Western District of Washington

Seattle – A 59-year-old man with arrests in three Western Washington counties and Idaho was sentenced this week in U.S. District Court in Seattle to ten years in prison, announced U.S. Attorney Nick Brown. Kermit Kellin Faglier pleaded guilty in October 2022 to one count of possession of a controlled substance with intent to deliver, one count of possession of a firearm in furtherance of a drug trafficking crime, and one count of access device fraud offense. U.S. District Judge John C. Coughenour imposed the sentence.

According to records filed in the case, Faglier was originally charged in the District of Idaho for a January 10, 2020, attempt to use a counterfeit credit card to purchase merchandise at a sporting goods store. The criminal charges from Idaho were later transferred to Washington as part of a global resolution of the case.

Faglier was arrested in Western Washington three times between January and May 2021. The first was January 23, 2021, in the town of Snoqualmie, where he was stopped driving a stolen vehicle. In the car, law enforcement found a stolen Smith and Wesson .38 revolver, a Glock semi-automatic pistol, methamphetamine, heroin, multiple driver’s licenses belonging to others, forged Washington driver’s licenses with Faglier’s picture but different names, multiple check cards, checks belonging to other people, and more than $2300 in cash.

Barely a week later, Faglier was arrested a second time in Mukilteo for attempting a fraudulent cash withdrawal from a bank. The February 1, 2021, arrest resulted in the seizure of counterfeit currency, checks, credit and debit cards, and multiple IDs from various states. Two guns were seized from the vehicle Faglier had been riding in – a 9 mm pistol and a 40 mm pistol. The van also contained heroin and meth.

On May 4, 2021, Faglier was contacted by officers in Spanaway, Washington because he had used a stolen identity to purchase a Ford F-150 truck. During the search incident, his arrest officers found methamphetamine in his pocket and a stolen Glock 43 semi-automatic handgun was in the center console of the truck.

The case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives, the Snoqualmie Police Department, the Mukilteo Police Department, the Pierce County Sheriff’s Office, and the United States Secret Service.

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.

Seattle – U.S. Attorney Nick Brown is hosting the Attorney General Advisory Committee’s Violent and Organized Crime Subcommittee in Seattle this week to share what is working in communities across the country to combat gun crime and enhance community safety. The group will hear from a variety of speakers on community programs working to end the cycle of gun violence, particularly among youth. Additionally, the Director of DOJ’s Project Safe Neighborhood program will lead discussions on the technical training and assistance available to support districts implementing anti-violence programs nationwide.

“This is an excellent opportunity to learn from other districts about strategies that are successfully promoting community safety,” said U.S. Attorney Brown. “We are also highlighting some of the community partnerships here in Western Washington that are working to get firearms away from those who shouldn’t have them. We’ll also spend time learning directly from community stakeholders about their perspectives on violence prevention.”

The King County Prosecutor’s Office will present about the Extreme Risk Protection Order program developed in Washington State. This “Red Flag” law has been a critical tool for getting firearms away from those with behavioral health or domestic violence issues or other violence risk factors. An Extreme Risk Protection Order ("ERPO") was utilized in a federal case during the investigation of Atomwaffen leader Kaleb Cole. Cole had numerous firearms removed from his residence north of Seattle under the ERPO.  The Assistant United States Attorney who prosecuted Cole will present to the group about how the law was an important tool in the investigation that ultimately led to the federal prosecution and conviction for hate crimes.

The AGAC Violent and Organized Crime Subcommittee is led by United States Attorney Andrew Luger of Minnesota and the Vice-Chair is United States Attorney Jacqueline Romero of the Eastern District of Pennsylvania. U.S. Attorneys or their representatives are attending from New York, Illinois, California, South Carolina, North Carolina, Colorado, Louisiana, Alabama, Missouri, Mississippi, Georgia, Maine, Ohio, South Dakota, Tennessee, and Iowa. 

The Justice Department, together with the Federal Trade Commission (FTC), announced today that the United States has resolved a case against Microsoft Corp. regarding its practices for collecting and retaining personal information from children who use Microsoft’s Xbox Live service. The stipulated order issued by the court today requires Microsoft to pay $20 million in civil penalties and imposes injunctive relief to settle allegations that Microsoft violated the Children’s Online Privacy Protection Act (COPPA) and the Children’s Online Privacy Protection Rule (COPPA Rule) in connection with the Xbox Live service, which consumers use to connect online and with others through the Xbox brand of gaming consoles.

In a complaint filed in the U.S. District Court for the Western District of Washington, the United States alleges that Microsoft knew that certain users were children but nonetheless continued to collect personal information, such as telephone numbers, before notifying parents of Microsoft’s information collection practices and before obtaining parental consent. In addition, the complaint alleges that, while Microsoft provided some notice to parents, that notice was incomplete and thus failed to comply with the COPPA Rule’s requirements. Finally, the complaint alleges that in certain instances when children started, but did not complete, creating Xbox Live accounts, Microsoft retained their personal information for longer than permitted by the COPPA Rule.

“It is essential that before collecting children’s personal information, online companies provide complete and timely disclosures about their information collection practices so that parents can make informed decisions,” said Principal Deputy Assistant Attorney General Brian Boynton, head of the Justice Department's Civil Division. “The department and the FTC are committed to ensuring that companies comply with the laws specifically designed to safeguard the privacy of children.”

“This settlement requires Microsoft to clearly communicate with parents about their child’s data and sets up procedures to monitor Microsoft’s compliance with federal statutes regarding children’s online privacy. This work will make children safer online,” said U.S. Attorney Nick Brown for the Western District of Washington. “I commend Microsoft for quickly acknowledging it was illegally collecting and retaining personal data of children younger than 13, and for taking steps to fix the problem.”

“Our proposed order makes it easier for parents to protect their children’s privacy on Xbox, and limits what information Microsoft can collect and retain about kids,” said Director Samuel Levine of the FTC’s Bureau of Consumer Protection. “This action should also make it abundantly clear that kids’ avatars, biometric data, and health information are not exempt from COPPA.”

This matter is being handled by Trial Attorney Katherine M. Ho, Senior Trial Attorney James T. Nelson, and Assistant Director Lisa K. Hsiao of the Civil Division’s Consumer Protection Branch, and Assistant U.S. Attorney Rebecca S. Cohen for the Western District of Washington. Megan Cox and Peder Magee represent the FTC.

For more information about the Consumer Protection Branch and its enforcement efforts, visit its website at www.justice.gov/civil/consumer-protection-branch. For more information about the U.S. Attorney’s Office for the Northern District of California, visit its website at www.justice.gov/usao-wdwa. For more information about the FTC, visit its website at www.FTC.gov.

Seattle – A 57-year-old Paradise Valley, Arizona man was sentenced today in U.S. District Court in Seattle to nine years in prison and a $1 million fine for an eight-year tax fraud scheme that resulted in more than $50 million in illegal tax refunds, announced U.S. Attorney Nick Brown.

Charles St. George Kirkland pleaded guilty in January 2023 to three counts of aiding or assisting the filing of fraudulent tax documents. At the sentencing hearing, U.S. District Judge John H. Chun rejected the defense request for a sentence of home confinement, commenting that Kirkland’s fraud was “a massive tax fraud scheme.” Judge Chun said he was struck by the “outrageous nature of the fraudulent scheme” and Kirkland’s “fraudulent and deceitful behavior.”

“This tax fraud scheme is an affront to all the taxpayers who honestly file tax returns and pay what they owe. These funds that Mr. Kirkland stole from the U.S. Treasury could have gone for infrastructure improvements, social services, and other programs aimed at community safety,” said U.S. Attorney Brown. “This is a significant sentence, and an example of the price to be paid for such dishonesty and deceit.”

According to records in the case, Kirkland falsely claimed in tax filings that he had lost more than $135 million by investing in solar equipment. Kirkland then “sold” those made-up losses to taxpayers through a network of tax preparers, telling the preparers that their clients could use Kirkland’s losses to claim refunds on their own tax returns. Taxpayers would file amended returns claiming that, because of the losses transferred from Kirkland, they were entitled to a refund of all the tax payments they had made in a prior tax year. After receiving the fraudulent refunds taxpayers paid 90% of the proceeds to Kirkland.

Taxpayers participating in Kirkland’s program filed nearly 3,200 fraudulent tax returns. In all, Kirkland’s scheme resulted in a loss to the U.S. Treasury of over $50 million. Kirkland collected $45 million. 

Kirkland used a web of limited liability entities he controlled to claim both net operating losses and investment tax credits based on fake investments in solar equipment.

For example, in 2013 alone, Kirkland claimed his businesses lost more than $40 million through investments in solar equipment. In fact, the businesses spent only about $150,000 on solar equipment that year. From 2012 to 2018, Kirkland’s companies claimed to have lost more than $135 million on investments in solar equipment. The companies spent less than $6 million on solar equipment over that period.

Some of the taxpayers who participated in the program were Washington residents. For example, one Maple Valley, Washington couple claimed to be partners in Kirkland’s Solar Farm entity and amended their 2015 tax return to claim a net operating loss of $347,893. The couple got a tax refund of $17,759. In 2018, a Seattle couple claimed a 2017 tax loss from Solar Farm of $22,870 so that they could claim a refund of $28,180. In 2019, Grapeview, Washington resident claimed a 2018 solar energy credit of $10,341 so she could claim a refund of $10,704.

Kirkland owes $51,615,484 in restitution in addition to the $1 million fine imposed by Judge Chun.

Two days after agreeing to plead guilty, Kirkland and his wife began a divorce proceeding. In the proceeding, they agreed the wife would take ownership of approximately 100 parcels of real estate, five Tesla automobiles and the couple’s 10,000 square foot home in Arizona. Prosecutors noted in their filings that the government will continue to pursue the assets in order to satisfy the restitution obligation.

In asking for the nine-year sentence, prosecutors wrote to the court, “This is by far the largest loss in a tax case in this district in least a dozen years. Kirkland’s brazen fraud, his long history of professional misconduct, and his efforts to keep the stolen money make clear he will continue to engage in fraud as long as he is permitted to do so.”

“This sentence is a win for American taxpayers! All of Mr. Kirkland’s schemes served the sole purpose of making him very wealthy, and he cared little for those he manipulated,” said IRS Criminal Investigation Seattle Field Office’s Assistant Special Agent in Charge Carrie Nordyke. “The IRS relies on taxpayers to file accurate tax returns. If you observe something suspicious, go to IRS.gov and report it.”

The case was investigated by the Internal Revenue Service Criminal Investigation (IRS-CI).

The case is being prosecuted by Assistant United States Attorney Seth Wilkinson.

Tacoma – A 40-year-old former soldier was sentenced Thursday, June 8, 2023, to thirty years in prison for raping two young children, announced U.S. Attorney Nick Brown. Lewis Patrick Thompson was arrested in July 2020 and pleaded guilty in October 2022. U.S. District Judge Robert J. Bryan ordered Thompson to be on lifetime supervised release following the prison term.

According to records filed in the case, the sexual assaults on the young children occurred on military bases overseas and in the U.S. The assaults occurred when Thompson was serving as a caregiver for the children.

The children disclosed the abuse to trusted adults when they were 11 years old. Both the Army Criminal Investigation Division (CID) and the FBI moved quickly to investigate the matter. Thompson has been incarcerated at the Federal Detention Center at SeaTac, Washington since the arrest.

At a future hearing, Judge Bryan will determine the amount of restitution Thompson must pay to the victims for the counseling and care they require due to the abuse.

The case was prosecuted by Assistant United States Attorney Matt Hampton.

Seattle –A former North Carolina man who brought an improvised gun to a 2020 Seattle protest and threatened to kill police was sentenced today in U.S. District Court in Seattle to two years in prison for possession of a destructive device, announced U.S. Attorney Nick Brown. Devinare Antwan Parker, 31, was arrested Sunday evening, May 31, 2020, after he possessed an improvised firearm capable of firing shotgun shells. At the sentencing hearing U.S. District Judge Ricardo S. Martinez said, “The offense conduct was extremely dangerous…. It was a very volatile time when emotions were running high. He basically had a homemade shotgun which was extremely dangerous.”

According to records in the case, at about 11:30 p.m. on Sunday evening, May 31, 2020, two Seattle Police Officers were driving their marked patrol car north on Third Avenue near Benaroya Hall. They saw Parker, who was downtown in violation of the curfew, walking down the middle of the street. Parker was ultimately arrested. When he was searched, officers found an improvised firearm constructed of two pieces of pipe and a firing pin with a laser pointer/ flashlight attached to the side. Parker also carried several shotgun shells that fit the device.

As he was being arrested, Parker shouted at the officers that he brought the weapon to the protest to shoot and kill police officers.

Following Parker’s federal arrest, prosecutors worked with his counsel to get him mental health treatment and the opportunity to resolve the case in King County’s mental health court. However, Parker repeatedly refused to participate in the mental health program, violated the conditions of his release with illicit drug use, and posted images on social media showing him using marijuana and displaying drugs, large amounts of cash, and apparent firearms parts.

In asking the court for a 27-month sentence, Assistant United States Attorney Erin H. Becker wrote to the court, “The government has struggled at length to reach a resolution in this case that would ensure community safety. For a long time, the government believed that this goal could be achieved through Mental Health Court. Parker’s mental illnesses and presumed addictions obviously present a danger to the community, and they may well have contributed to his offense. MHC offered an avenue for intensive oversight and supportive treatment to mitigate those risks. Unfortunately, it appeared that everyone wanted such a resolution except for Parker.”

The case was investigated by the Bureau of Alcohol, Tobacco, Firearms & Explosives.

The case was prosecuted by Assistant United States Attorney Erin H. Becker.

Seattle – A wide ranging fraud scheme, led by 29-year-old Paradise Williams, of Phoenix, was detailed today in a 26-count indictment charging wire fraud and money laundering, announced U.S. Attorney Nick Brown. Two defendants were arrested Monday in Phoenix, a third was arrested in Houston, and three defendants were arrested in Washington State. Two Seattle defendants are detained at the Federal Detention Center with hearings scheduled Friday and next week.

“The participants in this fraud were relentless in exploiting pandemic relief programs that were intended to assist small businesses and people who were vulnerable to eviction,” said U.S. Attorney Nick Brown. “The need for the emergency rental assistance greatly outweighed the funds available, and we know that fraud schemes such as this one stole money that should have gone to those desperately needing help.”

According to the indictment, Paradise Williams was the hub in a wheel of fraud. She created fake documents and told her accomplices how to pose as landlords and tenants claiming to need rental assistance. Because the program would pay for back rent and future payments, the person posing as the fraudulent landlord got payments of tens of thousands of dollars for each fake tenant application. Williams received kickback payments from those who used the scheme for fraud. Williams herself received more than $740,000 in emergency funds by posing as the landlord on at least 21 different applications for rental aid. In fact, neither Williams nor her accomplices owned any rental properties and were not the tenants they impersonated.

In addition to Williams the grand jury indicted:

Rayvon Darnell Peterson, 32, of Seattle, Washington

Tia Janee Robinson, 28, of Fife, Washington

Jahari Asad Cunningham, 45, of Houston, Texas

D’arius Akim Jackson, 37, Bonney Lake, Washington

David Jesus Martinez, 32, Pacific, Washington

In addition to the rental assistance fraud, members of the group defrauded or attempted to defraud the unemployment systems in Washington, California, South Carolina, and Nevada. 

Between June 2020 and August 2021, Williams and others submitted at least 35 fraudulent applications for Economic Injury Disaster Loans (EIDL) seeking more than $3.7 million from the Small Business Administration (SBA). Two of the loans were funded for a loss of $300,000. Williams assisted her accomplices with forging documents and fake tax statements to defraud the SBA. Williams used multiple common email addresses and a common naming convention for business names as she attempted the fraud.

