Western District of Washington
Press releases recorded for this federal judicial district.
Owner of Vashon Island landscaping company convicted of human trafficking, labor trafficking, and money laundering feloniesRead the Press Release
Seattle –A 45-year-old Vashon Island, Washington resident was convicted in U.S. District Court in Seattle of 21 federal felonies related to human trafficking and forced labor, announced U.S. Attorney Tessa M. Gorman. Jesus Ruiz-Hernandez, aka Christo Jesus Escobar Solares, was found guilty following a 13-day jury trial. Jurors deliberated one and a half days before returning the guilty verdicts on multiple counts of forced labor, transporting and harboring people without status in the U.S., and money laundering. U.S. District Judge James L. Robart set sentencing for April 30, 2024 at 9:30am.
Records filed in the case and testimony at trial revealed that Ruiz-Hernandez lured victims from his hometown of Vista Hermosa, Michoacan, with the promise of a better life for their families. In exchange, Ruiz-Hernandez required victims to put up collateral, including the temporary relinquishment of parental rights and interest in family properties. Ruiz-Hernandez, using smugglers he hired, brought the undocumented victims to the U.S. and then forced them to work for his company, Brothers Landscaping, on Vashon Island. He then charged the victims exorbitant fees for rent, food, and other expenses, housed them both in his home and worker properties and held ever increasing debts over their heads.
In the spring of 2017, Ruiz-Hernandez used smugglers to bring an adult victim to the United States and then used force, threats of force, and physical violence to force the victim to work for him without pay. The jury found Ruiz-Hernandez committed aggravated sexual abuse against the victim. From 2018 until August 2021, Ruiz-Hernandez forced a second victim he had brought to the U.S. to work for him by threatening him with harm. The victim was also transported and harbored for financial gain. In all, Ruiz-Hernandez was convicted of exploiting the labor of seven people not legally in the U.S. As prosecutors said in closing arguments, “For years Ruiz-Hernandez ensured a steady pipeline of workers for his landscaping business… He used their undocumented status and inability to speak English to prey on them.”
Ruiz-Hernandez presented himself as an upstanding and hardworking businessman on Vashon Island. He conned many unsuspecting homeowners and businessowners into hiring his company, consisting of the victims and others, many who were thousands of miles from home, did not speak, read, or write the English language and were dependent on him. It was because of this ongoing work Ruiz-Hernandez was able to continue his exploitive scheme, fueling his lavish lifestyle that benefited himself and his family for years.
Ruiz-Hernandez was also convicted of six counts of money laundering. Testimony revealed that Ruiz-Hernandez and his brothers had deposited over $1.5 million in checks from customers to their bank account between 2017 and 2022. Much of those funds were payment for the work done by the victims and others the defendant illegally brought to the U.S., trafficked, harbored, and exploited. Ruiz-Hernandez took steps to keep his name off corporate documents, financial records, numerous transactions, and hundreds of thousands of dollars of international wires to Mexico. Ruiz-Hernandez and his co-conspirators used some of that laundered proceeds to purchase two pieces of property on the island. Some of the money laundering counts relate to Ruiz-Hernandez sending money, and directing employees to send money, to Mexico to pay fees to coyotes for transport of his victims across the border.
Following the trial on the human and labor trafficking counts, the jury determined that the properties on Vashon were purchased with laundered proceeds of his illegal scheme and ordered that the properties should be forfeited to the government.
Forced labor is punishable by up to 20 years in prison and a $250,000 fine, and up to life imprisonment if the jury determines that the offense involved aggravated sexual abuse. Transporting an undocumented person for financial gain and harboring an undocumented person for financial gain are each punishable by up to ten years in prison. Bringing an undocumented person to the United States for financial gain is punishable by a mandatory minimum three years in prison and up to ten years in prison.
The case was investigated by Homeland Security Investigations (HSI) Task Force Officer Megan Bruneau Zentner. Detective Zentner is with the Seattle Police Department, assigned to the HSI Task Force. Detective Zentner’s position is federally funded by the Department of Justice’s Enhanced Collaborative Model with a focus on investigating labor trafficking of foreign-born victims.
The case is being prosecuted by Assistant United States Attorneys Kate Crisham, Jocelyn Cooney, and Jehiel Baer. Ms. Crisham is the Western District of Washington coordinator of efforts to stop human trafficking.
Drug trafficker who illegally possessed more than 20 guns – twelve purchased by a “straw buyer” -- pleads guiltyRead the Press Release
Seattle – a 32-year-old Federal Way man pleaded guilty today in U.S. District Court in Seattle to four federal felonies involving guns and drugs, announced U.S. Attorney Tessa M. Gorman. De’ondre Lamontia Phillips, aka Deondre Lamontia McDougle, is half of a pair of defendants involved in a firearms straw purchasing scheme that involved the purchase of 100 firearms in a two-year period. Phillips pleaded guilty today to possession of controlled substances with intent to distribute, possession of a firearm in furtherance of a drug trafficking crime, and two counts of illegal possession of firearms. Philips is scheduled to be sentenced by U.S. District Judge Ricardo S. Martinez on April 26, 2024.
According to records filed in the case, the investigation began in late January 2023, with the assault and attempted robbery of a woman in Rainier Valley. The victim was able to flee in her car. Police found a firearm in her vehicle that had been dropped by one of the assailants. A check of the firearm revealed it had been purchased by 31-year-old Kent resident Dion Jamar Cooper in December 2022. That recovery led the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF) to check Cooper’s purchase history. Cooper had purchased 107 firearms since June 2021. On 24 different instances he purchased multiple firearms – sometimes four or more. Of the 107 firearms identified as being purchased in this scheme, 24 of the guns have been recovered and linked to crimes.
During March and April of 2023, agents surveilled Cooper as he made arrangements to purchase additional firearms. Agents identified De’ondre Lamontia Phillips as the person who drove Cooper to the gun shops where he purchased the firearms. Phillips is prohibited from purchasing and possessing firearms due to convictions for distribution of heroin (2014) and convictions for illegal firearms possession and two counts of assault (2009). Surveillance of the two revealed Cooper turning the firearms over to Phillips who stored them in his residence.
On April 12, 2023, investigators arrested Phillips and searched his apartment, his car, and his storage unit. They found distribution amounts of fentanyl pills and methamphetamine as well as drug packaging materials and scales. In all, Phillips possessed 23 firearms – most of them handguns – and some firearms that were privately manufactured with no serial numbers. Ten of the firearms had been purchased by co-defendant Cooper on the day of the search and arrest.
Possession of controlled substances with intent to distribute is punishable by up to 20 years in prison. Possession of a firearm in furtherance of a drug trafficking crime is punishable by a mandatory minimum five years in prison to run consecutive to any sentence imposed on the other charges. Unlawful possession of firearms is punishable by up to fifteen years in prison.
Prosecutors have agreed to recommend no more than eight years in prison. Judge Martinez is not bound by the recommendation and is free to recommend any sentence allowed by law.
The case is being investigated by the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF) and the Seattle Police Department.
The case is being prosecuted by Assistant United States Attorney Todd Greenberg.
Former Puyallup man who conspired to cut power for burglary scheme sentenced to probation and home confinementRead the Press Release
Tacoma – A 32-year-old former Puyallup, Washington, man was sentenced today in U.S. District Court in Tacoma to three years of probation including one year of home confinement for Conspiracy to destroy energy facilities, announced U.S. Attorney Tessa M. Gorman. Matthew Greenwood pleaded guilty in April 2023, admitting that he and co-defendant Jeremy Crahan, 40, vandalized four power substations and plotted to fell trees to take out power lines. Both men were arrested before the tree plan was put into action. Chief U.S. District Judge David G. Estudillo said the crime was very serious, but he also recognized that the defendant had made great progress since his arrest.
Prosecutors joined with U.S. Probation in recommending the probationary sentence so that Greenwood could continue his progress toward a drug free and law-abiding life.
According to the facts in the plea agreement, Greenwood and Crahan hatched the scheme to disrupt power so they could break into ATMs and businesses and steal money. On December 25, 2022, they damaged four substations:
- Hemlock Substation in Puyallup, Washington, owned by Puget Sound Energy. Here, the two cut through a fence and Greenwood manipulated a switch damaging equipment and cutting power for 8,000 customers.
- Elk Plain substation in Spanaway, Washington, owned by Tacoma Power. The men cut padlocks on the gate and Greenwood manipulated breakers to damage equipment and cause an outage.
- Graham substation in Graham, Washington, operated by Tacoma Power. The men cut through a perimeter fence and Greenwood manipulated a switch to damage equipment. This outage, combined with the Elk Plain substation outage, caused more than 7,500 customers to lose power.
- Kapowsin Substation in Graham, Washington, operated by Puget Sound Energy. The men cut through a fence and Greenwood tampered with a switch causing sparks, flame, and a power outage.
Co-defendant Jeremy Crahan was not successful in drug treatment and was sentenced in December to 18 months in prison.
The FBI investigated the case with assistance from the Pierce County Sheriff’s Department, the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF), Tacoma Police Department, the Washington State Department of Corrections, and the Federal Protective Service.
The case was prosecuted by Assistant United States Attorney Todd Greenberg.
Former Bookkeeper for Mukilteo flooring company convicted of wire fraud, aggravated identity theft, and conspiracyRead the Press Release
Seattle – The former bookkeeper of a Mukilteo, Washington, flooring company was convicted today in U.S. District Court in Seattle of four counts of wire fraud, one count of aggravated identity theft, and one count of conspiracy, announced U.S. Attorney Tessa M. Gorman. Jodi Hamrick, who now resides near Memphis, Tennessee, was convicted following a five-day jury trial. The jury deliberated about eight hours before returning the guilty verdicts.
According to records filed in the case and testimony at trial, Hamrick conspired with David M. Gluth, the co-owner of Gluth Contract Flooring, to steal from the company and defraud the silent partner who had put up the money for the business. In the jury trial, prosecutors detailed how Hamrick and Gluth carried out the scheme by embezzling more than $400,000 from the commercial flooring business. Between 2011 and 2016, Gluth and Hamrick raided the company accounts to pay for everything from a home mortgage, to luxury vacations, to Nordstrom bills.
The two not only raided company funds, they also defrauded financial institutions by taking out loans without the knowledge or permission of the company’s co-owner. The two used the company funds for a variety of personal expenses. The lies and deceit in this scheme involved forged signatures, forged documents, altered records, secret bank accounts, secret credit cards, false bookkeeping entries, and false statements in declarations and court filings. The evidence in the case includes years of Skype instant messages between Hamrick and Gluth, showing the planning and execution of the fraud in minute detail.
Ultimately, the company co-owner had to go to court to try to get the truth about the embezzlement from the company. The flooring company went bankrupt in 2016, and the victimized business partner was left with nothing but debt.
In closing arguments prosecutor Jessica M. Ly told the jury, Hamrick’s role was “cooking the books, and keeping the money moving.” They noted that for four years, Hamrick paid her home mortgage with company funds. “Committing fraud was as routine for Jodi Hamrick as having her morning cup of coffee,” Assistant United States Attorney Mike Dion told the jury in closing.
Judge Jones scheduled Hamrick’s sentencing for April 26, 2024. Wire fraud is punishable by up to 20 years in prison. Conspiracy is punishable by up to five years in prison. Aggravated Identity Theft carries a mandatory minimum two years to follow any other sentence imposed in the case.
Gluth was charged in November 2020, and pleaded guilty in January 2021. Gluth was sentenced in 2021 to two years in prison and agreed to a restitution figure of $325,000.
The case was investigated by the FBI. The case was prosecuted by Assistant United States Attorney Michael Dion and Special Assistant United States Attorney Jessica M. Ly.
New York resident indicted for abusive sexual contactRead the Press Release
Seattle – A 29-year-old New York man was arraigned today in U.S. District Court in Seattle for illegally touching a 14-year-old boy seated next to him on a flight from Fresno to Seattle, announced U.S. Attorney Tessa M. Gorman. Ram N. Gazab pleaded “not guilty” today to Abusive Sexual Contact. Trial is scheduled in front of U.S. District Judge Tana Lin on March 11, 2024.
According to records filed in the case, on December 26, 2023, the victim was in a window seat near the back of the plane. The middle seat in the row was empty. Approximately 20 minutes before landing, Gazab seated himself in the empty seat next to the victim. Gazab allegedly placed his hand on victim’s thigh. The victim moved his body away from Gazab and told him to stop. Gazab told the victim he had been sleeping. After the plane landed, the victim tried to leave the row, and Gazab allegedly touched the victim’s buttocks.
The victim reported the conduct to the flight crew and law enforcement responded to the plane. Gazab was taken into custody and has remained detained ever since.
The grand jury returned the indictment on January 10, 2024. Abusive Sexual Contact is punishable by up to two years in prison.
The charges contained in the indictment are only allegations. A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.
The case is being investigated by the FBI.
The case is being prosecuted by Assistant United States Attorney Celia A. Lee.
Federal grand jury indicts Port Townsend, Washington man for production of images of child sexual abuseRead the Press Release
Tacoma – A 32-year-old Port Townsend, Washington, man was indicted yesterday for production of images of child sexual abuse, announced U.S. Attorney Tessa M. Gorman. Matan Liyor Goodman is scheduled to be arraigned in U.S. District Court in Tacoma next week.
According to records filed in the case, the investigation began with a report to the National Center for Missing and Exploited Children (NCMEC) that a user of Kik Messenger had uploaded suspected images of child sexual abuse. Review of the computer records indicated the person uploading the images resided in Western Washington and the information was forwarded to the Internet Crimes against Children Task Force at the Seattle Police Department.
An agent with Homeland Security Investigations connected the computer information with Goodman at an address in Port Townsend. Further investigation revealed that Goodman is a registered sex offender due to convictions in California.
Law enforcement obtained a judicially approved search warrant to search Goodman’s home and person, including any electronic devices belonging to him.
Following the search in October 2023, Goodman was taken into federal custody.
The charge contained in the indictment is an allegation. A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.
The mandatory minimum for the offense of Production of Child Pornography is 15 years. Due to his prior convictions, Goodman potentially faces a mandatory minimum 25 years in prison if convicted.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
The case is being investigated by Homeland Security Investigations with assistance from the Jefferson County Sheriff’s Office.
The case is being prosecuted by Assistant United States Attorneys Victoria Cantore and Matthew Hampton.
Tessa M. Gorman sworn in as U.S. Attorney, Western District of WashingtonRead the Press Release
Seattle – After serving six months as Acting U.S. Attorney, Tessa Gorman was sworn in today as U.S. Attorney, following her appointment to the post by U.S. Attorney General Merrick B. Garland. The appointment comports with the Federal Vacancies Reform Act of 1998. Chief U.S. District Judge David G. Estudillo administered the oath of office.
U.S. Attorney Gorman also issued the 2023 Report to the Community, highlighting the work of the U.S. Attorney’s Office in 2023. The report is linked below.
2023_final_report_to_the_community_1-16-2024.pdf..
Former Executive Director of victim advocacy organization convicted of two counts of wire fraudRead the Press Release
Tacoma – The former Executive Director of the Washington Coalition of Crime Victim Advocates (WCCVA) was convicted today of two counts of wire fraud following a six-day jury trial. Cody Benson, 51, formerly of Olympia, Washington, was indicted in July 2021 for her scheme to falsely claim Washington State public grant funding for work that was never done. Jurors deliberated about eight hours before returning the guilty verdicts. U.S. District Judge Benjamin H. Settle scheduled sentencing for April 8, 2024, at 1:30 p.m.
According to records filed in the case, Benson was the head of an Olympia-based non-profit organization that was tasked with training advocates to assist crime victims. In 2013, the legislature appropriated money for this work with a grant administered through the Washington State Attorney General’s Office. Between 2015 and 2017, Benson submitted fraudulent invoices for reimbursement under the grant. She submitted bills for training events that were never held or supplies that were never purchased. In early 2016, she moved away to Italy, yet in the ensuing years, she repeatedly told representatives of the Attorney General’s Office that she was in Washington State doing various outreach and other work. Those representations were false.
By the end of the scheme, WCCVA had only two employees: Benson and her son. The Washington State Attorney General’s Office became concerned about WCCVA’s performance under the grant in early 2018 and began investigating. Benson returned just over $50,000 to the state, but other funds were not recovered. The grant payments ceased, and WCCVA is defunct.
In all, prosecutors argued that WCCVA obtained almost $180,000 from Benson’s false invoices, and that Benson herself obtained approximately $257,000 in net salary and other benefits such as health insurance, retirement plan contributions, and health reimbursement account contributions during the fraudulent scheme.
The case was investigated by the FBI. The case is being prosecuted by Assistant United States Attorneys Philip Kopczynski and Yunah Chung.
Seattle man making drug sales in car stolen from Childrens’ Hospital sentenced to eight years in prisonRead the Press Release
Seattle – A Seattle man arrested in a car that had been stolen from a Children’s Hospital garage, was sentenced on Tuesday January 9, 2024, to eight years in prison, announced Acting U.S. Attorney Tessa M. Gorman. Timothy Robert Laucks, 42, pleaded guilty on September 26, 2023, to possession of controlled substances with intent to distribute and possession of a firearm in furtherance of a drug trafficking crime. U.S. District Judge James L. Robart imposed three years of supervised release to follow the prison term.
According to records filed in the case, Laucks was spotted driving a car that had been stolen at the Childrens’ Hospital parking garage, while the owner was inside with a sick child. The car was taken on October 30th and just days later, on November 4, 2022, Seattle Police spotted the car in the Ballard neighborhood. Officers observed the car for a few hours while the driver, Laucks, drove to various homeless encampments in the Seattle area. At these locations, officers observed Laucks carrying a pizza box and trafficking narcotics to members of the homeless encampments.
