District of Utah
Press releases recorded for this federal judicial district.
Complaint Filed Charging Utah County Man with Distribution of HeroinRead the Press Release
SALT LAKE CITY – A complaint filed in federal court Thursday afternoon charges Edward Lee Poorman, age 22, of Vineyard, UT, with one count of distribution of heroin. Poorman, who has been in state custody on unrelated charges, is scheduled for an initial appearance on the drug charge Monday at 10:30 a.m. before U.S. Magistrate Judge Paul M. Warner.
According to an affidavit filed with the complaint and signed by a special agent with Homeland Security Investigations, Provo City police officers responded to a Provo residence on July 6, 2016, following a call that a female at the residence was not breathing. Upon arrival, officers observed emergency medical personnel performing life saving techniques. Despite these efforts the victim, referred to as BW in the complaint, was pronounced dead a short time later.
A neighbor told officers that she had been walking by when she observed the victim’s son outside. She described him as looking lost and afraid. She stopped to see if she could help. He told her that his mother was in the house and he could not get her to wake up. He wanted some help. She immediately went to another neighbor’s home to seek help and was able to locate someone who knew BW and her family. This neighbor ran into the home to try to render aid. When she observed the BW’s condition, she called 911 and with the help of the 911 dispatcher, started CPR. Provo City Fire and Rescue arrived a short time later and took over the life saving techniques.
The medical examiner’s report later revealed that BW died as a result of the combined effects of methamphetamine and heroin-derived morphine. According to the complaint, toxicology results showed about twice as much morphine in BW’s system as meth. Provo detectives conducted a search of the residence and found two used syringes and a small amount of as black tar substance that field-tested positive for heroin, in a small syringe cap above the medicine cabinet. Detectives also located as cell phone in BW’s bedroom. They also observed that BW had a small puncture mark on her left hand consistent with recent narcotics injections.
According to the complaint, officers obtained a search warrant to search the cell phone and later obtained search warrants to search the Facebook accounts of BW and Poorman. Agents discovered BW had used a Facebook messenger application and that it contained messages from a multiple-day conversation between Poorman and BW. The conversations, recounted in the complaint filed in court, show the pair coordinating timing and directions to purchase drugs in the days leading up to BW’s death.
In an interview at the Utah County jail in February, Poorman admitted that he helped BW secure heroin on the evening of July 5, 2016, so that she would share some with him. According to the complaint, after they had secured heroin from his source, he injected himself and then BW dropped him off at a convenience store. Poorman claims this is the last time he saw BW.
The potential penalty for distribution of heroin is 20 years in prison and a fine of $1 million.
Complaints are not findings of guilt. Individuals charged in a complaint are presumed innocent unless or until proven guilty in court.
Grand Jury Returns 12-Count Indictment Charging Diehl in Bankruptcy Fraud CaseRead the Press Release
SALT LAKE CITY -- A federal grand jury returned a 12-count indictment late Wednesday afternoon charging Terry Charles Diehl, age 61, of Salt Lake City, with filing false declarations and concealing assets in connection with his Chapter 11 bankruptcy reorganization. Diehl is a Utah real estate developer and former board member of the Utah Transit Authority.
U.S. Attorney for Utah John W. Huber and Special Agent-in-Charge Eric K. Barnhart of the FBI’s Salt Lake Division announced today’s indictment.
“We seek to protect the integrity of the bankruptcy court from those who would exploit its protections because of selfish motivation,” Huber said Wednesday. “The defendant is a former UTA board member. Among other conduct, the indictment alleges that the defendant received more than $1 million in gross income related to a UTA Front Runner real estate development. It further alleges that he knowingly and fraudulently misrepresented that income to the bankruptcy court,” Huber said.
The indictment alleges that several months prior to filing for bankruptcy on March 30, 2012, Diehl set up a company, Skyline Ventures Associates, Inc. (SVA), owned by his two daughters, but managed and controlled by him, to conduct his daily business and financial affairs. Additionally, Diehl caused a SVA business bank account to be opened. The indictment further alleges that although the authorized signatories on the SVA account were his daughters and office manager, Diehl controlled and directed all funds in and out of the account.
The indictment further alleges that despite Diehl's primary obligation to provide for full financial disclosure imposed by federal bankruptcy law, he filed false declarations with the bankruptcy court, knowingly and fraudulently omitting or misrepresenting facts about SVA and the funds he controlled in and out of the SVA account. For example, on Diehl's Statement of Financial Affairs, a bankruptcy filing requiring full disclosure of his current financial status, he omitted SVA, a corporation Diehl clearly managed and controlled in his daily business affairs. In this filing, the indictment alleges Diehl also omitted more than $1 million in gross business income stemming from a UTA Front Runner transit oriented development in Draper, Utah.
The indictment further alleges that on numerous Monthly Operating Reports, filings requiring Diehl to fully disclose all cash receipts, he failed to report all funds he directed in and out of the SVA account. Rather, Diehl reported only a fraction of his monthly cash receipts on his monthly filings. During the period from April 2012 (when he filed his bankruptcy petition) to May 2013 (when Diehl's plan of reorganization was confirmed), Diehl filed 11 Monthly Operating Reports underreporting cash receipts in and out of the SVA account he directed and controlled.
Finally, the indictment alleges that each directive by Diehl to move funds into the SVA account, much of which was not reported on Monthly Operating Reports, was a knowing and fraudulent act to conceal assets of Diehl's bankruptcy estate.
The first five counts of the indictment allege false declarations. The indictment also alleges seven counts of concealment of assets. The potential penalty for each count in the indictment is five years in prison and a fine of $250,000. A summons will be issued for Diehl to appear in federal court on the charges alleged in the indictment.
Indictments are not findings of guilt. Individuals charged in an indictment are presumed innocent unless or until proven guilty in court.
Federal prosecutors in the U.S. Attorney’s Office are prosecuting the case. The case is being investigated by special agents of the FBI and the U.S. Department of Transportation Office of Inspector General.
Utah Federal, State and Local Government Officials Join Forces to Educate Investors on How to Avoid FraudRead the Press Release
SALT LAKE CITY -- In a new, collaborative effort, Utah federal, state and local government officials established the Financial Fraud Institute and will hold two separate multi-agency seminars designed to educate Utah investors and consumers on how to recognize and avoid financial and consumer fraud, announced U.S. Securities and Exchange Commission Regional Director Richard R. Best and U.S. Attorney for the District of Utah John W. Huber.
The free seminars are open to the public and will be held in Salt Lake City on April 26 and in Utah County on May 10. Follow us on Twitter at #StopFraudUtah.
Officials from the U.S. Securities and Exchange Commission, U.S. Attorney’s Office, Utah Attorney General’s Office, Financial Industry Regulatory Authority (FINRA), Utah Division of Securities, U.S. Commodity Futures Trading Commission, Utah Division of Consumer Protection, FBI, IRS, the Salt Lake District Attorney’s Office, and the Utah County Attorney’s Office will participate in the seminars.
Utah Attorney General Sean Reyes will be the keynote speaker at the April seminar and Chief Magistrate Judge Paul M. Warner of the U.S. District Court for the District of Utah will be the keynote speaker at the May seminar. These are the first in a series of seminars to be held by representatives of the Financial Fraud Institute.
The seminars will provide information on key questions to ask before making investment decisions; where to find free and unbiased information; how to spot financial scams; and how to report suspected fraud.
WHO: National and local experts from federal and state law enforcement and financial regulatory agencies
WHAT: Financial Fraud Institute Seminars to educate investors and consumers on how to recognize and avoid fraud
Salt Lake City
WHEN: April 26 in Salt Lake City
5:00 p.m. – 8:30 p.m. See full agenda
WHERE: University of Utah
S.J. Quinney College of Law Auditorium
383 S. University St.
Salt Lake City, UT 84112
Free parking at the University of Utah Stadium
Utah County
WHEN: May 10 in Utah County
5:00 p.m. – 8:30 p.m. See full agenda
WHERE: Utah Valley University
Classroom Building Rooms 101B and 101C
800 W. University Parkway
Orem, UT 84058
Those interested in attending the seminars must register at: Salt Lake City and Utah County, or call 801-579-6191. For more information, visit www.utfraud.com.
The seminars are open to the press. Press interested in attending the events should contact Melodie Rydalch of the Utah U.S. Attorney’s Office on 801-243-6475 or [email protected].
U.S. District Judge Denies Environmentalists’ Challenge to Four Oil and Gas Leases Sold by BLM at November 2011 Lease SaleRead the Press Release
SALT LAKE CITY - In a case before the court on a Motion for Review of Agency Action filed by the Southern Utah Wilderness Alliance, Natural Resources Defense Council, and The Wilderness Society, the plaintiffs challenged the BLM’s decision to issue four oil and gas lease parcels in the November 2011 oil and gas lease sale, and its subsequent decision to approve the Seven-Well Project.
The plaintiffs’ suit names the United States Department of the Interior, BLM, and the Price Field Office Manager for BLM, Ahmed Mohsen as defendants. XTO Energy, Inc., which purchased the leases and submitted the proposal for the Seven-Wells Project, intervened as a defendant.
As explained in the attached memorandum decision and order, U.S. District Court Judge Jill N. Parrish affirms the agency’s action regarding the 2011 Lease Sale and dismisses plaintiffs’ claims regarding the Seven-Well Project as moot.
Judge Parrish memorandum decision and order.pdfFifteen Firearms Cases Filed in St George Area in First Three Months of 2017Read the Press Release
ST. GEORGE – Federal prosecutors working in the U.S. Attorney’s Office in St. George have filed 15 firearms cases since the beginning of 2017. Partnering with local police officers, task forces, and federal agents, their efforts are targeting individuals prohibited under federal laws from possessing firearms or ammunition.
“Federal firearms laws are a valuable tool to we use to reduce violent crime and protect Utah communities. The majority of defendants in these cases have previous felony convictions and many are charged with possession of drugs or violations of other federal laws in addition to the firearms count,” U.S. Attorney John W. Huber said today. “We recognize and appreciate the diligent work of local law enforcement officers and task forces, federal agents, and other partners in preparing these cases for prosecution.”
Examples of the cases filed in St. George this year include:
US v William Henry Woods
Woods, age 38, of Tennessee, was charged with felon in possession of a firearm and possession of counterfeit currency in an indictment returned Feb. 1, 2017. According to a complaint filed in the case, a deputy from the Washington County Sheriff’s Office stopped a car in Washington City, Utah, for traffic violations. There were three individuals in the car – the male driver and two females. The driver provided the deputy with a driver’s license. The picture on the license did not resemble the driver.
While a deputy was checking the license, the driver drove away. He went a short distance before driving off the road. He then fled on foot. One of the passengers told the deputy the driver likely had a firearm in the vehicle or on his person. During a subsequent search of the vehicle, officers found a loaded Sig Sauer P938 9mm pistol. Records show the pistol was reported stolen in Memphis, TN. Officers also located about 42 $50 bills in the vehicle’s center console. Each of the bills shared one of four serial numbers. The driver, identified as Woods, was arrested by the officers. He was on federal supervised release in Tennessee after recently completing a 10-year prison sentence for another firearms violation. Woods pleaded guilty to the firearms count in the indictment on March 27. Sentencing is set for Aug. 7, 2017, at 1:30 p.m. in St. George before U.S. District Judge Ted Stewart. He faces up to 10 years in federal for the firearms conviction.
Deputies in the Washington County Sheriff’s Office and special agents of the FBI are investigating the case. Assistant U.S. Attorneys in St. George are prosecuting the case.
US v Verne Francis Holmes, III
Holmes, age 47, of St. George, was indicted in March on one count of felon in possession of a firearm and ammunition. He came to law enforcement’s attention in January after setting off a shoplifting alarm in a department store. After he was confronted by store employees, Holmes left the store. He got into a vehicle driven by a woman. Employees called the police. Eventually, the car Holmes was a passenger in entered the parking lot of a St. George restaurant. Holmes began shuffling property in the car and removed the license plate. An off-duty detective from Salt Lake City was observing his activities. The detective became suspicious watching Holmes’ actions.
Holmes was located hiding behind the restaurant. Officers found .22 caliber ammunition in a backpack in his possession. During a search of the car, officers located more ammunition and a Hi-Standard .22 caliber revolver. A writ has been issued for Holmes to appear in federal court in St. George on the charges. He faces up to 10 years in federal prison if convicted.
St. George police officers and special agents of the ATF are investigating the case. Assistant U.S. Attorneys in the U.S. Attorney’s Office in St. George are prosecuting the case.
US v Clinton Michael Johnson
Johnson, age 39, of Cedar City, was stopped by a Cedar City Police Officer for a traffic violation on Nov. 14, 2016. According to a complaint filed in the case, the officer detected the odor of marijuana. Johnson could not provide proof of insurance for the vehicle said he could call the owner of the vehicle who would bring the proof of insurance for the vehicle to the officer. While waiting for the owner to arrive, an Iron County deputy sheriff arrived with his K-9. The dog alerted to the presence of narcotics inside the vehicle. A search of the vehicle found a small amount of methamphetamine, two digital scales, and numerous small plastic baggies. A loaded .45 caliber handgun was located under the floor mat of the seat where Johnson had been sitting. Winchester .45 caliber ammunition was also found in the car.
On the same day as his arrest, Johnson was supposed to report to a U.S. Bureau of Prisons facility to begin serving a 40-month sentence imposed by U.S. District Judge Stewart in September 2016. The federal complaint for the new conduct was filed Jan 6, 2017, and he was charged in a Felony Information with felon in possession of ammunition and possession of methamphetamine on Jan. 17, 2017. Although ATF has yet to determine whether the firearm Johnson possessed traveled in interstate commerce, the ammunition was not manufactured in the State of Utah.
Johnson pleaded guilty to possession of the ammunition on Feb. 27, 2017. He faces up to 10 years in federal prison when he is sentenced by U.S. District Judge Ted Stewart in May.
Officers of the Cedar City Police Department, deputies from the Iron County Sheriff’s Office, and special agents of the DEA are investigating the case. Assistant U.S. Attorneys in the U.S. Attorney’s Office in St. George are prosecuting the case.
Grand Jury Returns Three-Count Indictment Charging Ogden Couple in FBI Child Pornography CaseRead the Press Release
SALT LAKE CITY – A federal grand jury returned a three-count indictment last week charging Jason David Lott, age 32, and his wife, Camila Mae Bergeson, age 22, both of Ogden, in connection with a child pornography case investigated by the FBI Child Exploitation Task Force.
Lott faces charges of distribution of child pornography, possession of child pornography, and possession of a firearm and ammunition following a felony conviction. Bergeson is charged with Lott in a possession of child pornography count. Lott and Bergeson appeared for arraignment on the charges in U.S. District Court Thursday. Both entered not guilty pleas to the charges
According to a complaint filed in the case, an FBI special agent was conducting an online investigation on the BitTorrent network for offenders sharing child pornography. He directed his investigative focus to a device at a specific IP address, referred to as the “Suspect Device” in the complaint, because it was associated with Torrent files. At least one of the files was identified as being a file of interest in child pornography investigations.
The complaint alleges that on several occasions, the agent successfully completed several downloads made available from the Suspect Device. The downloaded files included sexually explicit images and videos depicting the sexual abuse of infants, toddlers, and prepubescent children. Further investigation of the IP address led the FBI task force to Lott and Bergeson’s residence in Ogden.
Federal agents executed a federal search warrant at the residence on March 16, 2017. Several devices were seized during the execution of the warrant, including a laptop computer. During a preliminary search of the laptop computer, agents located the Bit-Torrent program Vuze, as well as evidence indicative of an individual using a peer-to-peer program to obtain files of child pornography.
Agents also located an H & R 12 gauge shotgun and associated ammunition. Lott is a registered sex offender. He has a 2009 Utah conviction for sexual exploitation of a minor.
Lott admitted to having the Bit-Torrent program on his computer and having knowledge that one could obtain images of child pornography. He also admitted to using a program to wipe his computer once a week. Bergeson admitted to looking at videos and images of child pornography on the computer with her husband. She admitted they have looked at child pornography for the last six months approximately every other week. They erased the child pornography after looking at it.
Lott faces a potential mandatory minimum sentence of 15 years with a maximum 40-year sentence if convicted of distribution of child pornography. Because of his criminal history, Lott faces a potential 10-year mandatory minimum for the possession of child pornography count. Possessing a firearm following a felony conviction carries a potential 10-year sentence. Bergeson faces up to 20 years in prison if convicted of the possession of child pornography count.
A four-day jury trial is set for May 22, 2017, before U.S. District Judge Jill N. Parrish. Lott is in custody. Bergeson was been released from custody subject to standard and special conditions of supervised release, including a requirement that she get a full-time job.
Indictments are not findings of guilt. Individuals charged in an indictment are presumed innocent unless or until proven guilty in court.
Gonzales Pleads Guilty to Possession of Ammunition; Agreement Includes Stipulated 10-Year SentenceRead the Press Release
SALT LAKE CITY – Sentencing is set for June 7, 2017, for Aldo Gonzalez, 26, of Salt Lake City, who pleaded guilty to possession of ammunition after a previous felony conviction. The plea agreement includes a stipulated 10-year sentence in federal prison. Gonzalez, a member of the Nortenos Familia Varrio Loco gang, is being prosecuted as a part of the #UtahGangInitiative and the Utah Project Safe Neighborhoods initiative.
Gonzalez was indicted on the charge in September. He entered his guilty plea March 14, 2017, before U.S. District Judge Tena Campbell.
The charges stem from a July 1, 2016, encounter Gonzalez had with an individual at a restaurant in West Valley City. The victim and his girlfriend saw a male, later identified as Gonzalez, wearing a red 49ers hat. The victim told Gonzalez he had a cool hat. Gonzalez left the restaurant shortly thereafter.
The victim and his girlfriend finished their dinner and drove to their home in West Valley City. As they got out of the vehicle, they were approached by two men who were pointing handguns at them. The victim recognized one of the men as the individual he had seen at the restaurant. Gonzalez asked the victim, “What set you claim?” The two men immediately began shooting at the victim. The two men got back into their car and fled the scene. The victim, who was not injured, recognized the make and model of the car.
A West Valley City police officer responded to the scene and observed several bullet holes in a nearby car and the victim’s home. He also located 10 spent shell casings. Two bullets were recovered from the house.
An officer patrolling the area quickly found a car that matched the description provided by the victim and the description of Gonzalez. After following the car for a while, the driver of the car suddenly accelerated in an apparent effort to evade the officer. The officer activated his lights and siren as the car reached speeds of 50-60 in a residential neighborhood. Gonzalez abandoned the car he was driving and fled the scene. The officer continued to give commands for him to stop. After a chase, Gonzalez jumped a fence and swam across a canal. Other officers responded to the other side of the canal where Gonzalez had been seen last. A bystander advised officers that Gonzalez had entered a home. Officers set up a perimeter around the home and ordered the occupants to leave the house. Three people exited the house. One occupant advised officers that Gonzalez was still in the home. SWAT teams entered the home and took Gonzalez into custody.
Officers found ammunition in the garage of the home, including ammunition that appeared to be hollow point. Additionally, 20 rounds of .40 caliber centerfire pistol cartridges and 20 rounds of 9 mm centerfire pistol cartridges in Gonzalez’ car.
The 10-year sentence in the plea agreement is subject to the approval of the court. As a part of the plea agreement reached in the federal case, Gonzalez agreed to plead guilty to three counts (12-14) in a related case filed in Third District Court. At the time of the offense, Gonzalez was on parole for a felony burglary conviction in state court.
