Western District of Washington
Press releases recorded for this federal judicial district.
Department of Justice and Department of Interior take important step in addressing Missing and Murdered Indigenous People crisisRead the Press Release
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.
Nigerian citizen pleads guilty to COVID-19 unemployment fraud on Washington and 17 other statesRead the Press Release
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.
Battle Ground, Washington man sentenced to prison for illegally possessing firearmsRead the Press Release
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.
Whidbey Island man charged federally in connection with San Juan Island ArsonRead the Press Release
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.pdfJustice Department Recognizes Human Trafficking Survivor and Advocate from Washington with Special Courage AwardRead the Press Release
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.”
Florida man who defrauded elderly investors with fake commodities investment scheme sentenced to prisonRead the Press Release
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.
Shoreline, Washington man arrested for possessing multiple firearms in violation of protection orderRead the Press Release
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.
Owner of construction company and Puget Sound properties involved in illegal production of marijuana sentenced to 6 years in prisonRead the Press Release
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 growDOJ and Skagit County health clinic resolve False Claims Act investigation over the use of imported birth control medicationsRead the Press Release
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.
Second of four men charged in racially motivated hate crime enters guilty pleaRead the Press Release
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.
Member of hacking group sentenced for scheme that compromised tens of millions of debit and credit cardsRead the Press Release
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.
Member of Hacking Group Sentenced for Scheme that Compromised Tens of Millions of Debit and Credit CardsRead the Press Release
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.
DOJ and Port of Edmonds resolve complaint regarding violations of the Americans with Disabilities ActRead the Press Release
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.
Renton, Washington, resident charged federally for huge stash of drugs and gunsRead the Press Release
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.
Co-Owner of defunct medical testing lab convicted of kickback scheme to profit on urine drug tests for government insurance programsRead the Press Release
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.
Former Port Angeles, Washington, Naturopath sentenced for scheme to profit on ‘COVID-19 cure’Read the Press Release
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
Justice Department Settles E-Verify Discrimination Claims Against Washington State-Based Home Care ProviderRead the Press Release
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 man pleads guilty to attempting to travel to the Middle East to join a foreign terrorist organizationRead the Press Release
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.
Seattle Man Pleads Guilty to Attempting to Provide Material Support to a Designated Foreign Terrorist OrganizationRead the Press Release
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.
Repeat offender sentenced to 2 years in prison for illegally possessing firearmsRead the Press Release
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.
Maple Valley, Washington, man sentenced to 10 years in prison for dealing drugs and illegally possessing firearmsRead the Press Release
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. DennisJustice Department Files Complaint to Stop Seafood Processor from Distributing Adulterated Seafood ProductsRead the Press Release
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.
Justice Department Files Complaint to Stop Seafood Processor from Distributing Adulterated Seafood ProductsRead the Press Release
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.
Washington’s two U.S. Attorneys join federal law enforcement partners to brief religious leaders on security for houses of worshipRead the Press Release
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).
Purveyor of fake COVID-19 vaccines sentencedRead the Press Release
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.
Former Seattle doctor sentenced to 4 years in prison for defrauding pandemic relief programsRead the Press Release
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.
Darknet drug trafficker pleads guilty to conspiracy and firearm chargesRead the Press Release
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.
Local and federal law enforcement work together to address illegal drug distribution and rising crime in Seattle’s International DistrictRead the Press Release
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.
Former Port Orchard, Washington attorney sentenced to prison for defrauding clientsRead the Press Release
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.
SeaTac man sentenced to 25 years in prison for crimes involving the sexual abuse of young boysRead the Press Release
Seattle – A 38-year-old SeaTac, Washington, man was sentenced today in U.S. District Court in Seattle to 25 years in prison for four federal felonies related to child sexual abuse, announced U.S. Attorney Nick Brown. Brandan L. Wilkins pleaded guilty in February 2021, to travel with intent to engage in a sexual act with a minor; possession of child pornography; receipt of child pornography; and enticement of a minor. At the sentencing hearing, U.S. District Judge John C. Coughenour noted that the sexual abuse of minors had occurred over a long period of time, and he said he was “particularly offended” by examples of Wilkins electronic chats with young children where he pressured them to send him sexually explicit images.
“Mr. Wilkins’ pattern of predatory and dangerous conduct left a trail of traumatized children in his wake,” said U.S. Attorney Brown. “This lengthy sentence and the lifetime of supervised release imposed, are necessary to protect the children in our community.”
According to records filed in the case, in July 2018, an electronic service provider notified the National Center for Missing and Exploited Children (NCMEC) that an internet account later linked to the defendant received a video of minors engaged in sexually explicit conduct. Law enforcement identified Wilkins as the owner of the internet account. A search of his online activity revealed Wilkins was posing as a 13-year-old boy to solicit sexually explicit pictures from young teens. When law enforcement served a search warrant at Wilkins’ residence, they seized electronic devices containing thousands of images of child pornography.
When law enforcement searched Wilkins’ wallet, they found a student ID card for a youth that Wilkins had befriended. Interviews with Wilkins and the youth revealed Wilkins had traveled with the victim to various locations to engage in sexual activity. In 2009 and 2011, Wilkins traveled with the youth who was then 12-years old to Disneyland and other locations where he engaged in sexual activity with the child. Wilkins admits he posed as a ‘father figure’ for the boy so he could have access to the child. The abuse began when the child was just 8 years old.
In asking for the lengthy sentence and lifetime supervised release Assistant United States Attorney Cecelia Gregson wrote to the court, “By sexually exploiting his many victims, the defendant has forever impacted their lives in ways that may have significant long-term health consequences. What these victims endured at his hands has the potential for severe lifelong psychological consequences to their self-esteem and well-being.”
Wilkins was employed as a TSA agent at Sea-Tac airport. He has been in custody since his arrest in December 2018.
Wilkins will next be appearing in King County Superior Court to face charges of sex offenses against a minor. King County is recommending a sentence of 290 months in custody – that sentence will run concurrently with his federal sentence.
The case was investigated by the Kent Police Department and Homeland Security Investigations as part of the Internet Crimes Against Children Task Force (ICAC).
The case was prosecuted by Assistant United States Attorney Cecelia Gregson.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Tacoma woman sentenced to 5 years in prison for arson at downtown Seattle protestRead the Press Release
Seattle –A 26-year-old Tacoma, Washington, woman was sentenced today in U.S. District Court in Seattle to 5 years in prison for arson for burning five Seattle P0lice vehicles parked around Sixth and Pine in downtown Seattle on Saturday, May 30, 2020, announced U.S. Attorney Nick Brown. Margaret Aislinn Channon was arrested June 11, 2020, following an investigation by the FBI, ATF, and Seattle Police Department. At the sentencing hearing U.S. District Judge John C. Coughenour said Channon’s conduct had done “tremendous damage to Black Lives Matter in Seattle.”
“The right to protest, gather, and call out injustices is one of the dearest and most important rights we enjoy in the United States,” said U.S. Attorney Nick Brown. “Indeed, our democracy depends on both exercising and protecting these rights. But Ms. Channon’s conduct was itself an attack on democracy. She used the cover of lawful protests to carry out dangerous and destructive acts, risking the safety of everyone around her and undermining the important messages voiced by others.”
According to records filed in the case, Channon appears in videos from a protest in downtown Seattle wearing distinctive clothing and showing tattoos on her hands and arms. Channon is captured on video using fire and aerosol cans to light five Seattle Police Department vehicles on fire. She is also shown entering various stores and stealing clothing. She admitted smashing the window at the Verizon Store and entering a sandwich shop and destroying the electronic cash register. Investigators identified Channon based on her clothing, tattoos, and information from her various social media accounts.