Officers followed Laucks, who drove to a downtown grocery store parking lot. When officers pulled their marked patrol car pulled in front of the stolen car, Laucks hit the accelerator crashing into the patrol car. He attempted to flee on foot but was caught within moments.
While running, Laucks attempted to toss his jacket and backpack. Those were recovered by officers. In the jacket was a .40 semi-automatic pistol that had been reported stolen in Redmond, Washington. In the backpack were multiple narcotics packaged for distribution, including zanax, fentanyl pills, powder, cocaine, meth, and heroin. Laucks had a second handgun and more than $8,000 cash on him when arrested.
Laucks claimed he had purchased the car from someone else and didn’t realize it had been stolen from a family with a sick child, until he saw some medical paperwork in the car. He told officers he had intended to return the car and the paperwork but “got busy making drops,” or drug sales.
Laucks was indicted by the grand jury on March 1st, 2023.
Laucks has multiple prior convictions which prohibit him from possessing firearms, including felony convictions in Whatcom and Skagit Counties. In asking for a nine-year prison sentence, Assistant United States Attorney Cecelia Gregson wrote to the court, “As a prohibited person, the defendant was precluded from possessing any firearms, let alone using them to traffic drugs. Seattle Police officers observed the defendant peddling drugs thinly disguised in a pizza box to various homeless communities in the city. The defendant’s prior encounters with the criminal system have failed to deter or dissuade him from selling drugs and carrying firearms.”
The case was investigated by the Seattle Police Department. The case was prosecuted by Assistant United States Attorney Cecelia Gregson.
Former Seattle resident convicted of bank fraud for false COVID-19 Paycheck Protection Program filingsRead the Press Release
Seattle – A 30-year-old New York City man was convicted today in U.S. District Court in Seattle of three counts of wire fraud and two counts of bank fraud related to his abuse of the COVID-19 Pandemic Paycheck Protection Program (PPP), announced Acting U.S. Attorney Tessa M. Gorman. Donte Jamal McClellon was a resident of Seattle when he submitted falsified documents to obtain $500,948 in loan proceeds from three different financial institutions in May and June 2020. The jury deliberated about two hours following the three-day trial. U.S. District Judge Lauren King scheduled sentencing for April 10, 2024.
According to records filed in the case, McClellon used the names of three limited liability corporations he had once registered in the State of Washington to make his claims. Each of the entities, ‘Frostlake,’ ‘Cannonlake,’ and ‘Skylake’ LLC, had been inactive and showed no signs of business activity in any state or federal registries in the years leading up to the pandemic. Nevertheless, in May and June 2020, McClellon submitted Paycheck Protection program applications claiming the entities each had as many as 13 employees and, in one case, gross receipts of more than $1.6 million. McClellon forged multiple Internal Revenue Service forms to make it appear the three companies were operating real estate, wholesale, or retail businesses, with employees who would benefit from the Paycheck Protection Program loans. McClellon claimed the businesses operated out of his home address in Seattle. The investigation revealed there was no business activity at that address.
The loan funds were disbursed to bank accounts that McClellon had set up just days before he made the loan applications. The proceeds were then moved to a personal bank account controlled by McClellon. McClellon used the money to pay his rent on a Manhattan apartment, for travel and gym memberships, and some $20,000 on Uber rides among other personal, non-business expenses.
The case was investigated by The FBI Seattle Field Division with assistance from FBI New York and the Small Business Administration Office of Inspector General (SBA-OIG).
The case was prosecuted by Assistant United States Attorney Lauren Watts Staniar, Jessica Murphy Manca, and Sok Tea Jiang.
On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline via the NCDF Web Complaint Form at https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
Pierce County repeat offender pleads guilty to illegally possessing firearms – including machine gunsRead the Press Release
Tacoma – A Pierce County, Washington man pleaded guilty today in U.S. District Court in Tacoma to unlawful possession of a machine gun and unlawful possession of firearms related to his October arrest at a Fife, Washington auto glass firm, announced Acting U.S. Attorney Tessa M. Gorman. Brady Lee Eltz, 39, is scheduled for sentencing before Chief U.S. District Judge David G. Estudillo on April 12, 2024.
According to records filed in the case, on October 4, 2023, Fife Police were dispatched to an auto-glass repair shop where workers at the shop reported seeing firearms in the trunk of a vehicle Eltz brought in for repair. Workers also reported seeing bullet holes in the vehicle.
After law enforcement took Eltz info custody, they checked the bathroom at the business. Eltz had gone into the bathroom when he saw police arrive. In the cabinet below the sink police found two firearms – 9 mm handguns. One, a Glock, had an illegal switch known as an “auto-sear” installed. The switch allows the gun to be fired automatically, making it a machine gun. The Glock had been reported stolen.
Fife Police towed Eltz’s vehicle and applied for a warrant to search it. During the search of the vehicle’s trunk, they found three additional firearms – including a stolen rifle that had been modified to fire automatically, making it a machine gun. Police then discovered a bag with two improvised explosive devices. Pierce County Sheriff’s Office bomb technicians were called in to evaluate the devices and make them safe. One was an explosive simulator likely stolen from the U.S. Army. It can cause serious bodily injury if exploded in a confined space. The second explosive was a thick cardboard tube filled with a black powder that appeared to be flammable.
After the explosives were made safe, police continued their search of the trunk and found two additional rifles, hundreds of rounds of ammunition, latex face masks, body armor, gun sites, holsters, and other firearms accessories. Eltz also had GPS trackers, several knives, and a voice-changing device.
All of the guns, ammunition and auto-sear devices are being forfeited to the government.
Eltz is prohibited from possessing any firearms because of criminal convictions including a 2013 conviction in the Western District of Washington. Eltz was sentenced to five years in prison for that crime.
Illegal possession of a firearm is punishable by up to 15 years in prison. Possession of a machine gun is punishable by up to 10 years in prison.
The case is being investigated by the Bureau of Alcohol, Tobacco, Firearms, & Explosives (ATF) with assistance from the Fife Police Department and the Pierce County Sheriff’s Office. The Washington State Patrol assisted with locating and arresting Eltz on a federal warrant after he posted bail and left state custody.
The case is being prosecuted by Assistant United States Attorney Marci L. Ellsworth.
Member of notorious international hacking crew sentenced to prisonRead the Press Release
Seattle – A 22-year-old French citizen from Epinal, France, was sentenced today in U.S. District Court in Seattle to three years in prison and more than $5 million in restitution for conspiracy to commit wire fraud and aggravated identity theft, announced Criminal Chief Sarah Vogel for the Western District of Washington. Sebastien Raoult, aka ‘Sezyo Kaizen,’ was arrested in 2022 in Morocco and was extradited to the U.S. in January 2023. At the sentencing hearing, U.S. District Judge Robert S. Lasnik said, “This is an extraordinarily serious offense. We’re talking about him robbing people of millions of dollars.”
“For over two years, Mr. Raoult participated in extensive computer hacking that caused millions of dollars in losses to victim companies and unmeasurable additional losses to hundreds of millions of individuals whose data was sold to other criminals,” said Criminal Chief Sarah Vogel of the Western District of Washington. “Mr. Raoult’s motive was pure greed. He sold hacked data. He stole people’s cryptocurrency. He even sold his hacking tools so that he could profit while other hackers attacked additional victims.”
According to records filed in the case, Raoult and his co-conspirators hacked into protected computers of corporate entities for the theft of confidential information and customer records, including personally identifiable information and financial information. They hacked numerous companies, including companies in Washington State, elsewhere in the United States, and around the world. After Raoult and his co-conspirators hacked companies, a user going by the name ShinyHunters posted hacked data from many of those companies for sale on dark web forums, including RaidForums, EmpireMarket, and Exploit. Between April 2020 and July 2021, ShinyHunters posted sales of hacked data from more than 60 companies. Sometimes ShinyHunters threatened to leak or sell stolen sensitive files if the victim did not pay a ransom.
Raoult helped create websites that pretended to be login pages belonging to legitimate businesses. The conspirators sent phishing emails to company employees that were designed to look like they came from legitimate businesses and contained links to those login pages. Victims provided their account sign-on credentials on those fake login pages, and the conspirators obtained the victims’ credentials. Raoult and his co-conspirators used the login information to breach victims’ accounts, steal the data stored there, and search the stolen data for credentials to access additional data on companies’ networks and third-party service providers, such as cloud storage services. In total, the conspirators stole hundreds of millions of customer records and caused loss to victim companies that is estimated to exceed $6 million.
In asking for a six-year prison term, Assistant United States Attorney Miriam Hinman wrote to the court, “Stealing and selling customer records put these hundreds of millions of individual customers at risk of identity theft and financial loss. As ShinyHunters demonstrated by listing the number of stolen customer records in its sale offerings, buyers would value the stolen data based on the number of customers whose data could be used. Raoult understood that buyers of the stolen data sought to misuse customers’ financial information, and yet he was eager to find those buyers.”
“The lengths to which Mr. Raoult and his co-conspirators went to steal personal and financial information are remarkably devious, and he played a substantial part in the scheme by creating code and phishing websites," said Richard A. Collodi, Special Agent in Charge of the Seattle field office. "Thanks to the diligent work of federal and international law enforcement, Mr. Raoult will be held accountable for his cyber-crimes, which caused millions of dollars of harm to companies and customers.”
Speaking to the court, Sebastian Raoult said “I understand my mistakes and I want to put that part behind me. No more hacking. I don’t want to disappoint my family again.”
Judge Lasnik said he believed Raoult’s arrest and imprisonment “has gotten through to Sebastian.” Still, he urged Raoult’s family and friends in the courtroom to “keep an eye on him” when he returns to France to guard against a return to criminal conduct.
The case is being investigated by the FBI Seattle Cyber Task Force. The case is being prosecuted by Assistant United States Attorney Miriam R. Hinman. DOJ’s Office of International Affairs provided substantial assistance. The Department of Justice also appreciates the significant cooperation and assistance provided by Moroccan and French authorities.
Former Army National Guard Recruiter sentenced to ten years in prison for sexual abuse of minorRead the Press Release
Tacoma – A former Air Force Special Agent was sentenced today in U.S. District Court in Tacoma to ten years in prison for enticement of a minor, announced Acting U.S. Attorney Tessa M. Gorman. Joshua Carl Harrod, 44, of Spanaway, Washington, was charged in July 2021 and pleaded guilty in October 2023. At the sentencing hearing, U.S. District Judge Benjamin Settle said the crimes were “sadistic” and “indescribably cruel.”
According to records filed in the case, between October 2017 and April 2018, Harrod sexually molested a young child left in his care. The conduct occurred in the location where he resided on Joint Base Lewis-McChord, an area of exclusive federal jurisdiction. Harrod separated from the Air Force in 2018 and prior to his arrest in this case, served as a recruiter for the Army National Guard in Lakewood, Washington.
Harrod also pleaded guilty to making a false statement to a government agency for his efforts to falsify phone records related to evidence in the case.
In addition to the ten-year prison term, Judge Settle ordered Harrod to be on lifetime supervised release. In handing down the sentence, Judge Settle said, “The consequences of many crimes before me do not have the impact that this one does…Victims of these crimes carry with them a life sentence.”
The case was investigated by the FBI with assistance from the U.S. Air Force Office of Special Investigations (OSI), Joint Base Lewis-McChord Military Police Investigations, the Lakewood Police Department, and the Washington State Patrol.
The case was prosecuted by Assistant United States Attorneys Kristine Foerster and Elyne Vaught.
Snohomish County man who aimed laser at two small planes sentenced to prisonRead the Press Release
Seattle – A 41-year-old Snohomish County resident was sentenced today in U.S. District Court in Seattle to eight months in prison for two counts of aiming a laser pointer at an aircraft, announced Acting U.S. Attorney Tessa M. Gorman. Christopher W. Harris has been in custody since his bond was revoked in August 2023. Harris was indicted in February 2023 for the laser crimes reported on November 20, 2022. At the sentencing hearing, U.S. District Judge Richard A. Jones said the conduct that temporarily damaged the pilot’s vision “was very dangerous, life-threatening, and done without regard for the victims.”
“Shining a laser at aircraft is dangerous for the pilot, those on board, and even those on the ground if the pilot cannot see to safely land,” said Acting U.S. Attorney Gorman. “Because of that danger, congress made such conduct a specific federal crime. It is fortunate both planes were able to safely land.”
According to records filed in the case, at about 5:00 PM on November 20,2022, Harris points a blue laser pointer at the cockpit of a two-person personal aircraft. The plane was on a track to land at Arlington Airport. The pilot’s eyes were damaged by the laser beam, and he was unable to see his instrument panel. He was able to switch to the backlight on the instrument screen which allowed him to safely land the aircraft. The pilot needed medical treatment for his eye injury.
Speaking in court today, pilot Jonathon Fay said once his vision was damaged by the laser, “I had to figure out how to land the plane… If I had been flying an older aircraft without the instrument visual aids, I likely would not have survived…By the grace of God, I have no permanent vision loss.”
Just two and a half hours later, Harris pointed the laser pointer at a four-seat aircraft being flown by a student pilot. The flight instructor on the plane was able to get pictures showing the origin of the laser light and also photographed how it obscured the sight of the pilot.
Based on the video from the second plane and the flight plan of the first plane, the Federal Aviation Administration and the Arlington Police were able to identify the origin of the laser light as a storage facility in Marysville, Washington. The storage facility is about 1.5 miles from the Arlington Airport.
Using entry logs and video surveillance from the storage facility law enforcement identified Harris as the person using the laser pointer on the planes. He was arrested by law enforcement at the storage facility on December 9, 2022.
In asking the judge to sentence Harris to a year and a day in prison, Assistant United States Attorney Jocelyn Cooney wrote to the court, “Mr. Harris’s behavior in this case is particularly concerning. This was not one poor decision by Mr. Harris. The two incidents are separated by approximately two-and-a-half hours. Mr. Harris left the storage facility after lasering the first plane before returning to laser the second plane. Both times, Mr. Harris’s actions were deliberate. He pointed the laser for approximately twelve (12) to thirteen (13) seconds—a considerable time—and tracked the plane’s cockpit as it moved across the sky. The fact that Mr. Harris chose to go back and engaged in the same dangerous behavior demonstrates that this was not a one-off occurrence of illegal behavior.”
Judge Jones sentenced Harris to three years of supervised release to follow the prison term, with intensive addiction and mental health treatment. Referencing the pilot in court Judge Jones said, “In this case, you almost killed this man… He has a family and people who depend on him. He could have wound up in a fatal crash… There must be consequences for what you did.”
The case was investigated by the Arlington Police Department and the Federal Aviation Administration (FAA).
The case was prosecuted by Assistant United States Attorney Jocelyn Cooney.
Seattle man who distributed thousands of fentanyl pills in Whatcom County sentenced to six years in prisonRead the Press Release
Seattle – A 33-year-old Seattle man was sentenced today in U.S. District Court in Seattle to six years in prison for distributing fentanyl and illegally possessing firearms, announced Acting U.S. Attorney Tessa M. Gorman. Ahbdurman Ahmed was one of six people indicted in April 2023 for a conspiracy to distribute fentanyl in Whatcom County. At the sentencing hearing, U.S. District Judge Richard A. Jones said, it was critical that he protect the public. Judge Jones told Ahmed, “I can’t imagine how you would feel if someone sold fentanyl to your children.”
“This defendant sold thousands of fentanyl pills in Whatcom County, pills that nearly killed him in an overdose,” said Acting U.S. Attorney Gorman. “Even after that brush with death, he continued to sell – putting others at risk. Drug suppliers must be held accountable for their conduct, whether driven by addiction or by greed – in this case it appears it was both.”
“DEA, along with our Federal, state, local, and tribal partners, works tirelessly to safeguard our communities by holding people like Mr. Ahmed accountable for distributing death in the form of fentanyl,” said David F. Reames, Special Agent in Charge, DEA Seattle Field Division. “We will go to any lengths to take armed traffickers off the streets and create a safe environment for Whatcom County and Lummi Nation residents, as we showed in this case.”
According to court records, law enforcement officers observed various drug transactions and interdicted the drug loads. On December 30, 2022, law enforcement was called to a mini mart where Ahmed and another person had overdosed on fentanyl and had to be revived and transported to the hospital. Nevertheless, ten days later Ahmed was seen trafficking fentanyl pills once again. In mid-January 2023, law enforcement seized bags containing 1,000 pills from two of Ahmed’s customers. In March of 2023, law enforcement seized a total of 3,000 fentanyl pills from Ahmed. Ahmed was armed at the time of the second seizure -- a Glock handgun with an extended magazine was found with him in the car he was driving. He is prohibited from possessing firearms due to prior criminal convictions.
“The Whatcom County Sheriff’s Office is committed and will continue locating dangerous drug traffickers that are poisoning our communities with potentially deadly substances,” said Whatcom County Sheriff Donnell Tanksley. “Losing one community member to an overdose, fatal or otherwise, is one community member too many – we are all family. We will also continue to work with our community partners to guide those affected by addiction to needed resources.”
The other defendants in this case are:
- Robel Sisay Gebremedhin A/K/A Robel Sisay Gebremedhui, 41, of Burien, WA is charged with: possession of fentanyl with intent to distribute; unlawful possession of a firearm; and carrying a firearm in furtherance of a drug trafficking crime. He is being sought by law enforcement.
- Mohamed Abdirisak Mohamed, 35, of Seattle, WA is charged with: possession of fentanyl with intent to distribute; unlawful possession of a firearm; and carrying a firearm in furtherance of a drug trafficking crime. Trial is scheduled for March 2024.
