Western District of Washington

Tacoma – A enrolled member of the Makah Tribe was sentenced today in U.S. District Court in Tacoma to 16 months in prison, announced U.S. Attorney Nick Brown. Nicolas Joseph James Johnson, 33, pleaded guilty to robbery in March 2022.  U.S. District Judge Benjamin H. Settle noted the trauma suffered by three young boys who were ordered out of the car at knifepoint.

According to records filed in the case, on the evening of September 18, 2021. Johnson carjacked a vehicle from outside the Mini-Market on Bay View Avenue in Neah Bay, Washington.  There were three brothers in the car, ages 16, 12 and 10.  Johnson used a machete to threaten the boys and ordered them out of the car.  After the boys got out Johnson sped off and led police on a high-speed chase.

Johnson has two prior convictions in state court related to stolen vehicles.  He had just terminated supervision on the state convictions when he committed this crime.

The case was investigated by the Neah Bay Police Department and the FBI. 

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

Tacoma – Multiple members of a methamphetamine trafficking ring were indicted last week in U.S. District Court for seven federal felonies related to their drug trafficking, announced U.S. Attorney Nick Brown.  Some of the conspirators, have been charged in state court over the last ten years, but fled the jurisdiction and then returned using different names.  Four of the defendants are detained pending further hearings. One remains a fugitive.

“These defendants are responsible for huge loads of methamphetamine, which continues to cause death and destruction in our community,” said U.S. Attorney Brown. “In one instance they brought 55 pounds of methamphetamine to Western Washington via Amtrak train – fortunately law enforcement seized the drugs at the Kelso train station.”

The indicted defendants are:

Jesus Venegas-Gatica, 35, of Lakewood, Washington

Jose Venegas-Gatica, 34, of Fresno, California

Juan Tolentino-Chino, 33, of Astoria, Oregon

Cristobal Venegas Diaz, 47, of Centralia, Washington

Esteban Martinez-Ortiz, 32, a citizen of Mexico, being sought by law enforcement.

According to records filed in the case, the Venegas family has been involved in drug trafficking since at least 2012. Defendant Jesus Venegas-Gatica was charged in Lewis County in 2012 in connection with a 15-pound load of methamphetamine.  He fled the jurisdiction and returned under a different name. In 2013, law enforcement seized 70 pounds of meth and ten firearms from members of the drug trafficking organization. The criminal complaint details another arrest in 2019 in Kitsap County with 20 pounds of meth. In each of those cases the drug distributors fled and used aliases to return to drug trafficking. 

Meth load

The current case charges various large-scale methamphetamine deals in Cowlitz, Lewis, Grays Harbor, Pierce, and Thurston Counties. According to one informant, the Venegas family transported 20 to 25 kilograms of methamphetamine to Washington each month.  Law enforcement tied these defendants to trafficking more than 105 pounds of meth at locations ranging from casino parking lots to outlet mall stores.  In one instance, law enforcement caught a co-conspirator getting off an Amtrak train in Kelso, Washington with 55 pounds of methamphetamine in his luggage that he had transported from Sacramento, California.

In May 2022, authorities recovered another 19 kilos of methamphetamine when they executed search warrants at various defendant’s homes and cars.

“The culmination of this investigation signifies the DEA’s unyielding pursuit of drug trafficking organizations,” said Jacob D. Galvan, Acting Special Agent in Charge of the DEA Seattle Field Division. “This organization was responsible for distributing more than one hundred pounds of methamphetamine in Western Washington. The DEA, along with its federal, state and local partners will relentlessly pursue drug traffickers to keep our communities safe and healthy, no matter how long it takes.”

Due to the large amounts of drugs involved, each defendant faces a mandatory minimum ten-year prison term.

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 investigation was conducted by the Drug Enforcement Administration (DEA) Tacoma Resident Office, the Lewis County Joint Narcotics Enforcement Team (JNET), and the Grays Harbor Drug Task Force (GHDTF).

The case is being prosecuted by Assistant United States Attorney Zachary Dillon in consultation with the Lewis County Prosecutor’s Office.

Load of methamophetamine

venegas_indictment.pdf venegas_complaint.pdf

Seattle – A 57-year-old member of the Lummi Nation was sentenced today in U.S. District Court in Seattle to 30 years in prison for aggravated sexual abuse, announced U.S. Attorney Nick Brown.  U.S. District Judge Richard A. Jones sentenced Lewis Dean Armstrong to 30 years in prison, the mandatory minimum sentence for the offense and imposed a lifetime term of supervised release following prison.  Armstrong will also be required to register as a sex offender.

In March 2014, Armstrong was convicted at trial of aggravated sexual abuse of a 6-year-old child.  The assault occurred in March 2013, at a home on the Lummi reservation where the child was visiting her father. DNA evidence linked Armstrong to the assault.

Following the conviction, in June 2014, U.S. District Judge John C. Coughenour sentenced Armstrong to 20 years in prison, ruling the 30-year mandatory minimum sentence was unconstitutional as applied to Armstrong.  On March 3, 2020, the 9th Circuit Court of Appeals upheld Armstrong’s conviction, reversed the 20-year sentence, and sent the case back for resentencing.

The case was investigated by the FBI and Lummi Nation Police Department.

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

Seattle –The former President & CEO of Northwest Territorial Mint, a now-bankrupt company dealing in precious metals, was sentenced today in U.S. District Court in Seattle to 11 years in prison for 14 federal felonies resulting from a Ponzi-like scheme that defrauded customers of millions of dollars, announced U.S. Attorney Nick Brown.  Bernard Ross Hansen, 61, aka Ross B. Hansen was convicted of multiple counts of wire and mail fraud after a four-week jury trial in July 2021.  Hansen’s co-defendant and partner, Vault Manager Diane Renee Erdmann, 49, was convicted of 13 counts of wire fraud and mail fraud. She was sentenced to five years in prison. This was the second scheduled sentencing hearing for the two after they failed to show up for their late April court date and attempted to flee.

At the sentencing hearing U.S. District Judge Richard A. Jones said, “The entire means of operation was nothing more than a fiction…. You were a wrecking ball building your empire.  (The victims) trusted you and had faith in the snake oil you were selling; that faith was met with manipulation and deceit.”

“Mr. Hansen and Ms. Erdman defrauded more than 3,000 people of some $30 million – money that represents the victims’ plans and dreams: retirement, college funds, and inheritances,” said U.S. Attorney Nick Brown.  “It is heartbreaking to hear how the fraud upended their lives and left them working longer, harder, and in deep stress to try to recover.  The impact of this fraud goes beyond the significant dollar figure.”

Northwest Territorial Mint (NWTM) operated both a custom business that involved the manufacturing of medallions and other awards, and a bullion business that involved the selling, buying, exchanging, storing, and leasing of gold, silver, and other precious metals.  The company had offices in Federal Way and Auburn, Washington, but declared bankruptcy on April 1, 2016.

 According to records in the case and testimony at trial, Hansen and Erdmann defrauded NWTM customers in a variety of ways. The evidence at trial showed that Hansen and Erdmann lied about shipping times for bullion, used customer money to expand the business to other states, and to pay their own personal expenses.  As a result, the company lacked enough assets to fulfill customer orders and used new customer money to pay off older customers in a Ponzi-like scheme.  In total, over 2500 customers paid for orders, or made bullion sales or exchanges, that were either never fulfilled or never refunded.  The total loss to these customers was more than $25,000,000.  

In addition to the bullion customer fraud, the evidence at trial demonstrated that Hansen and Erdmann defrauded customers who paid NWTM to safely and securely store bullion in the NWTM vaults.  Evidence and testimony at trial showed that Hansen and Erdmann used this bullion that was supposed to be in secure storage to fulfill other orders.  In April 2016, the NWTM vaults were inventoried and all or part of the stored bullion for more than 50 customers was missing.  The missing bullion was worth more than $4.9 million.  

Writing to the court, prosecutors pointed out the deception against the storage customers: “Mr. Hansen talked (the storage customers) into paying NWTM to steal from them—forking over fees, sometimes thousands of dollars’ worth, to “securely” store their bullion at NWTM, only to have the defendants use the vault as a company piggy bank.  Mr. Hansen collected those fees and delivered phony storage account statements in return.  But unbeknownst to the storage customers, Mr. Hansen used the storage customers’ bullion as his own – pulling it off the shelf to fulfill other orders, at times even melting down customers’ property to makes something else to ship somewhere else.”

“Company president Hansen apparently did not learn his lesson from his last trip to prison,” said Donald M. Voiret, Special Agent in Charge of the FBI Seattle Field Office. “Together, Hansen and his co-conspirator Ms. Erdmann stole decades of savings and financial security from thousands of victims who thought they were making safe investments for themselves and their loved ones.”

Prosecutors increased their sentencing recommendations for both Hansen and Erdmann to reflect the 11-day manhunt that followed their failure to appear.  When arrested in the small town of Port Hadlock on the Olympic Peninsula, they had three loaded firearms in a box behind the drivers’ seat of their car.  In supplemental sentencing memos, prosecutors urged the court to increase both defendants’ prison time due to their flight to avoid prison. “Ms. Erdmann and Mr. Hansen acquired a new vehicle, armed themselves with three loaded guns, and evaded supervision. Ms. Erdmann’s conduct shows a lack of respect for the Court and the law enforcement authorities that she knew would attempt to find her.” And of Hansen they wrote, “Recent events have shown that Mr. Hansen also presents a danger of violence. When he was apprehended by law enforcement in Port Hadlock, he was traveling with three loaded firearms in reaching distance of the front seat of his vehicle.”

Judge Jones ordered Hansen to pay $33.7 million in restitution. Erdmann is to pay $32.1 million in restitution.

The case was investigated by the FBI.  The case was prosecuted by Assistant United States Attorneys Brian Werner and Benjamin Diggs.

Seattle – A 42-year-old Ferndale, Washington woman was indicted this week by a federal grand jury for multiple counts of trafficking in counterfeit goods, announced U.S. Attorney Nick Brown.  Kara Suneva Allen, aka Kara Suneva Mitchell is scheduled to appear for arraignment on the indictment on June 9, 2022.

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.

Fake designer bag

On May 2, 2022, law enforcement executed search and seizure warrants at Allen’s place of business, home, and vehicle.  Large quantities of counterfeit merchandise were seized.

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.

Trafficking in counterfeit goods is punishable by up to 10 years in prison and a $2,000,000 fine.

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

allen_kara_indictment.pdf Warehouse goods Table of fake designer bags

 

Seattle – A father and son who ran a multimillion-dollar illegal marijuana business in Monroe, Washington, were each sentenced to five-year prison terms today, on drug and money laundering charges, announced U.S. Attorney Nick Brown. Kenneth Warren Rhule, 28, was sentenced to five years in prison for conspiracy to manufacture and distribute marijuana and laundering monetary instruments.  Kenneth John Rule, 47, was sentenced to five years in prison for conspiracy to manufacture and distribute marijuana.  U.S. District Judge John C. Coughenour noted the size of the enterprise, and the presence of firearms justified the five-year prison terms.

“Not only did this pair produce and distribute marijuana products on the dark web, in violation of the state’s regulatory scheme, they also illegally laundered immense amounts of bitcoin that their enterprise earned,” said U.S. Attorney Nick Brown.  “When law enforcement moved in there were more than a dozen firearms – some loaded and ready to be used to protect their drug trade.”

Kenneth W. Rhule first came to the attention of law enforcement for his money laundering activity.  In April 2o18, law enforcement became aware that someone with the screen name “Gimacut93” was operating an unlicensed bitcoin exchange business.  At various locations–primarily Starbucks coffee shops–in Western Washington, Kenneth W. Rhule met repeatedly with an undercover agent posing as a criminal who needed to launder funds.  Through their conversations the undercover agent made it seem they were laundering money related to human trafficking activities.  Rhule agreed to exchange bitcoin for cash apparently knowing the cash was the proceeds of criminal activity.  In fact, Rhule offered the undercover agent advice on virtual currency and how to hide the source of the funds.  Rhule asked the agent no questions as required under the “know your customer” rule. Altogether, Rhule exchanged $142,000 worth of bitcoin for cash with the undercover agent.

Even as he was engaged in the operation of the unlicensed financial exchange business, Rhule and his father Kenneth J. Rhule, were operating a marijuana products business that had no license with the State of Washington and paid no taxes to the state.  The facility, based in Monroe, Washington, manufactured hash oil and other marijuana products using the names HerbinArtisans, Heady.Watr, and KlearKrew, among others.  Electronic messages reviewed in the case indicate the Rhules sold various marijuana products for cash or cryptocurrency to customers nationwide.

The investigation revealed that the Rhules made over $13 million is sales from their business with a net profit of $2.5 million. 

In asking for prison time for both men, prosecutors noted that they worked to subvert the state regulatory scheme. “…[T]he state has set up a regulatory framework to serve many important purposes, including ensuring the safety of those who produce and consumer marijuana products. The state is also, of course, entitled to tax the marijuana industry. Yet the defendants ignored all this. Perhaps, as is so often true in fraud cases, they were motivated by simple greed. But in running their business in this way, they put a lot of people at risk, and disadvantaged others in the industry who chose to play by the rules.”

The case was investigated by Homeland Security Investigations and the Drug Enforcement Administration, with valuable assistance from state and local law enforcement agencies.

The case was prosecuted by Assistant United States Attorneys Philip Kopczynski, Casey Conzatti, and Krista Bush.

Monroe facility Monroe facility

 

Seattle – The former Chief Executive Officer of Northwest Physicians Laboratory (NWPL) was sentenced today in U.S. District Court in Seattle to two years in prison and $7.6 million in restitution for conspiracy to solicit kickbacks, announced U.S. Attorney Nick Brown.  Jae Lee, 51, of Bellevue, Washington, served as the CEO of Northwest Physicians Laboratory (NWPL).  Between 2013 and 2015, Lee conspired with others to get kickbacks from medical testing labs in exchange for government testing business referred to the labs.   In pronouncing sentence, U.S. District Judge John C. Coughenour noted, the scheme was large and clearly illegal.

“Mr. Lee knowingly set up a scheme to profit by referring government health care business to other labs – even more disturbing he tried to play one lab off against another to increase his ill-gotten gain,” said U.S. Attorney Nick Brown.  “Such conduct increases healthcare costs for all of us.  This case should be a warning to others who may consider such schemes.”

The activities of Bellevue-based Northwest Physicians Laboratory (NWPL) have been the subject of extensive civil and criminal litigation. CEO Lee 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. This resulted in government payments to those two labs of more than $6.5 million.

According to records filed in the case between January 2013 and July 2015, two labs, that were not physician owned, made payments to NWPL in exchange for referrals of Medicare and TRICARE program business, in violation of the Anti-Kickback Statute.  Paying remuneration to medical providers or provider-owned laboratories in exchange for referrals encourages providers to order medically unnecessary services.  The Anti-Kickback Statute functions, in part, to discourage such behavior. NWPL was physician-owned, and for that reason could not test urine samples for patients covered by government health programs such as Medicare, Medicaid, and TRICARE.  In order to conceal the payment of the kickbacks, Lee and other co-conspirators involved described the fees as being for marketing services; however, no marketing services were performed. 

The kickback payments to NWPL were commingled with other company revenue.  Over the course of the scheme, Lee received more than $800,000 in distributions from NWPL’s commingled funds.  As prosecutors wrote in their sentencing memo, “The crime was based purely on Mr. Lee and the others’ greed. The NWPL business model was profitable.  It could afford to pay doctors thousands of dollars a month in dividends.  It could afford to pay healthy distributions to its owners.  This did not satisfy Mr. Lee.  He was determined to maximize profits even if it meant breaking the law.” 

The company, NWPL, pleaded guilty in February 2021 and was sentenced to pay $8,114,417 in restitution joint and several with the other criminal defendants.  NWPL has dissolved. To date, the labs and individuals involved in this investigation have agreed to pay more than $14 million to settle related civil allegations. 