Channon’s most dangerous conduct was the arson of the vehicles using an aerosol can as a blowtorch. As prosecutors noted in their sentencing memo, “hundreds of people were standing in the vicinity of the police cars that Channon burned, some only a few feet away. All of them were in harm’s way if one of the vehicles had exploded.”
“This case is an example of the FBI’s commitment to investigating domestic terrorism cases, no matter what their motivations may be," said Donald M. Voiret, Special Agent in Charge of the Seattle Field Office. "The FBI believes in the peaceful expression of free speech, and Channon committed acts of violence and destruction, endangered other people, and distracted from and escalated demonstrations.”
“It should be clear that lawful protests do not include the use of violent actions such as breaking store windows and committing theft and arson,” said ATF Seattle Field Division Special Agent in Charge Jonathan T. McPherson. “We will vigorously investigate anyone who turns to arson and violence against our citizens, businesses and cities. This sentence is clearly warranted and should send a message that this behavior will never be tolerated.”
Under the terms of the plea agreement, Channon is responsible for restitution. Channon will be on three years of supervised release following her prison term.
The case was investigated by the FBI, Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF), and the Seattle Police Department.
The case is being prosecuted by Assistant United States Attorney Todd Greenberg.
Seafood broker pleads guilty to smuggling potentially tainted shellfishRead the Press Release
Seattle – A Burien, Washington, seafood broker pleaded guilty today in U.S. District Court in Seattle to smuggling goods from the United States, announced U.S. Attorney Nick Brown. Jeffrey Hallin Olsen, 52, owner of Absolute Seafoods LLC, admitted he falsified documents and lied to authorities about disposing of 46 cases of potentially tainted geoduck from Alaska. Olsen will be sentenced by U.S. District Judge John C. Coughenour on May 17, 2022.
According to the information filed in court, on February 20 or 21, 2019, Olsen purchased 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 obtained a U.S. Department of Commerce Export Health Certificate stating that the geoduck met health requirements.
One day after the purchase, 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 paralytic shellfish poisoning. An Alaska Wildlife Trooper notified Olsen that he needed to destroy the shipment as it was unsafe to consume. Because the illegally harvested geoduck had been mixed in with the legal clams, Olsen was told the entire shipment had to be destroyed. Olsen told the trooper he would destroy the geoduck.
Instead of destroying the geoduck, Olsen told the shipping company to hold the truck in Marysville, Washington. Olsen had ten crates taken off the truck and brought back to his Burien home. He had the company transport the remaining 36 boxes on to Vancouver where they were illegally shipped to Hong Kong.
Olson took pictures of the 10 crates that were brought back to his home. Olsen prepared false shipping paperwork that identified the contents of the crates as “fresh Yelloweye,” then shipped the geoduck to a buyer in Oakland, California. Olsen used the pictures of those crates and a bill from the King County garbage transfer station to try to fool Alaska authorities into thinking he had in fact destroyed the clams.
No illness has been reported in connection with the geoduck.
Smuggling goods from the United States is punishable by up to ten years of imprisonment. The ultimate sentence is up to Judge Coughenour who will consider U.S. Sentencing Guidelines and other statutory factors.
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 is being prosecuted by Assistant United States Attorney Seth Wilkinson.
Final defendant in $10 million tobacco tax evasion scheme sentenced to prisonRead the Press Release
Seattle – The final player in a scheme to cheat Washington State out of more than $10 million in tobacco excise taxes was sentenced today in U.S. District Court in Seattle to 22 months in prison announced U.S. Attorney Nick Brown. Tae Young Kim, 45, of Las Vegas, Nevada, was the registered owner of TK Mac, a company that owned and operated two smoke shops in Federal Way and Lynnwood, Washington. Together with Hyung Il Kwon, 48, of Henderson, Nevada, Kim devised fraudulent schemes to evade tobacco excise taxes, and Kim filed a false corporate tax return. In January 2019, Kim pleaded guilty to one count of wire fraud and one count of filing a false tax return. At the sentencing hearing, U.S. District Judge James L. Robart said, “People need to understand this is a crime and it will be punished.”
“This scheme to cheat on state taxes lasted for years and robbed the people of millions in funding for state programs,” said U.S. Attorney Nick Brown. “The coconspirators used false documents to conceal their actions from regulators and law enforcement. Their deceit did more than cut their taxes, they obtained a competitive advantage over other tobacco retailers.”
According to records filed in the case, between 2009 and 2017, Kim, Kwon, and their coconspirators engaged in two schemes to defraud the state of tobacco excise taxes. The schemes involved two tribal smoke shops on the Puyallup reservation which sold significant quantities of tobacco products to TK Mac, the non-tribal tobacco distributor. Most of the sales were in cash, and TK Mac failed to report the purchases to the state, thus avoiding millions of dollars in excise taxes. When TK Mac then resold the products for cash, the company had a problem, since large deposits of cash would have triggered state scrutiny of its tobacco business. So, beginning in 2013 and continuing until 2017, Kim and his coconspirators engaged in a money-laundering scheme: the two tribal smoke shops wrote checks to TK Mac as if the tribal smoke shops had purchased tobacco products from the non-tribal store. In fact, TK Mac simply provided the tribal smoke shops with large amounts of cash equal to the checks. The purported transactions were a sham. In fact, no tobacco products changed hands, but TK Mac received an excise tax credit. As a result of these schemes, Washington State suffered losses of more than $10 million.
The president of the company that owns the tribal smoke shops, Anthony Edwin Paul, was sentenced in December 2021 to 14 months in prison, a $5,000 fine, and $1,764,818 in restitution. Paul’s subordinate, Theodore Kai Silva, who operated the scheme on behalf of the tribal smoke shops, was sentenced to four years of probation with six months of home confinement, plus $25,000 in restitution. Kim’s coconspirator and business partner Kwon was sentenced last month to 26 months in prison, a $10,000 fine and $5,098,249 in restitution to the Washington State Department of Revenue.
The government seized more than $5 million in assets and cash from Kwon and Kim. Today, Judge Robart ordered Kim to pay $4,339,407 in restitution to the Washington State Department of Revenue.
The case was investigated by IRS-CI, with assistance from Homeland Security Investigations (HSI).
The case was prosecuted by Assistant United States Attorneys Jim Oesterle and Jonas Lerman
Former lab director sentenced to prison for falsifying results of steel testing on parts for Navy subsRead the Press Release
Tacoma – The former Director of Metallurgy at Bradken Inc. was sentenced today in U.S. District Court in Tacoma to 30 months in prison, and a $50,000 fine, for falsifying test results that measure the strength and toughness of steel that Bradken sold for installation in U.S. Navy submarines, announced U.S. Attorney Nick Brown. Elaine Thomas, 67, of Auburn, Washington, pleaded guilty November 8, 2021, to major fraud against the United States. At the sentencing hearing U.S. District Judge Benjamin H. Settle said it was, “a crime of pride and ego, that in some way she knew better than those who set the standards.”
“For 32 years, Elaine Thomas betrayed the trust of the United States Navy, knowingly placing its sailors and military operations at risk,” said U.S. Attorney Nick Brown. “She falsely stated that steel Bradken produced met critical specifications– standards developed to keep our military personnel safe– and allowed inferior steel to go to Navy subs in half the orders she reviewed.”