- Matthew Anderson, 35, of Bellingham, WA is also charged with: two counts of possession of fentanyl with intent to distribute. His trial is scheduled for March 2024.
- Daniel John Faix, 41, of Bellingham, WA pleaded guilty yesterday to Possession of controlled substances with intent to distribute, unlawful possession of firearms, and possession of firearms in furtherance of a drug trafficking crime. He is scheduled for sentencing on March 29, 2024.
- Natasha Parkhill, 38, of Bellingham, WA was arraigned on the indictment for possession of fentanyl with intent to distribute in November 2023 and remains detained pending trial.
In asking for a seven-year prison sentence, Assistant United States Attorney Stephen Hobbs wrote to the court, “Ahmed was involved in an ongoing conspiracy to distribute fentanyl in Whatcom County. Many of these drugs ended up being distributed on the Lummi Indian reservation, a community hard hit by the fentanyl pandemic. The Court is certainly aware of the dangers that these drugs – particularly fentanyl – pose to those who use them. Ahmed himself, as a drug user who has overdosed on fentanyl, was obviously aware of the risk of death or injury this drug presents. Ultimately, Ahmed – for whatever reason – was willing to personally profit from the distribution of an addictive and often deadly controlled substance.”
This case is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF .
This investigation was led by the Drug Enforcement Administration (DEA) and the Whatcom County Drug and Gang Task Force, with valuable assistance provided by the Whatcom County Sheriff’s Office, Washington State Patrol, and the Whatcom County Prosecutor’s Office.
The case is being prosecuted by Assistant United States Attorney Stephen Hobbs.
Leader of large cartel-connected drug trafficking organization sentenced to 11 years in prisonRead the Press Release
Seattle – A citizen of Mexico, twice federally convicted of drug trafficking in Washington State, was sentenced today in U.S. District Court in Seattle to 11 years in prison for conspiracy to distribute controlled substances and conspiracy to commit money laundering, announced Acting U.S. Attorney Tessa M. Gorman. Alan Gomez-Marentes, 38, of Los Angeles and Tukwila, Washington was arrested in July 2020 following an 18-month investigation of an extensive drug trafficking organization. Gomez-Marentes ordered drug shipments and directed underlings to process drugs for distribution. He and his sister were involved in laundering the proceeds from the drug trafficking.
At today’s sentencing hearing, U.S. District Judge John C. Coughenour said, the sentence he imposed was driven by the size of the drug trafficking ring, the amount of incredibly dangerous fentanyl it brought into the community and that this was Mr. Gomez-Marentes “second federal drug trafficking conviction.”
In total, the investigation into the conspiracy resulted in the seizure of 45 pounds of methamphetamine; 12 pounds of heroin; 3,200 fentanyl pills; 22 firearms; and $566,391.
On the wiretapped phone calls, agents heard Gomez-Marentes directing members of the organization to get new phones or pack up drug trafficking materials to avoid police scrutiny. He was heard asking members to obtain firearms and urging the beating of a drug trafficker who owed him money.
In 2005, Gomez-Marentes was convicted in Eastern Washington of distributing cocaine at Washington State University. He was sentenced to five years in prison and was deported. He was convicted in Mexico for another drug trafficking crime. While serving five years in a Mexican jail he began assisting drug dealers by translating drug deals with buyers in the U.S. He was released in Mexico in 2018 and illegally returned to Washington State in 2019.
Describing Gomez-Marentes role in the drug organization, prosecutors wrote to the court, “Alan Gomez-Marentes played a central leadership role in this highly successful organization for at least 10 months. He oversaw all aspects of drug trafficking: he orchestrated loads of drugs from Mexico; he managed the conversion of liquid methamphetamine to crystal methamphetamine; he directed numerous redistributors, providing them drugs for delivery and collecting cash drug proceeds; and he laundered tens of thousands of dollars.”
This is the final sentencing in this drug trafficking ring. The sentences for leaders and violent actors in the organization range from 17 years for Luis Magana-Ramirez, who was tied to violence and threats of violence, to ten and twelve years in prison for lower-level distributors who were caught with drugs and guns.
“The Jalisco Cartel is a significant threat to our community and the sentences today show the seriousness of the crimes of their affiliates here in the South Sound,” said DEA Seattle Special Agent in Charge David F. Reames. “DEA appreciates the partnership of the U.S. Attorney’s Office and our Federal, state, and local law enforcement partners as we close this investigation with a win for our community.”
This effort is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at www.justice.gov/OCDETF.
The investigation was conducted by the U.S. Drug Enforcement Administration’s (DEA) Tacoma Resident Office in partnership with Tahoma Narcotics Enforcement Team (TNET), Kent Police Department, Homeland Security Investigations, SeaTac Police Department, Thurston County Narcotics Team (TNT), the Federal Bureau of Investigation, the Bureau of Alcohol Tobacco, Firearms and Explosives (ATF), and the Internal Revenue Service (IRS). In addition, to the agencies listed above, these law enforcement agencies assisted in the investigation and/or with arrests and search warrants: DEA Seattle Special Response Team, Valley Narcotics Enforcement Team, Valley SWAT, Pierce County SWAT, Pierce County Sheriff’s Office, Joint Narcotics Enforcement Team, Bremerton Special Operations Group, King County SWAT, King County Sheriff’s Office Metro, Burien Police Department, Auburn Special Investigations Unit, FBI Seattle, FBI SWAT, FBI Portland Tactical and TNET, which is comprised of Tacoma, Lakewood, Auburn, Kent, Bonney Lake and Puyallup Police Departments, the Pierce County Sheriff’s Office and the Washington State Department of Corrections. The investigation was supported by the Northwest High Intensity Drug Trafficking Area (HIDTA).
The case is being prosecuted by Assistant United States Attorneys Amy Jaquette and Andy Colasurdo.
Georgia state prison inmate pleads guilty to impersonating a federal agent as part of a national telephone fraud schemeRead the Press Release
Seattle – A Georgia prison inmate who was indicted in Western Washington for a telephone fraud scheme pleaded guilty today in U.S. District Court in Seattle to conspiracy to impersonate a federal officer, announced Acting U.S. Attorney Tessa M. Gorman. Robert “Bo” Nnanwubas, 29, was incarcerated at Calhoun State Prison in Morgan, Georgia when he and others conspired to impersonate federal agents to defraud health care workers across the country. Prosecutors will ask that eight months in federal prison be added to Nnanwubas state sentence when he is sentenced by U.S. District Judge John C. Coughenour on March 12, 2024.
According to the plea agreement, Nnanwubas and others used contraband cell phones and Voice Over Internet Protocol (VOIP) technology to call victims and impersonate law enforcement personnel, including Deputy U.S. Marshals. The “Marshal” would tell the victim that a subpoena had been issued for the victim to appear and testify in court, and since the victim did not appear, a warrant had been issued for their arrest. The caller would say the warrant could be “quashed” if the victim sent money via Zelle or another digital payment system.
The conspirators targeted health care workers across the country. In March 2022, Nnanwubas’ Zelle account received approximately $15,000 in payments from eight different victims. An additional $5,300 was sent to Nnanwubas via Paypal and Venmo by three additional victims.
In a call to a Seattle area victim, Nnanwubas or his co-conspirators claimed to be “Deputy Marshal Gary Hartnett,” and demanded the victim return the call to what appeared to be a Seattle number. The scammers told the victim that two subpoenas had been sent to her place of work and that she needed to make payment, or she would be arrested. They also claimed there was a gag order in the case so that the victim could not consult a lawyer or other legal or law enforcement expert. The caller demanded the victim pay $2,000 or she would be arrested. The caller even told the victim she would have to turn herself in at the federal courthouse at 700 Stewart Street in Seattle. The schemers used as many correct details as possible to try to convince the victims to pay. The Seattle victim did not send money.
In the plea agreement Nnanwubas agrees to pay restitution to the victims of $15,300.
“This case should serve as a reminder that legitimate government workers will not call and demand payment via Zelle, Venmo or some other digital means,” said Acting U.S. Attorney Tessa M. Gorman. “The Courts and our federal partners do not demand money or any kind of payment in response to a subpoena. If you get a call like this, just hang up.”
The case was investigated by the FBI with assistance from the U.S. Marshals Service. The case is being prosecuted by Assistant United States Attorney Cindy Chang.
Former owner of Everett and Lynnwood restaurants sentenced to 10 months in prison for multi-year tax fraudRead the Press Release
Seattle – The 45-year-old former owner of two Snohomish County restaurants was sentenced today in U.S. District Court in Seattle to 10 months in prison, a $10,000 fine and two years of supervised release for tax evasion announced Acting U.S. Attorney Tessa M. Gorman. Si Yong Kim failed to pay taxes on more than $1.7 million in income at two sushi restaurants: Oshima and Si Joy. At the sentencing hearing, U.S. District Judge James L. Robart was particularly incensed that Kim had taken government aid in the form of Paycheck Protection Program loans during the pandemic. “Here is a man who is withholding his taxes to the treasury but is perfectly willing to take taxes from the treasury to keep his businesses afloat…. It is highly troublesome that this went on for an extensive period of time,” Judge Robart said.
“Our tax system operates on an honor system where we expect our taxpayers to pay their fair share,” said Acting U.S. Attorney Gorman. “In this case Mr. Kim didn’t cheat to keep his restaurants afloat, rather he used the money that should have gone to taxes for expensive watches, designer shoes and accessories, and jewelry. He used the money for investments and to pay off the mortgage on his home in Mukilteo. That conduct is an affront to all who scrimp and struggle to pay their fair share.”
According to records filed in the case between 2016 and 2020, Kim underreported the income at his restaurants by more than $1.7 million. He did this by keeping cash proceeds and periodically depositing the cash to his personal bank account or keeping the cash at his home. He paid his employees in cash and failed to pay over various employment taxes. He also overestimated the costs associated with the two restaurants.
When law enforcement executed a search warrant at Kim’s Mukilteo home and at his businesses in June 2022, they discovered he kept handwritten books in which he documented the actual gross income and legitimate expenses for his restaurants and noted a separate figure—a “CPA number”—that provided to his accountant for tax purposes. The CPA number omitted the cash receipts for his restaurants and understated credit card charges as well. The search also revealed an extensive collection of designer goods, large amounts of cash, and records that indicated employees were paid under the table. Kim also used the proceeds from his scheme to invest in properties in Georgia and to pay off his home mortgage.
An analysis by the Internal Revenue Service Criminal Investigation revealed that in each calendar year from 2016 to 2020 Kim failed to report his actual income for each restaurant. In 2017 he failed to report more than $586,395 in income.
Kim has paid restitution of $511,750.
In asking for a one-year prison sentence, Assistant United States Attorney Lauren Watts Staniar noted that the public needs to see that there is punishment for illegally evading taxes. Kim’s “tax fraud was meticulous and deliberate: he kept thorough handwritten books for his restaurants in which he calculated income and expenses. At the end of each month, he wrote down a ‘CPA Number’ that omitted his restaurants’ cash receipts and understated credit card receipts by several thousands of dollars…. He ha(d) cash stashed throughout his home, drives luxury cars, and proudly displays Rolex watches in a locked case. This is not a circumstance in which a struggling business owner underreported income to keep the lights on. Kim had the means to pay his taxes, he just chose not to.”
In court today Kim’s lawyer said he had already sold the sushi restaurant in Everett.
The case was investigated by the Internal Revenue Service Criminal Investigation (IRS-CI). The case is being prosecuted by Assistant United States Attorney Lauren Watts Staniar.
One of two Nigerian citizens who defrauded U.S. Pandemic programs of more than $1 million pleads guiltyRead the Press Release
Tacoma – One of two Nigerian citizens who resided in Canada, pleaded guilty today in U.S. District Court in Tacoma to wire fraud and aggravated identity theft for defrauding pandemic unemployment benefit programs in multiple states, announced Acting U.S. Attorney Tessa M. Gorman. Sakiru Olanrewaju Ambali, 45, was arrested in February 2023, in Frankfurt, Germany, as he traveled back to Canada from Nigeria. Ambali was detained in Germany and was extradited to the U.S. last August. Prosecutors will recommend a sentence of five years in prison when Ambali is sentenced by U.S. District Judge Robert J. Bryan on March 14, 2024.
In his plea agreement Ambali admits he and codefendant Fatiu Ismaila Lawal, 45, used the stolen identities of thousands of workers to submit over 1,700 claims for pandemic unemployment benefits to over 25 different states, including Washington State. In total, the claims sought approximately $25 million, but the conspirators obtained approximately $2.4 million, primarily from pandemic unemployment benefits. As part of his plea agreement Ambali has agreed to make restitution of $1,035,107.
The co-conspirators allegedly submitted claims for pandemic unemployment benefits to New York, Maryland, Michigan, Nevada, California, Washington and some 19 other states. Using 13 Google accounts, they filed some 900 claims. The co-conspirators also allegedly established four internet domain names that they then used for fraud – creating some 800 different email addresses that were used for fraud. Between March 2020 and December 2021, Ambali admits he personally submitted at least 620 claims for unemployment benefits that paid more than $1 million.
Additionally, between 2018 and 2021, Ambali used stolen personal information of eight U.S. citizens to try to claim tax refunds totaling more than $40,000. The IRS caught most of the fraud.
Ambali also attempted to use the stolen American identities for Economic Injury Disaster Loans (EIDL) to defraud the Small Business Administration (SBA). The SBA caught most of the fraud and paid only $2,500.
Ambali and his co-conspirators had the proceeds of their fraud sent to cash cards or to “money mules” who transferred the funds according to instructions given by the co-conspirators. They also allegedly used stolen identities to open bank accounts and have the money deposited directly into those accounts for their use.
Lawal was arrested in Canada in February and is pending extradition.
The National Unemployment Fraud Task Force provided a lead on this case to the investigative team in Western Washington. The case was investigated by the FBI with assistance from U.S. Postal Inspection Service (USPIS) and the Department of Labor Office of Inspector General (DOL-OIG). Also contributing to the investigation were Washington State Employment Security Division (ESD), the Internal Revenue Service Criminal Investigation (IRS-CI), and the Small Business Administration (SBA).
The case is being prosecuted by Assistant United States Attorney Cindy Chang of the Western District of Washington. DOJ’s Office of International Affairs is assisting.
On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the department’s response to the pandemic, please visit https://www.justice.gov/coronavirus
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline via the NCDF Web Complaint Form at https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
Bellevue, Washington tax preparer indicted for aiding and assisting with false tax returnsRead the Press Release
Seattle – A 63-year-old Bellevue, Washington, tax preparer was indicted this week on 14 counts of aiding and assisting with the preparation and presentation of false tax returns, announced Acting U.S. Attorney Tessa M. Gorman. Thanjavur Manavalan, the owner and operator of Mano Accounting Services, made his initial appearance on the indictment today. He entered a plea of “not guilty,” and trial was scheduled in front of U.S. District Judge Lauren King on February 20, 2024.
According to the indictment, Manavalan falsified a variety of items on clients’ tax returns, including charitable contributions, proceeds and initial price (basis) of investments sold, business losses, rental income, and private loans. Manavalan’s tax preparation business filed thousands of returns and grew substantially over the course of the fraud scheme.
The indictment lists 14 different tax returns for tax years 2018-2020 alleged to contain false and fraudulent information. The total tax loss to the U.S. Treasury from the 14 counts charged in the indictment is estimated to exceed $500,000. Manavalan has owned and operated Mano Accounting Services since 2004.
Aiding and assisting with the preparation and presentation of a false tax return is punishable by up to three years in prison.
The charges contained in the indictment are only allegations. A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.
The case is being investigated by the Internal Revenue Service Criminal Investigation (IRS-CI).
The case is being prosecuted by Assistant United States Attorney David T. Martin.
manavalan_indictment.pdfSeattle man convicted at trial of abusive sexual contact on Air France flight from Paris to SeattleRead the Press Release
Seattle – A 35-year 0ld Seattle man was convicted late Friday December 8, 2023, of abusive sexual contact on a flight from Paris to Seattle, announced Acting U.S. Attorney Tessa M. Gorman. Milan Edward Jurkovic was convicted following a three-day jury trial. The jury deliberated about three hours before reaching its verdict. Jurkovic faces up to two years in federal prison when he is sentenced by U.S. District Judge Robert S. Lasnik on March 21, 2024.
“Last summer, I joined with our law enforcement partners to call attention to a spike in sexual misconduct on aircraft – crimes such as this one that are traumatizing for victims,” said Acting U.S. Attorney Gorman. “This case should be a warning to anyone who thinks that in the confines of an aircraft cabin they can get away with unwanted sexual touching. We will prosecute and the penalties are significant.”
According to records filed in the case and testimony at trial, on July 3, 2022, Jurkovic was a passenger on an Air France flight from Paris to Seattle. Also on the flight was a school group from Western Washington. The students were returning from a class trip abroad. The 16-year-0ld victim was seated next to Mr. Jurkovic.
About three hours into the flight, Jurkovic reached under the Air France blanket covering the victim and began groping the victim’s thigh. The victim was shocked and frozen with fear. Jurkovic proceeded to rub her thigh for an extended period of time, touching her inner thigh, before the victim was able to pull away and seek assistance from a classmate and then her chaperone. The chaperone traded places with the victim for the duration of the flight.
The incident was reported to the flight crew, and Port of Seattle Police met the flight as it arrived at SEA Airport. The victim was interviewed by law enforcement. Jurkovic provided contradictory statements to different audiences. Initially, he told the chaperone he had been rubbing his leg due to bad circulation, suggesting that he inadvertently touched the victim. Later, after being told by a Port of Seattle officer that he was under investigation for allegedly assaulting the passenger seated next to him, Jurkovic said he did not hurt anyone. He later volunteered that he had an itch on his leg. He was indicted by a grand jury on January 4, 2023, and arrested January 30, 2023.
