing for the parent or child, but providing all relevant information is necessary to find the offender, stop the abuse, and bring him/her to justice.
More information about the FBI’s guidance on child sexual exploitation and protecting your kids
Omnicare Agrees to Pay over $15 Million to Resolve Allegations It Improperly Dispensed Opioids at Long-Term Care FacilitiesRead the Press Release
SALT LAKE CITY – Omnicare, Inc., a subsidiary of CVS Health and a provider of pharmacy services to long-term care facilities, has agreed to pay the United States a $15.3 million civil penalty to resolve allegations that it violated federal law by, among other things, allowing opioids and other controlled substances to be dispensed without a valid prescription, United States Attorney John W. Huber announced today.
The Cincinnati-based Omnicare operates “closed door” pharmacies – meaning they are not open to the public – that deliver controlled substances to nursing homes and other long-term care facilities (LTCFs). Omnicare makes daily deliveries of prescription medications to residents of LTCFs, and it also pre-positions limited stockpiles of controlled substances at LTCFs in “emergency kits,” which are to be dispensed to patients on an emergency basis. These emergency kits, which often include opioids and other controlled substances that are commonly abused and diverted, remain part of Omnicare’s inventory and must be tightly controlled and tracked. The controlled substances may be dispensed only pursuant to a valid prescription.
The United States alleged that Omnicare violated the federal Controlled Substances Act in its handling of emergency prescriptions, its controls over the emergency kits, and its processing of written prescriptions that lacked required elements such as the prescriber’s signature or DEA number. The federal investigation found that Omnicare failed to control emergency kits by improperly permitting LTCFs to remove opioids and other controlled substances from emergency kits days before doctors provided a valid prescription. The investigation also revealed that Omnicare had repeated failures in its documentation and reporting of oral emergency prescriptions of Schedule II controlled substances.
The Omnicare pharmacies in Utah are Omnicare of Salt Lake City and Omnicare of St. George.
As part of the settlement agreement announced today, Omnicare agreed to pay the $15.3 million civil penalty and entered into a Memorandum of Agreement with the Drug Enforcement Administration that will require Omnicare to increase its auditing and monitoring of emergency kits placed at LTCFs.
“In Utah, we understand the dangers involved with opioids. We understand how carefully they must be managed and accounted for. Omnicare failed on several fronts, including dispensing opioids without a valid prescription and failing to report losses of opioids and other drugs,” U.S. Attorney John W. Huber said today. “Controls are in place to make sure that companies dispensing these drugs are doing it correctly and safely. When these controls are not followed, penalties like we see in this case will be imposed.”
“Omnicare failed in its responsibility to ensure proper controls of medications used to treat some of the most vulnerable among us,” said DEA Acting Administrator Uttam Dhillon. “DEA is committed to keeping our communities safe by holding companies like Omnicare accountable for such failures, while ensuring continuity of care and necessary access to emergency prescription drug supplies.”
This matter was investigated by the DEA’s Field Divisions in Denver, Los Angeles, San Francisco and Seattle, in conjunction with five United States Attorney’s Offices: the District of Utah, the Central District of California, the Eastern District of California, the District of Colorado, and the District of Oregon. The settlement agreement, which was finalized on May 6, resolves Omnicare’s civil liability for the alleged CSA violations in those five districts.
The claims settled by this civil agreement are allegations. In entering into this settlement, Omnicare did not admit to any liability.
Assistant United States Attorneys Carra Cadman and Sandra Steinvoort of the Affirmative Civil Enforcement section in the U.S. Attorney’s Office in Salt Lake City represented Utah in the matter.
U.S. Attorney for Utah Recognizes Law Enforcement Officers as National Police Week BeginsRead the Press Release
SALT LAKE CITY – U.S. Attorney John W. Huber is recognizing the service and sacrifice of federal, state, local, and tribal law enforcement as National Law Enforcement Week begins. The week will be observed Sunday, May 10 through Saturday, May 16, 2020.
“As we begin another week amidst the upheaval of the pandemic, may we pause to remember our law enforcement heroes,” Huber said today. “These men and women continue to risk their own personal safety on our behalf. They are selfless, brave and dedicated to preserving peace and ensuring justice.”
“There is no more noble profession than serving as a police officer,” said Attorney General William P. Barr. “The men and women who protect our communities each day have not just devoted their lives to public service, they’ve taken an oath to give their lives in order to ensure our safety. And they do so not only in the face of hostility from those who reject our nation’s commitment to the rule of law, but also in the face of evolving adversity – such as an unprecedented global health pandemic. This week, I ask all Americans to join me in saying ‘thank you’ to our nation’s federal, state, local, and tribal law enforcement officers. Their devotion and sacrifice to our peace and security will not be taken for granted.”
“Utah police officers make our communities better places to live in ways both large and small. We observe daily examples of their commitment to the communities they serve, from metro Salt Lake City to the Navajo Nation in southern Utah. Police officers do extraordinary things, often making split-second decisions. They deserve our appreciation and thanks,” Huber said. “We also remember those officers who have given their lives in the line of duty in Utah. This week gives us a chance to pay tribute to the service of those who serve us.”
In 1962, President Kennedy issued the first proclamation for Peace Officers Memorial Day and National Police Week to remember and honor law enforcement officers for their service and sacrifices. Peace Officers Memorial Day, which every year falls on May 15, specifically honors law enforcement officers killed or disabled in the line of duty.
Each year, during National Police Week, our nation celebrates the contributions of law enforcement from around the country, recognizing their hard work, dedication, loyalty and commitment to keeping our communities safe. This year the COVID-19 pandemic has underscored law enforcement officers’ courage and unwavering devotion to the communities they swore to serve.
The names of the fallen officers who have been added in 2020 to the wall at the National Law Enforcement Memorial will be read on Wednesday, May 13, 2020, during a Virtual Annual Candlelight Vigil. Because public events have been suspended as a result of COVID-19, the vigil will be livestreamed to the public at 8:00 pm (EDT). To register to view this free online event, please www.LawMemorial.org/webcast.
To learn more about National Police Week and the virtual candlelight vigil, please visit www.policeweek.org.
Salt Lake City Man Charged with Armed Robberies of Convenience Stores in Three CitiesRead the Press Release
SALT LAKE CITY – A federal complaint filed Wednesday charges Hector Fernando De La Rosa, age 22, of Salt Lake City with brandishing a firearm during three convenience store robberies in Murray, Salt Lake City, South Salt Lake City in late January.
The complaint alleges De La Rosa brandished a firearm during a Jan. 21, 2020, robbery of a Maverik convenience store at 4800 South 530 West in Murray, a Jan. 22 robbery of a 7-Eleven at 1157 West California Avenue in Salt Lake City, and a Jan. 28, 2020, robbery of a 7-Eleven at 2700 South 420 East in South Salt Lake City.
De La Rosa is charged with three counts of robbery and three counts of brandishing a firearm during each of the robberies. He is also charged with possession of a firearm and ammunition following a felony conviction.
According to the complaint, two individuals went into the Maverik in Murray and the 7- Eleven in Salt Lake City. One of the suspects, wearing a gray Puma hoodie, has been identified as De La Rosa. The second individual has not been identified. Cigarettes were taken from the Maverik and a firearm was brandished to get the cashier to open cash registers. The complaint alleges the suspects told the cashier he would be shot if he did not open the cash register. The defendants stole $246 from the store.
De La Rosa and the second suspect used similar tactics in the robbery the next day at 7- Eleven in Salt Lake City, the complaint alleges. As they approached the register, the cashier saw one suspect pull out a handgun and pull the slide back. The second suspect, De La Rosa, also pointed a handgun at the cashier. The cashier ran to a backroom and called the police. One suspect immediately fled the store. The suspect wearing the gray hoodie, De La Rosa, tried to grab the cash register before fleeing as well.
De La Rosa is charged with the Jan. 28 robbery at the 7-11 in South Salt Lake City. Cigarettes and cash were stolen from the store along with the cashier’s cell phone.
Using store surveillance video, law enforcement officers were able to identify a white 1992 Toyota Camry and determined it had been stolen in West Valley City. A day later, West Valley City police officers were involved in a vehicle pursuit involving a different stolen car, the complaint alleges. The driver crashed into several parked cars. Officers ultimately spiked the tires, but the driver kept driving. He later left the car and fled from police officers. He was ultimately tackled and arrested.
The suspect was identified as Hector De La Rosa. He was wearing the same clothing worn in the South Salt Lake City robbery. A black revolver was also located in the stolen vehicle De La Rosa had been driving just prior to his arrest.
The potential maximum penalty for each of the three robberies is 20 years in federal prison. The potential penalty for possession of a firearm following a felony conviction is 10 years in prison. Each count of brandishing a firearm during a crime of violence has a potential life sentence with a seven-year minimum mandatory sentence. Penalties imposed for each brandishing count run consecutive to any sentence imposed for the robberies.
De La Rosa is currently in state custody. An initial appearance will be set for him.
Complaints are not findings of guilt. Individuals charged in a complaint are presumed innocent unless or until proven guilty in court.
FBI special agents and Salt Lake City police officers are investigating the case with assistance with the West Valley City Police Department. The U.S. Attorney’s Office is prosecuting the case.
Utah Court Orders Halt to Sale of Silver Product Fraudulently Touted as Covid-19 CureRead the Press Release
SALT LAKE CITY – A federal court in Utah has entered an injunction halting the sale of a fraudulent coronavirus (COVID-19) treatment, the Department of Justice announced today.
In response to a civil complaint and accompanying court papers filed on April 27, 2020, in Salt Lake City, the U.S. District Court for the District of Utah issued a temporary restraining order against defendants Gordon Pedersen of Cedar Hills, Utah, and his companies, My Doctor Suggests LLC and GP Silver LLC. The civil complaint alleges that the defendants are fraudulently promoting and selling various silver products for the treatment and prevention of COVID-19. The court’s order temporarily enjoins the defendants from continuing to sell or distribute their silver products for the diagnosis, cure, mitigation, treatment, or prevention of any disease, including COVID-19.
A separate court order temporarily freezes defendants’ assets in order to preserve the court’s ability to grant effective final relief and to maintain the status quo. A hearing on the government’s request for a preliminary injunction is set for May 12, 2020.
“The Department of Justice will take swift action to protect consumers from those who would recklessly exploit this public health crisis by offering phony cure-alls for the treatment and prevention of COVID-19,” said Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division. “We work closely with our partners at the Food and Drug Administration and will move quickly to shut down schemes that promote and sell unlawful products during this pandemic.”
“Even in a time of great uncertainty, there are at least two unchanging realities. There are those who would unlawfully exploit our vulnerabilities, and there are those who will hold such parties accountable,” said U.S. Attorney John W. Huber for the District of Utah. “COVID-19 is a dangerous disease, and American consumers must have accurate and reliable information as they make important health decisions.”
The complaint alleges that, beginning in early 2020, the defendants conducted a scheme to defraud consumers throughout the United States, promoting and selling silver products based on fraudulent claims of protection against, and treatment for, COVID-19. According to the complaint, the defendants have made a wide variety of false and misleading claims touting silver products as a preventative for COVID-19, including that having silver in the bloodstream will “usher” any coronavirus out of the body and that “it has been proven that Alkaline Structured Silver will destroy all forms of viruses, it will protect people from the Coronavirus.”
“The FDA will continue to help ensure those who place profits above the public health during the COVID-19 pandemic are stopped,” said Judy McMeekin, Pharm.D., Associate Commissioner for Regulatory Affairs, U.S. Food and Drug Administration. “We are fully committed to working with the Department of Justice to take appropriate action against those jeopardizing the health of Americans by offering and distributing products with unproven claims to prevent or treat COVID-19.”
The enforcement action is being prosecuted by Assistant U.S. Attorney Joel A. Ferre of the U.S. Attorney’s Office for the District of Utah and Trial Attorneys Speare I. Hodges and Sarah Williams of the Department of Justice, Civil Division’s Consumer Protection Branch. The FDA’s Office of Criminal Investigations and Office of the Chief Counsel is also assisting with the case.
The claims made in the complaint are allegations that, if the case were to proceed to trial, the government must prove to receive a permanent injunction against the defendants.
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 (the Coronavirus) by calling the National Center for Disaster Fraud (NCDF) hotline (1-866-720-5721) or by e-mailing the NCDF at [email protected].
Court Orders Halt to Sale of Silver Product Fraudulently Touted as COVID-19 CureRead the Press Release
A federal court in Utah has entered an injunction halting the sale of a fraudulent coronavirus (COVID-19) treatment, the Department of Justice announced today.
In response to a civil complaint and accompanying court papers filed on April 27, 2020, in Salt Lake City, the U.S. District Court for the District of Utah issued a temporary restraining order against defendants Gordon Pedersen of Cedar Hills, Utah, and his companies, My Doctor Suggests LLC and GP Silver LLC. The civil complaint alleges that the defendants are fraudulently promoting and selling various silver products for the treatment and prevention of COVID-19. The court’s order temporarily enjoins the defendants from continuing to sell or distribute their silver products for the diagnosis, cure, mitigation, treatment, or prevention of any disease, including COVID-19. A separate court order temporarily freezes defendants’ assets in order to preserve the court’s ability to grant effective final relief and to maintain the status quo. A hearing on the government’s request for a preliminary injunction is set for May 12, 2020.
“The Department of Justice will take swift action to protect consumers from those who would recklessly exploit this public health crisis by offering phony cure-alls for the treatment and prevention of COVID-19,” said Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division. “We work closely with our partners at the Food and Drug Administration and will move quickly to shut down schemes that promote and sell unlawful products during this pandemic.”
“Even in a time of great uncertainty, there are at least two unchanging realities. There are those who would unlawfully exploit our vulnerabilities, and there are those who will hold such parties accountable,” said U.S. Attorney John W. Huber for the District of Utah. “COVID-19 is a dangerous disease, and American consumers must have accurate and reliable information as they make important health decisions.”
The complaint alleges that, beginning in early 2020, the defendants conducted a scheme to defraud consumers throughout the United States, promoting and selling silver products based on fraudulent claims of protection against, and treatment for, COVID-19. According to the complaint, the defendants have made a wide variety of false and misleading claims touting silver products as a preventative for COVID-19, including that having silver in the bloodstream will “usher” any coronavirus out of the body and that “it has been proven that Alkaline Structured Silver will destroy all forms of viruses, it will protect people from the Coronavirus.” Additionally, the defendants assert that once in the blood stream, silver nanoparticles can block the virus from attaching to their cells, and thus “prevent[] the disease totally and completely.”
“The FDA will continue to help ensure those who place profits above the public health during the COVID-19 pandemic are stopped,” said Judy McMeekin, Pharm.D., Associate Commissioner for Regulatory Affairs, U.S. Food and Drug Administration. “We are fully committed to working with the Department of Justice to take appropriate action against those jeopardizing the health of Americans by offering and distributing products with unproven claims to prevent or treat COVID-19.”
The enforcement action filed today is being prosecuted 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 of the U.S. Attorney’s Office for the District of Utah, with support from FDA’s Office of Criminal Investigations and Office of the Chief Counsel.
The claims made in the complaint are allegations that, if the case were to proceed to trial, the government must prove to receive a permanent injunction against the defendants.
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 (the Coronavirus) by calling the National Center for Disaster Fraud (NCDF) hotline (1-866-720-5721) or by e-mailing the NCDF at [email protected].
Georgia Residents Charged in Utah Bank Fraud Scheme, Targeted Homeless Individuals to Cash ChecksRead the Press Release
SALT LAKE CITY – Three Georgia residents, accused of running an interstate criminal fraud scheme and preying on vulnerable individuals to facilitate their crimes, are charged in a 28-count federal complaint unsealed Friday.
Malik Wright, age 22, Tony Hutchinson, age 22, and Joseph D. Jackson, age 22, all of Atlanta, are charged with one count of conspiracy to commit bank fraud, 15 counts of possession of counterfeit securities, and 12 counts of aggravated identity theft in the complaint.
“These serious allegations outline a troubling scenario – out-of-state suspects recruited vulnerable adults into their plan that targeted Utah financial institutions for fraud,” U.S. Attorney John W. Huber said today. “Rest assured, during Utah’s stay at home directive, my office and our partners continue our work to keep Utah safe.”
The complaint alleges the defendants traveled from Atlanta to various states, including Utah, in rental cars. They obtained bank account numbers and bank routing information for checking accounts for several businesses, including stealing checks from the mail. Jackson and other conspirators used the stolen information to make counterfeit checks that were drawn against the victim businesses’ accounts.
Jackson directed Wright and Hutchinson to the location of homeless shelters. Wright and Hutchinson then targeted homeless individuals, who had government-issued identification cards, to act as check cashers of the counterfeit checks, the complaint alleges.
Once Wright and Hutchinson identified viable check cashers, conspirators, including Jackson, made counterfeit checks payable to the check cashers. Wright and Hutchinson took the check cashers to a Walmart and purchased clothing for them to change into so they would not appear to be homeless individuals, according to the complaint. After getting new clothes, the check cashers were driven to locations where the counterfeit checks were negotiated.
According to the complaint, on Dec. 10, 2019, the defendants attempted to cash seven checks totaling $13,860.95 at various Zions Bank branches drawn on the account of a Utah business. As a result of these efforts, the bank lost $11,882.73. A day later, the defendants attempted to cash seven checks totaling $11,882.51 at various Zions Bank branches. Six of the checks were cashed, causing a $9,893.10 to Zions Bank.
Law enforcement officers stopped Wright and Hutchinson on Dec. 11, 2019, after employees at a Layton branch of Zions Bank alerted police that an individual was in the bank attempting to cash a fraudulent check. The suspect fled the bank and got into a Silver GMC Yukon. Officers were able to find the vehicle and conduct a traffic stop. Wright and Hutchinson were in the front seats of the vehicle.
The individual who went into the bank was interviewed and told officers that earlier in the day, Wright and Hutchinson approached him near the homeless shelter, flashed a large amount of cash, and asked him if he wanted to make some money. Wright and Hutchinson drove the individual to Layton and told him he would be given checks with his name on them. He said he would go into banks, cash the checks, and give the money to Hutchinson. He would then receive a small portion of the money back.
At the time of the traffic stop, Wright and Hutchinson were in possession of 15 counterfeit checks purporting to be drawn on numerous actual business accounts. According to the complaint, two other homeless men passed fraudulent checks in Utah on behalf of Wright, Hutchinson, and Jackson on Dec. 10, 2019 and Dec. 11, 2019.
The complaint alleges Wright, Hutchinson, and Jackson are part of a group that travels around the country running bank fraud schemes that prey on homeless and vulnerable individuals to cash checks for them. According to the complaint, they traveled in Colorado, Ohio, Pennsylvania, Kentucky, and other states to achieve the goals of the conspiracy.
Wright and Hutchinson are in custody in Utah. Jackson was arrested recently in Georgia and has an appearance in federal court in Atlanta Monday. Wright and Hutchinson have detention hearings Tuesday afternoon.
The potential maximum penalty for the conspiracy to commit bank fraud is 30 years in prison. Each of the possession of counterfeit securities counts has a potential maximum penalty of 10 years. Aggravated identity theft counts have mandatory minimum two-year penalties that run consecutive to the sentence for any other counts.
Postal inspectors from the U.S. Postal Inspection Service and officers with the Layton Police Department are investigating the case.
Complaints are not findings of guilt. Individuals charged in complaints are presumed innocent until proven guilty in court.
Utah U.S. Attorney Highlights DOJ China Initiative During Remarks at Salt Lake City Security WebinarRead the Press Release
SALT LAKE CITY – Utah U.S. Attorney John W. Huber shared highlights of the Department of Justice’s China Initiative with law enforcement agents and officers, private sector business representatives, university officials, and others at a Salt Lake City Security Webinar Wednesday morning. The U.S. Department of Homeland Security and the FBI sponsored the webinar.
Huber’s remarks focused on the economic and national security threats China poses to the United States and the importance of defending the country against these efforts.
