Western District of Washington

Tacoma – A Ridgefield, Washington, man pleaded guilty today in U.S. District Court in Tacoma to multiple federal felonies for his scheme to entice and pressure young teens into sending him sexually explicit photos and videos.  Joshua Henry Punt, 39, pleaded guilty today to using the messaging apps ‘Kik’ and ‘Snapchat’ to connect with teens while posing as a teenager.  Punt then enticed and pressured young teens to send him sexually explicit photos and videos.  Victims have been identified across the U.S., including New York, Arkansas, California, Texas, Nevada, Kentucky, Pennsylvania, and West Virginia.

According to records filed in the case, Punt presented himself in his social media accounts as an attractive teenager by using profile pictures of youthful YouTube personalities.  After innocuous preliminary communications with his intended victims, Punt demanded sexually provocative and/or sexually explicit photos and videos.  Unbeknownst to his victims, Punt recorded their videos and images on a second phone.  So, for example, when a victim believed she was sending a “snap,” which would automatically delete or notify the sender if an attempt was made to copy it, Punt surreptitiously recorded the images and videos for future use.  When victims inevitably became uncomfortable with his behavior and attempted to exit the “relationship,” Punt threatened to send the videos/images to members of their local communities–including schools, coaches, and others‑‑if they did not comply with his demands which included production of additional sexually explicit videos and images.  The victims range in age from 12 to 16 years of age.

PUNT was arrested on May 21, 2019, and was originally charged in Clark County Superior Court.  He was charged federally on November 7, 2019.

In a separate investigation, the FBI identified Punt as the administrator of a child pornography distribution group on Kik.  As an administrator, Punt actively patrolled the group – demanding that new members share content and banning those that failed to share child pornography.  An FBI online covert employee followed links posted by Punt leading to a cache of child pornography. 

Punt pleaded guilty to production of child pornography, enticement of a minor, distribution of child pornography and advertisement of child pornography.  He is scheduled to be sentenced on July 26, 2021 and faces a mandatory minimum 15 years in prison and up to life in prison.  U.S. District Judge Benjamin H. Settle will determine the sentence after considering the U.S. Sentencing Guidelines and other statutory factors.  Prosecutors have agreed to recommend no more than 23 years in prison.  Punt will be required to register as a sex offender following prison.  Both the prosecution and defense will recommend that Punt be on supervised release for the rest of his life.

The case is being investigated by the Vancouver Police Department’s Digital Evidence Cybercrime Unit, in conjunction with Homeland Security Investigations.  The FBI investigated Punt’s activity administering a site for the trading of images of child abuse and molestation.  Law enforcement agencies in other jurisdictions are also assisting this investigation.

Assistant U.S. Attorneys Angelica Williams and Cecelia Gregson are prosecuting the case.

This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice.  Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims.  For more information about Project Safe Childhood, please visit www.justice.gov/psc.

Seattle – A Brooklyn, New York, man was arrested late yesterday in SeaTac, Washington, on criminal charges related to his alleged plan to travel to Washington State for sexual abuse of a minor.

According to court documents, Rajesh Singh, 28, began communicating with an undercover officer in August 2020 about his desire to travel to Washington State to sexually abuse a child under the age of 12.  The undercover officer was participating in an internet-based chat platform known to be used by individuals interested in child exploitation and child exploitation imagery.  The undercover agent created a fictitious daughter under the age of 12, and Singh communicated extensively about his desire to rape the child and film the sexual assault.  At various times in the chats, Singh indicated he had previously molested children.  Singh was observed in New York getting on a flight to Seattle, arrived at Sea-Tac, and took a shuttle to an area hotel and was arrested there by agents with Homeland Security Investigation.  Singh appeared in U.S. District Court in Seattle today and remains detained.

Rajesh Singh is charged with Aggravated Sexual Abuse of a Child Under Twelve, Attempted Production of Child Pornography, and Attempted Enticement of a Minor.  If convicted, Singh faces a mandatory minimum 30 years in prison and up to life in prison.  A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Acting U.S. Attorney Tessa Gorman of the Western District of Washington and Homeland Security Investigations Special Agent in Charge Robert Hammer made the announcement.

Agents with Homeland Security Investigations are investigating the case.

Assistant U.S. Attorney Matthew Hampton is prosecuting the case.

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.