In closing arguments, prosecutors told the jury, Jurkovic assaulted the girl “for his own sexual gratification . . . The defendant was counting on (the victim) not being strong enough and brave enough to stop him.”
Abusive sexual contact is punishable by up to two years in prison.
The case was investigated by the FBI and the Port of Seattle Police.
The case is being prosecuted by Assistant United States Attorneys Rachel Yemini and Brian Wynne.
Leader of violent, cartel-connected, drug trafficking ring sentenced to 17 years in prisonRead the Press Release
Seattle – A top leader of a violent international drug trafficking organization that distributed heroin, fentanyl, and methamphetamine in the Puget Sound region, was sentenced today U.S. District Court in Seattle to 17 years in prison, announced Acting U.S. Attorney Tessa M. Gorman. Luis Arturo Magana-Ramirez, 35, of Fife, Washington, was arrested in July 2020 and pleaded guilty in July 2022. At the sentencing hearing U.S. District Judge John C. Coughenour said Magana-Ramirez “had a leadership role in an organization bringing large quantities of drugs into the area, particularly fentanyl which is wreaking havoc in our community.”
“This defendant had a successful career as a contractor until he succumbed to the dark allure of drug money,” said Acting U.S. Attorney Gorman. “He not only flooded our communities with dangerous drugs, he sought out firearms to impose his will on rivals and debtors and to keep the dollars flowing to him and to his bosses in the cartel. He has earned this lengthy prison term.”
Magana-Ramirez led a transnational drug trafficking organization. Law enforcement has linked the organization to a cartel in Mexico. Magana-Ramirez was responsible for bringing large amounts of heroin, methamphetamine, and fentanyl into Western Washington. Magana-Ramirez also pursued those who owed drug debts to the organization. At various times on the wiretap, federal law enforcement heard Magana-Ramirez threatening to beat or murder those who owed the organization money. In at least one instance, law enforcement moved in to protect a target of Magana-Ramirez’ threats of violence.
When Magana-Ramirez was arrested on July 28, 2020, he possessed two firearms – one of them had been reported stolen and the other had an obliterated serial number. Magana-Ramirez could not legally possess firearms as he is a Mexican national who is illegally present in the U.S.
In all, this drug ring was responsible for bringing more than 120 pounds of meth into the region as well as heroin, fentanyl pills, and cocaine.
In asking the court to impose a 17-year prison term, prosecutors wrote, “Magana-Ramirez oversaw the redistribution of hundreds of thousands of dollars’ worth of drugs in our community. He drove the success of this drug trafficking organization (DTO) through fear by organizing, directing, and arming subordinates and himself, and then using threats and violent confrontations to ensure that the DTO and its members continued to turn profits. Month after month, investigators intercepted Magana-Ramirez and his coconspirators plotting to kidnap and murder debtors, and even fellow DTO members.”
“This lengthy sentence highlights the seriousness of Mr. Magana-Ramirez’ leadership role in a group that brought despair to our community,” said David F. Reames, Special Agent in Charge, DEA Seattle Field Division. “Our community is a little safer today because of this sentence.”
This effort is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at www.justice.gov/OCDETF
The investigation was conducted by the U.S. Drug Enforcement Administration’s (DEA) Tacoma Resident Office in partnership with Tahoma Narcotics Enforcement Team (TNET), Kent Police Department, Homeland Security Investigations, SeaTac Police Department, Thurston County Narcotics Team (TNT), the Federal Bureau of Investigation, and the Bureau of Alcohol Tobacco, Firearms and Explosives (ATF).
The case is being prosecuted by Assistant United States Attorneys Amy Jaquette and C. Andrew Colasurdo.
U.S. Attorney’s Office reminds hoteliers of obligations under the Americans with Disabilities ActRead the Press Release
Seattle – The U.S. Attorney’s Office, Western District of Washington is investigating six hotels following complaints the facilities violated the Americans with Disabilities Act (ADA), announced Acting U.S. Attorney Tessa M. Gorman. In addition to the six active investigations, three area hotels have entered into settlement agreements after findings that they were not compliant with the ADA.
“As we enter the busy holiday travel season, it is critical that hotels and motels review their properties and reservation systems to ensure people with disabilities can reserve and be appropriately accommodated in rooms that meet their needs,” said Acting U.S. Attorney Gorman. “I’m pleased that three hotels have agreed to fix their accessibility issues, and we thank those customers who brought these issues to our attention. However, we’d rather see the hospitality community embrace the ADA guidelines without an investigation and action from our office.”
Over the last year, the Civil Rights Unit of the U.S. Attorney’s Office received and resolved complaints about three hotels in the Seattle area: The MarQueen Hotel on Queen Anne Avenue North in Seattle, The Hampton Inn and Suites in Lynnwood, Washington and the Holiday Inn and Suites in Bothell, Washington. In each case, a traveler who is disabled was assigned a room that did not meet the ADA even though the customer had requested appropriate accommodation.
- The MarQueen Hotel allegedly ignored the customer’s request for a first-floor room since the customer has mobility issues and the historic hotel has no elevators. While the investigation did not determine whether the hotel had promised a first-floor room, it did conclude that the MarQueen does not have the required number of rooms that accommodate people with mobility disabilities. Under the resolution, the hotel will provide the U.S. Attorney’s office with it’s plan to add an additional room for those with mobility disabilities.
- The Lynnwood Hampton Inn Suites resolved a claim that it failed to honor a request for an accessible bathroom from a guest with mobility impairment. Under the terms of the resolution the hotel will improve the reservations system and training for employees. If the hotel fails to have an accessible room for the person who has reserved one, it will assist the customer with finding an accessible room at another property or will move a non-disabled customer to provide such a room.
- The Bothell Holiday Inn and Suites similarly failed to have a room with an accessible bathroom for a customer who had reserved a room and believed the room would accommodate their disability. However, the hotel website was unclear as to the accommodation and the room did not have an accessible bathroom. The hotel has agreed to make changes to it’s website and changes in training for its employees so that it is ADA compliant.
In each of the resolutions listed above, the hotel management has agreed to alert the U.S. Attorney’s Office to any complaints of ADA violations that the hotels receive over the next year.
In some instances, the complainant is financially compensated as part of the resolution.
The U.S. Attorney’s Office actively works to ensure ADA compliance. You can learn more about our efforts here.
The resolutions in these cases were handled by Assistant United States Attorney Susan Kas.
Leader of $6.8 Million Pandemic Fraud Scheme Pleads Guilty to Wire Fraud and Money Laundering ChargesRead the Press Release
Seattle - Paradise Williams, 29, the leader of a wide-ranging fraud scheme that stole more than $3.3 million from federally funded pandemic assistance programs and attempted to obtain more than $6.8 million, pleaded guilty today to wire fraud and money laundering charges, announced Acting U.S. Attorney Tessa M. Gorman. Williams personally received more than $2 million in fraudulent proceeds and spent the money on extravagant expenses such as luxury cars, lavish trips, cosmetic surgery, jewelry, and designer goods.
According to the plea agreement, from June 2020 to February 2022, Williams personally participated in the submission of over 125 fraudulent applications for the U.S. Department of Treasury’s Emergency Rental Assistance Program funds administered by King County, the Paycheck Protection Program (PPP), the Economic Injury Disaster Loan (EIDL) Program, and Coronavirus Aid, Relief, and Economic Security (CARES) Act unemployment benefits. Williams enlisted dozens of associates, including her five codefendants, in successfully defrauding the programs of more than $3.3 million by posing as fake tenants, landlords, and small business owners in need of assistance. In submitting these applications, Williams, among other things, created falsified bank statements, tenant ledgers, and landlord attestations.
Upon receipt of the illegal funds, Williams and her associates methodically laundered the funds through cash withdrawals, wire transfers, and expensive personal purchases. Williams received more than $1.2 million in kickback payments from her associates for facilitating the fraudulent submissions.
According to the terms of the plea agreement, Williams will pay restitution in the amounts of $2,7791,241 to the U.S. Department of the Treasury and $512,730 to the U.S. Small Business Administration. The defendant will forfeit $2,023,104, the proceeds Williams personally obtained through the scheme. Williams will also forfeit a Lexus sedan and a Range Rover SUV that she purchased with the fraudulent gains.
Wire fraud in relation to a presidentially declared major disaster or emergency is punishable by up to 30 years in prison. Money laundering is punishable by up to 20 years in prison. The government has agreed to recommend no more than 110 months in prison for Williams. The recommendation is not binding on U.S. District Judge John H. Chun, who will determine the appropriate sentence on February 26, 2024, after considering the sentencing guidelines and other statutory factors.
Williams’ codefendants D’Arius Jackson, Tia Robinson, Rayvon Peterson, and David Martinez previously entered guilty pleas for their participation in the scheme and will be sentenced by Judge Chun in January and February 2024.
This case was investigated by the Federal Bureau of Investigation, with assistance from the Small Business Administration’s Office of Inspector General.
The case is being prosecuted by Assistant United States Attorney Cindy Chang.
On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the Department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form
First of two defendants sentenced to prison for Christmas Day 2022 attack on power substationsRead the Press Release
Tacoma – One of two Pierce County men who vandalized electrical substations as part of a burglary scheme, was sentenced today in U.S. District Court in Tacoma, to 18 months in prison, announced Acting U.S. Attorney Tessa M. Gorman. Jeremy Crahan, 40, pleaded guilty in September 2023, admitting he joined co-defendant Matthew Greenwood in a conspiracy to knock out power so they could rob ATM machines. At the sentencing hearing Chief U.S. District Judge David G. Estudillo said, “Power stations are a key part of our community, and they are key infrastructure. Our reliance on this infrastructure cannot be overstated, especially in the dead of winter. . . Causing damage to key infrastructure is not tolerable.”
“These defendants launched a scheme that left thousands of people in the cold and dark in the middle of winter, A scheme that was dangerous – for them and for the workers that had to make repairs to the high voltage equipment,” said Acting U.S. Attorney Tessa M. Gorman. “Their motivation was greed – but all they got was a small amount of money from a restaurant cash register while doing more than $235,000 in damage.”
According to the facts in the plea agreement, Greenwood and Crahan hatched the scheme to disrupt power so they could break into ATMs and businesses and steal money. On December 25, 2022, they damaged four substations:
- Hemlock Substation in Puyallup, Washington, owned by Puget Sound Energy. Here, the two cut through a fence and Greenwood manipulated a switch damaging equipment and cutting power for 8,000 customers.
- Elk Plain substation in Spanaway, Washington, owned by Tacoma Power. The men cut padlocks on the gate and Greenwood manipulated breakers to damage equipment and cause an outage.
- Graham substation in Graham, Washington, operated by Tacoma Power. The men cut through a perimeter fence and Greenwood manipulated a switch to damage equipment. This outage, combined with the Elk Plain substation outage, caused more than 7,500 customers to lose power.
- Kapowsin Substation in Graham, Washington, operated by Puget Sound Energy. The men cut through a fence and Greenwood tampered with a switch causing sparks, flame, and a power outage.
Crahan shared in the planning and primarily served as a lookout during the attacks on the substations.
Following the December 25, 2022, substation vandalism, the men spent time looking for additional ways to cause power outages by felling trees. The goal was to cut power so that they could burglarize businesses and steal from ATMs. Law enforcement arrested them before they could put the tree plan into action.
Matthew Greenwood has pleaded guilty and is scheduled to be sentenced in January 2024.
The FBI investigated the case with assistance from the Pierce County Sheriff’s Department, the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF), the Tacoma Police Department, the Washington State Department of Corrections, and the Federal Protective Service.
The case is being prosecuted by Assistant United States Attorney Todd Greenberg.
Duvall, Washington, man sentenced to ten years in prison for trying to sexually exploit 11-year-old childRead the Press Release
Seattle – A Duvall, Washington, man was sentenced today to ten years in prison for attempted enticement of a minor, announced Acting U.S. Attorney Tessa M. Gorman. Steven Michael Burke, 37, was awaiting sentencing for possession and distribution of images of child sexual abuse, when he used an internet chat site to try to obtain sexually explicit images of an 11-year-old child. At the sentencing hearing, U.S. District Judge Ricardo S. Martinez imposed twenty years of supervised release to follow prison, saying, “one of [a judge’s] primary concerns is community protection… the protection of children I hold at the highest level of all.”
Burke pleaded guilty in September 2023, admitting that, while he was awaiting sentencing for possessing images of child sexual abuse, he reached out to the 11-year-old child seeking sexually explicit images. Burke also sent the child such images. The crime was discovered after Burke was sentenced to probation for the earlier criminal conduct.
In asking for the ten-year sentence, Assistant United States Attorney Cecelia Gregson wrote to the court, “His actions are unconscionable. Not only because of the harm he has undeniably caused this child victim as detailed in her statement and not only because the defendant himself is a father of four, but because the defendant was facing the full force of federal prosecution and was still unable to curb his appetite for child exploitation material.”
Burke has been in custody since his arrest on May 4, 2023.
The case was investigated by the Department of Homeland Security Investigations
The case is being prosecuted by Assistant United States Attorney Cecelia Gregson and Special Assistant United States Attorney Laura Harmon.
Armed repeat offender, who triggered neighborhood lock-down, sentenced to six years in prisonRead the Press Release
Seattle – A 42-year-old Seattle man was sentenced today in U.S. District Court in Seattle to six years in prison for possession of controlled substances with intent to distribute, and possession of a firearm in furtherance of a drug trafficking crime, announced Acting U.S. Attorney Tessa M. Gorman. Pedro Fernandez Kent triggered a neighborhood lockdown in January 2023 when he fled police in North Seattle. At the sentencing hearing U.S. District Judge Ricardo S. Martinez noted that firearms coupled with drug dealing often lead to deadly results “Everyone recognizes first of all how dangerous the particular conduct was in this case…”
According to records filed in the case, on January 15, 2023, Seattle Police were responding to a domestic violence report in North Seattle when they spotted the distinctive car driven by the suspect, Pedro Kent. Kent attempted to flee from police crashing his car into two curbs, rupturing the tires. Kent abandoned the car and ran into the yards of neighboring homes. Video from area cameras show Kent with a handgun in his hand as he ran into a backyard. Police converged on the area, alerting residents to stay in their homes with the doors locked. One couple called police reporting that the defendant appeared to be hiding in their backyard. A K-9 officer helped take Kent into custody.
In addition to the gun Kent carried when he ran from the car, police located a carbine rifle in the car as well as distribution amounts of fentanyl, cocaine, heroin, and methamphetamine. Kent also had a hatchet and a dagger in the car as well as scales and plastic baggies for drug distribution.
Kent was prohibited from possessing firearms due to previous King County convictions for burglary, theft, assault, and trafficking in stolen property.
The case was investigated by the Seattle Police Department with assistance from Homeland Security Investigations and the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF).
The case was prosecuted by Assistant United States Attorney Cecelia Gregson.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and gun violence, and to make our neighborhoods safer for everyone. On May 26, 2021, the Department launched a violent crime reduction strategy strengthening PSN based on these core principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence from occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results.
Prolific Whatcom and Skagit County drug dealer sentenced to 8 years in prisonRead the Press Release
Seattle – The key source of drugs for a drug distribution ring operating in Skagit and Whatcom counties was sentenced today in U.S. District Court in Seattle to eight years in prison, announced Acting U.S. Attorney Tessa M. Gorman. Enoc Martinez Lopez, aka “Victor,” 28, of Marysville, Washington, was the main supplier of drugs to other co-conspirators and drug redistributors. He distributed fentanyl pills, fentanyl powder, heroin, cocaine, and methamphetamine in areas that have seen an increase in overdose deaths. At Martine Lopez’s sentencing hearing, U.S. District Judge Lauren King said, “You chose to enrich yourself by perpetuating the cycle for others whose lives and families have been impacted by the drug epidemic."
“We know that fentanyl trafficking has led to increased fatal overdoses in the Lummi Nation and Whatcom County,” said Acting U.S. Attorney Gorman. “Feeding addiction in our communities leads to increased deaths. Fentanyl pills have even resulted in the deaths of children who mistake a colorful pill for a piece of candy.”
Records in the case detail how various defendants interacted with supplier Martinez Lopez and other drug customers. In April 2022, investigators initially saw Martinez Lopez meeting a drug customer and co-defendant at the Silver Reef Casino in Whatcom County. That person was later arrested with more than 1,000 fentanyl pills, fentanyl powder, and a firearm. Communication between Martinez Lopez and other coconspirators show he was supplying members of the ring with as many as 2,000 fentanyl pills at a time.
On November 30, 2022, when Martinez Lopez was arrested and his residence was searched, law enforcement seized, $177,710 in cash, 8.7 kilos of fentanyl pills, 2.3 kilos of fentanyl powder, more than 5 kilos of cocaine, a kilo of heroin, and more than 6 kilos of methamphetamine.
In asking for a ten-year sentence, Assistant United States Attorney Stephen Hobbs wrote to the court, “When arrested, Martinez Lopez was in possession of significant quantities of fentanyl pills, fentanyl powder, methamphetamine, cocaine, and heroin. The ability for Martinez Lopez to access the quantity of drugs found in his possession is particularly concerning and likely demonstrates the ability to connect with cartel-level narcotics sources-of-supply. This quantity of drugs represents a significant amount of misery and suffering.”
In all in this case, law enforcement has seized: 11.5 kilos of fentanyl pills, 2.8 kilos of fentanyl powder, 5.7 kilos of cocaine, 1.6 kilos of heroin, and 8.7 kilos of crystal meth, more than $186,000 in cash and nine firearms.