Huber referenced testimony given by Assistant Attorney General John C. Demers before the Senate Judiciary Committee on Dec. 12, 2018. “In many of the cases we see, China’s strategy is the same: Rob, Replicate, and Replace. Rob the American company of its intellectual property, Replicate the technology, and Replace the American company in the Chinese market and, one day, in the global market,” Demers said in his testimony.
“About 80 percent of all federal economic espionage prosecutions have conduct that would benefit China and around 60 percent of federal trade secret theft cases have some nexus to China,” Huber said.
Utah has experienced its own China-related espionage case, Huber told those participating in the webinar. Ron Rockwell Hansen, a Syracuse, Utah, resident and former Defense Intelligence Agency officer, was sentenced to 10 years in federal prison in September 2019 after admitting to spying and selling classified information to China.
Huber concluded with key takeaways for those involved in the webinar, including identifying trade secrets and valuable intellectual property; instituting protections such as non-disclosure agreements, access controls, and need-to-know rules; employee training; and developing an internal employee reporting mechanism for suspicious activities.
“Utah companies should take affirmative steps to protect their hard-earned intellectual property and trade secrets,” Huber said. “The Department of Justice will respond to the economic aggression and other national security threats from the Chinese government. United States Attorneys will hold accountable, and expose the tactics of those who would steal American innovation.”
FBI, St. George Police Department Investigation Leads to Arrest of Individual in Connection to Jewelry Store RobberyRead the Press Release
ST. GEORGE, UT – A Las Vegas man, who posed as an FBI agent and then robbed Seven Oaks Fine Jewelers in St. George at gunpoint in September, is in federal custody following an investigation by the FBI and the St. George Police Department.
Kevin White, age 57, of Las Vegas, was arrested Monday afternoon in Las Vegas on a federal complaint and arrest warrant charging him with one count of Hobbs Act robbery. The FBI Criminal Apprehension Team, comprised of officers and agents from the FBI, Las Vegas Metro Police Department, the Henderson Police Department, and the North Las Vegas Police Department. FBI agents from St. George and the St. George Police Department also assisted.
The federal complaint was unsealed Tuesday morning during an initial appearance for White in St. George. White will remain in custody. A detention hearing may be held later.
White, who has used at least 17 aliases, is currently on federal supervised release after serving 165 months in prison for an armed robbery of a Las Vegas jewelry store. According to a sentencing memo filed in the Nevada case, White is an eight-time felon who has committed multiple robberies.
According to the complaint, two employees were working at the family-owned jewelry store in St. George on Sept. 28, 2019, when a black male entered the store about 1:05 p.m. He was wearing a straw cowboy hat, a black jacket with “FBI” on the back, and a metal FBI badge on a lanyard around his neck. He was carrying a black portfolio, handcuffs, and a handheld radio. He also had a handgun in a holster on his right hip.
The man represented to the store employees that he was an FBI agent, the complaint alleges. He retrieved multiple FBI wanted posters from the portfolio and showed them to the victim employees. He told the employees that the fugitives had been in the St. George area and asked the employees if they recognized any of the fugitives. He also asked whether anyone else was working in the store. The employees told him they did not recognize the fugitives and they were the only ones working in the store at that time.
The complaint alleges the man placed the posters back in the folder and began to leave the store. He then turned toward a display case and began asking questions about several jewelry items. He told the employees he “came in looking for a suspect, might be leaving with an engagement ring.” The two employees, one standing behind the counter and one a few feet from the man, displayed several jewelry items for the man.
According to the complaint, at one point the man directed the employee standing near him to get behind the display counter with the other employee and pulled out a black handgun. The complaint alleges the man, referring to a silent alarm, told the employees, “If you hit the button, I’ll kill you.” The man grabbed the jewelry items from the display counter and put them into a bag. He also told the employees he would kill them if the exit doors were locked. The victim employees feared for their lives.
He left the store with 27 pieces of jewelry valued at $39,214, the complaint alleges. In his haste, he left behind a brown fabric bag and his black portfolio.
Investigators submitted the bag and portfolio with its contents to the FBI Laboratory for forensic analysis. Agents were notified April 13, 2020, that a male DNA profile had been obtained from the portfolio in the textured material near the exterior stitching. The DNA profile matched White. Physical descriptions of the suspect provided by the victim employees and surveillance images from the business, matched White’s appearance.
The potential maximum penalty for a Hobbs Act robbery is 20 years in prison.
Complaints are not findings of guilt. Individuals charged in a complaint are presumed innocent unless or until proven guilty in court.
Utah U.S. Attorney’s Office Joins the Department of Justice to Commemorate National Crime Victims’ Rights WeekRead the Press Release
SALT LAKE CITY – The U.S. Attorney’s Office in Utah is joining the Department of Justice and communities nationwide in observing National Crime Victims’ Rights Week, celebrating victims’ rights, protections and services throughout the week. This theme of this year’s observance, which takes place April 19-25, is “Seek Justice, Ensure Victims' Rights, Inspire Hope.”
“Every year, millions of Americans suffer the shock and trauma of criminal victimization, affecting their well-being and sense of security and dignity,” said Attorney General William P. Barr. “To these victims, we affirm our unwavering commitment to supporting them in their hour of need. We also commend the thousands of victim advocates and public safety professionals who labor tirelessly to secure victims’ rights and support survivors.”
“We remember victims of crime every day we come to work, but during this special week, we recognize them and recommit ourselves to serving their needs,” U.S. Attorney John W. Huber said. “While we cannot take back the crime that has traumatized victims, we will always seek justice for them and ensure we hold offenders accountable. We also recognize the many victim advocates and support agencies in Utah who work to support victims of crime.”
“While we have made tremendous progress driving down crime and violence across the country, far too many Americans continue to suffer the pain and loss of criminal victimization,” said Katharine T. Sullivan, Principal Deputy Assistant Attorney General of the Office of Justice Programs. “This week, we stand by these survivors and their families, and we pledge our ongoing support to the countless men and women who serve them with such extraordinary skill and compassion.”
Ronald Reagan proclaimed the first Victims’ Rights Week in 1981, putting crime victims' rights, needs, and concerns in a prominent spot on the American agenda. He also established the President's Task Force on Victims of Crime, which laid the groundwork for a national network of services and legal safeguards for crime victims. President Trump and his administration have implemented historic levels of support for victim assistance and victim compensation.
Some 3.3 million Americans age 12 and older were victims of violent crime in 2018, according to the National Crime Victimization Survey. The Office for Victims of Crime (OVC), part of the Justice Department’s Office of Justice Programs, supports more than 7,000 local victim assistance programs and victim compensation programs in every state and U.S. territory. Funds for these programs come from the Crime Victims Fund, which is made up of federal criminal fines, penalties and bond forfeitures.
During National Crime Victims’ Rights Week, victim advocacy organizations, community groups and state, local and tribal agencies traditionally host rallies, candlelight vigils, and other events to raise awareness of victims’ rights and services. This year, many communities are organizing virtual gatherings and online public awareness campaigns.
This year’s commemoration began yesterday, 25 years to the day when a truck bomb exploded in front of the Alfred P. Murrah Federal Building in Oklahoma City, Oklahoma, taking the lives of 168 people, including 19 children, as well as injuring hundreds of others. The mass murder remains the worst act of domestic terrorism in our nation’s history and led to the establishment of the Antiterrorism Emergency Reserve, which is administered by OVC, and has been used to provide direct services to hundreds of victims of mass violence and terrorism.
“Crime victims deserve to know that they have the encouragement and support of the American people,” said OVC Director Jessica E. Hart. “I hope that citizens throughout the nation will take the opportunity this week to remember all victims of crime and their heroic stories of survival. I encourage everyone to also find meaningful ways to express their appreciation to the many committed and compassionate service providers across the country who work tirelessly supporting these survivors.”
This year, the annual National Crime Victims’ Service Awards Ceremony will be postponed until a time when award recipients can be honored in person. During the ceremony, OVC will present awards recognizing individuals and organizations from across the nation for their outstanding service on behalf of crime victims. The awardees will be selected from public nominations in 11 categories, including federal service, special courage, public policy, and victim services. Visit www.ovc.gov/gallery to learn more about past recipients.
The U.S. Attorney’s Office in Utah also holds an awards ceremony to recognize individuals for their work providing service for victims. It will be scheduled later.
For more information on how to create your own public campaigns to raise awareness about crime victims’ rights online and at events throughout the year, please visit: https://ovc.ncjrs.gov/ncvrw2020/overview.html.
Salt Lake County Man Charged in Schemes to Defraud Health Care Benefit ProgramsRead the Press Release
SALT LAKE CITY – A Salt Lake County man, who managed and operated Eco Apothecary and Eco Pharmacy in South Jordan from early 2016 to Feb. 26, 2020, is facing federal criminal and civil cases related to an alleged scheme to defraud health care benefit programs.
James Vaughn Ammon aka James Vaughn Soto, age 56, is charged with four counts of health care fraud and one count of aggravated identity theft in the criminal case. A grand jury returned a five-count indictment in late February. According to the indictment, Eco Apothecary and Eco Pharmacy’s primary business was providing prescriptions to patients. The indictment alleges that Ammon devised a scheme to defraud Medicare and Medicaid.
According to the indictment, the businesses were enrolled as pharmaceutical providers with Medicaid and Medicare. To receive reimbursement for a covered service, the businesses were required to submit a claim with the required information identifying the patient and services rendered.
The indictment alleges Ammon unlawfully enriched himself by, among other things, submitting and causing the submission of false claims to Medicare and Medicaid. In furtherance of the scheme, the indictment alleges Ammon filed claims for drugs that were not dispensed to patients, filed claims for larger quantities of drugs than were actually dispensed, filed claims for dispensing drugs even though he did not have a valid prescription from a physician, and fabricated and forged State of Utah pharmacy licensing documents.
Each count of health care fraud carries a potential maximum penalty of 10 years in prison and a fine of $250,000. The potential penalty for aggravated identity theft is a two-year mandatory minimum sentence. The court has issued a summons to Ammon to appear on the charges.
Indictments are not findings of guilt. Individuals charged in an indictment are presumed innocent unless or until proven guilty in court.
A parallel civil action filed by the U.S. Attorney’s Office alleges Eco Pharmacy, Eco Apothecary and Ammon violated the Controlled Substances Act and the False Claims Act by filling and billing Medicare for prescriptions after Eco Apothecary lost its state-issued license; billing for medications, including controlled substances, for which there was not a proper prescription or authorization; billing for medications not dispensed and delivered to patients or billing for quantities larger than what were actually dispensed to patients; forging licensing documents from the State of Utah; and failing to keep proper records of controlled substances.
Many of the medications not delivered were important life-saving medications of elderly patients. One patient, a recent organ transplant recipient, did not receive scheduled anti-rejection medication. This patient was then unable to fill the prescription at another pharmacy because Medicare showed that it had paid for the medications.
According to the civil complaint, from 2018 through 2019, Eco Apothecary and Ammon caused Medicare Part D sponsors to pay at least $1,662,077 for prescriptions they dispensed. During the same time period, Eco Pharmacy and Ammon caused Medicare to pay at least $1,895.264 for prescriptions they dispensed. The civil complaint alleges Eco Apothecary and Ammon caused Medicare and Medicaid plan sponsors to pay at least $274,129 and Medicaid at least $11,013 for at least 2,576 prescriptions after it was no longer licensed by the State of Utah to operate as a pharmacy and dispense medication.
The civil complaint seeks damages and injunctive relief against Ammon and the two businesses. It asks the court to impose a civil penalty of $64,820 for each individual prescription that was filled in violation of the Controlled Substance Act and a civil penalty of $15,050 for each violation of the Controlled Substances Act’s record-keeping provisions.
As required by law, civil violations of the False Claims Act subject violators to treble damages.
The U.S. Attorney’s office is also seeking an order stopping the defendants and their employees or representatives from directly or indirectly distributing, dispensing, or processing with intent to distribute any controlled substances.
Department of Justice Makes $850 Million Available to Help Public Safety Agencies Address Covid-19 PandemicRead the Press Release
SALT LAKE CITY – The Department of Justice today announced that it is making $850 million available to help public safety agencies respond to the challenges posed by the outbreak of COVID-19. The Coronavirus Emergency Supplemental Funding program, authorized by the recent stimulus legislation signed by President Trump, will allow eligible state, local and tribal governments to apply immediately for these critical funds. The department is moving quickly to make awards, with the goal of having funds available for drawdown within days of the award.
There are 19 eligible jurisdictions in Utah with eligible allocations ranging from $58,008 to $716,764. The total for Utah is $2,649,050. The jurisdictions are county or municipal government agencies.
In addition to the Utah allocations, the Navajo Nation is eligible for an allocation of $486,348.
“We are all in this together, and so I am very pleased to announce on behalf of the Department of Justice that more than $2.6 million is available to go directly to our front line public safety officers in Utah to help with the COVID-19 pandemic,” U.S. Attorney John W. Huber said today. “The President, Congress and the United States Attorney General know how important our first responders are, and this supplemental funding will further bolster our counties and cities in their public safety missions.”
“This is an unprecedented moment in our nation’s history and an especially dangerous one for our front-line law enforcement officers, corrections officials, and public safety professionals,” said Office of Justice Programs Principal Deputy Assistant Attorney General Katharine T. Sullivan. “We are grateful to the Congress for making these resources available and for the show of support this program represents.”
The solicitation, posted by the Bureau of Justice Assistance in the Justice Department’s Office of Justice Programs (OJP), will remain open for at least 60 days and be extended as necessary. OJP will fund successful applicants as a top priority on a rolling basis as applications are received. Funds may be used to hire personnel, pay overtime costs, cover protective equipment and supplies, address correctional inmates’ medical needs and defray expenses related to the distribution of resources to hard-hit areas, among other activities. Grant funds may be applied retroactively to Jan. 20, 2020, subject to federal supplanting rules.
Agencies that were eligible for the fiscal year 2019 State and Local Edward Byrne Memorial Justice Assistance Grant Program are candidates for this emergency funding. A complete list of eligible jurisdictions and their allocations can be found at https://bja.ojp.gov/program/fy20-cesf-allocations.
For more information about the Coronavirus Emergency Supplemental Funding program, please visit https://bja.ojp.gov/funding/opportunities/bja-2020-18553. For more information about the Office of Justice Programs, please visit https://www.ojp.gov/.
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.
Lead Defendant Pleads Guilty in Elder Fraud Scheme Targeting 80-Year Old Widow in Washington, UtahRead the Press Release
ST. GEORGE, UT – Frank Gene Powell, age 51, of Hurricane, Utah, the lead defendant in a significant federal elder fraud case targeting an 80-year-old widow in Washington, Utah, has reached a plea agreement with federal prosecutors.
Powell pleaded guilty to all six counts he was charged with in a superseding indictment, including conspiracy to commit wire fraud, money laundering, two counts of destruction of records in a federal investigation, concealment of a document or object in an attempt to impair the object’s integrity or availability for use in an official proceeding, and tampering with a witness.
Powell was on state parole at the time of his federal crimes after serving nearly 30 years in state prison for murder. While he was in prison, he received a 1-to-15 year sentence for sexually assaulting an inmate.
The plea agreement includes a stipulated sentence of 120 months in federal prison and an agreement that Powell will pay almost $274,000 in restitution to the victim of the fraud. The victim is identified as L.N. in court documents. The sentence and restitution are subject to the approval of the Court at sentencing. Powell will also forfeit two vehicles and faces a money judgment of $273,849.20. Sentencing for Frank Powell is set for May 20, 2020, at 2 p.m. before U.S. District Judge David Nuffer. The hearing will be in St. George.
“Powell is a career criminal who has fended off decades of rehabilitative attempts in the Utah state criminal justice system. He’s a convicted murderer and sexual predator, who has now turned his criminal efforts to elder fraud while on state parole,” U.S. Attorney for Utah John W. Huber said today. “With these guilty pleas, he stands convicted of unconscionable crimes against a senior member of the St. George community. A 10-year sentence is very appropriate in this case and will help ensure that Utah will not fall victim to his crimes again.”
As a part of his plea agreement, Frank Powell admitted that from around March 2019 and continuing until about Feb. 6, 2020, he conspired with others to devise a fraud scheme with the specific intent to obtain money or property by means of fraudulent representations or promises. He agreed with his codefendants to engage in a scheme to defraud L.N. by soliciting money and assets in exchange for false promises to perform work for L.N. He also admitted he engaged a fake romantic relationship with L.N. as a part of his scheme to defraud her.
He admitted that he purchased a 2019 GMC Sierra using money he received as a part of his scheme to defraud L.N. Using money derived from criminal conduct is money laundering. Several of the counts he pleaded guilty to relate to efforts he took to impede and obstruct the investigation of the case, including concealing cellular phones and money.
Powell also pleaded guilty to witness tampering admitting that in November 2019, he engaged in misleading conduct toward L.N. in an attempt to persuade her from communicating with law enforcement officers investigating the case. Through written correspondence and phone calls, Powell and his codefendant, Faye Renteria, age 42, of Hurricane, made misleading statements and attempted to persuade L.N. in an effort to help them avoid prosecution.
Frank Powell’s mother and codefendant, Gloria Jean Powell, age 74, of St. George, also has reached a plea agreement in the case. She pleaded guilty to one count of concealment of a document or object, admitting she concealed or attempted to conceal U.S. currency with the intent to impair an FBI investigation. She admitted she aided and abetted her son, Frank Powell, and her daughter, Angela McDuffie, age 53, of Lehi, in the conduct.
Sentencing for Gloria Jean Powell is set for May 6, 2020, at 4 p.m. in St. George before Judge Nuffer. Her plea agreement includes a stipulated sentence of three months in prison or credit for time served at the date of sentencing, whichever is further from her Feb. 4, 2020, arrest date. She also will forfeit a 2010 Toyota Venza as a part of the case resolution.
Eight defendants were charged in a 10-count superseding indictment returned in early February. The indictment alleges the defendants, who have family relationships, conspired to obtain money and assets from the victim in exchange for false promises to perform work on her property. To further advance the scheme, one of the defendants engaged in romance fraud by enticing the victim to enter into a romantic relationship. He used the romantic relationship to manipulate the victim into giving him money and assets.
The indictment includes one count of wire fraud conspiracy, five counts of money laundering conspiracy – spending, two counts of destruction or concealment of records and tangible objects in a federal investigation, one count of concealment of a document or object, and one count of tampering with a witness or victim.
In addition to Frank Gene Powell, Gloria Jean Powell, McDuffie, and Renteria, other defendants include Bubby Mern Shepherd, age 58, of Lodi, California, Terrence Quincy Powell, age 23, of St. George, Rocky James Powell Mott, age 40, of Hurricane, and Martell Taz Powell, age 25, of Cedar City.
Charges are pending against the remaining six defendants in the case. A change of plea hearing is set for Monday in St. George for Renteria.
Combatting elder abuse and financial fraud targeted at seniors is a key priority of the U.S. Department of Justice and the U.S. Attorney’s Office in Utah. Elder abuse is a serious crime against some of our nation’s most vulnerable citizens, affecting at least 10 percent of older Americans every year. Together with federal, state, local and tribal partners, the Department of Justice is committed to combatting all forms of elder abuse and financial exploitation through enforcement actions, training and resources, research, victim services, and public awareness. This holistic and robust response demonstrates the Department’s unwavering dedication to fighting for justice for older Americans.
Assistant U.S. Attorneys in Utah are prosecuting the case. The FBI is investigating the case. Agents with Utah Adult Probation and Parole have made signification contributions to the investigation.
U.S. Attorney Urging Utahns to Report Suspected Fraud Schemes Related to Covid-19 to National HotlineRead the Press Release
SALT LAKE CITY– U.S. Attorney John W. Huber is urging Utahns to report suspected fraud schemes related to COVID-19 (the Coronavirus) by calling the National Center for Disaster Fraud (NCDF) hotline (1-866-720-5721) or to the NCDF e-mail address [email protected].
In coordination with the Department of Justice, Attorney General William Barr has directed U.S. Attorneys to prioritize the investigation and prosecution of Coronavirus fraud schemes.