A criminal complaint is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

Seattle – The U.S. Attorney’s Office Western District of Washington has seen a recent increase in phone calls that “spoof,” or fake, the U.S. Attorney’s Office main phone number, so the call appears to originate from the office on the recipient’s caller ID.  Fraudulent callers pose as a “Justice Department investigator.”  The scammers attempt to use a fake name and nonexistent case number to trick the victim.  The fraudsters have demanded money claiming it is “attorney fees” to resolve the case.  In some instances, the scammers appear to have some personally identifiable information on the victim or have reviewed social media posts for information that makes their spiel sound credible.

Law enforcement defines this type of scam as government impersonation fraud, in which criminals impersonate government officials.  The criminals often threaten to extort victims with physical or financial harm.  Scammers are becoming more sophisticated and organized in their approach, are technologically savvy, and often target young persons and the elderly.

The U.S. Attorney’s Office staff will never ask for money or personally identifying information over the phone.

According to the Internet Crime Complaint Center (IC3), 12,334 people reported being victims of government impersonation scams in 2020, with losses totaling more than $106 million.  In Washington State in 2020, 358 victims reported $2 million in losses.  Since January 1, 2021, 106 victims have already reported $777,045 in losses in Washington State.  To protect yourself from falling victim to this scam, be wary of answering phone calls from unrecognized numbers.  Do not send money to anybody that you do not personally know and trust.  Never give out your personal information, including banking information, Social Security number, or other personally identifiable information, over the phone or to individuals you do not know.

Anyone who feels they were the victim of this or any other online scam should report the incident immediately using the IC3 website at www.ic3.gov.  More information about government impersonation schemes and other online fraud schemes can be found at https://www.fbi.gov/scams-and-safety/common-fraud-schemes.

Seattle – The first high-level manager of the notorious hacking group FIN7 was sentenced today in U.S. District Court in Seattle to ten years in prison, announced Acting U.S. Attorney Tessa A. Gorman.  Fedir Hladyr, 35, a Ukranian national, served as a high-level manager and systems administrator for FIN7.  He was arrested in Dresden, Germany, in 2018 at the request of U.S. law enforcement and was extradited to Seattle.  In September 2019, he pleaded guilty to conspiracy to commit wire fraud and one count of conspiracy to commit computer hacking.  At today’s sentencing hearing, Chief U.S. District Judge Ricardo S. Martinez said, “Cybercrime has become the greatest threat to American’s financial health, and to citizens around the globe.”

“This criminal organization had more than 70 people organized into business units and teams.  Some were hackers, others developed the malware installed on computers, and still others crafted the malicious emails that duped victims into infecting their company systems,” said Acting U.S. Attorney Gorman.  “This defendant worked at the intersection of all these activities and thus bears heavy responsibility for billions in damage caused to companies and individual consumers.”

According to records filed in the case, since at least 2015, FIN7 members (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, gaming, and hospitality industries.  FIN7 hacked into thousands of computer systems and stole millions of customer credit and debit card numbers which were used or sold for profit. 

FIN7, through its dozens of members, launched numerous waves of malicious cyberattacks on numerous businesses operating in the United States and abroad.  FIN7 carefully crafted email messages that would appear legitimate to a business’s employees and accompanied emails with telephone calls intended to further legitimize the email.  Once an attached file was opened and activated, FIN7 would use an adapted version of the notorious Carbanak malware in addition to an arsenal of other tools ultimately 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.

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.  Additional intrusions occurred abroad, including in the United Kingdom, Australia, and France.  Companies that have publicly disclosed hacks attributable to FIN7 include such familiar chains as Chipotle Mexican Grill, Chili’s, Arby’s, Red Robin, and Jason’s Deli.  

“These cyber thieves orchestrated an elaborate network of hackers and systems to infiltrate businesses and exploit consumers’ personal information,” said Donald M. Voiret, FBI Special Agent in Charge of the Seattle Field Office.  “Their specialized skills to target certain industries amplified the damage exponentially.  Thanks to the hard work of law enforcement partners both in the U.S. and overseas, these fraudsters are not beyond our reach and cannot hide from the law.”

Hladyr originally joined FIN7 via a front company called Combi Security—a fake cyber security company that had a phony website and no legitimate customers.  Hladyr admitted in his plea agreement that he quickly realized that, far from being a legitimate company, Combi was part of a criminal enterprise.  Hladyr served as FIN7’s systems administrator who, among other things, played a central role in aggregating stolen payment card information, supervising FIN7’s hackers, and maintaining the elaborate network of servers that FIN7 used to attack and control victims’ computers.  Hladyr also controlled the organization’s encrypted channels of communication.