“Our Sailors and Marines depend upon high quality products and services from our contractors to safely and effectively meet the worldwide mission of the Department of the Navy,” said Secretary of the Navy Carlos Del Toro. “This outcome demonstrates that we will continue to insist that our contractors must meet these high standards and that the actions of Elaine Thomas and others like her will not be tolerated. The efforts seen today are the result of the strong cooperation between the Department of the Navy, the Department of Defense, and the Department of Justice to prevent fraud and to ensure that those who do commit fraud against the Government are brought to justice.”
According to records filed in the case, Bradken is the U.S. Navy’s leading supplier of high-yield steel castings for naval submarines. Bradken’s Tacoma foundry produces castings that prime contractors use to fabricate submarine hulls. The Navy requires that the steel meets certain standards for strength and toughness to ensure that it does not fail under certain circumstances, such as a collision. For 30 years, the Tacoma foundry (which was previously known as Atlas, and acquired by Bradken in 2008), produced castings, many of which had failed lab tests and did not meet the Navy’s standards. Elaine Thomas, as Director of Metallurgy, falsified test results to hide the fact that the steel had failed the tests. Thomas falsified results for over 240 productions of steel, which represents about half the castings Bradken produced for the Navy.
Court filings indicate there is no evidence that Bradken’s management was aware of the fraud until May 2017. At that time, a lab employee discovered that test cards had been altered and that other discrepancies existed in Bradken’s records. In April 2020, Bradken entered into a deferred prosecution agreement, accepting responsibility for the offense and agreeing to take remedial measures. Bradken also entered into a civil settlement, paying $10,896,924 to resolve allegations that the foundry produced and sold substandard steel components for installation on U.S. Navy submarines.
The Navy has taken extensive steps to ensure the safe operation of 30 affected submarines. Those measures will result in increased costs and maintenance as some of the substandard parts are monitored. To date, the Navy says it has spent nearly $14 million including 50,000 hours of engineering work to assess the parts and risk to the submarines.
“This sentencing holds Ms. Thomas accountable for her actions, which needlessly jeopardized the safety of countless U.S. Navy personnel and wasted millions of taxpayer dollars,” said the Honorable Sean W. O'Donnell, Acting Inspector General, Department of Defense. “As exemplified in this case, we and our oversight partners will vigorously investigate fraud, especially where substandard materials endanger our military men and women. Protecting the lives of our service members remains a top priority for the Department of Defense Office of Inspector General.”
“The announced sentencing demonstrates Naval Criminal Investigative Service (NCIS) and our law enforcement partners are committed to hold individuals accountable for supplying substandard products that can cause serious harm and negatively impact Department of Navy (DON) readiness and war fighting capabilities. NCIS will continue to work meticulously with our law enforcement partners to safeguard DON major acquisition programs and ensure the safety of our Sailors and Marines,” said Timothy King, Special Agent in Charge, NCIS Northwest Field Office.”
The criminal case against Thomas, deferred prosecution agreement, and civil settlement with Bradken are the result of a coordinated effort among the U.S. Attorney’s Office for the Western District of Washington, the Civil Division’s Commercial Litigation Branch, the Department of Defense Office of Inspector General's Defense Criminal Investigative Service, Naval Criminal Investigative Service, and the Defense Contract Audit Agency.
The criminal prosecution was handled by Assistant United States Attorney Seth Wilkinson.
First of six consultants indicted in Amazon bribery scheme sentenced to prisonRead the Press Release
Seattle – The first of six consultants indicted in September 2020, for a fraud and bribery scheme targeting Amazon.com and its online Marketplace, was sentenced today to 10 months in prison and a fine of $50,000, announced U.S. Attorney Nick Brown. Rohit Kadimisetty, 28, of Northridge, California pleaded guilty to conspiracy in September 2021. At the sentencing hearing U.S. District Judge Richard A. Jones said, “You do not have a license to steal from Amazon, …you were involved in illegal conduct…. This could be called modern day organized crime.”
“Mr. Kadimisetty used his knowledge and contacts from prior employment at Amazon, to enrich himself by manipulating listings on Amazon Marketplace,” said U.S. Attorney Nick Brown. “He was a critical cog in the bribery wheel: paying contacts in India to reinstate suspended accounts, steal confidential information and attack competitors who got in the way of those funding the bribery scheme.”
According to records in the case, since at least 2017, the defendants used bribery and fraud to elevate and benefit certain merchants on the Amazon Marketplace. Kadimisetty and the other defendants served as so-called consultants to third-party (“3P”) sellers on the Amazon Marketplace. Those 3P sellers sold a wide range of goods, including household goods, consumer electronics, and dietary supplements on Amazon’s multi-billion-dollar electronic commerce platform.
Following his employment at Amazon, and after relocating to the United States, Kadimisetty used his inside knowledge to recruit employees in India to misuse their employee privileges and access to internal information, systems, and tools. Kadimisetty connected employees in India with other consultants and 3P sellers across the United States. Kadimisetty acted as a middleman of sorts, assigning tasks on behalf of 3P sellers and negotiating and arranging bribe payments on behalf of corrupted Amazon insiders. To hide his criminal conduct, Kadimisetty used deceptive email accounts, encrypted messaging services, and bribes through third parties.
The illicit services provided by Kadimisetty and the other defendants included: stealing confidential business information about Amazon algorithms; reinstating accounts and products that had been suspended; circumventing inventory fees for Amazon warehouses; falsifying claims for lost inventory; and facilitating attacks on competing sellers and product listings.
In his plea agreement, Kadimisetty admits being responsible for $100,000 in bribes paid to Amazon insiders during his active involvement in the enterprise. Kadimisetty left the conspiracy in late-2018, after a number of his contacts in India were fired by Amazon due to the misconduct.
“Mr. Kadimisetty used his insider access and expertise for his own benefit and those of his co-conspirators. Not only did his actions break the law, but ultimately consumer confidence was shaken by calling into question fair play. Fortunately, the actions of law enforcement were able to stop this scheme,” said Special Agent in Charge Donald Voiret, FBI Seattle.
Four defendants, Ephraim Rosenberg, of Brooklyn, Joseph Nilsen, and Kristen Leccese, of New York City, and Hadis Nuhanovic, of Acworth, Georgia, are 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.
Public voice and principal salesperson for notorious videogame piracy group sentenced to 3+ years in prison for conspiracyRead the Press Release
Seattle – The public face of a notorious video game piracy group was sentenced today to 40 months in prison for two federal felonies, announced U.S. Attorney Nick Brown. Gary Bowser, 52, a Canadian national of Santo Domingo, Dominican Republic, pleaded guilty in October 2021 to Conspiracy to Circumvent Technological Measures and to Traffic in Circumvention Devices, and Trafficking in Circumvention Devices. At the sentencing hearing U.S. District Judge Robert S. Lasnik said, “These are serious criminal offenses with real victims and harm to the community.”
“This piracy scheme is estimated to have caused more than $65 million in losses to video game companies,” said U.S. Attorney Nick Brown. “But the damage goes beyond these businesses, harming video game developers and the small, creative studios whose products and hard work is essentially stolen when games are pirated.”
Bowser was a prominent leader of the criminal enterprise that developed and sold illegal devices that hacked popular videogame consoles so they could be used to play unauthorized, or pirated, copies of videogames. The enterprise targeted popular consoles such as the Nintendo Switch, the Nintendo 3DS, the Nintendo Entertainment System Classic Edition, the Sony PlayStation Classic, and the Microsoft Xbox.