Williams and others also sought to defraud a different SBA program, the Paycheck Protection Program (PPP). In April and May 2021, Williams, Jackson, and others submitted at least 13 fraudulent applications to the SBA PPP program seeking approximately $253,000. Nearly $212,000 was paid out.

According to the indictment the money was used for luxury cars, lavish trips, designer clothes, jewelry, and even plastic surgery. Williams used over $90,000 in cash and wire transferred funds, from the proceeds and kickbacks she received, to buy a 2018 Range Rover sport utility vehicle and a 2017 Lexus ES Sedan. Both vehicles were seized in Phoenix on Monday. In June 2021, Williams used funds from the frauds to travel to Miami and while there she rented a Lamborghini.

Wire fraud in connection with a presidentially declared major disaster or emergency is punishable by up to 30 years in prison and a $1 million fine. Money laundering is punishable by up to 20 years in prison.

The case was investigated by the FBI with assistance from SBA-OIG.

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

Seattle – A Marysville, Washington, man was sentenced today in U.S. District Court in Seattle to 15 years in prison for three federal felonies connected to the fentanyl pill manufacturing lab in his rental home, announced U.S. Attorney Nick Brown. Jose Eduardo Garnica, 34, pleaded guilty in March 2023 to conspiracy to manufacture and deliver controlled substances, possession of a firearm in furtherance of a drug trafficking crime, and conspiracy to commit money laundering. At the sentencing hearing, U.S. District Judge Tana Lin said, “This is one of the largest fentanyl seizures in the district. Mr. Garnica had so much fentanyl a hazmat team had to be called in.”

“This case weaves together all the strands that make fentanyl trafficking such a dangerous business,” said U.S. Attorney Nick Brown. “Mr. Garnica was manufacturing fentanyl pills with deadly powders that could make each pill lethal.  His activities contaminated the home he rented, and he had 27 guns – many of them high powered assault weapons – adding to the danger. This is a significant prison sentence, but appropriate due to the risk he posed to our community.”

According to records filed in the case, Garnica came to the attention of law enforcement on June 17, 2022, when U.S. Customs and Border Protection (CBP) officers in Los Angeles inspected a package shipped from China to Garnica’s Marysville address. The package was labeled “furniture parts,” but in fact it contained dies for use in a pill press that would make pills that appear to have the markings of oxycodone pills. Further investigation of Garnica and Wilson revealed numerous unusual cash transactions and the purchase of 11 firearms in a three-month span of 2020. In fact, when law enforcement searched the home, agents seized 27 guns and 25 kilos of fentanyl. Law enforcement also seized 50,000 rounds of ammunition.

On July 21, 2022, agents with Homeland Security Investigations and the FBI executed search warrants at the Marysville residence and seized the pill press

and other materials for making fake oxycodone pills in the garage. Officers called a hazmat team to secure the lab due to the potentially deadly nature of fentanyl powder. Investigators determined that fentanyl residue had spread from the manufacturing location in the garage, throughout the house. The spread may have been caused by the HVAC system. Garnica has agreed to pay more than $71,000 to the owner of the home to remediate the residence.

In addition to the pill press and fentanyl powder, law enforcement found kilo sized bricks of fentanyl pills that appeared to have been smuggled into the U.S. from Mexico. Also of great concern, some of the pills Garnica was manufacturing also contained Xylazine – a sedative used in veterinary medicine that has been linked to more deaths. In some instances, those injected with Xylazine had had tissue damage requiring amputation.

In asking for an 18-year prison sentence, Assistant United States Attorney Vince Lombardi cited the unique danger of fentanyl and the heavy toll of fatal overdoses in King County. “…Fentanyl overdose deaths have continued to soar in the Seattle area. Overdose deaths attributable in whole or in part to fentanyl have risen from just 22 in 2016 to 709 in 2022. As of May 26, more than 500 overdose deaths were attributable to fentanyl for 2023 to date – a pace that puts King County at more than 1,000 overdose deaths by year end.”

The case was investigated by Homeland Security Investigations (HSI) and the FBI with assistance from the Washington State Patrol, National Guard Civil Service Team, Drug Enforcement Administration (DEA), Custom and Border Protection’s Air and Marine Operations, the Snohomish County Drug Task Force, and the Skagit County Drug Task Force.

The case is being prosecuted by Assistant United States Attorney Vince Lombardi.

Seattle –A 42-year-old Everett, Washington, man was convicted today in U.S. District Court in Seattle of cyberstalking and making interstate threats following a three-day jury trial, announced U.S. Attorney Nick Brown. The jury deliberated about two hours before finding Christopher Scott Crawford guilty of an unrelenting campaign of online cyberstalking, threats, and harassment against a former romantic partner. Crawford was arrested on a criminal complaint on June 2, 2022. Crawford faces up to five years in federal prison when sentenced by U.S. District Judge James L. Robart on August 29, 2023.

According to records filed in the case, Crawford has repeatedly violated court ordered restraining orders by sending threats by text, email, social media messages, and phone calls. Crawford has sent threatening communications to various people associated with the victim in this case, such as parents, coworkers, siblings, and court-mandated professionals. The harassment included posting intimate pictures of the victim on a website and circulating private information about the victim to others.

Crawford repeatedly stated to the victim and others that he wanted to make her life so miserable that she would take her own life.

Crawford has been detained since his arrest on June 2, 2022, at the Federal Detention Center (FDC) at SeaTac, Washington.

The matter was investigated by the Naval Criminal Investigative Service (NCIS).

The case was prosecuted by Assistant United States Attorneys Cecelia Gregson and Elyne Vaught.

Seattle – A 32-year-old member of the Tulalip Tribes was sentenced today in U.S. District Court in Seattle to 46 months in prison in connection with a carjacking during which he assaulted a driver who had tried to help him, announced U.S. Attorney Nick Brown. Michael J.D. Clark Jones, was arrested in February 2022, following a high-speed chase that left his girlfriend injured, and then he injured another person in the carjacking. In sentencing Jones to 46 months in prison and three years of supervised release, Judge John C. Coughenour said he was conscious of the “dangerous theft of the vehicle” and the concerns of the Tulalip Tribes.

According to records filed in the case, Jones fled from Tulalip Tribal Police at high speeds, ultimately crashing his car and leaving his girlfriend injured. Jones fled into the woods and ultimately came to the home of a woman on the Tulalip Indian Reservation. He told the woman he had been injured in a boating accident and asked her for a ride. The woman drove him a short distance to an intersection where she saw a tribal fish and wildlife truck. The woman started to get out of the car to get help from the fish and wildlife agents. Jones lunged at her and attempted to push her out of the car. The woman grabbed the door handle and steering wheel to keep from falling. Jones put the vehicle in drive and hit the gas pedal. The car accelerated across the road and hit an embankment. Jones hit the woman and tried to force her out of the moving car by punching her hand on the wheel. The door closed on the woman when it hit the embankment, and ultimately, she lost her grip and fell from the car. The force knocked the wind out of her, and she suffered back pain from the assault where Jones punched her in the shoulders, ribs, and chest.

Tribal police found the damaged car and located Jones at a home on the reservation where he was arrested. Jones told law enforcement he fled because he had just picked up 500 fentanyl pills.

In court today, Jones’ attorney said at the time of the crime Jones was “smoking 100 fentanyl pills a day.” Judge Coughenour commented that given that level of drug use, “It is amazing he is still alive.”

In asking for a 52-month sentence Assistant United States Attorney J. Tate London noted that the crime was “part of a pattern of endangering the lives of others,” and “showing little to no concern for the community.”

At a later hearing a Magistrate Judge will determine the amount of restitution Jones will pay to the victims in this case.

The case was investigated by the Tulalip Tribes Police Department with assistance from the FBI.

The case was prosecuted by Assistant United States Attorney J. Tate London. Mr. London serves as the Tribal Liaison for the U.S. Attorney’s Office, Western District of Washington.

Seattle – A 42-year-old former Bellevue, Washington, man was sentenced today in U.S. District Court in Seattle to 12 years in prison for securities fraud, announced U.S. Attorney Nick Brown. Justin Costello victimized marijuana business owners, private investors, and investors who purchased stock in the public market. Costello used fraud proceeds for an expensive lifestyle, including an elaborate wedding with a James Bond theme. At the sentencing hearing, U.S. District Judge Ricardo S. Martinez said the frauds “caused a severe impact financially, and a severe emotional impact…. People felt betrayed and violated by (Costello’s) actions.

"Mr. Costello had ‘big dreams’ -- building a lifestyle that emulated his hero, 007 James Bond — but he did so by victimizing dozens of people and businesses who entrusted their personal savings to him,” said U.S. Attorney Nick Brown.  “When he was indicted, he fled with fake ID, cash, gold, and jewelry to finance a life on the run.  But his story is not fiction and the $35 million damage to his victims is all too real.  This prison sentence is fully appropriate.”  

“After finally having to answer for his crimes, Mr. Costello went on the run” said Richard A. Collodi, Special Agent in Charge of the FBI’s Seattle field office. “His flight to avoid prison demonstrates that is exactly where he belongs. I applaud the work of our investigators and prosecutors who finally put an end to his elaborate fraud, and to our partners who were able to apprehend him before he could leave the country.”

As part of his securities fraud scheme, Costello purchased two companies that were trading for pennies on the over-the-counter market and renamed them GRN Holding Corporation and Hempstract Inc. Costello recruited investors in these companies, allegedly making numerous false statements. Costello told potential private investors that he had an MBA from Harvard, that his personal wealth was significantly larger than it was, and that GRN Funds LLC, a private equity and hedge fund he owned, had over $1 billion in assets under management. None of that was true.

With these falsehoods, Costello convinced various investors across the country to invest in his companies.

Today., some of those recruited investors told the court how Costello preyed on their friendship to get them to invest. One told the court “Nothing with Costello was real… We were groomed by this predator… The stage was set for this big con.”

Another told the court “He is a liar, a financial psychopath, and a human wrecking ball.”

A third told the court that her husband was a changed man after losing all of their money investing with Costello. She described how her husband became depressed and took his own life.

Costello did not just defraud friends, he also committed fraud on those investing on public markets. He had press releases and securities filings made with multiple false representations. Between July 1, 2019, and May 18, 2021, over 7,500 investors purchased and sold GRN Holding Corp. securities while Costello was making, and causing to be made, material misrepresentations concerning GRN Holding Corp. Collectively, these investors lost approximately $25 million. Similarly, with Hempstract Inc., he made false statements and defrauded investors. Between November 2018 and June 2021, 29 private investors lost about $6 million.

Between October 2019, and January 2021, Costello hired an unindicted coconspirator to use Twitter in a pump and dump stock scheme. Costello would acquire the penny stock of a company and then instruct his prolific Twitter user to tweet falsehoods about the company that would drive up the stock price. The coconspirator would tweet about the stock as often as 90 times a day. In one instance Costello didn’t just use Twitter, he also instructed some of his “investors” to purchase stock in the company, driving the share price from a nickel to $2 per share. After driving the share price up, Costello sold the shares for a profit of more than $355,000. The prolific Twitter user was given a share of Costello’s profits from the pump and dump scheme. In all Costello made $625,092 in the pump and dump scheme.

Along with the securities fraud, in 2017 Costello owned and operated a company called Pacific Banking Corp that provided banking services to marijuana businesses in Washington, Colorado, California, Illinois, and Alaska. Costello sent false account statements to the marijuana businesses, so that they were lulled into thinking their money was secure. However, between 2019 and 2021, Costello diverted money from three marijuana business to benefit himself and his other companies. The three marijuana businesses lost about $3.7 million.

Costello was apprehended October 6, 2022, by law enforcement in Southern California. He had fake identification documents, cash, and valuables indicating he hoped to flee to Mexico to avoid prosecution.

In addition to the financial harm, prosecutors noted that Costello’s investors suffered a betrayal that stays with them to this day. “Costello’s deceit – about his background, his education, and his purported success – was designed to convince unwitting investors to trust him. And trust him they did. But when lies and fraud are exposed, victims are left with significant emotional and psychological damage. They blame themselves for being gullible and overly trusting. The resulting stress, anxiety, and sense of betrayal causes great emotional and psychological harm, and damages the victims’ relationships with friends, family, and others,” prosecutors wrote in their sentencing memo.

Judge Martinez recognized that harm in imposing the sentence saying, “in many financial crimes the victims are not known to the fraudster… Financial crimes where the defendant befriends the individual and uses them to entice others to the scheme has a completely different emotional impact. It leaves victims feeling helpless and hopeless.”

In his Plea Agreement, Costello agreed to pay no less than $35 million in restitution, but the Court will enter the final restitution amount in August 2023. Costello is forfeiting assets that were seized at the time of his arrest including $60,000 in cash, gold bars, Mexican pesos, two designer watches, and gem encrusted jewelry.

The case was investigated by the FBI. 

The case is being prosecuted by Assistant United States Attorneys Justin Arnold and Michael Dion.

Seattle – The suspect in a series of mail vehicle and mail key thefts was arrested today on a federal complaint charging him with theft of mail and possession of stolen mail, announced U.S. Attorney Nick Brown. Johny Mixayboua, 27, is accused of a string of mail theft incidents involving stolen postal vehicles, stolen postal keys, mail theft, and associated crimes such as identity theft. Mixayboua will appear in U.S. District Court in Seattle at 2:00 today.

According to the criminal complaint, on December 28, 2022, a U.S. Postal Service vehicle was stolen from the 6300 block of South Bangor Street in Seattle. In the vehicle was a postal key that is used to access the cluster mailbox units in the 98178 zip code. The key allows the postal worker to open the back of the cluster box to deliver mail to multiple households. Since the theft of the vehicle and postal key, there have been numerous reports of cluster boxes in zip code 98178 being opened and mail stolen.

Working with neighbors, the Postal Inspection Service was able to get door camera footage showing the person accessing the postal boxes. Neighbors reported credit cards being stolen and attempts being made to use them. Inspectors were able to review images from when the credit card attempts occurred and ultimately identified Mixayboua as the person stealing the mail and attempting to use the stolen credit cards.

Additionally, local law enforcement determined that vehicles used in a number of the mail theft incidents were reported stolen.

On January 17, 2023, two more Postal Service vehicles were stolen. One in the 3000 block of Beach Drive SW and a second one in the 3600 block of 57th SW. Both are in zip code 98116. Using doorbell camera footage from the block

where one of the vehicles were recovered, investigators allegedly saw Mixayboua removing mail and parcels from the stolen postal vehicle and putting them in another vehicle. Again, law enforcement traced credit cards stolen from the mail and obtained surveillance footage that appears to show Mixayboua attempting to make purchases with the credit cards.

On January 30, 2023, a fourth postal vehicle was stolen – this time from the 2000 block of S. Columbian Way in Seattle. On March 28, 2023, a fifth postal vehicle was stolen from the 5700 block of S. 129th Ave. One of the people associated with the theft matches a description of Mixayboua.

In late January and February, the mail theft incidents continued -- this time in the Snoqualmie, Washington area. The cluster boxes were opened with either a counterfeit or authentic postal key. Again, credit cards were stolen, and one was linked to images of Mixayboua making purchases at Target.

Throughout April, mail thefts continued from as far north as Lake Forest Park and as far south as southeast Seattle.

The postal service halted deliveries in zip code 98118 for about a week while investigators worked to track down and arrest Mixayboua.

The U.S. Postal Inspection Service (USPIS) has worked diligently to get Mixayboua and his coconspirators into custody.