"Mr. Lee’s sentencing culminates his illicit, greed-driven scheme to defraud federal healthcare programs, including the Department of Defense's TRICARE program," said Bryan D. Denny, Special Agent in Charge for the Department of Defense Office of Inspector General, Defense Criminal Investigative Service, Western Field Office.  "Fraudulent healthcare billings inflate costs, erode public confidence, and in the case of the Department of Defense, ultimately degrade American warfighter readiness and undermine the missions of our military services.”

“Individuals who participate in kickback schemes do so at the risk of undermining the integrity of federal health care programs,” said Special Agent in Charge Steven J. Ryan with the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG). “HHS-OIG will continue to work with law enforcement partners to bring to justice those who steal from these programs for personal gain.”

“Mr. Lee was one of the ringleaders of a conspiracy that stole more money per month than some honest Americans make in a year” said Donald M. Voiret, Special Agent in Charge of the Seattle FBI Field Office. “By stealing from these benefits programs, he wasn’t only stealing from taxpayers, but taking funding from people who legitimately relied on these programs for their health and well-being.”

In addition to Lee, two other defendants await sentencing.  Kevin Puls, 57, the former Executive Director of NWPL, is scheduled for sentencing September 6, 2022.  Richard Reid, 53, was convicted following a six-day jury trial.  He is scheduled for sentencing on October 11, 2022.

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 Attorneys Brian Werner and Michael Dion.

Seattle – Kalvinn Garcia, 25, of Sedro Woolley, Washington, pleaded guilty today to one count of committing a hate crime for the Feb. 24, 2020, arson at Queer/Bar, a nightclub and event space in Seattle, Washington. Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division, U.S. Attorney Nick Brown for the Western District of Washington and Special Agent in Charge Donald M. Voiret for the FBI Seattle Field Office made the announcement.

 

According to documents filed in connection with the plea, Garcia set fire to the contents of a dumpster in the alley directly behind Queer/Bar on February 24, 2020.  Garcia was arrested only minutes after setting the fire.  Garcia admitted to law enforcement that he set the fire and that he targeted Queer/Bar because it angered him to see a sign that said “queer.”  He also told officers, “I think it’s wrong that we have a bunch of queers in our society.”  A few weeks after the incident, Garcia told a stranger that his intent in setting the fire was to trap and hurt the people inside.

“The defendant targeted the patrons inside Queer/Bar, a known safe space for the LGBTQI+ community,” said Assistant Attorney General Clarke. “Hate crimes have no place in our society today and we stand ready to use our federal civil rights laws to hold perpetrators accountable.  All people deserve to feel safe and secure living in their communities, regardless of their sexual orientation or gender identity.”

“Mr. Garcia endangered countless people who he did not know, and who were simply trying to live their lives, solely because of his own hatred,” said U.S. Attorney Brown.  “We must stand up to this hate at every opportunity, to demonstrate to our community that acting on hate will not be tolerated.”

“Mr. Garcia’s hateful act endangered and spread fear in the LGBTQ+ community and caused damage to this business establishment,” said Special Agent in Charge Voiret, of the FBI Seattle Field Office. “Fortunately, our partners at the Seattle Police Department were able to respond quickly to this arson. This case shows our commitment to investigating civil rights violations with our partners.”

 

Garcia faces a maximum sentence of ten years of imprisonment and a $250,000 fine. Sentencing in front of U.S. District Judge John C. Coughenour is scheduled for September 20, 2022.

 

The case was investigated by FBI and the Seattle Police Department. The case is being prosecuted by Assistant United States Attorney Rebecca Cohen and Trial Attorney Angie Cha of the Civil Rights Division.

Seattle – A 51-year-old resident of Alberta, Canada was arrested on the water in the U.S. San Juan Islands yesterday in a small watercraft loaded with more than 1400 pounds of methamphetamine.  Ted Karl Faupel, was taken into custody after U.S. Customs and Border Patrol (CBP) encountered the boat riding low in the water near Stuart Island.

 

According to the criminal complaint, officers with CBP’ Office of Field Operations encountered the 18’ Bayliner Capri speedboat as it was headed towards Canada.  The boat had Canadian registration numbers.  The Customs and Border Patrol vessel used lights and siren to get the watercraft to stop.  The officers noted that the speedboat was riding very low in the water. 

 

The boat’s driver, Faupel, agreed to pull back the cabin cover and the officers noted a number of duffle bags that were secured with small luggage padlocks.  Acting on border search authority, officers made a small cut in one bag and observed shrink wrap packaging of what appeared to be crystal methamphetamine.

Faupel was taken into custody and the boat was taken to the Bellingham Coast Guard Station where a drug dog alerted to the presence of narcotics.  In all, the boat contained 28 duffle-bags filled with 539 packages of methamphetamine.  The total weight was nearly 1,432 pounds.

Faupel is charged with possession of methamphetamine with intent to distribute.  Due to the amount of drugs involved, Faupel faces a mandatory minimum ten years in prison.  Additionally, Faupel possessed a 9mm firearm at the time of his arrest.

The charges contained in the criminal complaint are only allegations.  A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.

The case is being investigated by Homeland Security Investigations in coordination with U.S. Customs and Border Protection.

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

faupel_complaint.pdf

 

Seattle – A 48-year-old Elk Grove, California man was arrested May 24, 2022, in Lacey, Washington, and was charged by criminal complaint with running a human smuggling scheme over the northern border with Canada and into Washington State, announced U.S. Attorney Nick Brown.  Rajinder Pal Singh, aka Jaspal Gill, has been detained since his arrest at the Federal Detention Center at SeaTac.

According to the criminal complaint in the case, Singh and his coconspirators used the ride share app Uber to transport people who had illegally crossed the border to the Seattle area.  Those records detail how trips beginning near the border in the early hours of the morning, would be split between different rides.  For example, one Uber trip would be from the border to Sea-Tac airport, and then minutes later the second Uber trip would be from a nearby airport hotel to an address in Lacey, Washington, owned by Singh’s spouse.  The Lacey house served as a way station for those entering the U.S. illegally.  In some instances, Singh arranged for rental cars to drive those who entered the U.S. illegally to destinations in the mid-west.  More recently Singh purchased airline tickets so that his smuggling customers could be flown to other parts of the country.

The smuggling scheme has been underway since at least 2018.  It slowed during the pandemic when Canada was not admitting non-citizens.  However as pandemic restrictions were lifted, the smuggling scheme became active again.  In all, the investigation estimates that between July 2018, and April 2022, the 17 Uber accounts tied to this smuggling ring ran up more than $75,000 in charges.  The Uber accounts were loaded onto pre-paid telephones to further hide who was running the scheme.

According to the complaint, Singh charged as much as $11,500 per person for his part of the smuggling services.  Surveillance video captured Singh purchasing large numbers of Uber gift cards in northern California.  Some of the gift cards were later used in connection with Uber trips that originated near the Canadian border.

In addition to the arrest in Lacey, law enforcement searched Singh’s Elk Grove, California, home.  They found about $30,000 in cash as well as counterfeit identity documents. 

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.

Conspiracy to transport and harbor illegal aliens for profit is punishable by up to ten years in prison and a $250,000 fine.

The investigation is being led by Homeland Security Investigations.

The case is being prosecuted by Assistant United States Attorney Joe Silvio.

 

gill_complaint.pdf

Seattle – The Vancouver Police Department in Vancouver, Washington, and the U.S. Department of Justice today reached a settlement agreement to ensure equal access to services for all individuals who are deaf or hard of hearing.  The investigation and settlement resulted from the complaint of a Vancouver resident who is deaf and was denied auxiliary aids or services during her interview and arrest.  The settlement agreement calls for substantial updates to the Department’s policies and procedures.  The complainant will also be paid $30,000 by the Vancouver Police Department.

“Law enforcement encounters are some of the most high-stakes and personally significant moments a person can experience. It is critically important that individuals be able to effectively communicate in these moments – both to provide information to the police and to receive information about their rights,” said First Assistant U.S. Attorney Tessa M. Gorman.  “This settlement will help ensure that every person who is deaf or hard of hearing has the ability to effectively communicate, and equal access to services in their encounters with the Vancouver Police Department.”

The investigation determined that Vancouver Police Department officers failed to take appropriate steps to ensure that communications with the Complainant were as effective as communications with others.  The department failed to provide auxiliary aids and services that were necessary to ensure effective communication with the Complainant during the investigation of criminal allegations against her (including interrogation), communications regarding her Miranda rights, and her arrest.  The Complainant alleged that VPD required her minor daughter to serve as an interpreter instead, in violation of her rights. Further, the Complainant alleges that VPD handcuffed her behind her back during transport to jail leaving her unable to communicate at all. The investigation substantiated these claims and further revealed that VPD further failed to provide a qualified interpreter to the alleged victim of the related incident, who is also deaf.

Under the terms of the settlement, within 60 days VPD will provide the U.S. Attorney’s Office with draft policy revisions to improve effective communication with persons who are deaf and hard of hearing.  Such policy revisions will address effective communications with persons with disabilities.  The settlement also calls for the police department to modify its restraint and handcuffing policy so that detainees who are deaf or hard of hearing can communicate using American Sign Language or in writing by having their hands in front of their bodies.

Under the terms of the settlement, the Vancouver Police Department will document all requests for communication assistive devices and how the Department met those requests. 

The U.S. Attorney’s Office will monitor the Vancouver Police Department’s compliance with the settlement for the next two years.  The Vancouver Police Department will report to the U.S. Attorney’s Office on training of staff, the logs regarding request and use of assistive services, and any complaints regarding compliance with the ADA.  The reports are due every six months.

The matter was initially handled by Assistant United States Attorney Christina Fogg.  Assistant United States Attorney Matt Waldrop is overseeing the compliance portion of this case.  Learn more about our civil rights program here.

Seattle – A 28-year-old New York City man was indicted this week in the Western District of Washington for three counts of bank fraud related to his abuse of the COVID-19 Pandemic Paycheck Protection Program (PPP), announced U.S. Attorney Nick Brown. Donte Jamal McClellon was a resident of Seattle when he submitted falsified documents to obtain $500,948 in loan proceeds from three different banks in May and June 2020.  Under the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act such funding was supposed to help small businesses weather the pandemic storm.

“Those who swooped in early with false and forged documents to claim loan funds, robbed legitimate businesses of the assistance they needed,” said U.S. Attorney Nick Brown. “Prosecuting pandemic fraud is a top priority of the Department of Justice and an ongoing focus for investigators here in Seattle.”

According to records filed in the case, McClellon used the names of three limited liability corporations he had once registered in the State of Washington to make his claims.  Each of the entities, ‘Frostlake,’ ‘Cannonlake,’ and ‘Skylake’ LLC, had been inactive and showed no signs of business activity in any state or federal registries in the years leading up to the pandemic.  Nevertheless, in May and June 2020, McClellen submitted Paycheck Protection program applications claiming the entities each had as many as 13 employees and, in one case, gross receipts of more than $1.6 million.  McClellan allegedly forged multiple Internal Revenue Service forms to make it appear the three companies were operating real estate or retail businesses, with employees who would benefit from the Paycheck Protection Program loans.  McClellan claimed the businesses operated out of his home address in Seattle.  The investigation revealed there was no business activity at that address.

The loan funds were disbursed to bank accounts that McClellon had set up just days before he made the loan applications.  The proceeds were then moved to a personal bank account controlled by McClellon.

McClellon is scheduled to appear for arraignment on the indictment on May 31, 2022.  Bank fraud is punishable by up to 30 years in prison.

The charges contained in the indictment are only allegations.  A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.

The case is being investigated by The FBI Seattle Field Division with assistance from FBI New York and the Small Business Administration Office of Inspector General (SBA-OIG).

The case is being prosecuted by Assistant United States Attorney Sok Tea Jiang.

On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline via the NCDF Web Complaint Form at https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

mcclellon_indictment.pdf

Seattle – A 32-year-old Washington State man was indicted this week for seven federal felonies concerning sex trafficking, production of child pornography, and illegal firearms possession, announced U.S. Attorney Nick Brown.  Dominique Terrel Gonzales resided in both Seattle and Vancouver, Washington, during the period when he preyed on young women, forcing them into prostitution.  Gonzales has been in federal custody since his arrest for illegal firearms possession in August 2020.

“Those who force vulnerable adults and minors into prostitution face significant sanctions under federal law,” said U.S. Attorney Nick Brown.  “Our office is a leader nationally in prosecuting these human trafficking crimes.  I commend the diligent work here in Washington, Oregon, and Idaho to hold Mr. Gonzales accountable for his conduct.”

The indictment follows a lengthy investigation by law enforcement in Idaho, Southwest Washington, and Seattle.  Gonzales is charged with:

• Sex trafficking of a minor – punishable by a mandatory minimum ten years in prison and up to life in prison.
• Transportation of a juvenile to engage in prostitution – punishable by a mandatory minimum ten years in prison and up to life in prison.
• Production of child pornography – punishable by a mandatory minimum 15 years in prison and up to life in prison.
• Two counts of sex trafficking of an adult through force, fraud, and coercion – each punishable by a mandatory minimum 15 years in prison and up to life in prison.
• Transportation of an adult for the purpose of prostitution through coercion and enticement – punishable by up to ten years in prison.
• And unlawful possession of a firearm and ammunition – punishable by up to five years in prison.

According to the indictment, in August 2020, Gonzales trafficked a juvenile female causing her to engage in commercial sex acts.  Gonzales transported the girl across state lines to Portland, Oregon, for her to engage in commercial sex acts.

The investigation revealed that between 2016 and 2019, Gonzalez forced adult women to work for him as prostitutes – using force, fraud, and coercion to make them do his bidding.  The indictment charges the sex trafficking of two adult women, one of whom was lured from her home in Idaho and then forced to engage in prostitution.

When law enforcement arrested Gonzales in August 2020, they reviewed his electronic devices and found images of sex acts with a minor victim created in December 2016 – that conduct is charged in the production of child pornography count.

Finally, at the time of his arrest, Gonzales illegally possessed a Desert Eagle 9mm semi-automatic pistol and ammunition.  He has three felony convictions that preclude him from possessing firearms.  Two counts of second-degree assault (domestic violence) from August 2014 in King County Superior Court and one count of unlawful imprisonment – domestic violence, from the same incident.

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 Homeland Security Investigations with assistance from the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF), Olympia Police Department, Vancouver Police Department, Idaho State Police, Ada County (Idaho) Sheriff’s Office, U.S. Department of Agriculture-Office of Inspector General (USDA-OIG), and the Department of Homeland Security’s Center for Countering Human Trafficking.

The case is being prosecuted by Assistant United States Attorney Kate Crisham, with assistance from the U.S. Attorney’s Office for the District of Idaho.  Ms. Crisham leads the Anti-Trafficking prosecutions in the Western District of Washington.

gonzales_indictment.pdf

Seattle – The former long-time Commissioner of an East King County drainage district and his wife were convicted today in U.S. District Court in Seattle of multiple federal felonies connected to their scheme to steal tax dollars intended for flood control, announced U.S. Attorney Nick Brown.  In all, Allan Thomas and Joann Thomas were convicted of conspiracy; four counts each of wire fraud and mail fraud, and one count of aggravated identity theft.  Joann Thomas was convicted of an additional count of aggravated identity theft and four counts of money laundering.  The jury deliberated for about four hours following the eight- day trial.   U.S. District Judge Richard A. Jones scheduled sentencing for September 23, 2022.

“Allan and Joann Thomas didn’t just defraud taxpayers, they abused a position of public trust, and repeatedly invented new lies to cover up old ones,” said U.S. Attorney Nick Brown.  “I am thankful the jury saw the truth, rejecting the defense attempt to paint the couple as victims of small-town political intrigue.”

According to records in the case and testimony at trial, Allan B. Thomas served as Commissioner for Drainage District 5 and 5A in King County for more than 35 years.  As a commissioner, Thomas was involved in estimating the costs of drainage maintenance for the district so that the county auditor could set and assess the appropriate taxes. The Commissioners then authorized payment to service providers who were supposed to do maintenance work on the drainage system.

As early as 2012, Joann Thomas set up a joint bank account with Allan Thomas’ son from a previous marriage.  The account was a business account for a company called A C Services.  Over the next six years, Allan Thomas had $413,323 of local tax dollars paid to A C Services claiming it was for drainage ditch maintenance.  However, Thomas’ son testified that other than two small jobs performed in 2012, he did not perform any drainage ditch work. At trial, a current drainage district commissioner testified that he saw no work done on the ditches during that time period, and that when he took on the commissioner job, it was clear the ditch network had had little maintenance for many years.