“For most of us, times like these bring out the best in us as we look out for our family, neighbors, and care for the vulnerable,” U.S. Attorney John W. Huber said. “However, fraudsters are always looking for a new way to make money and exploit the fears of those who are at risk. They will start touting miracle cures for COVID-19 and ask for money to support fraudulent causes or cures. Those who get involved in these fraud schemes are no different than the snake oil salesmen of the past.”
Huber said he is particularly concerned about senior citizens in Utah who are often vulnerable to fraud schemes. “Those who seek to profit by scamming others, especially our elders, must be stopped,” Huber said. “Anyone who hears about a suspected fraud scheme related to COVID-19 should report it immediately through the National Center for Disaster Fraud hotline.”
There is currently no known cure for COVID-19, and citizens should avoid interacting with or buying anything from those who claim there is.
Examples of these schemes include:
- Individuals and businesses selling fake cures for COVID-19 online and engaging in other forms of fraud.
- Phishing emails from entities posing as the World Health Organization or the Centers for Disease Control and Prevention.
- Malicious websites and apps that appear to share Coronavirus-related information to gain and lock access to your devices until payment is received.
- Seeking donations fraudulently for illegitimate or non-existent charitable organizations.
- Medical providers obtaining patient information for COVID-19 testing and then using that information to fraudulently bill for other tests and procedures.
The Department of Justice has directed U.S. Attorneys around the nation to appoint a Coronavirus Fraud Coordinator to serve as the legal counsel for matters relating to the Coronavirus, direct the prosecution of Coronavirus-related crimes, and to conduct outreach and awareness activities. The Coronavirus Fraud Coordinator in Utah is Assistant U.S. Attorney Jacob Strain.
The NCDF can receive and enter complaints into a centralized system that can be accessed by all U.S. Attorneys, as well as Justice Department litigating and law enforcement components to identify, investigate and prosecute fraud schemes. The NCDF coordinates complaints with 16 additional federal law enforcement agencies, as well as state Attorneys General and local authorities.
To find more about Department of Justice resources and information, please visit www.justice.gov/coronavirus.
Jury Finds Los Angeles Businessman Guilty in $1 Billion Biodiesel Tax Fraud SchemeRead the Press Release
A federal jury in Salt Lake City, Utah, convicted California businessman Lev Aslan Dermen, also known as Levon Termendzhyan, of criminal charges today relating to a $1 billion renewable fuel tax credit fraud scheme, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division, U.S. Attorney John W. Huber for the District of Utah, Don Fort Chief of Internal Revenue Service (IRS) - Criminal Investigation, Acting Special Agent-in-Charge Lance Ehrig for the Denver Area Office of Environmental Protection Agency (EPA) - Criminal Investigation Division, and Special Agent-in-Charge Michael Mentavlos for the Denver Area Office of Defense Criminal Investigative Service.
“Today’s guilty verdict brings Lev Dermen and his coconspirators to justice. They created and implemented this massive biofuel scheme to fund their greed at the expense of all taxpayers,” said Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division. “The conviction should serve as clear notice that we will vigorously prosecute those criminals who engage in any form of tax fraud.”
“These guilty verdicts show that no amount of bank accounts, shell companies, burner phones, or transfers of millions of dollars to foreign countries will stop the Department of Justice, the U.S. Attorney’s Office, and our law enforcement partners from tracking down money stolen from the government and holding criminals responsible for their wrongdoing,” said U.S. Attorney John W. Huber for the District of Utah. “I also want to thank the investigators, prosecutors, and support professionals who have dedicated so much time to this important case.”
“The biofuel tax credit program was established by the government to promote a clean fuel alternative to traditional fuel options. Mr. Dermen used his company Noil Energy Group to conspire with the Kingston family to corrupt the biofuel tax credit program in an effort to steal over $1 Billion from tax payers and launder the proceeds of this fraud,” said Don Fort, Chief of IRS Criminal Investigation. “This trial was the culmination of years of investigative effort that traced money through a variety of countries and states through a complicated fraud scheme to eventually put money in the pockets of Mr. Dermen. The complicated nature of the scheme shows the determination with which the defendants had to defraud the American public for the sole purpose of lining their own pockets.”
“The defendants claimed both EPA Renewable Fuel Standard (RFS) program credits and IRS tax credits for biodiesel fuel that did not exist, defrauding taxpayers out of hundreds of millions of dollars,” said Lance Ehrig, EPA Acting Special Agent in Charge. “With this action EPA and its enforcement partners are continuing to protect both the integrity of the RFS program and the American taxpayer.”
“The Defense Criminal Investigative Service (DCIS) will investigate all allegations of financial crimes impacting the Department of Defense," stated Michael Mentavlos, Special Agent in Charge, DCIS Southwest Field Office. "DCIS, along with our investigative partners, will diligently pursue all appropriate criminal, civil and administrative actions against individuals who violate the taxpayer's trust for illicit financial gain.”
According to evidence presented at a seven-week trial, Dermen was the owner and operator of Noil Energy Group, a California-based fuel company; SBK Holdings USA, a Beverly Hills real estate investment company; and Viscon International, a Nevada fuel additive corporation. From 2010 to 2016, Dermen conspired with the owners and operators of Washakie Renewable Energy (Washakie), a Utah-based biodiesel company, including its Chief Executive Officer Jacob Kingston, his brother, Chief Financial Officer Isaiah Kingston, and others, including their mother, Rachel Kingston, and Jacob Kingston’s wife, Sally, to fraudulently claim more than $1 billion in renewable fuel tax credits from the IRS.
The IRS administers refundable federal tax credits designed to increase the amount of renewable fuel used and produced in the United States. As part of their scheme, Dermen and Jacob Kingston shipped millions of gallons of biodiesel within the U.S. and from the U.S. to foreign countries and back again to create the appearance that qualifying renewable fuel was being produced and sold. They also doctored production and transportation records to substantiate Washakie’s fraudulent claims for more than $1 billion in IRS renewable fuel tax credits and credits related to the EPA renewable fuel standard. To further create the appearance they were buying and selling qualifying fuel, the coconspirators cycled more than $3 billion through multiple bank accounts.
As a result of the fraudulent claims, the IRS paid more than $511 million to Washakie and the Kingstons that was distributed between them and Dermen. Jacob and Isaiah Kingston sent more than $21 million in fraudulent proceeds to SBK Holdings USA, Inc., Dermen’s California-based company, and sent $11 million to an associate of Dermen’s at his request. Jacob Kingston used $1.8 million of the fraud proceeds to buy Dermen a 2010 Bugatti Veyron, and they exchanged gifts including a chrome Lamborghini and a gold Ferrari.
Dermen and Jacob Kingston also laundered $3 million through Dermen’s company, Noil Energy Group, to purchase a mansion in Sandy, Utah for Jacob Kingston and his wife Sally. Dermen also laundered $3.5 million through his California company, SBK Holdings USA, Inc., to purchase a mansion in Huntington Beach, California.
Throughout the scheme, Dermen assured Jacob Kingston that he and the Kingstons would be immune from criminal prosecution because they would be protected by Dermen’s “umbrella” of corrupt law enforcement personnel. Jacob and Isaiah Kingston transferred over $134 million in fraudulent proceeds to companies in Turkey and Luxembourg at Dermen’s direction, in purported payment for protection.
The jury found Dermen guilty of conspiracy to commit mail fraud, conspiracy to commit money laundering, and money laundering concealment money laundering, and expenditure money laundering.
The Kingstons, who are all members of the Davis County Cooperative Society, also known as the “Order,” each pleaded guilty on July 19, 2019 for their role in this scheme. Jacob Kingston pleaded guilty to crimes relating to the $1 billion biofuel fraud, including conspiracy to commit mail fraud, aiding and assisting in the filing of false claims with the IRS, conspiracy to commit money laundering, and conspiracy to obstruct justice. In his plea agreement, he admitted to laundering fraudulent proceeds through Order-related entities and transferring millions in fraudulent proceeds to Order-related entities. Jacob Kingston admitted to conspiring to obstruct justice for attempting to bribe government officials, tamper with witnesses, and destroy evidence based on his agreeing with his family to hide evidence and replace computer hard drives once they learned of an impending search warrant. Under the terms of his plea agreement, Jacob Kingston faces a maximum of thirty years in prison. He also faces a period of supervised release and other monetary penalties. Sentencing has not yet been scheduled.
Isaiah Kingston pleaded guilty to his role in the scheme, including to conspiracy to commit mail fraud, aiding and assisting in filing false claims with the IRS, conspiracy to commit money laundering, and conspiracy to obstruct justice. Under the terms of his plea agreement, he faces a maximum of 20 years in prison. Rachel Kingston pleaded guilty to conspiracy to commit mail fraud, conspiracy to commit money laundering, money laundering, and obstruction of justice. In her plea agreement, she admitted to creating false invoices, backdating documents, and concealing records in advance of a federal search warrant. She faces a maximum of 15 years in prison. Sally Kingston pleaded guilty to conspiracy to commit mail fraud and conspiracy to commit money laundering; she faces a maximum of 15 years in prison. They each also face a period of supervised release. As part of their plea agreements, the Kingstons will be ordered to pay $511 million in restitution to the United States and to forfeit the proceeds of their crimes.
Jacob and Isaiah Kingston both testified at Dermen’s trial.
U.S. District Judge Jill N. Parrish will set Dermen’s sentencing at a later date. At sentencing, he faces a maximum sentence of 20 years in prison for conspiracy to commit mail fraud, conspiracy to commit money laundering, and concealment money laundering, and 10 years in prison for expenditure money laundering. He also faces a period of supervised release, restitution, and monetary penalties.
Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney Huber commended special agents of IRS-Criminal Investigation, EPA Criminal Investigation Division, and Department of Defense DCIS who conducted the investigation. They also thanked Trial Attorneys Richard M. Rolwing, Leslie A. Goemaat, and Arthur J. Ewenczyk and Senior Litigation Counsel John E. Sullivan of the Tax Division, who are prosecuting the case.
They also thanked the U.S. Department of Justice Criminal Division’s Office of International Affairs, as well as law enforcement partners in the Grand Duchy of Luxembourg and the Republic of Malta for their assistance in the case.
Additional information about the Tax Division and its enforcement efforts may be found on the Division’s website.
Jury Finds Los Angeles Businessman Guilty in $1 Billion Biodiesel Tax Fraud SchemeRead the Press Release
SALT LAKE CITY – A federal jury in Salt Lake City convicted California businessman Lev Aslan Dermen, also known as Levon Termendzhyan, of criminal charges Monday afternoon relating to a $1 billion renewable fuel tax credit fraud scheme.
The convictions were announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division, U.S. Attorney John W. Huber for the District of Utah, Don Fort Chief of Internal Revenue Service (IRS) - Criminal Investigation, Acting Special Agent-in-Charge Lance Ehrig of the Denver Area Office of Environmental Protection Agency (EPA) - Criminal Investigation Division, and Special Agent-in-Charge Michael Mentavlos of the Denver Area Office of Defense Criminal Investigative Service.
“Today’s guilty verdict brings Lev Dermen and his coconspirators to justice. They created and implemented this massive biofuel scheme to fund their greed at the expense of all taxpayers,” said Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division. “The conviction should serve as clear notice that we will vigorously prosecute those criminals who engage in any form of tax fraud.”
“These guilty verdicts show that no amount of bank accounts, shell companies, burner phones, or transfers of millions of dollars to foreign countries will stop the Department of Justice, the U.S. Attorney’s Office, and our law enforcement partners from tracking down money stolen from the government and holding criminals responsible for their wrongdoing,” said U.S. Attorney John W. Huber for the District of Utah. “I also want to thank the investigators, prosecutors, and support professionals who have dedicated so much time to this important case.”
“The defendants claimed both EPA Renewable Fuel Standard (RFS) program credits and IRS tax credits for biodiesel fuel that did not exist, defrauding taxpayers out of hundreds of millions of dollars,” said Lance Ehrig, EPA Acting Special Agent in Charge. “With this action EPA and its enforcement partners are continuing to protect both the integrity of the RFS program and the American taxpayer.”
“The biofuel tax credit program was established by the government to promote a clean fuel alternative to traditional fuel options. Mr. Dermen used his company Noil Energy Group to conspire with the Kingston family to corrupt the biofuel tax credit program in an effort to steal over $1 Billion from tax payers and launder the proceeds of this fraud,” said Don Fort, Chief of IRS Criminal Investigation. “This trial was the culmination of years of investigative effort that traced money through a variety of countries and states through a complicated fraud scheme to eventually put money in the pockets of Mr. Dermen. The complicated nature of the scheme shows the determination with which the defendants had to defraud the American public for the sole purpose of lining their own pockets.”
“The Defense Criminal Investigative Service (DCIS) will investigate all allegations of financial crimes impacting the Department of Defense," stated Michael Mentavlos, Special Agent in Charge, DCIS Southwest Field Office. "DCIS, along with our investigative partners, will diligently pursue all appropriate criminal, civil and administrative actions against individuals who violate the taxpayer's trust for illicit financial gain.”
According to evidence presented at a seven-week trial, Dermen was the owner and operator of Noil Energy Group, a California-based fuel company; SBK Holdings USA, a Beverly Hills real estate investment company; and Viscon International, a Nevada fuel additive corporation. From 2010 to 2016, Dermen conspired with the owners and operators of Washakie Renewable Energy (Washakie), a Utah-based biodiesel company, including its Chief Executive Officer Jacob Kingston, his brother, Chief Financial Officer Isaiah Kingston, and others, including their mother, Rachel Kingston, and Jacob Kingston’s wife, Sally, to fraudulently claim more than $1 billion in renewable fuel tax credits from the IRS.
The IRS administers refundable federal tax credits designed to increase the amount of renewable fuel used and produced in the United States. As part of their scheme, Dermen and Jacob Kingston shipped millions of gallons of biodiesel within the U.S. and from the U.S. to foreign countries and back again to create the appearance that qualifying renewable fuel was being produced and sold. They also doctored production and transportation records to substantiate Washakie’s fraudulent claims for more than $1 billion in IRS renewable fuel tax credits and credits related to the EPA renewable fuel standard. To further create the appearance they were buying and selling qualifying fuel, the coconspirators cycled more than $3 billion through multiple bank accounts.
As a result of the fraudulent claims, the IRS paid more than $511 million to Washakie and the Kingstons that was distributed between them and Dermen. Jacob and Isaiah Kingston sent more than $21 million in fraudulent proceeds to SBK Holdings USA, Inc., Dermen’s California-based company, and sent $11 million to an associate of Dermen’s at his request. Jacob Kingston used $1.8 million of the fraud proceeds to buy Dermen a 2010 Bugatti Veyron, and they exchanged gifts including a chrome Lamborghini and a gold Ferrari.
Dermen and Jacob Kingston also laundered $3 million through Dermen’s company, Noil Energy Group, to purchase a mansion in Sandy, Utah for Jacob Kingston and his wife Sally. Dermen also laundered $3.5 million through his California company, SBK Holdings USA, Inc., to purchase a mansion in Huntington Beach, California.
Throughout the scheme, Dermen assured Jacob Kingston that he and the Kingstons would be immune from criminal prosecution because they would be protected by Dermen’s “umbrella” of corrupt law enforcement personnel. Jacob and Isaiah Kingston transferred over $134 million in fraudulent proceeds to companies in Turkey and Luxembourg at Dermen’s direction, in purported payment for protection.
The jury found Dermen guilty of conspiracy to commit mail fraud, conspiracy to commit money laundering, and money laundering concealment money laundering, and expenditure money laundering.
The Kingstons, who are members of the Davis County Cooperative Society, also known as the “Order,” each pleaded guilty on July 19, 2019 for their role in this scheme. Jacob Kingston pleaded guilty to crimes relating to the $1 billion biofuel fraud, including conspiracy to commit mail fraud, aiding and assisting in the filing of false claims with the IRS, conspiracy to commit money laundering, and conspiracy to obstruct justice.
In his plea agreement, he admitted to laundering fraudulent proceeds through Order-related entities and transferring millions in fraudulent proceeds to Order-related entities. Jacob Kingston admitted to conspiring to obstruct justice for attempting to bribe government officials, tamper with witnesses, and destroy evidence based on his agreeing with his family to hide evidence and replace computer hard drives once they learned of an impending search warrant. Under the terms of his plea agreement, Jacob Kingston faces a maximum of thirty years in prison. He also faces a period of supervised release and other monetary penalties. Sentencing has not yet been scheduled.
Isaiah Kingston pleaded guilty to his role in the scheme, including to conspiracy to commit mail fraud, aiding and assisting in filing false claims with the IRS, conspiracy to commit money laundering, and conspiracy to obstruct justice. Under the terms of his plea agreement, he faces a maximum of 20 years in prison. Rachel Kingston pleaded guilty to conspiracy to commit mail fraud, conspiracy to commit money laundering, money laundering, and obstruction of justice. In her plea agreement, she admitted to creating false invoices, backdating documents, and concealing records in advance of a federal search warrant. She faces a maximum of 15 years in prison. Sally Kingston pleaded guilty to conspiracy to commit mail fraud and conspiracy to commit money laundering; she faces a maximum of 15 years in prison. They each also face a period of supervised release. As part of their plea agreements, the Kingstons will be ordered to pay $511 million in restitution to the United States and to forfeit the proceeds of their crimes.
Jacob and Isaiah Kingston both testified at Dermen’s trial.
U.S. District Judge Jill N. Parrish will set Dermen’s sentencing at a later date. At sentencing, he faces a maximum sentence of 20 years in prison for conspiracy to commit mail fraud, conspiracy to commit money laundering and concealment money laundering, and 10 years in prison for expenditure money laundering. He also faces a period of supervised release, restitution, and monetary penalties.
Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney Huber commended special agents of IRS-Criminal Investigation, EPA Criminal Investigation Division, and Department of Defense DCIS who conducted the investigation. They also thanked Trial Attorneys Richard M. Rolwing, Leslie A. Goemaat, and Arthur J. Ewenczyk and Senior Litigation Counsel John E. Sullivan of the Tax Division, who are prosecuting the case.
They also thanked the U.S. Department of Justice Criminal Division’s Office of International Affairs, as well as law enforcement partners in the Grand Duchy of Luxembourg and the Republic of Malta for their assistance in the case.
Department of Justice Charges Unprecedented Number of Elder Fraud Defendants Nationwide and Launches HotlineRead the Press Release
SALT LAKE CITY – U.S. Attorney John W. Huber of Utah joined Attorney General William P. Barr, FBI Director Christopher A. Wray, and Chief Postal Inspector Gary R. Barksdale today in announcing the largest coordinated sweep of elder fraud cases in history. This year, prosecutors charged more than 400 defendants, far surpassing the 260 defendants charged in cases as part of last year’s sweep. In each case, offenders allegedly engaged in financial schemes that targeted or largely affected seniors. In total, the charged elder fraud schemes caused alleged losses of more than $1 billion dollars.
Four Utah cases (20 total defendants) are included in the coordinated sweep.
- U.S. v Fairbanks: Thomas Fairbanks of Logan is charged with wire fraud, securities fraud and money laundering in what the indictment alleges was a fraudulent investment scheme. As a part of the scheme, the indictment alleges Fairbanks gained the trust of a vulnerable adult and diverted at least $462,000 of her money for personal use. Trial is set for June 8, 2020, in the case.
- U.S. v Anyanwu: Eight individuals are charged in connection with a fraud scheme primarily targeting widowed women over 65 years old. The indictment alleges that over approximately two years, the defendants defrauded dozens of victims out of more than $6 million. The defendants and coconspirators used social media and social gaming applications to target widows. The indictment alleges they created false identities to befriend potential victims, feigned romantic interest, and eventually pressured them to send money to the defendants. Trial is set for May in the case.
- U.S. v Powell: Eight individuals are charged in connection with an alleged fraud scheme to obtain money and assets from a 90-year-old widow in Washington, Utah. The charges allege the defendants, who have family relationships, conspired to obtain money and assets from the victim in exchange for false promises to perform work on her property. To further advance the scheme, one of the defendants engaged in romance fraud by enticing the victim to enter into a romantic relationship. The charges alleges he used the romantic relationship to manipulate the victim into giving him money and assets. An April trial has been set in the case.