According to court documents, the Team Xecuter criminal enterprise is comprised of over a dozen individual members located around the world. These members include developers who exploit vulnerabilities in videogame consoles and design circumvention devices; website designers who create the various websites that promote the enterprise’s devices; suppliers who manufacture the devices; and resellers around the world who sell and distribute the devices. Bowser’s role in the conspiracy was to administer the websites that communicated with customers offering devices for sale.
As part of Team Xecuter, Bowser controlled websites that marketed the group’s products, announced new information about the products, and answered customer questions about the products. Bowser helped create and support online libraries of pirated videogames for its customers, and several of the enterprise’s devices came preloaded with pirated videogames. Even as game console companies announced new security features, Team Xecuter would roll out new devices designed to bypass such security.
In the sentencing memo, prosecutors quoted from a victim impact statement that said, “When video games are illegally copied and when circumvention devices become readily available, the video game industry—and the broader economy—experience a negative ripple effect…. This leads, at a minimum, to fewer incentives to create, and a less vibrant game scene.”
“This is not a victimless crime. The leaders of this multimillion-dollar scheme are responsible for diverting money from creative professionals who have worked hard to provide unique products and experiences,” said Special Agent in Charge (SAC) Robert Hammer, who oversees HSI operations in the Pacific Northwest. “HSI, along with our law enforcement and private sector partners, will continue to pursue those who prove to be enemies of innovation and global commerce.”
“As the voice and public face of these sophisticated cybercriminals for years, Mr. Bowser bears responsibility for stealing millions of dollars in profit and victim losses from the intellectual property of others,” said Donald M. Voiret, Special Agent in Charge of the Seattle Field Office. “He also wasted the efforts of legitimate companies as they attempted to build protections for their products.”
In September 2020, Bowser was arrested abroad and was deported from the Dominican Republic. Bowser has been in federal custody since his arrest. As part of his plea agreement, Bowser has agreed to pay $4.5 million in restitution to Nintendo of America.
Max Louarn, 49, a French national of Avignon, France, Yuanning Chen, 36, a Chinese national of Shenzhen, China, are both charged in the indictment. Neither is currently in federal custody.
This case is being investigated jointly by Homeland Security Investigations (HSI) and the FBI.
This case is being prosecuted by Assistant U.S. Attorney Brian Werner of the Western District of Washington, and Senior Counsel Anand Patel of the Justice Department’s Computer Crime and Intellectual Property Section. The government also recognizes the significant contribution to this case by former Assistant United States Attorney Francis Franze-Nakamura.
Financial Manager for Puyallup steel fabrication business indicted for tax fraudRead the Press Release
Seattle – The co-owner and financial manager of a Puyallup, Washington steel fabrication business was indicted today for nine counts of failing to pay over employment taxes, announced U.S. Attorney Nick Brown. Donna Powell, 56, co-owns and operates Pinnacle Steel Fabricators, a company that makes steel parts. Donna Powell serves as the Secretary/Treasurer and Accounting Manager for the business. The indictment alleges that between 2010 and 2018, the company withheld approximately $1,167,891 payroll taxes from employees’ paychecks, but failed to pay any of those funds over to the Internal Revenue System (IRS).
Powell will appear for an arraignment at 1:30 on February 14, 2022, at U.S. District Court in Tacoma.
According to the indictment, the company has 15-20 employees. Between 2010 and 2018, Powell withheld the employees’ share of employment taxes from their paychecks but failed to pay the withheld funds over to the government as required by law. Each quarter, Powell was required by law to file Forms 941 with the IRS disclosing the amount of payroll taxes withheld. Powell failed to file any Forms 941 for the period between 2010 and the first quarter of 2018. Instead of paying the taxes, Powell and her husband spent on personal interests such as travel ($32,000+), gambling at casinos ($41,000+), online gaming ($33,000+) and approximately $7,400 on spa and pool-related purchases.
Failure to pay over the taxes ultimately hurts the employees whose earning records are incomplete for Social Security, Medicare, and unemployment benefits. Employees can report concerns about federal withholding to the IRS and records can be corrected with documentation.
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.
Willful failure to pay over employment taxes is punishable by up to five years of imprisonment.
The case is being investigated by Internal Revenue Service Criminal Investigation (IRS:CI).
The case is being prosecuted by Assistant United States Attorney Seth Wilkinson.
powell_indictment.pdfSeattle man who recruited ‘teen’ for prostitution arrested on federal chargesRead the Press Release
Seattle – A 23-year-old Seattle man, appeared in federal court this week charged with two felonies related to human trafficking, announced U.S. Attorney Nick Brown. Issac Shorack, was arrested at Sea-Tac Airport Wednesday evening as he drove to the arrivals area to pickup a person he believed to be a 17-year-old minor. In fact, Shorack had been communicating with an undercover agent out of state about traveling to Seattle to work as a prostitute.
“Just this week, Attorney General Garland highlighted DOJ’s efforts to protect the victims of human trafficking. Those who prey on our youth to enrich themselves must be held accountable,” said U.S. Attorney Nick Brown. “This case began with a tip from a concerned citizen. Then law enforcement uncovered how Mr. Shorack used money and promises to lure young women into prostitution so that he could line his own pockets.”
According to the criminal complaint, the investigation began with a call to the National Human Trafficking Hotline in November 2021. The caller reported information about minors who were being trafficked in the Seattle area – in the location known as “the track” or “the blade,”on Aurora Avenue North. The FBI began an investigation and was able to trace some of the activities of Shorack and the minors he controlled for sex trafficking. Forensic examination of electronic devices revealed text messages showing Shorack in control of the minors’ activities including pricing, what sex acts they should engage in with sex buyers, the use of condoms and information about whether they were earning enough money for him. Investigators analyzed Shorack’s texts to the minors about how much money they were making, and saw that they correlated with cash deposits made into his bank accounts.
The FBI used an experienced undercover agent based out of state to reach out to Shorack posing as a 17-year-old minor. Shorack communicated with the “minor” via phone and text messages and attempted to entice her to travel to Seattle and work for him as a prostitute. Shorack had some of the minors under his control reach out to the undercover officer as well to try to recruit her to work for him. Shorack used various questions to try to determine whether the undercover was law enforcement. Ultimately, Shorack purchased a ticket for the “minor” to fly to Seattle and told her he would pick her up outside baggage claim. Instead, Shorack was arrested by Port of Seattle Police.
Shorack appeared in U.S. District Court in Seattle on Thursday February 3, 2022. He was detained pending a further hearing on Tuesday February 8, 2022.
Attempted enticement of a minor and attempted transportation of a minor to engage in prostitution are punishable by a mandatory minimum 10 years in prison to life in prison.
The National Human Trafficking Hotline is 1-888-373-7888
The case is being investigated by the FBI with assistance from the Seattle Police Department and the Port of Seattle Police.
The case is being prosecuted by Assistant United States Attorney Kate Crisham. Ms. Crisham is the Anti-Human Trafficking Coordinator for the Western District of Washington.
United States Attorney Chris Kavanaugh Offers Condolences to Fallen Bridgewater College OfficersRead the Press Release
CHARLOTTESVILLE, Va. – United States Attorney Christopher R. Kavanaugh joins the law enforcement community across the Commonwealth of Virginia in mourning the loss of Bridgewater College Police Officer John Painter and Campus Security Officer J.J. Jefferson, who died in the line of duty Tuesday, February 1, 2022.
“Every day, brave men and women put their lives at risk when they put on a uniform and a badge, and protect our communities,” U.S. Attorney Kavanaugh said today. “These two men are examples of what we should all aspire to be — courageous in the face of danger and willing to sacrifice for the benefit of others. The Department of Justice and our community mourns the loss of these two heroes, and we will honor their legacy.”