Speaking to the court, Hladyr said he had “ruined years of my life and put [his] family through great risk and struggle.”

Noting that cyber criminals must be deterred by significant sentences, Chief Judge Martinez said he was cognizant of the “ease of sitting at a keyboard and stealing money from people around the globe” and emphasized that would-be cybercriminals “must understand that, once caught, the punishment will be significant.”  The judge also ordered Hladyr to pay $2.5 million in restitution.

This case is the result of an investigation conducted by the Seattle Cyber Task Force of the FBI and the U.S. Attorney’s Office for the Western District of Washington, with the assistance of the Justice Department’s Computer Crime and Intellectual Property Section and 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 numerous international agencies.  German law enforcement authorities provided significant assistance by arresting Hladyr.

This case is being prosecuted by Assistant U.S. Attorneys Francis Franze-Nakamura and Steven Masada of the Western District of Washington, and Trial Attorney Anthony Teelucksingh of the Justice Department’s Computer Crime and Intellectual Property Section.

A Ukrainian national was sentenced today in the Western District of Washington to 10 years in prison for his high-level role in the criminal work of the hacking group FIN7.

Fedir Hladyr, 35, served as a manager and systems administrator for FIN7. He was arrested in Dresden, Germany, in 2018, at the request of U.S. law enforcement and was extradited to Seattle, Washington. In September 2019, he pleaded guilty to one count of conspiracy to commit wire fraud and one count of conspiracy to commit computer hacking.

“The defendant and his conspirators compromised millions of financial accounts and caused over a billion dollars in losses to Americans and costs to the U.S. economy,” said Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division. “Protecting businesses – both large and small – online is a top priority for the Department of Justice. The department is committed to working with our international partners to hold such cyber criminals accountable, no matter where they reside or how anonymous they think they are.”

“This criminal organization had more than 70 people organized into business units and teams.  Some were hackers, others developed the malware installed on computers, and still others crafted the malicious emails that duped victims into infecting their company systems,” said Acting U.S. Attorney Tessa M. Gorman of the Western District of Washington. “This defendant worked at the intersection of all these activities and thus bears heavy responsibility for billions in damage caused to companies and individual consumers.”

“These cyber thieves orchestrated an elaborate network of hackers and systems to infiltrate businesses and exploit consumers’ personal information,” said Special Agent in Charge Donald M. Voiret of the FBI’s Seattle Field Office. “Their specialized skills to target certain industries amplified the damage exponentially. Thanks to the hard work of law enforcement partners both in the U.S. and overseas, these fraudsters are not beyond our reach and cannot hide from the law.”

According to documents filed in the case, 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.

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, totaled billions of 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.  

Hladyr originally joined FIN7 via a front company called Combi Security – a fake cyber security company that had a phony website and no legitimate customers. Hladyr admitted in his plea agreement that he soon realized that, rather than a legitimate company, Combi was part of a criminal enterprise. Hladyr served as FIN7’s systems administrator who, among other things, played a central role in aggregating stolen payment card information, supervising FIN7’s hackers, and maintaining the elaborate network of servers that FIN7 used to attack and control victims’ computers. Hladyr also controlled the organization’s encrypted channels of communication.

This case is the result of an investigation conducted by the Seattle Cyber Task Force of the FBI and the U.S. Department of Justice. 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. German law enforcement authorities provided significant assistance by arresting Hladyr.

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

Seattle – The Washington State Department of Children, Youth and Family Services (DCYF) will pay $300,000 and make sweeping changes to procedures for providing services to families where a parent or child is deaf or hard of hearing, announced Acting U.S. Attorney Tessa M. Gorman of the Western District of Washington and Acting U.S. Attorney Joseph H. Harrington of the Eastern District of Washington.  The settlement follows an investigation of complaints by two Washington State families about DCYF’s Child Welfare Program (CWP). 

“At every step communication is key to the relationship between a family facing challenges and social workers who are trying to protect and serve children,” said Acting U.S. Attorney Gorman.  “It is critical whether in a home assessment, a supervised visit, or a therapeutic service, that a parent who is deaf or hard of hearing be able to understand and communicate with a caseworker.  DCYF has agreed to a path forward that will provide these critical services.”