- U.S. v Rust: For a period of at least 20 years, Gaylen Rust and others offered and sold investments to at least 500 investors located throughout the United States. Within the past five-year period alone, these co-conspirators collected an estimated $193 million dollars in connection with these investments. They promised investors secured high interest returns through buying, selling and trading silver, according to the indictment. In reality, besides making about $150 million in Ponzi payments, investor funds were used to support the Rust’s lifestyle.
Investors were encouraged to pull funds from their home equity, IRA, 401K or other retirement savings accounts or otherwise liquidate from other securities to invest as much as they could for optimum success, charges allege. Approximately 45 percent of the investors are retirees who used retirement funds to invest with Rust. The average age of investors is 60. The oldest investor 94. The case is set for trial in May.
“Americans are fed up with the constant barrage of scams that maliciously target the elderly and other vulnerable citizens,” said Attorney General William P. Barr. “This year, the Department of Justice prosecuted more than 400 defendants, whose schemes totaled more than a billion dollars. I want to thank the men and women of the Department’s Consumer Protection Branch, which coordinated this effort, and all those in the U.S. Attorneys’ Offices and Criminal Division who worked tirelessly to bring these cases. The Department is committed to stopping the full range of criminal activities that exploit America’s seniors.”
“We brought four significant cases to federal court as a part of this initiative, lodging allegations against 20 individual defendants. Protecting elderly and vulnerable members in Utah communities is one of our highest priorities. Those who target and take advantage of them should know that we will hold them accountable,” U.S. Attorney John W. Huber said today. “As I have stated many times, we don’t defraud our elders. We revere them.”
Huber also expressed appreciation to the many law enforcement partners and other agencies who investigate or assist with the prosecution of elder fraud and abuse cases, including the FBI, U.S. Postal Inspectors, the Security Exchange Commission, the IRS, the Utah Division of Securities, the Commodity Futures Trading Commission, the Utah Attorney General’s Office, and Utah Adult Probation and Parole.
Elder Fraud Hotline
Attorney General Barr also announced the launch of a National Elder Fraud Hotline, which will provide services to seniors who may be victims of financial fraud. The Hotline will be staffed by experienced case managers who can provide personalized support to callers. Case managers will assist callers with reporting the suspected fraud to relevant agencies and by providing resources and referrals to other appropriate services as needed. When applicable, case managers will complete a complaint form with the Federal Bureau of Investigation Internet Crime Complaint Center (IC3) for Internet-facilitated crimes and submit a consumer complaint to the Federal Trade Commission on behalf of the caller. The Hotline’s toll free number is 833-FRAUD-11
For the second year, the Department of Justice and its law enforcement partners also took comprehensive action against the money mule network that facilitates foreign-based elder fraud. Generally, perpetrators use a “money mule” to transfer fraud proceeds from a victim to ringleaders of fraud schemes who often reside in other countries. Some of these money mules act unwittingly, and intervention can effectively end their involvement in the fraud. The FBI and the Postal Inspection Service took action against more than 600 alleged money mules nationwide by conducting interviews, issuing warning letters, and bringing civil and criminal cases. Agents and prosecutors in more than 85 federal district participated in this effort to halt the money flow from victim to fraudster. These actions against money mules were in addition to the criminal and civil cases announced as part of this year’s elder fraud sweep.
These outreach efforts have helped to prevent seniors from falling prey to scams and have frustrated offenders’ efforts to obtain even more money from vulnerable elders.
The charges announced today are allegations, and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Grand Jury Returns Indictment Charging Utah Resident with Tax Evasion, Assisting in Preparation of False DocumentsRead the Press Release
SALT LAKE CITY – A federal grand jury returned an indictment Thursday afternoon charging a Price, Utah, resident with one count of tax evasion and eight counts of aiding and assisting in the preparation of false/fraudulent documents. At the time of the alleged crimes, he lived in Draper and Bluffdale.
The indictment alleges James Cunningham attempted to evade payment of federal income taxes he and his spouse owed for calendar years 2000, 2001, and 2013 – an amount of approximately $450,000 in income tax, penalties, and interest. The charges allege Cunningham took several affirmative steps to evade paying taxes, including having a person identified in the indictment as M.C. open a personal bank account at Nevada Bank & Trust which he used for his own purposes. M.C. never used or accessed the account, according to the indictment.
Cunningham used the bank account to receive commissions he earned from his sale of insurance products. As an example, the indictment alleges a deposit of $3,874.50 was made around May 15, 2013. By depositing the money into an account he controlled but was not named on, Cunningham concealed his income from the United States. In another instance, the indictment alleges that in June 2014 Cunningham caused $99,999.99 of his commissions to be deposited into a bank account held by J.C.
The indictment also alleges Cunningham used other people to obtain insurance licenses so he could sell insurance products and earn income under other names. In one instance, according to the indictment, he had M.C. obtain a life insurance license. Cunningham, the indictment alleges, used M.C.’s license to earn commissions totaling $18,891.02. Cunningham also used and controlled bank accounts belonging to other people to receive commission income.
The eight counts of aiding or assisting in the preparation of false or fraudulent documents charge Cunningham with willfully aiding and assisting in the preparation and submission of several different tax forms that were submitted to the IRS. The indictment alleges the returns were materially false and fraudulent and that at the time of preparation and submission to the IRS, Cunningham knew the taxpayers were not entitled to claim deductions in the claimed amounts and that the reported income was false.
A summons will be issued to Cunningham to appear for an initial appearance on the charges. The tax evasion count carries a potential maximum penalty of five years in prison. Each of the eight counts of aiding and assisting a fraudulent tax return carries a three year maximum sentence.
Indictments are not findings of guilt. Individuals charged in indictments are presumed innocent unless or until proven guilty in court.
The U.S. Attorney’s Office in Salt Lake City is prosecuting the case. IRS-Criminal Investigation special agents are conducting the investigation.
U.S. Attorney Announces Women in Leadership Initiative, Appoints New First Assistant U.S. Attorney for UtahRead the Press Release
SALT LAKE CITY– United States Attorney John W. Huber announced today the creation of Utah Women in Leadership (UWIL), an inter-agency initiative designed to bring together employees of the U.S. Attorney’s Office, the Federal Public Defender’s Office, U.S. District Court, the U.S. Probation Office, the U.S. Marshals Service, and other federal agencies and civil practitioners to foster professional development and association.
UWIL will offer quarterly presentations by speakers and panels on a variety of topics, including mentor/mentee relationships, leadership and courage, the art of a balanced life, effective communication, bias/diversity/inclusion, leading out/leaning in, and being the only woman in the room. In addition, UWIL is committed to community service and outreach to younger women who have an interest in federal public service work.
Elizabeth Kronk Warner, Dean of the University of Utah’s S.J. Quinney College of Law, and the first woman and first Native American to hold that title, was the inaugural speaker for UWIL. She spoke on Thursday at the U.S. Attorney’s Office about the experiences that have defined her professionally and personally.
Future speakers for UWIL will include community and business leaders, educators, professional coaches, and athletes, among others.
While the U.S. Attorney’s Office is taking a leadership role in organizing the group, which will be chaired by Jennifer E. Gully, an Assistant U.S. Attorney. A steering committee comprised of representatives from other federal agencies and partners will lead the group.
Steering Committee members for 2020-2021 include Melina Shiraldi, Assistant U.S. Attorney; Daphne Oberg, Assistant Public Defender; Anne Morgan, Chief Deputy Clerk, U.S. District Court; Kathryn Kerkhoff, Special Agent, Department of Transportation, Office of the Inspector General; Carissa Spencer, Special Agent, Housing and Urban Development, Office of the Inspector General; and Elizabeth Schulte, Department of the Interior, Office of the Solicitor.
Huber used Thursday’s inaugural meeting to announce the appointment of a new First Assistant U.S. Attorney for Utah. Andrea Martinez, currently the Deputy Section Chief of Violent Crimes, will become the second in command in the U.S. Attorney’s Office. Her predecessor, Jared Bennett, will begin service as a federal magistrate judge in May.
Ms. Martinez has served in a number of key positions during her 10 years in the office, including Senior Litigation Counsel, Project Safe Childhood Coordinator, and the Violence Against Women Act Coordinator. She has also served as the office’s Diversity Chairperson for more than six years. Prior to joining the U.S. Attorney’s Office in 2010, she was a state court prosecutor for more than eight years.
“Andrea’s demeanor is one of calm confidence and professionalism. She is approachable to all, and impeccably trustworthy. Although strong and certainly one who can hold to a worthy position, she is also humble and willing to see another’s perspective. In her supervisory capacity, she has gained experience in fostering success in others. She has numerous skills that will make her an excellent First Assistant U.S. Attorney in our office,” U.S. Attorney John W. Huber said.
Pair Charged with Dealing in Firearms Without A License, at Least 48 Firearms Purchased, Some Seized at US/Mexico BorderRead the Press Release
SALT LAKE CITY – Norma Llamas Rodriguez, age 46, of Moreno Valley, California, and her son, Carlos Arturo Garcia, age 21, of West Valley City, are charged with firearms trafficking in a seven-count federal indictment unsealed Monday afternoon.
According to the indictment, from about June 10, 2017, and continuing until at least Feb. 12, 2019, Llamas Rodriguez and Garcia purchased at least 48 firearms in transactions conducted through FFLs. The indictment alleges that at no time did either defendant possess a Federal Firearms License (FFL) required to be lawfully engaged in the business of dealing in firearms.
Seven of the firearms Llamas Rodriguez and Garcia purchased were FN M249S rifles, which are semi-automatic belt-fed tripod mount rifles. Llamas Rodriguez and Garcia purchased the rifles from FFLs between Nov. 20, 2018, and Feb. 12, 2019 for approximately $7,485-$7,895 using U.S. Postal money orders. During the same period, the indictment alleges the pair transferred firearms to others without conducting lawful transfers through FFLs.
ATF special agents in Utah launched an investigation in February 2019 after receiving information from an FFL concerned about a suspicious purchase. The FFL reported that they had listed an FN Model M249S belt-fed rifle for sale for $7,900. A buyer in Utah attempted to purchase the firearm. According to a complaint in the case, the FFL was concerned that it might be a scam so he reviewed additional information and noticed that the Utah purchaser had used the account to purchase two other FN M249S rifles within the past month. The FFL contacted the sellers of the other rifles and they did not report any issues. After the FFL received a U.S. Postal money order for the firearm, Llamas Rodriguez reached out to him and requested a refund for the firearm. The FFL reported Llamas was “spooked” and wanted her money back. The FFL started researching Llamas Rodriguez on the internet and then contacted the ATF after he became suspicious with her purchase of $24,000 worth of firearms in such a short period of time, according to the complaint.
The complaint alleges that ATF continued to investigate the two FN M249S rifles Llamas Rodriguez purchased and learned that the firearms were shipped to FFLs in Salt Lake City and Murray where Llamas Rodriguez and Garcia picked them up. They also found that between October 2017 and December 2018, Llamas had purchased an additional 22 AR-15 type rifles and four handguns from one of the FFLs.
ATF served a search warrant at two mobile homes in South Salt Lake City on Feb. 14, 2019. Agents found three firearms, documentation showing wire transfers to/from Mexico, multiple firearm operator manuals, and $7,400 in cash. Llamas Rodriguez was not at the residence. Garcia was there and, according to the complaint, told agents Llamas Rodriguez was buying the firearms for Hispanic males in California and was on her way to California with one of the FN M249S rifles.
During the investigation, ATF agents learned on March 3, 2018, six AR-15 firearms were seized at the Nogales Port of Entry on a bus entering Mexico from the United States. Four of those firearms were traced to Llamas Rodriguez. Records show Llamas Rodriquez purchased the firearms just two days prior on March 1, 2018. Agents traced two others to purchases she made on Feb. 22, 2018.
The indictment charges the pair with one count of dealing in firearms without a license. Llamas Rodriguez is also charged with four counts of false statements in the acquisition of a firearm and Garcia is charged with two counts of making a false statement in the acquisition of a firearm. The maximum potential penalty for dealing in firearms without a license is five years in prison. Each of the false statements in the acquisition of a firearm counts has a potential sentence of 10 years in prison.
Llamas Rodriguez was arrested on the complaint in California and had an initial appearance in federal court in California. She was released on conditions, including a $100,000 bond. She had an initial appearance in Salt Lake City Monday afternoon where she entered a plea of not guilty to the charges. She continues on the conditions of release set in California. Llamas Rodriguez is in the country on a green card. She is a former resident of West Valley City.
Garcia, a U.S. citizen, was taken into custody when he came to the federal courthouse Monday afternoon. He had an initial appearance Tuesday and entered a not guilty plea to the charges. He was released on conditions of supervised release.
Utah Man Convicted on Hate Crime Charges After Attacking Three Men with a Metal PoleRead the Press Release
After a five-day trial, a federal jury in Salt Lake City, Utah, found defendant Alan Covington guilty on three hate crime charges stemming from an incident in which the defendant attacked three men with a metal pole because he believed the men were Mexican.
The verdicts were announced by Eric Dreiband, Assistant Attorney General for the Civil Rights Division; John W. Huber, United States Attorney for the District of Utah; and Paul H. Haertel, Special Agent in Charge of the Salt Lake City Field Office of the Federal Bureau of Investigation.
Evidence presented at trial established that on Nov. 27, 2018, Covington entered a tire store, shouted at employees that he wanted to “kill Mexicans,” and then struck an employee in the head with a metal pole. The father of the victim rushed to help his son, who had been knocked to the ground with a serious head injury. While the father cradled his son’s head, Covington used the metal pole to strike the father in the back. When a third man tried to intervene to chase off the defendant, Covington swung the metal pole in an attempt to injure him. Covington was apprehended by police near the tire store, with a metal pole and a hatchet in his possession.
A sentencing date has not yet been set by U.S. District Judge Howard C. Nielson Jr. Covington faces a maximum sentence of life in in prison and a $250,000 fine.
The case was investigated by the Salt Lake City Field Office of the FBI, with the cooperation of the Salt Lake City Police Department. The case is being prosecuted by Assistant U.S. Attorney J. Drew Yeates of the United States Attorney’s Office and Special Litigation Counsel Rose E. Gibson of the Civil Rights Division.
Utah Man Convicted on Hate Crime Charges After Attacking Three Men with A Metal PoleRead the Press Release
SALT LAKE CITY– After a five-day trial, a federal jury in Salt Lake City, Utah, found defendant Alan Covington guilty on three hate crime charges stemming an incident in which the defendant attacked three men with a metal pole because he believed the men were Mexican.
The verdicts were announced this afternoon by Eric Dreiband, Assistant Attorney General for the Civil Rights Division; John W. Huber, United States Attorney for the District of Utah; and Paul H. Haertel, Special Agent in Charge of the Salt Lake City Field Office of the Federal Bureau of Investigation.
“In America, we have the right to wake each day and pursue work and family activities without the fear of a violent assault because of our ethnicity or perceived national origin. When an offender violates this basic civil right, we will hold him accountable,” U.S. Attorney John W. Huber said today. “Today, a jury of his peers held Mr. Covington responsible for violating the civil rights of the victims in this case, who were physically injured and traumatized.”
"Hate has no place in our society, and as the victims in this case testified, the brutal assault against them has completely altered their lives forever," said Paul H. Haertel, Special Agent in Charge of the FBI's Salt Lake City Field Office. "Hate crimes are the highest priority of the FBI's Civil Rights program. They devastate not only the victims but an entire community, and we will aggressively investigate those whose biases motivate their crimes."
Evidence presented at trial established that on November 27, 2018, Covington entered a tire store, shouted at employees that he wanted to “kill Mexicans,” and then struck an employee in the head with a metal pole. The father of the victim rushed to help his son, who had been knocked to the ground with a serious head injury. While the father cradled his son’s head, Covington used the metal pole to strike the father in the back. When a third man tried to intervene to chase off the defendant, Covington swung the metal pole in an attempt to injure him. Covington was apprehended by police near the tire store, with a metal pole and a hatchet in his possession.
A sentencing date has not been set by U.S. District Judge Howard C. Nielson, Jr. Covington faces a maximum sentence of life in prison after the jury found that an enhancement for “attempt to kill,” associated with count one of the indictment, applied in the case.
The case was investigated by the Salt Lake City Field Office of the FBI, with the cooperation of the Salt Lake City Police Department. The case is being prosecuted by Assistant U.S. Attorney J. Drew Yeates of the United States Attorney’s Office and Special Litigation Counsel Rose E. Gibson of the Civil Rights Division.
Utah Tax Return Preparers Indicted for Tax CrimesRead the Press Release
A federal grand jury in Salt Lake City, Utah, returned an indictment today charging Sergio Sosa, and his adult children, Alissa and David Sosa, with conspiracy to defraud the United States, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and United States Attorney John W. Huber for the District of Utah. Sergio Sosa was also charged with one count of tax evasion, and he and his children were also each charged with one count of corruptly endeavoring to obstruct the administration of the internal revenue laws.
According to the indictment, Sosa owned and operated Sergio Central Latino (SCL), a tax return preparation business in Orem, Utah, where both Alissa and David worked. From 2003 through 2017, Sosa allegedly did not timely file his personal tax returns and after multiple audits, the Internal Revenue Service (IRS) determined that he owed more than $750,000 in unpaid taxes. When the IRS began collection efforts, Sosa and his children allegedly agreed to obstruct IRS collection of the outstanding taxes by hiding Sosa’s personal assets, residential properties, and by titling SCL in the children’s names.
The indictment also alleges that when the IRS suspended SCL’s ability to electronically file client tax returns due to Sosa’s unpaid taxes, David Sosa changed SCL’s business name and obtained electronic filing authorization in a third party’s name. It is further alleged that Alissa Sosa falsely represented to the IRS that she owned a residence that was, in fact, her father’s, and that she withdrew funds from an account that she knew had been levied by the IRS. As of 2019, Sosa allegedly owes more than $1.1 million in taxes, penalties, and interest.
If convicted, the Sosas each face a statutory maximum sentence of five years in prison for the conspiracy charge and three years in prison for corruptly endeavoring to obstruct the administration of the internal revenue laws. Sergio Sosa faces an additional five years in prison for tax evasion. The Sosas also face a period of supervised release, restitution, and monetary penalties.
An indictment merely alleges that crimes have been committed. The defendant is presumed innocent until proven guilty beyond a reasonable doubt.
Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney Huber thanked special agents of IRS-Criminal Investigation, who conducted the investigation, and Assistant U.S. Attorney Ruth Hackford-Peer, and Trial Attorney Erin S. Mellen of the Tax Division, who are prosecuting the case.
Orem, Utah Return Preparers Indicted for Tax CrimesRead the Press Release
SALT LAKE CITY -- A federal grand jury in Salt Lake City, Utah, returned an indictment Thursday afternoon charging Sergio Sosa, and his adult children, Alissa and David Sosa, with conspiracy to defraud the United States, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and United States Attorney John W. Huber for the District of Utah.
Sergio Sosa was also charged with one count of tax evasion, and he and his children were each charged with one count of corruptly endeavoring to obstruct the administration of the internal revenue laws.
According to the indictment, Sosa owned and operated Sergio Central Latino (SCL), a tax return preparation business in Orem, Utah, where both Alissa and David worked. From 2003 through 2017, Sosa allegedly did not timely file his personal tax returns and after multiple audits, the Internal Revenue Service (IRS) determined that he owed more than $750,000 in unpaid taxes. When the IRS began collection efforts, Sosa and his children allegedly agreed to obstruct IRS collection of the outstanding taxes by hiding Sosa’s personal assets, residential properties, and by titling SCL in the children’s names.
The indictment also alleges that when the IRS suspended SCL’s ability to electronically file client tax returns due to Sosa’s unpaid taxes, David Sosa changed SCL’s business name and obtained electronic filing authorization in a third party’s name. It is further alleged that Alissa Sosa falsely represented to the IRS that she owned a residence that was, in fact, her father’s, and that she withdrew funds from an account that she knew had been levied by the IRS. As of 2019, Sosa allegedly owes more than $1.1 million in taxes, penalties, and interest.