“This defendant profited from the misery of some of the most vulnerable members of our community,” said David F. Reames, Special Agent in Charge, DEA Seattle Field Division. “This investigation reflects the seriousness with which DEA and our partners take fentanyl trafficking in Whatcom and Skagit counties.”
This prosecution is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.
The investigation was led by the Drug Enforcement Administration, Bellingham Resident Office (DEA), working with the Whatcom County Drug and Gang Task Force, the Whatcom County Sheriff’s Office, the Skagit County Interlocal Drug Enforcement Unit, Homeland Security Investigations (HSI), Bureau of Indian Affairs, Washington State Patrol, U.S. Customs and Border Protection (CBP), Snohomish Regional Drug Task Force, the CBP Air & Marine Operations, the Lummi Police Department, the Everson Police Department, and the Bureau of Alcohol, Tobacco, Firearms & Explosives.
The case is being prosecuted by Assistant United States Attorney Stephen Hobbs.
Pierce County based drug trafficking organization indicted for distributing cocaine, fentanyl, and marijuanaRead the Press Release
Seattle – Ten members of a South Puget Sound drug trafficking organization were indicted following a lengthy investigation that uncovered the trafficking of marijuana to East Coast locales, and the importation and distribution of fentanyl and cocaine in Western Washington. Multiple search warrants were served this morning and eight people were arrested. Seven will appear in U.S. District Court in Tacoma today, and one will appear in U.S. District Court in San Diego today.
“Unfortunately, these defendants were all young- under the age of 30, but the quantity of drugs they were dealing was staggering” said Acting U.S. Attorney Tessa M. Gorman. “They communicated via social media, and they advertised their drugs on social media using codes and emojis. They not only put their lives on a negative path, but they sold dangerous drugs that are harming so many other young people in our community.”
Since the beginning of this investigation in 2022, the Drug Enforcement Administration and partner law enforcement agencies have seized nearly 52 kilos of cocaine, more than 23 kilos of fentanyl pills, and 131 kilos of marijuana. One drug shipment seized by law enforcement contained 37 kilos of cocaine and more than a kilo of fentanyl pills. In June 2023, a traffic stop on Interstate 5 resulted in the seizure of 200,000 fentanyl pills that had been hidden in the vehicle.
Those arrested today for conspiracy to distribute controlled substances include:
Joel Adrian Valencia Rosas, 27, of Lakewood, Washington
Scott Bud Burrows, Jr., 26, of Spanaway, Washington
Jesus Emmanuel Cardenas Gonzalez, 22, of Chula Vista, CA
Silias Kapone Hale, 19, of Federal Way, Washington
Ronnie Kendrick, 24, of Lakewood, Washington
Alyson Marie Pyles, 20, of Port Orchard, Washington
KeShaun Marcus Tremper, 18, of Federal Way, Washington
Corey Earl Huff, 39, of Lakewood, Washington, was arrested today for the unlawful possession of a firearm.
“These defendants are accused of trafficking over 150,000 lethal doses of fentanyl to communities in Western Washington and beyond,” said David F. Reames, Special Agent in Charge, DEA Seattle Field Division. “This poison will never reach its potential victims because of the cooperation between DEA and our law enforcement partners in this investigation.”
“This operation will make a sizable dent in the drug trade over multiple states,” said ATF Seattle Special Agent in Charge Jonathan T. McPherson. “In addition, the participants’ use of firearms as part of this scheme makes these actions even more dangerous to our communities.”
“Illegal drugs continue to have horrific effects on our communities,” said Bonney Lake Police Chief Mark Berry. “Collaborative investigations partnering federal and local law enforcement agencies are a crucial element in reducing the flow of illegal narcotics into our community.”
“Fentanyl is impacting communities all across the country, including here in Lakewood,” said Assistant Chief John Unfred, Lakewood Police Department. “It is for this reason we have partnered with the DEA on this investigation. We hope that this operation will make a big impact in the distribution of this deadly drug. We look forward to continuing this positive working relationship and assisting with cases of this magnitude that impact Western Washington.”
Due to the quantity of drugs involved in this case, some defendants face mandatory minimum ten-year prison terms.
The charges contained in the indictment are only allegations. A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.
This prosecution is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.
The investigation was led by the Drug Enforcement Administration (DEA) with assistance from the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) IRS- Criminal Investigations, TNET (Tacoma Narcotics Enforcement Team), TNT (Thurston Narcotics Task Force), Lakewood PD, Puyallup PD, Bonney Lake PD, Kitsap County Sheriff’s Office, Tacoma PD, Pierce County Sheriff’s Department, and Metro Cities SWAT.
The case is being prosecuted by Assistant United States Attorneys Marci L. Ellsworth and Crystal Correa.
Prolific mail thief who stole postal vehicles and postal keys pleads guilty to federal chargesRead the Press Release
Seattle – A man who committed a series of mail vehicle and mail key thefts plead guilty to theft of government property, mail theft, illegal transactions on access devices, and illegally possessing a firearm, announced Acting U.S. Attorney Tessa Gorman. Johny Mixayboua, 27, committed a string of mail theft incidents involving stolen postal vehicles, stolen postal keys, mail theft and associated crimes. The postal service had to halt deliveries in the zip code 98118 for about a week while investigators worked to track down and arrest Mixayboua. Mixayboua will be sentenced in U.S. District Court by Judge Richard A. Jones in Seattle on March 8, 2024.
According to the plea agreement, between December of 2022 and May of 2023, Mixayboua unlawfully gained access to cluster mailbox units in various locations throughout King County. He repeatedly stole mail from the cluster mailbox units that were addressed to others.
During this time, Mixayboua stole credit cards from the mail he unlawfully collected and used the stolen credit cards to make purchases for himself. He also stole and operated a United States Postal Service Vehicle. When law enforcement executed an arrest warrant on Mixayboua in May of 2023, he was found with a firearm. Mixayboua is prohibited from possessing any firearms because of previous felony convictions in King County Superior Court.
This case was investigated by U.S. Postal Inspection Service (USPIS).
Theft of Government Property is punishable by up to 10 years in prison. Mail Theft is punishable by up to 5 years in prison. Access Device – Illegal Transactions is punishable by up to 15 years in prison. Unlawful Possession of a Firearm is punishable by up to 15 years in prison.
The case is being prosecuted by Assistant United States Attorney Elyne Vaught.
Pennsylvania plumbing and heating company settles allegations it failed to properly subcontract with disabled veteran owned companiesRead the Press Release
Seattle – A heating and plumbing business headquartered in Boothwyn, Pennsylvania will pay $1.35 million to settle allegations it failed to follow the terms of a contract for servicing fire and life safety systems at seven Veteran’s Affairs (VA) facilities nationwide. Media Plumbing and Heating, dba Kinetix, participates in the VA’s service-disabled veteran owned small business program. Under terms of its contracts with the VA, Media was supposed to hire sub-contractor companies that also qualified as service-disabled veteran owned to service the fire and life safety systems. However, between January 2016 and December 31, 2022, it failed to do so.
“Part of the VA’s mission is to assist veterans with the transition to life after their service. This program helps support service-disabled veterans as they seek to grow their businesses,” said Acting U.S. Attorney Tessa M. Gorman. “Media had agreed to find those similarly situated companies across the country to make the program work for other veterans. The failure to do that limited the impact of the program.”
“It is critical that companies who agree to hire service-disabled veteran-owned businesses honor those commitments. Many of our nation’s veterans depend on these contracts for their livelihoods,” said Jason Root, Special Agent in Charge of the Department of Veterans Affairs Office of Inspector General’s Northwest Field Office. “We thank the U.S. Attorney’s Office and our law enforcement partners for their efforts in this case.”
According to the settlement agreement, Media had agreed to find service-disabled veteran owned companies to service the fire and life safety systems at VA facilities in Seattle, Palo Alto, California, Louisville, Kentucky, West Palm Beach, Florida, Oklahoma City, Hines, Illinois, and Bedford, Massachusetts. If the company could not find such subcontractors, it was to do the work itself. Instead, it hired non-compliant subcontractors to do the work.
Of the $1.35 million settlement amount, $592,231 is restitution.
The matter was investigated by the Veteran’s Affairs Office of Inspector General (VA-OIG).
The investigation and settlement were handled Assistant United States Attorney Matt Waldrop for the U.S. Attorney’s Office, Western District of Washington.
“Money Mule” sentenced to one year in prison for call center scheme that defrauded victims of more than $700,000Read the Press Release
Seattle – A 33-year-old SeaTac, Washington, man was sentenced today to one year and one day in prison and three years of supervised release for a money laundering conviction related to his participation in a call center scheme to defraud elderly victims across the country, announced Acting U.S. Attorney Tessa M. Gorman. Arifkhan Pathan was arrested on January 4, 2021. Between August 2020 and January 2021, Pathan played a key role in defrauding 28 victims of more than $700,000. The restitution amount will be determined by U.S. District Judge Robert S. Lasnik at a later date.
“According to the FBI, in 2022 there was more than $1 billion in victim losses due to these call center fraud schemes. These schemers often target elderly victims and pretend to be government officials to try to build trust so they can steal their money,” said Acting U.S. Attorney Tessa M. Gorman. “We need to repeatedly remind people that government employees will never ask you to withdraw and send packages of cash to some other address for ‘safe-keeping.’”
According to records filed in the case, in November 2020, investigators with Homeland Security Investigation became aware of suspicious packages arriving at Seattle UPS and FedEx locations. The investigation revealed the packages were filled with cash and were sent by victims from as far away as New York, Texas, and Colorado. The packages were sent to conspirators who used fake identity documents, such as driver’s licenses, to pick-up the packages.
According to multiple victims in the case, they had received a telephone call from someone who claimed to be employed by the Social Security Administration. The caller claimed the victim’s Social Security number had been compromised, and the only way to protect the victim’s money was to withdraw thousands of dollars in cash from their bank accounts and send it via UPS or FedEx to an “agent” elsewhere in the U.S. for safe-keeping. The callers allegedly demanded the victims send packages containing as much as $30,000 in cash. The scammers used UPS and FedEx so the co-conspirators could track the packages and pick up the packages of cash using the fake identity documents. The investigation revealed the callers were connected to an Indian call center.
Pathan used false driver’s licenses in real people’s identities to pick up packages of cash sent by victims. Pathan deposited much of the money he picked up in various bank accounts that could be accessed by his co-schemers. He was paid a commission on the money of about seven percent.
In asking for a 40-month prison sentence, Assistant United States Attorney Miriam Hinman wrote to the court, “Seven of these victims have explained to the Court how severely the offense impacted them, including substantial loss of retirement savings, loss of credit, ongoing debt, and inability to afford basic items like groceries and medications. This financial hardship also caused victims to suffer from enormous anxiety, causing weight loss, migraines, and more….
Pathan participated extensively in a fraud scheme that caused enormous harm to dozens of U.S. victims, many of whom were elderly and lost their retirement savings. He did so for personal profit and should not be allowed to escape from facing the consequences of his actions ….”
The case was investigated by the Homeland Security Investigations Border Enforcement Security Task Force (BEST) comprised of representatives from HSI, the Internal Revenue Service – Criminal Investigation Division, the U.S. Secret Service, the U.S. Postal Inspection Service, U.S. Customs and Border Protection, and the Seattle Police Department.
The case is being prosecuted by Assistant United States Attorneys Miriam R. Hinman and Casey S. Conzatti.
Yelm, Washington, man sentenced to ten years in prison for possession of images of child sexual abuseRead the Press Release
Tacoma – A 40-year-old Yelm, Washington man was sentenced today in U.S. District Court in Tacoma to ten years in prison for possession of images of child sexual abuse, announced Acting U.S. Attorney Tessa M. Gorman. Scotti Jason Ortiz has been in custody since his arrest on February 9, 2021.
According to records filed in the case, a foreign law enforcement agency alerted Homeland Security Investigations (HSI) Cyber Crimes Center (C3) Child Exploitation Investigations Unit that a Kik user was sharing images of child sexual abuse. Ortiz was identified as the user.
When a search warrant was served on Ortiz’ electronic devices, law enforcement determined he possessed a video showing the sexual molestation of three children under the age of 12. It does not appear that Ortiz created the images.
Ortiz has prior convictions relating to child sexual abuse. In 2005 he was convicted of third-degree rape of a child. In 2013 he was sentenced to 75-months in prison for failing to register as a sex offender and dealing and possessing depictions of minors engaged in sexually explicit conduct. Due to those convictions, Ortiz faced a mandatory minimum ten-year federal prison sentence.
Ortiz was released from the 75-month state sentence on June 30, 2020, and had been out of prison barely a month when he set up the Kik account in August 2020. It was through that account that he began to communicate with an undercover law enforcement agent in England about his sexual interest in children.
The case was investigated by Homeland Security Investigations (HSI).
The case was prosecuted by Assistant United States Attorney Zach Dillon.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Sleep disorder medical practice with clinics in California and Washington resolves allegations it overbilled government medical programsRead the Press Release
Seattle – The Department of Justice and Innovative Sleep Centers PLLC and Innovative Sleep Centers, Inc., have resolved allegations that the sleep centers improperly billed Medicare and Medicaid for medical services. The clinics paid $644,562 to resolve the matter. Of the settlement amount, $435,404 went to the federal government as restitution and penalties and $209,138 to Washington State for its share of restitution and penalties.
The United States contends that between 2013 and 2022, Innovative Sleep Centers (ISC) submitted three categories of false claims for payment to Medicare and Medicaid.
- Between January 2018 and December 2020, ISC submitted false claims to Medicare for evaluation and management (E&M) services that were performed by lower-level providers, but billed under the name of ISC’s Medical Director, Dr. Mehrdad Razavi. By identifying a physician as the rendering provider on the claims, the clinic was able to bill at a higher rate. Those bills were false.
- Between October 2013 and July 2022, ISC submitted claims to Medicare for office visits that falsely identified Dr. Razavi as the rendering provider. In fact, the services were provided by employees who were not qualified to perform office visits, including office staff, Respiratory Therapists, and Registered Polysomnographic Technologists. By billing the claims under a physician’s NPI, ISC obtained reimbursement for non-covered services.
- And finally, between January 2015 and December 2020, ISC submitted false claims to Medicare and Medicaid for sleep studies that were performed by technologists who did not have required credentials.
The claims resolved by the settlement are allegations only and there has been no determination of liability.
The settlement resolved a lawsuit filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private parties known as relators to file suit on behalf of the government for false claims and to share in any recovery. The qui tam suit is captioned United States, State of California and State of Washington ex rel. SW Sleep LLC v. Innovative Sleep Centers, PLLC et al., No. 3:19-CV-5604 (W.D. Wash.).
The matter was handled by Assistant United States Attorneys Ashley Burns and Kayla Stahman and investigated by the Office of the Inspector General for the Department of Health and Human Services (HHS-OIG).
Binance and CEO Plead Guilty to Federal Charges in $4B ResolutionRead the Press Release
SEATTLE – Binance Holdings Limited (Binance), the entity that operates the world’s largest cryptocurrency exchange, Binance.com, pleaded guilty today and has agreed to pay over $4 billion to resolve the Justice Department’s investigation into violations related to the Bank Secrecy Act (BSA), failure to register as a money transmitting business, and the International Emergency Economic Powers Act (IEEPA).
Binance’s founder and chief executive officer (CEO), Changpeng Zhao, a Canadian national, also pleaded guilty to failing to maintain an effective anti-money laundering (AML) program, in violation of the BSA and has resigned as CEO of Binance.
Binance’s guilty plea is part of coordinated resolutions with the Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) and Office of Foreign Assets Control (OFAC) and the U.S. Commodity Futures Trading Commission (CFTC).
“Binance became the world’s largest cryptocurrency exchange in part because of the crimes it committed – now it is paying one of the largest corporate penalties in U.S. history,” said Attorney General Merrick B. Garland. “In just the past month, the Justice Department has successfully prosecuted the CEOs of two of the world’s largest cryptocurrency exchanges in two separate criminal cases. The message here should be clear: using new technology to break the law does not make you a disruptor, it makes you a criminal.”
“Binance turned a blind eye to its legal obligations in the pursuit of profit. Its willful failures allowed money to flow to terrorists, cybercriminals, and child abusers through its platform,” said Secretary of the Treasury Janet L. Yellen. “Today’s historic penalties and monitorship to ensure compliance with U.S. law and regulations mark a milestone for the virtual currency industry. Any institution, wherever located, that wants to reap the benefits of the U.S. financial system must also play by the rules that keep us all safe from terrorists, foreign adversaries, and crime or face the consequences.”
“A corporate strategy that puts profits over compliance isn’t a path to riches; it’s a path to federal prosecution,” said Deputy Attorney General Lisa O. Monaco. “Today’s charges and guilty pleas – combined with a more than $4 billion financial penalty – sends an unmistakable message to crypto and defi companies: if you serve U.S. customers, you must obey U.S. law.”
“Changpeng Zhao made Binance, the company he founded and ran as CEO, into the largest cryptocurrency exchange in the world by targeting U.S. customers, but refused to comply with U.S. law,” said Acting Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division. “Binance’s and Zhao’s willful violations of anti-money laundering and sanctions laws threatened the U.S. financial system and our national security, and each of them has now pleaded guilty. Make no mistake: when you place profits over compliance with the law, you will answer for your crimes in the United States.”
“Binance’s crimes gave sanctioned customers unfettered access to American capital and financial services,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division (NSD). “This prosecution is a warning that companies that do not build sanctions compliance into their services face serious criminal penalties, as do the executives who lead them.”