“No individual should be denied or delayed access to public services because of a disability,” said Acting United States Attorney Joseph H. Harrington for the Eastern District of Washington.  “Services provided by the State of Washington whether through DCYF or other important areas of civic life must comply with the ADA and its effective communication requirements.  The ADA for over thirty years has strengthened our society and this settlement should serve as a stark reminder of why this landmark legislation is so important.”

According to the settlement agreement, DOJ found evidence that on more than 100 occasions between 2017 and 2019, the Child Welfare Program failed to provide appropriate auxiliary aids or services, including qualified sign language interpreters, for the complainant families.  The communications included high stakes interviews during investigations regarding the possible termination of parental rights and during court-ordered treatments and counseling required for reunification with children.

The investigation by the U.S. Attorney’s Offices in both the Western and Eastern Districts of Washington determined that the failure to provide auxiliary aids and services, including qualified interpreters, denied the complainant families equal access to DCYF’s services, programs, and activities.  This failure to provide qualified interpreters in a timely manner, meant that the complainant families were not provided communication that was as effective as the agency’s communications to people without disabilities.  That is the standard set out in the Americans with Disabilities Act.

The investigation concluded that complainant families were frequently unable to participate fully in agency investigations, had unequal access to case resolutions options like mediation, and experienced delays in moving through court-ordered services such as counseling and drug treatment.  DCYF employees also improperly relied on ineffective means of communication such as the use of note-writing for the parents whose primary language was ASL, or the use of family members to interpret instead of qualified interpreters.  There was also evidence that the parents’ status as individuals who are deaf or hard of hearing and their legitimate requests for qualified interpreters resulted in caseworkers having a negative view about the willingness of such parents to cooperate in DCYF’s investigation.

DOJ concluded that the delays and barriers to access to DCYF’s services, including resolution of investigations and visitations with their children, caused significant emotional distress to the complainant parents and their children.  The investigation also reflected that these problems were likely not limited to the complainant parents but reflected a more widespread inability to communicate effectively with families with members who are deaf or hard of hearing.

Under the terms of the settlement DCYF Child Welfare Program must devise and implement, with input by the U.S. Attorney’s Offices, new policies, practices, and procedures on how it will communicate effectively with constituents who have communication disabilities, including individuals who are deaf or hard of hearing.  The new communications policies will follow the ADA requirements and will ensure there are a variety of resources, including appropriate auxiliary aids and services, for caseworkers to use in communicating with families.  The new policy will prohibit the use of interpreters who are family members and children, as required by the ADA. 

The settlement agreement also calls for DCYF to enter or maintain sufficient contractual arrangements across all the counties of Washington State to meet the expected needs for qualified interpreters.  Video remote interpreting may be used following the ADA’s standards and requirements.

The settlement agreement further calls for publicizing the new communications plan, appointing an ADA coordinator, training employees on the new plan and ADA requirements, and keeping a log of when auxiliary aids and services, including interpreter services, are used.  The log will be part of the information provided to the U.S. Attorney’s Offices to ensure DCYF remains in compliance with the settlement agreement.

Under the terms of the settlement, the $300,000 will be divided between the complainants in Western and Eastern Washington.  Some of the money will be held in trust for two of the children whose reunification with their parents was delayed by a repeated lack of interpreters. 

The Department of Children, Youth and Families cooperated fully in the investigation.

The investigation was conducted by Assistant United States Attorney Christina Fogg who serves as the Civil Rights Program Coordinator for the U.S. Attorney’s Office, Western District of Washington, and Assistant United States Attorney Joseph Derrig of the Eastern District of Washington. 

The U.S. Attorney’s Offices (in coordination with the Civil Rights Division of the United States Department of Justice) vigorously enforce federal civil rights laws throughout Washington.  These laws prohibit discrimination, protect the constitutional rights of residents, and affirm equal opportunity for all.  Find more information on our civil rights program here.

Seattle – A former Seattle college soccer star, currently serving a nearly 15-year prison sentence for sexual assault in Arizona and on a second sexual assault case in King County, Washington, was sentenced today in U.S. District Court in Seattle to an additional year and a day in prison for making false statements on a tax return, announced Acting U.S. Attorney Tessa M. Gorman.  During a massive tax fraud scheme, 49-year-old Dion L. Earl purchased the Seattle Impact FC franchise, a professional indoor soccer club.  According to the plea agreement, between 2008 and 2014, EARL used false documents to lie about his income, the amount of tax dollars withheld by employers, and his mortgage deductions so that he could attempt to claim tax refunds of more than $1.6 million.  At today’s sentencing hearing, U.S. District Judge Robert S. Lasnik noted Earl would pay a price by missing critical years with his children, with no way to recapture them. “You’re either there or you’re not,” the judge said.