The case is being prosecuted by Assistant United States Attorney Elyne Vaught.

 

Seattle – A former Seattle resident who defrauded federal COVID-19 benefit programs of more than $1 million was sentenced today to 100 months in prison for wire fraud and aggravated identity theft, announced U.S. Attorney Nick Brown. Bryan Alan Sparks, 42, was indicted for the fraud scheme in November 2021 and pleaded guilty January 20,2023. At the sentencing hearing, U.S. District Judge James L. Robart said, Sparks was “a serial thief and a fraudster – one of the more successful ones…. I am appalled by the damage Mr. Sparks has done.”

“People such as Mr. Sparks took advantage of the public and our government at the height of a crisis, and I’m glad to see him held accountable for the damage he caused,” said U.S. Attorney Nick Brown. “The harm goes beyond depleting government funds – his use of other people’s identities has damaged the victims and will continue to cause problems for them into the future.”

According to records filed in the case, from March 2020 until at least January 2021, Sparks and a coconspirator used stolen personal information of more than 50 Washington residents and businesses to apply for Economic Injury Disaster Loans (EIDL) from the Small Business Administration (SBA) and unemployment benefits from the Washington Employment Security Department (ESD). Sparks and his coconspirator obtained approximately $521,900 from SBA and $519,700 from ESD. Sparks opened fraudulent bank accounts to receive the benefits and had unemployment benefit debit cards mailed to a variety of addresses in the Seattle area where he could retrieve them. In all, Sparks attempted to obtain at least $1.98 million in federally funded payments.

Sparks used the identities of real people and, in some instances, actual small businesses to open bank and credit accounts. The victims suffered significant harm. One person saw his credit score drop 200 points because of the seven credit and bank accounts opened in his name. The victim’s impact statement stated that the financial toll of Sparks’ crimes included being unable to execute his plan to start a business and invest in real estate. He believes that these consequences will be lasting for “years to come.”

Another victim wrote about spending hours on the phone with law enforcement reporting the identity theft. “This fraud has changed me and will always cause me to have concern for my safety and for my family’s safety . . . This is something that I would never want anyone else to have to deal with. It is not a good feeling, and this is how it will be.”

In September 2020, law enforcement linked Sparks to lock boxes seized in Portland, Oregon. When the safes were searched, officers seized more than $65,000 in cash and a number of debit cards.

Assistant United States Attorney Cindy Chang wrote in her sentencing memo, “During a nine-month period, despite multiple encounters and seizures by law enforcement in multiple states, Sparks possessed at least 46 cell phones, 14 laptops, multiple credit card skimmers, countless bank and identification cards in identities other than Sparks…, and various other sophisticated devices used for identity theft.”

In all, Sparks was ordered to pay $1,041,661 in restitution to the government programs. He will be on supervised release for five years following the prison term.

“Bryan Sparks caused substantial harm to individuals by stealing their identities and misusing Social Security numbers,” said Gail Ennis, Inspector General for the Social Security Administration. “This sentence of 100 months holds Sparks accountable for his actions. I thank our law enforcement partners for their invaluable work on this case and the U.S. Attorney’s Office for prosecuting this case.”

The investigation of this case is led by the Social Security Administration, Office of the Inspector General (SSA-OIG) and U.S. Postal Inspection Service, with partners: Colusa County Sheriff’s Office (CA); Washington State Employment Security Department; Small Business Administration, Office of the Inspector General; Amtrak Police Department (D.C.); FBI (Sacramento, CA office); FBI Cyber Task Force (D.C.); Washington State Department of Licensing, Driver and Vehicle Investigations; and the Department of Labor, Office of the Inspector General. 

The case is being prosecuted by Assistant United States Attorneys Cindy Chang and Seth Wilkinson. 

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.

Seattle – A Mercer Island, Washington resident who previously served as a start-up company Chief Financial Officer (CFO) was indicted today in U.S. District Court in Seattle for wire fraud for taking and misusing some $35 million from his employer, announced U.S. Attorney Nick Brown.  Nevin Shetty, 39, is scheduled for arraignment on the indictment on May 25, 2023.

According to the indictment, Shetty was hired as the CFO of a private company in March 2021.  The company was raising capital for its work in multiple rounds of funding. The company, with Shetty, was working on policies as to how the money raised should be conservatively invested while the company worked to grow its business. The company adopted an investment policy statement that called for company cash to be invested only in fixed income instruments payable in U.S. dollars. Only certain types of conservative investments were approved.

Despite the fact that Shetty helped draft the policy and disseminate it, he moved $35 million in company funds to a cryptocurrency platform he controlled as a side business.  Shetty created that side business, called HighTower Treasury, in or around February 2022. In March 2022, he was told he could not continue as CFO at his employer due to concerns about his performance. Shortly after he got this news, Shetty secretly transferred the funds out of the company’s account.

Between April 1 and 12, 2022, Shetty transferred $35,000,100 of his employer’s money to an account for HighTower. No one else at the company knew of these transfers. The money was supposed to be invested by HighTower in a realm of cryptocurrency sometimes referred to as decentralized finance or “DeFi.”  HighTower would pay Shetty’s company 6% interest and keep the remainder of any interest earned, which could have been substantial. As an owner of HighTower, Shetty stood to keep those profits. Shetty kept this investment in cryptocurrency secret from the board and other employees at the company where he worked.

However, the cryptocurrency investments soon began declining and by May 13, 2022, the value of the $35 million investment was nearly zero.

The company reported the embezzlement to the FBI who launched an investigation.

Wire fraud is punishable by up to 20 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 prosecuted by Assistant United States Attorney Philip Kopczynski.

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Seattle – A 67-year-old Western Washington artist was sentenced today to 18 months of federal probation for violations of the Indian Arts and Crafts Act (IACA) by representing himself as a Native American artist, when he had no tribal enrollment or heritage, announced U.S. Attorney Nick Brown. Jerry Chris Van Dyke aka Jerry Witten, of Seattle, pleaded guilty in March 2023. At the sentencing hearing, U.S. District Judge Tana Lin noted that this was not a one-time error, but a ten-year period of “undermining a community and identity.”

“Prosecuting cases of fraud in the art world is a unique responsibility and part of our work to support Tribal Nations,” said U.S. Attorney Nick Brown. “I hope this case will make artists and gallery owners think twice about the consequences of falsely calling an artist Native and work Native-produced. They should consider the damage to reputation, the legal fees, and ultimately a criminal record. Fake Native art should be kept out of the marketplace because it harms the legitimate Native art community.”

The investigation of Jerry Van Dyke began in February 2019, when the Indian Arts and Crafts Board received a complaint that Van Dyke was representing himself as a Nez Perce Indian artist, when in fact, he is not an enrolled tribal member. Investigators from the U.S. Fish and Wildlife Service made undercover purchases at a gallery in the Pike Place Market area of Seattle that advertised pendants Van Dyke had made as Native American art. Van Dyke used the name Witten for these sales. When interviewed by agents, Van Dyke admitted knowing about the Indian Arts and Crafts Act, and admitted he was not a tribal member. Through the gallery Van Dyke had sold more than $1,000 worth of carved pendants represented as Native American artwork based on Aleut masks. According to the plea agreement, Van Dyke had worked with the gallery for more than ten years, with the gallery owner providing him with woolly mammoth ivory, antlers, animal bones and fossilized walrus ivory to make the pendants that it sold.

Speaking in court today, Shannon F. Wheeler, Chair of the Nez Perce, said “artwork is full of our culture… it is a piece of who we are.” Chair Wheeler continued that the sale of fake Native art “continues a process of devaluing us as a people.”

Native art “speaks of the enduring relationship that we have with our landscape,” said Nez Perce Cultural Resource Director Nakia Williamson. “All we have left is our identity, and that is under attack.”

“Jerry Van Dyke’s false tribal affiliation and marketplace saturation erodes the sustainability and economic well-being of Native American artists," said Edward Grace, Assistant Director of the U.S. Fish and Wildlife Service Office of Law Enforcement. "Our dedicated team of special agents works on behalf of the U.S. Department of the Interior and the Indian Arts and Crafts Board to protect American Indian and Alaska Native artists and the consumers who purchase authentic Native American art and craftwork. This sentencing is important in the ongoing effort to end violations of the Indian Arts and Crafts Act. We want to thank our partners at the U.S. Department of Justice and the Indian Arts and Crafts Board for their assistance with this investigation.”

"By statute, the Indian Arts and Crafts Board (IACB) is responsible for the Indian Arts and Crafts Act, a truth-in-marketing law governing the sale of Indian art and craftwork. The prosecution of Jerry Van Dyke under the Indian Arts and Crafts Act for counterfeiting Alaska Native art is another critically important step in protecting the economic livelihoods and rich cultural heritage of contemporary and traditional Indian artists, as well as preserving the vitality of the Indian art market in the Northwest and nationwide,” stated IACB Director Meridith Stanton. “When individuals and businesses market art misrepresented as Indian made, they undercut Indian artists and Indian economies, and prey upon unwitting consumers. For those selling counterfeit Indian art and craftwork, wherever you are we will diligently work to find you and prosecute you under the Act.”

Van Dyke pleaded guilty in March 2023 to Misrepresentation of Indian Produced Goods and Products. The crime is punishable by up to one year in prison.

The case was investigated by the U.S. Fish and Wildlife Service. The case was prosecuted by Assistant United States Attorney and Tribal Liaison J. Tate London.

Seattle –A 32-year-old Seattle man was sentenced today to ten years in prison for his possession of a so-called “ghost gun” and drugs in a stolen vehicle, announced U.S. Attorney Nick Brown. Jade B. Irey was arrested at an auto parts store in Kent, Washington on March 24, 2022. On December 5, 2022, Irey pleaded guilty to unlawful possession of a machinegun, possession of controlled substances with intent to distribute, and possession of a firearm in furtherance of a drug trafficking crime. At the sentencing hearing U.S. District Judge James L. Robart said, Irey had been “a one-person crime wave.”  Judge Robart noted that Irey had 700 fentanyl pills and the machinegun, making the case “one of the most serious I’ve seen in recent history.”

“Unregistered, fully automatic, and with an extended magazine, this weapon and others like it are designed for one thing: to kill,” said U.S. Attorney Nick Brown. “We are intent on using all the tools Congress has given us to combat possession of such illegal weapons and the damage they do in our communities.”

According to records in the case, Irey was under investigation for a December 2021 burglary in Bellevue, where he apparently dropped his cell phone while leaving the scene. The resident turned the cell phone over to police. Bellevue Police put Irey under surveillance, following him and an associate from his residence in the Magnolia neighborhood of Seattle to stops throughout the area.  When a records check indicated the vehicle Irey was driving was stolen, police arrested Irey inside the auto parts store in Kent. A search of the car turned up the ghost gun and a pouch containing methamphetamine, black tar heroin, and 700 suspected fentanyl pills. Using court authorized search

warrants, investigators reviewed information on Irey’s electronic devices detailing his drug sales and ownership of the firearm.

Irey is also charged in state court for a number of crimes including burglary, identity theft, car theft and hit and run.  The plea and sentencing in this case is part of a global resolution and the state sentences are expected to run concurrent with the ten year federal sentence.

The case was investigated by the Bellevue Police Department Special Operations Unit with assistance from Homeland Security Investigations (HSI).

The case was prosecuted by Assistant United States Attorney Todd Greenberg.

Seattle – A 62-year-old Redmond, Washington man was sentenced today in U.S. District Court in Seattle to one year in prison for conspiring to defraud the federal Paycheck Protection Program (PPP) of $646,000 in COVID-19 relief funds, announced U.S. Attorney Nick Brown.  Joseph M. Freeman used the names of two companies he registered to obtain forgivable Paycheck Protection Program loans. After detecting the fraud, federal investigators froze approximately $220,000 that remained in Freeman’s bank account and returned it to the Small Business Administration.  At the sentencing hearing U.S. District Judge James L. Robart said, “Other people who were in the same situation chose to suffer those circumstances rather than commit fraud on the Paycheck Protection Program… I think it is important to understand you cannot steal from the government.”

“When Mr. Freeman obtained pandemic relief funds through fraud, it meant other legitimately needy business owners were delayed and possibly denied funds as there was a limited pool of relief money,” said U.S. Attorney Nick Brown. “As we continue to emerge from the pandemic, it is critical that we uncover the fraud and hold accountable those who sought to unjustly profit from programs designed to keep the needy afloat.” 

According to records in the case, in May 2020, Freeman and his coconspirators used information about a company he formed in 2004 to claim $500,000 in PPP funds. Freeman claimed Special Delivery LLC had 15 employees and a payroll of $200,000 per month, when in fact it had no employees other than Freeman. Freeman used fake Internal Revenue Forms to make it appear the company had employees and sought $500,000 in PPP funds. On May 20, 2020, the loan proceeds were wired to Freeman’s bank. After receiving the funds, Freeman created an account with a payroll service to disburse the funds to individuals who were not employees of the company. In fact, the list included friends, family, and people to whom Freeman personally owed money.

On June 15, 2020, Freeman and his coconspirators submitted a second fake application. Freeman claimed New Jack Trucking LLC had 10 employees and a monthly payroll of $58,400. Freeman and his associates claimed the business had been in operation in February 2020 even though the entity never had any genuine business activity. The coconspirators used fake IRS forms and a falsified bank statement to make it appear New Jack Trucking was a genuine business with employees. On June 16, 2020, Freeman and his coconspirators obtained $146,000 for that fraudulent application.

Freeman supplied some of the loan proceeds to his coconspirators and used some of the funds for his own benefit. The account contained debits for airline travel, hotel expenses, and tickets to various venues and sporting events.

In July 2020, after federal investigators detected the fraud and notified Freeman’s bank, approximately $220,000 of the loan proceeds were frozen and returned to the Small Business Administration. The net loss from the scheme is $426,666.

As Assistant United States Attorney Cindy Chang noted, the damage was not just the stolen funds, but the strain fake applications put on the benefit system. “During major disasters and times of crisis, it is particularly important for the government to be able to disburse aid quickly to victims to mitigate the impact of the crisis.  When individuals exploit these vulnerable periods, they not only drain finite monetary resources, they also burden limited infrastructure resources.  For example, it was widely reported that the large volume of PPP applications in the first few months of the pandemic overwhelmed SBA servers and frustrated small business owners across the country who were unable to even submit an application, much less receive funds.”

Judge Robart ordered Freeman to pay $426,666 in restitution and to be on three years of supervised release following his prison sentence.

This case was investigated by the U.S Treasury Inspector General for Tax Administration (TIGTA).

The case was 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 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.

Seattle – A former Washington State resident who now resides in Texas was sentenced today in U.S. District Court in Seattle to 30 months in prison for Aggravated Identity Theft and Bank Fraud, announced U.S. Attorney Nick Brown. Jeanne Ang Rather, 51, was indicted in May 2021 for stealing the personally identifying information of at least ten people who worked under her at dialysis clinics. Between September 2019 and March 2020, she used the information to fraudulently open credit accounts and charge expenses for her family. She also stole and deposited checks from the clinics into her own bank accounts. U.S. District Judge John C. Coughenour ordered Rather to be on three years of supervised release following the prison sentence.

According to records filed in the case, Rather was the manager of two dialysis clinics in Skagit County. In addition to stealing the identities of her subordinates, she stole 20 checks from insurance companies written to one of the clinics and deposited the checks into her personal bank accounts. She defrauded the clinic of $98,511 and ran up credit card charges that defrauded a bank of $106,089 for a total loss amount of more than $204,000. In her plea agreement in February 2022, Rather agreed to make full restitution to the bank and clinic.