“From the beginning of its existence, Binance and founder Changpeng Zhao chose growth and personal wealth over following financial regulations aimed at stopping the laundering of criminal cash,” said Acting U.S. Attorney Tessa M. Gorman for the Western District of Washington. “Because Changpeng Zhao knowingly operated a financial platform without basic anti-money laundering safeguards, the company caused illegal transactions between U.S. users and users in sanctioned jurisdictions such as Iran, Cuba, Syria, and Russian-occupied regions of Ukraine – transactions for which Binance profited with significant fees.”
“Binance’s activities undermined the foundation of safe and sound financial markets by intentionally avoiding basic, fundamental obligations that apply to exchanges, all the while collecting approximately $1.35 billion in trading fees from U.S. customers,” said Chairman Rostin Behnam of the Commodity Futures Trading Commission (CFTC). “American investors, small and large, have demonstrated eagerness to incorporate digital asset products into their portfolios. It is our duty to ensure that when they do so, the full protections afforded by our regulatory oversight are in place, and that illegal and illicit conduct is swiftly addressed. When, as here, an entity goes even further, deliberately avoiding to employ meaningful access controls, intentionally avoiding knowing customers’ identities, and actively concealing the presence of U.S. customers on its platforms, there is no question that the CFTC will strike hard and aggressively.”
“When you put growth above compliance, you end up in hot water,” said Chief Jim Lee of the IRS Criminal Investigation (IRS-CI). “Our team of investigators uncovered that Binance disregarded anti-money laundering Know Your Customer laws, failed to register as a money transmitter, and willfully violated U.S. sanctions tied to the International Emergency Economic Powers Act. When you do so, your business becomes a playground for bad actors. Hundreds of millions of dollars in illicit proceeds from ransomware variants, darknet transactions, and various internet-related scams moved through Binance in an attempt to evade detection by law enforcement.”
According to court documents, Binance admitted to prioritizing growth and profits over compliance with U.S. law. Binance launched in 2017 and focused on attracting high-volume customers, including U.S.-based customers. Binance quickly became the largest cryptocurrency exchange in the world, with the greatest share of its customers coming from the United States. As a result of serving U.S. customers, Binance was required to register with FinCEN as a money services business and to implement an effective AML program that was reasonably designed to prevent Binance from being used to facilitate money laundering. Binance chose not to comply with U.S. law and failed to implement controls and procedures to prevent money laundering. Binance also did not implement controls that would have prevented U.S. customers from conducting transactions with customers in sanctioned jurisdictions, despite knowing that the system it used to match customers for transactions would necessarily cause transactions in violation of IEEPA.
Instead of complying with U.S. law, in 2019, Binance announced that it would block U.S. customers and launched a separate U.S. exchange, Binance.US. Despite this announcement, Binance took steps to maintain a substantial number of U.S. customers. In particular, Binance focused on retaining valuable “VIP” customers, which were responsible for a large portion of Binance’s trading volume and revenue. These VIP customers were critical to Binance’s business because they helped provide the necessary liquidity to facilitate trades of digital assets. For example, Binance executives, including Zhao, made a plan to contact VIP customers and help the VIP register a new account for an offshore entity and transfer holdings to that account. Binance employees also called U.S. VIPs to encourage them to provide information that suggested the customer was not located in the United States.
Binance also did not implement the core components of an effective AML program: Binance did not implement comprehensive know-your-customer (KYC) protocols or systematically monitor transactions, and Binance never filed a suspicious activity report (SAR) with FinCEN. For years, Binance allowed users to open accounts and trade without submitting any identifying information beyond an email address. Binance began requiring all users to provide KYC information in August 2021 but allowed users who had not provided KYC to continue trading on the exchange until May 2022. Between August 2017 and October 2022, U.S. users, including VIPs, conducted trillions of dollars in transactions on the platform, generating over $1.6 billion in profit for Binance.
As Binance’s internal communications showed, Binance’s compliance employees recognized that Binance did not have protocols to flag or report transactions for money laundering risks, which employees recognized would attract criminals to the exchange. As one compliance employee wrote, “we need a banner ‘is washing drug money too hard these days - come to binance we got cake for you.’” Due in part to Binance’s failure to implement an effective AML program, illicit actors used Binance’s exchange in various ways, including conducting transactions for mixing services that obfuscated the source and ownership of cryptocurrency; transferring illicit proceeds from ransomware variants; and moving proceeds of darknet market transactions, exchange hacks, and various internet-related scams.
Binance also knew that U.S. sanctions laws prohibited U.S. persons – including its U.S. customers – from trading with its customers subject to U.S. sanctions, including customers in comprehensively sanctioned jurisdictions, such as Iran. Binance knew that it had a significant number of users from comprehensively sanctioned jurisdictions and a substantial number of U.S. users and that its matching engine would necessarily cause U.S. users to transact with users in sanctioned jurisdictions in violation of U.S. law. Nonetheless, Binance did not implement controls that would prevent U.S. users from trading with users in Iran; and, because of this intentional failure, between January 2018 and May 2022, Binance willfully caused over $898 million in trades between U.S. users and users ordinarily resident in Iran.
As part of the plea agreement, Binance has agreed to forfeit $2,510,650,588 and to pay a criminal fine of $1,805,475,575 for a total financial penalty of $4,316,126,163. Binance has also agreed to retain an independent compliance monitor for three years and remediate and enhance their anti-money laundering and sanctions compliance programs. Binance separately has also reached agreements with the CFTC, FinCEN, and OFAC, and the Department will credit approximately $1.8 billion toward those resolutions.
The Department reached its resolution with Binance based on a number of factors, including the nature, seriousness, and pervasiveness of the offense, as a result of which Binance processed billions of dollars of cryptocurrency transactions for U.S. persons and caused U.S. customers to engage in transactions in violation of U.S. sanctions. Binance did not make a timely and voluntary disclosure of wrongdoing, but it received partial credit for its cooperation with the Department’s investigation, and it has taken steps to remediate its compliance program. Binance did not receive full credit for its cooperation because it delayed producing relevant evidence, including recorded meetings in which Binance executives discussed U.S. legal requirements. Accordingly, the total criminal penalty reflects a 20% reduction off the bottom of the applicable U.S. sentencing guidelines fine range.
In addition, according to court documents, Zhao, Binance’s founder, owner, and CEO, admitted that he understood that Binance served U.S. users and was thus required to register with FinCEN and implement an effective AML program. Zhao knew that U.S. users were essential to Binance’s growth and were a significant source of revenue and knew that an effective AML program would include KYC protocols that would mean that some customers would choose not to use Binance. Zhao told employees it was “better to ask for forgiveness than permission,” and prioritized Binance’s growth over compliance with U.S. law. Without an effective AML program, Binance caused transactions between U.S. users and users in jurisdictions subject to U.S. sanctions. These illegal transactions were a clear and foreseeable result of Zhao’s decision to prioritize Binance’s profit and growth over compliance with the BSA.
IRS-CI is investigating the case. The case is being prosecuted by Bank Integrity Unit Deputy Chief and National Cryptocurrency Enforcement Team Deputy Director Kevin Mosley and Trial Attorney Elizabeth Carr of the Criminal Division’s Money Laundering and Asset Recovery Section (MLARS), Trial Attorneys Beau Barnes and Alex Wharton of NSD’s Counterintelligence and Export Control Section (CES), and Assistant U.S. Attorney (AUSA) Mike Dion for the Western District of Washington. Trial Attorney Julia Jarrett, formerly of MLARS and currently an AUSA for the District of Oregon, and Trial Attorney Matthew Anzaldi, formerly of CES and currently with NSD’s National Security Cyber Section, made substantial contributions to this investigation and prosecution.
MLARS’s Bank Integrity Unit investigates and prosecutes banks and other financial institutions, including their officers, managers, and employees, whose actions threaten the integrity of the individual institution or the wider financial system. The Criminal Division has surged resources to the Bank Integrity Unit, which has imposed over $12 billion in penalties on financial institutions for sanctions violations over the last decade. NSD’s Counterintelligence and Export Control Section investigates and prosecutes individuals and corporations for violations of export control and sanctions laws, in addition to other national security crimes. NSD continues to expand its corporate enforcement efforts – including growing the ranks of prosecutors dedicated to this work and establishing a Chief Counsel and Deputy Chief Counsel for Corporate Enforcement.
Binance and CEO Plead Guilty to Federal Charges in $4B ResolutionRead the Press Release
Binance Holdings Limited (Binance), the entity that operates the world’s largest cryptocurrency exchange, Binance.com, pleaded guilty today and has agreed to pay over $4 billion to resolve the Justice Department’s investigation into violations related to the Bank Secrecy Act (BSA), failure to register as a money transmitting business, and the International Emergency Economic Powers Act (IEEPA).
Binance’s founder and chief executive officer (CEO), Changpeng Zhao, a Canadian national, also pleaded guilty to failing to maintain an effective anti-money laundering (AML) program, in violation of the BSA and has resigned as CEO of Binance.
Binance’s guilty plea is part of coordinated resolutions with the Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) and Office of Foreign Assets Control (OFAC) and the U.S. Commodity Futures Trading Commission (CFTC).
“Binance became the world’s largest cryptocurrency exchange in part because of the crimes it committed – now it is paying one of the largest corporate penalties in U.S. history,” said Attorney General Merrick B. Garland. “In just the past month, the Justice Department has successfully prosecuted the CEOs of two of the world’s largest cryptocurrency exchanges in two separate criminal cases. The message here should be clear: using new technology to break the law does not make you a disruptor, it makes you a criminal.”
“Binance turned a blind eye to its legal obligations in the pursuit of profit. Its willful failures allowed money to flow to terrorists, cybercriminals, and child abusers through its platform,” said Secretary of the Treasury Janet L. Yellen. “Today’s historic penalties and monitorship to ensure compliance with U.S. law and regulations mark a milestone for the virtual currency industry. Any institution, wherever located, that wants to reap the benefits of the U.S. financial system must also play by the rules that keep us all safe from terrorists, foreign adversaries, and crime or face the consequences.”
“A corporate strategy that puts profits over compliance isn’t a path to riches; it’s a path to federal prosecution,” said Deputy Attorney General Lisa O. Monaco. “Today’s charges and guilty pleas – combined with a more than $4 billion financial penalty – sends an unmistakable message to crypto and defi companies: if you serve U.S. customers, you must obey U.S. law.”
“Changpeng Zhao made Binance, the company he founded and ran as CEO, into the largest cryptocurrency exchange in the world by targeting U.S. customers, but refused to comply with U.S. law,” said Acting Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division. “Binance’s and Zhao’s willful violations of anti-money laundering and sanctions laws threatened the U.S. financial system and our national security, and each of them has now pleaded guilty. Make no mistake: when you place profits over compliance with the law, you will answer for your crimes in the United States.”
“Binance’s crimes gave sanctioned customers unfettered access to American capital and financial services,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division (NSD). “This prosecution is a warning that companies that do not build sanctions compliance into their services face serious criminal penalties, as do the executives who lead them.”
“From the beginning of its existence, Binance and founder Changpeng Zhao chose growth and personal wealth over following financial regulations aimed at stopping the laundering of criminal cash,” said Acting U.S. Attorney Tessa M. Gorman for the Western District of Washington. “Because Changpeng Zhao knowingly operated a financial platform without basic anti-money laundering safeguards, the company caused illegal transactions between U.S. users and users in sanctioned jurisdictions such as Iran, Cuba, Syria, and Russian-occupied regions of Ukraine – transactions for which Binance profited with significant fees.”
“Binance’s activities undermined the foundation of safe and sound financial markets by intentionally avoiding basic, fundamental obligations that apply to exchanges, all the while collecting approximately $1.35 billion in trading fees from U.S. customers,” said Chairman Rostin Behnam of the Commodity Futures Trading Commission (CFTC). “American investors, small and large, have demonstrated eagerness to incorporate digital asset products into their portfolios. It is our duty to ensure that when they do so, the full protections afforded by our regulatory oversight are in place, and that illegal and illicit conduct is swiftly addressed. When, as here, an entity goes even further, deliberately avoiding to employ meaningful access controls, intentionally avoiding knowing customers’ identities, and actively concealing the presence of U.S. customers on its platforms, there is no question that the CFTC will strike hard and aggressively.”
“When you put growth above compliance, you end up in hot water,” said Chief Jim Lee of the IRS Criminal Investigation (IRS-CI). “Our team of investigators uncovered that Binance disregarded anti-money laundering Know Your Customer laws, failed to register as a money transmitter, and willfully violated U.S. sanctions tied to the International Emergency Economic Powers Act. When you do so, your business becomes a playground for bad actors. Hundreds of millions of dollars in illicit proceeds from ransomware variants, darknet transactions, and various internet-related scams moved through Binance in an attempt to evade detection by law enforcement.”
According to court documents, Binance admitted to prioritizing growth and profits over compliance with U.S. law. Binance launched in 2017 and focused on attracting high-volume customers, including U.S.-based customers. Binance quickly became the largest cryptocurrency exchange in the world, with the greatest share of its customers coming from the United States. As a result of serving U.S. customers, Binance was required to register with FinCEN as a money services business and to implement an effective AML program that was reasonably designed to prevent Binance from being used to facilitate money laundering. Binance chose not to comply with U.S. law and failed to implement controls and procedures to prevent money laundering. Binance also did not implement controls that would have prevented U.S. customers from conducting transactions with customers in sanctioned jurisdictions, despite knowing that the system it used to match customers for transactions would necessarily cause transactions in violation of IEEPA.
Instead of complying with U.S. law, in 2019, Binance announced that it would block U.S. customers and launched a separate U.S. exchange, Binance.US. Despite this announcement, Binance took steps to maintain a substantial number of U.S. customers. In particular, Binance focused on retaining valuable “VIP” customers, which were responsible for a large portion of Binance’s trading volume and revenue. These VIP customers were critical to Binance’s business because they helped provide the necessary liquidity to facilitate trades of digital assets. For example, Binance executives, including Zhao, made a plan to contact VIP customers and help the VIP register a new account for an offshore entity and transfer holdings to that account. Binance employees also called U.S. VIPs to encourage them to provide information that suggested the customer was not located in the United States.
Binance also did not implement the core components of an effective AML program: Binance did not implement comprehensive know-your-customer (KYC) protocols or systematically monitor transactions, and Binance never filed a suspicious activity report (SAR) with FinCEN. For years, Binance allowed users to open accounts and trade without submitting any identifying information beyond an email address. Binance began requiring all users to provide KYC information in August 2021 but allowed users who had not provided KYC to continue trading on the exchange until May 2022. Between August 2017 and October 2022, U.S. users, including VIPs, conducted trillions of dollars in transactions on the platform, generating over $1.6 billion in profit for Binance.
As Binance’s internal communications showed, Binance’s compliance employees recognized that Binance did not have protocols to flag or report transactions for money laundering risks, which employees recognized would attract criminals to the exchange. As one compliance employee wrote, “we need a banner ‘is washing drug money too hard these days - come to binance we got cake for you.’” Due in part to Binance’s failure to implement an effective AML program, illicit actors used Binance’s exchange in various ways, including conducting transactions for mixing services that obfuscated the source and ownership of cryptocurrency; transferring illicit proceeds from ransomware variants; and moving proceeds of darknet market transactions, exchange hacks, and various internet-related scams.
Binance also knew that U.S. sanctions laws prohibited U.S. persons – including its U.S. customers – from trading with its customers subject to U.S. sanctions, including customers in comprehensively sanctioned jurisdictions, such as Iran. Binance knew that it had a significant number of users from comprehensively sanctioned jurisdictions and a substantial number of U.S. users and that its matching engine would necessarily cause U.S. users to transact with users in sanctioned jurisdictions in violation of U.S. law. Nonetheless, Binance did not implement controls that would prevent U.S. users from trading with users in Iran; and, because of this intentional failure, between January 2018 and May 2022, Binance willfully caused over $898 million in trades between U.S. users and users ordinarily resident in Iran.
As part of the plea agreement, Binance has agreed to forfeit $2,510,650,588 and to pay a criminal fine of $1,805,475,575 for a total financial penalty of $4,316,126,163. Binance has also agreed to retain an independent compliance monitor for three years and remediate and enhance their anti-money laundering and sanctions compliance programs. Binance separately has also reached agreements with the CFTC, FinCEN, and OFAC, and the Department will credit approximately $1.8 billion toward those resolutions.
The Department reached its resolution with Binance based on a number of factors, including the nature, seriousness, and pervasiveness of the offense, as a result of which Binance processed billions of dollars of cryptocurrency transactions for U.S. persons and caused U.S. customers to engage in transactions in violation of U.S. sanctions. Binance did not make a timely and voluntary disclosure of wrongdoing, but it received partial credit for its cooperation with the Department’s investigation, and it has taken steps to remediate its compliance program. Binance did not receive full credit for its cooperation because it delayed producing relevant evidence, including recorded meetings in which Binance executives discussed U.S. legal requirements. Accordingly, the total criminal penalty reflects a 20% reduction off the bottom of the applicable U.S. sentencing guidelines fine range.
In addition, according to court documents, Zhao, Binance’s founder, owner, and CEO, admitted that he understood that Binance served U.S. users and was thus required to register with FinCEN and implement an effective AML program. Zhao knew that U.S. users were essential to Binance’s growth and were a significant source of revenue and knew that an effective AML program would include KYC protocols that would mean that some customers would choose not to use Binance. Zhao told employees it was “better to ask for forgiveness than permission,” and prioritized Binance’s growth over compliance with U.S. law. Without an effective AML program, Binance caused transactions between U.S. users and users in jurisdictions subject to U.S. sanctions. These illegal transactions were a clear and foreseeable result of Zhao’s decision to prioritize Binance’s profit and growth over compliance with the BSA.