Gonzalez was indicted on the charge in September. The case is being investigated by West Valley City police officers and special agents of the ATF. The case is being prosecuted by a West Valley City prosecutor acting as a Special Assistant U.S. Attorney.
Utah Gang InitiativeRead the Press Release
UTAH GANG INITIATIVE CASE EXAMPLES
U.S. v Jonah Robinson
Age: 18
Orem, UT
Robinson is charged with possession of a firearm/ammunition and possession of a stolen firearm in a two-count indictment returned March 1, 2017. Robinson, a self-proclaimed member of the Kearns Town Bloods, came to law enforcement’s attention in February when he posted a video on Snapchat in which he pointed a firearm, from the window of a residence, at a group of Provo City police officers. He stated, in the video, that for “15 snapshots I’ll shoot every last one.” A concerned citizen saw the video, took screen shots, and called it to law enforcement’s attention. Robinson was on state court probation at the time of the offense. With a felony conviction, possession of the firearm used in the video, which the indictment alleges was stolen, is a violation of federal law. The case is being investigated by the Provo City Police Department, the FBI, and the Utah County Major Crimes Task Force.
U.S. v Pedro Valdez-Camacho aka Pedro Chofer; aka Cota Cota; aka Jesus Gonzalez-Valdez; aka Cota Valdez-Camachor; aka Pedro Choffer; aka Jesus Cota Gonzalez-Chofer; aka Jesus Valdez; aka Pedro Valdez-Camachor; aka Jesus Gonzales Valdez-Chofer
Age: 33
Coalville, UT
A Felony Information filed Wednesday charges Valdez-Camacho with re-entry of a previously removed alien. He is scheduled for an initial appearance Tuesday at 11 a.m. before U.S. Magistrate Judge Paul Warner. The defendant is a confirmed member of Los Paisanos. Because he has a previous federal conviction for possession of methamphetamine with intent to distribute, he is subject to a potential 20-year sentence in the Utah case. (He was sentenced to 87 months in 2008 for the conviction in Wyoming.) Valdez-Camacho has five previous deportations/voluntary departures from the country. Law enforcement believed he posed a threat to officer safety before he was taken into custody. The case is being investigated by U.S. Homeland Security Immigration and Customs Enforcement.
U.S. v Joseph Hores Medina
Age: 30
Roy, UT
Medina was sentenced to 98 months in federal prison on Feb. 27, 2017, after pleading guilty to possession of a firearm following a felony conviction and possession with intent to distribute methamphetamine. He will be on supervised release for four years when he finishes his federal prison sentence. According to documents filed by prosecutors in federal court, Medina is reputed to be the leader of the Nortenos, a local criminal gang in Ogden. Following a three-month investigation, law enforcement officers obtained a search warrant for his home and person. During the execution of the warrant, they found a pistol directly under the driver’s side seat. The firearm was loaded and had a high capacity magazine. They also found a red bandana, which officers recognized as representing the colors of the Nortenos. They also found several baggies of meth containing around 8.629 grams of meth, around $900 in cash, a police scanner, a stolen police badge, and other firearms, among other things. Medina is a convicted felon and prohibited from possession a firearm under federal law. He admitted that he possessed the methamphetamine with intent to distribute it to others. The case was investigated by member agencies of the Weber/Morgan Strike Force and ATF. It was prosecuted in federal court by Branden B. Miles, Chief Criminal Deputy in the Weber County Attorney’s Office, who is cross designated as a Special Assistant U.S. Attorney.
U.S. v Mahyar Movahhed
Age: 28
Iranian citizenship; Sandy, UT
Movahhed was sentenced to 60 months in federal prison on Feb. 22, 2017, after pleading guilty possession of methamphetamine with intent to distribute. Movahhed was involved in a traffic stop executed by Unified Police Department officers in August 2016. He was found with 27.3 grams of meth. Law enforcement officers say Movahhed is an active member of the Taliban Bloods/Rose Park Taliban. As a part of his supervised release conditions following his prison term, U.S. District Judge Robert J. Shelby ordered that he not get any new tattoos associated with a criminal street or prison gang and not wear clothing or other items that may be identified with a criminal street gang. He will be on supervised release for 36 months. Officers with the UPD/Metro Gang Unit and the FBI investigated the case. The ATF is a member of the Metro Gang Unit.
U.S. v Hector Renteria
Age: 29
Salt Lake City
Renteria was convicted of four counts of distribution of a controlled substance and one count of carrying a firearm during and in relation to a drug trafficking offense by a jury in May 2016. He was sentenced to 15 years in prison in December 2016. According to a sentencing memorandum filed by prosecutors in the case, Renteria is a long-time active member of the Avenues street gang. Renteria negotiated narcotics sales, including one that involved a firearm sale as well, on multiple occasions from November 2013 to June 2014. Investigators recovered about 25 grams of heroin, 595 grams of meth, and a firearm from these sales. When he was arrested, agents seized more than $2,000 cash from his wallet as well as several cell phones. A search of the phones revealed pictures of Renteria, who was not allowed to possess a firearm following a felony conviction, firing assault rifles and pistols with known gang members. Other photos show him posing with large stacks of $100 bills and making gang signs. The case was investigated by the FBI.
U.S. v Colton Paul Poore
Age: 26
Roy, UT
Poore, an Ogden Trece affiliate well-known to gang detectives in Salt Lake and Weber counties, was sentenced to 51 months in federal prison Feb. 15, 2017, after pleading guilty to possession of a firearm following a felony conviction. Gang officers were looking for Poore, at the time a parole fugitive, in the area of 2100 South State Street in Salt Lake City in mid-September. When Poore saw the officers, he attempted to flee. Even after he was taken to the ground, Poore continued to resist officers. Once he was taken into custody, he told officers they would find a gun in the bag he was carrying. He admitted he found the handgun and kept it for protection. The semi-automatic handgun was fully loaded with a round in the chamber. As a part of Poore’s sentence, U.S. District Judge Jill N. Parrish imposed several conditions of release he must follow after he is released from prison. The conditions preclude him from having contact of any kind with any member or associate of a criminal street gangs. He also is prohibited from getting new tattoos associated with a criminal street gang and cannot wear clothing or other items that may be associated with a gang. The case was investigated by the UPD/Salt Lake Metro Gang Unit, including the ATF.
Palmer Pleads Guilty to Fraud, Money Laundering in Connection with Alleged Investment Fraud SchemeRead the Press Release
SALT LAKE CITY – Wayne LeMar Palmer, age 60, of West Jordan, indicted in August 2015 in connection with an alleged investment fraud scheme that raised more than $140 million from more than 600 investors, pleaded guilty Tuesday afternoon to wire fraud and money laundering.
Julieann Palmer Martin, age 47, also of West Jordan, a co-defendant in the case, pleaded guilty to misprision of felony in the case. The pleas were entered in U.S. District Judge Clark Waddoups’ courtroom.
In admissions filed as a part of the plea agreement, Palmer admitted that from 2009 through June 2012, acting through his company National Note of Utah and affiliated entities (collectively referred to as NNU), he solicited investors to invest in NNU’s business of loaning funds to real estate based companies. As a part of his solicitations to investors, he admitted he falsely represented that their investment in NNU was safe and guaranteed, and that NNU was profitable and generated sufficient income from its business operations to pay investors a 12 percent per annum return. Palmer admitted that he failed to inform investors that NNU had insufficient operating revenues to pay investors and operating expenses. He also admitted he failed to inform investors that new investor funds were being used, in part, to pay prior investors’ return of principal and interest payments. These omissions were material to investors and their decision to invest with NNU, he admitted as part of the plea agreement.
While the fraud scheme raised more than $140 million from 600 investors, some of the money was used to make payments to earlier investors. Prosecutors believe the actual loss in the case is approximately $60 million.
Martin, who is Palmer’s cousin, was employed as a bookkeeper at NNU from 1995 until a receiver took it over in 2012. In admissions made as a part of her plea agreement, Martin admitted she was the primary contact person for NNU investors and prospective investors when Palmer was not available. She also had online access to two NNU bank accounts. Because she monitored the accounts, at any given time she knew whether NNU had adequate funds in these two bank accounts to meet its obligations and frequently updated Palmer on the status of the accounts.
She admitted that, beginning in March 2010, she knew that NNU was having difficulty returning principal to investors whose notes had matured. She also recognized that NNU was unable to bring in new investor funds sufficient to pay its operating expenses and began updating Palmer nearly every day regarding the funds needed to pay the promised returns to investors and to cover operating expenses. She admitted knowing that Palmer continued to solicit new investors after NNU developed financial problems and after it stopped making investor payments.
Martin admitted she did not notify law enforcement or any regulatory agency about Palmer’s fraud. Instead, she took steps to conceal the crime by lulling both new and prior investors into a false sense of security that NNU’s business was turning a profit and making timely returns to investors.
Palmer’s plea agreement includes a stipulated sentence of 0-120 months, subject to approval and acceptance by the Court. He also agreed to a $290,000 money forfeiture judgment for his scheme to defraud. The total amount of restitution and the payment schedule will be determined at sentencing.
Martin’s plea agreement includes a stipulated sentence of 0-24 months, which is subject to the approval and acceptance by the Court. Restitution and the payment schedule for Martin will also be determined at sentencing.
Sentencing for both defendants is set for Sept. 11, 2017. They are not in custody.
The case is being prosecuted by the U.S. Attorney’s Office in Utah. Special agents of the FBI and IRS Criminal Investigation are investigating the case. The U.S. Department of Labor, Employee Benefits Security Administration has also contributed to the investigation.
Eight Individuals Face Fraud, Identity Theft Charges Involving Possession of Names, Information of More Than 143,000 IndividualsRead the Press Release
SALT LAKE CITY – A 56-count federal indictment returned by a Utah grand jury charges eight individuals in connection with what the indictment alleges was a scheme to use fraudulently created identification documents and fraudulently obtained bank account information to open store credit accounts. The defendants then used the newly-obtained credit to make purchases at various merchants in Salt Lake County.
The indictment alleges the defendants possessed the names of more than 143,000 individuals – nearly one in 20 Utahns – most of whom either live in Utah or lived in the state at some point. In addition to the names, the defendants had corresponding personal identifying information of these individuals. The source of the information is not known, but the format of the database suggests it may have come from a medical insurance provider or a business who provided services to a medical insurance provider more than five years ago.
Charged in the indictment are Danny Lechtenberg, age 36, Jesse Ryan Bell, age 30, Christopher Wayne Cummings, age 33, Jody Ray Bledsoe, age 44, and Christopher Winterton, age 35, all of Taylorsville; Carolina Cueller Morton, age 53, and Donald Leslie Peck, age 51, both of Salt Lake City; and Tina Marie Schilling, age 57, of West Valley City.
A sealed indictment was returned by a federal grand jury Feb. 1, 2017. It was unsealed Feb. 3, 2017.
According to the indictment, the defendants obtained the names and personal identifying information of individuals primarily living in Utah, created false and fraudulent identification documents using the individuals’ personal identifying information; opened credit accounts at retail merchants; and made fraudulent purchases using the names and credit account numbers taken out in the names of the individuals knowing that financial institutions, which secured the credit cards for the merchants, would rely on the fraudulent information provided to open and secure these credit accounts.
Each defendant is charged with conspiracy to commit bank fraud in the first count of the indictment. Lechtenberg is also charged with bank fraud, possession with intent to use or transfer five or more documents; using an unauthorized access device; aggravated identity theft; and unlawful manufacture of a controlled substance – marijuana. In addition to the conspiracy to commit bank fraud count, the other defendants face bank fraud, using an unauthorized access device, and aggravated identity theft counts. (See the chart at the end of the press release for more specific information on the individual charges.)
Lechtenberg, Bell, Cummings, Morton, and Winterton were arrested on federal warrants and had initial appearances in federal court Feb. 3, 2017. Lechtenberg, Winterton and Cummings are in custody. Lechtenberg has a detention hearing Friday at 2:30 p.m. before U.S. Magistrate Judge Evelyn J. Furse. Magistrate Judge Furse found that Morton and Bell pose a risk of non-appearance and are a danger to the safety of others and the community, but found those risks are manageable under a combination of conditions. Bledsoe, Peck, and Schilling are scheduled for initial appearances on the charges Feb. 28, 2017, at 2:30 p.m. These three were issued summons to appear in court.
While more than 143,000 people were included in the database, the evidence suggests that only a small number of people had their identity used for a fraudulent purpose. Those individuals who have been identified as suffering a direct impact have been notified that they are victims of the charged crimes.
The case is being investigated by the Unified Police Department, the U.S. Postal Inspection Service, and member agencies of the Utah Identity Theft Task Force. It is being prosecuted by the U.S. Attorney’s Office in Salt Lake City.
Breakdown of charges
1. Danny Lechtenberg
Counts Charges
1 - Conspiracy to commit bank fraud
2-7 - Bank fraud
33 - Possession with intent to use or transfer five or more documents
34-36 - Identity theft
39, 41, 44, 46, 48, 50, 52, 54 - Using an unauthorized access device
37, 38, 40, 42, 43, 45, 47, 49, 41, 53, 55 - Aggravated identity theft
56 - Manufacture of a controlled substance/marijuana
2. Jesse Ryan Bell
Counts Charges
1 - Conspiracy to commit bank fraud
8-9 - Bank fraud
39 - Using an unauthorized access device
40 - Aggravated identity theft
3. Christopher Wayne Cummings
Counts Charges
1 - Conspiracy to commit bank fraud
10-14 - Bank fraud
41 - Using an unauthorized access device
42-43 - Aggravated identity theft
4. Jody Ray Bledsoe
Counts Charges
1 - Conspiracy to commit bank fraud
15-17 - Bank fraud
44 - Using an unauthorized access device
45 - Aggravated identity theft
5. Carolina Cuellar Morton
Counts Charges
1 - Conspiracy to commit bank fraud
18-23 - Bank fraud
46 - Using an unauthorized access device
49 - Aggravated identity theft
6. Christopher Winterton
Counts Charges
1 - Conspiracy to commit bank fraud
24-26 - Bank fraud
50 - Using an unauthorized access device
51 - Aggravated identity theft
7. Donald Leslie Peck
Counts Charges
1 - Conspiracy to commit bank fraud
27-28 - Bank fraud
52 - Using an unauthorized access device
53 - Aggravated identity theft
8. Tina Marie Schilling
Counts Charges
1 - Conspiracy to commit bank fraud
29-32 - Bank fraud
54 - Using an unauthorized access device
55 - Aggravated identity theft
To determine if your personal information was included in the compromised database, please contact the Department of Justice’s Mega-Victim Case Assistance Program at 1-844-527-5299 or [email protected]. If there was evidence to suggest that your information was used for a fraudulent purpose, you should have already received a personal letter from the Victim Notification System. Even if you are not among the identified victims, however, it is possible that your information may have been used on third party websites to check credit scores or obtain unauthorized credit accounts. We encourage you to monitor your credit and notify investigators if you suspect fraudulent activity.
Grand Jury Returns Indictment Charging Individual with Destruction of an Energy FacilityRead the Press Release
SALT LAKE CITY – A federal grand jury returned an indictment Wednesday charging Stephen Plato McRae, age 57, of Escalante, with one count of destruction of an energy facility. The indictment alleges McRae knowingly and willfully damaged and attempted to damage the Garkane Energy Cooperative’s Buckskin substation in Kane County on Sept. 25, 2016.
The indictment was announced by U.S. Attorney John W. Huber, FBI Special Agent in Charge Eric K. Barnhart, and Kane County Sheriff Tracy Glover.
The investigation showed that a person shot and damaged a substation transformer at the facility. The indictment alleges the incident caused a significant interruption and impairment of the function of the energy facility. Power was knocked out to the majority of Kane and Garfield counties, affecting residents and businesses in the counties. The power outage lasted about eight hours.
McRae was initially charged with possession of a firearm after a felony conviction in a complaint filed in November. The complaint alleged he was in possession of a Springfield Armory, 30-40 rifle, Model 1898 rifle and associated ammunition. Federal law prohibits individuals convicted of a felony from possessing firearms or ammunition. Based on information developed from a confidential witness, law enforcement officers from the Kane County Sheriff’s Office and agents with the FBI executed a federal search warrant on Oct. 28, 2016, at a location in Escalante and found the firearm in the bottom of a container. Inside the magazine, at least two rounds were observed from viewing the magazine’s contents through the ejection port of the rifle, according to the complaint. Investigators found an additional 16 rounds of unused 30-40 ammunition in a separate enclosure inside the container.
McRae was charged with the firearm violation and one count of possession of marijuana in a federal indictment returned in November 2016. He has been in custody since his arrest on the complaint.
The indictment returned Wednesday, which added the destruction of an energy facility count, supersedes the November indictment.
The potential maximum penalty for destruction of an energy facility is 20 years in federal prison. The firearm count in the indictment has a penalty of up to 10 years in prison and the possession of a controlled substance has a potential two-year penalty. Each count has a potential fine of $250,000. An initial appearance on the superseding indictment will be scheduled for McRae in federal court.
Indictments are not findings of guilt. Individuals charged in an indictment are presumed innocent unless or until proven guilty in court.
The case is being investigated by special agents of the FBI and the BLM, who are participating as members of the FBI’s Joint Terrorism Task Force, and the Kane County Sheriff’s Office. It is being prosecuted by the U.S. Attorney’s Office.
Kaysville CPA Pleads Guilty to Tax Evasion and is Sentenced to PrisonRead the Press Release
SALT LAKE CITY – David Brian Bybee, age 56, of Kaysville, Utah, a Utah businessman and CPA, pleaded guilty Wednesday afternoon to one count of attempt to evade and defeat payment of taxes, U.S. Attorney John W. Huber announced today.
According to the plea agreement, Bybee managed and controlled several companies from his home in Kaysville or at other business addresses in Davis County. Bybee hired and managed employees for the Bybee companies. His duties included generating revenue, keeping books and records, paying expenses, making employee payroll, withholding and paying over taxes from employee payroll, and filing all required business returns. The Bybee companies offered various services, including membership in various business professional associations and groups, along with bookkeeping, accounting, and tax management training and services.
As a part of the plea agreement executed Wednesday, Bybee admitted he formed the National Association of Certified Bookkeepers, LLC (NACPB) on or about July 21, 2006, with himself and D.B. as its only members. From at least Jan. 7, 2007, to Aug. 7, 2008, NACPB held a business account at Wells Fargo Bank. Bybee and D.B. were the only authorized signers on the Wells Fargo account. Bybee also formed the National Bookkeepers Association, LLC (NBA) about Jan. 9, 2008, listing his sons, B.B. and L.B., as NBA’s only members. From Jan. 16, 2008, to at least March 1, 2016, NBA held a business account at America First Credit Union. B.B. and L.B. were the only authorized signers on the account. Revenues generated by the two associations were received primarily through credit card sales deposited into the Wells Fargo and America First Credit Union accounts.
Bybee further admitted, as a part of the plea agreement, that he and D.B. filed a Form 1040 joint personal return with the IRS for tax years 2000 through 2002 and 2005 through 2009, and for which the IRS assessed Bybee $153,569.41 as of March 14, 2011. Bybee admitted he had willfully failed to pay those taxes due and owing the United States.