Financial records admitted at trial show that over those six years (2012-2017), shortly after the tax dollars were deposited into A C Services’ account, the money was quickly transferred to other accounts belonging to the Thomases or was used to pay their expenses for such things as hay, mortgage payments, or property taxes.  More than $68,000 was withdrawn as cash.

Allan and Joann Thomas worked together on the scheme.  Both were involved in submitting false documents by mail and wire (the mail fraud and wire fraud counts) and the funds that were fraudulently obtained were then moved through various bank accounts (money laundering).  The couple forged the signatures of Allan Thomas’ son and a second drainage commissioner on various records and checks.  The forgeries constitute Aggravated Identity Theft.  Those counts carry a mandatory two-year sentence that must run consecutive to any sentence imposed on the other counts of conviction.

In 2018, after the couple became aware of an investigation into their conduct, they began funneling the tax dollars through another company: City Biz.  The couple submitted warrants for City Biz to be paid for drainage maintenance work and within days of the funds arriving in City Biz bank accounts, nearly all the money was transferred directly to Allan Thomas or the Thomases’ dairy farm.  The Thomases’ friend who agreed to help with the City Biz fraud, now also has a federal felony conviction for repeatedly lying to the FBI.

In all, the couple defrauded taxpayers of $468,165.

“Public funds are gathered from our communities for the benefit of all residents. Instead of stewarding these funds for the public’s interest, Mr. and Mrs. Thomas abused Mr. Thomas’ position as an elected official and betrayed the trust of their neighbors and friends by diverting these funds to line their own pockets,” said Special Agent in Charge Bret Kressin, IRS Criminal Investigation (IRS:CI), Seattle Field Office. “IRS:CI will continue to work with our partners in law enforcement and be vigilant in protecting the public from corrupt officials like Mr. Thomas, who think only of their own greed.”

“For years, Commissioner Thomas and his wife chose to betray the public’s trust both by failing to maintain the property under their care and by stealing from the hardworking taxpayers of King County for personal gain. Today’s verdict reinforces that public servants will be held accountable for their actions and to a high ethical standard,” said Donald M. Voiret, Special Agent in Charge of the FBI Seattle Field Office.

The IRS Criminal Investigation (IRS:CI) and the FBI led the investigation with assistance from the Enumclaw Police Department.  The Enumclaw City Attorney initiated the review of the district finances.   The Washington State Auditor’s Office also conducted an audit of the district in 2019.    The King County Prosecuting Attorney’s Office, in consultation with the U.S. Attorney’s Office, determined the case was appropriate for federal prosecution.

The case is being prosecuted by Assistant United States Attorneys Justin Arnold and Andrew Friedman.

Seattle – A Burien, Washington, seafood broker was sentenced today in U.S. District Court in Seattle to 90 days in prison, and three years of supervised release, for smuggling goods from the United States, announced U.S. Attorney Nick Brown. Jeffrey Hallin Olsen, 52, owner of Absolute Seafoods LLC, falsified documents and lied to authorities about disposing of 46 cases of potentially tainted geoduck from Alaska.  U.S District Judge John C. Coughenour sentenced Olsen’s company, Absolute Seafoods LLC, to probation and was ordered to pay a $25,000 fine. 

“Mr. Olson chose to gamble with the lives of customers across the globe – putting them at risk of shellfish poisoning,” said U.S. Attorney Brown. “We’ll likely never know if any of the Chinese customers became ill from these clams, but a prison sentence is justified by the danger of his conduct and his repeated lies to authorities, claiming he had destroyed the potentially harmful geoduck.”

According to records filed in the case, on February 20 or 21, 2019, Olsen purchased 2,500 pounds of geoduck from various Alaska divers.  The geoduck were mixed together in crates for shipping, and were picked up at Sea-Tac Airport, to be trucked to Vancouver B.C and shipped to Hong Kong.  Olsen produced a U.S. Department of Commerce Export Health Certificate stating that the geoduck met health requirements.

One day after the purchase, but before the geoduck were exported, one of the divers notified Alaska state officials that he had mistakenly harvested his geoduck from an area that had not been approved for harvest.   The area had not been tested for the toxins that cause paralytic shellfish poisoning, which has been a recurring problem in Alaskan waters.  An Alaska Wildlife Trooper notified Olsen that he needed to destroy the shipment as it was unsafe to consume.  Olsen told the trooper he would destroy the geoduck.

Instead of destroying the geoduck, Olsen illegally shipped most of the geoduck to Hong Kong for human consumption.  Olsen shipped an additional 10 cases of potentially tainted geoduck to a buyer in Oakland, California.  Olsen prepared false shipping paperwork that falsely identified the contents of the crates as “fresh Yelloweye.”

Olsen falsely told Alaskan officials that he had destroyed the geoduck and provided them with a bill from the King County garbage transfer station as proof the geoduck had been destroyed.  However, investigators reviewed surveillance video from the transfer station showing that at the time of the receipt, Olsen only disposed of a small amount of household waste.  Investigators also retrieved video showing Olsen personally delivering the crates for shipment to Oakland. 

The case was investigated by NOAA Fisheries Enforcement, the Washington Department of Fish and Wildlife Police and the Alaska Department of Public Safety, with assistance from the California Department of Fish and Game, and the Department of Fisheries and Oceans – Canada. 

The case was prosecuted by Assistant United States Attorney Seth Wilkinson.

NOAA photo Potentially tainted geoduck NOAA photo

 

Seattle – Two significant players in a scheme to bribe Amazon employees and contractors pleaded guilty today in U.S. District Court in Seattle to various federal charges, announced U.S. Attorney Nick Brown.  Joseph Nilsen, 32, pleaded guilty to conspiracy to commit wire fraud, conspiracy to commit violations of the Travel Act and filing a false tax return.  Kristen Leccese, 33, pleaded guilty to conspiracy to commit violations of the Travel Act. Both are New York residents. Sentencings are scheduled for September 9, 2022, before the Honorable Richard A. Jones.

In all, three of six defendants have now pleaded guilty in a multimillion-dollar scheme to manipulate the Amazon Marketplace.  

According to the plea agreements filed in the case, Nilsen, Leccese and their associates conspired to pay bribes to get Amazon employees and contractors to misuse their access to Amazon networks and confidential information. They sought to obtain various unfair competitive advantages for certain merchants on the Amazon Marketplace by, among other things, interfering with Amazon’s ability to monitor the safety and authenticity of goods sold and impairing the accuracy of information posted on the Marketplace.  In the two plea agreements, Nilsen and Leccese admit they conspired to pay bribes: to obtain confidential Amazon business information; to get suspended third-party sellers and product listings reinstated on the Marketplace; to circumvent Amazon restrictions and limitations on certain products; to gain access to restricted product categories by misrepresenting the source of goods; to manipulate customer reviews; and to surveil and attack other merchants and product listings.

Nilsen also pleaded guilty to filing a false tax return. In 2018 and 2019 he failed to file tax returns on behalf of his Amazon consulting company, and in 2017 he filed a false tax return significantly underreporting his and his company’s actual taxable revenue.  For tax year 2017, he admits the tax loss to the U.S. is $44,178.

Conspiracy to commit violations of the Travel Act is punishable by up to five years in prison.  Conspiracy to commit Wire Fraud is punishable by up to 20 years in prison.  Filing a false tax return is punishable by up to three years in prison.

On February 11, 2022, defendant Rohit Kadimisetty was sentenced to ten months in prison and ordered to pay a $50,000 fine.

Two defendants, Ephraim Rosenberg, of Brooklyn, New York, and Hadis Nuhanovic, of Acworth, Georgia, remain scheduled for trial in October 2022. Defendant Nishad Kunju, of Hyderabad, India, has not been arraigned on the indictment.

The case is being investigated by the FBI, with assistance from the Internal Revenue Service-Criminal Investigations (IRS-CI), and the Department of Justice Office of International Affairs.

The case is being prosecuted by Assistant United States Attorneys Steven Masada and Nicholas Manheim.

Tacoma – A 25-year-old Renton, Washington, man was sentenced today in U.S. District Court in Tacoma to 200 months in prison for second degree murder for the brutal beating death of a 21-year-old woman, announced U.S. Attorney Nick Brown.  The victim, a resident of California, had traveled to the Seattle area to meet up with Alejandro J. Aguilera Rojas.  The two traveled to the Sequim, Washington, area on February 10, 2020.  The murder occurred in the Olympic National Forest.

In his sentencing remarks U.S. District Judge Benjamin H. Settle described the brutal nature of the crime and the wide-reaching devastation felt by the victim’s family.  Speaking to Aguilera Rojas, Judge Settle noted: “if you take a life in the manner you took here, there will be significant consequences.”

 

“This cruel and coldhearted attack robbed a family of a young and vibrant daughter, sister and niece,” said U.S. Attorney Nick Brown.  “Law enforcement, prosecutors, and our specially-trained crime victim advocates have worked diligently to get justice for the family of this young woman.”

According to records in the case, Aguilera Rojas was having a relationship with the victim–a relationship hidden from his wife and family.  The victim had traveled to the Seattle area to visit Aguilera Rojas.  The victim’s friends and family members reached out to Aguilera Rojas, who gave them conflicting information about the victim’s whereabouts.  A friend of the victim reported her missing to law enforcement when she did not contact them after February 10, 2020.  The victim’s body was found off a logging road in Olympic National Forest on February 14, 2020.  There were signs she had been beaten and stabbed.  A broken and bloody tequila bottle and knives were located near where the victim’s body was discovered.  There was no identification on the body.

Law enforcement reviewed surveillance video at a Sequim convenience store and determined a woman and a man, later identified as Aguilera Rojas, had visited the store.  Law enforcement was able to determine that Aguilera Rojas’ cell phone and the victim’s phone had been in the area of the murder on February 10 and 11 and that both phones had then travelled back to the area of Aguilera Rojas’ residence, after the victim had been killed and left in the Olympic National Forest.

The autopsy of the victim by the King County Medical Examiner’s Office ruled the manner of death as a homicide and the cause of death by multiple blunt and sharp force injuries.

Aguilera Rojas was interviewed by law enforcement on February 19, 2020.  He made a number of different statements about his relationship with the victim and what had happened.  Aguilera Rojas was booked into Clallam County Corrections where he remained until being taken into federal custody.  Because the murder occurred on federal land in the Olympic National Forest, the case was prosecuted in federal court.

Aguilera Rojas pleaded guilty to second degree murder in December 2021.

The case was investigated by the FBI and the Clallam County Sheriff’s Office, with significant assistance from the Washington State Patrol.

The case is being prosecuted by Assistant United States Attorneys Rebecca S. Cohen and Ye-Ting Woo. 

Seattle – In honor of National Police Week, United States Attorney Nick Brown is recognizing the service and sacrifice of federal, state, local, and Tribal law enforcement. This year, the week is observed Wednesday, May 11 through Tuesday, May 17, 2022.

“This week, we gather to pay tribute to the law enforcement officers who sacrificed their lives in service to our country,” said Attorney General Garland. “We remember the courage with which they worked and lived. And we recommit ourselves to the mission to which they dedicated their lives. On behalf of a grateful Justice Department and a grateful nation, I extend my sincerest thanks and gratitude to the entire law enforcement community.”

“On Friday the names of seven Washington State law enforcement officers who died in 2019, 2020, and 2021, will be added to the Memorial wall in Washington DC – among them is Seattle Police Officer Alexandra Brenneman Harris – a young officer devoted to improving police and community relations. She was struck and killed on I-5 while checking that others were uninjured,” said U.S. Attorney Brown. “To honor these officers who made the ultimate sacrifice, we must join with our communities and work tirelessly for a safe and just future.”

In 1962, President Kennedy issued the first proclamation for Peace Officers Memorial Day and National Police Week to remember and honor law enforcement officers for their service and sacrifices.  Peace Officers Memorial Day, which every year falls on May 15, specifically honors law enforcement officers killed or disabled in the line of duty. Based on data submitted to and analyzed by the National Law Enforcement Officer Memorial Fund (NLEOMF), 472 law enforcement officers died nationwide in the line of duty in 2021.  Of that number, 319 succumbed to COVID-19.

The seven officers who died in the line of duty between 2019 and 2021 in Washington State and will have their names added this week to the memorial wall in Washington DC are:

• Jeremy Robert Brown, Clark County Sheriff’s Office
• Reginald Bernard Harris, King County Sheriff’s Office
• Alexandra Brenneman Harris, Seattle Police Department
• Jon David Anderson, Spokane Police Department
• Gabriel Kyle Forrest, Washington State Corrections
• David Alan Christensen, Washington State Corrections
• Eric Thomas Gunderson, Washington State Patrol

Additionally, according to 2021 statistics reported by the Federal Bureau of Investigation (FBI) through the Law Enforcement Officer Killed and Assaulted (LEOKA) Program, 73 law enforcement officers who died in the line of duty in 2021 were killed as a result of felonious acts, whereas 56 died in accidents.  Deaths resulting from felonious acts increased in 2021, rising more than 58 percent from the previous year.  In 2021, unprovoked attacks were the cause of 24 deaths significantly outpacing all other line of duty deaths resulting from felony acts and reaching the highest annual total in over 30 years of reporting.  Additional LEOKA statistics can be found on FBI’s Crime Data Explorer website for the LEOKA program. 

The names of the 619 fallen officers added this year to the wall at the National Law Enforcement Officer Memorial will be read on Friday, May 13, 2022, during a Candlelight Vigil in Washington, D.C., starting at 8:00 PM EDT. Those who wish to view the vigil live online, can watch on the NLEOMF YouTube channel found at https://www.youtube.com/TheNLEOMF. 

 

Seattle – A 53-year-old Seattle man who has a history of drug dealing in Seattle’s Pioneer Square neighborhood, was sentenced today in U.S. District Court in Seattle to six years in prison, announced U.S. Attorney Nick Brown.  Marvin Traylor was arrested in February 2021, for dealing drugs while armed with a gun.  Traylor was on supervised release at the time for prior drug dealing convictions.

U.S. District Judge John C. Coughenour imposed a 5-year sentence for use of a firearm in connection with a drug trafficking crime, and an additional year in prison for violating the conditions of his supervised release.

According to records filed in the case, Traylor was released from prison and began his term of supervised release in February 2019.  The U.S. Probation Office worked diligently to assist Traylor with reentry to the community. Despite that hard work, Traylor committed new offenses: domestic violence assault, and later was arrested for dealing drugs again in Pioneer Square.  During the new term of supervised release, Traylor was assisted by the Veteran’s Administration and King County’s Law Enforcement Assisted Diversion (LEAD) program.  However, his drug dealing continued.

In February 2021, undercover Seattle Police Officers observed Traylor making drug sales in the 12th and Jackson area of the International District.  When an elderly Asian man came to the street corner to panhandle, Traylor punched the elderly man and held something in his pocket to the man’s head.  He struck the man again with what was in his pocket and kicked the man.  Bystanders separated the two.  A short time later officers arrested Traylor and found a loaded handgun in the same pocket that Traylor had used to threaten and then strike the man.  The gun had been reported stolen.  Traylor had small bags of crack cocaine, heroin and methamphetamine on him at the time of the arrest.

In asking for the significant sentence, Assistant United States Attorney Vince Lombardi noted that Traylor’s lawbreaking had been “escalating” – not diminishing as it should with the involvement of Federal Probation.

The case was investigated by the Seattle Police Department, the Drug Enforcement Administration(DEA), and U.S. Probation.

The case was prosecuted by Assistant United States Attorney Vince Lombardi.

Seattle – A significant drug distributor for the Jalisco New Generation Cartel (CJNG) was sentenced today in U.S. District Court in Seattle to nine years in prison, announced U.S. Attorney Nick Brown.  Adrian Izazaga-Martinez, 32, of Kent, Washington, was ordering 8-pound loads of methamphetamine.  At the sentencing hearing U.S. District Judge John C. Cougheour said, “the size of the drug trafficking organization, the quantity of drugs, and the violence involved,” justify the long prison term.