“This defendant lived a lie in most parts of his life—including his financial life,” said Acting U.S. Attorney Gorman.  “His scheme of phony documents stole more than a million U.S. tax dollars, and another $600,000 from the state of Arizona.  It is appropriate that he serves substantial prison time—nearly 15 years—for the sexual assaults, with the additional year of prison time for the tax fraud.”

In the 1990’s, EARL was a soccer star at Seattle Pacific University.  Between 2008 and 2014, EARL also worked in car sales in Washington State and Arizona and owned Dion Earl’s Total Soccer & Tennis Camps, LLC, d/b/a Total Business Ventures, and the Seattle Impact, FC.  Earl used his association with car dealers, Dion Earl’s Total Soccer & Tennis Camps, and the Seattle Impact to commit tax fraud.

With his guilty plea in January 2021, Earl specifically acknowledged that, on his 2012 Form 1040 tax return, he claimed that (1) he made $1,600,000 working for eight different car dealers, which withheld more than $660,000 of his wages for taxes, and (2) his wife was employed by Dion Earl’s Total Soccer & Tennis Camps, which paid her $240,000 and withheld $51,000 in taxes, and (3) he made $520,000 in mortgage interest payments on four different properties.  All these claims were false.  During 2012, Earl made less than $45,000, from which he did not have any taxes withheld, and he paid limited mortgage interest.  Due to the false claims, Earl obtained a federal tax refund of $414,160. 

Even after the IRS began a civil audit of his taxes in 2013, Earl continued to make false claims and provide false information to the IRS.  For example, Earl admitted that, as late as 2015, he falsely claimed he and his wife made $765,000 from Dion Earl’s Total Soccer & Tennis Camps, LLC, and the Seattle Impact FC, from which the businesses withheld $180,000 in taxes.  In making these false claims, Earl sought a tax refund of $137,554.  That refund was not paid. 

“Tax fraud cheats all honest American taxpayers who are paying their fair share and deprives our communities of crucial resources,” said Acting Special Agent in Charge Steven Slazinik of IRS Criminal Investigation (IRS-CI).  “Today, Mr. Earl was held accountable for his illicit personal gain at the expense of his friends, neighbors, and community.  IRS-CI will continue to protect the integrity of our tax system and in doing so, safeguard the well-being of our communities.”  

In total, Earl sought $1.6 million in fraudulent tax refunds and was paid $1,093,534 by the IRS.  Earl will owe restitution to the U.S. in that amount, as well as more than $600,000 in restitution to the State of Arizona, as a result of fraudulent tax returns he filed with that state.  Earl also agreed to pay Key Bank approximately $100,000 in restitution for submitting false information in 2008 for a home equity line of credit.   

Through tears, Earl told the Court, “I disappointed Seattle and disappointed my family… I just miss my kids.”    

The case was investigated by the Internal Revenue Service Criminal Investigation (IRS-CI) and is being prosecuted by Assistant United States Attorney Arlen Storm.

Seattle –Twenty-one people were arrested today on indictments and criminal complaints charging an extensive drug dealing conspiracy by defendants who often illegally possessed firearms, announced Acting U.S. Attorney Tessa M. Gorman. Law enforcement teams from FBI, DEA, Seattle Police Department, and other public safety organizations executed about 90 search warrants across the Puget Sound region from as far north as Everett and as far south as Spanaway. In addition to 16 of the 19 people named in the indictments, 5 additional defendants were arrested on criminal complaints.  Those arrested will make their initial appearances in U.S. District Court in Seattle and Tacoma over the next few days.

“Too often the intersection of drug dealing and gun possession leads to violence in our communities,” said Acting U.S. Attorney Tessa M. Gorman.  “These defendants enriched themselves by feeding the addictions of the vulnerable and harming community health and safety.  Community safety remains a priority for the Department of Justice.”

Nineteen defendants are charged in 4 related indictments with both drug and gun crimes.  Multiple defendants in today’s takedown have criminal histories that preclude them from legally possessing firearms.  Prior to today’s takedown, 33 firearms were seized from drug traffickers identified in this case.  Today, another 40 firearms were seized by law enforcement.