During the period from 2008 to 2011, substantial revenues from credit card sales were deposited into the America First Credit Union account, Bybee admitted as a part of the plea agreement. Despite not being an authorized signer on the account, Bybee controlled significant electronic funds transfers out of the account for, among other things, various personal expenditures. The expenditures included a mortgage, cars, jet skis, and a boat. He also admitted that on many occasions, he also issued checks from the America First Credit Union Account, signing B.B.’s signature on the checks. In taking or causing these acts, Bybee acknowledged he acted willfully, intending to evade and defeat payment of tax due and owing the United States.
District Judge Dee Benson also accepted and imposed a stipulated sentence of 12 months and one day during Wednesday’s hearing. Bybee also agreed to pay $469,381.19 in restitution. This figure includes individual income tax obligations totaling $370,661.96 and $98,719.23 in payroll tax obligations. The $98,719.23 stems from Bybee’s failure, as a person with corporate responsibilities, to deduct and collect payroll taxes, deposit payroll taxes with the IRS, and truthfully account for payroll taxes to the IRS for several companies he controlled. Bybee will be on supervised release for 36 months when he finishes his prison sentence. He was ordered to report to the Bureau of Prisons to begin serving his sentence at noon on March 22, 2017.
The case was prosecuted by the U.S. Attorney’s Office in Salt Lake City and investigated by special agents of IRS-Criminal Investigation.
Koerber Charged with Wire Fraud, Money Laundering, Tax Evasion, and Fraud in the Offer and Sale of Securities in 18-Count Indictment Returned by Federal Grand JuryRead the Press Release
SALT LAKE CITY – A federal grand jury returned an 18-count indictment Wednesday afternoon charging Claud R. Koerber aka Rick Koerber with violations of federal law in connection with an alleged fraudulent investment scheme.
Koerber, age 43, faces four counts of fraud in the offer and sale of securities, 10 counts of wire fraud, two counts of money laundering, and two counts of tax evasion.
"In reinitiating this prosecution, the United States brings a case that the community deserves to have determined on its merits. Our intent is to press this matter to such a resolution. We seek a speedy public trial, without undue delay, where a jury of his peers can fairly assess the evidence against the defendant," U.S. Attorney John W. Huber said today.
The indictment alleges that Koerber was involved with several businesses in Utah. He exercised almost complete control over Founders Capital, which received investment money, sometimes termed as loans, from victims of the alleged fraud scheme described in the indictment. The indictment alleges Koerber was also involved with Founders Capital, Franklin Squires Investments, and Franklin Squires Companies.
According to the indictment, which is attached to this press release, from about 2004 to about Dec. 31, 2008, Koerber devised a fraud investment scheme to obtain money through false pretenses, representations, and promises. Koerber used the United States mails, interstate wire transmissions, and interstate commerce to execute the scheme, the indictment alleges.
The indictment alleges that Koerber used investors’ money for purposes not disclosed to many investors or potential investors, such as for Koerber’s personal housing, other personal expenses, expensive automobiles, investments into restaurants, and unsecured loans to other businesses and entities.
The indictment alleges that in order to convince earlier investors that their funds were earning money and to convince potential investors that the program was working and earning money, Koerber operated the businesses of Founders Capital and related entities as a “Ponzi scheme.” According to the indictment, Koerber used money placed with Founders Capital to make interest payments to earlier investors to create the false impression that the businesses were profitable, that investments were safe, secure, and that interest was being paid.
The indictment alleges that at no time during the operation of the investment scheme did Founders Capital or Franklin Squires entities operated by Koerber make a yearly profit. Koerber, by means of his misrepresentations and omissions, obtained approximately $100 million in investor funds, the indictment alleges. More than $50 million of the investor funds were used to make Ponzi payments to other investors. When Founders Capital stopped making payments to investors in 2007, investors lost approximately $47 million, according to the indictment.
Despite the fact that neither Founders Capital nor Franklin Squires made a profit in 2005, 2006, or 2007, the indictment alleges that Koerber falsely stated in an article distributed to investors and potential investors that in 2005, the Franklin Squires Companies did $111 million in revenue and in 2006 Franklin Squires and the businesses in which Franklin Squires had a substantial interest generated revenues in excess of $500 million.
A summons will be issued to Koerber to appear on the charges. The potential maximum penalty for each count of fraud in the offer and sale of securities is five years. Each wire fraud count carries a potential penalty of 20 years. The money laundering counts, which allege Koerber used criminally derived money to purchase expensive cars in excess of $200,000 each, carry potential 10-year sentences. The two tax evasion counts have potential penalties of five years. The tax counts allege Koerber had taxable income of in excess of $600,000 in tax year 2005 and taxable income in excess of $300,000 in tax year 2006 and failed to file an income tax return with the IRS.
The case is being prosecuted by the U.S. Attorney’s Office in Utah and investigated by special agents of IRS-Criminal Investigation and the FBI.
Four Salt Lake City Men Charged with Robberies, Firearms Violations After September Robberies in Salt Lake ValleyRead the Press Release
SALT LAKE CITY – Four residents of Salt Lake City have initial appearances in federal court Wednesday afternoon after a grand jury returned an indictment charging them with violations of federal law in connection with a string of robberies in the Salt Lake Valley during September 2016. A silver handgun was used during each of the robberies.
The hearing is at 1 p.m. before U.S. Magistrate Judge Dustin B. Pead. The grand jury returned the indictment last week. The robbery counts are charged under the federal Hobbs Act.
Charged in the indictment are Tyrell Anthony James, age 23; Damon Keith Grigsby, age 19; Isaiah Alexander Jones, age 19; and Tristan Melchizadek Walker, age 20 – all of Salt Lake City.
Three counts of the indictment charge the defendants in connection with three robberies that occurred on Sept. 10, 2016. The indictment alleges James, Grigsby and Jones participated in a robbery at a 7-Eleven store located at 510 East 1300 South in Salt Lake City. James, Grigsby, Walker and Jones are charged with robbing a Subway store located at 3197 South Redwood Road in West Valley City and James and Grigsby are charged with a robbery of the CVS Pharmacy located at 3148 West 3500 South in West Valley, also on Sept. 10.
James is charged with using, carrying and brandishing a firearm in relation to a crime of violence during the alleged 7-Eleven robbery. James and Grigsby are charged with using, carrying, and brandishing a firearm in connection with the alleged Subway robbery. Both are also charged with using the firearm in the CVS Pharmacy robbery. During the CVS robbery, a shot was fired in the direction of an employee, so the count reads using, carrying, brandishing, and discharging a firearm during a crime of violence.
The indictment also charges James and Grigsby with three alleged robberies that occurred on Sept. 12, 2016, in Salt Lake City, West Jordan, and South Salt Lake City. James and Grigsby are charged with robberies at a 7-Eleven store located at 1692 West North Temple in Salt Lake City, the Nike Factory Store located at 3736 West Center Park Drive in West Jordan, and the Maverick store located at 514 West 3900 South in South Salt Lake City.
James and Grigsby are also charged with using, carrying and brandishing a firearm during the robberies.
The final count of the indictment charges James with possession a firearm after a felony conviction. Federal law prohibits individuals convicted of a felony from possessing a firearm.
After the first robbery, law enforcement officers received information from a witness about a car the suspects were driving. This information ultimately helped officers locate the defendants.
The potential maximum penalty for each count of robbery is 20 years in prison. James is facing a mandatory 130 years in federal prison for using a firearm during the commission of a violent crime and 10 years for the felon in possession count. Grigsby is facing a mandatory 105 years on the firearms counts in the indictment. (James –five years for first count, 25 years for each of the next five. Grigsby – is charged with aiding and abetting the firearms violations, but the penalty is the same – five years for the first count and 25 five years for each of the next four counts. The penalties for each of these counts run consecutive to any other sentence.)
Jones and Walker are not charged with firearms counts and face up to 20 years on each of the robbery counts. Jones is charged with two robberies and Walker is charged with one robbery.
Indictments are not findings of guilt. Individuals charged in indictments are presumed innocent unless or until proven guilty in court.
The case is being prosecuted by the U.S. Attorney’s Office in Salt Lake City and is being investigated by special agents of the FBI with assistance from police departments in Salt Lake City, West Valley City, West Jordan, and South Salt Lake City.
Grand Jury Returns 12-Count Indictment Charging Utah County Man with Health Care Fraud, Wire FraudRead the Press Release
SALT LAKE CITY -- A federal indictment unsealed this week charges Dustin Joseph Long, age 29, of Santaquin, with six counts of health care fraud and six counts of wire fraud in connection with what the indictment alleges was a scheme to defraud Humana, a health care benefits program. The indictment alleges the fraud scheme resulted in more than 900 fraudulent claims being submitted to Humana resulting in payments exceeding $700,000.
Long was arrested Tuesday morning in Orem. He appeared for an initial appearance on the charges Tuesday afternoon before U.S. Magistrate Judge Dustin Pead and entered a plea of not guilty to the charges. Magistrate Pead released Long from custody and imposed a variety of conditions of release. A five-day jury trial has been set for March 17, 2017, before U.S. District Judge Clark Waddoups.
Long was co-owner and primary operator of two drug and alcohol treatment centers in Utah, collectively referred to as Arcadia in the charging document. Arcadia Recovery Center was a drug and alcohol outpatient treatment center located in Payson. Arcadia Residential Treatment Center was a drug and alcohol intensive outpatient treatment center located in Bluffdale.
Arcadia used a third-party biller, CloudMedBilling (CMB), to prepare, submit, and track claims submitted to health care benefit program. Long was a co-owner of CMB. In the normal course of CMB’s business, drug and alcohol treatment centers provided CMB login access to drug and alcohol treat records maintained by BestNotes, a web-based records keeping system based in Twin Falls, Idaho. The access allowed CMB to submit complete and accurate claims on behalf of drug and alcohol treatment centers.
According to the indictment, from around January 2015 to October 2015, Long devised and executed a fraud scheme to obtain money from Humana. The indictment alleges that as a part of the execution of the scheme, Long caused fraudulent insurance claims to be submitted from Arcadia to Humana for drug and alcohol therapy and treatment services not rendered. The claims resulted in payments to Arcadia under false pretenses.
According to the indictment, Long had exclusive control over Arcadia claims submitted to Humana, which were prepared and submitted by CMB. The indictment alleges Long emailed CMB weekly “rosters” reflecting drug and alcohol therapy treatment services allegedly provided to Humana-insured Arcadia clients on specific dates. Acting at Long’s direction, CMB employees prepared and submitted claims to Humana based on the rosters. Long had exclusive control over all information provided to CMB.
The indictment alleges that despite numerous requests, Long denied CMB employees access to BestNotes, the most accurate source of Arcadia client information available, to prepare claims and to verify the accuracy of the rosters provided by Long. Other drug and alcohol treatment centers routinely provide CMB employees access to BestNotes to ensure accurate information claims seeking payment for drug and alcohol treatment services.
In late June 2015, CMB discovered that Long’s rosters falsely identified continued drug and alcohol therapy and treatment services well past Arcadia clients’ discharge dates, the indictment alleges. Although CMB notified Long about the billing discrepancies and the need to take remedial action, Long failed to correct any billing errors, did not refund money to Humana, and continued to submit false and fraudulent rosters to CMB for claims processing until October 2015.
The indictment alleges that from around January 2015 to around October 2015, Long caused more than 900 fraudulent claims to be submitted to Humana involving about 14 clients resulting in total payments from Humana to Arcadia exceeding $700,000.
The potential maximum penalty for each of the six health care fraud counts in the indictment is 10 years and a fine of $250,000. The wire fraud counts each carry a potential 20-year penalty and a fine of $250,000.
Indictments are not findings of guilt. Individuals charged indictments are presumed innocent unless or until proven guilty in court.
The case is being prosecuted by the U.S. Attorney’s Office in Salt Lake City and is being investigated by special agents of the FBI.
Utah Businessman Indicted for Tax EvasionRead the Press Release
A federal grand jury sitting in Salt Lake City, Utah, returned an indictment yesterday charging Peter N. Nordberg, a former resident of Draper, Utah, with tax evasion, announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division, and U.S. Attorney John W. Huber for the District of Utah.
According to the indictment, Nordberg was the Chief Executive Officer of Max International, a company that produces and markets nutritional supplements directly and through independent associates and distributors. As an employee of Max International, Nordberg earned a salary and commissions equal to a percentage of sales. The indictment alleges that during 2009 and 2010, Nordberg used a nominee entity that he registered in Delaware to conceal his receipt of commissions from Max International and filed false individual income tax returns that failed to report his commission income.
If convicted, Nordberg faces a statutory maximum sentence of five years in prison for each count, as well as a period of supervised release, restitution and monetary penalties.
An indictment is not a finding of guilt. It merely alleges that crimes have been committed. A defendant is presumed innocent until proven guilty beyond a reasonable doubt.
Principal Deputy Assistant Attorney General Ciraolo and U.S. Attorney Huber thanked agents of Internal Revenue Service–Criminal Investigation, who conducted the investigation, and Trial Attorney Matthew R. Hoffman of the Tax Division and AUSA Ruth Hackford-Peer of the District of Utah, who are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Two Indicted on Conspiracy to Commit Money Laundering; Charges Allege They Laundered Money for Mexican Drug Trafficking OrganizationsRead the Press Release
SALT LAKE CITY – A federal grand jury returned an indictment last week charging two Salt Lake City women with conspiracy to commit money laundering. The charges allege they conspired to launder drug proceeds for Mexican drug trafficking organizations from Utah to Mexico. The indictment, returned Wednesday, was unsealed Friday afternoon.
Charged in the indictment are Rosa Rodiguez, age 41, and her sister, Yadira Rodriquez, age 35, both of Salt Lake City. According to a complaint filed in the case, Rosa Rodriguez owns and operates two money services businesses in Utah. These businesses provide money transfer services from Utah to Mexico and other areas. One business, Happy Travel, is located in West Valley City. Rosa Rodriguez is the primary operator of this location, the complaint alleges. The second business, Happy Travel 2, is located in Salt Lake City. Yadira Rodriguez is the primary operator of this location.
The two were arrested last week. A detention hearing for Rosa Rodriguez is scheduled for Dec. 22, 2016, at 2:15 p.m. in Magistrate Judge Evelyn J. Furse’s courtroom. Yadira Rodriguez has been released on conditions.
According to the indictment, those who own and operate money services businesses are subject to various laws and regulations that govern, among other things, record keeping, filing reports on certain transactions, and ensuring anti-money laundering compliance.
Charges allege that the Rodriguez sisters used their money service businesses to send money transfers for the drug trafficking organizations and took steps to conceal and disguise the source and ownership of the illegal proceeds. The charges allege they split up money transfer amounts to avoid having to produce or provide identification information for money transfers in an attempt to conceal and disguise the source and ownership of the illegal proceeds. The charges also allege the pair concealed the traffickers’ identity by falsifying sender information on the money transfers. Investigators believe that by structuring transactions and sending money under fictitious names, the defendants laundered an estimated $1 million for Mexican drug trafficking organizations.
The case is being investigated by the DEA Metro Narcotics Task Force, IRS-Criminal Investigation and the U.S. Marshals Service.
Peila Sentenced to 144 Months in Federal Prison for Conspiracy to Distribute Oxycodone, Money LaunderingRead the Press Release
SALT LAKE CITY – Aaron Peila, age 33, of Utah and Nevada, will serve 144 months in federal prison after pleading guilty to a conspiracy to distribute oxycodone and conspiracy to commit money laundering. U.S. District Judge David Nuffer imposed the sentence Wednesday afternoon in federal court.
For five years, from approximately 2007 through 2012, Peila engaged with other co-conspirators in a large-scale effort to distribute oxycodone in Utah and surrounding areas, federal prosecutors wrote in a sentencing memorandum filed with the court. Through a significant investigation, agents believe Peila and his co-conspirators distributed approximately 89,000 oxycodone 80 mg tablets and 22,000 oxycodone 30 mg tablets. They also engaged in laundering about $3.8 million in drug proceeds. As a part of his plea agreement with federal prosecutors, Peila admitted traveling from Utah to Las Vegas to pick up the oxycodone pills for distribution in Utah.
“Peila clearly engaged in distributor activity throughout the Salt Lake Valley and elsewhere. He engaged persons inside and outside the state to receive large amounts of oxycodone pills and shipped/transferred money in exchange for those pills. While Peila should not be held responsible for the oxycodone epidemic at large, he should be held responsible for his substantial piece of it,” prosecutors wrote in the sentencing memorandum.
Several co-conspirators involved in the case have pleaded guilty and are serving sentences ranging from 72 months to probation. Sentencing is pending for three individuals.
“The far-reaching impact generated by this law enforcement operation was made possible through the joint investigative partnership between DEA and IRS-Criminal Investigation. This criminal organization was at the very forefront of the local opioid epidemic and its profit-driven enterprise serves as a relevant and timely example of the scope of the problem that is killing Utah’s citizen at an alarming rate of 24 per month,” DEA Assistant Special Agent in Charge Brian Besser said today.
“Today’s sentencing is a direct result of the hard work done by the DEA Metro Narcotics Task Force here in Salt Lake City. IRS-Criminal Investigation is proud to be a part of this team and is committed to assisting our law enforcement partners in battling narcotics traffickers here in Utah and across America. We will continue to use our unique expertise in financial investigations and following the money trail,” IRS-Criminal Investigation Special Agent in Charge Tara Sullivan said today.
A Home Town HeroRead the Press Release
SALT LAKE CITY-- In September, I had the honor of attending a West Valley City Council meeting to recognize Officer Cody Brotherson and his colleagues for their outstanding police work in swiftly and safely capturing an armed and dangerous gang member. When I learned Sunday of Officer Brotherson’s tragic death, I remembered shaking his hand and thinking that this dedicated young man had all the qualities to be a hero in his home town of West Valley City. And he was.
In the early hours of Sunday morning, Officer Brotherson was once again protecting our community by laying tire spikes to stop a stolen car when he was struck and killed by the fleeing suspects. There is no greater sacrifice a person can make than to give his own life to keep our community safe.
While the rest of us are sleeping, men and women in law enforcement are on the streets risking their lives. We ask our law enforcement officers to work long hours with little pay, to subject themselves to intense public scrutiny, and to put themselves in harm’s way. We ask officers and their families to sacrifice their own safety and security for our wellbeing. It is too much to ask of any citizen, yet these brave men and women do it every single day.
Law enforcement professionals like Officer Brotherson are not in it for the accolades, and they rarely get them. I consider it a great honor to have had the opportunity to meet Officer Brotherson and to present him with an award for his service to our community. So young and so heroic, Officer Brotherson made a huge impact for the good of our community before his premature departure. My thoughts and prayers are with Officer Brotherson’s family and friends, and with my dear colleagues at the West Valley City Police Department, during this very difficult time.
U. S. Attorney Appoints Election Day Officer, Utah Joins Justice Department Efforts to Protect Right to Vote and Prosecute Ballot FraudRead the Press Release
SALT LAKE CITY – In anticipation of the upcoming general elections, United States Attorney John W. Huber announced today that Assistant U.S. Attorney Lake Dishman will lead the efforts of his office in connection with the Justice Department’s nationwide Election Day program for the Nov. 8, 2016, general election. Dishman has been appointed to serve as Election Officer for the District of Utah. In that capacity, he will be responsible for overseeing the District’s handling of complaints of election fraud and voting rights abuses in consultation with the Justice Department in Washington, D.C.