The case was investigated by the U.S. Postal Inspection Service (USPIS).. 

The case was prosecuted by Assistant United States Attorneys Sok Tea Jiang and Yunah Chung.

Seattle – The former Finance Director at two Seattle area non-profits pleaded guilty today in U.S. District Court in Seattle to embezzling more than $3 million from her employers, announced U.S. Attorney Nick Brown.  Susana Tantico, 62, of Renton, Washington committed the embezzlement over a nine-year period.  Tantico will be sentenced by U.S. District Judge James L. Robart for two counts of wire fraud on August 15, 2023.

“Ms. Tantico was a trusted financial professional who sadly used her skills to steal from organizations serving those most in need of help,” said U.S. Attorney Brown.  “Each time she used the organization’s credit card for trips, gambling, or clothing, she knew she was effectively stealing from people who depended on assistance from her employer. Then she used her access to the organization ledgers to cover-up the theft.  The true victims are the clients who should have been served with the funds she stole.”

According to the charging information and plea agreement, in 1999 Tantico began working for a non-profit that provides healthcare to underserved populations.  Ultimately, Tantico became the non-profit’s Finance Director.  Between 2011 and June 2020, Tantico embezzled nearly $2.3 million from the healthcare non-profit.  She used the non-profit’s debit and credit cards to withdraw $1.6 million at casinos for gambling.  She also used the debit and credit cards to pay for personal vacations, such as a $26,000 family trip to Disneyworld, and trips to Las Vegas and San Diego.  Tantico also used the medical non-profit’s debit and credit cards for more than $83,000 worth of purchases at Nordstrom and $40,000 worth of purchases at Apple stores.

After running up the big bills, Tantico used the non-profit’s funds to pay the credit card bills and disguised the payments as legitimate expenses, such as medical supplies.  Throughout this timeframe, Tantico told the non-profit auditors that she was aware of no fraud at the non-profit. 

In 2020, Tantico went to work as Finance Director for a different non-profit -- one with a focus on criminal justice issues.  Tantico used more than $485,000 of the non-profit’s funds for gambling at casinos.  She transferred $21,000 from the non-profit to her mortgage servicer to pay her home mortgage.  She also transferred money to her personal bank account.  Tantico then altered the bank records to hide the embezzlement.  At one point, she was questioned by one of the organization’s banks about all the withdrawals at casinos.  She claimed that the non-profit held youth programs at the casinos and claimed the withdrawals were for cash prize giveaways.  In all, Tantico stole nearly $893,000 from the non-profit.  The non-profit has incurred $132,000 in costs to forensically audit its books, fix its accounting procedures and records, and reply to vendors.

Prosecutors have agreed to recommend a prison sentence of no more than 41 months in prison.  Judge Robart is not bound by the recommendation and can impose any sentence allowed by law.

Wire fraud is punishable by up to 20 years in prison and a $250,000 fine.

The case was investigated by the FBI. 

The case is being prosecuted by Assistant United States Attorney Seth Wilkinson.

WASHINGTON – GCI Communications Corp. (GCI), located in Anchorage, Alaska, has agreed to pay $40,242,546 to resolve allegations that it violated the False Claims Act by knowingly inflating its prices and violating Federal Communications Commission (FCC) competitive bidding regulations in connection with GCI’s participation in the FCC’s Rural Health Care Program. The program provides more than $570 million each year to assist rural health care providers with their telecommunications needs.

Under the Rural Health Care Program, the FCC pays a subsidy equal to the difference between the more expensive cost for a telecommunication service in a rural area and the less expensive cost for the same service in an urban area in the same state. FCC regulations also require contracts for these subsidized services be awarded through a competitive bidding process. The United States alleged that, between 2013 and 2020, GCI failed to comply with FCC regulations that governed how telecommunications companies must calculate their prices for purposes of claiming subsidy payments, and as a result GCI received greater subsidy payments than it was entitled to. The United States further alleged that GCI caused Eastern Aleutian Tribes Inc., a rural health care provider in Alaska, to agree to inflated prices after the relevant contract was competitively bid. As a result, GCI knowingly received higher payments under the program, from 2015 through 2018, in connection with its contract with Eastern Aleutian Tribes, Inc.

“Telecommunications providers that seek to participate in important FCC programs like the Rural Health Care Program must comply with applicable rules, including those governing how they competitively bid on contracts and set their prices,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “Today’s settlement demonstrates our continuing commitment to preventing the misuse of taxpayer funds.”

“Providing health care services in rural areas, especially to Indigenous people in remote areas of Alaska, is vital and must be protected,” said U.S. Attorney Nick Brown for the Western District of Washington. “This $40 million settlement should deter other companies from attempting to improperly enrich themselves by overcharging the government for important healthcare-related telecommunications services.”

“Compliance with the Universal Service Fund’s Rural Health Care Program rules is a critical component in making sure that medical providers have access to the types of communications equipment and services needed to enhance medical options and care in rural communities,” said FCC Enforcement Bureau Chief Loyaan Egal. “This global settlement reflects our strong partnership with the Department of Justice in protecting the USF, and we thank them for their efforts in this particular case.”

Contemporaneous with the civil settlement, GCI has agreed to enter into a corporate compliance agreement with the FCC. GCI will also resolve an FCC administrative investigation and an FCC proceeding arising from GCI’s participation in the Rural Health Care Program.

The civil settlement includes the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act by Robert Taylor, GCI’s former Director of Business Administration. Under those provisions, a private party can file an action on behalf of the United States and receive a portion of any recovery. The qui tam case is captioned U.S. ex rel. Taylor v. GCI Liberty, et al., Case No. 19-cv-2029 (W.D. Wash.). The whistleblower will receive $6.4 million as his share of the recovery.

The resolution obtained in this matter was the result of a coordinated effort between the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section, and the United States Attorney’s Office for the Western District of Washington, with assistance from the FCC’s Office of the Inspector General and the FCC’s Enforcement Bureau.

The matter was handled by Trial Attorney David M. Sobotkin and Assistant U.S. Attorney Kayla Stahman for the Western District of Washington.     

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The claims resolved by the settlement are allegations only and there has been no determination of liability.

Seattle – A 39–year-old Kent, Washington, woman pleaded guilty today in U.S. District Court in Seattle to wire fraud and tax fraud charges for her 10-year embezzlement scheme, announced U.S. Attorney Nick Brown. Christin Guillory, an Accounting Manager at an Everett-based manufacturing company, stole more than $2.5 million from her employer by transferring funds to accounts Guillory set up in the names of fake companies and then routing the funds to her own bank accounts.  Guillory faces up to 20 years in prison when sentenced by U.S. District Judge Ricardo S. Martinez on August 11, 2023.

According to the plea agreement, in April 2013, Guillory set up an account with payment processor Square that used a display name that made it appear it was an account of a commercial shipping company. Between 2014 and 2019, Guillory secretly paid $1,695,591 to that account and then transferred the money to her own bank accounts. She made false entries in the company books to conceal the theft.

In 2019, Guillory stopped using Square for her fraud and instead used two PayPal accounts. She gave one of the PayPal accounts a display name similar to that of her employer. For the second account, she used the name of a shipping company with which she had no affiliation. In 2020 and 2021, she caused the transfer of $604,000 to the PayPal accounts and made false accounting entries to cover her tracks. She then transferred the bulk of the money for her own use. Becoming more brazen, between August and November 2021, Guillory transferred $247,000 directly from company accounts to her own bank accounts. Again, she made fraudulent accounting entries and reused legitimate invoices to make it appear the payments were for appropriate business purposes. In all, Guillory made at least 867 secret transactions using interstate wires that totaled $2,536,086.

The scheme was detected when a financial institution reported irregularities.

Guillory is also charged with making a false tax return for failing to report the more than $2.5 million in income she embezzled. For example, for the tax year 2019, Guillory represented that her income was $38,022, but failed to report the $615,392 in income she received that year from her embezzlement. In all, Guillory failed to pay $590,850 that she owed in taxes.

“Ms. Guillory received millions of dollars of ‘involuntary contributions’ from her employer, stolen amounts which she gave herself by abusing her position of trust within the company,” said Special Agent in Charge Bret Kressin, IRS Criminal Investigation (IRS:CI), Seattle Field Office. “Financial and tax crime have consequences, and Ms. Guillory’s guilty plea today is a compelling reminder of that.”

Wire fraud is punishable by up to twenty years in prison. Filing a false tax return is punishable by up to three years in prison.

Under the terms of the plea agreement, prosecutors will recommend no more than 41 months in prison for Guillory. The actual sentence is up to Judge Martinez who will consider a number of statutory factors before determining the appropriate sentence.

The case was investigated by the FBI and the Internal Revenue Service: Criminal Investigation (IRS:CI).

The case is being prosecuted by Assistant United States Attorney Seth Wilkinson.

Seattle – A Seattle-area man who was arrested for drug trafficking by multiple law enforcement agencies six times over a two-year period was sentenced this week in U.S. District Court in Seattle to ten years in prison, announced U.S. Attorney Nick Brown. Steven Eric Strauss, 56, was charged federally on May 5, 2022, with Unlawful Possession of a Firearm, Possession of Controlled Substances with Intent to Distribute and Possession of a Firearm in Furtherance of a drug trafficking crime. At the sentencing hearing, U.S. District Judge James L. Robart said Strauss “has the potential to return to what has been a life of crime…. I need to protect the community from that.”

According to records filed in the case, between January 2020 and March 2022, Strauss was investigated and arrested for drug trafficking by multiple law enforcement agencies. Those arrests and seizures include:

• January 2020: Snohomish County Sheriff’s Office searched Strauss’ Everett residence after he sold narcotics to a person working with law enforcement. Seized methamphetamine, heroin, fentanyl, 9mm handgun and more than$14,000 in cash.
• March 2021: Washington State Patrol (WSP) stopped him in Seattle and seized methamphetamine, heroin, fentanyl, marijuana, a rifle, and more than $27,000 in cash.
• April 2021: Strauss sold heroin and methamphetamine to a person working with law enforcement. Bellevue Police searched his car and seized a stolen pistol and a second handgun, methamphetamine, heroin, fentanyl, and more than $34,000 in cash.
• October 2021: Seattle Police arrested Strauss in a stolen travel trailer and seized two firearms, methamphetamine, heroin, fentanyl, and more than $9,000 in currency.
• November 2021: Lynnwood Police arrested Strauss for having a stolen disabled parking placard in his car. He had a short barrel rifle, heroin, methamphetamine, fentanyl, and more than $31,000 in cash.
• March 2022: Seattle Police arrested Strauss after seeing him engage in hand-to-hand drug deals. From his car officers seized methamphetamine, heroin, fentanyl, cocaine, two pistols, and more than $20,000 in cash.

In asking for the ten-year sentence, Assistant United States Attorney Cecelia Gregson noted that Strauss has failed to reform following state prison sentences. “The defendant’s prior encounters with the criminal system also failed to deter or dissuade him from selling drugs and carrying firearms. A review of the defendant’s criminal history establishes that from the age of eighteen, the defendant has been in a revolving door of crime commission to prison admission,” AUSA Gregson wrote in her sentencing memo.

The case was investigated by the Washington State Patrol with assistance from the Seattle Police Department, Snohomish County Sheriff’s Office, Lynnwood Police, and Bellevue Police.

The case was prosecuted by Assistant United States Attorney Cecelia Gregson.

Seattle – A 64-year-old Everson, Washington, man was sentenced today in U.S. District Court in Seattle to two years in prison for failing to pay over taxes, announced U.S. Attorney Nick Brown. Between 2013 and 2019, Jay Howard Prather owned and operated Heritage General Building Contractors. He had as many as 48 employees over that period and withheld $1,095,388 in Social Security, Medicare, federal income taxes, and unemployment taxes from his employees’ paychecks. Then, instead of paying the money to federal programs as required, he used the money to buy expensive horses, exotic sportscars, and to remodel his multi-million-dollar lavish estate. At the sentencing hearing, U.S. District Judge John C. Coughenour said Prather “was warned several times that his conduct was illegal.”

“Mr. Prather stole from his employees and continued to do so even after he was confronted by those employees and by his accountant. He simply had no respect for the law or any concern about how his actions would impact his employees in the future,” said U.S. Attorney Nick Brown. “Instead, he spent money that should have gone to their Social Security and Medicare accounts on his personal luxuries: $200,000 for thoroughbred horses and more than $360,000 on three Porsche automobiles.”

According to records filed in the case, several employees confronted Prather about his failure to pay over the money he had withheld from their paychecks. In 2017, he met with an accountant who told him his tax obligation was significant. Prather sought to limit his payment to the two former employees who were threatening to sue him if he did not pay. The accountant told him that was not possible. Prather stopped communicating with the accountant and never paid the taxes owed.

Even as Prather refused to pay the taxes he owed for his employees, he used their labor, and the money he withheld, to build and remodel his luxurious estate in rural Whatcom County.

In 2020 he formed a new custom cabinet company, Artisan Builders Inc.  According to an affidavit from investigators, to date Prather has not paid the taxes he withheld from the two employees of that company.

“Mr. Prather made the wrong decision when he chose to buy horses and Porsches for his own fun over doing the lawful, right, and mandatory thing,” said Special Agent in Charge Bret Kressin, IRS Criminal Investigation (IRS:CI), Seattle Field Office. “Mr. Prather abused his employees’ trust when he spent their withholdings for his own unjust enrichment.”  

Judge Coughenour imposed a restitution obligation of $1,095,388.

The case was investigated by the Internal Revenue Service: Criminal Investigation.

The case was prosecuted by Assistant United States Attorney Erika Evans.

Seattle – A 30-year-old California man who allegedly forced women into prostitution using assaults, threats, and manipulation was arrested in Seattle last week on a grand jury indictment, announced U.S. Attorney Nick Brown. Brandon Denzel Washington appeared today, in U.S. District Court in Seattle, and was ordered detained pending trial. Washington is charged with four federal felonies related to human trafficking. He has pleaded “Not Guilty,” and trial is currently scheduled for July 2023.

According to the indictment, Washington is charged with two counts of Sex Trafficking through Force, Fraud, and Coercion. Count One charges the forced trafficking of an adult female in Seattle from 2014 to 2020. Count Three charges Sex Trafficking through Force, Fraud, and Coercion for a second victim in Seattle from 2017 to 2019. In each case, Washington transported the victims to engage in prostitution. The transportation is charged in Counts Two and Four. One victim was transported from California to Washington State and elsewhere to engage in commercial sex acts. The second victim was transported from Washington to Hawaii and elsewhere to engage in commercial sex acts.

The sex trafficking scheme was first uncovered when a retired Bellevue Police Officer working security noticed a high number of men visiting a Bellevue luxury apartment building over a period of just a few weeks. The investigation took off from there with law enforcement investigators analyzing financial records, travel records, ads for commercial sex posted in online forums, and social media posts to identify victims of Washington’s sex trafficking activities and to gather evidence of the offenses. Washington uses the name “Bentley” online and allegedly had women under his control tattoo the emblem of the luxury car company on their bodies to show his ownership.

According to records filed in the case, two different women have provided law enforcement with detailed accounts of the brutal assaults Washington used to keep the victims in his control and earning money for him through commercial sex acts. Washington is alleged to have trafficked multiple women through California, Washington, Nevada, Hawaii, Florida, New York, and other states. Evidence in the case reveals Washington allegedly forced one victim to sign a “contract” in blood spelling out that she had to earn $200,000 per year for him and “submit completely to him” – even asking permission to leave the house.

Washington’s social media posts indicate he remains active in human trafficking bragging about his luxury residences, vehicles, and wealth.