If convicted, the Sosas each face a statutory maximum sentence of five years in prison for the conspiracy charge and three years in prison for corruptly endeavoring to obstruct the administration of the internal revenue laws. Sergio Sosa faces an additional five years in prison for tax evasion. The Sosas also face a period of supervised release, restitution, and monetary penalties.
An indictment merely alleges that crimes have been committed. Individuals charged in an indictment are presumed innocent until proven guilty beyond a reasonable doubt.
Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney Huber thanked special agents of IRS-Criminal Investigation, who conducted the investigation, and Assistant U.S. Attorney Ruth Hackford-Peer and Trial Attorney Erin S. Mellen of the Tax Division, who are prosecuting the case.
United States Reaches Settlement with Utah State University to Address Sexual Harassment and Sexual Assault of StudentsRead the Press Release
Today the Department of Justice’s Civil Rights Division and the U.S. Attorney’s Office for the District of Utah announced a settlement agreement with Utah State University (“USU” or the “University”) to ensure the University responds adequately to sexual harassment, including sexual assault, of students in its education programs and activities.
“Sexual harassment and violence have no place on college campuses, and too often deny students their right to an equal education. No student should feel unsafe because of a school’s failure to address sexual violence and its devastating impacts,” said Assistant Attorney General Eric Dreiband. “We look forward to working with USU to implement this agreement and to ensure that students can learn in a safe and healthy environment.”
“Utah schools should be free of discrimination, including sexual harassment and sexual assault. When such misconduct occurs, schools must know how to respond appropriately,” said John W. Huber, U.S. Attorney for the District of Utah. “We are pleased that USU has joined with us as a partner in these efforts.”
The settlement, when fully implemented, will resolve the Department’s compliance review of USU under Title IX of the Education Amendments of 1972 (Title IX), which prohibits sex discrimination in education programs and activities receiving federal financial assistance. The Department initiated the review in 2017 based on allegations that the University failed to respond to numerous reports of serious student-on-student sexual assault. USU is a recipient of financial assistance from the Department.
The Department reviewed USU’s policies, procedures, and responses to sexual harassment complaints over a more than four-year period and concluded that the University did not comply with Title IX. The agreement announced today details specific steps USU has agreed to take to improve its investigation and resolution of sexual harassment complaints, help students, faculty, and staff understand their reporting options, duties, and obligations with respect to sexual harassment, and ensure that members of the campus community know where to go for resources and support.
Under the agreement, USU will:
- revise its notice of nondiscrimination and all other relevant sexual harassment policies, procedures, and practices;
- respond promptly, equitably, and adequately to known sexual harassment that has created a hostile environment;
- train students and employees on University policies and federal laws pertaining to sexual harassment, how and to whom they can report allegations of sexual harassment and retaliation, details on the resources available and how to access them, and the University’s Title IX grievance procedures and potential outcomes;
- conduct climate surveys to collect information on students’ understanding of USU’s reporting procedures, the effectiveness of the University’s outreach, education, and prevention efforts, and the incidence of sexual harassment and related retaliation; and
- ensure the individuals designated to administer and coordinate Title IX efforts receive adequate training, resources, and support necessary to coordinate these efforts effectively.
The Department will monitor compliance with the terms of the agreement, which will be in effect through the 2022-2023 academic year.
Combating sex discrimination in education is a top priority of the Department of Justice’s Civil Rights Division. Additional information about the Civil Rights Division of the Justice Department is available on its website at www.justice.gov/crt.
United States Reaches Settlement with Utah State University to Address Sexual Harassment and Sexual Assault of StudentsRead the Press Release
SALT LAKE CITY – Today the Department of Justice’s Civil Rights Division and the U.S. Attorney’s Office for the District of Utah announced a settlement agreement with Utah State University (“USU” or the “University”) to ensure the University responds adequately to sexual harassment, including sexual assault, of students in its education programs and activities.
“Sexual harassment and violence have no place on college campuses, and too often deny students their right to an equal education. No student should feel unsafe because of a school’s failure to address sexual violence and its devastating impacts,” said Assistant Attorney General Eric Dreiband. “We look forward to working with USU to implement this agreement and to ensure that students can learn in a safe and healthy environment.”
“Utah schools should be free of discrimination, including sexual harassment and sexual assault. When such misconduct occurs, schools must know how to respond appropriately,” said John W. Huber, U.S. Attorney for the District of Utah. “We are pleased that USU has joined with us as a partner in these efforts.”
The settlement, when fully implemented, will resolve the Department’s compliance review of USU under Title IX of the Education Amendments of 1972 (Title IX), which prohibits sex discrimination in education programs and activities receiving federal financial assistance. The Department initiated the review in 2017 based on allegations that the University failed to respond to numerous reports of serious student-on-student sexual assault. USU is a recipient of financial assistance from the Department.
The Department reviewed USU’s policies, procedures, and responses to sexual harassment complaints over a more than four-year period and concluded that the University did not comply with Title IX. The agreement announced today details specific steps USU has agreed to take to improve its investigation and resolution of sexual harassment complaints, help students, faculty, and staff understand their reporting options, duties, and obligations with respect to sexual harassment, and ensure that members of the campus community know where to go for resources and support.
Under the agreement, USU will:
- revise its notice of nondiscrimination and all other relevant sexual harassment policies, procedures, and practices;
- respond promptly, equitably, and adequately to known sexual harassment that has created a hostile environment;
- train students and employees on University policies and federal laws pertaining to sexual harassment, how and to whom they can report allegations of sexual harassment and retaliation, details on the resources available and how to access them, and the University’s Title IX grievance procedures and potential outcomes;
- conduct climate surveys to collect information on students’ understanding of USU’s reporting procedures, the effectiveness of the University’s outreach, education, and prevention efforts, and the incidence of sexual harassment and related retaliation; and
- ensure the individuals designated to administer and coordinate Title IX efforts receive adequate training, resources, and support necessary to coordinate these efforts effectively.
The Department will monitor compliance with the terms of the agreement, which will be in effect through the 2022-2023 academic year.
Combating sex discrimination in education is a top priority of the Department of Justice’s Civil Rights Division. Additional information about the Civil Rights Division of the Justice Department is available on its website at www.justice.gov/crt.
Department of Justice Taking Steps to Combat Dangerous and Unlawful Polices of “Sanctuary Jurisdictions”Read the Press Release
SALT LAKE CITY – U.S. Attorney General William P. Barr highlighted steps the Department of Justice is taking to combat the dangerous and unlawful practices of “sanctuary jurisdictions” in a speech at the National Sheriffs’ Association Winter Legislative and Technology Conference in Washington, D.C., late Monday afternoon. Utah’s U.S. Attorney John W. Huber shares those concerns, but says continued communication, cooperation and a shared commitment to protect Utah communities from criminal conduct is working in ICE cases in Utah.
“Let us state the reality upfront and as clearly as possible: When we are talking about sanctuary cities, we are talking about policies that are designed to allow criminal aliens to escape. These policies are not about people who came to our country illegally but have otherwise been peaceful and productive members of society. Their express purpose is to shelter aliens whom local law enforcement has already arrested for other crimes. This is neither lawful nor sensible,” the Attorney General said in his remarks to the Sheriffs Association. “It is not lawful because the Constitution vests the federal government with the sole authority to make and enforce immigration law,” the Attorney General said Monday.
“In 2017, I spoke from the podium in the White House Press Briefing Room regarding unwise sanctuary policies across the nation. I was reminded of those concerns as I listened to the remarks Attorney General Barr shared with sheriffs Monday afternoon,” U.S. Attorney John W. Huber said. “Removing unnatural impediments to cooperation between local and federal law enforcement will help keep our neighborhoods safe,” Huber said today.
“Each year my office prosecutes hundreds of criminal aliens with extensive criminal records and, in many cases, multiple previous deportations. We find these criminals back in Utah committing new crimes. If these offenders are released from local jails into our communities without coordinating with federal officers, there is no question our communities will be less safe. Unlike some areas around the country, we have the support and cooperation of Utah law enforcement agencies as we all work together to protect Utah communities,” Huber said.
According to Huber, the U.S. Attorney’s Office in Salt Lake City filed 42 illegal re-entry of previously removed alien cases in January of this year. The overwhelming majority of the defendants in these cases were illegal aliens found in local jails.
“Cooperation between law enforcement agencies and ICE is in the best interest of the residents of Utah,” said Robert Culley, U.S. Immigration and Customs Enforcement, Enforcement and Removal Operations field director in Salt Lake City. “Let me be clear, we target specific individuals, not random immigrants in our communities. These criminal aliens come to our attention specifically because they have been arrested and booked by local law enforcement following the alleged commission of a crime. Allowing criminal aliens to be released to the streets puts our communities in avoidable potential danger.”
Examples of Utah cases include:
U.S. v Luis Fernando Bueso-Romero: A federal complaint filed Feb. 5, 2020, charges Bueso-Romero with damaging a building by means of fire. The complaint charges him in connection with a Feb. 1, 2020, fire at the Overlook Point Apartments in West Valley City. At about 8:25 p.m. that day, West Valley Fire and Police Departments were dispatched to a fire at the apartments. They found an eight-unit apartment building engulfed in flames. Two residents had to evacuate by jumping off second story balconies. The investigation led police officers to Bueso-Romero, a citizen of Honduras living illegally in the United States. Police officers took him into custody and booked into the county jail for attempted murder, aggravated arson, criminal trespass, and causing a catastrophe. Federal authorities filed a detainer with the jail. The U.S. Attorney’s Office filed federal charges Feb. 5 and brought him into federal custody. He faces up to 20 years in federal prison with a five-year minimum mandatory sentence if he is convicted of the charges in the complaint. His next court hearing is Feb. 20, 2020.
U.S. v Roberto Miramontes Roman – Roman is an armed drug dealer who boasted that he would kill a law enforcement officer to stay out of jail. He was previously deported to Mexico after being convicted of two felony drug offenses. On both occasions, he was found in possession of cocaine and firearms. After deportation, he twice re-entered the country illegally. On Jan. 5, 2010, he was stopped by Millard County Sheriff’s Deputy Josie Greathouse Fox on suspicion of drug trafficking. He had just sold methamphetamine and was armed with a handgun and a semi-automatic rifle. To avoid being apprehended, Roman intentionally shot and killed Deputy Fox. Following a state trial in the case, a federal grand jury charged Roman with intentionally killing a local law enforcement officer to avoid apprehension for a felony drug crime, drug trafficking offenses, firearms violations, and illegal re-entry by a previously removed alien. A jury convicted him on all counts. In May 2017, Roman was sentenced to life in prison plus 80 years in federal prison.
U.S. v Geronimo Cuara – Cuara had two previous removals from the United States – one on Aug. 9, 2012, and a second on Sept. 29, 2018. Prior to his removal in September 2018, he was convicted in Utah of possession of a firearm by an illegal alien and illegal re-entry of a previously removed alien. He was sentenced to 18 months in federal prison and one year of supervised release.
A few short months after his last conviction and removal, Cuara was back in Salt Lake County. On the Sunday evening, May 27, 2019, during Memorial Day weekend, many people were outside in their front yards celebrating a holiday weekend. Cuara was walking down the street when he pulled out a gun and began firing multiple shots into the air. Several people initially believed the shots were fireworks, but then realized what was actually happening. People grabbed their children and ran for cover inside their houses.
Residents of the neighborhood were in fear for their safety. Cuara walked a short distance and again removed the gun from his waistband, pointed it in the air, and fired several more shots. This was not new behavior for him. His prior conviction for illegal firearm possession was for the same conduct – using the firearm to shoot bullets into the air.
He was charged in a two-count indictment with felon in possession of firearm and illegal re-entry of a previously removed alien. He pleaded guilty to both counts and was sentenced to 46 months prison and three years of supervised release. He also received an eight-month sentence for his supervised release violation. Four months of that sentence will run consecutive to his new 46-month sentence.
U.S. v Harlin Colindres-Ramos: Ramos is an illegal alien with four previous deportations from the United States. Less than a year after his most recent removal, Ramos was discovered back in the United States.
“Please don't kill me. I have kids.” The victim's plea was in vain, as Harlin Ramos stabbed him eight times, including a fatal thrust to the heart. In April 2014, according to reports and court records, Joaquin Gonzalez had just left a movie when a complete stranger stabbed him to death. Gonzalez and a woman left the Gateway movie theater about 1:20 a.m. and returned to a car at 515 W. 100 South. Ramos was selling drugs in the area. He opened Gonzalez's passenger-side door, according to an arrest affidavit. Ramos and Gonzalez started fighting, during which time Ramos began stabbing Gonzalez. Ramos ultimately fled the scene. Despite aid from emergency responders, Gonzalez died at the scene. Officers eventually found Ramos at a motel near 1500 W. North Temple. They also found Ramos’ backpack, cellphone, and identification card at the scene. Bloodstained clothing, with Gonzalez’s DNA on it, was found in the room.
Ramos was convicted in state court of murder and was sentenced to 15 years to life. The United States Attorney’s Office also filed federal charges for illegal re-entry of previously removed alien. The federal case is pending.
Oregon Man Working Remotely for Provo Company Charged with Using Position, Access to Defraud CompanyRead the Press Release
SALT LAKE CITY – A federal indictment unsealed Wednesday charges Dustin Erhardt, age 33, of Beaverton, Ore., with five counts of wire fraud in connection with what the indictment alleges was a scheme to use his position and access as a contractor to defraud a Provo company.
According to the indictment, Erhardt began working as a contractor for Dark Energy, a Provo business, on March 27, 2017. His primary job was to do marketing for Dark Energy. He worked remotely and never met the owner of the company in person, the indictment says. His responsibilities included managing Dark Energy’s Amazon seller account.
Dark Energy makes military grade power products, including the Poseidon Device, which is a portable charger that is waterproof and crushproof. The device retails for $99.99, according to the indictment. One of the places the company sells its products is on Amazon. The company keeps its products at a warehouse in Salt Lake City, managed by Agile Supply Chain Strategies.
The indictment alleges that from about July 6, 2017 through about Dec. 7, 2017, Erhardt devised a scheme to defraud his employer. As a part of the scheme, Erhardt used Dark Energy’s confidential information without authorization, including login information to its warehouse, to ship to company’s products to himself or to Amazon Fulfillment Centers for sale on his own Amazon account. The indictment alleges he pocketed the proceeds of the scheme. According to the indictment, Erhardt stole at least 1,102 Poseidon Devices from Dark Energy through his scheme.
The indictment alleges that when the company discovered that there were unauthorized sellers on Amazon, who had somehow acquired the Poseidon devices, Erhardt offered to find out who the unauthorized sellers were in an effort to conceal his theft from the company. When Erhardt was laid off in December 2017, Dark Energy was still unaware he was the unauthorized Amazon seller. He continued to sell the remaining Poseidon Devices he had diverted from the company. As the investigation into continued, law enforcement officers discovered Erhardt was the unauthorized seller.
Erhardt was arrested Wednesday morning in Oregon and had an initial appearance in federal court in Oregon. He is not in custody. His next court appearance will be Thursday at 3:45 p.m. before U.S. Magistrate Furse in Salt Lake City. The maximum potential penalty for each of the five counts of wire fraud 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 Salt Lake City are prosecuting the case. It is being investigated by the FBI’s Cyber Task Force and Provo Police Department Detective Robert Payne, who is a member of the Cyber Task Force.
Eight Individuals Charged in Alleged Scheme to Get Money, Assets from 80-Year Old Widow in Washington, UtahRead the Press Release
SALT LAKE CITY – A federal grand jury returned a 10-count indictment Thursday afternoon charging eight individuals in connection with an alleged fraud scheme to obtain money and assets from an 80-year-old widow who lives in Washington, Utah. The indictment was unsealed Tuesday afternoon.
The indictment alleges the defendants, who have family relationships, conspired to obtain money and assets from the victim in exchange for false promises to perform work on her property. To further advance the scheme, one of the defendants engaged in romance fraud by enticing the victim to enter into a romantic relationship. He used the romantic relationship to manipulate the victim into giving him money and assets.
The indictment includes one count of wire fraud conspiracy, five counts of money laundering conspiracy – spending, two counts of destruction or concealment of records and tangible objects in a federal investigation, one count of concealment of a document or object, and one count of tampering with a witness or victim.
“We prioritize investigations and prosecutions where seniors are targeted for victimization,” U.S. Attorney John W. Huber said today. “We revere our elders, we do not defraud them.”
Individuals charged in the indictment are Frank Gene Powell, age 51, of Hurricane, Bubby Mern Shepherd, age 58, of Lodi, California, Gloria Jean Powell, age 74, of St. George, Faye Ann Renteria, age 42, of Hurricane, Terrence Quincy Powell, age 23, of St. George, Rocky James Powell Mott, age 40, of Hurricane, Martell Taz Powell, age 25, of Cedar City, and Angela Ruth McDuffie, age 53, of Lehi.
Seven of the eight defendants are in custody. Shepherd will have an initial appearance on the indictment in California Wednesday.
Frank Powell, Faye Ann Renteria, Gloria Powell, Rocky Mott, Taz Powell and Angela McDuffie will have an initial appearance on the indictment at 9 a.m. Thursday in St. George, Utah, before U.S. Magistrate Judge Paul Kohler. A summons was issued to Terrence Quincy Powell to appear at the hearing.
The indictment alleges that starting around March 2019 through October 2019, several of the defendants began soliciting payments from L.N. by offering to perform routine repairs and odd jobs on her property. L.N. created a list of requested repairs, such as painting the exterior of the house, resurfacing the driveway, doing yard work, hammering protruding nails on the roof, fixing a door handle on a car, removing grease spots on the driveway, and installing carpet on an outdoor deck.
According to the indictment, most of the jobs they promised to do were never completed or the quality of work was extremely poor and fell well below any expectation of professionally done work. The victim paid the defendants at least $273,849.20, both indirectly and directly, for this work.
Frank Powell engaged in the romance fraud scam with the victim and told L.N. that he intended to marry her while maintaining a domestic partnership with Renteria. According to the indictment, he is legally married to another woman not involved in the conspiracy.
The money laundering counts allege four defendants, Frank Powell, Gloria Powell, Renteria, and Taz Powell, used money derived from their alleged unlawful activity to buy cars, a Polaris Razor, and a trailer.
Frank Powell and Renteria are charged with two counts of destruction of records or tangible objects in a federal investigation – specifically cell phones – in an effort to impede the investigation of the case. They are also charged with tampering with a victim in an effort to avoid prosecution. Powell and Renteria, according to the indictment, contacted L.N. through written correspondence and phone calls in which they made misleading statements and attempted to persuade L.N. to withhold information from law enforcement and help them avoid prosecution. Frank Powell and Faye Renteria were arrested on a federal complaint in November charging them with tampering with a victim or witness.
The potential maximum penalty for each count of wire fraud conspiracy, destruction or concealment of records or tangible objects in a federal investigation, concealment of a document or object, and tampering with a witness is 20 years in federal prison. The money laundering counts are up to 10 years per count.
Indictments are not findings of guilt. Individuals charged in indictments are presumed innocent unless or until proven guilty in court.
Combatting elder abuse and financial fraud targeted at seniors is a key priority of the U.S. Department of Justice and the U.S. Attorney’s Office in Utah. Elder abuse is a serious crime against some of our nation’s most vulnerable citizens, affecting at least 10% of older Americans every year. Together with federal, state, local and tribal partners, the Department of Justice is committed to combatting all forms of elder abuse and financial exploitation through enforcement actions, training and resources, research, victim services, and public awareness. This holistic and robust response demonstrates the Department’s unwavering dedication to fighting for justice for older Americans.
Assistant U.S. Attorneys in Utah are prosecuting the case. The FBI is investigating the case. Agents with Utah Adult Probation and Parole have made signification contributions to the investigation.
U.S. Attorney John W. Huber Statement on Pending Expiration of Emergency Prohibition of Fentanyl AnaloguesRead the Press Release
“The emergency prohibition of fentanyl analogues expires on February 6 without congressional action. Fentanyl and its analogues are responsible for dozens of overdose deaths in Utah. Without action by Congress, my partners and I will not have the tools we need to protect Utah families from the onslaught of these extraordinarily dangerous substances.