"Although Utah has a history of conducting problem-free elections, we want to make sure residents of Utah know that reports of fraud or abuse will be taken seriously," Huber said today. “Election fraud and voting rights abuses dilute the worth of votes honestly cast. They also corrupt the essence of our representative form of government. It is imperative that those who have specific information about discrimination or election fraud make that information available immediately to the U.S. Attorney’s Office, the FBI, or the Department of Justice.”
Dishman will be available Nov. 8 to respond to complaints of election fraud or voting rights abuses and to ensure that any complaints are directed to the right place. Dishman can be reached by the public at 801-325-1409 while the polls are open.
In addition, the FBI in Salt Lake City will have special agents available throughout the day to receive allegations of election fraud and other election abuses on Election Day. The FBI can be reached at 801-579-1400.
Complaints about ballot access problems or discrimination can also be made directly to the Department of Justice’s Civil Rights Division’s Voting Section in Washington, D.C., at 1-800-253-3931 or 202-307-2767. Complaints related to violence, threats of violence, or intimidation at a polling place should be immediately reported to local authorities by calling 911. They should also be reported to federal authorities.
The administration of the election process is primarily a state rather than a federal function. States have the power to establish the place, time, and manner for holding elections. The Department of Justice, however, plays an important role in deterring election fraud and discrimination at the polls. The Justice Department's Criminal and Civil Rights Divisions enforce specific federal laws that help to ensure that all qualified voters have an opportunity to cast their ballots and have them counted.
The Department of Justice’s Civil Rights Division’s Voting Section enforces the civil provisions of a wide range of federal statutes that protect the right to vote including the Voting Rights Act, the National Voter Registration Act, the Uniformed and Overseas Citizens Absentee Voting Act, the Help America Vote Act and the Civil Rights Acts. Among other things, collectively, these laws:
- prohibit election practices that have either a discriminatory purpose, based on race or membership in a minority language group, or a discriminatory result, with members of racial or language minority groups having less opportunity than other citizens to participate in the political process;
- prohibit voter intimidation;
- provide that individuals who need assistance in voting because of disability or illiteracy can obtain assistance from a person of their choice;
- provide for accessible election machines for voters with disabilities;
- require provisional ballots for voters who assert they are eligible but whose names do not appear on poll books;
- provide for absentee ballots for service members, their family members and U.S. citizens living abroad;
- require states to ensure that citizens can register through drivers’ license offices, public assistance and disability services offices, other state agencies and through the mail; and
- include requirements regarding maintaining voter registration lists.
Mistakes by election administrators, violations of state laws governing how elections are to be conducted, the accuracy of campaign literature, campaigning too closely to voting locations, the process by which candidates qualify for ballot status and events that occur in the course of political campaigns generally are not appropriate for federal prosecution, although such matters may violate state election laws.
Anyone with questions about local voting procedures should call their county clerk’s office.
Logan Veterinarian Pays $200,000 to Settle Allegations Under the Controlled Substance ActRead the Press Release
SALT LAKE CITY – Dr. Michael J. Larson, a veterinarian who owns and operates IBEX Pre-Clinical Research, Inc., in Logan, has agreed to pay the United States $200,000 in civil penalties to resolve allegations involving the handling of controlled substances at the Logan business. The company is involved in conducting orthopedic surgical studies on a variety of laboratory animal species for pharmaceutical and medical device companies.
The DEA received a hotline tip in February 2016 alleging that control substances were being diverted for Dr. Larson’s personal use at IBEX. The tipster also told DEA numerous violations of the Comprehensive Drug Abuse Prevention and Control Act were taking place at the company.
The DEA conducted an investigation and audit which confirmed Dr. Larson was in violation of numerous record-keeping regulations. The violations included failing to conduct inventories of controlled substances on a regular basis and failing to maintain accurate and complete records of controlled substances received and dispensed. For example, the investigation showed that on 52 different occasions, Dr. Larson did not maintain accurate and complete records of the drug Buprenorphine that was purchased and administered. The investigation also showed that Dr. Larson failed to restrict access to the electronic Controlled Substance Ordering system. Dr. Larson purchased controlled substances for personal use.
Each of the violations could have resulted in a $10,000 civil penalty. As a part of the settlement to resolve the allegations, Dr. Larson agreed to surrender his DEA Registration and to associate with another veterinarian in the area to order, maintain and administer controlled substances.
St. George Man Sentenced to 108 Months in Federal Prison After Convictions for Fraud, Money LaunderingRead the Press Release
SALT LAKE CITY – Edmund Edward Wilson, age 72, of St. George, Utah, who pleaded guilty to wire fraud and money laundering in connection with a real estate fraud scheme, will serve 108 months in federal prison followed by 36 months of supervised release. U.S. District Judge Dee Benson imposed the sentence Thursday afternoon in federal court. Wilson also must pay $12,227,920 in restitution to victims of the fraud scheme.
According to a sentencing memorandum filed by federal prosecutors, Wilson ran a real estate investment scheme from approximately 2005 until 2012. His fraud accelerated in 2009 when businesses were in desperate need for financing, and the economic collapse made such loans more difficult to obtain through traditional means. Wilson sought out individuals all over the country who were developing real estate projects, such as shopping malls or resorts.
Wilson represented to investors that his company could provide financing for real estate development projects for an advance fee of either $80,000 or $150,000 through a “substitution of collateral program.” Through this program, individuals would provide the fee, obtain financing for their projects within 30-60 days (in some cases hundreds of millions of dollars), and not have to repay the loan. In return, these individuals Wilson called “investors” would give Mr. Wilson a 30 percent stake in the development project.
When investors called Wilson to ask why they had not received funding for their projects within the time promised, Wilson falsely represented to investors that he needed additional money to cover various unforeseen fees and expenses, and that once these costs were paid, funds would be released for the development projects. Wilson failed to disclose to investors that he never provided any funding for any development project through his substitution of collateral program and that he used a significant portion of the advanced fees for his personal benefit.
Later in the scheme, Wilson falsely represented to investors who had already invested in his program and to new potential investors that he could arrange financing of their development projects through his wealthy partner in Asia known as “the General.” In exchange for an investment of $80,000 to $150,000, investors would receive a forgivable loan for their real estate development project. The loan would come from “the General” who had access to millions of dollars in U.S. currency set aside for investment projects in the United States.
Again, Wilson failed to disclose to investors that he had never provided any funding for any development project through his foreign investment program and that he used a significant portion of the advanced fees for his personal benefit.
For example, in the wire fraud count he pleaded guilty to, Wilson admitted that around September 2008, he told an investor identified as M.B.K. that if M.B.K. paid $150,000 into his foreign investment program, Wilson could obtain and provide $96,080,000 in financing within 30 days for M.B.K.’s real estate development project of a hotel and spa in Greenville, N.C. As a result of Wilson’s representations, M.B.K. wired $150,000 to Wilson. Wilson admitted he used a portion of the advanced fees M.B.K. paid for his own personal benefit, transferring $100,000 to another account that had nothing to do with his substitution of collateral program or foreign investment program.
“Mr. Wilson never funded a single real estate project. Every iteration of the story Mr. Wilson told was pure fabrication. The majority of funds received by Mr. Wilson were used to cover his personal expenses and expenses of his other businesses which operated at a significant loss. No funds were ever put in escrow as the loan agreements specified,” federal prosecutors wrote in the sentencing memorandum. Wilson declared bankruptcy in August 2012.
The case was prosecuted by the U.S. Attorney’s Office in Utah and investigated by special agents of the FBI and IRS Criminal Investigation.
Roosevelt Man Charged with Social Security Fraud Resulting in Alleged Overpayments of $202,671.60Read the Press Release
SALT LAKE CITY – Benjie Leroy Christensen, age 53, of Roosevelt, Utah, will be in federal court in Salt Lake City Wednesday morning for an initial appearance on an indictment charging him with one count of Social Security fraud and one count of theft of government money.
The hearing will be at 11 a.m. before U.S. Magistrate Judge Paul M. Warner. The potential maximum penalty for Social Security fraud is five years in prison. Theft of government money has a potential 10-year sentence. Both counts have potential fines of $250,000.
The indictment alleges that Christensen, who received Social Security benefits and knew he had a duty to report any event or change of circumstances affecting his right to have the benefits, failed to disclose such an event. Christensen’s concealment or failure to disclose the event resulted in overpayments of $202,671.60.
Christensen was receiving Social Security disability insurance benefits based on a claim he was unable to work because of a medical condition. His wife and children later applied for auxiliary benefits based on his record. An investigation conducted by a Social Security Administration Office of Inspector General agent, showed Christensen was actually working during the time he was receiving disability benefits. An agent with the Montana Department of Justice’s Division of Criminal Investigation also contributed to the case.
Indictments are not findings of guilt. Individuals named in indictments are presumed innocent unless or until proven guilty in court.
Justice Department Settles with Salt Lake City-Area Apartment Complexes to Resolve Allegations of Discrimination Against Individuals with DisabilitiesRead the Press Release
The Justice Department announced today that the owners and managers of four multi-family apartment complexes in the Salt Lake City area have agreed to pay $45,000 to settle a lawsuit alleging that they violated the Fair Housing Act by discriminating against tenants and prospective tenants with disabilities.
The lawsuit, filed in the U.S. District Court for the District of Utah, alleges that the defendants failed to provide reasonable accommodations for certain tenants with disabilities who sought to live with their assistance animals. The department’s complaint alleges, among other things, that the defendants – the property management company NALS Apartment Homes; the owners of Pinnacle Highland Apartments, Cobble Creek Apartments and Sky Harbor Apartments; and the former owners of Thornhill Park Apartments – required tenants with disabilities who sought to live with an assistance animal to have a healthcare provider complete a “prescription form” suggesting that the healthcare provider may be held responsible for any property damage or physical injury that the assistance animal may cause. The defendants did not require tenants without disabilities who had pets to have a third party assume liability for their animals.
The lawsuit arose as a result of complaints by both former tenants and Utah’s Disability Law Center (DLC) filed with the U.S. Department of Housing and Urban Development. DLC, a non-profit organization that works to promote equal housing opportunities in the Salt Lake City metropolitan area, sent testers posing as prospective renters to the defendants’ apartment buildings to determine whether they were engaging in discriminatory practices in violation of the Fair Housing Act.
“The Fair Housing Act requires landlords to make accommodations for individuals with disabilities who require assistance animals in their homes,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “The Justice Department remains deeply committed to protecting the rights of persons with disabilities and holding accountable housing providers who utilize discriminatory policies.”
“This office will not tolerate business practices that deprive those with disabilities their rights to housing accommodations required under the law,” said U.S. Attorney John W. Huber of the District of Utah. “We will vigorously pursue those who fail to comply with these standards.”
Under the terms of the consent order, which must still be approved by the court, the defendants are required to pay $20,000 to a former tenant and her seven-year-old son with autism who were denied permission to keep the child’s assistance animal after the child’s doctor refused to assume liability for any possible damages caused by the animal. The defendants are also required to pay $25,000 to establish a settlement fund to compensate any additional individuals who were harmed by their conduct. The settlement also prohibits the defendants from engaging in future discrimination and requires them to establish a non-discriminatory reasonable accommodation policy, use non-discriminatory reasonable accommodation application forms and have the relevant employees participate in fair-housing training.
Individuals who have a disability and believe they were improperly denied the opportunity to live with their assistance animal or received a substantially delayed decision in response to a request to live with their assistance animal at one of the four apartment complexes listed above should contact the Justice Department at 1-800-896-7743, option 994, or email the department at [email protected].
The Fair Housing Act prohibits discrimination in housing based on race, color, religion, national origin, sex, disability and familial status. More information about the Civil Rights Division and the laws it enforces is available at www.justice.gov/crt. Persons who believe that they have experienced unlawful housing discrimination elsewhere can contact the Justice Department at 1-800-896-7743, by e-mail at [email protected], or contact the Department of Housing and Urban Development at 1-800-669-9777.
NALS Complaint NALS Consent DecreeUtah Business Owner Convicted of Dealing in Firearms without a License and Filing False Tax ReturnsRead the Press Release
SALT LAKE CITY – A Salt Lake County, Utah, man was convicted Friday by a federal jury of one count of dealing in firearms without a license and five counts of filing false tax returns, announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division, and U.S. Attorney John W. Huber for the District of Utah.
“Individuals such as Mr. Webber, who view themselves above the law and engage in criminal conduct to line their own pockets with funds that belong to the U.S. Treasury, will be held to account for their crimes and face severe consequences, including prosecution and incarceration,” said Principal Deputy Assistant Attorney General Ciraolo. “The Tax Division thanks its colleagues in the District of Utah and other federal agencies for their continued efforts to ensure that everyone pays their fair share.”
“This defendant repeatedly purchased firearms for resale without a federal firearms license and substantially under reported the gross receipts of the sales on his taxes,” said U.S. Attorney Huber. “Around 2,000 firearms were involved in this conduct. Evidence at trial showed that Mr. Webber claimed a mere fraction of his gross receipts on his tax forms over a four-year period.”
Pursuant to an agreement reached with the United States in 2007, Adam Michael Webber, was barred from applying for a federal firearms license or engaging in the business of dealing firearms. According to the evidence presented at trial, between 2007 and 2008, Webber was the sole owner of HK Parts, an Internet gun parts business that operated originally as a sole proprietorship and later as an S corporation. In 2008, Webber added firearms to his product line and primarily sold them on the Internet at hkparts.net. He also sold firearms and firearm parts out of the basement of his residence. Webber never held a federal firearms license and, from 2009 through May 2012, illegally sold firearms under the auspices of a company owned by another Utah resident. Webber also sold firearms to undercover Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) agents on two separate occasions, including selling one firearm for cash in a parking lot. In May 2012, approximately $180,000 in cash, a 70-pound silver bar, silver coins and firearms were found at Webber’s residence during the execution of a search warrant.
From 2007 through 2010, Webber earned more than $10 million in gross receipts from his illegal firearms business. For those years, he reported only a total of $183,397 in gross receipts, underreporting his earnings on his 2007, 2008 and 2009 individual income tax returns and underreporting gross receipts on his 2009 and 2010 corporate tax returns. In 2010, Webber paid $670,000 in cash for a new home in Salt Lake County.
Sentencing is set for Dec. 1. Webber faces a statutory maximum sentence of up to five years in prison for dealing in firearms without a license and up to three years in prison for each count of filing a false tax return, as well as a period of supervised release and monetary penalties.
“The laws regulating the buying and selling of firearms exist to prevent criminals and other prohibited people from illegally accessing firearms,” said Ken Croke, Special Agent in Charge of the ATF’s Denver Field Office. “By circumventing these laws, Webber knowingly and intentionally put people’s lives at risk.”
“Mr. Webber's crimes were not victimless,” said Special Agent in Charge Tara Sullivan of the Internal Revenue Service-Criminal Investigation (IRS-CI) Field Office in Las Vegas, Nevada. “Reporting inaccurate information on your taxes cheats the government and is unfair to honest taxpayers. Mr. Webber decided that he was above the law and IRS CI holds all offenders accountable.”
“Illegal firearms dealers can create public safety and national security vulnerabilities by potentially arming criminals and terrorists without a traceable paper trail, while also hurting the image and business reputation of licensed law-abiding firearms dealers,” said Special Agent in Charge David A. Thompson of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations’ (HSI) Denver office. “Frequently, such successful criminal cases are identified, investigated and presented for prosecution by combining the law enforcement resources and authorities of multiple agencies. Our HSI special agents routinely work cooperatively with other law enforcement partners to shut down these criminal operations that pose a public safety risk to our communities.”
Principal Deputy Assistant Attorney General Ciraolo and U.S. Attorney Huber commended the special agents of ATF, IRS-CI and HSI, who conducted the investigation and Assistant U.S. Attorneys Cy H. Castle and J. Drew Yeates and Paralegal Heather Nielson of the U.S. Attorney’s Office in the District of Utah and Trial Attorney Kathleen M. Barry of the Tax Division, who prosecuted the case.
Utahns invited to attend screenings of Chasing the Dragon documentary, panel discussions as a part of National Heroin and Opioid Awareness WeekRead the Press Release
SALT LAKE CITY – Screenings of the FBI and DEA’s documentary about the dangers of opioid addiction, “Chasing the Dragon: The Life of an Opiate Addict,” will be held in West Jordan, Orem, and Ogden next week as a part of National Heroin and Opioid Awareness Week, U.S. Attorney John W. Huber announced today. The screenings are open to the public.
The title of the documentary refers to the never-ending pursuit of the original or ultimate high. It features first-person accounts of people who have abused opioids or who have children who have abused opioids with tragic consequences. The documentary also includes interviews with medical and law enforcement professionals discussing a variety of issues, including how quickly addiction can set in, how the increasing costs of prescriptions opioids can lead to the use of heroin as a less expensive alternative, the challenges of withdrawal, the ties between addiction and crime, and the fact that opiate abuse is prevalent in all segments of society.
The 45-minute screening of the documentary will be followed by a panel discussion in each community exploring issues related to prevention, enforcement, and treatment of prescription opiate and heroin abuse.
"We cannot arrest and prosecute our way out of the problems contributing to overdose deaths in Utah. We have to get to the root of the problem, and that is not something that those of us in law enforcement can do alone,” U.S. Attorney John W. Huber said today. “We need a community response, one that brings law enforcement professionals, health care providers, educators, policy makers, faith leaders, and families together to approach the opioid challenge. The first step toward that response is community education and awareness about these issues.”
The first screening will be Monday, Sept. 19, at 7 p.m. at the Viridian Event Center in West Jordan. The center is located at 8030 South 1825 West in West Jordan. The screening will be in Room B. Panelists involved in the discussion following the documentary will be Assistant U.S. Attorney Stewart Young, FBI Special Agent Cameron Smilie, Johnny Ngo of the Unified Police Department; and Trish Henrie-Barrus, Assistant Professor of Educational Psychology at the University of Utah.
The second screening will be Tuesday at 7 p.m. in the Ragan Theatre on the campus of Utah Valley University in Orem. Participating in the panel discussion following the UVU screening will be Assistant U.S. Attorney Aaron Clark, Greg Peterson of the U.S. Probation Office, Taylor West of the Salt Lake City Police Department, and Carol Lundwall of the Intermountain Specialized Abuse Treatment Center (ISAT) in Provo.
The final screening will be Thursday, Sept. 22, at 7 p.m. in the Thomas D. Dee Auditorium at McKay-Dee Hospital in Ogden. Participating in the panel discussion following the Ogden screening will be Special Assistant U.S. Attorney Michael Gadd, Troy Burnett of the Ogden Police Department, Scott Byington of the Davis Metro Narcotics Strike Force, and Dr. Timothy Houden, Medical Director of Pain Medicine at Intermountain Health Care.
"This film may be difficult to watch,” explains FBI Director James Comey, “but we hope it educates our students and young adults about the tragic consequences that come with abusing these drugs and that it will cause people to think twice before becoming its next victim.”
According to Acting DEA Administrator Chuck Rosenberg, “The numbers are appalling – tens of thousands of Americans will die this year from drug-related deaths, and more than half of these deaths are from heroin and prescription drug overdoses. I hope this documentary will be a wake-up call for folks.”
Grand Jury Returns Superseding Indictment in Deyoung CaseRead the Press Release
SALT LAKE CITY – A federal grand jury returned a superseding indictment Wednesday afternoon charging Curtis Lynn DeYoung, age 60, of Draper, Utah, who acted as president and Chief Executive Officer of American Pensions Services (APS), with obstruction of justice, false declaration before a court of the United States, and making a false statement.