Sex trafficking through force, fraud and coercion is punishable by a mandatory minimum 15 years in prison. Transporting a victim for prostitution is punishable by up to 20 years in prison.

The case is being investigated by Homeland Security Investigations (HSI).

The case is being prosecuted by Assistant United States Attorney Erin H. Becker.

Seattle – The U.S. Department of Justice, the Washington State Attorney General’s Medicaid Fraud Control Division, and United Wound Healing P.S., today resolved allegations that United Wound Healing (UWH) of Puyallup, Washington, had improperly billed Medicare and Medicaid for services provided in nursing homes and care facilities in Washington, Oregon, Utah, and Idaho. UWH will pay $292,132 to resolve the matter. The company is settling the matter but admits no wrongdoing.

UWH partners with long-term care facilities, including skilled nursing facilities, assisted living facilities, and adult family homes, to provide wound care to patients residing in those facilities. UWH providers travel to the partner facilities, where they conduct rounds to identify and treat patients with wounds, including wounds caused by pressure, dermatitis, vascular disease, diabetes, and surgery.

Between 2015 and 2022 UWH allegedly submitted false claims to the Medicare and Medicaid programs for evaluation and management (E&M) services. Medicare generally prohibits healthcare providers from separately billing for E&M services provided on the same day as another medical procedure, unless the E&M services are significant, separately identifiable, and above and beyond the usual pre- and post-operative care associated with the medical procedure.

The settlement resolves allegations in a lawsuit filed in the Western District of Washington by Dena Walker, a former employee of UWH. The lawsuit was filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private individuals to sue on behalf of the government for false claims and to share in any recovery Ms. Walker will receive approximately $58,426 as part of the resolution.

“Providers have a responsibility to submit accurate claims to Medicare and Medicaid that are driven by patient needs,” said Steven J. Ryan, Special Agent in Charge at the Department of Health and Human Services, Office of Inspector General (HHS-OIG). “As this case demonstrates, HHS-OIG is committed to investigating those who threaten the integrity of federal health care programs and recovering valuable taxpayer dollars so they can be used for their intended purposes.”

Of the settlement amount, $273,711 will go to the federal government and $18,420 will go to the state of Washington. Of those amounts, $130,136 is restitution to federal healthcare programs, and $15,929 is restitution to the state. The False Claims Act allows for increased damages to discourage improper billing to federal programs.

The matter was investigated by the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG).

This resolution was negotiated by Assistant United States Attorney Ashley Burns. Senior Counsel Carrie L. Bashaw handled the matter for the Washington State Attorney General’s Office.

Seattle – The former co-owner of a defunct medical testing company failed to report to prison as directed last week, and a warrant has been issued for his arrest. Richard Reid, 53, was convicted in March 2022, of five federal felonies connected to his scheme to profit from illegal kickbacks in the medical testing industry. In January 2023 he was sentenced to two years in prison.

Reid has repeatedly petitioned the judge to delay his prison reporting date, claiming to have COVID-19 and then long COVID. Judge John C. Coughenour refused to delay the date past the end of April. 

Law enforcement has been working to locate Reid so that he can begin serving his sentence. Reid had been living in Astoria, Oregon but could not be located at his address. Law enforcement has learned Reid may be carrying a firearm and asks that the public contact the Seattle office of the FBI, at 206-622-0460, if they have information on his whereabouts.

The activities of Bellevue-based Northwest Physicians Laboratory (NWPL) have been the subject of extensive civil and criminal litigation. Richard Reid was one of the owners and the Vice President of Sales for NWPL. Reid helped NWPL obtain more than $3.7 million in kickback payments by steering urine drug test specimens to two labs that could bill the government for testing.

The case was investigated by the FBI, Health and Human Services Office of Inspector General (HHS-OIG), and the Defense Criminal Investigative Service (DCIS).

The case is being prosecuted by Assistant United States Attorney Michael Dion

reid_fbi_wanted_poster.pdf

Seattle – The Justice Department joins its partners across the federal government, as well as people throughout American Indian and Alaska Native communities, in recognizing May 5, 2023 as National Missing or Murdered Indigenous Persons Awareness Day. Responding to the unacceptable levels of violence that have led to the crisis of Missing or Murdered Indigenous Persons (MMIP) is a priority of the Department of Justice every day.

The department’s work to respond to the MMIP crisis is a whole-of-department effort that takes many forms. One year ago today, Deputy Attorney General Lisa Monaco joined Secretary of the Interior Deb Haaland to launch the Not Invisible Act Commission, a joint Commission established by the Not Invisible Act with an essential mission — to reduce violence against American Indians and Alaska Natives. In February, they welcomed the first in-person plenary meeting of the Not Invisible Act Commission. Since then, the department’s representatives on the commission—who are department leaders and subject matter experts—have participated in the Commission’s field hearings, which will continue through the summer. Later this year, the Commission will deliver recommendations for addressing the MMIP crisis to the Attorney General and the Secretary. In addition to supporting the Not Invisible Act Commission, the department remains steadfast in its commitment to addressing the MMIP crisis.

“The Justice Department is marshalling the full strength of its resources to confront the crisis of Missing or Murdered Indigenous Persons, which has devastated the lives of victims, their families, and entire Tribal communities,” said Attorney General Merrick B. Garland. “Addressing this crisis requires a whole-of-government approach, and we are grateful for the partnership of Tribal and other law enforcement agencies across the nation that are working alongside the Justice Department to help reduce crime and support victims in American Indian and Alaska Native communities.”

“Missing or Murdered Indigenous Persons Awareness Day calls on our nation to pause and honor the loved ones who have gone missing or who have been the victims of violent crime,” said Deputy Attorney General Lisa O. Monaco.  “Acknowledging the many American Indian and Alaska Native people who have suffered, and continue to suffer, from the pain of a missing loved one or of violent crime serves as an important reminder of the urgency and importance of the department’s work to respond to the crisis of missing or murdered indigenous persons. The Justice Department—including our dedicated agents, analysts, and prosecutors—remains steadfast in our pledge to work as partners with Tribal governments in preventing and responding to the violence that has disproportionately harmed Tribal communities.”

“The Justice Department is committed to using every resource at its disposal to combat the Missing or Murdered Indigenous Persons Crisis,” said Associate Attorney General Vanita Gupta. “In addition to our core law-enforcement work, we are providing grant funding and guidance to help Tribes develop response plans for missing-persons cases, partner effectively with local law enforcement, and provide resources for victims of crime.”

“Tribal Nations in the Western District of Washington are working on their response plans to be ready to act if a tribal member is reported missing. The Tulalip Tribes is the first to adopt and implement their plan, and we celebrate that milestone,” said U.S. Attorney Nick Brown. “The Washington State Patrol data notes 142 Indigenous persons in Washington are missing and we must keep them front and center as we undertake this important work.”

There are various activities planned throughout Western Washington. Today, several tribes are having walks and healing circles to honor the missing. This evening, the Tulalip Tribes and the Muckleshoot Tribe will gather for ceremonial observances. Tomorrow the community is invited to join the 3rd Annual MMIP Families March from Westlake Park in Seattle to Seattle Center. The march begins at 10:00 AM, and the public is encouraged to wear red in honor of the Murdered and Missing.

The Washington State Coalition against Domestic Violence has a list of events on its website.

Attached to this release is a fact sheet on DOJ resources

doj_mmip_resources.pdf

regarding Missing and Murdered Indigenous Persons and the latest information from the Washington State Patrol regarding MMIP in our state.

missing_list_for_public_release_050123_002.pdf

Seattle – A former member of the Washington State Patrol was sentenced to ten years in prison last week, after pleading guilty in January 2023 to Attempted Enticement of a Minor, announced U.S. Attorney Nick Brown. Trevor Smith, 30, of Marysville, was arrested in February 2021 after communicating with a woman who he believed was offering to allow him to have sex with her 6 and 11-year-old children. In reality, the woman was an undercover police officer, and the children were fictitious. Smith was arrested after meeting with the woman, purchasing condoms and traveling to the hotel where he thought the encounter would occur.

At the sentencing hearing last week, U.S. District Judge John H. Chun imposed 15 years of supervised release to follow the 10-year prison term. Smith will be required to register as a sex offender after his release from prison.

Smith was originally charged in King County Superior Court, but the case was transferred to federal court in May 2021. Smith was released on bond until January 2023. When Smith entered his guilty plea, he also was taken into custody to begin serving his sentence.

The case was investigated by Homeland Security Investigations and the Seattle Police Department as part of the Internet Crimes Against Children Task Force (ICAC).

The case was prosecuted by Special Assistant United States Attorney Laura Harmon. Ms. Harmon is a Senior King County Deputy Prosecutor specially designated to prosecute child exploitation crimes in federal court.

Seattle – A man and woman from Southern California were arrested this week on an indictment charging them with conspiracy and ten counts of wire fraud related to an organized retail theft scheme, announced U.S. Attorney Nick Brown. Jalen Amir Thomas, 27, of Santa Monica, California, and Armia Ta’Jae Timmons, 25, of Los Angeles, were arrested on the eleven-count indictment. They appeared in U.S. District Court in the Central District of California yesterday. Prosecutors will ask that they be detained and transported to the Western District of Washington for arraignment.

“Organized retail theft has exploded across the country, due in large part to the growth of an online resale marketplace,” said U.S. Attorney Nick Brown. “In this case, we allege the coconspirators hatched a scheme to rent high-value construction equipment and then fail to return it. They allegedly sold the stolen goods on websites such as OfferUp and Facebook Marketplace. They traveled through 23 different states and hit nearly 200 stores causing more than $800,000 in losses. We are putting a stop to it here in Western Washington.”

“As the US retail sector faces increasing challenges such as layoffs and store closings, it becomes more difficult for stores to absorb the impact of retail fraud, which amounts to billions of dollars in losses,” said SAC Robert Hammer, who oversees HSI operations in the Pacific Northwest. “HSI is proud to have started a strategic initiative with the Seattle Police Department and various corporate partners in 2023 to hold those involved in organized retail theft accountable for their actions.”

According to the indictment, as early as March 2022, Thomas led a group including Timmons, that traveled the U.S., stopping at home improvement stores and renting two types of expensive construction equipment: jumping jack tampers and vibratory plate compactors valued between $1,500 and $2,000 each. The group used debit cards to make a small rental deposit for each machine and signed an agreement that if the equipment was not returned on time, they would pay mounting fees. They used false identities and ruse telephone numbers to rent the equipment. They transported stolen goods in vans and rental trucks.

In all, some 480 pieces of equipment were stolen from the home improvement stores. When a store tried to charge the debit account for the value of the equipment or the penalties incurred, it learned there was insufficient funds to cover the debt. Thomas and Timmons then attempted to sell the stolen equipment at a steep discount on various online marketplaces.

The group stole multiple items of equipment from stores in Federal Way, Tacoma, Vancouver, Covington, Longview, Bothell, Everett, Redmond, and Seattle.

Because the deposits traveled by wire outside the state of Washington, the pair is charged with conspiracy to commit wire fraud and ten counts of wire fraud and/or aiding and abetting wire fraud.

The conspiracy count and the wire fraud counts are each punishable by up to 20 years in prison and a $250,000 fine.

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 investigation is being led by Homeland Security Investigations (HSI).

The case is being prosecuted by Assistant United States Attorney Lauren Watts Staniar.

Seattle – The Department of Justice investigative team in a major cybercrime case, pursued in the Western District of Washington, was honored today with an Executive Office of U.S. Attorney’s Director’s award for Outstanding Litigative Team, announced U.S. Attorney Nick Brown. The prosecutors, paralegals, and cyber investigators from the FBI broke up the hacking group Fin7. The award was presented today in Washington DC.

“Investigating and prosecuting cybercrime is uniquely challenging –the offenders hide behind keyboards, often overseas, but can do untold billions of dollars in damage,” said U.S. Attorney Brown. “With Fin7, the tireless work by our team saw three of the defendants arrested and brought to the United States to face charges. All three have been held accountable with significant prison sentences. Fin7 as an entity is no more.”

Those recognized today with the Director’s Award include: Former Assistant United States Attorneys Frances Franze-Nakamura and Steven Masada, and DOJ Trial Attorney Anthony Teelucksingh for their work prosecuting the case; Paralegals Anna Chang and Salee Porter for their critical work organizing records and discovery from companies, foreign governments, and law enforcement so that we could successfully petition for the extradition of the three defendants who were arrested while traveling in Germany, Spain, and Thailand; and FBI special agents who all performed outstanding investigative and analytic work that was critical to the successful prosecution.

According to records filed in U.S. District Court for the Western District of Washington, between 2015 and 2018, FIN7 members engaged in a highly sophisticated malware campaign to attack more than 100 U.S. companies, predominantly in the restaurant, gaming, and hospitality industries. FIN7 hacked into thousands of computer systems and stole millions of customer credit and debit card numbers which were used or sold for profit. 

In the United States alone, FIN7 successfully breached the computer networks of businesses in all 50 states and the District of Columbia, stealing more than 15 million customer card records from over 6,500 individual point-of-sale terminals at more than 3,600 separate business locations. Additional intrusions occurred abroad, including in the United Kingdom, Australia, and France. Companies that have publicly disclosed hacks attributable to FIN7 include such familiar chains as Chipotle Mexican Grill, Chili’s, Arby’s, Red Robin and Jason’s Deli.

Fedir Hladyr, 38, a Ukranian national, who played a managerial role in FIN7, was arrested in Dresden, Germany and was sentenced in April 2021 to ten years in prison. Andrii Kolpakov, 35, who served as a high-level hacker, was arrested in Lepe, Spain, and was sentenced to seven years in prison June 2021. Denys Iarmak, 33, who also served as a high-level hacker was arrested in Bangkok, Thailand and was sentenced to five years in prison in April 2022.

The Director’s Awards are awarded annually by the Executive Office of U.S. Attorneys to recognize outstanding work by U.S. Attorney’s Offices across the United States.

Seattle – A 37-year-old Seattle man was sentenced this week to four years in federal prison and three years of supervised release for Possession of Controlled Substances with Intent to Distribute, announced U.S. Attorney Nick Brown.  Joseph Johnson was prosecuted federally as part of Seattle’s Operation New Day – a concerted effort by Seattle Police and federal partners to remove open air drug markets in key hotspots in the city of Seattle.

“We are committed to prosecuting appropriate federal cases from the efforts to stop drug trafficking on Third Avenue and in the International District,” said U.S. Attorney Nick Brown. “In this case, Mr. Johnson did not learn from his first arrest in the International District and was arrested a second time, less than a month later, selling fentanyl at 3rd and Pike. In both instances he was armed with semi-automatic pistols. Such a case is appropriate for federal sanctions.”

Johnson was arrested on February 4, 2022, near 12th and Jackson in the International District, when an undercover law enforcement officer approached him and purchased fentanyl pills. At the time of the arrest Johnson had additional pills, $165 cash, and a semi-automatic 9 mm pistol. Johnson was released from custody. Before charges were filed on that arrest, Johnson was contacted again by law enforcement – this time at 3rd and Pike. On March 2, 2022, law enforcement officers saw Johnson engage in hand-to-hand sales of fentanyl pills. Johnson had 184 fentanyl pills in his pocket as well as nearly $1,100 in cash drug proceeds. He also had a loaded Polymer80 semi-automatic pistol.

In imposing the four-year prison sentence and the three years of supervised release to follow, Judge John C. Coughenour said “the involvement of the firearms and the significant amount of fentanyl is very troubling for the court.”