“We have seen a transition in the source of fentanyl finding its way into Utah communities. Initially, law enforcement officers found fentanyl from China in relatively small amounts in Utah.
“In a dangerous turn of events, law enforcement officials are now intercepting load after load of Mexican cartel-produced fentanyl. The cartels are using their established and prolific distribution networks to deliver fentanyl – a substance that is exponentially more dangerous than both methamphetamine and heroin. We continue to be very aggressive in prosecuting these cases.
“I am urging Congress to give us the tools we need to continue our efforts against the distribution of fentanyl and its analogues here in Utah. This fight is far from over. We need every tool we have to target this dangerous drug. Congress must take action immediately to extend the scheduling of these dangerous substances.”
Background: In an effort to combat this deadly drug epidemic, DEA issued a temporary emergency two-year order in February 2018 that made all fentanyl-related substances illegal. Our country has seen a marked supply impact from DEA’s temporary scheduling of fentanyl-related substances during the past two years, with a 50 percent decrease in fentanyl-related substances encountered across the United States. However, DEA’s emergency authority expires at midnight on February 6, 2020, unless Congress acts to extend it.
U.S. Attorney’s Office Collects $16,113,273.52 in Civil and Criminal Actions in Fiscal Year 2019Read the Press Release
SALT LAKE CITY -- U.S. Attorney John W. Huber announced Wednesday that $16,113,273.52 in criminal and civil actions was collected in Utah during fiscal year 2019, which ended Sept. 30, 2019.
Of this amount, $5,937,820.86 was collected in criminal cases and $10,175,452.66 through civil actions.
Additionally, the U.S. Attorney’s Office in Utah worked with other U.S. Attorneys’ Offices and components of the Department of Justice to collect an additional $2,020,570.97 in cases pursued jointly by these offices. Of this amount, $3,450 came from criminal cases and $2,017,120.97 through civil actions.
“The money we have collected is used to provide restitution to victims of federal crimes and support important victim assistance programs,” Huber said today. “These funds also come from divesting criminals of the proceeds of their illegal conduct.”
Collections this year included the Lyle Jeffs case, where $99,216.53 in forfeited assets were applied to Jeffs’ $1 million restitution judgment in March 2019 in favor of the U.S. Department of Agriculture. Another defendant voluntarily paid $449,571.19 in February 2019 in full satisfaction of his restitution debt.
The U.S. Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the Department of Justice’s Crime Victims Fund, which distributes the funds collected to federal and state victim compensation and victim assistance programs.
Additionally, the U.S. Attorney’s Office in Utah, working with partner agencies and divisions, collected $1,517,673 in asset forfeiture actions in FY 2019. Forfeited assets deposited into the Department of Justice’s assets forfeiture fund are used to restore funds to crime victims and for a variety of law enforcement purposes.
Leader of Utah Drug Trafficking Organization Gets 23 Years in Federal Prison for Drug DistributionRead the Press Release
SALT LAKE CITY – Brenton Michael Forney, 28, of Salt Lake City, the lead defendant in a federal drug case targeting a significant drug trafficking organization distributing methamphetamine, heroin, and fentanyl in Utah communities, will serve 276 months in federal prison.
Forney pleaded guilty in October to one count of possession of methamphetamine, heroin, and fentanyl with intent to distribute. As a part of the agreement with federal prosecutors, Forney admitted that in October 2018, he was in possession of the controlled substances and intended to sell them. The drugs, seized following the execution of a search warrant, were tested and determined to be approximately 12,591.5 grams of actual methamphetamine, approximately 6,000 grams of a mixture containing methamphetamine, approximately 10,054 grams of heroin, and approximately 1,789 grams of fentanyl.
“The women and men of Utah law enforcement dismantled a prolific drug trafficking operation,” U.S. Attorney John W. Huber said today. “They significantly slowed the flow of extraordinarily dangerous substances into our neighborhoods, such as fentanyl, heroin and methamphetamine. I am confident that this operation, and others like it, helped saved Utah lives.”
U.S. District Judge Jill N. Parrish imposed the sentence Tuesday afternoon in federal court. The sentencing guideline range for Forney was life in federal prison with a 25-year mandatory minimum sentence given the quantity of drugs involved and two previous convictions for drug trafficking. The plea agreement included a stipulated sentence of 23 years. Forney will forfeit $491,674.52 in cash and five firearms and associated ammunition as a part of the resolution of the case.
Forney and six other defendants were charged with conspiracy to distribute controlled substances, two counts of possession of a controlled substance with intent to distribute, four counts of possession of a firearm by a restricted person, one count of possessing a firearm in furtherance of a drug trafficking crime, one count of carrying a firearm during and in relation to a drug trafficking crime, eight counts of distribution of a controlled substance, 19 counts of use of a communication facility in a drug trafficking offense, and one count of structuring in a superseding indictment returned in November 2018.
During the investigation of the case, approximately 47 pounds of methamphetamine, 26.4 pounds of heroin, 4.4 pounds of a mixture or substance containing a detectable amount of fentanyl, and eight guns were seized.
At sentencing, Assistant U.S. Attorney Michael Kennedy said prosecutors learned that in the aftermath of Forney’s arrest and the seizure of his drugs, there was a significant decline in the availability of illegal drugs in the Salt Lake Valley for months afterward.
Assistant U.S. Attorneys in the Utah U.S. Attorney’s Office prosecuted the case. Officers and agents with the DEA Metro Narcotics Task Force, Layton Police Department, and the Davis Metro Narcotics Strike Force investigated the case.
Former ER Nurse Sentenced to 60 Months in Prison for Fraudulently Obtaining, Tampering with Patient DrugsRead the Press Release
SALT LAKE CITY – Elet Neilson, age 53, of Layton, a former emergency room nurse who admitted to tampering with controlled substances intended for patients and diverting the drugs for her own use, will serve 60 months in federal prison. U.S. District Judge Dee Benson imposed the sentence Monday afternoon in Salt Lake City.
As a result of the tampering and diversion, Neilson admitted infecting seven (known) patients with Hepatitis-C 2B. Hepatitis C, which is a viral disease, is primarily transmitted through blood exposure. There are different genotpyes. One variant, Hepatitis-C 2B, makes up only 8 to 10 percent of all Hepatitis C found in humans in Utah, according to the indictment filed in the case.
Federal prosecutors had asked Judge Benson to impose a sentence of 90 months. “This is more than a mistake. Punishment and general deterrence should be the driving force in fashioning a sentence today,” Assistant U.S. Attorney Sam Pead said. Judge Benson’s sentence of 60 months was three months below the sentencing guideline range in the case of 63-78 months. The court found she abused a position of trust in imposing the sentence.
“As sad as addiction may be, it is not without victims. This case illustrates addiction’s wake of tragedy like few others,” U.S. Attorney for Utah John W. Huber said today. “At least seven unwitting and innocent victims were in vulnerable positions when the nurse defendant recklessly exposed them to, and infected them with a serious and stigmatizing disease. These convictions represent knowing and intentional conduct that went well beyond an unwise decision made amidst addiction.”
“Patients deserve to have confidence that they are not only receiving the proper treatment from those entrusted with providing their medical care, but also that they are not being placed at an increased risk of harm,” said Special Agent in Charge Charles L. Grinstead, of the Food and Drug Administration’s Office of Criminal Investigations, Kansas City Field Office. “We will continue to protect the public health and bring to justice health care professionals who take advantage of their unique position and compromise their patients’ health and comfort by tampering with needed drugs.”
Between July 2013 and November 2014, Neilson was employed at McKay-Dee Hospital in Ogden, Utah. As a nurse, Neilson had access to controlled substances, including medication intended for patients in the emergency room. As a part of a plea agreement reached in September 2019, Neilson admitted that on multiple occasions, she tampered with hydromorphone and morphine, diverting the drugs for her own use.
According to the plea agreement, Neilson admitted that by tampering, diverting, and using the drugs, she acted with reckless disregard for the risk to other people, including placing people in danger of death or bodily injury, and did so under circumstances that manifested extreme indifference to that risk.
In late 2014, according to charges filed in the case, the U.S. Center for Disease Control and the Utah Department of Health began an investigation into a cluster of Hepatitis C 2B diagnoses in the Ogden region, which eventually focused on patients seen in the emergency room at McKay-Dee Hospital while Neilson was working there. The investigation ultimately determined that seven patients, each of whom were given intravenous opioid pain management drugs handled by Neilson before or during their administration, were infected with not only the same genotype of Hepatitis-C 2B as Neilson, but the same sub-genotype.
“Neilson, a medical professional, diverted drugs for her own use, and as a result infected her patients. For that she will rightly be punished,” said Curt L. Muller, Special Agent in Charge of the Office of Inspector General of the U.S. Department of Health and Human Services, Kansas City Region. “Along with our law enforcement partners, protecting patients is our top priority.”
“When professionals in positions of trust, abuse that trust by engaging in the diversion of controlled substances, it is extremely disappointing. Anyone who deliberately diverts and tampers with controlled substances causing harm to patients, has violated their duties as a professional and will be held accountable,” said Acting Assistant Special Agent in Charge of the DEA Salt Lake City District Office Miguel Chino. “The charge and plea agreement in this case are the result of DEA’s continued commitment to work with our law enforcement partners and hold accountable those who participate in illegally diverting controlled substances in our communities. It also is a testament to law enforcement’s commitment to fight the illegal diversion of these drugs.”
"Medical professionals are entrusted with the care of others. Elet Neilson betrayed that trust and in turn, put her patients' health and lives at risk," said Special Agent in Charge Paul Haertel of the FBI's Salt Lake City Field Office. "The FBI would like to thank our law enforcement partners for their dedication and persistence in a case that should serve as an example that such reckless behavior within our nation's health care system will be aggressively investigated and prosecuted."
“The mission of the Medicaid Fraud Control Unit (MFCU) in the Utah Attorney General’s Office is to protect vulnerable individuals from harm. The victims in this case went to the hospital for treatment, trusting that they would be safe and cared for. Instead, because of the defendant’s actions, the victims came out of the hospital with life-changing diseases. The MFCU is proud to have been part of a team that brought this nurse to justice and gave a voice to each victim,” Kaye Lynn Wootton, MFCU Director, said today.
Neilson will be on supervised release for two years when she finishes her federal prison sentence. Special conditions of the supervised release include drug/alcohol and mental health treatment. She must pay a $400 special assessment fee. The court ordered Neilson to self-surrender to the U.S. Bureau of Prisons (BOP) to begin serving the sentence no later than March 2 at noon. BOP will designate a prison in the coming weeks.
Salt Lake Man Convicted of Importing, Selling Devices to Convert Semi-Automatic Handguns to Machine GunsRead the Press Release
SALT LAKE CITY – A federal jury convicted Gary Mark Hill, age 42, of Salt Lake City of unlawfully engaging in the business of importing and dealing machine guns and illegal possession and transfer of machine guns Wednesday afternoon following a four-day trial in U.S. District Court in Salt Lake City.
The jury deliberated less than two hours before returning the verdict.
A two-count indictment returned in May charged Hill with knowingly engaging in the business of importing and dealing in firearms – specifically machine gun conversion devices for Glock handguns without having paid a special occupational tax required and without having registered, both required under federal law.
The indictment alleged that from about February 2017 through March 2017, Hill knowingly possessed and transferred the machine gun conversion devices to others. The machine gun conversion devices, known as Glock auto switches, are machine guns under federal law because they are parts designed solely and exclusively for the purpose of converting a semi-automatic handgun into a machine gun.
“The defendant purchased machine guns at bargain prices from China, and knowingly sold them on Utah’s street corners at a steep markup,” U.S. Attorney John W. Huber said today. “In this day and age, there are few transactions more dangerous than an anonymous and unregulated exchange of cash for machine guns. This intentional conduct showed a reckless disregard for our safety at its best, and certainly exposed Utah to risks that the community should not have to bear. The jury had little difficulty in holding the defendant accountable.”
Evidence at trial showed that Hill, a former investment banker, sold multiple illegal machine gun conversion devices for Glock handguns to three undercover ATF agents on February 27, 2017, March 1, 2017, and March 8, 2017. During the execution of a search warrant, agents found five additional machine gun conversion devices in his residence and six conversion devices in his car.
U.S. District Court Judge Dale A. Kimball set sentencing in the case for March 5, 2020. Hill faces up to 10 years in federal prison for each of the two counts of conviction. Hill will remain out of custody and subject to supervision on conditions of release pending sentencing.
Assistant U.S. Attorneys in Salt Lake City prosecuted the case. The ATF investigated the case.
NIBIN “Hit” Links Gang Member to Drive-By Shooting, Charged with Firearms Violations in Project Guardian CaseRead the Press Release
SALT LAKE CITY – A complaint signed by a federal magistrate judge Monday morning charges Edward Jose Peralta-Moran, age 19, of Taylorsville with possessing a firearm following a felony conviction and possession of a stolen firearm. Ramon Avila, age 22, of Salt Lake City is charged with possession of a stolen firearm.
Based on an analysis of the ballistic evidence using the National Integrated Ballistics Information Network (NIBIN), Utah Bureau of Forensic Services analysts linked casings recovered from a drive-by shooting in Taylorsville on Sept. 3, 2019, to a .45 caliber Smith and Wesson firearm recovered from Peralta-Moran. The U.S. Department of Justice Project Guardian initiative emphasizes the importance of using all modern technologies available to law enforcement to promote gun crime intelligence.
NIBIN is a database system that captures, stores, and correlates digital images of spent cartridge casings recovered from crime scenes and test-fired firearms. The Utah Crime Gun Intelligence Center uses NIBIN technology to assist law enforcement agencies in solving firearms crimes. So far this year, 1,644 NIBIN entries have been entered in Utah. This figure includes 1,100 firearms and 544 casings from shooting scenes submitted by 38 different Utah law enforcement agencies. The entries have resulted in 69 “hits” involving 170 cases.
According to the complaint, Unified Police Department (UPD) officers responded to a drive-by shooting at a home in Taylorsville, on Sept. 1, 2019. Officers observed bullet entry points on the exterior of the home and collected six 9 mm shell casings. They were unable to identify anyone involved in the shooting.
Two days later, on Sept. 3, 2019, a UPD officer heard what sounded like gunfire in the area of 4700 South and 2700 West and observed a car leaving the area and entering I-215. According to the complaint, about the same time dispatch started receiving emergency calls reporting shots fired at the same residence as the Sept. 1, 2019, incident. Responding officers observed numerous new bullet entry points on the exterior of the home and collected six expended .45 caliber shell casings and a .223 projectile, but were unable to locate any suspects.
One occupant of the home told officers he had been in a recent confrontation with an individual. He identified the individual for the officer. The information pointed officers to Peralta-Moran, a known Sureno-affiliated convicted felon. Peralta-Moran was on state probation and had an outstanding arrest warrant.
On Sept. 4, Sandy City police officers responded to a report of firearms thefts at The Amory Firearms and Shooting Range, a Federal Firearms Licensee. The manager told them three males entered the business and stole three handguns while he was speaking to another customer. According to the store manager, the individuals took a Glock 17 handgun with a green slide from behind the sales counter and a Glock 19 handgun from the manager’s office. (Only two of the three stolen firearms are related to charges included in this case.)
Viewing store surveillance video, officers observed the three males enter The Armory and go to different areas in the store. The video shows them taking guns from behind the counter and from the store manager’s office. The three left in a vehicle described by the store manager as a silver or blue Lexus with “In God We Trust” on the license plate. The store manager was able to provide the officers with a partial plate number, according to the complaint.
UPD officers looking for Peralta-Moran on Sept. 5, 2019, observed a Lexus sedan similar to the description of the passenger car leaving the scene of the Sept. 3, 2019, drive-by shooting. Officers executed a traffic stop. According to the complaint, as the vehicle pulled into a residential driveway, officers heard the distinctive sound of a metal object hitting the pavement.
Avila was driving the car and Peralta-Moran was a passenger in the front seat. Officers located a .45 Smith and Wesson handgun on the ground adjacent to the passenger side of the vehicle and found a Glock 17 handgun with a green slide under the front portion of the driver’s seat, similar in description to one of the guns stolen from The Armory. The license plate on the car matched the description given by the store manager.
According to the complaint, Peralta-Moran told officers he paid someone to shoot up the house on Sept. 3, 2019. He also admitted the Lexus was used in the Sept. 3 shooting and the .45 Smith and Wesson officers found on the pavement on the passenger side of the Lexus was used in the drive-by shooting. Officers executed a search warrant at Peralta-Moran’s residence and found a Glock 19 handgun concealed in his bed – one of the handguns stolen from The Armory.
Peralta-Moran is appearing Wednesday morning on the charges in the complaint. A warrant is pending for Avila. Both defendants face a potential 10-year statutory sentence, a fine of $250,000, and a three-year term of supervised release if convicted of the charges in the complaint. Defendants charged in complaints 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. Officers from the UPD and Sandy City Police Department and special agents from the ATF are investigating the case. The Utah Crime Gun Intelligence Center is also contributing to the investigation.
Cache Valley Resident Charged in Fraud Scheme, Allegations Include Diverting $462,000 from Vulnerable VictimRead the Press Release
SALT LAKE CITY –Thomas Fairbanks, age 66, of Logan, Utah, who faces a five-count indictment alleging he devised schemes to defraud investors, including a vulnerable adult, will be in federal court Dec. 5, 2019, at 10:15 a.m. for an initial appearance. The indictment alleges Fairbanks devised a scheme to defraud investors using materially false and fraudulent pretenses, representations and promises, and omissions of material facts.
As a part of the scheme, Fairbanks earned the trust of a vulnerable older adult, identified as B.D. in the indictment, and diverted at least $462,000 of her money for his personal use and benefit. B.D. is unmarried, has no children, and is in her 80s.
According to the indictment, Fairbanks was the founder and CEO of SupplyLine Partners, an unregistered business. The company maintains a website, which purports to provide marketing, administrative, and other business support services. It has never been registered to issue securities, the indictment alleges. Fairbanks is involved in other business entities.
Fairbanks offered and sold an investment opportunity in SupplyLine to B.D. and a couple, identified as J.H. and R.H., in the indictment. Fairbanks accepted $45,500 in cash from these victims, promising them a 6 percent return – or their money back. According to the indictment, investment contracts are securities.
Fairbanks made a number of misrepresentations to the investors, including telling them assets of other business collateralized their investment, they could liquidate their investments at any time, they would receive an accounting of their investment, and the funds would go toward SupplyLine’s business efforts – among other things.
In an effort to induce further investments, the indictment alleges Fairbanks began giving investment and financial advice to B.D. B.D. opened a joint personal checking and savings account with Fairbanks using her money. The indictment alleges B.D. believed Fairbanks would help manage her finances, deal with her finances in her best interest, not put her money at substantial risk, and help her write checks. The $462,000 he diverted from B.D.’s account is in addition to the $40,000 she invested in SupplyLine.
Fairbanks utilized his interests in other business entities to receive the misappropriated funds, the indictment alleges.
Combatting financial fraud targeted at seniors is a key priority of the U.S. Department of Justice and the U.S. Attorney’s Office in Utah. Together with federal, state, local and tribal partners, the Department of Justice and U.S. Attorney’s Office are committed to combatting financial exploitation through enforcement actions, training and resources, research, victim services, and public engagement efforts. The U.S. Attorney’s Office in Utah recently collaborated with the Utah Division of Aging and Adult Services to provide training on financial fraud and elder abuse for more than 100 law enforcement officers in Utah.
Fairbanks faces up to 20 years in prison for each of the wire fraud counts (two counts), up to five years for each count of securities fraud (two counts), and up to 10 years for the money laundering count. Indictments are not findings of guilt. Individuals charged in indictments are presumed innocent unless or until proven guilty in court.
Assistant U.S. Attorneys from the U.S. Attorney’s Office are prosecuting the case. The Utah Division of Securities along with special agents of the FBI are investigating the case.
Attorney General Announces Launch of Project Guardian, A Nationwide Strategic Plan to Reduce Gun ViolenceRead the Press Release
WASHINGTON, D.C. -- Today, Attorney General William P. Barr announced the launch of Project Guardian, a new initiative designed to reduce gun violence and enforce federal firearms laws across the country. Specifically, Project Guardian focuses on investigating, prosecuting, and preventing gun crimes.