IRS-CI is investigating the case. The case is being prosecuted by Bank Integrity Unit Deputy Chief and National Cryptocurrency Enforcement Team Deputy Director Kevin Mosley and Trial Attorney Elizabeth Carr of the Criminal Division’s Money Laundering and Asset Recovery Section (MLARS), Trial Attorneys Beau Barnes and Alex Wharton of NSD’s Counterintelligence and Export Control Section (CES), and Assistant U.S. Attorney (AUSA) Mike Dion for the Western District of Washington. Trial Attorney Julia Jarrett, formerly of MLARS and currently an AUSA for the District of Oregon, and Trial Attorney Matthew Anzaldi, formerly of CES and currently with NSD’s National Security Cyber Section, made substantial contributions to this investigation and prosecution.
MLARS’s Bank Integrity Unit investigates and prosecutes banks and other financial institutions, including their officers, managers, and employees, whose actions threaten the integrity of the individual institution or the wider financial system. The Criminal Division has surged resources to the Bank Integrity Unit, which has imposed over $12 billion in penalties on financial institutions for sanctions violations over the last decade. NSD’s Counterintelligence and Export Control Section investigates and prosecutes individuals and corporations for violations of export control and sanctions laws, in addition to other national security crimes. NSD continues to expand its corporate enforcement efforts – including growing the ranks of prosecutors dedicated to this work and establishing a Chief Counsel and Deputy Chief Counsel for Corporate Enforcement.
Binance Plea Agreement Zhao Plea Agreement Binance Information Zhao InformationMan arrested with ten pounds of methamphetamine and three firearms sentenced to 10 years in prisonRead the Press Release
Seattle – A 43-year-old man who was arrested in Federal Way, Washington in August 2022, with ten pounds of methamphetamine for a drug deal, was sentenced to ten years in prison, announced Acting U.S. Attorney Tessa M. Gorman. Tawn Tzo Saeteurn pleaded guilty in April 2023 to possession of a controlled substance with intent to distribute and possession of a firearm in furtherance of a drug trafficking offense. At today’s sentencing hearing, U.S. District Judge Richard A. Jones said, “Your continued dealing shows that you had little or no respect for the law.”
According to records filed in the case, Saeteurn had agreed to deliver ten pounds of meth and additional fentanyl pills to a drug purchaser. When Saeteurn arrived with the drugs, he was arrested and his car was searched. He had a .22 caliber pocket pistol in the driver’s side door of his vehicle, a .38 caliber Titan Tiger revolver on the floorboard of the passenger seat next to a bag containing 10 pounds of methamphetamine, and a 9mm Glock hidden in the gap between the driver’s seat and the center console.
In addition to the methamphetamine, Saeteurn had nearly a half kilo of fentanyl pills, some fentanyl powder, $2,495 in U.S. currency, plastic baggies, two scales, and five cell phones.
The case was investigated by the FBI.
The case was prosecuted by Assistant United States Attorney Zach Dillon.
Women who led troubled Tacoma bakery pleads guilty to wire fraud in connection with COVID-19 loan fundsRead the Press Release
Tacoma – A woman who was part owner and CEO of Tacoma Baking Co. pleaded guilty today in U.S. District Court in Tacoma to wire fraud in connection with nearly $350,000 in Paycheck Protection Program (PPP) loan funds, announced Acting U.S. Attorney Tessa M. Gorman. Jessica Heinlein, aka Jessica DeVisser, obtained three loans using fraudulent information. The largest, some $309,972, was obtained on behalf of Tacoma Baking Company. But much of the information in the applications was fraudulent, and the money was not used exclusively for payroll as required. Heinlein will be sentenced by U.S. District Judge Benjamin H. Settle on February 12, 2024.
According to the plea agreement, Heinlein made the first loan application on behalf of Tacoma Baking Company in April 2020. In the application she claimed two of the company’s eight owners were “sole owners” of the company. Heinlein created email accounts in the names of the two people she designated as “sole owners” so that she could respond to any questions from financial institutions. Heinlein forged the signatures of the two people and provided copies of their drivers licenses without their permission. The loan funds were deposited in Heinlein’s personal account, and she used some of the money for her personal expenses. In addition to the loan funds, the Small Business Administration (SBA) also paid nearly $25,000 in interest and processing fees on the loan.
Heinlein sought PPP loans twice more. In January 2021 she applied for a PPP loan under “Jessica DeVisser Consulting,” claiming she was an independent contractor and had a monthly payroll obligation of $7,189. In fact, she was not an independent contractor and had no payroll obligation. She submitted altered financial records to support the application. The $17,900 loan was approved, but before Heinlein could access the money her bank froze the funds and returned them to the lender.
In April 2021, Heinlein tried a second time for a loan for “Jessica DeVisser Consulting.” In this case, she claimed the monthly payroll was $20,833. She received $20,833 in loan funds even though she was not an independent contractor and had no payroll. The funds were used for improper purposes.
Heinlein has agreed to pay restitution to the Small Business Administration of $360,881. The amount includes the loan amounts as well as fees and interest paid by the SBA.
At sentencing, prosecutors will recommend a sentence at the low end of the guidelines range. Judge Settle is not bound by the recommendation and can impose any sentence up to the maximum of twenty years in prison.
The case was investigated by the Federal Bureau of Investigation and the Small Business Administration Office of Inspector General (SBA-OIG).
The case is being prosecuted by Assistant United States Attorney Mike Dion.
Romanian citizen indicted for illegally crossing into the U.S. from Canada with six other Romanian nationals in the carRead the Press Release
Seattle – A 48-year-old citizen of Romania, who has no legal status in the U.S., was indicted this week for thirteen federal crimes for his attempt to smuggle six other Romanian nationals into the U.S., announced Acting U.S. Attorney Tessa M. Gorman. Ionel Niculae, aka Adrian Dumitrescu, was taken into custody near Lynden, Washington, at an accident scene where the car he was driving flipped over, badly injuring three passengers.
“We are responding to an increase in dangerous smuggling events on our northern border,” said Acting U.S. Attorney Tessa M. Gorman. “This case illustrates how these illegal smuggling efforts endanger not only those being smuggled into the U.S., but also others traveling near the border. The driver who was hit by the fleeing SUV was injured and is still recovering from the crash.”
“We have seen an uptick in the number of human smuggling events here in Washington State along our northern border with Canada,” said Special Agent in Charge (SAC) Robert Hammer, who oversees HSI operations in the Pacific Northwest. “HSI will continue to prioritize investigations into these organizations using dangerous tactics that jeopardize not only the lives of the individuals being smuggled, but also the lives of those in our communities who may be in danger by this reckless behavior.”
The indictment charges Niculae with one count of improper entry by an undocumented individual, three counts of bringing an undocumented individual into the United States at a place other than a designated Port of Entry and causing serious bodily injury, three counts of bringing an undocumented individual into the United States at a place other than a designated Port of Entry, and six counts of aiding and abetting the improper entry of an undocumented individual.
According to the criminal complaint, the Jeep Niculae was driving was seen crossing into Canada illegally three days before the September 17, 2023, accident. On the day of the crash, Canadian Border officers obtained images of the Jeep traveling near the Canada/U.S. Border and, moments later, a camera on the U.S. side picked up images of the Jeep crossing the border via some agricultural fields near Lynden.
Border Patrol agents set out to find the Jeep and were quickly alerted by the Sumas Police Department that the Jeep was involved in a crash with another SUV. The Jeep had flipped and three of the six passengers in the car had broken bones – two had broken pelvises and one had a broken leg. Niculae was not injured.
“Due to the exceptional vigilance and response of our Border Patrol Agents, Blaine Sector agents were able to assist with the accident scene and link the accident to a recent vehicle that illegally crossed the border smuggling several Romanian citizens. Events like this highlight the disregard smugglers have for human life,” said Chief Rosario Vasquez, Blaine Sector Chief Patrol Agent.
None of the people in the Jeep were legally present in the United States. Niculae possessed drivers licenses for both Washington and California and appears to have been residing in Southern California. He has been detained at the Federal Detention Center at SeaTac since being charged by criminal complaint on September 20, 2023.
Bringing an undocumented individual into the U.S. at a place other than a designated Port of Entry resulting in serious bodily injury is punishable by up to 20 years in prison. Bringing an undocumented individual into the U.S. at a place other than a designated Port of Entry is punishable by up to ten years in prison. Aiding and abetting improper entry by an undocumented individual is punishable by up to six months in prison.
The case is being investigated by Homeland Security Investigations (HSI) and U.S. Border Patrol with assistance from the Washington State Patrol and Sumas Police Department.
The case is being prosecuted by Assistant United States Attorney Sanaa Nagi.
Pierce County man indicted for unlawful possession of firearms – including machine gunsRead the Press Release
Tacoma – A Pierce County, Washington man with a prior federal conviction for illegal gun possession, was indicted this week for unlawfully possessing firearms – including two weapons that had been modified to be machine guns, announced Acting U.S. Attorney Tessa M. Gorman. Brady Lee Eltz, 39, made his initial appearance on a criminal complaint last week, and was ordered detained.
According to records filed in the case, on October 4, 2023, Fife Police were dispatched to an auto-glass repair shop where workers at the shop reported seeing firearms in the trunk of a vehicle Eltz brought in for repair. Workers also reported seeing bullet holes in the vehicle.
After law enforcement took Eltz info custody, they checked the bathroom at the business. Eltz had gone into the bathroom when he saw police arrive. In the cabinet below the sink police found two firearms – 9 mm handguns. One, a Glock, had an illegal switch known as an “auto-sear” installed. The switch allows the gun to be fired automatically, making it a machine gun. The Glock had been reported stolen.
Fife Police towed Eltz’s vehicle and applied for a warrant to search it. During the search of the vehicle’s trunk, they found three additional firearms – including a stolen rifle that had been modified to fire automatically, making it a machine gun. Police then discovered a bag with two improvised explosive devices. Pierce County Sheriff’s Office bomb technicians were called in to evaluate the devices and make them safe. One was an explosive simulator likely stolen from the U.S. Army. It can cause serious bodily injury if exploded in a confined space. The second explosive was a thick cardboard tube filled with a black powder that appeared to be flammable.
After the explosives were made safe, police continued their search of the trunk and found two additional rifles, hundreds of rounds of ammunition, latex face masks, body armor, gun sites, holsters, and other firearms accessories. Eltz also had GPS trackers, several knives, and a voice-changing device.
Eltz is prohibited from possessing any firearms because of criminal convictions including a 2013 conviction in the Western District of Washington. Eltz was sentenced to five years in prison for that crime.
Illegal possession of a firearm is punishable by up to 15 years in prison. Possession of a machine gun is punishable by up to 10 years in prison.
The case is being investigated by the Bureau of Alcohol, Tobacco, Firearms, & Explosives (ATF) with assistance from the Fife Police Department and the Pierce County Sheriff’s Office. The Washington State Patrol assisted with locating and arresting Eltz on a federal warrant after he posted bail and left state custody.
The case is being prosecuted by Assistant United States Attorney Marci L. Ellsworth.
Northwest Safe Trails Task Force awarded DOJ grant to enhance prosecutions in tribal communitiesRead the Press Release
Seattle – The Northwest Safe Trails Task Force, made up of the FBI and five western Washington Tribes, will receive $888,748 from DOJ’s Bureau of Justice Assistance to enhance efforts to battle violent crime and drug crime in tribal communities, announced Acting U.S. Attorney Tessa M. Gorman. The funding, delivered over five years, will pay for an additional federal prosecutor who can review and file cases in either tribal or federal court.
“I congratulate the Swinomish Indian Tribal Community for their successful application for this grant funding. Working to make our tribal communities safer is a key priority for the Department of Justice,” said Acting U.S. Attorney Gorman. “Having an additional prosecutor working with the Swinomish, Tulalip, Lummi, Nooksack, and Upper Skagit Tribes will improve our ability to assist the Tribes with the prosecutions they identify as key to community safety.”
Swinomish Senator Brian Porter, as Chairman of the Swinomish Law and Order Committee, championed this grant application and sees this grant as key to improving safety within tribal communities. “Partnering with our federal and tribal law enforcement is essential to combating violent and drug related crimes on our tribal lands,” said Senator Porter. “The FBI Pacific Northwest Safe-Trails Task Force has been an ally to Swinomish and our neighboring Tribes as we collaborate to prosecute large drug offenses that have a high community impact. The Safe Trails Special Assistant United States Attorney is a key component in our partnership as they will be able to work directly with our federal and tribal law enforcement to bring cases in federal court. We applaud the efforts and partnership with the United States Attorney’s Office for the Western District of Washington,” said Senator Porter.
The FBI investigates major crimes such as homicide, sexual abuse, major drug trafficking, and felony assaults on tribal land. This will be the second term of a dedicated prosecutor for the Safe Trails Task Force. During the last two-year grant period there were more than eight different federal cases prosecuted involving armed drug dealing in and around tribal communities.
“It takes resources to successfully perform our work.” said Richard A. Collodi, Special Agent in Charge of the FBI’s Seattle field office. “Reducing and investigating violent crime on our state’s reservations is a goal for the FBI and our partners. Securing of this funding and enabling additional personnel to support investigations and prosecutions substantially advances that aim.”
The Special Assistant United States Attorney who is hired to work with the Safe Trails Task Force will join three other tribal liaisons working in the U.S. Attorney’s Office Western District of Washington. The current liaisons are Assistant United States Attorneys J. Tate London, Jocelyn M. Cooney, and Michael Harder.
More than $4.4 million in federal grants focused on reentry services coming to Washington StateRead the Press Release
Seattle – More than $4.4 million in Department of Justice funds will flow to Washington State entities to provide reentry services to those involved with the criminal justice system, announced Acting U.S. Attorney Tessa M. Gorman. The largest share of the grants – some $1.8 million – goes to the Washington State Department of Corrections for programs aimed at helping incarcerated persons be successful once released from custody.
“The vast majority of justice involved persons will be returning to our communities. It is critical that we invest in ways to improve reentry so that those former inmates can lead safe and productive lives,” said Acting U.S. Attorney Gorman. “These grants are aimed at mental health issues, substance abuse problems and family unification programs that can make a difference for individuals and for the community as a whole.”
The Department of Corrections (DOC) was awarded $550,000 to provide mental health and substance abuse treatment for 200 women at the Correction Center at Purdy. In its application, DOC says a shortage of health providers and constraints at the institution have limited the services it can provide. This additional funding will also be used to hire a psychologist and a reentry navigator to help those leaving custody to find services in the community.
The Department of Corrections was awarded $764,508 to evaluate, refine and expand services DOC provides to try to keep families together and break the cycle of intergenerational incarceration. The funding will provide access to mental health programs, substance abuse programs, and parenting skills programs. The University of Washington will help evaluate what programs are working.
Finally, DOC was awarded $534,828 to train staff in mental health disorders, and how to appropriately de-escalate and defuse mental health crises. The training will address mental health as well as co-occurring substance abuse disorder and intervention strategies. The training is for staff both at the institutions and those working in community supervision.
The non-profit organization House of Mercy of Federal Way was awarded $750,000to provide reentry services to some 864 formerly incarcerated persons. The case management and training and reentry support will serve men returning to King, Pierce, Whatcom, Clark, Yakima, and Spokane counties. Former inmates who are involved in House of Mercy services have a re-offense rate below 5%.
Skagit County was awarded $677,356 for its Community Court. The program is an alternative problem-solving court that serves low-level non-violent offenders. The program connects the offenders with mental health and substance abuse services. Areas served include Anacortes, Burlington, Sedro Woolley, Mount Vernon, Hamilton, Lyman, Concrete, Marblemount, and Diablo.
The Suquamish Indian Tribe was awarded $784,943 for a new “Begin Again” program for those reentering the community from incarceration or court-ordered inpatient substance abuse treatment. The funding will ensure that tribal services are coordinated and culturally appropriate for those reentering the community.
And finally, Government Impact Consulting LLC of Marysville, Washington, was awarded $350,000 to work on barriers to Treatment Courts and work to enhance support for culturally appropriate treatment and recovery. The consulting group will work with community partners including Tribal Wellness to Healing courts to reduce the stigma around substance abuse treatment.
The U.S. Attorney’s Office, Western District of Washington has active programs to assist with reentry to the community for those involved with the criminal justice system. For more on those programs visit: https://www.justice.gov/usao-wdwa/reentry-program
Assistant United States Attorneys Zach Dillon and Michelle Lambert lead the reentry program in the Western District of Washington.
DOJ funds programs for juveniles in six Western Washington tribal communitiesRead the Press Release
Seattle – More than $2 million in grants from the Department of Justice have been awarded to Western Washington tribal communities to enhance services for juveniles, announced Acting U.S. Attorney Tessa M. Gorman. The grants fund needs ranging from substance abuse and mental health treatment to academic support and getting students engaged in school.
“Each of these tribes submitted detailed proposals for how they could best use this federal money,” said Acting U.S. Attorney Gorman. “It is exciting to see how they will impact the lives of the youngest tribal members as they work to build safe and healthy communities into the future.”
The six tribal grants and their purpose are:
Stillaguamish Tribe of Indians - $499,700 to hire an online school support specialist to assist with tribal youth as risk of truancy and to develop programs to engage all youth in leadership and cultural activities.
Quinault Indian Nation - $500,000 to enhance the work of the Tribal Juvenile to Healing Wellness Court to centralize access to assistance for youth facing challenges such as substance addiction, mental health issues, absenteeism, and trauma.
Nooksack Tribe -$99,439 to assess current programming for youth and identify gaps and strategies for improvement.
Lummi Nation - $100,000 to coordinate services to tribal youth.