“Mr. Izazaga-Martinez was a high-level drug redistributor for a trafficking organization that was bringing upwards of 20-pound shipments of meth and heroin into our area,” said U.S. Attorney Brown.  “And along with the drugs they brought the violence – the violence we see from cartels in Mexico was brought to the drug trade in our district.”

According to records filed in the case, between September 2019 and December 2020, a multi-agency law enforcement team began investigating drug trafficking tied to the CJNG cartel.  During the investigation, agents conducted thousands of hours of physical and electronic surveillance, secured tracking warrants for more than 100 telephones and/or vehicles, obtained authorization to intercept more than 25 target telephones and executed search warrants at DTO members’ residences.  The investigation revealed the trafficking organization was bringing in large amounts of meth and heroin as well as fentanyl-laced pills and cocaine.  The distribution ring operated in King, Snohomish, Lewis, and Pierce Counties.  The investigation also revealed members of the ring were plotting assaults, kidnappings and intimidation using firearms – law enforcement had to intervene multiple times in an effort to prevent violence.

Izazaga-Martinez was heard on the telephone wiretaps discussing guns and threats.  When he was arrested in Kent, Washington, on July 28, 2020, he had nearly $2,500 in cash.  Investigators found ammunition in the car he had been riding in.

On February 8, 2022, Izazaga-Martinez pleaded guilty to conspiracy to distribute controlled substances.

In recommending an 11-year sentence, prosecutors noted that Izazaga-Martinez was repeatedly heard on the wiretap discussing guns and threats of violence.  They also noted the huge amount of narcotics linked to the drug trafficking organization. “The risks of synthetic opioids, like methamphetamine, are well documented – according to the University of Washington Addictions, Drug & Alcohol Institute, state drug poisonings went up by approximately 30% in 2020, with methamphetamine and other synthetic opioids (mostly fentanyl) comprising ‘a growing share of drug-caused deaths,’” prosecutors wrote in their sentencing memo.

The investigation was conducted by the U.S. Drug Enforcement Administration’s (DEA) Tacoma Resident Office in partnership with Tahoma Narcotics Enforcement Team (TNET), Kent Police Department, Homeland Security Investigations (HSI), SeaTac Police Department, Thurston County Narcotics Team (TNT), the Federal Bureau of Investigation  (FBI), and the Bureau of Alcohol Tobacco, Firearms and Explosives (ATF).

This case is being prosecuted by Assistant United States Attorneys Amy Jaquette and C. Andrew Colasurdo.

This prosecution is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.

Tacoma – A Brazilian National with multiple convictions for domestic violence assault, was arrested Friday on eight counts for illegal possession of firearms, announced U.S. Attorney Nick Brown.  Joao Ricardo DeBorba, 46, of Vancouver, Washington, remains detained at the Federal Detention Center in SeaTac pending further court proceedings.

According to the criminal complaint, DeBorba entered the United States on a tourist visa in 1999.  DeBorba overstayed the visa and allegedly falsified documents to work in the U.S. and to acquire firearms.  In April 2019, while purchasing firearms in Portland and Lebanon, Oregon, and Lacey, Washington, DeBorba entered false information on government forms stating he was a U.S. citizen.  Shortly after the first three gun purchases, DeBorba was arrested for drunken driving and was found to have a Glock pistol.

Despite that arrest, DeBorba continued to purchase firearms: a rifle in Gresham, Oregon, and a revolver in Vancouver, Washington, again providing false information about his citizenship on required forms.

In November 2019, DeBorba was arrested for domestic violence assault.  DeBorba was served with a “No Contact” order and was instructed to surrender all of his firearms.  On November 16, 2019, DeBorba was arrested for violating the no contact order and 20 firearms were seized from his residence.

In January 2022, DeBorba was convicted in a second case of domestic violence assault.  He was again informed that he could not possess firearms.

Last week, law enforcement served a search warrant at DeBorba’s residence and seized 5 firearms: 3 AR-15 style rifles with no serial numbers or manufacturers marks and two handguns – one without any serial number or manufacturers mark.  The firearms, so-called “ghost guns,” appear to have been manufactured from parts ordered online.

In addition to the guns, DeBorba had a large amount of ammunition, a workbench with firearms parts and tools, firearms silencers, magazines, and various gun cases.

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.

Illegal firearms possession is punishable by up to 10 years in prison and a $250,000 fine.

The case is being investigated by the FBI, with assistance from the Vancouver Police Department, U.S. Immigration and Customs Enforcement (ICE), the Bureau of Alcohol, Firearms & Explosives (ATF), and the Social Security Office of Inspector General (SSA-OIG).

The case is being prosecuted by Assistant United States Attorney Max Shiner.

deborba_complaint.pdf FBI photo Guns seized

 

Seattle – U.S. Attorney Nick Brown today highlighted National Missing or Murdered Indigenous Persons Awareness Day. Washington State and both of its U.S. Attorney’s Offices are working collaboratively to build systems to ensure tribal communities can quickly report and seek help if a tribal member goes missing.

“Here in Washington, many of our tribal communities are completing their tribal community response plans to address this initiative.  These plans set a framework so that the community and law enforcement can quickly respond if someone goes missing,” said U.S. Attorney Brown. “Our program coordinator has seen great progress on the plans and in the months ahead will continue to expand the planning process to additional tribes.”

 

Today, Secretary of the Interior Deb Haaland and Deputy Attorney General Lisa Monaco recognized National Missing or Murdered Indigenous Persons Awareness Day with a virtual event to highlight the Not Invisible Act Commission. The commission is a cross jurisdictional advisory committee composed of law enforcement, Tribal leaders, federal partners, service providers, family members of missing and murdered individuals, and most importantly — survivors.  Member of the commission are listed here: https://www.doi.gov/priorities/strengthening-indian-country/not-invisible-act-commission 

“The Justice Department is committed to addressing the crisis of missing or murdered Indigenous persons with the urgency it demands,” said Attorney General Merrick B. Garland. “That commitment is reflected in the strength of our partnerships across the federal government, including with the Department of the Interior as we take the next steps in launching the Not Invisible Act Commission.  The Commissioners announced today will play a critical role in our efforts to better meet the public safety needs of Native communities. The Justice Department will continue to work alongside our Tribal partners with respect, sincerity, and a shared interest in the wellbeing of Tribal communities.”

“Everyone deserves to feel safe in their community, but a lack of urgency, transparency and coordination have hampered our country’s efforts to combat violence against American Indians and Alaska Natives,” said Interior Secretary Deb Haaland. “As we work with the Department of Justice to prioritize the missing and murdered Indigenous people’s crisis, the Not Invisible Act Commission will help address the underlying roots of the Missing and Murdered Indigenous Peoples crisis by ensuring the voices of those impacted by violence against Native people are included in our quest to implement solutions.” 

The Not Invisible Act Commission will make recommendations to the Departments of the Interior and Justice to improve intergovernmental coordination and establish best practices for state, Tribal, and federal law enforcement, to bolster resources for survivors and victim’s families, and to combat the epidemic of missing persons, murder, and trafficking of Native American, Alaska Native, and Native Hawaiian people. 

Among its missions, the Commission will:  

• Identify, report and respond to instances of missing and murdered Indigenous peoples (MMIP) cases and human trafficking,
• Develop legislative and administrative changes necessary to use federal programs, properties, and resources to combat the crisis, 
• Track and report data on MMIP and human trafficking cases, 
• Consider issues related to the hiring and retention of law enforcement offices, 
• Coordinate Tribal-state-federal resources to combat MMIP and human trafficking offices on Indian lands, and  

• Increase information sharing with Tribal governments on violent crimes investigations and other prosecutions on Indian lands.  

The Commission has the authority to hold hearings, gather testimony, and receive additional evidence and feedback from its members to develop recommendations for the Secretary and Attorney General. 

 

Tacoma – A 45-year-old resident of Lekki, Nigeria, pleaded guilty today in U.S. District Court in Tacoma to wire fraud and aggravated identity theft for using stolen identities to claim hundreds of thousands of dollars in pandemic-related unemployment benefits, announced U.S. Attorney Nick Brown. Abidemi Rufai has been in custody since his arrest at New York’s JFK airport in May 2021.  At the time of his arrest, Rufai was the Special Assistant to the Governor of Nigeria’s Ogun State. 

According to the plea agreement, since 2017, Rufai unlawfully obtained the personal identifying information for more than 20,000 Americans to submit more than $2 million in claims for federally funded benefits under a variety of relief programs.  The various agencies involved paid out more than $600,000.

The largest amount of fraud was committed against the Washington State Employment Security Department, which paid out $350,763 in fraudulent pandemic unemployment claims to accounts controlled by Rufai.  Rufai also submitted fraudulent pandemic unemployment claims in at least 17 other states. 

Rufai also defrauded the Small Business Administration (SBA) by attempting to obtain Economic Injury Disaster loans (EIDL) tied to the COVID-19 pandemic.  Between April 8, 2020, and June 26, 2020, he submitted 19 fraudulent EIDL applications.  SBA paid out $10,000 based on the applications.

Between 2017 and 2020, Rufai attempted to obtain more than $1.7 million in IRS tax refunds by submitting 675 false claims.  The IRS paid out $90,877 on these claims.

Rufai’s efforts to enrich himself with false disaster claims did not start with COVID-19.  In September and October 2017, he submitted 49 disaster relief claims connected to Hurricane Harvey and Hurricane Irma.  He filed $24,500 in false claims and was paid on 13 claims totaling $6,500.

Rufai has agreed to pay full restitution to the defrauded agencies.

Wire fraud in relation to a presidentially declared major disaster or emergency is punishable by up to 30 years in prison.  Aggravated identity theft is punishable two years in prison to follow any prison term imposed on another charge.  Prosecutors have agreed to recommend no more than 71 months in prison.  The recommendation is not binding on U.S. District Judge Benjamin H. Settle, who will determine the appropriate sentence on August 15, 2022, after considering the sentencing guidelines and other statutory factors.

This case was investigated by the FBI, with assistance from the Department of Labor Office of Inspector General, Internal Revenue Service Criminal Investigations, Department of Homeland Security Office of Inspector General, and the United States Small Business Administration Office of the Inspector General.  The Washington Employment Security Department is cooperating in the investigation.

The case is being prosecuted by Assistant United States Attorneys Seth Wilkinson and Cindy Chang of the Western District of Washington.

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 44-year-old Battle Ground, Washington, man was sentenced today in U.S. District Court in Seattle to 18 months in prison for being a felon in possession of firearms, announced U.S. Attorney Nick Brown.  Lynn Manley Cargile was arrested on December 26, 2019, following a six-hour stand-off with police.  Cargile was indicted federally in August 2021.  At today’s sentencing hearing Chief U.S. District Judge Ricardo S. Martinez said, “If you want your children to have a different life (than you), it’s up to you to model that for them.”

According to records filed in the case, police were called to Cargile’s home by a 9-1-1 call from his ex-wife, who alleged that Cargile had pushed her on their bed, had refused to allow her to get up, and when she later attempted to flee, had pulled her back into the house by her hair.  After a lengthy wait, officers used ‘flash-bang’ devices to get Cargile to leave the house, and he was taken into custody.  When officers entered the home to secure it for officer safety, they noted numerous firearms.  After obtaining a court authorized search warrant, law enforcement discovered a Smith and Wesson AR-15 style rifle with a swastika on the rifle butt and a Black Rain Ordinance short-barreled rifle.  Investigators also found two silencers, one of which was marked with “SS Bolts” markings associated with a Nazi Germany paramilitary organization.  Cargile is prohibited from possessing firearms due to prior felony convictions in Clark County Washington for attempting to elude (2002 and 2003) and illegal firearms possession (1999 and 2002). 

Cargile was in state custody until August 2021 serving a 29-month prison sentence for domestic violence stemming from the same incident.  The court and prosecutors took into account that state prison term in determining the appropriate federal sentence.

Speaking at sentencing, Cargile said he had renounced his white supremacist views.  “For the first time in my life I want to do something different.  I want to do gang intervention and give back to the community…. My goal is to be a good dad, serve God and give back to my community.”

Chief Judge Ricardo S. Martinez ordered Cargile to be on supervised release for three years following prison with drug treatment and mental health treatment as appropriate.  As he closed the hearing, the Chief Judge noted that he does not usually believe the statements defendants make about how they have changed, but he does believe the actions they take once released from custody.

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

The case is being prosecuted by Assistant United States Attorney Will Dreher and former Assistant United States Attorney Angelica Williams.

Seattle – A 33-year-old Whidbey Island, Washington resident was charged by criminal complaint with arson in connection with the April 6, 2022, fire that destroyed or damaged multiple businesses on San Juan Island, announced U.S. Attorney Nick Brown.  Dwight Christianson Henline will be brought to federal court in Seattle for his initial appearance on the charge.

“Federal investigators worked carefully and methodically with their state and local counterparts, using video evidence and sales records to identify Mr. Henline as a suspect in this fire,” said U.S. Attorney Nick Brown. “The blaze is estimated to have caused millions of dollars in damage in a very small community. It took a community effort to stop the fire from spreading further. Holding the arsonist accountable is now our priority.”

According to the criminal complaint, arson investigators determined the fire originated on the back deck of the Crystal Seas Kayaking building at 40 Spring Street. They also determined, based on video and other evidence, that the fire was caused by someone lighting an ignitable liquid. A video recording from the adjacent Windermere Real Estate office indicates the fire began at about 10:04 p.m. on April 6, 2022, then died down. It smoldered until it intensified and began to grow again at about 3:15 a.m. on April 7, 2022. A local citizen saw the fire at about 3:43 a.m. and reported it. Although firefighters arrived from throughout the islands, the fire seriously damaged or destroyed the Crystal Seas Kayaking building, the Windermere Real Estate office, and the building housing Crow’s Nest Coffee and Herb’s Tavern before it was extinguished.

ATF personnel and local investigators collected various surveillance videos from San Juan Island businesses to try to determine who set the fire. These videos show Henline in the proximity of the fire’s origin on April 6, 2022. Using these videos, investigators were able to track Henline’s movements in Friday Harbor immediately before and after the fire. Of significance, Henline purchased candy, energy drinks, bleach, and ammonia at King’s Market with a debit or credit card in the early evening. At about 9:53 p.m., Henline used cash to buy lighter fuel at a small convenience store. That nearly empty bottle of lighter fuel was later found with Henline’s belongings at the home where he was staying on Whidbey Island.

After buying the lighter fuel, Henline walked through some alleys in Friday Harbor, then crossed Spring Street in the direction of Crystal Seas Kayaking. One minute after the fire began, Henline walked away from that area towards the harbor, collected a suitcase he had stashed in the lower deck area beneath the Friday Harbor Ice Cream Company, then boarded the ferry bound for Anacortes. 

Investigators later obtained a warrant for Henline’s arrest. A Langley Police Department officer located and arrested Henline on that warrant on April 16, 2022, on Whidbey Island.

Initial estimates are that the fire caused millions of dollars of damage to multiple businesses, including Crystal Seas Kayaking; San Juan Property Management; San Juan Excursions; Windermere Real Estate; Crow’s Nest Coffee; and Herb’s Tavern.

Arson is punishable by a mandatory minimum 5 years and up to 20 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), the San Juan County Sheriff’s Office, and San Juan County Fire and Rescue, with assistance from the Langley Police Department and the Island County Sheriff’s Office.

The case is being prosecuted by Erin H. Becker and Cecelia Gregson.

henline_complaint.pdf

The Office for Victims of Crime, a component of the Justice Department’s Office of Justice Programs, presented the Special Courage Award to Suamhirs Piraino-Guzman, a human trafficking survivor and advocate residing in Seattle, Washington.

This Special Courage Award category honors a victim or survivor who has shown exceptional perseverance or determination. It may also acknowledge one who hasacted bravely to aid a victim or to prevent victimization.

After enduring a terrifying and traumatic ordeal at a young age, Mr. Piraino-Guzman became a courageous advocate who has used his personal tragedy to help community leaders better understand the atrocities of human trafficking,” said Amy L. Solomon, Principal Deputy Assistant Attorney General for OJP. “Through his experience and advocacy, he has brought international attention to the critical importance of trauma-informed counseling and services at the onset of recovery, taking his message to communities throughout America and to nations across the globe. He is a remarkable man whose courage is an example to all who know him.”