The superseding indictment also includes the 15 counts of mail fraud included in the initial indictment, returned by a federal grand jury in February 2015. The indictment alleges DeYoung misappropriated more than $24 million from the accounts of more than 5,000 customers without their knowledge or consent.
The three new counts in the indictment, Count 16, 17, and 18, relate to alleged efforts DeYoung made to conceal approximately $50,000 worth of personal valuables including precious gems, minted coins, gold and silver coins, and jewelry. The valuables were found in an area above a suspended ceiling at a West Jordan business.
Count 16 alleges DeYoung obstructed justice by concealing, moving, and hiding the $50,000 worth of personal valuables in violation of an April 2014 court order freezing all of his assets. Count 17 alleges DeYoung made a false material declaration before a Court of the United States as a part of a case being litigated before the Court, concealing the $50,000 in personal valuables from the court during a discussion of assets owned by him, his spouse, or any other members of his household. Count 18 alleges DeYoung made a false statement while testifying under oath when he concealed the $50,000 worth of personal valuables from his statement of financial condition.
APS was a Utah corporation formed around 1983. It acted as a third-party administrator for self-directed individual retirement accounts. According to the indictment, beginning in 1998 and continuing until April 2014, DeYoung devised a scheme to defraud and obtain money from APS customers through the use of false and fraudulent representations, promises, and omission of material facts. The indictment alleges DeYoung misappropriated the funds of more than 5,000 APS customers held in two of the three APS bank accounts known as the “Master Trust” accounts which comingled all APS customer cash, including cash deposited into customer IRA accounts and cash generated from customer IRA investments.
The indictment alleges DeYoung used the misappropriated funds from the Master Trust accounts to make personal high-risk, unsecured investments. DeYoung misappropriated the money without notifying APS customers, knowing that the money did not belong to him and that he was using it for purposes not authorized by APS customers, the indictment charges. According to the indictment, neither APS nor DeYoung had discretionary authority or control over the APS customer funds. APS was responsible only to disburse funds as directed by the beneficiaries.
According to the indictment, around Oct. 31, 2009, DeYoung made a false accounting entry in APS records in the amount of $24,789,313.65 to conceal the fact that he misappropriated these funds. DeYoung continued to solicit new customers to engage APS as a third-party administrator and concealed the fact that the total cash balances in customer accounts did not equal the amount of cash available in the APS Master Trust accounts because he had misappropriated more than $24 million dollars, the indictment alleges.
In an effort to conceal his scheme, beginning in 1998 and continuing until January 2014, DeYoung mailed false APS account statements to all APS customers that contained inflated cash balances. These inflated cash balances did not equal the amount of cash actually available in the APS Master Trust accounts. The indictment alleges DeYoung knew that APS customers would rely on these statements in determining the value of their APS accounts.
The indictment also includes a notice of intent to seek forfeiture of a sum of money equal to the value of the proceeds of the scheme to defraud, which is approximately $24,789,313.65, upon conviction of any offense in the indictment.
The potential maximum penalty for each count of mail fraud in the indictment is 20 years in prison and a fine of $250,000. The potential penalty for obstruction of justice is 10 years in prison. Making a false declaration before a court of the United States and making a false statement each carry potential five-year sentences. A summons will be issued to DeYoung to appear in federal court for an arraignment on the new indictment.
The case is being investigated by special agents of the FBI and prosecuted by Assistant U.S. Attorneys in the U.S. Attorney’s Office in Salt Lake City.
Indictments are not findings of guilt. Individuals charged in indictments are presumed innocent unless or until proven guilty in court.
Civil Complaint Filed Against Sevier Valley Oil Company Alleging Eight Amtrak Locomotives Broke Down After Refueling with Contaminated Fuel in Salt Lake CityRead the Press Release
SALT LAKE CITY – A civil complaint filed Friday afternoon in U.S. District Court in Salt Lake City alleges that Sevier Valley Oil Company of Monroe, Utah, provided contaminated fuel for eight Amtrak locomotives refueled in Salt Lake City during April and May of 2011. The locomotives broke down after leaving Salt Lake City. Repairs required to fix the locomotives took them out of commission for several days and cost taxpayers tens of thousands of dollars.
In one instance on May 17, 2011, an Amtrak train was stranded without electrical power about 100 miles east of Elko, Nevada, after one of two locomotives began losing power, billowing smoke, and shooting flames and sparks out of its exhaust. Soon after, both locomotives, which had been refueled in Salt Lake City a few hours before, completely failed and could not be restarted. According to the complaint, with the loss of both locomotives, the train was stranded without electrical power. Amtrak was able to lease a locomotive from Union Pacific to tow the stranded train to Elko, where passengers were taken by bus. Some passengers were transported to the hospital because their medical devices were without power for an extended period of time while they were on the stranded train.
Sevier Valley Oil and Amtrak entered into a contract on Dec. 1, 2009. As a part of the contract, Sevier agreed to provide No. 1-D and No. 2-D diesel fuel for Amtrak’s locomotives. Among other requirements, Sevier agreed to provide this diesel fuel that would be “free from grit, acid, microbial growth, and fibrous or other foreign material likely to clog pipes and strainers or damage injectors.”
Amtrak suspended Sevier from fuel deliveries after the incident involving the stranded train near Elko and asked Sevier to provide information about its refinery sources. According to the complaint, Sevier provided Amtrak with refinery test results from Silver Eagle, Tesoro, Holly, and Sinclair. However, the complaint notes that Sevier did not disclose that it had obtained fuel from Rock Canyon Oil Company in American Fork, Utah, which blended diesel fuel with re-fined used oil. Amtrak later determined that all of the engine failures were caused by fuel contamination, which clogged the locomotives’ fuel injectors. Subsequent fuel analysis showed that the fuel in all of the broken-down locomotives was contaminated with a non-fuel product. Amtrak had to repair all of the damaged locomotives by draining all of the contaminated fuel and making several repairs to the locomotives.
Amtrak, the complaint alleges, spent $84,124.13 in labor and parts to repair the damaged locomotives; $3,370 to drain the contaminated fuel from all of its damaged locomotives; and $5,500 to have the contaminated fuel test. Amtrak had to issue $14,575.83 in refunds or credits to passengers as compensation for late trains or missed connections. Additionally, Amtrak paid Sevier $48,081.78 for the substandard fuel that damaged its locomotives.
The complaint asks the court to declare that Sevier breached its contract and to order Sevier to pay Amtrak damages in the amount of $242,452.93 for Sevier’s breach of contract.
The complaint includes a second cause of action under the False Claims Act. According to the complaint, Sevier presented a claim for payment to Amtrak on six different days in April and May of 2011. According to the complaint, Sevier knowingly misrepresented and concealed the type of fuel that was delivered to Amtrak on their claims. The complaint asks the Court to declare that Sevier violated the False Claims Act and award the United States a civil penalty of not less than $5,500 and not more than $11,000 for each false claim and treble damages in the amount of $144,245.34 based on the amount that Amtrak paid for the substandard fuel Sevier delivered.
The U.S. Attorney’s Office in Utah is representing Amtrak and the United States in the action. The case has been investigated by the Amtrak Office of Inspector General.
Veteran Assistant U.S. Attorney in Utah Honored by Department of Justice at Awards CeremonyRead the Press Release
WASHINGTON – Stewart C. Walz, who has been an Assistant U.S. Attorney in Utah since 1980, was honored for Superior Performance as an Assistant U.S Attorney at a Department of Justice ceremony Wednesday morning in Washington, D.C. Walz, a criminal attorney, was one of 160 nationwide recipients recognized by Deputy Attorney General Sally Yates and Executive Office for U.S. Attorneys (EOUSA) Director Monty Wilkinson at the 32nd annual Director’s Awards Ceremony held in the Great Hall at the Robert F. Kennedy Department of Justice Building.
Walz was recognized for his lifetime of distinguished service as an Assistant United States Attorney. Walz began his professional career in 1976 as an Attorney for Chief Counsel for the IRS. Most of his 35-year career in the U.S. Attorney’s Office has been spent prosecuting white collar crime cases involving investment, securities, and tax fraud. He currently serves as Senior Litigation Counsel in the office.
“Assistant U.S. Attorney Walz has made significant contributions to the integrity and effectiveness of the United States Attorney’s office through his successful prosecution of complex white collar cases and his exemplary service as a leader in the District of Utah. He has distinguished himself as a highly-skilled and well-respected prosecutor and leader who has served as an influential role model and mentor for lawyers throughout the country,” U.S. Attorney John W. Huber said today.
Walz teaches extensively around the country for the Department of Justice on trial advocacy, grand jury practice, evidence, and white collar crimes.
In her prepared remarks, Deputy Attorney General Yates said, “The achievements being recognized today reflect the breadth of the department’s responsibilities, and some of our most significant challenges. From dismantling dangerous gangs, drug cartels and human trafficking operations to tackling political corruption, white collar crimes, and international terrorism, these awardees have taken on our toughest cases. And the citizens of our country are safer because of their work.”
“We honor the truly talented and dedicated legal and administrative personnel in the 94 U.S. Attorneys’ offices and our law enforcement partners who everyday touch lives in our communities, protect the American people, and work to ensure the fair and impartial administration of justice,” said Director Wilkinson.
EOUSA provides oversight, general executive assistance, and direction to the 94 United States Attorneys’ offices around the country. For more information on EOUSA and its mission, visit http://www.justice.gov/usao.
Grand Jury Returns Indictment Charging West Valley Man in Connection with Alleged Forgery, Identity Theft SpreesRead the Press Release
SALT LAKE CITY – A federal grand jury returned a 31-count indictment Wednesday morning charging Kevin Russell Humphreys, age 35, of West Valley City with multiple violations of federal law in connection with alleged forgery and identity theft crime sprees in 2013 and 2015 in Salt Lake County.
The indictment alleges 21 counts of bank fraud for his alleged attempts to defraud banks by cashing stolen and forged checks.
The first six bank fraud counts relate to Humphreys’ alleged efforts to obtain, typically via theft of mail, identifications and checks belonging to other people or organizations. He then forged checks in various amounts, made checks payable to people whose identities he illegally possessed or forged, and then cashed or attempted to cash the checks at various financial institutions in Salt Lake County. The amount of money involved in the bank fraud alleged in these six counts is $19,531.10.
The remaining 15 bank fraud counts relate to lines of credit Humphreys applied for and received using personal identifiers that belonged to other people. He received $93,300 in credit based on the alleged fraud in the 15 counts. Because he didn’t use all of the credit, actual losses to the banks were about $6,448.70.
Three counts in the indictment allege fraud in relation to Treasury securities in connection with three stolen U.S. Treasury checks. Humphreys is also charged with five counts of aggravated identity theft; one count of access device fraud for his alleged use of a credit card belonging to a person identified in the indictment as S.P. The indictment alleges Humphreys used the card at various locations in Salt Lake County, accumulating $4,464.16 in charges.
The final count of the indictment alleges possession of stolen mail in connection with one of the Treasury checks.
The maximum potential penalty for each count of bank fraud is 30 years in prison. The counts alleging fraud in relation to Treasury securities and access device fraud have potential sentences of 10 years and mail fraud is up to five years. Aggravated identity theft carries a minimum-mandatory sentence of two years per count, and can be added to the end of any sentence imposed on other counts. Humphreys is currently in state custody. A federal arrest warrant will be issued based on the charges in the indictment.
Indictments are not findings of guilt. Individuals charged in indictments are presumed innocent unless or until proven guilty in court.
The Utah Identity Theft Task Force case is being prosecuted by the U.S. Attorney’s Office in Utah. It is being investigated by task force officers with the Unified Police Department’s Kearns/Magna Precinct and Inspectors with the U.S. Postal Inspection Service. The investigation also included significant investigative efforts by detectives with the Draper Police Department and the UPD’s Midvale Precinct.
U.S. Attorneys Huber and Neronha Appointed to Attorney General’s Advisory CommitteeRead the Press Release
WASHINGTON – Attorney General Loretta E. Lynch announced today the appointments of John W. Huber, U.S. Attorney for the District of Utah, and Peter F. Neronha, U.S. Attorney for the District of Rhode Island, to the Attorney General’s Advisory Committee (AGAC), effective immediately.
“The Attorney General’s Advisory Committee plays a crucial role in shaping the Justice Department’s approach to fighting crime, countering national security threats and securing equal justice under the law and I am pleased to welcome two new members to its ranks,” said Attorney General Lynch. “U.S. Attorneys John Huber and Peter Neronha have spent their careers tackling some of the most high-profile and difficult challenges we face, from political corruption and terrorism to gun violence and organized crime. I have come to know them both as outstanding law enforcement officers and devoted public servants and I look forward to drawing upon their insight and expertise in the months to come as we continue our work to create a stronger, safer, and more equal nation for all Americans.”
U.S. Attorney Huber will fill the seat vacated by former U.S. Attorney for the District of Kansas, Barry Grissom, who resigned on April 15.
U.S. Attorney Neronha will fill the seat vacated by former U.S. Attorney for the Northern District of Ohio, Steven Dettelbach, who resigned on Feb. 5.
U.S. Attorney Huber was nominated by President Barack Obama on Feb. 4, 2015, and confirmed by the U.S. Senate on June 10, 2015, as U.S. Attorney for Utah. Prior to confirmation as the U.S. Attorney, U.S. Attorney Huber prosecuted a number of high profile federal cases and coordinated task forces that focused on violent crime and counter-terrorism. He also served as chief of the National Security Section in the U.S. Attorney’s Office before being asked to serve as the Executive Assistant U.S. Attorney, a member of the office’s executive management team.
Mr. Huber is a veteran public servant who has served as a prosecutor at every trial court level in the State of Utah. After graduating with honors from the University of Utah, Mr. Huber went on to complete his juris doctor degree at the University of Utah’s S.J. Quinney College of Law. He began his prosecution career in the Weber County Attorney’s Office, and later served as the Chief Prosecutor for West Valley City before joining the United States Attorney’s Office in 2002.
U.S. Attorney Neronha was nominated by President Barack Obama on July 31, 2009, and confirmed by the U.S. Senate on Sept. 15, 2009, as the U.S. Attorney for the District of Rhode Island. In 2002, U.S. Attorney Neronha joined the U.S. Attorney’s Office for the District of Rhode Island. As an Assistant U.S. Attorney, he prosecuted criminal cases involving political corruption, white collar crime, drug and firearm offenses. When he joined the U.S. Attorney’s Office, he was named coordinator of the District’s Project Safe Neighborhoods, a Department of Justice initiative against gun crimes. Prior to being named U.S. Attorney, he was Chief of the District’s Organized Crime Strike Force. U.S. Attorney Neronha previously served on the AGAC during 2009-2011.
The AGAC was created in 1973 to serve as the voice of the U.S. Attorneys and to advise the attorney general on policy, management and operational issues impacting the offices of the U.S. Attorneys.
Jury Finds Fortney Guilty of Making False Declaration to Court, Lying to FBI Agent in an Effort to Obstruct SEC CaseRead the Press Release
SALT LAKE CITY – A jury returned a verdict Tuesday evening finding Kevin Carl Fortney, age 55, of Washington, Utah, guilty of making a false declaration before a court of the United States and making a false statement to a federal agent as a part of efforts to obstruct the administration of justice in a Securities and Exchange Commission case pending in federal court.
Fortney and a co-defendant, Roger Stanley Bliss, age 57, of Bountiful, Utah, were charged in an indictment returned in August 2015. Federal prosecutors sought the indictment after U.S. District Judge Robert Shelby referred the case to the U.S. Attorney’s Office requesting a criminal perjury and obstruction investigation be opened against Bliss and Fortney. Judge Shelby made the request following an evidentiary hearing in his court where it was proven that Bliss and Fortney violated his order freezing defendant Bliss’ assets and that they had made false declarations to the court to conceal the conduct. Bliss pleaded guilty to obstruction of justice and false declaration before a court of the United States in September and was sentenced to a year in federal prison in January.
As a part of his guilty plea, Bliss admitted that he understood that the court had issued an ordering freezing all of his assets and that assets purchased with funds from any bank account in his name were subject to that order. He admitted that he arranged to have a third party to whom he owed money, take control of a 17-foot catamaran sailboat that had been purchased with funds from a bank account in his name and was subject to the court’s order freezing his assets. Bliss admitted he transferred the catamaran so it could be liquidated by the third party and the proceeds used to reduce a debt he owed to the third party. He also admitted submitting a false declaration to the court, under penalty of perjury, as a part of a subsequent hearing. Bliss knew the declaration was not consistent with the facts when he made it, according to a statement made as a part of his guilty plea.
Fortney was convicted this week for his role in assisting Bliss, his brother-in-law, in concealing and selling the catamaran. Fortney, under penalty of perjury before a federal court, signed and submitted a declaration he knew was false saying he owned the catamaran, used the catamaran at Bear Lake and moved his catamaran to St. George. The ownership of the catamaran was material to the contempt proceedings in the SEC action.
His conviction for making a false statement to a federal agent relates to his statement to FBI Special Agent Jason Henrikson that in June or July of 2014 he purchased the catamaran from a salesman in Ogden. Evidence at trial proved he made the statement to the agent knowing it was false.
Sentencing for Fortney is scheduled for Aug. 2, 2016, at 2 p.m. He faces up to five years in federal prison for each of the two counts of conviction.
“Mr. Fortney’s deception is an affront to the integrity of our judicial system. The actions he took to help circumvent the court-imposed asset freeze sought by the SEC further injured investor-victims of Bliss’ fraudulent investment scheme,” U.S. Attorney John W. Huber said today. “Those who attempt to obstruct the work of the court by giving false testimony or who knowingly violate orders of the court will face vigorous prosecution,” Huber said.
Asset freeze orders, like the one violated in the Bliss case, serve to prevent the unfair dissipation of assets and ensure the availability of funds for restitution to victims. “Bliss lacks the resources to repay the investor-victims of his Ponzi scheme. Bliss victimized them yet again by recruiting his brother-in-law, Kevin Fortney, to liquidate Bliss’ catamaran sailboat and then to lie about it to the court and to investigators. Bliss deliberately violated Judge Shelby’s asset freeze order, recruited a co-conspirator to his cause, and then provided false and misleading information to influence the court’s decision on the matter. Bliss circumvented the SEC’s efforts to protect investors,” Assistant U.S. Attorney Jacob Strain wrote in a sentencing document filed in the case.
The case is being prosecuted by Assistant U.S. Attorney Jacob Strain and SEC Trial Counsel Amy Oliver, who is a Special Assistant U.S. Attorney. The case is being investigated by special agents of the FBI.
Dr. Wilcox Sentenced to 100 Months in Federal Prison for Distribution of Oxycodone ConvictionsRead the Press Release
SALT LAKE CITY – Dr. Simmon Lee Wilcox, age 60, of Las Vegas, who was found guilty in January of one count of conspiracy to distribute oxycodone and one count of distribution of oxycodone following a trial in U.S. District Court in Salt Lake City, will serve 100 months in federal prison.
U.S. District Judge Ted Stewart imposed the sentence Monday morning. Wilcox will be on supervised release for 36 months when he finishes his prison sentence. He will self-surrender to begin serving his prison sentence in August.
Evidence at the trial showed Dr. Wilcox wrote about 618 prescriptions resulting in the diversion of approximately 81,000 30-milligram oxycodone pills for non-medical purposes between July of 2010 and March of 2013. Dr. Wilcox wrote hundreds of prescriptions to people using false identifications that were filled at various pharmacies in Utah and Nevada. Those who filled the prescriptions and took possession of the oxycodone either sold it or used it personally.