Attorney General Merrick B. Garland announces Justice Department strategy to combat human traffickingRead the Press Release
Seattle – U.S. Attorney General Merrick B. Garland has released the Justice Department’s new National Strategy to Combat Human Trafficking pursuant to the Justice for Victims of Trafficking Act.
Rooted in the foundational pillars and priorities of the interagency National Action Plan to Combat Human Trafficking, which President Biden released on Dec. 3, 2021, the Justice Department's National Strategy is expansive in scope. It aims to enhance the department's capacity to prevent human trafficking; to prosecute human trafficking cases; and to support and protect human trafficking victims and survivors.
“Human trafficking is an insidious crime,” said Attorney General Garland. “Traffickers exploit and endanger some of the most vulnerable members of our society and cause their victims unimaginable harm. The Justice Department’s new National Strategy to Combat Human Trafficking will bring the full force of the Department to this fight.”
“The Western District of Washington has been at the forefront of the fight against human trafficking since 2004, when the U.S. Attorney’s Office convened the Washington Advisory Committee on Trafficking (WashACT) in partnership with the Seattle Police Department and the International Rescue Committee of Seattle,” said U.S. Attorney Nick Brown. “Thanks to grants made to our partners by the Department of Justice’s Office for Victims of Crime and Bureau of Justice Assistance, WashACT has served as a model of a multi-disciplinary, collaborative, victim-centered task force. WashACT remains focused on its mission of ensuring that victims of trafficking receive all resources available to them and that human traffickers are identified, investigated, and prosecuted to the utmost extent of the law. We will continue advancing the goals set forth in the Attorney General’s National Strategy to Combat Human Trafficking.”
Among other things, the Justice Department’s multi-year strategy to combat all forms of human trafficking will:
- Strengthen engagement, coordination, and joint efforts to combat human trafficking by prosecutors in all 94 U.S. Attorneys’ Offices and by federal law enforcement agents nationwide.
- Establish federally-funded, locally-led anti-human trafficking task forces that support sustained state law enforcement leadership and comprehensive victim assistance.
- Step up departmental efforts to end forced labor by increasing attention, resources and coordination in labor trafficking investigations and prosecutions.
- Enhance initiatives to reduce vulnerability of American Indians and Alaska Natives to violent crime, including human trafficking, and to locate missing children.
- Develop and implement new victim screening protocols to identify potential human trafficking victims during law enforcement operations and encourage victims to share important information.
- Increase capacity to provide victim-centered assistance to trafficking survivors, including by supporting efforts to deliver financial restoration to victims.
- Expand dissemination of federal human trafficking training, guidance and expertise.
- Advance innovative demand-reduction strategies.
The department’s strategy will be implemented under the direction of the National Human Trafficking Coordinator designated by the Attorney General in accordance with the Abolish Human Trafficking Act of 2017.
If you believe that you or someone you know may be a victim of human trafficking, please contact the National Human Trafficking Resource Center Hotline at 1-888-373-7888, or Text 233733.
To read the National Strategy to Combat Human Trafficking click here.
Owner of two South King County pawn shops sentenced to prison for trafficking in stolen goods and possession of images of child rape and abuseRead the Press Release
Seattle – A 46- year-old Auburn, Washington man was sentenced today in U.S. District Court in Seattle to 6 years in prison and 15 years of supervised release for trafficking in stolen goods and possession of child pornography, announced U.S. Attorney Nick Brown. Aleksandr Pavlovskiy pleaded guilty in October 2021, following a lengthy investigation by the FBI and Auburn Police Department. At the sentencing hearing U.S. District Judge John C. Coughenour said, the sentence was driven in part by “the stunning amount of stolen material.”
“This case highlights the tremendous value we place in state and federal law enforcement teamwork. The investigation began through the patient, dedicated work of an Auburn Police detective, who reached out to the FBI. It is through this sort of teamwork that we can root out all manner of crimes,” said U.S. Attorney Nick Brown. “While the stolen property case is what brought us here, the possession of child pornography demonstrates the damage Mr. Pavlovskiy inflicted on the larger community.”
According to records filed in the case, between 2013 and 2016, Pavlovskiy operated two pawn shops: Thrift Electro in Renton, Washington and Innovation Best in Kent, Washington. At the shops, Pavlovskiy directed employees to purchase stolen retail goods from shoplifters and others. Employees paid the shoplifters cash for the items. Some of the items came from delivery drivers for online retailers who stole the packages and sold them to the pawn shops.
In 2016, Pavlovskiy established a warehouse in Kent where the stolen goods would be stored and repackaged for re-sale. At the warehouse employees would use heat guns and scrapers to remove any tags from the items. Employees photographed the items and listed them for sale on eBay and Amazon. Between January 2017 and July 2019, Pavlovskiy and his employees at the warehouse shipped hundreds of thousands of stolen items to purchasers across the United States. The business generated between $1.5 million and $3.5 million on the sale of stolen goods.
The law enforcement investigation began in the summer of 2018, when an alert Auburn police detective noticed the large number of stolen goods being sold at pawn shops owned and operated by Mr. Pavlovskiy. In July 2019, state and federal law enforcement served search warrants on Pavlovskiy’s home, cars, and business locations. At the warehouse they documented racks of stolen goods being processed for resale. They took a number of electronic devices for analysis. On Pavlovskiy’s devices, forensic analysis revealed more than 20,000 images or videos of minors engaged in sexually explicit conduct. Pavlovskiy used file sharing software to obtain and share the images.
In imposing the sentence, Judge Coughenour directed Pavlovskiy serve 24 months on the child pornography count and 48 months on the trafficking in stolen property count, with the sentences to run consecutively. Pavlovskiy is required to register as a sex offender. He was ordered to pay $12,000 in restitution. Of the 65 known sexual abuse victims identified during the investigation, six victims requested restitution to help defray costs of their ongoing mental health treatment, and for other crime-related expenses. Each victim will receive at least $2,000 in restitution. The stolen property recovered in the investigation is being returned to the victim retailers.
The case was investigated by the FBI and Auburn Police Department.
The case was prosecuted by Assistant United States Attorney Mike Lang.
Repeat embezzler sentenced to prison for stealing nearly $300,000 from her employerRead the Press Release
Seattle – A 75-year-old woman from Lynnwood, Washington, who worked as a contract accountant, was sentenced today in U.S. District Court in Seattle to 6 months in prison and one year of home detention, announced U.S. Attorney Nick Brown. Over seven years, Judith Wright stole nearly $300,000 from Transportation Demand Management LLC (“TDM”), a Washington State passenger transportation company. This is Wrights second conviction for embezzling. In 1994 she was sentenced to a year and a day in prison for embezzling from the bank where she served as Chief Financial Officer.
At the sentencing hearing U.S. District Judge Richard A. Jones noted Wright’s prior conviction saying, “Even with the passage of time, you have little respect for the law.” Judge Jones said Wright had violated the trust of her employer and deprived others of money that could have changed their lives.
According to records filed in the case, between February 2010 and January 2017, Wright wrote some 120 fraudulent checks to herself and then disguised the payments in company books as if they were made to legitimate vendors. The fraud came to light when a new Chief Financial Officer at the company began questioning some of the entries. An FBI analysis of the accounts revealed that much of the money was clearly used for non-business expenses such as more than $78,000 in payments to Nordstrom, more than $17,000 spent with QVC (the home shopping network) and more than $20,000 spent at Costco.
This is the second time Wright has been sentenced for a similar embezzlement scheme. In 1994 she wrote unauthorized checks at the bank where she worked to pay her credit card bills. In that case the total theft was $45,000.