In 2004, Mr. Piraino-Guzman, 14-years-old at the time, was abducted from his native country of Honduras and smuggled into the United States where he was abused, exploited and trafficked in California until he was identified during a police raid. He was held by Immigration and Customs Enforcement, then placed in a mental health facility, then a group home and subsequently with a foster family, who took him to a border station and left him with Customs and Border Protection officers to be deported.

When he was identified as a trafficking victim and returned to foster care, he assisted in the prosecution of the traffickers without receiving any trauma-informed medical care or services from a case manager. He survived, but the experience instilled in him a need to help other children, immigrants and trafficking survivors obtain the services he was denied. He has facilitated a series of listening sessions on men and boys for the Office on Trafficking in Persons at the Department of Health and Human Services, and he appeared in the video education series, “The Faces of Human Trafficking,” released by OVC in 2014. He also served on the first U.S. Advisory Council on Human Trafficking, comprised of survivors charged with advising U.S. government agencies on improving responses to trafficking to serve in the United Nations Trust Fund for Contemporary Forms of Slavery Board of Trustees and as the Special Rapporteur on the Labor and Sexual Exploitation of Children, Especially Boys. Currently, Mr. Piraino-Guzman is the Mental Illness and Drug Dependency Partnerships Manager for King County, Washington.

“It is a great privilege to honor a man who has faced the darkest of moments and emerged with such strong reserves of empathy, compassion and love,” said Kristina Rose, director of OVC. “Mr. Piraino-Guzman’s courage lies in his resilience and strength but also in his insistence on a safer, better world. We are proud to recognize him for his extraordinary contributions.”

Every April, OVC leads communities across the country in observing National Crime Victims’ Rights Week. President Ronald W. Reagan proclaimed the first Victims’ Rights Week in 1981, calling for greater sensitivity to the rights and needs of victims. This year’s observance took place from April 24 through April 30, featuring the theme, “Rights, Access, Equity, for All Victims.”

Seattle –A Cocoa Beach, Florida, man was sentenced today in U.S. District Court to 30 months in prison for wire fraud in connection with his million-dollar scheme to pose as a successful commodities trader, announced U.S. Attorney Nick Brown.  Matthew White, 29, accepted $1.29 million in investments from family, friends, and others, promising big gains.  In truth, little was invested, and the profits were non-existent.   At the sentencing hearing, U.S. District Judge Robert S. Lasnik acknowledged that White was working to pay back the money he stole. However, the judge said a prison sentence is important to show there is a price to pay for “targeting vulnerable people and stealing their money.”

According to records filed in the case, between 2011 and 2018, White solicited funds from investors in Florida and Washington State.  White represented that he would use the money to successfully trade in futures contracts first under his own name, and later under the name of his company, M.W. Global Futures LLC, of which he was the sole member.  White claimed to have expertise as a commodities trader, with special training.  He also claimed to be a member of the Chicago Board of Trade.  All of these claims were false.

White provided promotional materials that claimed his trading would provide a high return on investment.  In October 2017, he sent one elderly investor a brochure claiming a return on investment in excess of 16% annually.   Once he got their funds, White sent investors statements purporting to show substantial trading activity and profits.  The statements also showed White’s commissions, which were allegedly tied to the level of profits.  White sent some of these fictitious statements via email, constituting wire fraud.  Very little of the money was actually traded in investment accounts, and the investments that were traded resulted in losses.

Of the $1.29 million, White repaid approximately $425,000 as redemptions and purported profits during the scheme.  In November 2018, White was contacted by investigators from the Commodity Futures Trading Commission.  He then repaid an additional $602,000 to two victims.  White owes the remaining $281,970 in restitution to his victims.  According to White’s defense counsel, he is paying $80,000 towards that restitution amount today, before his prison term.

Speaking in court today, Assistant United States Attorney Benjamin Diggs said White ran his fraud with repetition and persistence.  “It was not a one-time lapse in judgment, for years he sent fake account statements and got new infusions of cash…. He knew the victims were elderly and vulnerable.  They had their own hopes and plans for this money.”

The case was investigated by the FBI and the Division of Enforcement of the Commodity Futures Trading Commission.

The case was prosecuted by Assistant United States Attorney Benjamin Diggs. 

Seattle – A 44-year-old Shoreline, Washington man will make his initial appearance in U.S. District Court in Seattle this afternoon, charged with two counts of illegal possession of firearms, announced U.S. Attorney Nick Brown.  Rustam Yusupov was arrested without incident late yesterday at his Shoreline residence. 

According to the criminal complaint, 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 and
• A skeletonized AR-15 5.56 NATO caliber pistol with no serial number.

Yusupov is the subject of a 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.

Illegal possession of a firearm is punishable by up to five 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 Seattle Police Department and the Bureau of Alcohol, Tobacco, Firearms, & Explosives (ATF).

The case is being prosecuted by Assistant United States Attorneys Todd Greenberg and Thomas Woods.

Seattle – A 52-year-old Seattle-area man was sentenced today in U.S. District Court in Seattle to 6 years in prison for his schemes involving the illegal manufacturing of marijuana, announced U.S. Attorney Nick Brown.  Raymond Ng engaged in conspiracies to facilitate illegal marijuana grows in residential neighborhoods, and to launder the proceeds through businesses and properties. At the sentencing hearing U.S. District Judge John C. Coughenour said “Ng continued his conduct after he had plenty of warning that it was criminal, and he was at risk.”

“Mr. Ng’s scheme was damaging to our community on many levels,” said U.S. Attorney Brown.  “The illegal marijuana grows are at risk for electrical fires, drug rip-offs by other criminals, and mold and chemical contamination from the growing process.  Violating Washington State law on marijuana production harms the regulated market. And buying homes with drug proceeds and converting them to grow houses hurts homebuyers trying to get a toehold in the real estate market.”

According to records filed in the case, Ng’s involvement in the illegal marijuana business appears to have begun as early as 2016, when he purchased a house near a Renton elementary school and rented it to an employee of his construction company to grow marijuana.  The house was searched by law enforcement in June 2017, resulting in the seizure of 533 plants. This house was later sold by Ng, but on his seller disclosure statement he lied and said the house had not been used for drug manufacturing.

Despite the search of his property, Ng continued to help others illegally grow marijuana in residences around Seattle. He rented his own properties to illegal marijuana growers, and helped others buy properties that were used to illegally grow marijuana. When a grow was searched by law enforcement, Ng’s construction company would renovate the property, and his real estate company would help to sell it. Through these many services, Ng helped to spread illegal marijuana grows in Puget Sound neighborhoods.

“Illegal marijuana grows only serve to damage our community” said Inspector in Charge Anthony Galetti. “By circumventing Washington State’s law on legal marijuana we saw the home next door turned into an underground production facility. From fires caused by shoddy electrical wiring to pesticides and chemical running into local waters, these grows put the workers and our community in harm’s way. With Ng’s sentencing we hope this serves as a warning to all others, these grows are dangerous and have no place in our neighborhoods or in the U.S. Mail.”

Ng also conspired to launder drug proceeds, working with his co-conspirator to use illegal marijuana proceeds to pay for properties. Ng used his position as a successful businessman to lie to a mortgage company so that an employee of his construction business could purchase a house, which the employee then used to grow marijuana.

Ng’s girlfriend, Qifang Chen, 33, who was pregnant when she and Ng were arrested in this case, was also charged in the scheme.  She was sentenced to six months of home confinement and three years of probation.

Ng has been in custody since his arrest in October 2020. As part of a larger investigation, law enforcement searched Ng’s home as well as dozens of other locations in Washington, Oregon and New York seizing 13,000 marijuana plants, more than 500 kilograms of processed marijuana, 20 firearms, and millions of dollars in cash and properties.  At Ng’s home they seized more than $300,000 in cash, which Ng admitted were drug proceeds.  Ng is forfeiting more than $750,000 as part of his sentence.

In asking for an 87-month sentence, prosecutors wrote to the court, Ng “used his successful business as a front to launder drug proceeds. He used his experience as a real estate agent to ease the purchase and sale of marijuana grow houses. And he used his position as the owner of businesses to lie to mortgage companies and the government. In many ways, it was precisely Ng’s professional accomplishments that allowed him to break the law.”

“Today’s sentencing is a testament to the dedication and hard work each and every member of the King County Sheriff’s Office invested in this case,” said interim King County Sheriff Patti Cole-Tindall.  “When we work with the Department of Justice and other federal partners to combat trafficking and other criminal enterprises, communities throughout King County are safer.”

“Everyone has an obligation to abide by the laws at the federal, state, and local levels. When individuals like Mr. Ng and Ms. Chen choose to flout these laws for their own illegal enrichment, they betray the trust of their communities and the public,” said Special Agent in Charge Bret Kressin, IRS Criminal Investigation (IRS:CI), Seattle Field Office. “With our expertise in ‘following the money,’ IRS:CI is committed to working with our partners in law enforcement to bring criminals like these to justice.”

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 case was investigated by the U.S. Postal Inspection Service (USPIS) and the Internal Revenue Service Criminal Investigation (IRS-CI) and the King County Sheriff’s Office.  The Drug Enforcement Administration (DEA), the FBI, and Homeland Security Investigations (HSI) and the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF) assisted with the search warrants in October 2020.

The case is being prosecuted by Assistant United States Attorneys Nicholas Manheim and Stephen Hobbs.

Illegal marijuana grow

 

Seattle – The U.S. Department of Justice today reached a settlement with Skagit Family Health Clinic of Mount Vernon, Washington, over the importation of birth control medications that were unlawfully imported from a foreign source and not approved by the Food and Drug Administration (FDA).  Under the terms of the settlement, the clinic will pay a total of $120,000 to the state and federal governments for false claims the clinic filed with state or federal medical programs.

“FDA approval is a critical way for government medical programs to ensure patients get appropriate medicines and devices,” said U.S. Attorney Nick Brown. “We don’t have evidence that any patients were harmed from these unapproved medications, but government programs cannot pay for clients to take such a risk.”

The prelitigation settlement, claims the clinic imported and billed for the medications between 2015 and 2020.  The clinic submitted claims for the birth control medications to the Washington State Medicaid Program.  Of the $120,000 settlement paid by the clinic, nearly $72,000 will go to Washington State, while just over $48,000 will to the federal government for its share of the medical costs.

DOJ settled the matter on behalf of the Department of Health and Human Services Office of the Inspector General (HHS-OIG), the Washington State Attorney General’s Office and the Washington State Health Care Authority.

Seattle – The second of four defendants pleaded guilty today in U.S. District Court in Seattle to a federal hate crime, and making false statements in connection with a December 8, 2018, racially-motivated assault, announced U.S. Attorney Nick Brown. Jason DeSimas, 47, of Tacoma, Washington, is one of four men from across the Pacific Northwest being prosecuted for punching and kicking a Black man and making derogatory comments about his actual and perceived race at a bar in Lynnwood, Washington.  U.S. District Judge Richard A. Jones scheduled sentencing for July 8, 2022.

According to the plea agreement, DeSimas was a prospective member of a white supremacist group that was traveling in the Seattle area to celebrate a known white supremacist, killed in a standoff with police in the 1980s.  DeSimas had discussed using “mutual combat” against members of groups he opposed such as Antifa and Black Lives Matter.  DeSimas believed that he and his group could go into bars and initiate fights, so that the rest of the members of the group could join in.  In the early morning hours of December 8, 2018, the men went to the bar in Lynnwood, Washington and assaulted a Black man who was working as a DJ.  The group also assaulted two other men who came to the DJ’s aid.   The attackers shouted racial slurs and made Nazi salutes both before and during the assault.

In addition to the hate crime DeSimas admits making false statements to the FBI during the investigation of the case. Jason DeSimas falsely claimed that neither he nor anyone else used a racial slur during the assault. In fact, DeSimas now admits that he repeatedly used a racial slur before, during, and after the assault.

Under the terms of the plea agreement, both sides will recommend a 37-month prison term.  U.S. District Judge Richard Jones is not bound by the recommendation.  The ultimate sentence will be determined by Judge Jones after considering U.S. Sentencing Guidelines and other statutory factors.

Daniel Delbert Dorson, 27, of Corvallis, Oregon, has pleaded guilty in the case and is scheduled for sentencing August 19, 2022.  Jason Stanley, 46, of Boise, Idaho and Randy Smith, 42, of Eugene, Oregon, are also charged in the case and are in custody awaiting trial.

The hate crime charge carries a maximum penalty of ten years in prison.  The false statements charge carries a maximum penalty of five years.

This case was investigated by the FBI, with the assistance of the Snohomish County Sheriff’s Office.  The case is being prosecuted by Assistant United States Attorneys Rebecca S. Cohen and Ye-Ting Woo and Trial Attorney Christine M. Siscaretti of the Justice Department’s Civil Rights Division.

Seattle – A Ukrainian man was sentenced today in the Western District of Washington to 5 years in prison for his criminal work in the hacking group FIN7. Denys Iarmak, 32, served as a high-level hacker, whom the group referred to as a “pen tester,” for FIN7. He was arrested in Bangkok, Thailand in November 2019 at the request of U.S. law enforcement.   At the sentencing hearing Chief U.S. District Judge Ricardo S. Martinez noted that Iarmak had been in custody during both the COVID pandemic and now the war in Ukraine.  “There is some irony, that the nation you were plundering is now leading an international effort to protect your country, your people, your family.”

Iarmak is the third FIN7 member of the group to be sentenced in the United States. On April 16, 2021, FIN7 member Fedir Hladyr was sentenced to 10 years in prison. On June 24, 2021, FIN7 member Andrii Kolpakov was sentenced to seven years in custody.

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 20 million customer card records from over 6,500 individual point-of-sale terminals at more than 3,600 separate business locations.  According to court documents, victims incurred enormous costs that, according to some estimates, exceeded $1 billion dollars. Additional intrusions occurred abroad, including in the United Kingdom, Australia, and France. Companies that have publicly disclosed hacks attributable to FIN7 include such chains as Chipotle Mexican Grill, Chili’s, Arby’s, Red Robin, and Jason’s Deli.  

“Iarmak and his conspirators compromised millions of financial accounts, causing over a billion dollars in losses to Americans and costs to America’s economy,” said Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division. “Protecting businesses – both large and small – online is a top priority for the Department of Justice. We are committed to working with our international partners to hold such cyber criminals accountable, no matter where they live or how anonymous they think they are.”

“Mr. Iarmak was directly involved in designing phishing emails embedded with malware, intruding on victim networks, and extracting data such as payment card information,” said U.S. Attorney Nicholas W. Brown of the Western District of Washington. “To make matters worse, he continued his work with the FIN7 criminal enterprise even after the arrests and prosecution of co-conspirators. He and others in this cybercrime group used hacking techniques to essentially rob thousands of locations of multiple restaurant chains at once, from the comfort and safety of their keyboards in distant countries.”

“This cyber-criminal probed and mapped victims’ networks searching for data to exploit,” said Special Agent in Charge Donald M. Voiret of the FBI’s Seattle Field Office. “Masquerading as a legitimate business, the hacking group he belonged to recruited other members to assist with their criminal activities. Thanks to the hard work of law enforcement, this defendant, who is responsible for an enormous loss amount, will be spending the next few years in prison.”

According to court documents, since at least 2015, members of FIN7 (also referred to as Carbanak Group and the Navigator Group, among other names) engaged in a highly sophisticated malware campaign to attack hundreds of U.S. companies, predominantly in the restaurant, gambling, and hospitality industries. FIN7 hacked into thousands of computer systems and stole millions of customer credit and debit card numbers that were then used or sold for profit. FIN7, through its dozens of members, launched waves of malicious cyberattacks on numerous businesses operating in the United States and abroad. To execute its scheme, FIN7 carefully crafted email messages that would appear legitimate to a business’ employees and accompanied emails with telephone calls intended to further legitimize the emails. Once a file attached to a fraudulent email was opened and activated, FIN7 would use an adapted version of the Carbanak malware, in addition to an arsenal of other tools, to access and steal payment card data for the business’s customers. Since 2015, many of the stolen payment card numbers have been offered for sale through online underground marketplaces.