Five co-conspirators in the case previously pleaded guilty to conspiracy to distribute oxycodone. Benjamin David Grisel, age 49, of Santa Clara, has been sentenced to 48 months in prison; Brenda Grisel, age 48, also of Santa Clara, will serve 12 months in prison. Jeron Scott Hales, age 40, of Hurricane, is serving a 32-month sentence and Jeremy Daniel Perkins, age 36, of Washington, was sentenced to time served. Randall David Ayrton, age 35, of St. George, is serving a 36-month sentenced. As a part of plea agreements reached with federal prosecutors, co-conspirators in the case admitted they conspired with Dr. Wilcox to use his medical license to write prescriptions for oxycodone pills. To facilitate the conspiracy, one of the co-conspirators created false identification documents for the group to use in filling the oxycodone prescriptions at various pharmacies.
The defendants in the case were charged in an indictment returned by a federal grand jury in October 2013 following an investigation by DEA drug diversion investigators.
In a sentencing memorandum filed in anticipation of Monday’s sentencing hearing, federal prosecutors highlight the tragic effects abuse of oxycodone is having throughout the United States. “Utah is not exempt from this tragedy. Just in the past week, the Utah Department of Health has noted that new data shows six people die each week in Utah as a result of overdosing on prescription opioids,” prosecutors noted in the memorandum.
“I have talked before about the heroin and opioid tsunami threatening Utah. In 2012, 31.71 pounds of heroin were seized in Utah. In 2014, that number grew to 244.04 pounds,” U.S. Attorney John W. Huber said today. “The 81,000 oxycodone pills that found their way into our communities through the 618 prescriptions Dr. Wilcox wrote are no different than a drug dealer selling heroin on the corner. In fact, these crimes are worse because they abuse the trust we place in physicians. To stop the wave we are seeing, we need to attack every angle of the heroin and opioid problem in our state,” Huber said.
“DEA takes its responsibility to prevent the distribution of dangerous and addictive drugs to those who do not have a medical reason to have them very seriously,” Acting DEA Assistant Special Agent in Charge John Eddington said today. “We are pleased with the sentence imposed on Dr. Wilcox today and believe it reflects the seriousness of the conduct involved in this case.”
Orem Man Charged with Fraud in Indictment Alleging Business was Run as a Ponzi SchemeRead the Press Release
SALT LAKE CITY – Chad Roger Deucher, age 43, of Orem will make a May 26, 2016, appearance in federal court in Salt Lake City to face charges alleging that from March 2010 to February 2016, he operated a Ponzi scheme through a business he controlled that collected about $28 million from about 250 investors. Investigators involved in the case believe about 170 of the investors lost about $16 million in the scheme.
The indictment includes 18 counts of wire fraud and one count of fraud in connection with the purchase and sale of securities. A summons has been issued to Deucher to appear at 1:30 p.m. in U.S. Magistrate Judge Brooke C. Wells’ courtroom.
According to the indictment, Deucher owned and controlled Marquis Properties, a Utah company engaged in real estate transactions. Deucher marketed Marquis as a company of experienced property professionals specializing in acquiring, repairing, and managing high quality cash-flowing properties in several markets across the country, according to the indictment. Deucher claimed that Marquis owned and managed investment properties in desirable areas.
Deucher used direct solicitations, radio advertisements, a website, and real estate and retirement seminars, among other things, to find investors for three types of investments offered through his company. The investment options included turnkey cash flow real estate investments, promissory notes secured by real properties, and joint ventures.
The indictment alleges that Deucher made oral and written misrepresentations about the investments in communications with potential investors. He represented that Marquis located, purchased, renovated and sold single family and small, multi-family homes in lucrative areas of the country. Deucher told investors that Marquis retained renovation crews, property managers and realtors on the ground to assist with all stages of the projects, eliminating the need for direct involvement. According to the indictment, Deucher represented that investors could earn a significant return on their investments. These returns depended on the type of investment being made and varied in length of time period. For example, some investors were promised approximately 8 percent per year for three years, while others were promised 16 percent to 22 percent over an investment period of about one year when rental income was considered. Later in the scheme, according to the indictment, some investors were promised 12 percent to 18 percent for a period of about two weeks to around two months, or 10 percent for investments of about two to six weeks. In truth, the indictment alleges, Deucher tailored the terms of return based on his need for money and what he believed would induce the investor to invest in his company.
According to the indictment, Deucher failed to disclose to investors that the property Marquis offered as collateral were not owned by the company, were substantially encumbered, or were in uninhabitable or blighted condition. He also did not disclose that Marquis was insolvent, the indictment alleges, and was unable to make interest and principal payments to investors and that investor returns were being paid from the funds of new investors.
Deucher also failed to disclose that the securities he offered were not registered and that he was not registered or associated with a securities broker or dealer, all required by law, the indictment alleges.
The indictment alleges Deucher transferred several millions of dollars of client investment funds from business accounts he controlled for his own business and personal interests unrelated to the acquisition or rehabilitation of real property.
The potential maximum penalty for each of the 19 counts in the indictment is 20 years in federal prison. The potential fine for the securities fraud count is $5 million. Each wire fraud count has a potential $250,000 fine.
Indictments are not findings of guilt. Individuals charged in indictments are presumed innocent until proven guilty in court.
The case is being prosecuted by the U.S. Attorney’s Office in Salt Lake City and investigated by FBI special agents. The Orem Police Department and investigators with the Utah County Attorney’s Office also participated in the investigation.
Jury Convicts Jereb of Assault on a Federal Officer, Possession of Methamphetamine, HeroinRead the Press Release
SALT LAKE CITY -- Sentencing is set for June 30, 2016, for Arron B. Jereb, age 34, of Wyoming, convicted of assault on a federal officer, possession of methamphetamine and heroin, and possession of drug paraphernalia by a federal jury following a four-day trial in federal court last week. The jury made a specific finding as a part of its verdict on the assault count that Jereb forcibly opposed the officer, subjecting him to a potential 20-year prison sentence. He was acquitted of harming a law enforcement animal and possession of marijuana.
U.S. Attorney John W. Huber said the conduct in this case is something federal prosecutors take very seriously. “Our law enforcement officers put themselves in harm’s way every day to ensure the safety and security of our communities. We will do everything we can to protect them, including the aggressive prosecution of those individuals who put officers’ lives at risk.” Huber said.
The convictions stem from an Oct, 15, 2015, incident on U.S. Forest Service land in the Uinta-Wasatch-Cache National Forest in Salt Lake County. Just after 9 p.m., a Forest Service law enforcement officer initiated contact with two individuals in a red 1994 Chevrolet Blazer parked in a pull off area in Lambs Canyon. Jereb was a passenger in the car driven by Amber Haanpaa. Following an investigation that turned up methamphetamine, heroin, marijuana and drug paraphernalia in the car, the officer issued them mandatory appearance citations to appear in federal court.
After the suspects were released and the officer jump-started the defendant’s car battery, a series of events put the officer in fear for his safety. He called for backup officers over his radio. The defendant told the officer they would not get there in time. The officer commanded Jereb to back up and then remotely deployed his police service dog, Livo, from his patrol vehicle.
During the next several minutes, the defendant assaulted the Forest Service officer resulting in bodily injury to the officer. Livo was also injured during the incident. After continuing to fight and resist the officer, the defendant eventually escaped over the ledge of a steep embankment by the road. He was later found by responding officers who arrived on the scene to assist the Forest Service officer.
The potential maximum penalty for assault on a federal officer with a specific verdict of forcibly opposed is 20 years in prison. Possession of methamphetamine and possession of heroin have a potential one-year jail sentence for each count. The maximum penalty for possession of drug paraphernalia is six months in jail. Jereb is in custody pending sentencing.
Grand Jury Returns Indictment Charging Kaysville Man with Attempt to Evade Payment of Taxes, Failure to Pay TaxesRead the Press Release
SALT LAKE CITY – A federal grand jury returned a five-count indictment this week charging David Brian Bybee, age 55, of Kaysville, Utah, a Utah businessman and CPA, with two counts of tax evasion and three counts of failure to pay taxes. The indictment alleges Bybee has taken steps to evade payment of personal tax debt and payroll taxes for his employees through the use of nominees and misrepresentations to IRS revenue officers.
According to the indictment, Bybee managed and controlled several companies from his home in Kaysville or at other business addresses in Davis County. Bybee hired and managed employees for the Bybee companies. His duties included generating revenue, keeping books and records, paying expenses, making employee payroll, withholding and paying over taxes from employee payroll, and filing all required business returns. Bybee issued payroll checks from Bybee companies and withheld Medicare and Social Security (often referred to as Federal Insurance Contribution Act or “FICA” taxes) and federal income tax withholdings, collectively referred to as “payroll taxes.”
The first count of the indictment, attempt to evade and defeat payment of tax, alleges Bybee attempted to evade a large part of the income tax he owned to the federal government for calendar years 2000, 2001, 2002, 2005, 2006, 2007, 2008 and 2009, in an amount totaling about $153,569.41. The indictment alleges he took steps to conceal and attempt to conceal the nature, extent and location of his assets from the IRS to avoid paying the taxes.
A second count of attempt to evade and defeat payment of tax relates to efforts the indictment alleges Bybee took to evade paying payroll taxes to the federal government on behalf of the employees of three companies he controlled from about April 30, 2000, to about March 14, 2011. Bybee deducted and collected payroll taxes totaling at least $39,244.49 but did not report the payroll taxes with the exception of one employment tax payment of $899.32 in April 2012. Bybee was determined to be responsible for the payroll taxes and was assessed penalties totaling $47,919.06 for the unpaid taxes. According to the indictment, he has failed to make any payments.
The final three counts of the indictment allege Bybee failed to truthfully account for and pay over to the IRS all of the federal income taxes withheld and FICA taxes due to the United States on behalf of the Bybee companies and its employees for three calendar quarters, including approximate payroll taxes of $2,247.51 for the fourth quarter of 2010; $1,800 for the fourth quarter of 2011; and $1,830.66 for the fourth quarter of 2012.
A summons will be issued to Bybee to appear for an arraignment in federal court. The maximum potential penalty for each of the five counts in the indictment is five years, a fine of $250,000, and the costs of prosecution.
Indictments are not findings of guilt. Individuals charged in an indictment are presumed innocent unless or until proven guilty in court.
The case is being prosecuted by the U.S. Attorney’s Office in Salt Lake City and investigated by special agents of IRS-Criminal Investigation.
Kilgore Sentenced to 60 Months in Prison after Pleading Guilty to Three Counts of Conspiracy to Commit Health Care FraudRead the Press Release
SALT LAKE CITY – Jacob J. Kilgore, a former owner of a Salt Lake City durable medical equipment company, will serve 60 months in federal prison after pleading guilty to three counts of conspiracy to commit health care fraud as a part of Medicare fraud scheme involving power wheelchairs. Three company sales representatives were sentenced Thursday, two receiving prison terms, for their role in the fraud scheme.
Kilgore, 36, of Fruit Heights, was the co-owner of and employed as the vice president, and later, president of Orbit Medical, a Utah- and Indiana-based national supplier of durable medical equipment that specialized in power wheelchairs. Orbit maintained three Utah offices in the Salt Lake City area. Kilgore acted as sales manager for Orbit’s western region sales territory which included offices in Utah, Arizona, Nevada, Idaho, Washington, and Oregon. The case was investigated by the agents of the FBI, the Defense Criminal Investigative Service, and Health and Human Services Office of Inspector General.
U.S. District Judge David Nuffer imposed the 60-month sentence for Kilgore last week. Kilgore will be on supervised release for 36 months following the completion of his federal prison sentence. As a part of the resolution of the case, Kilgore has agreed to pay $4 million in restitution in the case over the next eight months. The first installment of $1 million was paid at his sentencing. A second $1 million payment is due by June 1, 2016, with a final payment of $2 million due by Dec. 31, 2016 on the date of his sentence Kilgore also must forfeit $776,001, the amount of his personal gain from the criminal conduct.
In a sentencing memorandum submitted to the court as a part of the sentencing hearing, federal prosecutors told the court the fraud scheme was driven by money and drove the imposition of a monthly quota demanding each sales representative sell 10 power wheelchairs per month. “While the genesis of the quota remains unclear, Jake Kilgore enforced it relentlessly throughout Orbit Medical’s western regional offices, at times threatening sales reps with probation and, if low sales persisted, termination,” federal prosecutors wrote in the sentencing memorandum. Prosecutors said that pressure to perform and to reach unrealistic sales heights caused sales reps to alter physician charts to meet Medicare’s stringent medical necessity requirements.
“This was a serious offense. It was not a crime of opportunity. It involved significant planning and an undaunted, selfish desire by a durable medical equipment company executive to maximize his company’s bottom line at the expense of compromising the values and morals of scores of Orbit sales reps,” prosecutors wrote in their sentencing memorandum. To his credit, prosecutors wrote, “Jake Kilgore takes full responsibility for his actions.”
Federal prosecutors told the court that the sales reps were not innocent victims. “Many were young, inexperienced, hungry for success, and as is common in the sales industry, driven and competitive. Jake Kilgore knew that. He used commissions to entice sales reps, to encourage them, and, sadly, to corrupt them,” they wrote in a sentencing memorandum filed with the court.
“Kilgore’s pressure to perform and close power wheelchair sales never let up, and over time, caused sales reps to pursue more shortcuts, essentially ramping up the fraud and deception. Rather than facilitating mobility evaluations and obtaining proper chart notes, sales reps instead requested a signed prescription and any recent chart notes. With genuine physician chart notes in hand, sales reps chiseled away (electronically or via cut-and-paste), creating mobility evaluations that never occurred, concocting medical findings never made, and adding a physician signature never signed,” federal prosecutors said.
While noting that Hartman, Evans, and Workman have taken responsibility for their misdeeds and sought to make amends, “falsifying physician chart notes cannot be defended, sugar-coated, or swept under the rug,” federal prosecutors said.
Three sales representatives of the company, Hunter Hartman, age 31, of Ladera Ranch, Calif., David Evans, age 38, of South Jordan, and Morgan Scott Workman, age 37, of Farmington, each pleaded guilty to one count of conspiracy to commit health care fraud. Judge Nuffer imposed sentences on the three sale representatives Thursday morning. Hartman was sentenced to 4 months in prison and 36 months of supervised release. He must pay $585,786.62 in restitution in the case, an obligation he shares with Kilgore. Evans received a 6-month sentence and will be on supervised release for 36-months following his release from prison. He was ordered to pay $957,055.77 in restitution, a responsibility he shares with Kilgore. Workman was sentenced to 36 months of probation. He shares an obligation with Kilgore to pay $230,910.80 in restitution.
According to documents filed in court, throughout his employment at Orbit, Evans altered and concocted medical records resulting in approximately $957,055.77 in total reimbursements from the Medicare Trust Fund, paid under false and fraudulent pretenses. Hartman altered and concocted medical records resulting in approximately $585,768.62 in total reimbursements from the Medicare Trust Fund. Workman’s conduct resulted in about $230,910.80 in total reimbursements.
“The resolution of these four cases should discourage those in the health care industry tempted to cut corners and circumvent rules to maximize reimbursement from a health care benefit program for personal or business gain. Durable medical equipment executives or sales reps currently engaged in or contemplating fraud against these programs would do well to reconsider their conduct,” U.S. Attorney John W. Huber said today.
“The Salt Lake City FBI recognizes the significant collaborative effort among our federal partners in bringing this lengthy and complex health care fraud investigation to a suitable resolution. We underscore the importance of protecting the Medicare trust fund as well as other government and private insurance programs for legitimate medical needs. We encourage our Utah citizens to bring to our attention any activity within the health care arena that appears to be illegal or suspicious,” FBI Special Agent in Charge Eric Barnhart said today.
"Jacob Kilgore and Orbit Medical, Inc., overbilled federal health care programs, including the TRICARE program, which provides health care for our military warfighters, their families, and military retirees," said Janice M. Flores, Special Agent in Charge of the Defense Criminal Investigative Service (DCIS) Southwest Field Office. "These sentences demonstrate that DCIS and its law enforcement partners will continue to aggressively investigate health care fraud and hold individuals or companies accountable for their actions."
“These sentences are the result of the diligent work of several agencies. Our office will continue to work with our law enforcement partners to pursue and bring to justice those individuals who attempt to cheat the federal health care programs,” said Steven D. Hanson, Special Agent in Charge of Health and Human Services Office of Inspector General.
U.S. John Huber joining in Nationwide Department of Justice Effort to Confront Discriminatory BacklashRead the Press Release
WASHINGTON – Utah U.S. Attorney John Huber is joining other U.S. Attorneys around the country, local law enforcement, and community leaders for a series of events around the country to address backlash against Muslim, Arab, Sikh and South Asian Americans following the tragic terrorist attacks in Brussels, Paris and San Bernardino, California. The 14 events in 11 districts will build on both the Justice Department’s prosecutorial work in countering post-September 11th backlash, as well as its outreach efforts, including the new interagency initiative to combat religious discrimination throughout the country.
From April 12 through May 6, U.S. Attorneys in Utah, California, Colorado, Connecticut, Idaho, Louisiana, Massachusetts, Michigan, Minnesota, New Jersey, and Ohio will work with community leaders and law enforcement to address discrimination, violence and harassment targeting people because of what they look like, which country they come from or where they worship. The aim is to reaffirm the Department of Justice’s commitment to protecting civil rights and preventing and prosecuting hate crimes.
U.S. Attorney John Huber will visit the Khadeeja Islamic Center in West Valley City Friday where he will participate in Friday prayers and consultations with Center leaders. Salt Lake City Police Chief Mike Brown also made a recent visit to Utah’s largest mosque.
“I value the relationships I have with leaders of the Muslim community in Utah and particularly, my association with those at the Khadeeja Mosque. Every religious community in Utah should be free from discrimination and harassment. Open lines of communication will help us quickly identify and address any issues that may develop,” Huber said.
The Department of Justice is determined to uphold the fundamental principle that all Americans should be free from violence and protected from hatred no matter who they are, what they look like, or where they're from,” said Attorney General Loretta E. Lynch. “These events underscore our ongoing commitment to safeguard the civil rights of every American – including Muslim, Arab, Sikh and South Asian Americans, who are so often the targets of threats on the basis of their appearance or religion. There is no place for intolerance in our country. In the weeks and months ahead, the Department of Justice will continue to work with local law enforcement partners and community leaders to defend the safety and the dignity of all our people.”
During the last several months, individuals who are, or who are perceived to be, Muslim, Arab, Sikh and South Asian have been targeted for harassment and violence around the country.
A Connecticut man pleaded guilty to firing a high-powered rifle at a mosque; a Florida man pleaded guilty to threatening to firebomb two mosques and shoot their congregants; a former Missouri man pleaded guilty to violating the civil rights of others by leading a conspiracy to deface a local Islamic center with graffiti and burn two copies of the Qur’an; and a New York man was sentenced to 13 months in prison for emailing death threats to the executive director of an Islamic advocacy group.