Nisqually Indian Tribe - $400,000 to develop a Juvenile Tribal Healing to Wellness Court - part of a comprehensive effort on behalf of the Tribe to address the increasingly serious problem of alcohol and opioid/drug use, and related crime, within the reservation population and among Tribal youth and young adults.
Lower Elwha Klallam Tribe - $500,000 for drug and alcohol prevention services through the Empowering Youth through the Ways of Our Ancestors (EYWOA) program. The program is based on evidence- and community-based participatory research that was conducted and implemented in partnership with the University of Washington’s Alcohol and Drug Abuse Institute, the Suquamish, and Port Gamble S’Klallam Tribes.
These grants are part of the Consolidated Tribal Assistant Grants for 2023 awarded by the Office of Justice Programs, Bureau of Justice Assistance.
Two federal inmates who coordinated Washington drug trafficking from Oklahoma prison sentenced to additional long prison termsRead the Press Release
Seattle – Two men who were federal inmates at the Federal Correctional Institute Great Plains in Hinton, Oklahoma, while organizing large methamphetamine shipments and sales, were sentenced today in U.S. District Court in Tacoma to long prison terms, announced Acting U.S. Attorney Tessa M. Gorman. Alfredo Valdovinos-Diaz, 45, previously of Vancouver, Washington, and Cosme Sanchez-Espino, 41, also previously of Vancouver, were both sentenced to 11 years in prison. Both men were indicted in 2020 and pleaded guilty to conspiracy to distribute controlled substances in July 2023.
In sentencing Valdovinos-Diaz, Chief U.S. District Judge David G. Estudillo said, drug dealing “affects families…. affects communities because of the crime associated with controlled substances, but also the effect on public services such as health care….(Drugs) take a toll on individuals who ingest a bad mixture, and maybe get a dose of fentanyl that is mixed into the methamphetamine, and they just die.”
According to records filed in the case, both men were serving lengthy prison terms for drug trafficking in the Pacific Northwest. Valdovinos-Diaz was serving an eight-year sentence for a 2015 drug trafficking conviction. In that case, Valdovinos-Diaz was responsible for directing a methamphetamine distribution network, with ties to a Mexican drug cartel, that operated out of Vancouver, Olympia, and Tacoma, and was responsible for distributing multi-kilogram quantities of heroin and methamphetamine in western Washington. Valdovinos-Diaz’ drug trafficking activity did not end with his prison term. Using a contraband cell phone, he sent and received various messages in 2019 and 2020 instructing couriers and drug suppliers about packaging large shipments of methamphetamine and how to hide it in secret compartments under the floor of a vehicle or in the vehicle bumper.
Cosme Sanchez-Espino was serving a 15-year prison sentence for a 2008 drug distribution conviction in Montana. In that case, Sanchez-Espino distributed methamphetamine from his supplier in Washington to drug distributors in Montana. Like Valdovinos-Diaz, Sanchez-Espino used contraband cell phones to direct drug trafficking to Southwest Washington. Law enforcement seized loads of 57 pounds and 25 pounds of methamphetamine connected to the men.
In asking for a sentence of eleven years for lead defendant Valdovinos-Diaz, Assistant United States Attorney Max Shiner wrote to the court, Valdovinos-Diaz’ conduct “demonstrates that he is committed to criminal activity and that his “blatant disrespect” requires additional deterrence…. (His) communications demonstrate he knew how the drugs would be packaged, transported, and stored in hidden compartments. This strongly suggests his full knowledge of the weights and quantities of the drugs involved. Second, he was an experienced leader of a drug trafficking ring in the Vancouver area who continued his drug distribution activities in that area after his conviction…”
Both defendants are citizens of Mexico who likely will be deported following their prison terms.
The case was investigated by the FBI. The case was prosecuted by Assistant United States Attorney Max Shiner.
Former King County Jail guard and five others indicted for bribery scheme that brought meth and fentanyl into Seattle jailRead the Press Release
Seattle – A former King County Jail guard, two Department of Corrections inmates, and three co-conspirators were indicted by a federal grand jury for five federal felonies including bribery, drug possession with intent to distribute, and conspiracy. Those arrested today will appear in U.S. District Court in Seattle at 2:00 this afternoon.
“Fentanyl and meth are horribly destructive in our community, and our correctional institutions are not immune. The challenge of keeping inmates safe is made much more difficult when correctional staff betray their positions of trust and authority,” said Acting U.S. Attorney Tessa M. Gorman. “I credit King County law enforcement officials with working quickly and cooperatively with the FBI to identify those allegedly involved in this bribery and drug smuggling conspiracy.”
According to the indictment, former King County Jail Guard Mosses Ramos, 39, of Milton, Washington, worked as a correctional officer for 17 years - from June 2006 until he was fired in September 2023. According to the indictment, between March and May 2023, Ramos accepted bribes to bring methamphetamine and fentanyl into the jail for the benefit of inmates Michael Anthony Barquet, 37, and Francisco Montero, 25. Both men are currently incarcerated.
The web of bribes and drug trafficking extended outside the jail with coconspirators who are associates of the two inmates: Neca Silvestre, 38, of Kent; Katrina Cazares, 38, of Burien; and Kayara Zepeda Montero, 27, of Seattle.
“Impact in our community is built on the foundation of partnership and trust,” said Richard A. Collodi, Special Agent in Charge of FBI Seattle. “We are grateful for the exceptional collaboration with the King County Jail, King County Sheriff’s Office, King County Prosecutor’s Office, and the U.S. Attorney's Office for their shared commitment to holding public servants who violate trust accountable and for steadfast efforts to keep drugs out of our correctional facilities. Our partners identified the actions of an employee and brought the case to our attention which resulted in a successful joint investigation. This demonstrates the commitment by public safety professionals to hold those who violate this trust to the highest standards.”
Each of the defendants is charged with four counts in the five-count indictment. Ramos is charged with soliciting and accepting a bribe. The other defendants are charged with bribery for paying the bribes. All are charged with conspiracy to engage in bribery, conspiracy to distribute controlled substances, and possession of controlled substances with intent to distribute.
ramos_et_al_indictment.pdfFor Ramos, Barquet, and Montero, the charges carry mandatory minimum sentences if convicted of ten years in prison and up to life in prison. The other defendants face up to 20 years in prison if convicted.
The charges contained in the indictment are only allegations. A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.
The case was investigated by the FBI, the King County Sheriff’s Office, and the King County Prosecuting Attorney’s Office.
The case is being prosecuted by Assistant United States Attorneys Cindy Chang and Vince Lombardi.
Snohomish County man pleads guilty to involuntary manslaughter for gravel pit crash that killed passengerRead the Press Release
Seattle – A 40-year-old Snohomish County man who is an enrolled member of the Tulalip Tribes pleaded guilty today in U.S. District Court in Seattle to involuntary manslaughter in connection with the February 2, 2020, crash that killed the sole passenger in his truck, announced Acting U.S. Attorney Tessa M. Gorman. Danny Lee Simpson, Jr. will be sentenced by U.S. District Judge Tana Lin on January 24, 2024, at 10:00 a.m.
According to the plea agreement, Simpson, his wife, and a mutual acquaintance had been drinking at a bar in Stanwood, Washington on February 1, 2020. After midnight, Simpson drove his truck, with the acquaintance as his sole passenger, to a gravel pit owned by his parents. Simpson had recently modified his truck, so it was suitable for off road use. Simpson had failed to check the braking system on the truck.
The sand and gravel pit was poorly lit and had a sheer 40-foot cliff face. Simpson knew about the cliff. The truck overheated and stalled. At about 1:15 in the morning, Simpson backed the truck off the sheer cliff. The truck landed upside down at the bottom of the cliff. The crash killed Simpson’s passenger – another member of the Tulalip Tribes. Simpson admits he knew or could have reasonably foreseen that it was dangerous to drive under the influence of alcohol near the cliff face in a dark, wet, and poorly lit gravel pit.
Prosecutors have agreed to recommend no more than 18 months in prison. Judge Lin is not bound by the recommendation and can impose any sentence up to the maximum of eight years in prison.
The case was investigated by the FBI and the Tulalip Police Department.
The case is being prosecuted by Assistant United States Attorneys J. Tate London and Jocelyn Cooney. Mr. London and Ms. Cooney serve as Tribal Liaisons for the U.S. Attorney’s Office, Western District of Washington.
DOJ awards more than $2.5 million to Western Washington non-profits who assist survivors of human traffickingRead the Press Release
Seattle – The U.S. Department of Justice is awarding more than $2.5 million in grants to three non-profit organizations that work to combat human trafficking and support survivors, announced Acting U.S. Attorney Tessa M. Gorman. The three non-profits focus their work on different geographic areas of Western Washington.
“The U.S. Attorney’s Office in Western District of Washington is a leader in prosecuting cases of human trafficking – whether it is sex trafficking of vulnerable victims or labor trafficking of immigrants who feel helpless to escape,” said Acting U.S. Attorney Gorman. “This grant funding will ensure the victims of modern-day slavery are rescued and supported as they put their lives back together.”
The largest grant, $950,000, is awarded to Innovations Human Trafficking Collaborative (IHTC) to provide support and resources to 300 survivors of sex and labor trafficking in the South Sound region. Specifically, the organization will focus on Thurston, Lewis, Pierce, and Mason counties and among ten tribes: Nisqually, Chehalis, Tulalip, Puyallup, Cowlitz, Quileute, Lower Elwha Klallam, Muckleshoot, and Hoh tribes. IHTC will provide training on best practices for local law enforcement, health, mental health, and social services providers while also mobilizing a network of non-profits, government agencies, the faith community, tribal elders, and businesses who can assist those seeking to escape human trafficking.
Seattle’s International Rescue Committee was awarded $800,000 to provide evidence-based and trauma informed Mental Health and Psychosocial Support (MHPSS) services to survivors of human trafficking in King County. Primary activities include individual counseling, group support, and case management services to survivors and training and technical assistance to providers to increase their capacity to serve survivors.
Finally, the Northwest Immigrant Rights Project (NWIP) was awarded $800,000 to provide legal services to human trafficking survivors in southwest Washington and on the Olympic Peninsula. Two other non-profits will have services funded through this grant award: Centro Integral Educativo Latino de Olympia (CIELO) an organization dedicated to meeting the human service needs of Latino residents of three rural counties with high risk for labor trafficking, specifically in non-timber forest harvesting, fishing/shellfish, and agriculture; and Pueblo Unido PDX, an organization dedicated to more effectively serving the immigration legal needs of indigenous language speakers. NWIP will oversee these subgrants.
Western Washington tribes awarded more than $5.6 million for programs that support victims of domestic violenceRead the Press Release
Seattle – The U.S. Department of Justice Office on Violence Against Women has awarded $5.6 million to six Western Washington tribes and a non-profit entity working to combat domestic and sexual violence in tribal communities, announced Acting U.S. Attorney Tessa M. Gorman. The funding will be used for a range of services from emergency shelter to legal assistance to counseling for victims of domestic violence.
“We know that rates of domestic and sexual violence are disproportionately higher for Alaska Native and American Indian women. These grant funds are critical to providing safety in our tribal communities,” said Acting U.S. Attorney Tessa M. Gorman. “We welcome the coordinated effort by the Women Spirit Coalition to bring this grant funding to Western Washington.”
The tribal grants include:
Port Gamble S’Klallam Tribe - $1 million for transitional housing and to strengthen tribal court system interventions.
Makah Tribe - $425,000 for education and intervention strategies on domestic violence, sexual assault, and sex trafficking.
Snoqualmie Indian Tribe - $998,595 for planning and implementing a supervised visitation program; providing no-cost civil legal services for survivors; and continuing their advocacy and support efforts.
Confederated Tribes of the Chehalis Reservation - $650,000 – to enhance services such as crisis intervention, advocacy, emergency shelter, supportive counseling, information, and referral services.
Quileute Tribe - $650,000 - the New Beginnings Program will continue effective advocacy responses for victims of domestic violence including emergency transportation, housing assistance, and transitional housing assistance.
Tulalip Tribes -$1.5 million – as part of the Special Tribal Criminal Jurisdiction Program to enhance programs through the tribal prosecutor’s office that hold non-natives responsible for their crimes and provide support and safety for tribal victims.
Washington State Native American Coalition against Domestic Violence and Sexual Assault - $382,188 – for the Women Spirit Coalition that works with 22 tribes on anti-violence work and community awareness.
Additionally, DOJ announced $1.5 million in funding to the Washington State Attorney General’s Office to investigate Missing and Murdered Indigenous persons in “cold cases” – these are cases that occurred before 1980. The Attorney General’s Office will work with the tribes and their tribal archives to research and identify pre-1980 cold cases with civil rights violations involving Indigenous victims and create an inventory of these cases. The grant will produce a public report documenting what was found over the course of research.
Two skilled nursing care centers resolve allegations of Americans with Disabilities Act violationsRead the Press Release
Seattle – Two nursing home chains in Western Washington have resolved allegations they violated the Americans with Disabilities Act (ADA) by denying admission to prospective residents because of their Substance Use Disorder (SUD). One of the nursing home groups resolved a second ADA complaint that it failed to provide a sign-language interpreter for a patient who is deaf.
“It can be difficult to find appropriate nursing home care for our loved ones,” said Acting U.S. Attorney Tessa M. Gorman. “It should not be made more difficult by care centers who discriminate against those with disabilities, violating the ADA. I am pleased that both skilled nursing groups identified in these cases are changing their policies and training to comply with the ADA.”
Avalon Health Care Management Inc. manages three care centers in Western Washington: Avalon Care Center Federal Way; Benson Heights Rehabilitation Center; and Grays Harbor Health and Rehabilitation. The company previously managed Willapa Harbor Health and Rehabilitation. An investigation by the U.S. Attorney’s Office determined that Avalon facilities engaged in discrimination by denying admission to individuals with a Substance Use Disorder (SUD). The U.S. Attorney’s Office found that in some instances, patients were denied admission because they were prescribed FDA approved medication for Opioid Use Disorder (OUD). As part of the settlement Avalon will submit a draft non-discrimination policy to the U.S. Attorney’s Office for review. After approval, Avalon will post the policy at its facilities and will train its employees and contractors on the policy and on medications to treat SUD. Avalon will keep training and admission logs for review by the government and will alert government investigators to any ADA complaints. Avalon is to pay the government $12,000. However, $10,000 of the penalty is suspended pending successful compliance with the requirements of the settlement.
Arcadia Medical Resorts operates two skilled nursing care facilities in Renton as well as facilities in University Place and Union Gap, Washington. The U.S. Attorney’s Office investigation determined that individuals were denied admission to the Arcadia facilities because of their Substance Use Disorder (SUD). Arcadia agrees to update its policies and not discriminate against persons who have been prescribed medication for their Opioid Use Disorder. The chain will undertake new training and keep logs of training and patient admissions. Any ADA complaints will be forwarded to the U.S. Attorney’s Office. Like Avalon, Arcadia will pay the government $12,000. However, $10,000 of the penalty is suspended pending successful compliance with the requirements of the settlement.
Finally, in a different settlement, Avalon Health Care - Federal Way LLC, has agreed to pay a patient who is deaf $20,500, for violating the ADA by failing to provide the patient with a qualified sign-language interpreter while the patient was recovering from back surgery. The patient was in the facility from February 18, 2021, to March 11, 2021. Avalon did not act on the patient’s requests for a sign-language interpreter so the patient could not communicate with staff about her treatment plan or physical therapy.
Avalon disputes many of the government findings, but to avoid the cost and uncertainty of litigation, is choosing to resolve the matter. The settlement requires Avalon to put training, policies, and procedures in place to ensure staff do not violate the ADA and provide appropriate communication devices or services to the patients who need such assistance. The settlement lists a number of required improvements regarding evaluations, contracting, dissemination of policies and complaint tracking. The government will review the compliance for 18 months.
The patient who is deaf was referred to the U.S. Attorney’s Office by the Northwest Justice Project.
The U.S. Attorney’s Office for the Western District of Washington has investigated several similar complaints from patients who are deaf or hard of hearing regarding failures to provide communication assistance in the health care setting. Those settlements are detailed in the Disability Rights section of our website.
Sumner, Washington, man charged with Aggravated Identity theft, falsely claiming to be U.S. Citizen, and using a false documentRead the Press Release
Tacoma – A Sumner, Washington man who has lived under a false identity for more than 25 years was arrested on a federal criminal complaint for Aggravated Identity Theft, falsely claiming to be a U.S. Citizen, and using a false document, announced Acting U.S. Attorney Tessa M. Gorman. Roberto Manzano, 53, was taken into custody yesterday and appeared in U.S. District Court in Tacoma. He was detained pending additional court proceedings next month.
According to the complaint, Manzano began living under a false identity shortly after a California court issued a warrant for his arrest in 1996 on domestic violence related assault and kidnapping charges. Manzano has been using an identity that belongs to a real individual, without that person’s knowledge. He used the identity for his employment with a logistics company in the Seattle area. Manzano also used the identity to pass necessary clearance checks required by the Transportation Security Administration to perform his work at this logistics company. In evaluating his most recent application, TSA Investigations noticed some conflicting information and referred the matter to the Diplomatic Security Service for investigation.
Manzano has also used the identity to unlawfully vote in state and national elections since approximately 2004.
The charges contained in the criminal complaint are only allegations. A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.
Aggravated Identity Theft is punishable by a mandatory minimum two years in prison on top of any other sentence imposed in the case. Falsely claiming to be a U.S. Citizen is punishable by up to three years in prison and using a false document is punishable by up to five years in prison.
The case is being investigated by the Diplomatic Security Service (DSS) with assistance from the TSA.
The case is being prosecuted by Assistant United States Attorney Sean Waite.