Those named in the indictments unsealed today include:

Eugene McGee, 54, of Federal Way, Washington

Larry W. Collins, 48, of Seattle, Washington

Johnathan F. Harrington, 43, of Seattle, Washington

Randolph P. Brown, 48 of Federal Way, Washington

Marco Calvert-Majors, 51, of Seattle, Washington

David A. Kelley, 52, of Seattle, Washington

Adam Anderson-Dotson, 41, of Seattle, Washington

Jerrell G. Ingram, 42, of Seattle, Washington

Kefentse Lumumba-Olabisi, 40, of Tacoma, Washington

Kenneth N. Lee, 58, of Tacoma, Washington

Edward Coleman, 65, of Tacoma, Washington

Jimmy J. Carter, 42, of Spanaway, Washington

Kevin L. Gipson, 45, of Seattle, Washington

Curtis G. Snipes, 50, of Tacoma, Washington

Richard D. Lewis, 47, of Seattle, Washington

Yusef H. Parrish, 51, of Seattle, Washington

Terry Cameron, 61, of Federal Way, Washington

Michael L. Hopkins, 51, of Tacoma, Washington

Jamar J. Howard, 48, of Renton, Washington

The defendants are all charged with drug distribution counts involving possession of cocaine and crack cocaine.  Brown, Kelley, Parrish, and Snipes are charged with gun possession crimes, including being a felon in possession of a firearm and/or possession of a firearm in furtherance of a drug trafficking crime.

The 5 defendants arrested on criminal complaints today include:

Craig Jordan, 51, of Seattle

Carlos Daniels, 51, of Bellevue

Devon Evans, 46, of Seattle

Cesar Clemente, 41, of Renton, Washington

Terry Ezell, 54, of Seattle

 

Over the course of the investigation law enforcement seized 33 firearms, over 10 kilos of cocaine, more than 2 pounds of methamphetamine, more than $160,000 in cash, fentanyl pills and a fentanyl pill manufacturing lab.  Today alone, law enforcement seized an additional 40 firearms, nearly $450,000 in cash and nearly 4 pounds of cocaine.

“The arrests today exemplify the collaboration of agencies at all levels with one common goal, the safety of the citizens we've all sworn to protect,” said Donald M. Voiret, FBI Special Agent in Charge of the Seattle Field Office.  “The positive impact made by getting these subjects off the streets should be immediately felt by communities where they held sway for far too long.”

“The Seattle Police Department values its partnerships with federal and local law enforcement agencies because, by working together, we increase the likelihood of arresting violent offenders and taking weapons out of their hands,” said Seattle Police Chief Adrian Diaz.  “Not only are these suspects and their guns off the streets, but so are dangerous narcotics, including fentanyl tablets and the tools to manufacture them.  Our communities have been devastated by a recent rise in fentanyl deaths.  The SPD is certain this joint effort saved lives, and we’re gratified the months of hard work by our officers and partners paid off.”

“Drug trafficking and violence are often intertwined, leaving communities and families devastated,” stated DEA Special Agent in Charge Frank Tarentino.  “This strategic collaborative approach between federal and local law enforcement demonstrates our commitment to not only serve, but also protect the public from these violent criminal networks who terrorize their neighborhoods.”

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

This effort is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation.  OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach.  Additional information about the OCDETF Program can be found at www.justice.gov/OCDETF

The investigation was led by the FBI Safe Streets Task Force with key participation by the Drug Enforcement Administration (DEA), Seattle Police Gang and Narcotics Units, Homeland Security Investigation (HSI), and Internal Revenue Service Criminal Investigation (IRS-CI).

Today’s arrests and searches involved teams from FBI, DEA, Seattle Police Department, HSI, U.S. Marshal Service, Lakewood Police Department SWAT, Tacoma Police Department SWAT, Pierce County Sheriff's Office, North Sound Metro SWAT, Washington State Patrol SWAT, Valley SWAT, Kent Police Department, Renton Police Department, U.S. Postal Inspection Service, WA Liquor & Cannabis Board, Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF), and Narcotics/Currency/Firearms K9 support from Snohomish County Sheriff's Office, U.S. Customs and Border Protection (CBP), Centralia Police Department, Washington State Patrol, Snoqualmie Police Department, Auburn Police Department, Stillaguamish Police Department, Bothell Police Department, Anacortes Police Department, Puyallup Police Department, King County Sheriff's Office, and Tacoma Police Department.