Places of worship also face discrimination through unlawful barriers to construction in many communities around the country. In the last year, the Justice Department filed suit against Des Plaines, Illinois, over the city’s denial of rezoning to allow a Muslim congregation to use a vacant office building as a mosque. The complaint alleged that the city treated the mosque less favorably than it has treated nonreligious assemblies, discriminated against the mosque based on religion and imposed a substantial burden on the mosque members’ religious exercise without justification. The Justice Department also closed its investigation into Norwalk, Connecticut, after the city made changes to treat religious assemblies equally with nonreligious assemblies in five of its zoning districts. The department had opened an investigation of Norwalk’s zoning practices in 2012 in response to the city’s denial of a special use permit to the Al Madany Islamic Center to build a mosque on land it had bought in a residential zoning district.
Backlash against Muslim, Arab, Sikh and South Asian Americans can have a particularly harmful impact on education, employment and housing. In March, the Civil Rights Division announced that the Educational Opportunities Section launched a new enforcement initiative with the U.S. Attorneys’ Offices to strengthen our efforts to combat religious discrimination in schools and other educational settings. The new initiative, together with Justice Department’s recent work in Bakersfield, California; Lewisville, Texas; Pine Bush, New York; Dearborn Heights, Michigan; DeKalb County, Georgia; and many more cities and counties through the nation, will help ensure that schools remain free from discrimination, harassment and violence for all students.
This effort is a reflection of the Department of Justice’s long-standing commitment to working to protect Muslim, Sikh, Arab and South Asian Americans from threats and violence directed at them because of their religion or ethnicity, and to prevent acts of discrimination against them in the workplace, schools or elsewhere. Since September 11th, the Department of Justice has investigated over 1,000 incidents involving acts of violence, threats, assaults, vandalisms and arsons targeting Arab, Muslim, Sikh and South Asians, and those perceived to be members of these groups. The Civil Rights Division and U.S Attorneys’ offices have brought prosecutions against more than 60 defendants in such cases, with 57 convictions to date.
Burr Pleads Guilty to Conspiracy to Distribute Heroin, Money Laundering in La Raza Street Gang CaseRead the Press Release
SALT LAKE CITY – Wayne LeRoy Burr aka Miclo, age 32, of Salt Lake County, pleaded guilty to conspiracy to distribute heroin and money laundering in federal court Tuesday as a part of an investigation of drug trafficking activities involving La Raza, a local street gang. The investigation, which was initiated by the Salt Lake City Police Department and the FBI’s Safe Streets Task Force, focused on an auto shop that was believed to be utilized as a stash house where illegal narcotics were received, packaged, and later distributed.
Burr admitted that between May 1, 2013, and June 27, 2013, he conspired with other individuals to violate federal drug laws by illegally distributing heroin. He also admitted that he purchased a Dodge Ram 1500 on Feb. 12, 2013. The purchase of the vehicle involved more than $10,000 obtained through the illegal trafficking of narcotics, Burr admitted.
The plea agreement reached with federal prosecutors includes a stipulated sentence of 96 months, which is subject to the approval of the Court at an upcoming sentencing hearing. Burr also has agreed to forfeit $1,248 in cash, three vehicles, and a 19-inch stainless steel knife as proceeds of illegal conduct or property used to help facilitate the illegal conduct.
Burr was one of 13 individuals charged with conspiracy to distribute methamphetamine and heroin, distribution of methamphetamine and heroin, possession of methamphetamine and heroin with intent to distribute, and money laundering in a 31-count indictment returned in March 2014. In addition to the FBI and the Salt Lake City Police Department, special agents of IRS-Criminal Investigation also joined the investigation.
Samuel Covarrubias-Velazquez, age 38, of Salt Lake County, was sentenced to 87 months in federal prison after pleading guilty to conspiracy to distribute methamphetamine and conspiracy to distribute heroin. Javier Corrales, age 36, of Salt Lake County, is serving a 60- month sentence after pleading guilty to distribution of methamphetamine. David Miramontes, age 30, of Salt Lake County, is serving a 72-month sentence for possession of methamphetamine with intent to distribute and money laundering convictions. Carlos Tenengueno, age 26, of Salt Lake County, and Jose Munoz, age 28, of Salt Lake County, were each sentenced to 60 months in prison for distribution of heroin. Guillermo Miramontes, age 24, of Salt Lake County, who pleaded guilty to money laundering, was sentenced to 36 months of probation and William Reveles, age 36, of Salt Lake County, who also pleaded guilty to money laundering, was sentenced to time served and 36 months of supervised release. Anthony Pedroza, age 28, of Salt Lake County, pleaded guilty to possession of heroin with intent to distribute. Sentencing in his case is set for June 27, 2016. Sentencing is set for May 19, 2016, for Juan Reveles, age 37, of Sevier County, who pleaded guilty to possession of methamphetamine with intent to distribute.
Alejandro Arciniega-Zetin, age 26, of Salt Lake County, was convicted of distribution of heroin following a three-day trial in March. Sentencing in his case is set for June 28, 2015. Prosecutors dismissed money laundering charges against two defendants in the case.
Checora Sentenced to 60 Months in Federal Prison for Voluntary Manslaughter ConvictionRead the Press Release
SALT LAKE CITY – Grant Hubert Checora, age 23, of Ft. Duchesne, who pleaded guilty to voluntary manslaughter while within Indian Country in January, will serve 60 months in federal prison. Checora will be on supervised release for 36 months once he finishes his prison sentence. U.S. District Judge Dale Kimball imposed the sentence Monday afternoon in U.S. District Court in Salt Lake City.
As a part of a plea agreement reached in the case, Checora admitted that he killed an individual identified as E.C. on June 11, 2014. The victim, an enrolled member of the Ute Indian Tribe, was killed on the Uintah and Ouray Reservation. Checora admitted that he acted recklessly with extreme disregard for human life by killing E.C., while in a sudden quarrel. Checora is also an enrolled member of the Ute Indian Tribe.
The charges stem from a June 11, 2014, incident in the Little Chicago Community of Fort Duchesne. Bureau of Indian Affairs officers responded to a shooting about 2 a.m. A confrontation between two groups preceded the shooting. The case was investigated by the BIA and the FBI.
Checora was initially indicted on murder in the second degree, two counts of discharge of a firearm in furtherance of a crime of violence and attempt to commit murder while in Indian Country. A felony information charging voluntary manslaughter was filed in connection with the plea agreement reached with federal prosecutors. The charges in the indictment were dismissed at the sentencing hearing Monday.
Kimball recommended that Checora receive vocational rehabilitation and participate in the Tribal Reentry Court when he finishes his federal sentence.
Grand Jury Returns Indictment Charging Five with Meth, Heroin Trafficking in UtahRead the Press Release
SALT LAKE CITY – Four individuals are charged with trafficking drugs in Utah following an investigation by the DEA, the Davis Metro Narcotics Task Force, and the West Valley City Police Department. The drugs were transported from Los Angeles to Salt Lake City for distribution.
Charged in the seven-count indictment are Fausto Alejandro Galaviz-Gaxiola, age 21, Fernando Galaviz-Castro, age 22, Jesus Pina-Cantua, age 22, and Efrain Espinoza, age unknown. The defendants are citizens of Mexico living in West Valley City. The charges include conspiracy to distribute methamphetamine; conspiracy to distribute heroin; possession with intent to distribute methamphetamine; possession with intent to distribute heroin; and distribution of methamphetamine.
According to a complaint filed in the case, the DEA and the Davis County task force initiated a joint investigation targeting the drug trafficking activities of Galaviz-Gaxiola, Galaviz-Castro, and Espinoza in October 2015. As a part of the investigation task force officers made several under cover purchases of methamphetamine and heroin from the defendants.
A search warrant was executed Feb. 18, 2016, at a residence in West Valley City shared by Galaviz-Gaxiola, Galaviz-Castro, and Pina-Cantua. They also executed a search warrant on a vehicle used by the defendants. Agents recovered approximately 4.8 kilograms of heroin (street value of about $480,000), 2.1 kilograms of methamphetamine (street value of $126,000), and $103,764 at the home. About 615 grams of cocaine (street value of $61,500) was recovered during the search of the car, according to the complaint.
Agents also executed a search warrant on Espinoza’s residence in West Valley City and on a car he used. According to the complaint, agents located $8,000 in a sophisticated, electronically-operated compartment hidden on the front passenger side of his car.
The defendants, who were initially charged by complaint, had initial appearances in court following their arrests. They were arraigned on the indictment Thursday afternoon and entered pleas of not guilty to the charges. They will be in custody pending trial.
Indictments are not findings of guilt. Individuals charged in indictments are presumed innocent unless or until proven guilty in court.
The first six distribution counts of the indictment each carry potential 10-year mandatory minimum sentences. The seventh count of the indictment, distribution of methamphetamine, carries a potential 40 year sentence with a five-year mandatory minimum. The indictment also seeks the forfeiture of $111,764 in U.S. currency and two vehicles obtained or used as a part of the commission of the offenses.
Former Hill Air Force Base Civilian Contract Employee Charged with Unlawful Exportation of F-16 Parts to IndonesiaRead the Press Release
SALT LAKE CITY – Scott A. Williams, age 51, of Huntsville, Utah, is charged with two counts of unlawful exportation of goods from the United States, false statement in a document, and conversion of property of the United States in an indictment unsealed last week in U.S. District Court in Salt Lake City. Williams is a former civilian contract employee at Hill Air Force Base where he worked with the Foreign Military Sales Program with specific responsibility for F-16 parts.
The indictment alleges Williams exported two F-16 Aircraft brake assemblies, knowing it was a violation of federal law to export them. The indictment alleges Williams prepared a document falsely authorizing two F-16 brake assemblies to be shipped to Indonesia in violation of federal law. The indictment further alleges Williams exported several documents, identified in the indictment as U.S. Air Force technical orders for F-16 aircraft. The final count of the indictment alleges Williams converted to his own use, and for the use of another, technical data of F-16 aircraft through the use of an external hard drive containing U.S. Air Force orders. The indictment alleges the items were in Williams’ care and possession by virtue of his employment as a program and financial manager at Hill Air Force Base.
“The U.S. Attorney’s Office represents the interests of the United States in the federal court, and we are committed to protecting the assets and technology of the U.S. Air Force and the Department of Defense,” U.S. Attorney John W. Huber said today.
"Air Force Office of Special Investigations (AFOSI) takes allegations involving the illegal technical transfer of Department of Defense aircraft technologies very seriously. Prevention, detection, and/or prosecution of such transfers are essential to ensuring our ability to maintain air supremacy against our adversaries. This investigation was the result of hard work and contributions made by the personnel of the U.S. Department of Homeland Security’s Homeland Security Investigations, IRS Criminal Investigation, the Air Force Audit Agency, the Defense Contract Audit Agency, and the Defense Criminal Investigative Service," said OSI Special Agent Dave Bolton, OSI Detachment 113.
"The primary goal of Homeland Security Investigations (HSI) Counter Proliferation Investigations is detecting and disrupting illegal exports before they, or the actors behind them, damage U.S. national security interests," said David A. Thompson, Special Agent in Charge of HSI Denver. “HSI is committed to aggressively investigating these violations to prevent unauthorized countries from procuring anything that could harm the national security interests of the United States and its allies.”
Williams, who was arrested on the charges in the indictment on Feb. 19, 2016, was arraigned Feb. 23 in federal court in U.S. Magistrate Judge Dustin Pead’s courtroom. He entered a plea of not guilty to the four charges. Trial is set for May 2, 2016, before U.S. District Court Judge Jill N. Parrish. Magistrate Pead released Williams on strict conditions, including a restriction that he avoid contact with individuals considered either alleged victims, potential witnesses and or co-defendants in the case. He also must undergo a mental health evaluation and complete any recommended treatment, as directed by his pretrial release officer.
An indictment is not a finding of guilt. Individuals charged in indictments are presumed innocent unless or until proven guilty in court.
The potential maximum penalty for each count of unlawful exportation of goods from the United States is 10 years in prison. False statement in a document carries a potential penalty of up to five years. Conversion of government property has a potential penalty of 10 years.
Head of Utah Heroin, Meth Distribution Organization Sentenced to 144 Months in Federal PrisonRead the Press Release
SALT LAKE CITY – Lorenzo Verduzco-Benitez, age 28, of West Jordan, Utah, head of a drug organization which sold heroin and methamphetamine in Utah, will serve 144 months in federal prison. U.S. District Court Judge Jill N. Parrish imposed the sentenced Thursday afternoon.
Verduzco-Benitez, a citizen of Mexico, pleaded guilty in December to one count of conspiracy to distribute heroin and one count of conspiracy to commit money laundering. He admitted that between July 1, 2014, and March 6, 2015, he was the head of a narcotics organization operating in Utah. He admitted that during this time he distributed approximately 10.5 kilograms of heroin and 10.7 kilograms of methamphetamine in Utah. He admitted using surrogates to deposit drug proceeds into nominee bank accounts to pay his suppliers, allowing him to conceal and disguise the nature, source, and ownership of the drug proceeds. He also admitted that he reinvested drug proceeds into the drug distribution business to ensure its ongoing success.
According to a documents filed in court, DEA started an investigation of the drug trafficking organization in July 2014 after a confidential source provided information to them that law enforcement officers were able to independently corroborate. Evidence showed Verduzco-Benitez resupplied numerous subordinate dealers in Utah, Colorado, Wyoming, and Michigan. As a part of the investigation, agents intercepted significant loads of drugs on several occasions and conducted many controlled drug purchases from the Verduzco organization.
Verduzco-Benitez and five others drug distribution conspiracy were charged in a sealed indictment returned by a federal grand jury in March 2015. Ernesto Vega, age 29, of West Jordan pleaded guilty to conspiracy to deliver a controlled substance and conspiracy to commit money laundering and was sentenced to 72 months in federal prison. Jorge Aquino Andrade, age 44, of Salt Lake City pleaded guilty to conspiracy to distribute heroin and money laundering and is scheduled to be sentenced March 1. His plea agreement includes a stipulated sentence of 60 months. Miquel Escobedo-Mendoza, age 24, of West Valley City, pleaded guilty to possession of heroin with intent to distribute and possession of a firearm in furtherance of a drug trafficking offense. He was sentenced to 120 months in federal prison. Melissa Cervantes, age 24, of Salt Lake City pleaded guilty to conspiracy to commit money laundering and was sentenced to a year in federal prison. Elvira Damian, age 50, of West Jordan, is a fugitive. Several of the defendants are citizens of Mexico and will be referred to ICE for deportation proceedings when they finish their prison sentences.
As a part of his plea agreement, Verduzco-Benitez agreed to forfeit $11,231 in cash and a Cobra Enterprise .380 semi-automatic handgun.
The case is being prosecuted by the U.S. Attorney’s Office in Salt Lake City and investigated by the DEA, IRS Criminal Investigation, and the Davis Metro Narcotics Strike Force.
Indictment Unsealed Charging FLDS Church Leaders with Conspiracy to Divert SNAP BenefitsRead the Press Release
SALT LAKE CITY – A two-count indictment unsealed Tuesday afternoon in U.S. District Court in Salt Lake City charges 11 leaders and members of the Fundamentalist Church of Jesus Christ of Latter-day Saints (FLDS Church) with conspiracy to commit Supplemental Nutrition Assistance Program (SNAP) benefits fraud and conspiracy to commit money laundering. The defendants include leaders of the church.
The indictment alleges church leaders diverted SNAP proceeds from authorized beneficiaries to leaders of the FLDS Church for use by ineligible beneficiaries and for unapproved purposes. A large percentage of FLDS Church members living in the Hildale, Utah – Colorado City, Arizona, community known as Short Creek receive SNAP benefits, amounting to millions of dollars in benefits per year.
Charged in the indictment are Lyle Steed Jeffs, age 56, John Clifton Wayman, age 56, Kimball Dee Barlow, age 51, Winford Johnson Barlow, age 50, Rulon Mormon Barlow, age 45, Ruth Peine Barlow, age 41, and Preston Yates Barlow, age 41, all of Hildale; Seth Steed Jeffs, age 42, of Custer, South Dakota; and Nephi Steed Allred, Hyrum Bygnal Dutson, age 55, and Kristal Meldrum Dutson, age 55, all of Colorado City. Lyle Jeffs is the brother of Warren Jeffs. In the physical absence of Warren Jeffs, Lyle Jeffs handles the daily affairs of the organization, including its financial matters. Another of Warren Jeffs’ brothers, Seth Jeffs, leads a congregation of FLDS members in rural Custer County, South Dakota. Arrest warrants were issued for all defendants charged in the indictment.
“This indictment is not about religion. This indictment is about fraud,” U.S. Attorney John W. Huber said today. “This indictment charges a sophisticated group of individuals operating in the Hildale-Colorado City community who conspired to defraud a program intended to help low-income individuals and families purchase food.”
Washington County Sheriff Cory Pulsipher, who helped initiate the investigation and has officers participating on the FBI’s Public Corruption Task Force, emphasized the role his local investigators played in starting the investigation. “What started as a small investigation quickly grew to a point where it was important to work with federal agencies to build a case to present to a grand jury.” Washington County Attorney Brock R. Belnap, whose office also participated in the investigation, will participate in prosecuting the case as a Special Assistant U.S. Attorney.
Arrest warrants were executed Tuesday morning in Salt Lake City, in the FLDS community encompassing Hildale, Utah and Colorado City, Arizona, and in Custer County, South Dakota. The case is being investigated by the FBI, Washington County Sheriff’s Office, IRS Criminal Investigation, the U.S. Department of Agriculture’s Office of Inspector General, and the Washington County Attorney’s Office. The Arizona Department of Economic Security, the Mohave Sheriff’s Office, the FBI’s Minneapolis and Phoenix Field Offices, and the U.S. Attorney’s Office in South Dakota assisted with the case. Custer County, South Dakota Sheriff Rick Wheeler also assisted with the investigation and arrests Tuesday.
“Today’s indictment is the culmination of the tireless efforts of the FBI Public Corruption Task Force, which includes the IRS-Criminal Investigation, the U.S. Department of Agriculture’s Office of Inspector General, the Washington County Sheriff’s Office and the Washington County Attorney’s Office. The violations included in the indictment are especially egregious since they allege that leaders of the conspiracy directed others to commit crimes, for which only certain people benefited. This type of conduct represents nothing less than pure theft. The FBI and its law enforcement partners will actively pursue those entities or persons who unlawfully manipulate and control government programs for their own gain,” Eric Barnhart, Special Agent in Charge of the FBI’s Salt Lake City Field Office said today.
"IRS Criminal Investigation uses its financial expertise to unravel complex financial transactions and money laundering schemes designed to conceal the true source of funds," stated Acting Special Agent in Charge Aimee Schabilion. "We are committed to working with our federal agency partners in combatting frauds against the government."
Washington County Attorney Brock R. Belnap, who will help prosecute the case, expressed appreciation for the efforts of the many agencies involved in the investigation. "I am grateful for the numerous partners who have worked diligently on this case. It is our shared hope that this action will help innocent families receive the food assistance that they genuinely need while holding people accountable who conspire to divert those resources to illegal purposes."
Special Agent in Charge Lori Chan, Office of Inspector General (OIG) of the U.S. Department of Agriculture (USDA), Western Region, stated, “Protecting the integrity of the Supplemental Nutrition Assistance Program (SNAP) is a major investigative priority for the Office of Inspector General. Vendors who engage in SNAP fraud exploit the program’s needy beneficiaries, and misuse the substantial funding that taxpayers provide. OIG is dedicated to ensuring SNAP funds are used for their intended purpose – feeding individuals and families. We look forward to continuing to work with our law enforcement partners to combat SNAP fraud.”
The U.S. Department of Agriculture’s Food and Nutrition Service operates the SNAP program to provide assistance to low-income individuals and families to purchase food products.