Under the terms of the plea agreement, Wright will pay $298,737 in restitution to her former employer.
The case was investigated by the FBI.
The case was prosecuted by Assistant United States Attorney Justin Arnold.
Former Contract Mail Carrier sentenced to prison for vehicle smuggling scheme and possession of images of child rape and abuseRead the Press Release
Tacoma – A 48– year-old Mason County, Washington resident was sentenced today in U.S. District Court in Tacoma to 30 days in custody for three federal felonies related to a smuggling scheme and possession of child pornography, announced U.S. Attorney Nick Brown. In September 2021, Christopher M. Cox pleaded guilty to: smuggling goods into the U.S.; making false statements related to the Clean Air Act; and possession of child pornography. At today’s sentencing hearing U.S. District Judge Robert J. Bryan ordered Cox to register as a sex offender and placed him on five years of supervised release following his incarceration.
Prosecutors had asked the court to sentence Mr. Cox to two years in prison.
“Mr. Cox was a danger to the community on multiple fronts. He abused a position of trust and endangered his colleagues by selling unsafe vehicles and ignoring air pollution control efforts,” said U.S. Attorney Nick Brown. “The vehicles he imported and sold did not meet safety or air quality standards. These crimes, along with his possession of images of child rape and abuse, demonstrate he poses serious safety concerns. We advocated for a lengthier punishment for Mr. Cox to best protect the community and are disappointed by today’s sentence.”
According to records filed in the case, between approximately 2015 and January 2019, Cox falsified the required paperwork on two dozen vehicles he imported from overseas. Many of the vehicles were extremely light vehicles imported from Japan that did not meet U.S. safety standards. Cox sold some of the vehicles to contract mail carriers he knew from his job. Cox falsified the forms that claimed the vehicles met both safety standards and Environmental Protection Agency (EPA) Clean Air Act standards. Cox used his identification as a contract mail carrier to circumvent inspections at the Port of Tacoma and took the vehicles from the Port without proper inspections. The total value of the imported vehicles exceeds $55,000. Those who bought the vehicles were not told that they failed to meet federal safety and pollution standards.
“The defendant’s intentional disregard for the law included an attempt to deceive law enforcement” said Scot Adair, Special Agent in Charge of the EPA’s criminal enforcement program in Washington. “The American public relies on accurate information on products being imported into this country to help protect the environment and the consumer.”
When law enforcement officers served search warrants on Cox’s electronic accounts, they observed images of child pornography. Some of the images are known series of images of child rape and abuse manufactured outside the State of Washington. When officers executed search warrants on Cox’s residence and obtained his electronic devices, they located 142 images and 2 videos of child molestation, rape and abuse.
“Mr. Cox thrived through deceitful actions. He prioritized personal profit over the environment all while taking gratitude in the sexual exploitation of children,” said Special Agent in Charge (SAC) Robert Hammer, who oversees HSI operations in the Pacific Northwest. “We’re thankful to our partners at the EPA, CBP and U.S. Attorney’s Office for investigating and prosecuting the case.”
The case was investigated by the U.S. Environmental Protection Agency Criminal Investigation Division (EPA-CID), the United States Postal Inspection Service, the Department of Transportation, and Homeland Security Investigations with critical assistance from U.S. Customs and Border Protection (CBP).
The case was prosecuted by Assistant United States Attorney Cecelia Gregson
Plant Manager of Seattle barrel reconditioning company pleads guilty to conspiracy and lying to investigatorsRead the Press Release
Seattle – The plant manager of Seattle Barrel and Cooperage Company, a barrel cleaning and reconditioning operation, pleaded guilty today in U.S. District Court in Seattle to conspiracy and making a false statement to the Environmental Protection Agency, announced U.S. Attorney Nick Brown. John Sanft, 51, formerly of Issaquah, Washington, was the company’s plant manager during a conspiracy to illegally dump caustic waste into the King County sewer system, which ultimately empties into Puget Sound. The company used a hidden drain, and, over ten years, lied to regulators to carry out their illegal dumping. Last month, the company and its owner, Louie Sanft, were found guilty by a jury of participating in the dumping scheme. John Sanft will be sentenced by U.S. District Judge Richard A. Jones on April 22, 2022.
Seattle Barrel’s business involves collecting used industrial and commercial drums and reconditioning and reselling them. Between 2009 and March of 2019, part of the reconditioning process involved washing the barrels in a highly-corrosive chemical solution. The caustic solution had a very high pH level. Since at least 2009, Seattle Barrel operated under a discharge permit that prohibits it from dumping effluent with a pH exceeding 12 to the sewer system. Effluent above pH 12 will corrode the sewer system and treatment plant, and potentially cause pass-through pollution to Elliott Bay and Puget Sound.
In 2013, King County conducted covert monitoring of Seattle Barrel, and discovered the company was illegally dumping effluent with a pH above 12 in violation of its permit. King County fined the company $55,250, but later agreed to reduce the fine when Seattle Barrel installed a pretreatment system for its wastewater.
However, in 2018 and 2019, additional covert monitoring by the EPA inspectors revealed that Seattle Barrel was continuing to routinely dump wastewater with a pH above 12 into the sewer system despite telling local regulators that no industrial wastewater was being discharged. Agents then installed real-time monitoring equipment that allowed them to determine when the dumping was taking place and obtained a search warrant.
Early on the morning of March 8, 2019, the covert monitors indicated Seattle Barrel was dumping high-pH material into the sewer. Agents immediately executed the warrant and entered the building. Inside, they discovered a portable pump on the floor near the tank of caustic solution. They then discovered that the pump was being used to pump the caustic solution to a nearby hidden drain that had never been disclosed to King County. The drain led directly to the sewer system. According to the company, since mid-2019, following the criminal conduct in this case, it no longer uses the caustic solution for barrel cleaning.
As noted in the plea agreement, John Sanft knew of the existence of the hidden drain, and further knew that Seattle Barrel was regularly discharging the contents of the caustic tank through the hidden drain. John Sanft did not personally engage in the discharges or tell the employee to cause the discharges. However, Sanft admits he was part of the conspiracy to hide the conduct from the King County inspectors and the EPA. John Sanft admitted to lying to federal agents about the dumping during a March 8, 2019 interview. John Sant faces up to five years in prison for each of the two charges to which he pled guilty.
“The defendant’s intentional disregard for the environment included an attempt to deceive law enforcement and conceal other crimes” said Scot Adair, Special Agent in Charge of the EPA’s criminal enforcement program in Washington. “EPA and the Department of Justice continue to hold accountable companies and individuals that place communities and the environment at risk.”
In December 2021, John Sanft’s cousin, Louie Sanft, the owner and operator of Seattle Barrel, was convicted following a three-week trial of: conspiracy; 29 violations of the Clean Water Act for discharging pollutants to the sewer; four counts of submission of False Clean Water Act Certifications; and making a false statement to special agents of the EPA. Louie Sanft faces up to 5 years in prison on the conspiracy and false statement counts, and up to three years in prison for each violation of the Clean Water Act.
Under the terms of the plea agreement with John Sanft, prosecutors will recommend he be sentenced to no more than a year and a day in prison. However, the ultimate sentence is up to U.S. District Judge Richard A. Jones. Judge Jones will determine the sentence for both John and Louie Sanft and the company, after considering the U.S. Sentencing Guidelines and other statutory factors.
The case was investigated by the Environmental Protection Agency Criminal Investigation Division (EPA-CID) with significant assistance from King County Industrial Waste.