Reducing gun violence and enforcing federal firearms laws have always been among the Department’s highest priorities. In order to develop a new and robust effort to promote and ensure public safety, the Department reviewed and adapted some of the successes of past strategies to curb gun violence. Project Guardian draws on the Department’s earlier achievements, such as the “Triggerlock” program, and it serves as a complementary effort to the success of Project Safe Neighborhoods (PSN). In addition, the initiative emphasizes the importance of using all modern technologies available to law enforcement to promote gun crime intelligence.
“Gun crime remains a pervasive problem in too many communities across America. Today, the Department of Justice is redoubling its commitment to tackling this issue through the launch of Project Guardian,” said Attorney General William P. Barr. “Building on the success of past programs like Triggerlock, Project Guardian will strengthen our efforts to reduce gun violence by allowing the federal government and our state and local partners to better target offenders who use guns in crimes and those who try to buy guns illegally.”
“Project Guardian has our full support. The Attorney General is exercising strong leadership in focusing on ways to reduce gun violence in our communities,” John W. Huber, U.S. Attorney for Utah, said today..
“This initiative will enhance our long-running strategies that have proven successful in fighting violent crime in Utah. We vigorously enforce federal firearms laws, maximize partnerships throughout the state, and use cutting edge technology in the Utah Crime Gun Intelligence Center to hold offenders accountable and prevent violence in the first place,” Huber said.
“ATF has a long history of strong partnerships in the law enforcement community,” said Acting Director Regina Lombardo. “Make no mistake, the women and men of ATF remain steadfast to our core mission of getting crime guns off of our streets. ATF and U.S. Attorneys nationwide will leverage these partnerships even further through enhanced community outreach initiatives and coordination with local, state, and tribal law enforcement and prosecutors to cut the pipeline of crime guns from those violent individuals who seek to terrorize our communities. Project Guardian will enhance ATF’s Crime Gun Intelligence, to include identifying, investigating and prosecuting those involved in the straw purchases of firearms, lying on federal firearms transaction forms, and those subject to the mental health prohibition of possessing firearms.”
Project Guardian’s implementation is based on five principles:
- Coordinated Prosecution. Federal prosecutors and law enforcement will coordinate with state, local, and tribal law enforcement and prosecutors to consider potential federal prosecution for new cases involving a defendant who: a) was arrested in possession of a firearm; b) is believed to have used a firearm in committing a crime of violence or drug trafficking crime prosecutable in federal court; or c) is suspected of actively committing violent crime(s) in the community on behalf of a criminal organization.
- Enforcing the Background Check System. United States Attorneys, in consultation with the Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) in their district, will create new, or review existing, guidelines for intake and prosecution of federal cases involving false statements (including lie-and-try, lie-and-buy, and straw purchasers) made during the acquisition or attempted acquisition of firearms from Federal Firearms Licensees.
Particular emphasis is placed on individuals convicted of violent felonies or misdemeanor crimes of domestic violence, individuals subject to protective orders, and individuals who are fugitives where the underlying offense is a felony or misdemeanor crime of domestic violence; individuals suspected of involvement in criminal organizations or of providing firearms to criminal organizations; and individuals involved in repeat denials.
- Improved Information Sharing. On a regular basis, and as often as practicable given current technical limitations, ATF will provide to state law enforcement fusion centers a report listing individuals for whom the National Instant Criminal Background Check System (NICS) has issued denials, including the basis for the denial, so that state and local law enforcement can take appropriate steps under their laws.
- Coordinated Response to Mental Health Denials. Each United States Attorney will ensure that whenever there is federal case information regarding individuals who are prohibited from possessing a firearm under the mental health prohibition, such information continues to be entered timely and accurately into the United States Attorneys’ Offices’ case-management system for prompt submission to NICS. ATF should engage in additional outreach to state and local law enforcement on how to use this denial information to better assure public safety.
Additionally, United States Attorneys will consult with relevant district stakeholders to assess feasibility of adopting disruption of early engagement programs to address mental-health-prohibited individuals who attempt to acquire a firearm. United States Attorneys should consider, when appropriate, recommending court-ordered mental health treatment for any sentences issued to individuals prohibited based on mental health.
- Crime Gun Intelligence Coordination. Federal, state, local, and tribal prosecutors and law enforcement will work together to ensure effective use of the ATF’s Crime Gun Intelligence Centers (CGICs), and all related resources, to maximize the use of modern intelligence tools and technology. These tools can greatly enhance the speed and effectiveness in identifying trigger-pullers and finding their guns, but the success depends in large part on state, local, and tribal law enforcement partners sharing ballistic evidence and firearm recovery data with the ATF.
Federal law enforcement represents only about 15% of all law enforcement resources nationwide. Therefore, partnerships with state, local, and tribal law enforcement and the communities they serve are critical to addressing gun crime. The Department recognizes that sharing information with our state, local, and tribal law enforcement partners at every level will enhance public safety, and provide a greater depth of resources available to address gun crime on a national level.
- Coordinated Prosecution. Federal prosecutors and law enforcement will coordinate with state, local, and tribal law enforcement and prosecutors to consider potential federal prosecution for new cases involving a defendant who: a) was arrested in possession of a firearm; b) is believed to have used a firearm in committing a crime of violence or drug trafficking crime prosecutable in federal court; or c) is suspected of actively committing violent crime(s) in the community on behalf of a criminal organization.
Indictments Unsealed Alleging Pay-To-Play Bribery Scheme by Manager, Trucking Companies at Utah FedEx Ground HubRead the Press Release
SALT LAKE CITY – Four indictments unsealed in U.S. District Court Monday afternoon allege several trucking companies in Utah paid more than $1 million in bribes to the Utah FedEx Ground hub manager as a part of a scheme to exploit the employee’s position within FedEx Ground (FXG) to make the trucking businesses as lucrative as possible. Ten individuals are charged in the indictments.
Announcing the indictments today are U.S. Attorney for Utah John W. Huber, Special Agent in Charge Paul Haertel of the FBI’s Salt Lake City Field Office, Special Agent in Charge Tara Sullivan of IRS-Criminal Investigation, Special Agent in Charge Jeffrey Dubsick of the U.S. Department of Transportation Office of Inspector General, and Michael Mentavlos, Special Agent in Charge of the Defense Criminal Investigative Service’s Southwest Field Office.
According to charging documents, FXG operates approximately 39 hubs or distribution centers to move packages around the country. One of the hubs is located in North Salt Lake City in Utah. FXG contracts with local trucking companies to transport packages on behalf of the company. Ryan Lee Mower, age 47, of Bountiful, was FXG’s highest-ranking employee in Utah from at least 2008 to October 2019. His primary responsibilities included overseeing the FXG contract service providers and ensuring that each local trucking company complied with FXG policies and regulations.
One of the four indictments, for example, alleges that by fraudulently obtaining runs, allowing unauthorized runs to continue, boosting miles and receiving payment for “ghost runs,” falsely reporting accidents, and falsely reporting miles to gain income – among other things, five co-conspirators received approximately $150 million in FedEx Ground revenue and paid $300,000 in bribes to Mower.
“Fair play, honest dealings, and transparency are core values in the American business landscape. Bribery and corrupt practices are not,” said U.S. Attorney John W. Huber. “The conduct alleged in the indictment not only runs counter to societal expectations for American business, it runs afoul of the laws of the United States. The alleged unjust enrichment comes at the expense of those who play by the rules in the market place.”
"These individuals allegedly exchanged bribes for business opportunities, and, as a result, lined their pockets with hundreds of millions of dollars spent on property, luxury cars, and other extravagances," said Paul Haertel, Special Agent in Charge of the FBI's Salt Lake City Field Office. "The FBI will never turn a blind eye to those who operate fraudulently because legitimate businesses should be allowed to compete on fair and level playing fields. The FBI is thankful for the collaboration of our law enforcement partners and the cooperation of FedEx to secure these indictments and arrests."
Tara Sullivan, Special Agent in Charge for IRS-Criminal Investigation said, “Ryan Mower allegedly received more than $1million in illegal income, which he did not claim on his tax returns, by taking bribes to provide an unfair advantage to other trucking companies. IRS Criminal Investigation is proud to assist its law enforcement partners in utilizing our unique financial investigative experience.”
“Maintaining public safety on our nation’s highways is paramount to protecting our families our economy and our way of life,” stated Jeffrey Dubsick, regional Special Agent-in-Charge of the U.S. Department of Transportation Office of Inspector General. “Motorists expect and deserve the highest standards of safety from trucking companies whose business is transporting goods on taxpayer-funded roads. The arrests in this case demonstrate our commitment to protecting the traveling public from commercial operators allegedly content with placing profit over public safety through actions that undermine important DOT regulations.”
"The Defense Criminal Investigative Service (DCIS) will aggressively pursue allegations of fraud and corruption impacting the Department of Defense (DoD)," stated Michael Mentavlos, Special Agent in Charge, Southwest Field Office. "Along with our Law Enforcement partners, DCIS is committed to safeguarding the integrity of precious taxpayer resources and will exhaust all appropriate criminal, civil and administrative actions against those individuals that choose to defraud the government and the DoD."
U.S. v Tuchinsky, Mower, et al
Six individuals are charged in one indictment with 16-counts of wire fraud conspiracy, promotional money laundering, and money laundering in connection with a 10-year conspiracy the indictment alleges started in 2009.
Charged in this indictment are Yevgeny Felix Tuchinsky, age 59, who has resides in Salt Lake City and San Diego, Alexsander Vasiliyevich Barsukov, age 52, of Salt Lake City, Konstantin Mikhaylovich Tomilin, age 50, who has homes in Salt Lake City and Pennsylvania, Leonid Isaakovich Teyf, age 58, of Raleigh, North Carolina, Felix Tsipelzon, age 48, of South Jordan, and Mower.
Five of the defendants were involved in some way with Salt Lake Trucking Group (SLTG). SLTG Ground is comprised of several trucking companies that contract to carry packages for FedEx Ground.
The indictment alleges the co-conspirators used Mower’s position to game FXG’s process governing the awarding of new runs and that Mower helped the co-conspirators grow their business larger than FXG allowed by submitting false information to FXG. Using Mower’s position, the co-conspirators falsified mileage reports and, on occasion, Mower would inflate or boost the number of weekly miles driven by one or more of the co-conspirators’ companies. Additionally, the trucking companies received payments from FXG for “ghost routes” never actually run by a trucking company, the indictment alleges.
The Salt Lake Trucking Group received about $150 million in FXG revenue during the approximate 10-year period of the conspiracy. During that same period, the indictment alleges the co-conspirators paid approximately $300,000 in bribes to Mower.
US v Ugarte and Mower
Hubert Ivan Ugarte, age, 52, of Draper and Mower are charged with four counts of wire fraud and six counts of money laundering in connection with the alleged bribery scheme. Ugarte owned and operated several trucking companies.
The indictment alleges that by fraudulently obtaining assigned runs, obscuring business ownership and growth, covering up failed contractual performances, and falsely reporting miles to gain unearned income, Ugarte’s companies received approximately $90 million in FXG revenue over the past eight years and paid Mower at least $490,000 in bribes, according to the indictment.
US v Kovacevic, Mower, et al
Davor Kovacevic, age 41, and Zlate Balulovski, age, 41, of West Jordan and Mower are charged with seven counts of wire fraud and three counts of money laundering in an indictment alleging that around April 2012, Kovacevic and Balulovski began bribing Mower. In exchange, Kovacevic and Balulovski asked for and received favors, preferential treatment, and assistance in defrauding FXG.
Kovacevic and Balulovski own and operate several trucking companies in Utah.
According to the indictment, the defendants used Mower’s position to game FXG’s process governing the awarding of new truck routes to FXG contract service providers, to falsify or boost mileage reports so that FXG paid the defendants’ companies more than they were entitled to, and to receive payments for “ghost routes” or runs never actually run by a trucking company.
As a result of the fraud, the indictment alleges the defendants’ companies received approximately $21,373,873 in FXG net revenue over the past seven and a half years and paid Mower approximately $165,000 in bribe payments.
US v Murdock and Mower
William Shayne Murdock, age 42, of Providence, Utah, and Mower are charged in a 10-count indictment with wire fraud, promotional money laundering, concealment money laundering, and money laundering. Murdock owns several trucking companies in Utah. Sometime around February 2014, Murdock began paying Mower bribes. In exchange, Murdock asked for and received favors and assistance in defrauding FXG, according to the indictment.
Fox example, at some time in 2014, one of Murdock’s trucking companies was awarded a FedEx freight run from Salt Lake City to Pennsylvania to Memphis. The indictment alleges Mower determined that based on FXG policies, he should have posted this run as an assigned run so that other contracted service providers could compete for the run. Mower did not post the run. He allowed Murdock trucking companies to operate the unauthorized assigned run for about five years.
By fraudulently obtaining assigned runs, obscuring business ownership and growth, and falsely reporting miles to gain unearned income, Murdock’s companies received about $19 million in FXG revenue over the past five years. During that period, Murdock paid bribes to Mower of at least $50,000.
US v Mower
Mower is charged with five counts of filing false tax returns in a Felony Information unsealed Monday. The charges allege Mower failed to include income in individual income tax returns he filed for several tax years. For example, in February 2016, he filed a return stating that his adjustable gross income for the 2015 tax year was $112,113, knowing he had received at least $223,088.54 in additional income. In a return for tax year 2016, he reported income of $111,835 when he knew that he had received at least $348,877.85 in additional income.
Seizures
In addition to the criminal charges, the United States obtained seizure warrants to deprive the defendants of the profits of their alleged criminal conduct by seizing 25 pieces of real property, 60 bank accounts, investments, cars, boats, snowmobiles, motorcycles, ATVs, trailers, jewelry and firearms. Items seized during a case are held while the case is litigated. The process is finalized with a forfeiture order signed by the Court.
Arrests/court hearings
Balulovski, Kovacevic, Barsukov, Tsipelzon, Tomilin and Murdock were arrested Friday and have initial appearances Monday afternoon in federal court. An arrest warrant has been issued for Ugarte. Mower has been issued a summons for an initial appearance Wednesday. Tuchinsky was arrested in San Diego Friday. A detention hearing has been set for Tuesday at 9:45 a.m. in San Diego. Teyf is in federal custody in North Carolina in an unrelated case.
The potential maximum penalty for wire fraud conspiracy/wire fraud is 20 years in prison. Promotional money laundering and concealment of money laundering counts each have potential 20-year sentences. The potential sentence for money laundering is up to 10 years in prison. Filing a false tax return has a potential maximum sentence of three years per count.
Indictments are not findings of guilt. Defendants charged in indictments are presumed innocent unless or until proven guilty in court.
First Defendant in Methamphetamine Trafficking Ring Sentenced to 20 Years in Federal PrisonRead the Press Release
SALT LAKE CITY – The lead defendant in a methamphetamine trafficking ring responsible for distributing more than 99 pounds of methamphetamine in Utah, Idaho, and other locations, will spend 20 years in federal prison after pleading guilty to conspiracy to distribute methamphetamine and conspiracy to commit money laundering.
According to documents filed in court, Tiffany Scott Spevak, age 39, of Salt Lake City, agreed that she conspired with others from about January 2014 through October 2016, to procure methamphetamine in Arizona and California and distribute it to customers in Utah, Idaho, and other locations.
She admitted that more than 99 pounds of methamphetamine were distributed during the conspiracy period. Spevak admitted that she directed other individuals to get the methamphetamine and to distribute it during conspiracy period. Investigators involved in the case estimate that the group distributed between 250-500 pounds of methamphetamine.
She also admitted that those involved in the conspiracy engaged in financial transactions, knowing the property involved in the financial transactions represented proceeds of unlawful activity – distribution of methamphetamine in this case – with the intent to continue the unlawful activity.
Acting on information provided by an individual arrested in Washington, special agents with U.S. Department of Homeland Security Investigations interviewed Spevak at her home in January 2016. Agents found $37,000 in case during a search of her residence. A narcotics K-9 alerted on items in the home. Agents found postal express mail envelopes and a small roll of green shrink wrap in a closet. Spevak initially told them the materials were from 2012 and were used by her significant other, Hugo Tapia-Mendoza, who is currently incarcerated in another federal drug case. During a later interview, Spevak told agents that after Tapia was arrested, she began to contact individuals who worked for Tapia who connected her with individuals who sold her methamphetamine.
Cases are pending for four other defendants in the case. Carlos Rafael Cota-Escalante, age 53, of Phoenix, Arizona, is charged with conspiracy to distribute methamphetamine and conspiracy to commit money laundering in the indictment. He is in custody. Stephen Scott Spevak, 62, of Idaho, is charged with conspiracy to distribute methamphetamine, conspiracy to commit money laundering, and three counts of money laundering. He is on pretrial release. An arrest warrant is pending for Carlos Rafael Cota-Llanes, age 31, of Phoenix, who is charged with conspiracy to distribute methamphetamine and conspiracy to commit money laundering. Shanna Walter, age 42, of Salt Lake County, is charged with money laundering and is on pretrial release. (Stephen Scott Spevak is Tiffany Scott Spevak’s father.)
In a related case in Idaho, Ryan Dalley of Pocatello, Idaho, who worked with Tiffany Spevak to get methamphetamine in Los Angeles and Phoenix for distribution in Idaho and Montana, was sentenced to 17 years in federal prison in September. At sentencing, U.S. District Court Judge B. Lynn Winmill noted he has presided over a significant share of the drug sentencings in federal court in Pocatello in the past 24 years, and he believed Dalley’s drug trafficking organization is “one of, if not the largest, drug trafficking operation in Eastern Idaho.”
Federal prosecutors in the U.S. Attorney’s Office in Utah are prosecuting the case. Special agents of the DEA, IRS-Criminal Investigation, and the U.S. Department of Homeland Security Investigations are investigating the case along with the Idaho State Police.
Utah Tax Return Preparers Sentenced to Prison for Filing False Tax ReturnsRead the Press Release
Alma Barlow and Denver Barlow, formerly of Hildale, Utah, were sentenced in federal court today to 24 months in prison each for conspiracy to file false claims, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney John W. Huber for the District of Utah.
According to court documents, from 2009 to 2014, the defendants held themselves out to the public as legitimate tax return preparers, though they filed over 700 false tax returns for themselves and for hundreds of unknowing clients, ultimately claiming over $9.7 million in false refunds from the Internal Revenue Service (IRS).
In furtherance of their conspiracy, the defendants added false entries to tax returns to trigger the Earned Income Tax Credit or added false figures for federal income tax withholdings, Form 1099-OID income tax withholdings, or Schedule C business expenses in order to fraudulently increase the amount of the claimed refunds.
In addition to the term of imprisonment, U.S. District Court Judge Ted Stewart ordered the defendants to each serve three years of supervised release, and to pay over $5.3 million in restitution to the United States.
Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney Huber thanked special agents of IRS-Criminal Investigation, who conducted the investigation, and Assistant U.S. Attorney Tyler Murray and Trial Attorney Matthew Hoffman of the Tax Division, who prosecuted the case.
Former Intelligence Officer Convicted of Attempted Espionage Sentenced to 10 Years in Federal PrisonRead the Press Release
SALT LAKE CITY – A former Defense Intelligence Agency (DIA) officer, who pleaded guilty in March to attempting to communicate, deliver, or transmit information involving the national defense of the United States to the People’s Republic of China, will serve 10 years in federal prison. U.S. District Judge Dee Benson imposed the sentence Tuesday afternoon in Salt Lake City.
Ron Rockwell Hansen, 60, of Syracuse, Utah, was arrested June 2, 2018, on his way to the Seattle-Tacoma International Airport in Seattle, Wash., as he was preparing to board a flight to China while in possession of SECRET military information.
Hansen pleaded guilty to the lead count of a 15-count indictment returned in June 2018, charging him with attempt to gather or deliver defense information, acting as an agent of a foreign government, bulk cash smuggling, structuring monetary transactions, and smuggling goods from the United States. On the motion of federal prosecutors, the court dismissed the remaining counts of the indictment at the sentencing.