The authority to determine eligibility and to certify individual SNAP recipients who qualify for the program is delegated to individual states. Persons in need of benefits apply with the appropriate state agency. Approved applicants receive an Electronic Benefits Transaction Card (EBT card), similar to a bank debit card, that is linked to a SNAP account. EBT cards have a magnetic strip containing recipient information and the benefit amount. When a recipient presents a SNAP EBT card to a retailer to pay for eligible food items, the retailer debits funds from the recipient’s available SNAP benefits. SNAP benefits apply only to the purchase of eligible food items. Recipients cannot exchange their benefits for non-food items, household goods or cash. Only members of the recipient household may use the program benefits.
The indictment alleges that starting in about 2011, FLDS leaders, including Lyle Jeffs, instituted the “United Order” within the ranks of the Church. Participation in the United Order purports to constitute the highest level of worthiness and spiritual preparedness in the church. Devout FLDS members aspire to eligibility in the United Order. Adherents to the United Order must donate all of their material assets to the FLDS Storehouse, a communal clearinghouse charged with collecting and disbursing commodities to the community. United Order policy also dictates that members must obtain their food and household commodities solely through the FLDS Storehouse, according to the indictment.
The indictment alleges that the defendants engage in a variety of overt acts in furtherance of a conspiracy to defraud the SNAP program by diverting SNAP proceeds from authorized beneficiaries to leaders of the FLDS Church for use by ineligible beneficiaries and for unapproved purposes. Church leaders, including Lyle Jeffs, Seth Jeffs, John Wayman and Kimball Barlow, held meetings in which they disseminated storehouse protocols, according to the indictment. These protocols dictated methods for unlawfully diverting SNAP benefits to the FLDS Storehouse as well as instruction on how to avoid suspicion and detection by the government, according to the indictment.
FLDS members transferred their SNAP benefits to FLDS controlled stores without receiving eligible food products at the time of the transactions. For example, on Oct. 16, 2015, an FLDS member conducted a SNAP transaction for $800 without receiving eligible food products at the time of the transaction. On one occasion, John Wayman collected EBT cards from legitimate beneficiaries, provided the cards to another individual, and directed that person to use the SNAP funds to purchase food and goods for non-eligible persons.
SNAP fraud proceeds also financed ineligible purposes. For example, the indictment alleges that in March 2015, using SNAP fraud proceeds, Kimball Barlow signed a check for $16,978 to Orchid’s Paper Products Company for the purchase of paper products. During the period May 31, 2013, through September 22, 2014, the indictment alleges Ruth Barlow signed five checks totaling $13,561 made payable to John Deere Financial. The SNAP fraud proceeds were used for installment payments on a 2013 John Deere load tractor. SNAP fraud proceeds were also used for 16 checks totaling $30,236 payable to Ford Motor Credit for installment payments on a 2012 Ford F-350 purchased by Winford Barlow about Sept. 29, 2012.
The money laundering count of the indictment alleges the defendants conspired to conceal and disguise the nature, location, source, ownership and control of proceeds of a specified unlawful activity while conducting or attempting to conduct financial transactions. The indictment also seeks a money judgment equal to the value of the proceeds traceable to the alleged criminal offenses.
The potential penalty for conspiracy count is five years in prison. The money laundering count carries a potential penalty of 20 years in prison.
An indictment is not a finding of guilt. Individuals charged in an indictment are presumed innocent unless or until proven guilty in court.
Lyle Steed Jeffs and John Clifton Wayman were arrested Tuesday morning in Salt Lake City. They are scheduled to make an initial appearance on the charges Wednesday at 10 a.m. in Room 7.1 of the federal courthouse in Salt Lake City.
Seth Steed Jeffs was arrested Tuesday morning in Custer County, South Dakota, and will have an initial appearance in federal court in South Dakota.
Defendants arrested Tuesday in the Hildale – Colorado City area will appear Wednesday at 10 a.m. in federal court in St. George. At this time, Ruth Peine Barlow and Kristal Meldrum Dutson have been taken into custody. (Will update through the day.)
My View: Honor Those Who Run Toward DangerRead the Press Release
Law enforcement officers throughout the state serve and protect our communities. Where these professionals see someone in need, they act.
Utah police officers have made our community a better place in ways both large and small. We have seen many examples of their commitment to the communities they serve. A Unified police officer stopped to change a flat tire for a woman on Redwood Road to ensure she got home safely. One observant Orem police officer surprised a struggling single mother by coordinating the delivery of donated appliances and home essentials for her young family. A St. George police officer saved two lives in one day, by performing CPR on a critically ill middle school student and later by removing an obstruction from the airway of a 9-day-old infant.
These professionals put their own lives at risk to keep our communities safe. We have just experienced the tragic loss of Officer Doug Barney as he was working to protect the community he served. Other examples often go unnoticed. A Sandy police officer pulled a woman from a burning car moments before the car was engulfed in flames. A West Jordan police officer turned himself into a human shield while rescuing three children and their mother from an armed attacker. Another brave police officer came to the rescue of two adult sisters under deadly attack from a home intruder in Salt Lake City. Not long ago, a police officer dared to venture onto cracking ice to save a woman who had plunged into Mantua Reservoir.
Whether the call for help requires a dramatic rescue or a simple act of kindness, officers consistently place the needs of the community above their own. These men and women suit up knowing that many with whom they come in contact during their shift will not appreciate their efforts. They know that split-second decisions may be second-guessed and scrutinized for months and years to come. They leave home with no promise of a safe return to their families.
The overwhelming majority of these officers exercise sound judgment throughout their shifts each day. They enforce duly enacted laws with fidelity and soberness. These men and women also understand that they are accountable to those whom they serve. Our communities expect, and deserve, the very best from the law enforcement officers trusted with the power and authority to enforce the law.
Public discourse regarding how law enforcement officers exercise that authority, while sometimes uncomfortable, is a hallmark of what makes our nation and judicial system great. When an officer does not live up to society’s high expectations, fair criticism often leads to positive improvements for more effective policing. When an officer acts outside the bounds of the law, our justice system is ready and able to address such transgressions. The rule of law ensures that no one is above scrutiny.
In addressing those isolated incidents where police power is abused, we must not forget that our law enforcement professionals are a force for good in our communities. It is misguided to impugn any group based on wrongs committed by a few aberrant members, but it is dangerous to apply that proposition toward all law enforcement.
Utah communities have rallied around their police officers to express gratitude for their willingness to respond to the most dangerous and heart-wrenching episodes of our lives. They meet those expectations with courage and fortitude unknown to many of us.
So hats off to our law enforcement professionals – the few who run toward the danger before it reaches the rest of us.
Sabol Pleads Guilty to Wire Fraud in Connection with Fraudulent Auto Leasing Scheme;Read the Press Release
SALT LAKE CITY – Nghia Thi Sabol, age 65, a Vietnamese citizen living in Salt Lake County, pleaded guilty to wire fraud in U.S. District Court Wednesday afternoon in connection with a fraudulent auto leasing program. Most of the investors in the scheme were promised returns of 4-5 percent per month on their investment, however they lost all or a majority of the funds they invested in the scheme. Restitution owed to victims in the case is $943,250.
Sabol, also known as Nia Sabol, Nghia Cano, Nghia Thi Nguyen, Nghia Wynn Sabol, and Nghia Wynn, is currently incarcerated in the Utah State Prison on unrelated securities charges. She was charged in a federal indictment returned in November with four counts of wire fraud and one count of money laundering following an investigation by the FBI and IRS Criminal Investigation.
According to documents filed in federal court, Sabol established a company called W.A.V.E., LLC (WAVE) with headquarters in Midvale. She claimed WAVE offered an automobile leasing program referred to as “WAVE’s American Evaluation Program” and solicited individuals to participate in the leasing program, promising returns of approximately 4 to 5 percent per month. She also sold investments in WAVE. Sabol represented that participants in WAVE’s automobile leasing program would receive a new automobile of their choice manufactured by one of the three major U.S. automobile manufacturers to “test drive” for one year with unlimited mileage. In return, they were required to pay a one-time, non-refundable fee of about $300, pay 10 percent of the manufacturer’s suggested retail price for the vehicle chosen, and were required to complete vehicle evaluation forms to be furnished to the manufacturer.
As a part of a plea agreement reached with federal prosecutors, Sabol admitted that she represented to investors that WAVE had contracts with three major U.S. automobile manufacturers and that WAVE would be paid a subsidy in exchange for vehicle evaluations provided by their participants, when in fact, she knew WAVE had no contracts with automobile manufacturers. She also admitted that she represented to investors that WAVE had purchased vehicles for WAVE’s auto leasing program with funds received from major automobile manufacturers, when in fact, the funds were obtained from WAVE investors. She also represented to investors that WAVE attorneys had received millions of dollars from automobile manufacturers and were awaiting distribution to WAVE, when in fact, no such funds had been provided to WAVE.
Sabol also concealed from investors that she had a previous felony conviction for fraud and was on parole, that the terms of her parole prohibited her from dealing in investments or being employed in a fiduciary position, and that most investors lost all or a majority of the funds they invested in WAVE.
Sabol’s plea to wire fraud involved the transfer of $160,000 from a victim of the fraud to WAVE’s account at a bank in Utah.
The plea agreement executed Wednesday includes a stipulated sentence of 24 months to be followed by 36 months of supervised release. The sentence is subject to the approval of and acceptance of the Court. The sentence would run concurrent with any indeterminate sentence imposed in a separate state case.
U.S. District Judge Clark Waddoups presided at the plea hearing Wednesday and is scheduled to impose the sentence in the case on April 14 at 3 p.m.
Department of Justice, EPA and the State of Utah Reach Agreement with Salt Lake County to Reduce Polluted Runoff and Protect Water QualityRead the Press Release
WASHINGTON – The Department of Justice, the U.S. Environmental Protection Agency (EPA) and the State of Utah have reached an agreement with Salt Lake County to resolve alleged Clean Water Act violations associated with the County’s stormwater management program. This agreement, lodged as a consent decree in the U.S. District Court for the District of Utah today, requires the county to take specific measures to reduce illegal stormwater and non-stormwater discharges to Jordan River Valley surface waters by thoroughly implementing the requirements of its municipal separate storm sewer system (MS4) permit. The county will also pay a civil penalty of $280,000.
“This agreement is good news for water quality in Salt Lake County and the people and wildlife that depend on it,” said Assistant Attorney General John C. Cruden for the Department of Justice’s Environment and Natural Resources Division. “The settlement today is the result of a joint enforcement action by the State of Utah and the United States that will protect the area’s precious water resources from contaminated runoff for many years to come.”
“Protecting the water quality in Salt Lake County is a priority for all of us,” said U.S. Attorney John W. Huber for the District of Utah. “Salt Lake County, working together with the State of Utah, the EPA, and the Department of Justice, has agreed to take several measures that will help protect the Jordan River watershed going forward.”
“Preventing and managing polluted runoff in urban areas is essential to protecting water quality,” said Director Suzanne Bohan for EPA’s Enforcement Program in Denver, Colorado. “The rivers and streams in the Jordan River watershed support growing populations and provide significant economic and recreational benefits in Salt Lake County’s communities. EPA will continue to take steps to ensure that municipalities have viable stormwater programs in place to reduce polluted runoff and protect water resources.”
Under the terms of the agreement, Salt Lake County will secure adequate resources to fully maintain and implement its stormwater program, including training and maintaining full-time staff. The county will also take measures to remedy several identified deficiencies, including procedures to review construction site stormwater control plans, inspect sites with active construction or industrial activity and enforce sediment and erosion control requirements. In addition, the county will ensure structural controls are properly installed and maintained and will improve efforts to identify and eliminate illegal discharges to stormwater infrastructure.
The volume of annual runoff in the Jordan River Valley is estimated at 190 million cubic meters per year, a figure that underscores the importance of local efforts to manage stormwater so it does not become contaminated before reaching surface waters. The Jordan River watershed supports fish, migratory bird species and wildlife and provides water for recreation, irrigation and public supply.
Stormwater runoff from rain and snowmelt events can pick up pollutants like trash, chemicals, oils and sediment as it flows over land and impervious surfaces, such as industrial storage areas, paved streets and parking lots. These pollutants can damage the health of a watershed and cause changes in the water quality, resulting in impaired drinking water sources, habitat modification and loss, increased flooding, decreased aquatic biological diversity and increased sedimentation and erosion. Stormwater controls—also known as best management practices—filter out pollutants and prevent pollution by controlling it at its source.
The Clean Water Act uses a permitting process to manage stormwater discharges from three types of sources: municipal separate storm sewer systems (MS4s), construction activities, and industrial activities. These permits are designed to prevent runoff from rain and snowmelt events from washing harmful pollutants into local surface waters. MS4s are systems of conveyances for storm water that include infrastructure such as storm drains, pipes, ditches and roads. MS4 permits are designed to reduce the release of contaminated runoff into MS4s and the waters into which they discharge. EPA and the Utah Department of Environmental Quality inspected the County’s MS4 in 2012 and identified numerous violations of the County’s MS4 permit.
The consent decree agreement requires the county to pay a one-time civil penalty of $280,000, including $140,000 to the United States and $140,000 to the State of Utah, with an opportunity to offset a portion of the state amount through the completion of supplemental environmental projects.
The settlement, lodged today is subject to a 30-day public comment period and approval by the federal court. The settlement will be available for viewing at www.justice.gov/enrd/Consent_Decrees.html
For more information on EPA’s NPDES stormwater program visit: http://www.epa.gov/npdes/npdes-stormwater-program
Jury Finds St. George Doctor Guilty of Narcotics Trafficking Offenses After Eight-Day Federal TrialRead the Press Release
SALT LAKE CITY – A jury concluded an eight-day trial in U.S. District Court Thursday evening finding Dr. Simmon Lee Wilcox, age 60, of Las Vegas, guilty of one count of conspiracy to distribute oxycodone and one count of distribution of oxycodone. The jury acquitted Wilcox on three counts of distribution of hydrocodone. The jury deliberated about five hours before returning the verdict.
Evidence at the trial showed Dr. Wilcox wrote about 618 prescriptions resulting in the diversion of approximately 74,000 30-milligram oxycodone pills for non-medical purposes between July of 2010 and March of 2013. Dr. Wilcox wrote hundreds of prescriptions to people using false identifications that were filled at various pharmacies in Utah and Nevada. Those who filled the prescriptions and took possession of the oxycodone either sold it or used it personally.
Five co-conspirators in the case previously pleaded guilty to conspiracy to distribute oxycodone. Benjamin David Grisel, age 49, and Brenda Grisel, age 48, both of Santa Clara; Jeron Scott Hales, age 40, of Hurricane; Jeremy Daniel Perkins, age 36, of Washington; Randall David Ayrton, age 35, of St. George; and Wilcox were initially charged in a 12-count indictment returned by a federal grand jury in October 2013 following an investigation by DEA drug diversion investigators. The first 11 counts of the indictment involved drug trafficking offenses. The final count charged identification document fraud.
As a part of plea agreements reached with federal prosecutors, co-conspirators in the case admitted they conspired with Dr. Wilcox to use his medical license to write prescriptions for oxycodone pills. To facilitate the conspiracy, one of the co-conspirators created false identification documents for the group to use in filling the oxycodone prescriptions at various pharmacies. Co-conspirators in the case are scheduled to be sentenced in February.
“I have talked before about the heroin and opioid tsunami threatening Utah. In 2012, 31.71 pounds of heroin were seized in Utah. In 2014, that number grew to 244.04 pounds,” U.S. Attorney John W. Huber said today. “The 74,000 oxycodone pills that found their way into our communities through the 618 prescriptions Dr. Wilcox wrote are no different than a drug dealer selling heroin on the corner. In fact, these crimes are worse because they abuse the trust we place in physicians. To stop the wave we are seeing, we need to attack every angle of the heroin and opioid problem in our state,” Huber said.
“DEA takes its responsibility to prevent the distribution of dangerous and addictive drugs to those who do not have a medical reason to have them very seriously,” Acting DEA Assistant Special Agent in Charge John Eddington said today. “We are pleased the jury recognized the seriousness of the conduct involved in this case.”
U.S. District Judge Ted Stewart, who presided over the trial, set sentencing for Dr. Wilcox for April 18, 2016, at 10 a.m. Wilcox faces up to 20 years in prison and a fine of $1 million for each of the two drug distribution counts of conviction.
Salt Lake City Man Pleads Guilty to Possession of Child Pornography; Agreement Includes Stipulated 156-Month SentenceRead the Press Release
SALT LAKE CITY -- Jonathan Brett Wood, age 49, of Salt Lake City, pleaded guilty to one count of possession of child pornography in U.S. District Court Wednesday afternoon. The plea agreement reached with federal prosecutors includes a stipulated 156-month sentence. The case is a part of the Utah Project Safe Childhood initiative, which brings together federal, state and local agencies to investigate and prosecute individuals who exploit children.
The significant sentence is subject to the approval of U.S. District Judge Clark Waddoups, who will impose a sentence in the case on June 2, 2016. Judge Waddoups also will impose a term of supervised release for Wood, who faces at least five years of supervised release when he finishes his federal prison sentence with a maximum term of life. (There is no parole in the federal criminal system.) Wood also agreed to forfeit a Samsung laptop computer as a part of the plea agreement reached with federal prosecutors.
As a part of the plea agreement, Wood admitted that on a date unknown and continuing to Feb. 11, 2015, he possessed a computer that contained images of child pornography, including images depicting prepubescent children engaged in sexually explicit conduct. He also acknowledged that he has a previous conviction for aggravated sexual abuse of a child in Utah’s 4th District Court.
“Protecting vulnerable victims is a top priority for the Department of Justice and my office in Utah. We are particularly focused on the exploitation of children,” U.S. Attorney John W. Huber said today. “In this case, our federal, state, and local law enforcement partners contributed to the successful prosecution of an individual who is a repeat offender. We will continue to work together to keep children in Utah safe from these predators.”
Wood was charged with distribution of child pornography, receipt of child pornography, and possession of child pornography in a three-count indictment returned by a federal grand jury in September following an investigation by local, state, and federal agents participating as members of the Utah Internet Crimes Against Children Task Force.
Statement of U.S. Attorney John W. HuberRead the Press Release
“Like all who work in the criminal justice system, our hearts are heavy this week. We are deeply saddened by the loss of Officer Doug Barney and the serious injuries sustained by Officer Jon Richey. Our hearts are also full of gratitude for the heroic efforts of those who willingly risk their lives every day to keep our families and communities safe. We also want the families of our law enforcement officers to know we recognize how much they sacrifice on our behalf.
“Those of us involved in the criminal justice profession will join others in the coming weeks to review the circumstances surrounding this tragedy. Federal judges, prosecutors, and defense attorneys make decisions on detention issues every day. In each of these cases, those involved take their duties seriously and use their best judgment in balancing competing interests. While it is valuable and necessary to assess what happened and identify ways we can all do our jobs better, hindsight is 20/20. We would all do things differently knowing what we now know.
“Our federal judges in Utah are thoughtful, careful, and have the best of intentions as they make difficult decisions. In this matter, the U.S. Attorney’s Office did not object to the judge’s ultimate pre-trial detention decision. Once we have had time to honor the two Unified Police Department officers and support their families, we intend to focus our energy on making sure we learn from this tragic situation.
“In the emotional aftermath of these shootings, may we remember there is only one person to blame – the fugitive who committed these heinous crimes.”