Iarmak was involved with FIN7 from approximately November 2016 through November 2018. Iarmak frequently used project management software such as JIRA, hosted on private virtual servers in various countries, to coordinate FIN7 malicious activity and to manage the assorted network intrusions. JIRA is a project management and issue-tracking program used by software development teams. JIRA allows team members to create “projects” containing posted “issues” under which other team members can make comments and share data. Under each issue, FIN7 members tracked their progress breaching a victim’s security, uploaded data stolen from the victim, and provided guidance to each other. As one example, Iarmak created a JIRA issue, to which he and other members of the cybergroup had access, for a specific victim company, and, on or about March 3, 2017, Iarmak updated that JIRA and uploaded data he had stolen from that company. During the course of the scheme, Iarmak received compensation for his participation in FIN7, which far exceeded comparable legitimate employment in Ukraine.  Moreover, FIN7 members, including Iarmak, were aware of reported arrests of other FIN7 members, but nevertheless continued to attack U.S. businesses.

Iarmak initially fought extradition but in February 2020 he consented to extradition in a Thai court.  In May 2020 he was transferred to U.S. custody. In November 2021, Iarmak pleaded guilty to one count of conspiracy to commit wire fraud and one count of conspiracy to commit computer hacking.

This case is the result of an investigation conducted by the FBI’s Seattle Cyber Task Force. The Justice Department’s Office of International Affairs, the National Cyber-Forensics and Training Alliance, numerous computer security firms and financial institutions, FBI offices across the nation and globe, as well as a number of international agencies provided significant assistance. Thailand law enforcement authorities provided significant assistance by arresting Iarmak.

This case was prosecuted by Assistant U.S. Attorney Steven Masada of the Western District of Washington and Trial Attorney Anthony Teelucksingh of the Criminal Division’s Computer Crime and Intellectual Property Section.

A Ukrainian man was sentenced today in the Western District of Washington to five years in prison for his criminal work in the hacking group FIN7.

According to court documents, Denys Iarmak, 32, served as a high-level hacker, whom the group referred to as a “pen tester,” for FIN7. He was arrested in Bangkok, Thailand, in November 2019 at the request of U.S. law enforcement. Iarmak is the third member of the FIN7 group to be sentenced in the United States. On April 16, 2021, FIN7 member Fedir Hladyr was sentenced to 10 years in prison. On June 24, 2021, FIN7 member Andrii Kolpakov was sentenced to seven years in prison.

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 20 million customer card records from over 6,500 individual point-of-sale terminals at more than 3,600 separate business locations. According to court documents, victims incurred enormous costs that, according to some estimates, exceeded $1 billion dollars. Additional intrusions occurred abroad, including in the United Kingdom, Australia, and France. Companies that have publicly disclosed hacks attributable to FIN7 include such chains as Chipotle Mexican Grill, Chili’s, Arby’s, Red Robin, and Jason’s Deli.  

“Iarmak and his conspirators compromised millions of financial accounts, causing over a billion dollars in losses to Americans and costs to America’s economy,” said Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division. “Protecting businesses – both large and small – online is a top priority for the Department of Justice. We are committed to working with our international partners to hold such cyber criminals accountable, no matter where they live or how anonymous they think they are.”

“Iarmak was directly involved in designing phishing emails embedded with malware, intruding on victim networks, and extracting data such as payment card information,” said U.S. Attorney Nicholas W. Brown of the Western District of Washington. “To make matters worse, he continued his work with the FIN7 criminal enterprise even after the arrests and prosecution of co-conspirators. He and others in this cybercrime group used hacking techniques to essentially rob thousands of locations of multiple restaurant chains at once, from the comfort and safety of their keyboards in distant countries.”

“This cyber-criminal probed and mapped victims networks searching for data to exploit,” said Special Agent in Charge Donald M. Voiret of the FBI’s Seattle Field Office. “Masquerading as a legitimate business, the hacking group he belonged to recruited other members to assist with their criminal activities. Thanks to the hard work of law enforcement, this defendant, who is responsible for an enormous loss amount, will be spending the next few years in prison.”

According to court documents, since at least 2015, members of FIN7 (also referred to as Carbanak Group and the Navigator Group, among other names) engaged in a highly sophisticated malware campaign to attack hundreds of U.S. companies, predominantly in the restaurant, gambling, and hospitality industries. FIN7 hacked into thousands of computer systems and stole millions of customer credit and debit card numbers that were then used or sold for profit. FIN7, through its dozens of members, launched waves of malicious cyberattacks on numerous businesses operating in the United States and abroad. To execute its scheme, FIN7 carefully crafted email messages that would appear legitimate to a business’ employees and accompanied emails with telephone calls intended to further legitimize the emails. Once a file attached to a fraudulent email was opened and activated, FIN7 would use an adapted version of the Carbanak malware, in addition to an arsenal of other tools, to access and steal payment card data for the business’s customers. Since 2015, many of the stolen payment card numbers have been offered for sale through online underground marketplaces.

Iarmak was involved with FIN7 from approximately November 2016 through November 2018. Iarmak frequently used project management software such as JIRA, hosted on private virtual servers in various countries, to coordinate FIN7 malicious activity and to manage the assorted network intrusions. JIRA is a project management and issue-tracking program used by software development teams. JIRA allows team members to create “projects” containing posted “issues” under which other team members can make comments and share data. Under each issue, FIN7 members tracked their progress breaching a victim’s security, uploaded data stolen from the victim, and provided guidance to each other. As one example, Iarmak created a JIRA issue, to which he and other members of the cybergroup had access, for a specific victim company, and, on or about March 3, 2017, Iarmak updated that JIRA and uploaded data he had stolen from that company. During the course of the scheme, Iarmak received compensation for his participation in FIN7, which far exceeded comparable legitimate employment in Ukraine. Moreover, FIN7 members, including Iarmak, were aware of reported arrests of other FIN7 members, but nevertheless continued to attack U.S. businesses.

Iarmak initially fought extradition but in February 2020 he consented to extradition in a Thai court. In May 2020 he was transferred to U.S. custody. In November 2021, Iarmak pleaded guilty to one count of conspiracy to commit wire fraud and one count of conspiracy to commit computer hacking.

This case is the result of an investigation conducted by the FBI’s Seattle Cyber Task Force. The Justice Department’s Office of International Affairs, the National Cyber-Forensics and Training Alliance, numerous computer security firms and financial institutions, FBI offices across the nation and globe, as well as a number of international agencies provided significant assistance. Thailand law enforcement authorities provided significant assistance by arresting Iarmak.

This case was prosecuted by Assistant U.S. Attorney Steven Masada of the Western District of Washington and Trial Attorney Anthony Teelucksingh of the Criminal Division’s Computer Crime and Intellectual Property Section.

Seattle – The U.S. Department of Justice and the Port of Edmonds, Washington have resolved a complaint that the Port violated the Americans with Disabilities Act (ADA) when it altered the parking lot at the Port marina and failed to provide appropriate accessible parking spaces, announced U.S. Attorney Nick Brown.  As part of the settlement, the Port of Edmonds will pay a complainant $3,522 for discrimination and inability to use the marina.

“This resolution is a good reminder that federal law requires full and equitable access. It is not enough to simply designate a parking space with a blue accessible parking marker—that space must also have special characteristics that will allow those with mobility issues to enjoy full access,” said U.S. Attorney Nick Brown. “Once our office became involved, the Port of Edmonds quickly reconfigured their spaces with appropriate space and access aisles so that the spaces were usable by those using assistive devices such as walkers or wheelchairs.”

According to the settlement agreement, in February 2021, the Port of Edmonds reconfigured its parking lot and constructed a dumpster area where accessible parking had been.  Soon after the work, the complainant notified the Port of Edmonds that the new configuration violated the ADA.  Nevertheless, the Port did not make any changes. 

On August 12, 2021, a representative of the U.S. Attorney’s Office viewed the North and South parking areas at the marina. The review found multiple violations of the ADA including a lack of aisle space next to the accessible parking spaces, and no designated van accessible parking spaces.  The U.S. Attorney’s Office concluded the parking area did not comply with the ADA. 

After receiving notice of non-compliance from the U.S. Attorney’s Office, the Port of Edmonds quickly made changes. By August 31, 2021, the Port reconfigured its parking areas to include accessible spaces with access aisles and designated van accessible areas.  The accessible parking spaces were moved to shorten the distance to Port facilities.

The Port has agreed to designate an ADA coordinator, and place signs throughout its facilities identifying the ADA coordinator and how he or she can be contacted.  The coordinator will be responsible for investigating any complaints regarding discrimination against individuals with disabilities.

The Port will pay the complainant who could not use Port facilities $3,522 and agrees in the settlement not to retaliate in any way against anyone who brings a complaint regarding ADA access.

The Port of Edmonds will certify its compliance with the ADA to the U.S. Attorney’s Office. The U.S. Attorney’s Office will monitor compliance for two years following the settlement.  If no further issues arrive, the matter will be closed.

The matter was investigated and resolved by former Assistant United States Attorney Sarah Morehead and subsequently by Assistant United States Attorney Heather Costanzo.  

Seattle – A 43-year-old Renton, Washington, man was transferred to federal custody today and charged with drug and gun crimes, announced U.S. Attorney Nick Brown.  David Christopher Pitts was initially arrested in December 2021, following an undercover investigation of his drug trafficking activities.  Pitts appeared today before a U.S. Magistrate Judge and was ordered detained pending further hearings.

According to records filed in the case, in November and December 2021, a person working with law enforcement purchased fentanyl from Pitts at his residence in Renton.   After obtaining a search warrant, officers with the Seattle Police Department SWAT team arrested Pitts without incident and searched his residence.  In the main bedroom, officers found three different handguns – one of them stolen.  In the closet of the bedroom there was a hard-shell case containing methamphetamine, fentanyl, and Xanax bars.   In a safe in that same closet investigators found heroin, cocaine, suboxone, ketamine, fentanyl pills, and medical grade fentanyl.  There was also more than $55,000 in cash.

In a second bedroom, which Pitts had been using as a storage space, officers found fifteen handguns, four semiautomatic assault rifles, two bolt action rifles, and a 12-guage shotgun.  Throughout the residence, there were numerous items that appeared to be stolen goods, such as power tools, computer equipment, laptops, and camera gear.  Many of these items are often traded for drugs.

Due to the amount of drugs involved in this case, possession of controlled substances with intent to distribute is punishable by a mandatory minimum 10 years in prison.  Possession of a firearm in furtherance of a drug trafficking crime is punishable by a consecutive 5-year prison term in addition to any term imposed on the drug crime.

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 was investigated by the Seattle Police Department as part of the FBI’s Violent Crime, Gang and Organized Crime Task Force.

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

Seattle – A resident of Astoria, Oregon was convicted this week in U.S. District Court in Seattle of five federal felonies connected to his scheme to profit from illegal kickbacks in the medical testing industry, announced U.S. Attorney Nick Brown.  Richard Reid, 53, was convicted following a six-day jury trial. Reid faces up to 5 years in prison on each count when sentenced by U.S. District Judge John C. Coughenour on July 12, 2022.

“Mr. Reid devised this scheme, knowing that it was illegal to profit on tests conducted by his toxicology lab that were paid for by government insurance,” said U.S. Attorney Brown. “The web of referrals and kick-backs increased profits for Reid and his co-conspirators, while inflating medical costs for the rest of us. This is essentially theft from taxpayers. I commend the investigators and our prosecutors who unraveled the scheme and are holding Mr. Reid accountable.”

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. This resulted in government payments to those two labs of more than $6.5 million.

According to records filed in the case between January 2013 and July 2015, two labs, that were not physician owned, made payments to NWPL in exchange for referrals of Medicare and TRICARE program business, in violation of the Anti-Kickback Statute.  Paying remuneration to medical providers or provider-owned laboratories in exchange for referrals encourages providers to order medically unnecessary services.  The Anti-Kickback Statute functions, in part, to discourage such behavior. NWPL was physician-owned, and for that reason could not test urine samples for patients covered by government health programs such as Medicare, Medicaid, and TRICARE.  In order to conceal the payment of the kickbacks, Reid and other co-conspirators involved described the fees as being for marketing services; however, no marketing services were performed. 

Reid was convicted of one count of conspiracy to solicit and receive kickbacks involving health care programs and four counts of receipt of kickbacks. Each count is punishable by up to 5 years in prison.  The actual sentence will be determined by Judge Coughenour after considering the U.S. Sentencing Guidelines and other statutory factors.

The company, NWPL, pleaded guilty in February 2021 and was sentenced to pay $8,114,417 in restitution joint and several with the other criminal defendants.  NWPL has dissolved. To date, the labs and individuals involved in this investigation have paid more than $14 million to settle related civil allegations. 

In addition to Reid, three other defendants have pleaded guilty and await sentencing.  Former NWPL CEO Jae Lee is scheduled for sentencing on May 24, 2022.  Kevin Puls, the former Executive Director of NWPL is scheduled for sentencing June 7, 2022.  Both will be sentenced by Judge Coughenour.  Steve Verschoor, who headed one of the labs that paid the kickbacks is scheduled for sentencing by Judge James L. Robart on May 10, 2022.

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 Attorneys Brian Werner and Michael Dion.

Tacoma - A former Port Angeles, Washington, naturopathic physician was sentenced today in U.S. District Court in Tacoma to 8 months in prison and one year of supervised release for a federal felony related to his misbranding, and sale in interstate commerce, of products he claimed could prevent and treat numerous serious diseases, including COVID-19 and MRSA, announced U.S. Attorney Nicholas W. Brown.   Richard Marschall, 69, was convicted in October 2021, following a 4-day trial.  The jury found Marschall guilty of Introduction of Misbranded Drugs into Interstate Commerce, his third conviction for the same crime following earlier prosecutions in 2011 and 2017.  At the sentencing hearing U.S. District Judge Benjamin H. Settle said, “It is extremely dangerous during the COVID epidemic for people to be engaged in conduct that would lead other people to defer and wait to receive medical care.”

“Mr. Marschall has a history of lying to patients about their health and his proposed treatments.  His lies in this case are particularly troubling because he employed them when advising others about a deadly pandemic,” said U.S. Attorney Nick Brown.  “As people became fearful and searched for answers, Marschall touted an unproven treatment as a miracle cure for the deadly disease.  Such conduct can prevent patients from getting the legitimate treatment they need if they become ill.”

According to records filed in the case, in late March 2020, Food and Drug Administration criminal investigators began reviewing complaints from the public about Facebook posts for Marschall’s products.   Investigators reviewed Marschall's Facebook page which included claims that his product the “Dynamic Duo” could “crush” viruses, including the coronavirus.  Marschall billed himself as a retired naturopath and “Health Coach.”  Marschall’s Facebook page also claimed that his products could eliminate MRSA and other infections “even if there is antibiotic resistance.”

On March 30, 2020, an FDA investigator spoke to Marschall on the telephone in an undercover capacity explaining to Marschall that she was worried about COVID-19.  Marschall told the investigator that the “Dynamic Duo” contained garlic extract and larch tree starch, and further represented that one of the substances “doesn’t boost the immune system, it just kills the virus.”  Marschall represented that the second substance would boost the production of white blood cells that attack infections.  The undercover agent ultimately ordered the “Dynamic Duo” for $140 plus shipping. 

On the call with the FDA investigator, Marschall also referred to himself as “Dr. Rick Marschall.” His Facebook posts and other marketing materials for the “Dynamic Duo” also referred to Marschall as “N.D.” and “N.D. retired.” But Marschall did not have a license to practice naturopathy. In 2018, the Washington State Department of Health permanently revoked his credential to practice as a naturopath. 

FDA investigators received Marschall’s “Dynamic Duo” products in early April 2020, along with instructional and marketing material.  The products themselves were not made by Marschall but by other manufacturers.  The manufacturers’ labels for the substances do not claim to kill viruses, but the material added by Marschall stated the substances can “crush 30 different viral infections, including those in the Corona family, like in China Corona-19.”