The case is being prosecuted by Assistant United States Attorneys Seth Wilkinson and Jim Oesterle, and Special Assistant United States Attorneys Karla Perrin and Gwendolyn Russell, Regional Criminal Enforcement Counsel with the Environmental Protection Agency.
Seattle drug dealer who preyed on young runaway sentenced to prisonRead the Press Release
Seattle – A 29-year-old Seattle-area resident was sentenced today in U.S. District Court in Seattle to 10 years in prison for four federal felonies, announced U.S. Attorney Nick Brown. Steve Godina Ochoa was arrested in February 2020, after a 13-year-old runaway disclosed to counselors, that Godina Ochoa repeatedly sexually assaulted her. At the sentencing hearing U.S. District Judge John C. Coughenour imposed a 10-year term of supervised release to follow the prison sentence.
According to records filed in the case, in November 2019, the Bellevue Police Department Sexual Assault Unit began investigating Godina Ochoa after disclosures from a young victim. When Godina Ochoa and his vehicles were located, law enforcement seized quantities of methamphetamine and heroin and three firearms. Two of the firearms had been reported stolen – one from Federal Way and the other from Snohomish County. Godina Ochoa had more than $4,500 cash in the car – the proceeds from his drug dealing. Godina Ochoa was prohibited from possessing firearms due to prior convictions for arson and unlawful possession of a firearm.
When law enforcement seized and analyzed Godina Ochoa’s electronic devices they found images of the sexual assault on the young victim. The images constitute child pornography.
In asking for the 10-year sentence prosecutors wrote to the court, “There are very few crimes that are more serious than those involving the sexual abuse and exploitation of children and narcotics trafficking is an undeniable blight on our community which robs our citizens of quality and longevity of life. As a convicted felon, the defendant elected to use firearms to protect his wares again putting himself and others are risk of harm or death all in an effort to support his lifestyle.”
The case was investigated by the Bellevue Police Department, the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF) and the Department of Homeland Security (HSI).
The case was prosecuted by Assistant United States Attorney Cecelia Gregson.
Edmonds, Washington woman sentenced to home confinement for setting fire to her business in insurance fraud schemeRead the Press Release
Seattle – An Edmonds, Washington, business owner was sentenced today in U.S. District Court in Seattle to five years of probation, with one year of house arrest, for wire fraud related to the April 30, 2018, fire at her business, CJN Miniatures & More, a dollhouse, miniatures, collectibles, and antiques shop, announced U.S. Attorney Nick Brown. Connie L. Bigelow, 54, set the fire to try to collect insurance money to solve her financial troubles. At the sentencing hearing U.S. District Judge Robert S. Lasnik said he was opting for home confinement because of the COVID pandemic.
According to records filed in the case, Bigelow set fire to her business to collect insurance money as the store was struggling to make enough money to pay the rent. Bigelow moved her business, CJN Miniatures LLC, into the building at 23030 Highway 99, in Edmonds in September 2017. The store maintained an inventory of miniatures and collectables for sale, consigned items on behalf of other individuals, and rented out space to other vendors. Between October 2017 and April 2018, the business fell behind in rental payments and payments to consigners.
Bigelow carried an insurance policy with State Farm Fire and Casualty Company that covered up to $100,000 in loss of business personal property, as well as loss of income. The policy did not cover loss arising from arson.
Bigelow set the fire underneath three Thomas Kinkade paintings worth thousands of dollars. In May 2018, Bigelow initiated a claim to State Farm for the losses arising from the fire. On May 3, 2018, Bigelow communicated with the insurance agent via email as part of the wire fraud scheme. Bigelow made false statements to law enforcement, as well as representatives of State Farm as part of the scheme to defraud.
Prosecutors had asked for a year in prison, citing the inherent danger of the fire and the losses to the community. In pleading guilty, Bigelow agreed to make full restitution. Currently the restitution is over $200,000 to the building owners and some 50 victims who lost consigned items in the fire.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF), along with the Snohomish County Fire Marshals’ Office. The case was prosecuted by Assistant United States Attorney Amy Jaquette.
Tax preparer sentenced to prison for fraudulent deductions on federal income tax returnsRead the Press Release
Seattle – A 58-year-old resident of Pacific, Washington, was sentenced today in U.S. District Court in Seattle, to a year and a day in prison for 14 counts of aiding and abetting the filing of false tax returns, announced U.S. Attorney Nick Brown. Jean Mpouli worked for 25 years as an aviation inspector for the Federal Aviation Administration (FAA), while on the side he ran a tax preparation business with hundreds of clients, offering his services primarily to African immigrants. At the 3-day trial in September 2021, prosecutors showed how Mpouli falsely increased deductions for unreimbursed business expenses and educational expenses to boost his clients’ tax refunds. Mpouli took a percentage of the refund as his fee, so the higher the refund, the larger the fee. Further, on his personal tax returns, Mpouli hid over $200,000 of revenue generated from his illegal side business.
At today’s sentencing hearing U.S. District Judge John C. Coughenour ordered Mpouli to pay $31,296 in restitution, and imposed one year of supervised release following the prison term.
“Motivated purely by greed, Mr. Mpouli took advantage of the trust placed in him by his community – African immigrants and their descendants,” said U.S. Attorney Nick Brown. “His clients were particularly vulnerable to being used in this way, as they were unfamiliar with U.S. tax law. Mr. Mpouli placed his clients in harm’s way, exposing them to audit, fines and penalties, and potential criminal investigation.”
According to records filed in the case and testimony at trial, in late 2016 an analyst with the IRS noted that an unusually large number of returns prepared by Mpouli claimed deductions for unreimbursed business expenses. In 2017, the IRS Criminal Investigation Division sent an undercover officer into the business to get an up-close look at how Mpouli prepared tax returns. Using the W-2 information the undercover officer supplied, Mpouli rightly determined the agent owed approximately $800 in taxes. However, Mpouli then offered to enter in approximately $34,000 in fraudulent expenses in order to boost the undercover officer’s refund to more than $5,600. Mpouli explained that the undercover officer should consider the refund as a “loan” in the event the officer was audited by the IRS. Mpouli then accepted $250 in cash as his fee for preparing the fraudulent return.
When agents executed court authorized search warrants on the business in September 2017, they found more than 1,200 personal tax returns on Mpouli’s computers. Hundreds of the tax returns show suspiciously high amounts of unreimbursed business expenses and education expenses. In one example, Mpouli claimed a client had driven more than 33,000 miles for business in one year. However, the client did not own a vehicle, did not have a driver’s license, and had never driven a vehicle in the U.S.
When investigators contacted a random sampling of the clients who had used Mpouli’s services, they said they were not aware of the extent of the deductions he had claimed on their behalf. Many did not own vehicles even though Mpouli listed unreimbursed car expenses. Others never attended the educational institution listed on the returns. In some instances, he claimed children were attending the secondary education institution, even though the children were actually enrolled in daycare or elementary school. The clients said Mpouli did not discuss the returns with them before filing, and when they were notified that they were being audited, he refused to assist them.
According to financial records, during the time period of the fraud, Mpouli was sending more than $300,000 to his native Cameroon to pay for the construction of an apartment building.
In all, the government estimated the tax loss to be nearly $3.5 million.
“When those we trust to prepare our taxes take advantage of their clients for their own greed, everybody is harmed. We rely on our tax system to provide resources to fund critical services that we all rely on,” said Bret Kressin, IRS Criminal Investigation (IRS:CI) Special Agent in Charge, Seattle Field Office. “Mr. Mpouli knew on a personal level how critical tax revenue is to public safety, as his prior career as a government employee was funded by taxpayer dollars. However, Mr. Mpouli chose to abuse the system in spite of this for his own illicit gain. Today’s sentence is a reminder that IRS:CI takes attacks on our tax system seriously, because the safety and well-being of our communities are what is at stake.”