Assistant United States Attorney Cecelia Gregson noted the case was slated for federal prosecution, because of Johnson’s quick return to dealing after the first arrest. “The rapid rate of recidivism the defendant demonstrated by engaging in the very same conduct weeks later leaves little question about the threat he poses to community safety. Fentanyl is highly addictive and incredibly lethal. Packing firearms while dealing fentanyl adds another layer of dangerousness and increases the risk of violence occurring when addicted consumers and unruly rivals are factored into the mix,” AUSA Gregson wrote in her sentencing memo.

The case was investigated by the Seattle Police Department with assistance from the Drug Enforcement Administration.

The case was prosecuted by Assistant United States Attorney Cecelia Gregson.

Seattle – A 48-year-old man with ties to Seattle was charged federally with unlawful possession of a firearm and other offenses after he was arrested for a drive-by shooting in Seattle’s International District, announced US Attorney Nick Brown. Phuong Nguyen Le, appeared today on the indictment. In February 2023 Le was allegedly found with fentanyl, heroin, and cocaine base. Le has been in custody in King County and today was brought over for arraignment on the federal charges.

On February 24, 2023, Seattle Police officers responded to reports of shots fired at the intersection of 10th Avenue South and South King Street in Seattle. Witnesses at the scene reported a man in a white Mercedes fired a handgun in the air multiple times at the intersection. SPD officers then located the vehicle nearby and found Phuong Nguyen Le driving, with his girlfriend in the passenger seat. Le was the owner of the vehicle. Le ultimately gave consent to search the vehicle. SPD officers seized the following items:

• a Springfield Armory XD-9 9mm caliber pistol, bearing serial number BY348001, with a round of ammunition in the chamber and a partially loaded magazine;
• an additional Springfield Armory 9mm caliber magazine loaded with ammunition;
• two spent bullet shell casings;
• approximately 83 grams of heroin;
• approximately 135 grams of cocaine;
• approximately 194 grams of suspected fentanyl powder;
• approximately 350 pills suspected to contain fentanyl;
• multiple cloth zipper bags containing approximately $4,400 in mixed denominations;
• various baggies;
• large amounts of handwritten names and phone numbers written on
• various documents;
• A notebook containing names.

In April of 2012, Le was convicted of distribution of cocaine base in U.S. District Court for the Western District of Washington. In September of 2020, Le was sentenced to two years in prison for illegal possession of a firearm and illegal possession of drugs.

Unlawful possession of a firearm is punishable by up to 15 years imprisonment. Possession of a controlled substance with intent to distribute is punishable by up to 40 years imprisonment. Carrying a firearm during and in relation to a drug trafficking crime is punishable by up to life in imprisonment.

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 Seattle Police Department and Bureau of Alcohol, Tobacco, Firearms and Explosives.

The case is being prosecuted by Assistant United States Attorney Brian Wynne.

Seattle – A 45-year-old Shoreline, Washington man was sentenced today in U.S. District Court in Seattle to 51 months in prison for unlawful possession of ammunition, announced U.S. Attorney Nick Brown. Rustam Yusupov pleaded guilty in February 2023, following his arrest in March of 2022. At today’s sentencing hearing U.S. District Judge John C. Coughenour said the prevalence of guns on the streets is leading “to a bloodbath in this country.”

“Washington State is a pioneer in Red Flag laws designed to keep firearms out of the hands of those who pose a danger,” said U.S. Attorney Nick Brown. “We will never know what motivated Mr. Yusupov to bring high powered firearms and sniper rifles to a downtown hotel. This prosecution means his arsenal has been surrendered to police, and he remains prohibited from purchasing more firearms in the future.”

According to records filed in the case, Seattle Police Officers were called to a downtown Seattle hotel room on March 10, 2022, with reports of a distraught man asking the hotel staff for assistance. When the officers went to the hotel room, they noted that furnishings had been over-tuned, with the mattress moved to block the door. Police found two firearms in the room – including a “ghost gun,” -- a firearm without a serial number.

Due to his agitated state, Yusupov was transported for medical attention. As officers were preparing to leave the hotel, a staff member working in the garage alerted them to weapons he had seen in Yusupov’s car. In the car were multiple firearms – including two additional “ghost guns.” In all, police recovered:

• FMK Firearms Model AR-1 Extreme 5.56 NATO caliber rifle.
• Aero Precision Model X15 5.56 caliber pistol.
• Ruger Model 5.7 5.7x28mm caliber pistol.
• Ruger Model 18029 Precision 6.5mm Creedmoor/.308 Winchester Caliber rifle.
• Kel-Tec Model Sub 2000 9x19mm caliber rifle.
• A North American Arms Corp. Derringer .22 revolver.
• Two Polymer80 9mm caliber pistols with no serial number.
• A skeletonized AR-15 5.56 NATO caliber pistol with no serial number.

In his plea agreement Yusupov admits that he is the subject of a domestic violence protection order. He had been ordered by King County Superior Court to surrender all his weapons. In March 2020 and again in May 2021, Yusupov was ordered to surrender his firearms and had signed paperwork and informed law enforcement that he no longer possessed any firearms.

When law enforcement went to search Yusupov’s home, they found the walls smeared with blood. Testing revealed that it was the blood of a dog. A dog was also found in the home in a kennel, badly malnourished. It was taken to a shelter for care.

The search of the home resulted in the recovery of two inert grenades; a container for 120mm rocket projectiles; hundreds of rounds of assorted ammunition (both handgun and rifle caliber), including 600 rounds of Israel Military Industries 5.56mm caliber ammunition; multiple handguns and rifle magazines (some loaded); assorted pistol slides; a ballistic vest with rifle plates; a bolt-action rifle; and assorted firearms accessories and firearms parts.

Yusupov is forfeiting multiple firearms and ammunition to the government.

The case was investigated by the Seattle Police Department and the Bureau of Alcohol, Tobacco, Firearms, & Explosives (ATF).

The case was prosecuted by Assistant United States Attorney Todd Greenberg.

Seattle – The owner of ‘Simply Thai’ restaurant in Tukwila, Washington, was sentenced today in U.S. District Court in Seattle to 18 months in prison for willful failure to pay over taxes, announced U.S. Attorney Nick Brown. Keovilayvanh Rinthalukay, 62, pleaded guilty in February 2023, admitting that between 2015 and 2019 he withheld Medicare, Social Security, and federal income taxes from his employees’ paychecks, but instead of paying the taxes to the government, he pocketed the money for his own benefit. At the sentencing hearing, U.S. District Judge James L. Robart said the amount withheld “is not a small number – it’s a lot of money. And the defendant didn’t find it necessary to pay his taxes for a number of years – it shows no respect for the law.”

“The failure to turn over payroll taxes is simply theft from employees who trust their employer to make those payments for their future well-being,” said U.S. Attorney Nick Brown. “In this case, Mr. Rinthalukay has committed to aggressively pay back more than $926,000 in tax debt. The prison sentence brings home the need to do right by workers and their future Social Security, Medicare, and federal unemployment benefits.”

According to records filed in the case, between 2015 and 2019, the Tukwila restaurant employed dozens of people. Over that same period the restaurant failed to pay over the taxes withheld from paychecks, as well as the employer’s share of the payroll and federal unemployment taxes. In all, Rinthalukay failed to pay at least $926,092. Instead, he used the money for his personal expenses including buying property, paying private school tuition for his children, and buying a motorcycle. Judge Robart noted at today’s hearing that Rinthalukay currently owns two homes in Western Washington that together are valued at well over $2 million.

As relevant conduct, the government noted that Rinthalukay has not paid his personal federal income taxes since 1998. The IRS is still reviewing that matter.

Prosecutors described Rinthalukay’s history of misconduct in their sentencing memo. “Rinthalukay has a long history of disregard for his tax obligations, both personally and as a business owner. The criminal conduct here is not some momentary aberration but rather part of a decades-long pattern. And his conduct harmed not only the United States Treasury, but also the employees at his restaurant. Employees risk losing credit with the Social Security system when their payroll taxes are not turned over to the IRS,” Assistant U.S. Attorney Philip Kopczynski wrote in the sentencing memo.

“Restaurant employees deal with a lot: long hours, irate customers, and exhausting work. One thing they shouldn’t have to worry about – their employer stealing from them,” said Acting Special Agent in Charge Adam Jobes, IRS Criminal Investigation (IRS:CI), Seattle Field Office. “Mr. Rinthalukay has owned and operated a restaurant for a long time and knows how important it is for his staff to provide good customer service. Today’s sentence is a strong reminder that business owners must play by their own rules and provide good service to their employees. Remitting tax withholdings and not stealing from their workers is a solid start.”

As of today, Rinthalukay has paid $550,000 of the taxes owed. The judgment imposed by Judge Robart will require prompt repayment of the remainder, including having Rinthalukay liquidate assets if needed.

The case was investigated by the Internal Revenue Service Criminal Investigation.

The case was prosecuted by Assistant United States Attorney Philip Kopczynski.

Tacoma – A Snohomish, Washington, man who was rearrested following his sentencing in a drug trafficking scheme, has now pleaded guilty to new charges, including attempting to hire a hitman to kill a witness in his case, announced U.S. Attorney Nick Brown. Michael John Scott, 44, was sentenced in January 2020 to 78 months in prison for dealing fentanyl-laced pills and cocaine. One week later, before he was to report to serve his sentence, he was arrested on his way to a drug deal in Whatcom County. While at the federal detention center awaiting trial on these new drug charges, Scott tried to hire a hitman to kill a witness against him. Today, Scott pleaded guilty to four federal felonies.

Scott admitted two additional crimes connected to drug distribution. According to the facts in the agreement, even as Scott was awaiting sentencing for the earlier drug distribution crimes, he was continuing to set up drug deals. On January 30, 2020, he was arrested as he arrived to sell fentanyl pills to a person in Whatcom County. That person was working with law enforcement. A search of Scott’s home revealed a stolen, loaded firearm, a Colt Delta Elite 10mm semi-automatic pistol. Scott admits in his plea agreement that he had the gun in furtherance of his drug distribution conspiracy.

Following the January 30, 2020, arrest, while in custody at the Federal Detention Center in SeaTac, Washington, Scott agreed to pay an associate $2,000 if he would assist Scott in finding a hitman to kill a witness against him and an associate of that witness. Scott said he would pay $10,000 each for the murders. Scott told his associate that he wanted the deaths to appear to be fentanyl overdoses. In June and July 2021, Scott wrote letters disguised as ‘legal mail’ to the person he thought was the hitman and to a friend he wanted to handle payment for the crimes.

The FBI was aware of the scheme and had an agent pose as the hitman. The friend of Scott’s met with the “hitman” and provided him with a down payment.

Today, Scott pleaded guilty to: Conspiracy to Distribute Controlled Substances --punishable by up to 20 years in prison; Possession of a Firearm in Furtherance of a Drug Trafficking Crime – punishable by a mandatory consecutive five year prison term on top of any sentence imposed for the other counts of conviction; Use of Interstate Commerce Facilities in the Commission of Murder for Hire –punishable by up to ten years in prison; and Tampering with a Witness, Victim, or Informant – punishable by up to 30 years in prison.

Under the terms of the plea agreement, prosecutors will recommend no more than 20 years in prison and the defense can recommend no less than ten years in prison. U.S. District Judge Robert J. Bryan is not bound by the recommendations and can impose any sentence allowed by law when Scott is sentenced on July 27, 2023.

Scott pleaded guilty in June 2019 for his role in U.S. v Hernandez et al, a 32-defendant drug trafficking case that was unsealed in December 2018. Scott was a high-volume redistributor of fentanyl-laced imitation oxycodone pills and cocaine, who delivered hundreds of thousands of dollars in cash to his cartel suppliers for the drugs–sometimes as much as $150,000 at a time. When Scott’s home was searched in December 2018, law enforcement recovered illegal drugs, more than $40,000 in cash, and other tools of the drug trade.

In the current case, Scott is forfeiting more than $25,000 seized in the case as well as the firearm seized at his residence.

The case was investigated by the FBI, the Whatcom County Sheriff’s Office, and the Drug Enforcement Administration (DEA).

The case is being prosecuted by Assistant United States Attorneys Kristine Foerster and Max Shiner.

Tacoma – A 32-year-old Puyallup, Washington man pleaded guilty today in U.S. District Court in Tacoma to Conspiracy to destroy energy facilities, announced U.S. Attorney Nick Brown. Matthew Greenwood admits in his plea agreement 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. Greenwood faces up to twenty years in prison when sentenced by Chief U.S. District Judge David G. Estudillo on July 21, 2023.

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.

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.

Prosecutors have agreed to recommend the low end of the guidelines range when Greenwood is sentenced. Since his arrest, Greenwood has been in intensive drug treatment while awaiting resolution in this case.

Co-defendant Jeremy Crahan remains charged with conspiracy to attack energy facilities.

The FBI is investigating 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 is being prosecuted by Assistant United States Attorney Todd Greenberg.

Seattle – A California man was indicted today by a federal grand jury for four federal felonies related to his sex trafficking of adult female victims, announced U.S. Attorney Nick Brown. Winston Cornell Burt aka “Dice Capone,” 31 of Hemet, California, was arrested November 6, 2022, after he allegedly brutally assaulted a 20-year-old woman and engaged in a rolling gun battle as she fled in a van driven by a man who picked her up from the roadway. Burt is charged federally with Sex Trafficking through Force, Fraud, and Coercion; Transportation of an Adult Female for Prostitution through Coercion and Enticement; and two counts of Unlawful Possession of Firearms. Burt will be arraigned on the indictment within the next couple weeks.

“The level of violence in this case is stunning – brutal beatings of young women, threats with firearms, emotional and physical control of every aspect of the victims’ lives,” said U.S. Attorney Brown. “I commend the Seattle Police Department and King County Prosecuting Attorney’s Office for working quickly to get Mr. Burt in custody, thus ensuring the immediate safety of the victim and the community.”

According to records filed in the case, Burt self-identifies as a “pimp” who led a sex trafficking enterprise through California, Arizona, and Washington. The young women in the case were allegedly required to provide all the money they earned in prostitution to Burt. Three women had his name tattooed on their faces – an apparent sign of “ownership.”

On November 2, 2022, Burt assaulted the 20-year-old victim in this case by kicking her, punching her, and pistol whipping her after she indicated she wanted to stop working for Burt. The assault occurred at an Airbnb in south Seattle.  Three days later, on November 5, 2022, Burt assaulted the victim again and forced her to strip to her underwear. The victim tried to escape from the rental home by jumping out a third story window. The defendant and two women working for him forced her into a car and drove towards a motel on north Aurora Avenue. Burt was armed with a gun, but the victim was able to get out of the car and ran into traffic on Aurora wearing only her underwear. Burt and his female assistants tried to force the victim back into their car, but the victim stayed in the middle of the roadway until finally picked up by an Uber driver who saw her in distress.

Even after the victim was driven away in a van, Burt gave chase on Aurora Avenue and fired shots at the van with the victim inside. The driver was eventually able to evade Burt and called the Washington State Patrol for assistance.

Ultimately law enforcement responded to the scene and got the victim to Harborview Medical Center for treatment.

Burt was arrested on November 6, 2022, as he was attempting to leave the Airbnb in south Seattle. He has been detained at the King County Jail since his arrest.

The indictment calls for the forfeiture of both firearms, more than $24,000 in cash, and jewelry worth in excess of $100,000.

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.

Sex trafficking by force, fraud or coercion is punishable by a mandatory minimum 15 years in prison and up to life in prison. Transportation of an adult female for prostitution through coercion and enticement is punishable by up to 15 years in prison and illegal possession of a firearm is punishable by ten years in prison.

The case is being investigated by the Seattle Police Department and the FBI with assistance from the Washington State Patrol (WSP).