The jury found that Marschall misbranded the drugs because his marketing was false or misleading and because his products were not listed with the FDA.

Marschall was convicted previously and sentenced in federal court for distributing misbranded drugs, both in 2011 and again in 2017. 

In asking for a year-long prison term prosecutors wrote to the court, “For decades, Marschall lied and broke the law to provide unapproved treatments and

healthcare services. Marschall lied to patients. He lied to authorities. He treated patients without examining them. And he prescribed substances in unusually large doses. Marschall repeated that dangerous playbook in this case: lying to the undercover agent about his credentials, treating her and her children over the phone without a physical exam, and recommending an extremely high dose of his drug.”

The case was investigated by the FDA Office of Criminal Investigation (FDA-OCI).  The case was prosecuted by Assistant United States Attorneys Nicholas Manheim, Michelle Jensen, and Brian Werner

WASHINGTON – The Department of Justice announced today that it reached a settlement with Bianchi Home Care Inc. (Bianchi), a home care provider based in Washington state. The settlement resolves the department’s claims that Bianchi violated the Immigration and Nationality Act (INA) when it discriminated against non-U.S. citizens through its use of E-Verify. Run by the Department of Homeland Security, E-Verify is an electronic program that enables enrolled employers to confirm that their employees have permission to work in the United States.

“Employers cannot use E-Verify to discriminate against employees because of their citizenship or immigration status,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “The Civil Rights Division is committed to protecting workers from unlawful citizenship discrimination and removing discriminatory barriers from all stages of the hiring process.”

The department opened its investigation to determine whether Bianchi discriminated against non-U.S. citizens when using E-Verify. Based on its investigation, the department determined that Bianchi only used E-Verify to confirm the permission to work of its non-U.S. citizen employees and did not use the program for its U.S. citizen employees. Even though E-Verify found that all of Bianchi’s non-U.S. citizen employees had permission to work, by only subjecting them to E-Verify, Bianchi imposed an additional burden on them in the hiring process because of their citizenship or immigration status. Under the INA and the E-Verify program rules, employers cannot discriminate in their use of E-Verify based on citizenship or immigration status.

The settlement prohibits Bianchi from selectively using E-Verify to discriminate against employees based on their citizenship or immigration status. Additionally, Bianchi must train its employees on the requirements of the INA’s anti-discrimination provision, change its policies and procedures and be subject to monitoring for a three-year period.  

The Civil Rights Division’s Immigrant and Employee Rights Section (IER) is responsible for enforcing the anti-discrimination provision of the INA. The statute prohibits citizenship or immigration status and national origin discrimination in hiring, firing or recruitment or referral for a fee; unfair documentary practices; and retaliation and intimidation.  

Learn more about IER’s work and how to get assistance through this brief video. Job applicants or employees who believe they were discriminated against based on their citizenship, immigration status or national origin in hiring, firing, recruitment or during the employment eligibility verification process (Form I-9 and E-Verify); or subjected to retaliation, can file a charge. The public also can contact IER’s worker hotline at 1-800-255-7688; call IER’s employer hotline at 1-800-255-8155 (1-800-237-2515, TTY for hearing impaired); email [email protected]; sign up for a free webinar; or visit IER’s English and Spanish websites. Subscribe to GovDelivery to receive updates from IER. 

Seattle – A 21-year-old Seattle man pleaded guilty today in U.S. District Court in Seattle to Providing Material Support to a Designated Foreign Terrorist Organization.  Elvin Hunter Bgorn Williams was arrested May 28, 2021, at Seattle-Tacoma International Airport on criminal charges related to his alleged efforts to join the Islamic State of Iraq and al-Sham (ISIS), a designated foreign terrorist organization, to engage in violent acts of terrorism in the Middle East or the United States.  Williams faces up to 20 years in prison when sentenced by U.S. District Judge John C. Coughenour on June 14, 2022.

According to court documents, Williams was arrested following a lengthy investigation into his efforts to join ISIS.

According to the plea agreement, in November 2020, Williams began telling family members he was a member of ISIS. Williams posted a video on Facebook in which he swore an oath of loyalty to a leader of ISIS. 

Using confidential sources close to Williams, the FBI monitored his activity and became aware of his efforts to travel to the Middle East and join ISIS. Williams expressed to his associates that if he could not travel overseas, he would commit an attack in the U.S. on behalf of ISIS. Williams began communicating with those he believed were ISIS recruiters who could get him to an ISIS terror cell in the Middle East or other parts of the world.

The plea agreement contains statements Williams made about his intentions: that he sought martyrdom, had “no problem with killing,” and hoped to be involved in beheading others.

In May 2021, Williams obtained a passport and pawned a laptop computer to raise funds for his travel. In early May 2021, Williams booked an airline ticket from Seattle to Amsterdam and on to Egypt to join ISIS. On Friday May 28, 2021, he went to Sea-Tac Airport to catch the first leg of his international flight. Williams was arrested at the departure gate.

The case was investigated by the FBI’s Joint Terrorism Task Force in Seattle with assistance from the King County Sheriff’s Office; U.S. Customs and Border Protection; Homeland Security Investigations; Federal Air Marshals; U.S. Citizenship and Immigration Services; U.S Marshals Service; U.S. Postal Inspection Service; Transportation Security Administration; Bureau of Alcohol, Tobacco, Firearms and Explosives; Naval Criminal Investigative Service; Seattle Police Department; Bellevue Police Department; and Port of Seattle Police Department.

Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division, U.S. Attorney Nicholas W. Brown for the Western District of Washington, and Special Agent in Charge Donald Voiret of the FBI’s Seattle Field Office made the announcement.

Assistant United States Attorney Todd Greenberg of the Western District of Washington’s Terrorism and Violent Crime Unit, and Trial Attorney Andrew Sigler of the National Security Division’s Counterterrorism Section are prosecuting the case.

A Seattle man pleaded guilty today in U.S. District Court in Seattle to attempting to provide material support to a designated foreign terrorist organization.

According to court documents, Elvin Hunter Bgorn Williams, 21, of Seattle, was arrested May 28, 2021, at Seattle-Tacoma International Airport on criminal charges related to his alleged efforts to join the Islamic State of Iraq and al-Sham (ISIS), a designated foreign terrorist organization, to engage in violent acts of terrorism in the Middle East or the United States.

According to court documents, Williams was arrested following a lengthy investigation into his efforts to join ISIS. According to his plea agreement, in November 2020, Williams began telling family members he was a member of ISIS. Williams posted a video on Facebook in which he swore an oath of loyalty to a leader of ISIS. 

Using confidential sources close to Williams, the FBI monitored his activity and became aware of his efforts to travel to the Middle East and join ISIS. Williams expressed to his associates that if he could not travel overseas, he would commit an attack in the United States on behalf of ISIS. Williams began communicating with those he believed were ISIS recruiters who could get him to an ISIS terror cell in the Middle East or other parts of the world.

The plea agreement contains statements Williams made about his intentions: that he sought martyrdom, had “no problem with killing,” and hoped to be involved in beheading others.

In May 2021, Williams obtained a passport and pawned a laptop computer to raise funds for his travel. In early May 2021, Williams booked an airline ticket from Seattle to Amsterdam and on to Egypt to join ISIS. On May 28, 2021, he went to Sea-Tac Airport to catch the first leg of his international flight. Williams was arrested at the departure gate.

Williams pleaded guilty to attempting to provide material support to a designated foreign terrorist organization. He is scheduled to be sentenced on June 14 and faces a maximum statutory penalty of 20 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division, U.S. Attorney Nicholas W. Brown for the Western District of Washington, and Special Agent in Charge Donald Voiret of the FBI’s Seattle Field Office made the announcement.

The case was investigated by the FBI’s Joint Terrorism Task Force in Seattle with assistance from the King County Sheriff’s Office; the U.S. Customs and Border Protection; Homeland Security Investigations; Federal Air Marshals; the U.S. Citizenship and Immigration Services; the U.S Marshals Service; the U.S. Postal Inspection Service; the Transportation Security Administration; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the Naval Criminal Investigative Service; the Seattle Police Department; the Bellevue Police Department; and the Port of Seattle Police Department.

Assistant U.S. Attorney Todd Greenberg of the Western District of Washington’s Terrorism and Violent Crime Unit and Trial Attorney Andrew Sigler of the National Security Division’s Counterterrorism Section are prosecuting the case.

Tacoma – A 40-year-old Puyallup, Washington, man was sentenced today in U.S. District Court in Tacoma to 24 months in prison for being a felon in possession of two firearms, announced U.S. Attorney Nick Brown.  Christopher S. Hammond was arrested March 3, 2021, when a search of his apartment revealed a handgun with the serial number removed, and a rifle.  Hammond is prohibited from possessing firearms due to prior criminal convictions.  At the sentencing hearing U.S. District Judge Benjamin H. Settle noted that Hammond blamed his offense on drug addiction. “The drug addiction doesn’t explain the offense… Drugs and firearms are a bad mix,” Judge Settle said.

According to records filed in the case, Hammond was convicted in 2013, of being a felon in possession of a firearm.  He was sentenced to 69 months in prison.  Following prison, while on federal supervised release, Hammond possessed two additional firearms – even though he clearly knew he was prohibited from having guns.  Probation officers searched Hammond’s home after a tipster sent them a photo of Hammond holding a firearm.

When he spoke to the court, Hammond said, “It took me a long time to realize that I am an addict. I need help.”

Judge Settle reduced Hammond’s sentence from the 30 months recommended by all parties to 24 months. “I see your addiction and your genuine desire to live a clean and productive life,” Judge Settle said.

Hammond pleaded guilty December 14, 2021.  Following the 24-month prison term he will be on 3 years of supervised release.

The case was investigated by the Federal Probation Office with assistance from the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF).

The case was prosecuted by Assistant United States Attorney Zachary Dillon.

Seattle – A Maple Valley, Washington, man was sentenced today in U.S. District Court in Seattle to 10 years in prison and 5 years of supervised release for Possession with Intent to Distribute Methamphetamine and Heroin.  Daryl Brandon Dennis, 33, was arrested in July 2021, following a 6-month investigation by the King County Sheriff’s Office.  At today’s sentencing hearing, U.S. District Judge Richard A. Jones noted the harm Dennis’ drug dealing did to the community saying, “the large volume of drugs” he possessed has an “impact on a large number of lives” and that Dennis has no idea who is harmed once he “put the drugs into the stream.”

“Sadly, fentanyl-involved deaths more than doubled in King County from 2020 to 2021.  That troubling statistic highlights the importance of stopping the trafficking of these deadly drugs,” said U.S. Attorney Nick Brown.  “Mr. Dennis’ storage trailer contained thousands of fentanyl pills, heroin, meth and cocaine, as well as a dozen firearms – four of them stolen.  A dangerous combination for our community.”

According to records filed in the case, Dennis’ drug dealing came to the attention of King County Sheriff’s deputies in January 2021.  For the next few months, detectives surveilled Dennis and arranged some undercover purchases.  On July 2, 2021, investigators searched his home and car.  Just prior to the court authorized search officers noticed Dennis loading duffel bags into the car – inside investigators found guns and drugs.  Dennis led police to his storage trailer in Kent, Washington. Where they found 12 more guns, 2 grenades, and drugs including fentanyl, methamphetamine, heroin, cocaine and crack cocaine, mushrooms, MDMA and prescription narcotics such as Xanax.

“Illegal drugs have touched too many lives in King County,” said Interim Sheriff Patti Cole-Tindall.  “I could not be more proud to lead the men and women of the Sheriff’s Office.  Together, we share a commitment to make communities throughout our region safer.”

Dennis was indicted federally in September 2021. He pleaded guilty in November 2021.

The case was investigated by the King County Sheriff’s Office and the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF).

King County Sheriff's Office Drugs and guns seized in U.S. v. Dennis

 

WASHINGTON — The United States filed a complaint to stop a seafood processor in Monroe, Washington, from processing and selling adulterated seafood products, the Justice Department announced today.

In a civil complaint for permanent injunction filed March 9 at the request of the U.S. Food and Drug Administration (FDA), the United States alleged that Diane Zollinger, through her business, Felix Custom Smoking, violated the Federal Food, Drug and Cosmetic Act (FDCA) by distributing adulterated ready-to-eat seafood products, including fish jerky and cold- and hot-smoked salmon. According to the complaint, Zollinger sells products directly to consumers from her business and at farmers’ markets. She also provides custom processing for fisherman and other wholesalers.

The complaint, which was filed in the U.S. District Court for the Western District of Washington, alleges that FDA inspectors visited Zollinger’s facility in 2021 and found a significant infestation of flies and other filthy conditions that can create an ideal environment for the growth of harmful bacteria, such as Listeria monocytogenes (L. mono). Food contaminated with L. mono can cause symptoms such as diarrhea and vomiting in healthy adults. For vulnerable consumers — including pregnant women, the elderly and the immune-compromised — L. mono can cause more serious effects, such as stillbirths, miscarriages and death.

The complaint further alleges that FDA inspectors took multiple samples at Zollinger’s facility and confirmed the presence of L. mono in and around food preparation areas. According to the complaint, genetic testing showed the same strain of L. mono had been present in the facility since at least 2018, and a sample of seafood from one of Zollinger’s customers also showed the same strain of L. mono. FDA issued a public health alert warning against purchasing or eating Felix Custom Smoking seafood. The United States now seeks an injunction that would require Zollinger to eliminate L. mono at her facility, make sanitation improvements and comply with federal food safety regulations before processing or distributing any more seafood.

 “Food processors must ensure the safety of their products,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “The department will continue to work closely with FDA to stop the distribution of contaminated food.”

 “The Western District of Washington has seen all too vividly what happens when adulterated food makes it into our food supply,” said U.S. Attorney Nick Brown for the Western District of Washington. “Whether it is E.coli in ground beef or orange juice or, as alleged in this case, dangerous bacteria in smoked salmon, we count on the FDA’s inspectors to keep us and our families safe.” 

Trial Attorney Sarah Williams of the Justice Department’s Consumer Protection Branch is handling the case with the assistance of Assistant U.S. Attorneys Kerry Keefe and Kayla Stahman in the Western District of Washington and Assistant Chief Counsel Lauren Fash of the FDA’s Office of the Chief Counsel.

The claims made in the complaint are allegations that, if the case were to proceed to trial, the government must prove by a preponderance of the evidence.

Additional information about the Consumer Protection Branch and its enforcement efforts may be found at http://www.justice.gov/civil/consumer-protection-branch.

The United States filed a complaint to stop a seafood processor in Monroe, Washington, from processing and selling adulterated seafood products, the Justice Department announced today.

In a civil complaint for permanent injunction filed March 9 at the request of the U.S. Food and Drug Administration (FDA), the United States alleged that Diane Zollinger, through her business, Felix Custom Smoking, violated the Federal Food, Drug and Cosmetic Act (FDCA) by distributing adulterated ready-to-eat seafood products, including fish jerky and cold- and hot-smoked salmon. According to the complaint, Zollinger sells products directly to consumers from her business and at farmers’ markets. She also provides custom processing for fisherman and other wholesalers.

The complaint, which was filed in the U.S. District Court for the Western District of Washington, alleges that FDA inspectors visited Zollinger’s facility in 2021 and found a significant infestation of flies and other filthy conditions that can create an ideal environment for the growth of harmful bacteria, such as Listeria monocytogenes (L. mono). Food contaminated with L. mono can cause symptoms such as diarrhea and vomiting in healthy adults. For vulnerable consumers — including pregnant women, the elderly and the immune-compromised — L. mono can cause more serious effects, such as stillbirths, miscarriages and death.

The complaint further alleges that FDA inspectors took multiple samples at Zollinger’s facility and confirmed the presence of L. mono in and around food preparation areas. According to the complaint, genetic testing showed the same strain of L. mono had been present in the facility since at least 2018, and a sample of seafood from one of Zollinger’s customers also showed the same strain of L. mono. FDA issued a public health alert warning against purchasing or eating Felix Custom Smoking seafood. The United States now seeks an injunction that would require Zollinger to eliminate L. mono at her facility, make sanitation improvements and comply with federal food safety regulations before processing or distributing any more seafood.