“One of three ex-US intelligence officers recently convicted of acting on behalf of the People’s Republic of China, Ron Rockwell Hansen received hundreds of thousands of dollars for betraying his country and former colleagues,” said Assistant Attorney General John C. Demers of the Department of Justice’s National Security Division. “These cases show the breadth of the Chinese government’s espionage efforts and the threat they pose to our national security. Our intelligence professionals swear an oath to protect our country’s most closely held secrets and the National Security Division will continue to relentlessly pursue justice against those who violate this oath.”
“The Chinese government continues to attempt to identify and recruit current and former members of the United States intelligence community. This is a very troubling trend. These individuals must remain vigilant and immediately report any suspicious activity. The Hansen case is an example of what will happen to those who violate the public’s trust and risk our national security by disclosing classified information,” U.S. Attorney John W. Huber said today.
“Ron Hansen was willing to betray his oath and his country for financial gain,” said Special Agent in Charge Paul Haertel of the FBI’s Salt Lake City Field Office. "This case brings to light that not all spies are foreign adversaries. Insider threats pose a significant national security risk, and the FBI will continue to aggressively investigate those who put our country and citizens at risk.”
Hansen retired from the U.S. Army as a Warrant Officer with a background in signals intelligence and human intelligence. He speaks fluent Mandarin-Chinese and Russian, according to court documents. Upon retiring from active duty, DIA hired Hansen as a civilian intelligence case officer in 2006. Hansen held a Top Secret clearance for many years and signed several non-disclosure agreements during his tenure at DIA and as a government contractor.
As Hansen admitted in the plea agreement, in early 2014, agents of a Chinese intelligence service targeted him for recruitment, and he began meeting with them regularly in China. During these meetings, the agents described to Hansen the type of information that would interest Chinese intelligence. Hansen stipulated that during the course of his relationship with Chinese intelligence, he received hundreds of thousands of dollars in compensation for information he provided them.
Between May 24, 2016, and June 2, 2018, Hansen admitted he solicited national security information from an intelligence case officer working for the DIA. Hansen admitted knowing that the Chinese intelligence services would find the information valuable, and he agreed to act as a conduit to sell that information to the Chinese. He advised the DIA case officer how to record and transmit classified information without detection, and how to hide and launder any funds received as payment for classified information. He admitted he now understands that the DIA case officer reported his conduct to the DIA and subsequently acted as a confidential human source for the FBI.
Hansen admitted meeting with the DIA case officer on June 2, 2018 and receiving individual documents containing national defense information that he had previously solicited. The documents he received were classified. The documents included national security information related to U.S. military readiness in a particular region -- information closely held by the federal government. Hansen did not possess a security clearance nor did he possess a need to know the information contained in the materials.
As a part of his plea agreement, Hansen admitted he reviewed the documents, queried the case officer about their contents, and took written notes which contained information determined to be classified. He advised the DIA case officer that he would remember most of the details about the documents he received that day and would conceal notes about the material in the text of an electronic document he would prepare at the airport before leaving for China. He admitted he intended to provide the information he received to the agents of the Chinese Intelligence Service with whom he had been meeting. He also admitted knowing that the information was to be used to the injury of the United States and to the advantage of a foreign nation.
As a part of the plea agreement, Hansen has agreed to forfeit property acquired from or traceable to his offense, including property used to facilitate the crime.
The case was handled by Assistant U.S. Attorneys Robert A. Lund, Karin Fojtik, Mark K. Vincent and Alicia Cook of the District of Utah, and Trial Attorneys Patrick T. Murphy, Matthew J. McKenzie and Adam L. Small of the National Security Division’s Counterintelligence and Export Control Section. Prosecutors from the U.S. Attorney’s Office for the Western District of Washington assisted with this case.
The prosecution is the result of an investigation by special agents of the FBI, IRS-Criminal Investigation, U.S. Department of Commerce, the U.S. Department of Defense, U.S. Army Counterintelligence, and the Defense Intelligence Agency.
Former Intelligence Officer Convicted of Attempted Espionage Sentenced to 10 Years in Federal PrisonRead the Press Release
A former Defense Intelligence Agency (DIA) officer, who pleaded guilty in March to attempting to communicate, deliver, or transmit information involving the national defense of the United States to the People’s Republic of China, will serve 10 years in federal prison. U.S. District Judge Dee Benson imposed the sentence Tuesday afternoon in Salt Lake City.
Ron Rockwell Hansen, 60, of Syracuse, Utah, was arrested June 2, 2018, on his way to the Seattle-Tacoma International Airport in Seattle, Washington, as he was preparing to board a flight to China while in possession of SECRET military information.
“One of three ex-US intelligence officers recently convicted of acting on behalf of the People’s Republic of China, Ron Rockwell Hansen received hundreds of thousands of dollars for betraying his country and former colleagues,” said Assistant Attorney General of National Security John C. Demers. “These cases show the breadth of the Chinese government’s espionage efforts and the threat they pose to our national security. Our intelligence professionals swear an oath to protect our country’s most closely held secrets and the National Security Division will continue to relentlessly pursue justice against those who violate this oath.”
“The Chinese government continues to attempt to identify and recruit current and former members of the United States intelligence community. This is a very troubling trend. These individuals must remain vigilant and immediately report any suspicious activity. The Hansen case is an example of what will happen to those who violate the public’s trust and risk our national security by disclosing classified information,” said U.S. Attorney John W. Huber for the District of Utah.
“Ron Hansen was willing to betray his oath and his country for financial gain,” said Special Agent in Charge Paul Haertel of the FBI’s Salt Lake City Field Office. "This case brings to light that not all spies are foreign adversaries. Insider threats pose a significant national security risk, and the FBI will continue to aggressively investigate those who put our country and citizens at risk.”
Hansen retired from the U.S. Army as a Warrant Officer with a background in signals intelligence and human intelligence. He speaks fluent Mandarin-Chinese and Russian, according to court documents. Upon retiring from active duty, DIA hired Hansen as a civilian intelligence case officer in 2006. Hansen held a Top Secret clearance for many years, and signed several non-disclosure agreements during his tenure at DIA and as a government contractor.
As Hansen admitted in the plea agreement, in early 2014, agents of a Chinese intelligence service targeted him for recruitment, and he began meeting with them regularly in China. During these meetings, the agents described to Hansen the type of information that would interest Chinese intelligence. Hansen stipulated that during the course of his relationship with Chinese intelligence, he received hundreds of thousands of dollars in compensation for information he provided them.
Between May 24, 2016, and June 2, 2018, Hansen admitted he solicited national security information from an intelligence case officer working for the DIA. Hansen admitted knowing that the Chinese intelligence services would find the information valuable, and he agreed to act as a conduit to sell that information to the Chinese. He advised the DIA case officer how to record and transmit classified information without detection, and how to hide and launder any funds received as payment for classified information. He admitted he now understands that the DIA case officer reported his conduct to the DIA and subsequently acted as a confidential human source for the FBI.
Hansen admitted meeting with the DIA case officer on June 2, 2018, and receiving individual documents containing national defense information that he had previously solicited. The documents he received were classified. The documents included national security information related to U.S. military readiness in a particular region -- information closely held by the federal government. Hansen did not possess a security clearance nor did he possess a need to know the information contained in the materials.
As a part of his plea agreement, Hansen admitted he reviewed the documents, queried the case officer about their contents, and took written notes which contained information determined to be classified. He advised the DIA case officer that he would remember most of the details about the documents he received that day and would conceal notes about the material in the text of an electronic document he would prepare at the airport before leaving for China. He admitted he intended to provide the information he received to the agents of the Chinese Intelligence Service with whom he had been meeting. He also admitted knowing that the information was to be used to the injury of the United States and to the advantage of a foreign nation.
As a part of the plea agreement, Hansen has agreed to forfeit property acquired from or traceable to his offense, including property used to facilitate the crime.
The case was handled by Assistant U.S. Attorneys Robert A. Lund, Karin Fojtik, Mark K. Vincent and Alicia Cook of the District of Utah, and Trial Attorneys Patrick T. Murphy, Matthew J. McKenzie and Adam L. Small of the National Security Division’s Counterintelligence and Export Control Section. Prosecutors from the U.S. Attorney’s Office for the Western District of Washington assisted with this case.
The prosecution is the result of an investigation by special agents of the FBI, IRS-Criminal Investigation, U.S. Department of Commerce, the U.S. Department of Defense, U.S. Army Counterintelligence, and the Defense Intelligence Agency.
Eight Individuals Charged in Fraud Scheme Targeting Widows; Created False Identities, Feigned Relationships, Took MoneyRead the Press Release
SALT LAKE CITY – A federal grand jury returned a 10-count superseding indictment Wednesday afternoon charging eight individuals in connection with a fraud scheme primarily targeting widowed women over 65 years old. The indictment alleges that over approximately two years, the defendants defrauded dozens of victims out of more than $6 million, which they laundered through accounts they controlled.
According to the indictment, the defendants and unnamed co-conspirators used social media and social gaming applications to target widows. The defendants created false identities to befriend potential victims, feigned romantic interest, and eventually pressured them to send money to the defendants. The indictment also alleges the defendants engaged in a series of subsequent transactions to disguise the origins of the funds and promote the operation of the conspiracy – often sending significant sums of money overseas.
Charged in the indictment are Jeffersonking Anyanwu, age 25, Daniel Negedu, age 21, Onoriode Kenneth Adigbolo, age 31, Chukwudi Kingsley Kalu, age 28, and Godsent Nwanganga, age 24, all Nigerians living in Orem; David Maduagu, age 27, a Nigerian living in Taylorsville; and Richard Ukorebi, age 38, and Adrianna Sotelo, age 20, both of West Valley City. Ukorebi is also Nigerian.
All defendants are charged with one count of conspiracy to commit mail fraud, three counts of mail fraud, and one count of money laundering conspiracy. Anyanwu, Negedu, Adigbolo, Kalu, Ukorebi, Nwanganga and Sotello are also each charged with one count of money laundering.
The indictment alleges that in the typical execution of the scheme, the defendants and their co-conspirators would create a fake online personality on a social media website or dating application, befriend a woman through that website, and convince the woman through the fake persona that they had some urgent financial need. The fake profiles included a businessman in Europe, high ranking United States military officers, a successful Utah businessman, an individual in Sweden under house arrest, and an engineer working as a subcontractor for a large oil company working in Oman. The fake schemes alleged in the indictment included telling women that a U.S. military member was stranded overseas, pitching loans or investment opportunities, and describing an urgent business need to purchase equipment. After presenting the false financial need, the victims were provided with the defendants’ bank account information. Once the money was in the defendants’ accounts, they would transfer the money to each other and to overseas accounts, withdraw the money as cash, or use the money for personal expenses. The indictment includes several examples of fake profiles the defendants allegedly used to obtain and launder money from victims. The victims in these examples ranged in age from 52 to 76.
One victim of the alleged scheme, a 75-year-old woman identified as C.S. in the indictment, was contacted on social media by the defendants using the profile “Aaron.Brain.” “Brain” claimed to be a businessperson living in Germany. “Brain” provided photos and discussed his business, claiming he was involved in a business supplying pipe for a sewer in Turkey. “Brain” provided photographs of industrial pipes in a warehouse. He told the victim she could make $600,000 in his business venture. He convinced C.S. to send 10 checks totaling $275,000 and make five wire transfers totaling $81,000 between April 2, 2018 and May 17, 2018.
The defendants and their unnamed co-conspirators used the name of a U.S. military general to befriend N.W., a 74-year-old woman, through social media. Using the persona of the general, they pretended to be a high-ranking officer at Ft. Bragg deployed overseas. They claimed to have a “portfolio” that was restricted due to customs fees and he needed her assistance to get his “portfolio” released. They instructed N.W. to send checks made out to several of defendants. The address they provided for mailing the checks was an address for Negedu in Vineyard, Utah, and other locations. N.W. sent approximately $140,150.
The maximum potential penalty for each of the first four counts in the indictment is 20 years in prison and a fine of $250,000 (or double the stolen amount). The penalty for each money laundering and money laundering conspiracy count is 10 years in federal prison and $250,000 (or double the laundered amount).
Anyanwu, Negedu, and Adigbolo were initially charged in an indictment returned by a federal grand jury in late May. They were arraigned on the charges and entered pleas of not guilty. They will remain in custody pending resolution of the case after U.S. Magistrate Judge Paul M. Warner found them to be a financial danger to the community, a risk of non-appearance, or both. Ukorebi, Maduagu, and Sotelo were previously charged by criminal complaint and arrested. Ukorebi and Maduagu were ordered detained pending trial. Sotelo is released on supervision pending trial. Nwanganga is incarcerated on unrelated charges. Kalu remains at large.
Assistant U.S. Attorneys in Salt Lake City are prosecuting the case. Special agents of the FBI and Postal Inspectors from the U.S. Postal Inspection Service are investigating the case.
The defendants were arrested and charged as part of DOJ’s Operation reWired, a coordinated international enforcement operation. (DOJ September 10, 2019 Press Release).
Surge of Law Enforcement, Prosecution Resources Making Ogden PSN Target Area Safer for ResidentsRead the Press Release
PSN Target Enforcement Area Summary
- 963 months of prison imposed (80.25 years)
- 21 defendants sentenced (20 to prison, 1 on probation)
- Average prison is 48.15 months
- Screened cases involving 164 individuals
- 74 individuals have been charged
- Another 90 are under review or have been declined
- 115 weapons recovered as a part of cases filed – including a grenade launcher, 78 pistols
- 34,656.42 grams of drugs, including 29,766.63 grams of meth
- In 2018, Weber County CSI responded to 93 shooting incidents where casings or bullets were recovered. By Sept. 1, 2018, there had been 69 shootings. As of Sept. 1, 2019, they have responded to 32 shootings.
What is the PSN Target Enforcement Area: While the Utah PSN Task Force, along with other local and federal law enforcement agencies fulfill their duties and mission in every area of the state, the PSN Task Force has selected a 4.86 square mile area located primarily within Ogden City and Weber County for enhanced targeted enforcement. This area, selected for its history of firearm and drug related crimes, includes 8,047 households and more than 22,000 residents of Ogden City and Weber County. Through collaborative efforts and combined resources, the PSN Task Force is strategically targeting this area to detect, investigate, and disrupt those who violate state and federal laws, particularly firearm and drug related crimes. Offenders arrested as a part of the targeted enforcement action are being prosecuted in state or federal court based upon which jurisdiction that can provide the most appropriate sanction. In 2018, Ogden City experienced a historic 19.7% reduction in its Part 1 crimes. Ogden City leaders attribute much of the success of this reduction in crime to the coordinated work occurring within the PSN Target Enforcement Area.
Significant cases prosecuted as a part of the TEA:
U.S. v. Christopher J. Spraw, et al: Six individuals are charged in a six-count indictment with conspiracy to distribute methamphetamine, conspiracy to distribute heroin, possession of meth with intent to distribute (Buenrostro), and two counts of possession of heroin with intent to distribute (Buenrostro and Deroboam). Spraw is charged in the last count with possession of a firearm. According to a complaint filed in the case, the FBI, the Davis Metro Narcotics Strike Force and the Weber Morgan Strike Force initiated separate investigations based on information indicating Spraw, a member of the Silent Aryan Warriors (SAW), was working with others to sell large amounts of methamphetamine and heroin in Weber and Davis counties. The agencies joined forces to continue the investigation. Counts 3 and 4 of the indictment relate to approximately 195 pounds of meth and 1 pound of heroin found during the execution of a search warrant in Kearns. Spraw, age 49, is from Ogden. Other defendants include Manuel Ramblano Sanchez Jr., age 24, address unknown, Damian Buenrostro, age 22, of Kearns, Sheila Mary Deroboam, age 52, Heidi Lynn Openshaw, age 40, and Vanessa Dominguez, age 33, all of Ogden. Arrest warrants are pending for Sanchez and Buenrostro. The defendants face up to life in prison with a mandatory minimum 10 years if convicted of the conspiracy to distribute meth count.
U.S. v Lawley: Dijuan Michele Lawley, age 45, of Ogden, pleaded guilty to distribution of cocaine and possession of a firearm in furtherance of a drug trafficking crime in late May and was sentenced to 78 months in federal prison and five years of supervised release when he finishes his sentence. Lawley admitted he distributed approximately 2 grams of cocaine to another person, who was an ATF agent acting in an undercover capacity. He also admitted he possessed three firearms in furtherance of his drug trafficking crime. Lawley was initially in custody on another federal case that was dismissed Aug. 31, 2018. Five days after being released from custody, he made arrangements to sell cocaine. He was arrested by the ATF SWAT team with helicopter surveillance assistance from the Utah Department of Public Safety.
U.S. v Cordova: A two-day trial will start Oct. 22, 2019, before U.S. District Judge Robert J. Shelby for Rory Curtis Cordova, aka “Joker,” age 51, of Ogden, who faces two counts of possessing a firearm following a felony conviction. A criminal complaint filed Aug.15, 2018, alleges that around midnight on June 30, 2018, South Salt Lake City police officers responded to reports of gunfire at a residence. Officers learned that an unidentified individual had fired multiple shots at the residence from a vehicle. Eight bullets struck the residence. Two individuals were inside the home at the time. Based on the video information and additional information provided by a resident of the home, law enforcement officers were able to identify Rory Cordova as a suspect in the case. At approximately, 3:15 a.m., the complaint says, law enforcement officers from multiple agencies located Cordova’s vehicle in Ogden and took him into custody. During the course of the investigation, officers recovered several shell casings from inside Cordova’s vehicle where they also located a stolen Glock 26 9mm handgun. Firearms leave unique markings on ammunition and casings as it is discharged from the firearm. NIBIN stores images of those markings, which identify the signature of the firearm. These images are compared against other NIBIN entries for matches or “hits.” A “hit” indicates that the markings are the same on the ammunition or casings and would have been fired from the same firearm. NIBIN analysis revealed that the markings on the spent shell casings recovered from the scene of the South Salt Lake shooting matched the spent shell casings recovered from Cordova’s car. The NIBIN analysis also linked the Glock handgun recovered from Cordova’s vehicle to spent shell casings recovered from the scene of a shots fired call in Ogden on June 8, 2018. According to the complaint, the Ogden incident involved a man pulling up in front of a residence where a child’s birthday party was taking place. Shots were fired at the residence from the vehicle. Officers located several bullet holes and marks on the exterior of the residence, the front window of the residence, and the windshield of a vehicle parked in the driveway at the residence. Witness statements describing the shooter and the vehicle he was driving were consistent with Cordova and matched a vehicle registered to Cordova. Cordova is a documented Ogden Trece gang member and has felony convictions, leading to his restricted status under federal law firearms laws, according to charging documents. The potential maximum penalty for each of the counts in the complaint is 10 years in federal prison.
US v Armstrong: Charles Ray Armstrong, age 55, of West Valley City, who pleaded guilty to conspiracy to distribute more than 50 grams of methamphetamine, was sentenced to 117 months in federal prison Aug. 12, 2019. Armstrong admitted that he agreed to deliver meth to a location in Ogden. According to the court document, when he arrived to deliver the meth, he recognized the person purchasing the meth was an informant who worked with law enforcement. He immediately left the area and drove his vehicle to the freeway with law enforcement in pursuit. He admitted throwing the meth out the window of his vehicle. Police recovered a portion of the drugs. Testing done at the Utah Crime Lab found 94.83 grams of actual meth.
US v Sexton: Brandon Michael Sexton, age 44, of Ogden, is charged in a three-count indictment with possession of methamphetamine with intent to distribute, possession of heroin with intent to distribute, and possession of 19 firearms and associated ammunition following a felony conviction. An investigation conducted by the Weber Morgan Narcotics Strike Force resulted in Sexton’s arrest. A three-day jury trial is set for Oct. 15, 2019, before U.S. District Judge Jill N. Parrish. The maximum potential penalty for the charges in the indictment is life in prison with a 10-year mandatory minimum.
Indictments are not findings of guilt. Individuals charged in indictments are presumed innocent unless or until proven guilty in court.