Senior Deputy King County Prosecutor Ben Gauen worked closely with the Seattle Police Department and Assistant United States Attorney Kate Crisham on this case.

burt.indictment.filed_.pdf

Seattle – The owner of a Vancouver, Washington business that sought to assist immigrants with a variety of services has pleaded guilty to tax fraud charges, announced U.S. Attorney Nick Brown. Saul Valdez was an unlicensed tax preparer who led his immigrant customers to believe he was filling out their tax forms correctly. Instead, from 2016 through 2018, Valdez inserted a variety of false deductions and expenses on tax returns, lowering the customers’ tax obligations. Valdez faces up to three years in prison when sentenced by U.S. District Judge Benjamin H. Settle on August 28, 2023.

“Mr. Valdez operated a business providing services to primarily non-English speaking clients, who had little understanding of the U.S. tax system,” said U.S. Attorney Nick Brown. “Rather than truly assist them, his false deductions, expenses and credits put them at risk of owing back taxes and penalties, not to mention the stress of contact from the IRS.”   

According to the plea agreement, Valdez operated Conexion Latina, and used programs such as TaxAct and TurboTax to prepare clients’ taxes. For tax year 2017, Valdez admits claiming false and fraudulent expenses, donations, and credits on 36 different tax returns. The tax loss on those 36 returns is $54,045.  That is the amount of restitution Valdez has agreed to pay.

Using statistical sampling of 50 of some 2000 returns prepared by Valdez from 2016 through 2018, Valdez admits that the total tax loss for his fraud is $1,293,921.

Aiding and Assisting in the Preparation and Presentation of a False and Fraudulent Return is punishable by up to three years in prison.

Prosecutors have agreed to cap their sentencing recommendation at 30 months in prison.

The case is being investigated by Internal Revenue Service Criminal Investigations (IRS-CI).

The case is being prosecuted by Assistant United States Attorney Kristine Foerster.

Seattle – A federal grand jury indicted six people in connection with a Whatcom County fentanyl distribution organization, announced U.S. Attorney Nick Brown. The ring has been under investigation since late 2022 and was actively moving fentanyl from the Seattle area to redistributors in the Bellingham, Washington area. Three of the six people indicted are in custody. Three more are being sought by law enforcement.

“I commend the Whatcom County Sheriff’s Office Drug and Gang Unit and the Drug Enforcement Administration for a fast-moving investigation that worked to interdict potentially deadly pills over the last four months,” said U.S. Attorney Brown. “These alleged traffickers also possessed guns – some stolen, some with extended magazines – a dangerous combination with the narcotics.”

In a detailed criminal complaint, law enforcement officers described how they observed various apparent drug transactions and interdicted the drug loads. In one instance, law enforcement was called to a mini-mart where two people involved with the drug ring overdosed on fentanyl and had to be revived and transported to the hospital. Investigation of the ring revealed that the alleged two top leaders lived in Burien, Washington, and downtown Seattle. Multiple members of the ring have criminal histories which prohibit them from possessing firearms.

The grand jury charges all six defendants below with conspiracy to distribute fentanyl. Additionally, the defendants are charged as follows:

• Robel Sisay Gebremedhin A/K/A Robel Sisay Gebremedhui, 40, 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.
• Mohamed Abdirisak Mohamed, 34, of Seattle, WA is also 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.
• Ahbdurman Ahmed, 32, of Seattle, WA is also charged with: two counts of possession of fentanyl with intent to distribute; unlawful possession of a firearm.
• Matthew Anderson, 35, of Bellingham, WA is also charged with: two counts of possession of fentanyl with intent to distribute
• Daniel John Faix, 39, of Bellingham, WA is also charged with possession of fentanyl with intent to distribute; possession of controlled substances with intent to distribute; unlawful possession of a firearm; and possession of a firearm in furtherance of a drug trafficking crime.
• Natasha Parkhill, 37, of Bellingham, WA is also charged with possession of fentanyl with intent to distribute.

State charges are anticipated on seven additional defendants.

“While our community struggles with the impacts of fentanyl overdoses and deaths, the Whatcom County Sheriff’s Office Gang and Drug Task Force continues to work closely with our local, state, and federal partners to hold those distributing this dangerous drug accountable for their actions. We aggressively investigate those that bring these deadly drugs and criminal enterprises into our communities that prey on our most vulnerable,” said Whatcom County Undersheriff Doug Chadwick.

“In order to continue to protect the Puget Sound region from organizations that distribute fake pills laced with fentanyl, we will act swiftly, as we did in this investigation, with all of our local and federal partners to ensure the health and safety of our communities,” said Jacob D. Galvan, Acting Special Agent in Charge, DEA Seattle Field Division. 

For some defendants in this case, the large drug quantities involved, and the firearms, require mandatory minimum penalties of ten years in prison and up to life in prison. Possession of a firearm is furtherance of a drug trafficking crime is punishable by a consecutive five years in prison on top of any sentence imposed on other charges.

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 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.

Seattle – A 49-year-old Des Moines, Washington woman was sentenced today in U.S. District Court in Seattle to 30 months in prison and five years of supervised release for Bank Fraud and Aggravated Identity Theft, announced U.S. Attorney Nick Brown. Jennifer Suazo, aka Jennifer Esperanza, was arrested in August 2022 after fleeing from law enforcement at an earlier encounter. At the sentencing hearing, U.S. District Judge Tana Lin said, “… identity theft is something that everyone lives in fear of …. Having one’s identity stolen steals that person’s sense of confidence, faith, and security too ….”

According to records filed in the case, Suazo purchased victims’ identifying information from various sources, including the dark web, which she then used to open accounts at financial institutions in the victims’ names and to take over victims’ existing bank accounts. To carry out this fraud, Suazo created identification documents in victims’ names but with her photograph on the ID. Suazo also changed the mailing addresses for the accounts created or taken over so that she would receive all communications about the accounts and thereby hide her fraud and theft from the victims. Suazo also deposited victims’ checks into her personal bank account. Between 2019 and 2022, Suazo defrauded individual victims and financial institutions of at least $107,472.

When law enforcement executed a court authorized search warrant at her home, they discovered notebooks with the personal information of some 316 victims.

Suazo pleaded guilty in January 2023.

Due to her history of drug addiction, Judge Lin recommended Suazo participate in the Bureau of Prisons’ intensive Residential Drug Abuse Program (RDAP).

In sentencing materials, Special Assistant United States Attorney Jessica M. Ly noted the harm posed by identity theft, writing, “… the ramifications of her actions were wide-reaching: Suazo not only drained state and federal law enforcement resources to identify victims and trace the fraudulent transactions, but also caused victims ongoing anxiety about the security of their accounts and credit after their information was compromised.”

The case was investigated by the U.S. Postal Inspection Service with assistance from the Des Moines Police Department.

The case is being prosecuted by Special Assistant United States Attorney Jessica M. Ly. 

Seattle – Two South King County men were charged today with multiple firearms offenses for their involvement in the purchase of more than 100 firearms in an apparent “straw purchaser” scheme, announced U.S. Attorney Nick Brown. Dion Jamar Cooper, 31, of Kent, Washington and De’ondre Lamontia Phillips, aka Deondre Lamontia McDougle, 32, of Federal Way, Washington were charged by criminal complaint. Phillips  and Cooper will appear in U.S. District Court in Seattle at 2:00 today.

“The alleged straw purchaser in this case bought more than 100 firearms in less than two years – and two dozen of the firearms have been linked to crimes,” said U.S. Attorney Nick Brown. “Schemes like this put our community at significant risk. We will use all tools – including new criminal statutes passed by congress – to stop such conduct.”

According to the criminal complaint, the investigation began in late January 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 Dion Jamar Cooper on December 10, 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 – sometime 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 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.

Cooper and Phillips are charged with Straw Purchasing of Firearms, involving ten different guns. Both men are also charged with two counts of trafficking in firearms. Phillips is charged with possession of controlled substances with intent to distribute and possession of a firearm in furtherance of a drug trafficking crime. Phillips is also charged with unlawful possession of firearms.

Straw Purchasing of Firearms and Trafficking in Firearms are both punishable by up to 15 years in prison. Possession of controlled substances in this case is punishable by a mandatory minimum five years and up to 40 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.

The charges contained in the 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.

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.

Tacoma – A 45-year-old Los Angeles man was sentenced late yesterday in U.S. District Court in Tacoma to 126 months in prison for conspiracy to distribute methamphetamine, announced U.S. Attorney Nick Brown. Anthony Morales was arrested in May 2021 and pleaded guilty in November 2022. At the sentencing hearing, U.S. District Judge Benjamin H. Settle imposed five years of supervised release to follow prison.

According to records filed in the case, Morales conspired with others to use a stolen RV to transport and sell methamphetamine and other drugs. Morales was arrested in the stolen RV in Grayland Beach State Park. Inside the RV was more than a kilo of methamphetamine, counterfeit M30 pills containing fentanyl, five firearms, assorted ammunition, and high-capacity firearm magazines. Law enforcement also recovered $24,000 in cash. Morales also had a number of identity theft related documents – drivers licenses, Social Security cards in other names, a passport, checkbooks and credit cards in other names, as well as a credit card magnetic stripe reader/writer.

Morales has eleven previous convictions as an adult for crimes such as possession of controlled substances, firearms possession, theft, and identity fraud offenses. He has been sentenced to prison for terms ranging from two years to 32 months.  Prosecutors recommended an 11-year prison term for this federal offense. 

The case was investigated by the Drug Enforcement Administration (DEA), the Joint Narcotics Enforcement Task Force (JNET), comprised of officers with the Lewis County Sheriff’s Office, Centralia Police Department and the Washington State Department of Corrections, and the Grays Harbor Drug Task Force.

The case was prosecuted by Assistant United States Attorney Max Shiner.

Tacoma – A 32-year-old Tacoma man was arrested and charged with production of child pornography, announced U.S. Attorney Nick Brown. Bryant Keith McCullough was arrested today, April 10, 2023, after an investigation conducted by the Tacoma Police Department and the Federal Bureau of Investigation. McCullough is accused of enticing and coercing minors to engage in sexually explicit conduct for the purpose of producing child pornography. McCullough made his initial appearance today in U.S. District Court in Tacoma.

According to the criminal complaint filed in the case, the Tacoma Police Department received information from a concerned parent about an image that was shared in a group chat of Pierce County motocross parents regarding an explicit Snapchat message apparently sent by McCullough to a minor motocross racer whom he was sponsoring.

Law enforcement executed a search warrant at McCullough’s Tacoma residence last month and seized several devices, including a GoPro camera. Police found numerous sexually explicit images and videos of minors on the seized GoPro. Several of the GoPro videos found by law enforcement show McCullough filming a cellphone on which he is viewing sexually explicit images and videos of young males sent to him through Snapchat.

At least one victim confirmed to law enforcement that they had sent McCullough sexually explicit images and videos, at the motocross coach’s request. The victim acknowledged sending the images with the promise that they would receive money, clothing, alcohol, marijuana, and/or preferential treatment regarding motocross coaching. 

McCullough came into federal custody today and will remain detained at the Federal Detention Center at SeaTac pending further hearings.

Production of child pornography is punishable by a mandatory minimum of 15 years in prison and a maximum of 30 years in prison.

The charges contained in the 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.

The case is being investigated by the Tacoma Police Department and the FBI. If you have any information regarding this case, you can submit a tip to tips.fbi.gov.

The case is being prosecuted by Assistant United States Attorney Matt Hampton.

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

Seattle – A 39-year-old Woodinville, Washington, resident was sentenced today in U.S. District Court in Seattle to 108 months in prison, for his role as the leader of a conspiracy to distribute narcotics including fentanyl, meth, and heroin, announced U.S. Attorney Nick Brown. Jose Luis Ibarra-Valle has been in custody since his arrest in December 2020. At his sentencing hearing, U.S. District Judge Richard A. Jones said, “You introduced large quantities of heroin and fentanyl into this community…drugs that are highly addictive and dangerous.”

“During the investigation, Mr. Ibarra-Valle was heard on the wire-tap talking about getting a firearm so he could go after drug customers who owed him money,” said U.S. Attorney Brown. “And when Mr. Ibarra-Valle learned someone had died from his fentanyl laced pills, he wasn’t worried about selling deadly pills, instead he only complained that the death would cause increased law enforcement scrutiny.”

The investigation began in March 2020 and involved telephone wiretaps beginning in July 2020. The investigation revealed Ibarra-Valle was bringing drugs up from California to Oregon and Western Washington. Over the course of the investigation, law enforcement seized 16,000 fentanyl pills, 30 pounds of methamphetamine, and six pounds of heroin. Ibarra-Valle was stopped by law enforcement in October 2022 with 10,000 fentanyl pills, 20 pounds of methamphetamine, and more than a kilo of heroin.

Five members of the drug trafficking ring have already been convicted and sentenced:

JESUS GUTIERREZ-GARCIA, 33, Everett, WA was sentenced to 78 months in prison.

JESUS GARNICA-MELGOZA, 41, Seattle, WA was sentenced to 42 months in prison

SANTOS CARO, 37, Portland, Oregon was sentenced to five years in prison

LEE WALLETTE, 39, Mountlake Terrace, WA was sentenced to six years in prison

TISHA GIRTZ, 40, Lake Stevens, WA was sentencing to 54 months in prison

In asking for a ten-year sentence prosecutors noted the huge increase in overdose deaths. According to a national report, “between June 2020 and May 2021 more than 100,000 Americans died from drug overdose – more than twice the number of U.S. traffic fatalities or gun violence deaths during that period. Some two-thirds of these deaths – about 170 fatalities each day, primarily among those ages 18 to 45 – involved synthetic opioids.” Commission on Combatting Synthetic Opioid Trafficking – Final Report, Executive Summary, page ix, dated February 2022.

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 .

The investigation was led by the Drug Enforcement Administration in partnership with the Federal Bureau of Investigation, Homeland Security Investigations, Whatcom Gang and Drug Task Force, Washington State Patrol, Snohomish Regional Drug Task Force, United States Border Patrol, Customs and Border Protection, Skagit County Interlocal Drug Enforcement Unit, the Whatcom County Sheriff’s Office, the Lake Stevens Police Department and Tulalip Police Department.

The case is being prosecuted by Assistant United States Attorney Vince Lombardi.

Seattle – A 42-year-old Ferndale, Washington woman was sentenced today in U.S. District Court in Seattle to three months in prison and three months home confinement for trafficking in counterfeit goods, announced U.S. Attorney Nick Brown. Kara Suneva Allen, aka Kara Suneva Mitchell, pleaded guilty in October 2022. At the sentencing hearing, U.S. District Judge Richard A. Jones said, “We cannot tolerate a robin hood mentality in the community…even though you thought you were helping other mothers afford luxury goods, you were actually helping them participate in criminal activity.”

According to records filed in the case, Allen operated a business named ‘Keepin Up With Kara’ LLC.   The business was located in a warehouse space in Ferndale, Washington.  As of March 2022, a website associated with the business advertised 467 different items for sale that appeared to be products made by Adidas, Burberry, Cartier, Chanel, Christian Dior, Fendi, Gucci, Hermès, Louis Vuitton, MCM, Nike, Prada, Saint Laurent, Tiffany & Co., Tory Burch, and UGG.  All the products were priced substantially below the suggested retail price for the genuine items.

An investigation by Homeland Security Investigations, U.S. Customs and Border Protection, and the Whatcom County Sheriff’s Office revealed that in August and September 2021, three shipments destined for Allen and her company were seized from the mail in Oakland, California.  The shipments, which originated in China and Hong Kong, contained a wide variety of counterfeit goods, including handbags, wallets, and jewelry.   Allen was notified of these seizures, but never petitioned to have the goods in the shipments released.  An analysis of shipping records revealed that between September 2021 and March 2022, approximately 46 shipments from China and Hong Kong had been sent to the Ferndale warehouse where ‘Keepin Up With Kara’ operated.