 “Food processors must ensure the safety of their products,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “The department will continue to work closely with FDA to stop the distribution of contaminated food.”

 “The Western District of Washington has seen all too vividly what happens when adulterated food makes it into our food supply,” said U.S. Attorney Nick Brown for the Western District of Washington. “Whether it is E.coli in ground beef or orange juice or, as alleged in this case, dangerous bacteria in smoked salmon, we count on the FDA’s inspectors to keep us and our families safe.” 

Trial Attorney Sarah Williams of the Justice Department’s Consumer Protection Branch is handling the case with the assistance of Assistant U.S. Attorneys Kerry Keefe and Kayla Stahman in the Western District of Washington and Assistant Chief Counsel Lauren Fash of the FDA’s Office of the Chief Counsel.

The claims made in the complaint are allegations that, if the case were to proceed to trial, the government must prove by a preponderance of the evidence.

Additional information about the Consumer Protection Branch and its enforcement efforts may be found at http://www.justice.gov/civil/consumer-protection-branch.

Seattle – U.S. Attorney Nick Brown of the Western District of Washington and U.S. Attorney Vanessa Waldref of the Eastern District of Washington joined federal law enforcement leaders Monday evening March 7, 2022, for the first of five online trainings on security issues for houses of worship.

“People gather in their houses of worship for prayer, fellowship, and community. Investigating and prosecuting hate crimes is a top priority for the Department of Justice, and we must ensure that people are safe,” said U.S. Attorney Nick Brown.  “I want to be sure our religious communities have the latest information on ways to secure their facilities, and deal with threats that may come their way.  As we saw recently at a synagogue in Houston, training made a difference in the safe escape of those taken hostage.”

“A top priority for FBI Seattle is protecting against threats to Washington state’s faith communities,” said Donald M. Voiret, Special Agent in Charge of the Seattle Field Office. “That’s why we held this event and others like it. We want our houses of worship to be equipped and our lines of communication open before a disaster strikes, and hopefully, with preparation, we can keep that from happening.”

The virtual meeting was facilitated by the Jewish Community Center.    More than 70 people attended the opening training.

The meeting provided an overview of some of the future trainings and provided an opportunity for questions to a panel of experts.  The future trainings will cover: Active Shooter guidance, ensuring facility safety, counterterrorism, and hate crimes prosecutions.

Participating federal agencies include the FBI, Homeland Security’s Cybersecurity & Infrastructure Security Agency, and the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF).

Seattle – A Redmond, Washington, man who held himself out as a biotech expert was sentenced today in federal court for introducing misbranded drugs into interstate commerce, announced U.S. Attorney Nick Brown.  Johnny T. Stine, 57, was sentenced to 5 years of probation and $246,986 in restitution.  Stine claimed to be Founder & President of North Coast Biologics.  In a variety of online postings from as early as March 2, 2020, Stine claimed to have developed a COVID-19 vaccine that he offered to inject in customers for $400-$1000 each.  At the sentencing hearing Magistrate Judge Brian A. Tsuchida said, “This is a difficult and troubling case…. It would be completely reasonable to send you to jail, but I’m going to give you a longer probation sentence so we can keep an eye on you.”

“This wasn’t just a COVID related scheme. From 2018-2020, Mr. Stine made more than $200,000 selling cancer patients his ‘vaccines’ that he said would cure their disease,” said U.S. Attorney Nick Brown.  “He truly preyed on those who were desperate for any glimmer of hope, injecting people with unapproved substances developed in his rented garage, with no assurance of safety or purity.”

According to records filed in the case, in early March 2020, the Food and Drug Administration - Office of Criminal Investigation (FDA-OCI), was alerted to Stine’s posts on social media.  An investigator contacted Stine in an undercover capacity, and Stine represented that he had a COVID-19 vaccine for sale.  Stine claimed that his main biotech effort was creating vaccines that attack cancer tumors.  He indicated that he had used a similar method to develop his COVID-19 vaccine.  On March 27, 2020, even as the undercover investigation was ongoing, FDA-OCI received a complaint from an area resident about Stine injecting a friend of the complainant with a “vaccine” for COVID-19.

In early April 2020, investigators met with Stine in undercover roles.  Stine represented to the agents that he traveled across the U.S. giving his vaccine.  Stine indicated he would make a trip to Oregon and California to vaccinate family members of the undercover agents.

In late April, responding to complaints from the public, the Washington State Attorney General issued a ‘cease and desist’ letter to Stine, telling him to stop making claims and offering his “vaccine” for COVID-19.  Rather than be deterred, Stine indicated it had just increased demand for his injections which he now called an “immunogen” instead of a vaccine.  In June, Stine signed a Consent Decree with the Washington State Attorney General wherein he agreed not to promote or sell his COVID-19 vaccine.

Still, in August 2020, Stine again communicated with an undercover agent and traveled to Idaho to “vaccinate” the agent.  Law enforcement contacted Stine in Idaho and seized the “vaccine.”  Agents also executed a court-authorized search warrant on the Redmond warehouse where Stine claimed to conduct his research.

In asking for a custodial sentence prosecutors wrote to the court, “Mr. Stine is dangerously arrogant or overwhelmingly greedy, or both. Time and again, he placed his misguided confidence and personal interest ahead of the wellbeing of the people whose health he endangered by providing them unapproved, and most likely ineffective, medical treatment; medical treatment that dissuaded them from pursuing actual effective treatment and/or from acting in ways that would protect them from infection.”

“The FDA works tirelessly to identify and neutralize threats to consumers, including halting the sale of products with unproven claims to treat, prevent, or cure COVID-19 and other conditions, such as these unapproved injectable drugs that were purported to be ‘vaccines’,” said Special Agent in Charge Lisa L. Malinowski, FDA Office of Criminal Investigations Los Angeles Field Office. “We will continue to investigate and bring to justice those whose actions threaten the public’s health in this time of heightened risks.”

“It’s important for consumers to know when someone is trying to take advantage of them, and the old adage that if it’s it too good to be true then it isn’t true certainly applies here,” said Special Agent in Charge (SAC) Robert Hammer, who oversees HSI operations in the Pacific Northwest. “Legitimate businesses do not evade law enforcement agencies and they do not evade consumer safety rules. HSI Seattle appreciates the work done by the U.S. Food and Drug Administration and Seattle Police Department, and we will continue utilizing all of our partnerships to ensure the health and safety of our communities.”

The case was investigated by the FDA Office of Criminal Investigations, Homeland Security Investigations, and the Seattle Police Department.

The case is being prosecuted by Assistant United States Attorneys Brian Werner and Andrew Friedman.  Mr. Werner serves as the COVID-19 fraud coordinator for the U.S. Attorney’s Office.

Seattle – A former Seattle doctor was sentenced today in U.S. District Court in Seattle to 4 years in prison for fraudulently seeking over $3.5 million in Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) COVID-19 relief funds.  Eric R. Shibley, 43, of Seattle, was convicted following a trial in November 2021.  At today’s sentencing hearing U.S. District Judge John C. Coughenour said the sentence was due to “the blatant nature of the fraud and its size.” Judge Coughenour also noted Shibley’s decision to testify in the case saying, “I have to say it was one of the worst performances of a criminal defendant.  There was very little willingness to adhere to the truth while testifying.”

“Mr. Shibley took advantage of the community, disrupted and distraught by the pandemic, to try to enrich himself through fraud,” said U.S. Attorney Nick Brown.  “These funds were desperately needed to keep people employed by legitimate small businesses.  This fraud made it tougher for those truly in need.” 

According to court documents and evidence presented at trial, Shibley, submitted 26 fraudulent PPP applications and 13 EIDL loan applications to federally insured financial institutions, other Small Business Administration (SBA)-approved lenders, and the SBA, in the names of businesses with no actual operations or by misrepresenting the business’s eligibility. In the applications, Shibley misrepresented the number of employees and payroll expenses in several applications and concealed his own criminal history.  To support the fraudulent applications, Shibley submitted fake tax documents and the names of purported employees who did not, in fact, work for the businesses for which Shibley claimed they worked.  Shibley was convicted by a jury of seven counts of wire fraud, three counts of bank fraud, and five counts of money laundering.

Shibley was ordered to pay $1,438,000 in restitution. Shibley’s license to practice medicine was suspended in 2020.

“As the American people suffered from the negative economic effects of the pandemic, Mr. Shibley chose to further this suffering by stealing funds meant to help small businesses stay afloat,” said Adam Jobes, Assistant Special Agent in Charge, IRS Criminal Investigation (IRS:CI), Seattle Field Office. “Contrary to his oath as a physician to cause no harm, Mr. Shibley caused great harm to those around him as he illegally pocketed resources meant for those who actually qualified for and needed those funds. Financial crimes are not victimless, and IRS:CI will continue to investigate and bring to justice those like Mr. Shibley who choose their own greed above the well-being of the public.”

“OIG is steadfast in our commitment to expose and bring to justice those who would seek to defraud SBA’s pandemic assistance programs,” said SBA OIG’s Special Agent in Charge Weston King. “OIG remains committed to rooting out bad actors and protecting the integrity of SBA programs. I want to thank the U.S. Attorney’s Office and our law enforcement partners for their dedication and pursuit of justice.”

SBA-OIG, the FBI’s Seattle Field Office, FDIC-OIG, TIGTA, IRS-CI, HSI, and HHS-OIG investigated the case. 

Trial Attorney Laura Connelly of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Brian Werner of the Western District of Washington prosecuted the case.

The Fraud Section leads the Criminal Division’s prosecution of fraud schemes that exploit the PPP. Since the inception of the CARES Act, the Fraud Section has prosecuted over 167 defendants in more than 103 criminal cases and has seized over $75 million in cash proceeds derived from fraudulently obtained PPP funds, as well as numerous real estate properties and luxury items purchased with such proceeds. More information can be found at https://www.justice.gov/criminal-fraud/ppp-fraud.

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 – 28-year-0ld Nicholas Partlow of Issaquah, Washington, pleaded guilty today in U.S. District Court in Seattle to drug and gun charges, announced U.S. Attorney Nick Brown. Partlow admits selling drugs on the darknet more than 400 times as part of a conspiracy with the operators of darknet marketplaces and other drug traffickers. Partlow also admits selling drugs locally and possessing five firearms during and in furtherance of his drug-trafficking activities. After law enforcement searched Partlow’s residence in November 2020, he continued selling drugs. U.S. District Judge Richard A. Jones will sentence Partlow on July 1, 2022.

According to the plea agreement, over the course of 2020, postal investigators seized multiple parcels mailed by Partlow to his drug customers. Inside the packages, investigators found heroin, fentanyl pills, and other controlled substances. Investigators also covertly ordered heroin, methamphetamine, and other drugs from Partlow through the darknet.

In November 2020, law enforcement obtained a search warrant for Partlow’s Issaquah residence. That search turned up heroin, methamphetamine, fentanyl, ketamine, GHB, and other drugs; electronic equipment that Partlow used as part of his trafficking operation; and drug proceeds in cash and cryptocurrency.

Investigators also seized Partlow’s five firearms—including a sawed-off shotgun and a pistol equipped with a silencer.

After the November 2020 search, Partlow continued trafficking drugs. He also tried to obtain another gun. In March 2021, police in Bellevue, Washington, arrested Partlow and an associate. Partlow carried narcotics and a notebook containing information about his trafficking activities. A few months later, in September 2021, Partlow crashed a car in Renton, Washington, while carrying narcotics and a taser. At the time, Partlow was wanted on a federal arrest warrant. He has been in federal custody since then.

Under the plea agreement, Partlow is forfeiting to the government a range of items, including guns, electronics, cryptocurrency, cash, and seven wristwatches.

Partlow pleaded guilty to two felonies: conspiring to distribute controlled substances and possessing firearms in furtherance of that crime. For the conspiracy charge, Partlow faces up to 20 years in prison; for the firearms charge, he faces a mandatory-minimum five-year prison term, which will run consecutive to any sentence imposed on the conspiracy charge. The ultimate sentence will be determined by Judge Jones after considering U.S. Sentencing Guidelines and other statutory factors.

The case was investigated by the U.S. Postal Service Office of Inspector General, with assistance from the U.S. Postal Inspection Service, the Drug Enforcement Administration (DEA), Homeland Security Investigations, the Federal Bureau of Investigations (FBI), U.S. Customs and Border Protection, and the Bellevue Police Department.

 The case is being prosecuted by Assistant United States Attorney Jonas Lerman.

Seattle – The Seattle Police Department, King County Sheriff’s Office, and Drug Enforcement Administration have been using targeted undercover operations to combat open air drug markets in Seattle.  Today, U.S. Attorney Nick Brown joined Seattle Mayor Bruce Harrell and law enforcement leaders to highlight a series of arrests aimed at removing persistent fentanyl dealers—some of whom are illegally armed with firearms—from the 12th and Jackson area in Seattle’s International District.

In all 16 people have been arrested for felonies in the undercover operation.

“There are too many guns in our communities, and we’ve seen a significant increase in shootings throughout Seattle and a rise in violent crime. This week I convened a meeting of law enforcement leaders to share strategies on how federal agents and local police can work together to reduce community violence,” said U.S. Attorney Nick Brown. “In this undercover operation, we have charged three people federally, who were illegally possessing firearms while dealing fentanyl. The Department of Justice will do everything that we can to help break the cycle of crime—not only with federal prosecution—but also with support for programs that keep our youth out of the criminal justice system.”

Mar’jon Guyton, 21, of Kent, Washington is charged with two counts of distribution of fentanyl, one count of possession of fentanyl with intent to distribute and one count of unlawful possession of a firearm.

Ceandrick M. Davis, 29, of Seattle, is charged with distribution of fentanyl, possession of fentanyl with intent to distribute, possession of a firearm in furtherance of a drug trafficking crime, and unlawful possession of a firearm.

Cuong Cao, 54, of Seattle, is indicted for possession of controlled substances with intent to distribute, being a felon in possession of a firearm, and possession of a firearm in furtherance of drug trafficking.

The first two defendants are detained at the Federal Detention Center pending further hearings. Law enforcement is actively looking for Cao.

A fourth defendant who was originally arrested for state charges at 12th and Jackson, is now facing federal prosecution following a second arrest, with a firearm at 3rd and Pike.

The King County Prosecutors Office is prosecuting 12 defendants in state court.

Tacoma – A former Port Orchard, Washington attorney, who stole a bequest left by a client for the benefit of a children’s hospital, and then defrauded a close friend, was sentenced today in U.S. District Court in Tacoma to 18 months in prison and 3 years of supervised release for wire fraud, announced U.S. Attorney Nick Brown.  Darlene Piper, 57, of Bremerton, Washington pleaded guilty on August 30, 2021.  Piper was indicted in September 2020, following a multi-year fraudulent scheme.  At the sentencing hearing U.S. District Judge Robert J. Bryan said Piper “became a thief and a crook” through “a long series of criminal acts.” In addition to her financial victim Judge Bryan said “the legal profession is a victim as well.”

According to records filed in the case, Piper practiced law in Port Orchard, handling wills, trusts and probate of estates.  In 2011, she prepared a will for a client who left his entire estate to St. Jude’s Children’s Hospital.  However, when that client died in 2014, Piper as executor of the estate, stole $500,000 from the estate and invested it in Paraguay.  When the children’s hospital inquired about the funds it was owed, Piper stole from a friend to repay the hospital.  She told the friend that she had invested the money in Paraguay.  The victim had just sold a home, and the money was for her retirement.  The victim sued Piper and won.   Piper has not paid the victim any of the money awarded through the litigation.

In sentencing documents prosecutors described how Piper continues to falsify her finances.  She failed to list homes she owns in Cabo San Lucas and property on the coast of Mexico as assets that could be liquidated to pay her victims.

Judge Bryan ordered Piper to sell the waterfront property within 6 months to compensate her victims.  He ordered her to pay restitution of $500,000.

Piper had already given up her law license and bar membership, after the Washington State Bar Association was poised to sanction her for stealing $42,000 from two other clients.

The case was investigated by the FBI.  The case was prosecuted by Assistant United States Attorney Michael Dion, and by former Assistant United States Attorneys Arlen Storm and Andre Penalver.