The case was investigated by Internal Revenue Service: Criminal Investigation. The case was prosecuted by Assistant United States Attorneys Lyndsie Schmalz and Frances Franze-Nakamura.
Repeat offender sentenced to 3 years in prison for bank fraud and identity theftRead the Press Release
Seattle – A 33-year-old Seattle man was sentenced today in U.S. District Court in Seattle to three years in prison for bank fraud and aggravated identity theft, announced U.S. Attorney Nick Brown. Kevin Antoine Jones used information from a bank insider so that he and his underlings could impersonate customers and drain their bank accounts, causing actual and attempted loss of more than $299,000. At the sentencing hearing U.S. District Judge John C. Coughenour imposed three years of supervised release to follow prison.
According to records filed in the case, Jones has spent the last dozen years in and out of prison for a number of criminal convictions. In 2007, he was convicted of promoting prostitution when a 16-year-old girl told police Jones would not let her go home to her family until she earned $25,000 for him. That same year he was convicted of illegally possessing a firearm. In 2011, he was convicted in federal court of bank robbery-related charges. In 2017, while on supervised release for that crime, he was convicted of illegally possessing ammunition. Following a 30-month prison term, Jones was again on supervised release. During 2019 he was arrested for stealing from a casino and assaulting a blackjack dealer and a few months later police were called when he assaulted his domestic partner.
The investigation revealed that from March 2019, to October 2019, Jones got information from a BECU insider so that he could victimize some 20 customers of the credit union. Jones used the inside information so that he (and others acting at his direction) could impersonate the customers and obtain new debit cards for their accounts. Jones recruited others, including his father, to impersonate the customers and drain the bank accounts. Jones was ordered to pay $231,000 in restitution.
The bank insider was sentenced to 24 months in prison. Jones’ father has pleaded guilty and is awaiting federal sentencing.
The case was investigated by the United States Secret Service and the Kirkland Police Department.
The case is being prosecuted by Assistant United States Attorney Michael Dion.
Former CEO of recycling firm sentenced to second prison term for tax fraudRead the Press Release
Seattle – The former owner and co-CEO of an electronics recycling firm was sentenced today in U.S. District Court in Seattle to 6 months in prison for tax fraud, announced U.S. Attorney Nick Brown. Jeffrey Zirkle, 58, of Gig Harbor, Washington, was the owner and co-CEO of Total Reclaim, the Northwest’s largest recycler of electronic waste. In 2019, Zirkle was sentenced to 28 months in prison for defrauding clients by secretly exporting electronic waste to Hong Kong, despite presenting his business as an environmentally-friendly recycling service. Today’s second criminal case stems from Zirkle using company funds to pay for his personal expenses and failing to report the transactions on his income tax returns.
At today’s sentencing hearing U.S. District Judge James L. Robart said, “He’s been defrauding the company and defrauding the government for years…. He has no respect for the law whatsoever.” Judge Robart ordered Zirkle to pay $125,549 in restitution to the government.
“Those who fail to pay their taxes are not just cheating the government, they are also stealing from taxpayers who are following the rules. But despite earning nearly $1 million a year in salary, Mr. Zirkle refused to pay his fair share,” said U.S. Attorney Nick Brown. “At the same time that he was misleading customers about his company’s business practices, he was also lying to the IRS by mischaracterizing his personal expenses as business expenses. No one is above the law.”
According to records filed in the case, following the prosecution of Zirkle and his partner for fraud, a new CEO took over Total Reclaim. That executive discovered Zirkle had embezzled from the company by charging hundreds of thousands of dollars in personal expenses on company credit cards. An investigation by the FBI and IRS:CI determined that as much as $480,000 were for personal items and that Zirkle never reported those benefits on his income tax returns. Many of the charges involved the purchase of luxury goods: more than $4,000 at Louie Vuitton Las Vegas, $4,000 as a down payment on a motocross bike, and over $15,000 for the partial payment of a vintage 1966 Chevrolet Chevelle. Zirkle also spent over $17,000 in corporate funds on a single day to purchase home appliances, and over $15,000 on a home irrigation system. Even after his sentencing on the fraud charges in April 2019, Zirkle continued to use the corporate credit card for his own expenses charging over $5,000 for septic work on his home.
In October 2021, Zirkle pleaded guilty to filing false tax returns from 2008 to 2017. Zirkle negotiated a settlement with Total Reclaim regarding the expenses. Zirkle was ordered to pay $125,549 in restitution for the tax loss.
“Mr. Zirkle not only defrauded the Government and endangered the environment, Mr. Zirkle also had the audacity to further line his pockets by stealing from his own company,” said Special Agent in Charge Bret Kressin, IRS Criminal Investigation (IRS:CI), Seattle Field Office. “IRS:CI is committed to investigating financial and tax crimes, and we will not let these crimes go unnoticed. Today’s sentence is proof of this commitment, and the sentence represents further justice for Mr. Zirkle’s schemes.”
In the earlier criminal case, an EPA investigation concluded that Total Reclaim had secretly exported over eight million pounds of monitors containing toxic materials such as mercury. The investigation revealed that Zirkle and his co-defendant had concealed this practice by submitting fraudulent documents to auditors and customers, and had falsified more documents when the practice was discovered.
Due to concern about the pandemic, Judge Robart ordered Zirkle to begin serving his sentence in early August. Over the objections of the prosecutor, Zirkle asked for the delay in serving his time, so he could attend two family weddings. Zirkle will be on 18 months of supervised release for the tax crimes following his prison term.
The tax case was investigated by the FBI and Internal Revenue Service Criminal Investigation (IRS:CI).
The case was prosecuted by Assistant United States Attorney Seth Wilkinson.
DOJ and Federal Way, Washington doctor settle False Claims Act allegations over drug testingRead the Press Release
Seattle – The U.S. Department of Justice and a Federal Way, Washington general-practice doctor have settled allegations that the doctor billed government health programs for urine drug tests that were never performed or performed too late to be useful, announced U.S. Attorney Nick Brown. Dr. Vuthy Leng is the sole owner and operator of Family Medicine Clinic of Federal Way LLC. Dr. Leng will pay state and federal health programs $228,000 to resolve allegations that Dr. Leng billed government health programs for useless urine drug tests.
According to the settlement agreement, the Federal Way clinic had a certified lab, capable of performing urine drug tests so that patients could be screened for appropriate prescribing of medications including substance use disorder treatment. Between January 1, 2019 and July 30, 2019, Dr. Leng submitted bills to Medicare and Medicaid for urine drug tests. In fact, for long periods during this timeframe, the medical equipment for testing urine was broken, the samples were simply frozen for testing at a later date. Some were never tested at all.
While not admitting the allegations in the settlement, Leng will pay $76,000 in restitution to the government medical programs. Under the False Claims Act, the government can seek treble damages resulting in an additional $152,000 to be paid by Dr. Leng over the next 12 months. The amount will be split between the state and federal programs based on the share each paid of the false bills.
Under the terms of the settlement each party will pay their own legal fees.
The matter was investigated by the Health and Human Services Office of Inspector General (HHS-OIG) and the Washington State Health Care Authority and Washington Attorney General Medicaid Fraud Division.
Assistant United States Attorney Nickolas Bohl negotiated the settlement for the U.S. Department of Justice.