To document Allen’s sale of counterfeit goods, an undercover agent made online purchases from the company’s website.  In one instance, the agent made an undercover purchase of a Louis Vuitton-branded handbag for $110.  The suggested retail price for that specific authentic Louis Vuitton handbag is $1,690.00.  A Louis Vuitton representative confirmed the handbag purchased from the website was counterfeit.

On May 2, 2022, law enforcement executed search and seizure warrants at Allen’s place of business, home, and vehicle.  Over 1,800 items of suspected counterfeit merchandise were seized, including purses, scarves, belts, luggage tags, sunglasses, tumblers, and other accessories.

In total, between June 2021 and May 2022, Allen acquired, attempted to acquire, or sold more than 1,900 counterfeit items with an estimated retail value of $185,842.  Her profit over that time was approximately $43,430.

As noted in the government’s sentencing memorandum, before the search warrant was executed, Allen was told more than once that what she was doing was illegal.  Allen “received several letters from CBP and Louis Vuitton’s counsel putting her on notice that her business activities were unlawful.  It is an aggravating factor that, despite these numerous opportunities to cease … operations, Allen nonetheless persisted in obtaining and selling counterfeit merchandise, and even instructed an employee to describe that merchandise using coded language to avoid detection,” Special Assistant United States Attorney Jessica M. Ly wrote in her sentencing memorandum.

The case was investigated by Homeland Security Investigations with assistance from U.S. Customs and Border Protection, the Whatcom County Sheriff’s Office, U.S. Postal Inspection Service, the Ferndale Police Department, and the National Intellectual Property Rights Center.

The case was prosecuted by Special Assistant United States Attorney Jessica M. Ly. 

Seattle – A 27-year-old Federal Way, Washington, resident was sentenced today in U.S. District Court in Seattle to 180 months in prison for distribution of fentanyl and carrying a firearm in commission of a drug trafficking crime, announced U.S. Attorney Nick Brown. Fernando Lopez-Armenta has been in custody since his arrest on August 4, 2021.

According to records filed in the case, a confidential source received a phone call from Lopez-Armenta on August 4, 2021, stating that he was willing to sell him fentanyl. Later that day, Lopez-Armenta met the confidential source in his car in Federal Way, intending to sell the source 10,000 fentanyl pills, with 4,000 more stashed in his car.

Once it was confirmed that Lopez-Armenta possessed illegal narcotics, agents moved in to arrest him. Upon seeing the agents, Lopez-Armenta stepped out of his car and pointed his loaded pistol in the direction of agents and the confidential source. Lopez-Armenta finally put his pistol down on the hood of his car after a verbal order from another agent. He was subsequently arrested. At the sentencing hearing, U.S. District Judge Coughenour stated, “The Court commends the arresting officers. The fact that Lopez-Armenta pointed a loaded gun at the officers, and they did not fire, shows tremendous restraint. He is lucky to be alive today.”

At trial in August, the jury found Lopez-Armenta guilty of one count of possessing fentanyl with the intent to distribute and one count of carrying a firearm in commission of that crime.

In asking for a prison sentence of 180 months plus five years of supervised release, Assistant United States Attorney Erika Evans argued to the Court, “The 10,000 fentanyl pills that Lopez-Armenta brought to this drug deal represented thousands of potential overdose deaths. And he did not just traffic deadly drugs—he did so while carrying a gun.”

The case was investigated by Homeland Security Investigations (HSI) and the Drug Enforcement Administration (DEA).

The case was prosecuted by Assistant United States Attorneys Erika Evans and Rebecca Cohen.

Seattle – A 39-year-old Mount Vernon, Washington, resident was sentenced today in U.S. District Court in Seattle to 72 months in prison for possessing dangerous drugs and guns on two separate occasions, announced U.S. Attorney Nick Brown. Steven Lopez Ruiz has been in custody since his arrest on March 14, 2022.

According to records filed in the case, Ruiz was first encountered by law enforcement on March 1, 2022, in the driver’s seat of a car that contained fentanyl laced pills, methamphetamine, and two firearms. Just two weeks later, on March 14, 2022, law enforcement stopped a car in which Ruiz was riding. Ruiz attempted to run from police but was apprehended. On that occasion, he possessed over 1,000 fentanyl pills, as well as heroin.

Ruiz was prosecuted along with the car’s driver, Santos Gutierrez-Fosella and a second passenger, Robert Johnny. Gutierrez-Fosella was held responsible for some 89,000 fentanyl pills in the car and was sentenced to ten years in prison. In January 2023, Robert Johnny was sentenced to six years in prison for his role in the case.

In asking for a seven-year prison sentence, Assistant United States Attorney Miriam Hinman wrote to the court, “Ruiz has committed serious offenses that pose a danger to the public. He has received substantial sentences for prior drug-trafficking and violence, and yet he was not deterred from engaging in the instant offense. He also attempted to flee from law enforcement in this case. Ruiz’s history of drug-trafficking, unlawful firearm possession, and physical violence, and his lack of respect for the law and for law enforcement, require a significant prison sentence in order to achieve deterrence and protect the public.”

The case was investigated by the Skagit County Interlocal Drug Enforcement Unit, Homeland Security Investigations (HSI), the Bureau of Indian Affairs, the Swinomish Police Department, and the Mount Vernon Police Department.

The case was prosecuted by Assistant United States Attorney Miriam Hinman.

Seattle – A 44-year-old Vashon Island, Washington resident was arrested yesterday on a superseding indictment charging him with ten federal felonies related to human trafficking in the form of forced labor, announced U.S. Attorney Nick Brown. Jesus Ruiz-Hernandez, aka Christo Jesus Escobar Solares, was originally indicted in November 2022 for transporting, harboring, and bringing an alien to the United States for financial gain. The superseding indictment, returned this week, adds seven federal counts including two counts of forced labor and additional counts of transporting, harboring, and bringing an alien to the U.S. for financial gain.

“Undocumented people are particularly vulnerable to forced labor schemes because they believe they do not have the same basic rights as U.S. citizens,” said U.S. Attorney Nick Brown. “In this case the grand jury found that Mr. Ruiz-Hernandez sought to enrich himself by forcing undocumented workers to labor for him, and that he benefitted financially by bringing undocumented workers to Western Washington.”

Specifically, the indictment states that in the spring of 2017, Ruiz-Hernandez used force, threats of force, and physical violence to force an adult victim to work for him (count 1). That count also alleges the victim suffered aggravated sexual abuse. Ruiz-Hernandez is charged with transporting that victim for financial gain (count 2), harboring that victim for financial gain (count 3), and bringing that victim to the United States for financial gain (count 4).

The superseding indictment also charges that in July 2018, and continuing until August 2021, a second victim was forced to work for Ruiz-Hernandez and was threatened with harm (count 5). That victim was also transported for financial gain (Count 6). The indictment also charges that the victim was harbored for financial gain (count 7) and was brought to the U.S. for financial gain (count 8).

Finally, Ruiz-Hernandez is charged with transporting and harboring a third victim for financial gain between May 2020 and August 2021(counts 9 and 10).

When Ruiz-Hernandez was arrested on the first indictment in November 2022, the Magistrate Judge determined there were conditions under which he could safely be released, and he had been out of custody until yesterday.

Following his arrest yesterday, law enforcement determined that he was harboring five additional workers who do not appear to have status in the United States. The investigation into how those non-citizens came to be employed by Ruiz-Hernandez is under investigation. After hearing argument, Magistrate Judge Mary Alice Theiler determined there are no conditions under which Ruiz-Hernandez can be safely released in the community, and that he poses a risk of flight.       

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.

Trial in this matter is set for May 15, 2023, in front of U.S. District Judge James L. Robart.

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 alien for financial gain and harboring an alien for financial gain are each punishable by up to ten years in prison. Bringing an alien 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 is being investigated by the Seattle Police Department and Homeland Security Investigations (HSI).

The case is being prosecuted by Assistant United States Attorney Kate Crisham.  Ms. Crisham is the Western District of Washington coordinator of our efforts to stop human trafficking.

Seattle – A 28-year-old resident of Nogales, Arizona, was sentenced today in U.S. District Court in Seattle to 70 months in prison for conspiracy to commit money laundering and his attempt to smuggle ammunition for high powered firearms into Mexico, announced U.S. Attorney Nick Brown. Rafael Alejandro Canez, was arrested November 13, 2021, after he was contacted on multiple occasions attempting to hide ammunition in his vehicle to smuggle across the border to Mexico. Canez was also identified as part of a separate money laundering conspiracy. At the sentencing hearing Judge Ricardo S. Martinez said “If you are involved in money laundering for a drug ring, you don’t know for sure someone is going to die from the drugs…. But unfortunately, cartels are awash in guns.  If you are smuggling ammunition and gun parts the result is people dying -- innocent bystanders, other cartel members, or law enforcement officers.”

“The conduct in this case touches on the two things that keep the cartels flooding our country with drugs: the money they make and the guns they use to enforce their often violent conduct,” said U.S. Attorney Nick Brown. “Mr. Canez played a critical role as a smuggler of both money and ammunition and so must be held accountable.” 

According to records filed in the case, Canez played a significant role in a massive multi-state and multi-national “funnel account” money laundering scheme. Canez traveled across the country collecting funds and depositing them in bank accounts which then were accessed to wire money to cartel connections in Mexico, or to withdraw cash and smuggle the money into Mexico. Canez personally laundered more than $1 million in cash for the drug trafficking organization. In just a few months in 2017 and 2018, more than $120,000 from Western Washington flowed through Canez’ account. Canez traveled to Illinois, Arizona, and New Mexico to pick up cash and make deposits – in Chicago alone he picked up $800,000 in currency.

On multiple occasions in 2020 and 2021, Canez came to the attention of law enforcement for his munitions smuggling scheme. In June of 2020, Homeland Security Investigations contacted him when he ordered 5,000 links for machine gun ammunition. The links allow a “belt” of bullets to be fed into the machine gun. Law enforcement seized the links. About a year later, Canez was found with 3,000 rounds for an AK-47 style rifle, and an upper receiver for an AR-15 style assault rifle. Canez admitted he planned to smuggle the ammunition into Mexico. Records reflect that he had purchased 16,000 rounds of that type of ammunition.

Finally, Canez was contacted as he was trying to leave the U.S. for Mexico and was found to be carrying 55 high-capacity magazines for AR-15-style assault rifles. The magazines were hidden in the spare tire underneath his vehicle.

Multiple law enforcement agencies worked on this case including Homeland Security Investigations (HSI) in Washington and Arizona, Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF) in Arizona, the Drug Enforcement Administration (DEA) in Western Washington, and Customs and Border Protection (CBP) in Arizona.

The case is being prosecuted by Assistant United States Attorney Vince Lombardi.

Seattle – A 20-year-old Bremerton, Washington, man was arrested early today on an indictment charging him with ten federal felonies related to his illegal harassing activity – also known as “swatting.” Ashton Connor Garcia will make his initial appearance today in U.S. District Court in Tacoma.

“Every time Mr. Garcia is alleged to have made one of his false reports to law enforcement, he triggered a potentially deadly event – sending heavily armed police officers to an address where they mistakenly believed they would confront someone who was armed and dangerous,” said U.S. Attorney Nick Brown. “Fortunately, no one was hurt, but the unpredictable and terrifying dynamic these calls created for Mr. Garcia’s alleged victims cannot be overstated. There is nothing funny about abusing emergency resources and intentionally placing people in harm’s way.”

“Fortunately, no one was hurt as law enforcement responded to Mr. Garcia’s swatting calls,” said Richard A. Collodi, Special Agent in Charge of the FBI’s Seattle field office. “However, it is impossible to quantify the significant harm caused by his actions, which affected communities across the nation. Mr. Garcia will be held accountable for his actions, and we hope this also serves as an example of how serious the FBI, the US Attorney’s Office, state, and local law enforcement take these threats.”

According to the indictment, between June 2022 and early September 2022, Garcia made more than 20 swatting calls to law enforcement, targeting victims in California, Georgia, Illinois, Kentucky, Michigan, Minnesota, New Jersey, Ohio, Pennsylvania, Tennessee, Washington, and Edmonton, Alberta, Canada. According to the indictment, Garcia gathered personal information about his victims, and then threatened his victims with harm, including placing swatting calls to send an armed police presence to their home. In some instances, he made swatting calls at the request of friends. Garcia demanded money, virtual currency, credit card information, or sexually explicit photos from some of the people he threatened.

Garcia used voice over internet technology to hide his identity. Using false identities, he made fake reports to non-emergency police numbers claiming things such as that he and others had planted explosive devices in particular locations. He falsely accused other individuals of committing crimes, such as murder, rape, and kidnapping, and he falsely claimed that these individuals possessed dangerous weapons, such as knives, firearms, and explosive devices. Frequently he used the same scripts claiming that his father was holding him hostage, false claims that he shot his parents, false claims that his father stabbed his mother, and false claims that his father had raped female members of the family.

The false reports tied up law enforcement resources that could have been used for actual emergencies. In some instances, law enforcement entered the victim residence with weapons drawn and detained people at the residence.

Garcia allegedly treated the swatting calls like entertainment. He broadcast his swatting calls via the internet platform Discord. Garcia allegedly told other Discord users that he considered himself a “cyber terrorist.”

Specifically, the indictment charges Garcia with these crimes:

• Extortion – Ohio: On July 17, 2022, allegedly demanded credit card information or would injure the reputation of the victim, their family, would leak nude photos, and “swat them.”
• Threats and Hoaxes -Ohio: On July 22, 2022, allegedly made a swatting call to the Shaker Heights Police Department falsely alleging his father was holding the family hostage with firearms and a hand grenade.
• Threats and Hoaxes – Ohio: On July 28, 2022, allegedly called the Cleveland Police Department falsely claiming he had planted a bomb at the Fox News station in Cleveland.
• Hoaxes regarding firearms – California: On July 29, 2022, allegedly called the Los Angeles Police Department falsely claiming his father was raping his sister, that his father had lots of guns and was both mentally ill and a drug addict.
• Interstate threats – Kentucky: on July 30, 2022, allegedly called the Kentucky State Police threatening to kill named hostages.
• Hoaxes regarding aircraft – California: on August 23, 2022, allegedly called the Los Angeles Police and claimed his daughter told him there was a bomb on her flight from Honolulu to LAX.
• Extortion – New jersey: on August 24, 2022, allegedly attempted to obtain photographs and videos of a minor female’s body by threatening to accuse a family member of a crime and “swat” them.
• Threats and hoaxes regarding explosives – Michigan: allegedly reported to the Milan Michigan Police Department that his father was holding him hostage with a gun and bomb.
• Threats and hoaxes – Tennessee: on September 2, 2022, allegedly called the Milan, Tennessee Police Department alleging he was being held hostage by his father who had a gun and bomb.
• Threats and hoaxes regarding explosives – California: allegedly called Los Angeles Police Department alleging he had stashed four pounds of C4 explosives at an airport in Los Angeles and would detonate it unless he was paid $200,000 in bitcoin.

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.

Threats and hoaxes involving explosives are punishable by up to 10 years in prison. Other charged threats and hoaxes are punishable by up to five years in prison. Extortion is punishable by up to two years in prison.

The case is being investigated by the FBI, with substantial assistance from numerous local law enforcement agencies throughout the United States and in Canada.

The case is being prosecuted by Assistant United States Attorney Jessica Manca.

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