The case is being prosecuted by Assistant United States Attorneys Erin H. Becker and Lyndsie Schmalz.

firearms seized

 

Seattle – Cameron Shea, 25, a leader of the neo-Nazi group Atomwaffen Division, pled guilty earlier today in the United States District Court for the Western District of Washington to federal conspiracy and hate crime charges for threatening journalists and advocates who worked to expose anti-Semitism, announced Acting U.S. Attorney Tessa M. Gorman. 

Shea pled guilty to one count of conspiring to commit three offenses against the United States:  interference with federally-protected activities because of religion, in violation of Title 18, United States Code, Section 245; mailing threatening communications, in violation of Title 18, United States Code, Section 876; and cyberstalking, in violation of Title 18, United States Code, Section 2261A.  He also pled guilty to one count of interfering with a federally protected activity because of religion, in violation of Title 18, United States Code, Section 245.

Shea and three co-defendants were charged with conspiring via an encrypted online chat group to identify journalists and advocates they wanted to threaten in retaliation for the victims’ work exposing anti-Semitism.  The group focused primarily on those who are Jewish or journalists of color.  The group created posters, which featured Nazi symbols, masked figures with guns and Molotov cocktails, and threatening messages, to deliver or mail to the journalists or advocates the group targeted.  Shea messaged the group that he wanted Atomwaffen members in different locations to place posters on their victims’ homes on the same night to catch journalists off guard and accomplish a “show of force.”  The posters were delivered to victims in Tampa, Seattle, and Phoenix.  Shea mailed posters to several victims, including a poster sent to an official at the Anti-Defamation League that depicted a Grim Reaper-like figure wearing a skeleton mask holding a Molotov cocktail outside a residence, with the text “Our Patience Has Its Limits . . . You have been visited by your local Nazis.”  Two of Shea’s co-defendants, Ashley Parker-Dipeppe and Johnny Roman Garza, previously pled guilty to the conspiracy charge and were sentenced.  The fourth co-defendant, Kaleb Cole, pled not guilty and is awaiting trial in September 2021.

Shea will be sentenced on June 28, 2021.  He faces a maximum penalty of 10 years in prison for the hate crime charge and 5 years for the conspiracy charge.

The case is being investigated by the FBI’s Joint Terrorism Task Forces in Tampa, Seattle, Houston, and Phoenix with assistance from the Seattle Police Department.

The case is being prosecuted by Assistant United States Attorney Thomas Woods and Civil Rights Division Trial Attorney Michael J. Songer, with assistance from U.S. Attorneys’ Offices in the Middle District of Florida, Southern District of Texas, District of Arizona, and Central District of California.

Seattle – A 21-year-old Edmonds, Washington, man was sentenced today in U.S. District Court in Seattle to 40 months in prison and 3 years of supervised release, for unlawful possession of destructive devices for his activities at a protest that turned violent in downtown Seattle, announced Acting U.S. Attorney Tessa M. Gorman.  Kelly Thomas Jackson was arrested in September 2020 when he was identified as the person who used Molotov cocktails to burn two Seattle Police vehicles in downtown Seattle on May 30, 2020.  At the sentencing hearing, U.S. District Judge James L. Robart said, “The public’s right to peacefully protest has been repeatedly violated by people doing criminal things.”  Judge Robart noted that throwing a Molotov Cocktail at police cars loaded with gasoline and potentially weapons was very dangerous for those in the area.

"Unlike the vast majority of demonstrators who came to downtown Seattle to protest peacefully against systemic racism, this defendant came armed with Molotov Cocktails - intent on dangerous destruction," said Acting U.S. Attorney Gorman. "The danger to others is captured in pictures from the scene: flames from the burning cars and burning gasoline spread across the sidewalk, pollutant-filled smoke billowing into the crowd.  This isn't free speech - it is criminal conduct deserving of a federal prison sentence."

According to records filed in the case, following a May 30, 2020, demonstration in downtown Seattle, law enforcement had various videos of a white male suspect in distinctive clothing using glass containers with a flammable material and a wick to burn or attempt to burn two police vehicles.  Jackson was identified as that man after an anonymous tip to law enforcement.  An analysis of cell phone records placed Jackson in the area at the time of the fires.  Law enforcement obtained videos that show Jackson traveling into Seattle with at least one of the glass bottles with a wick.  Other videos show Jackson throwing one Molotov cocktail into a police vehicle, then hiding himself in the crowd and jumping up and down with excitement after his crime.  Another video shows the second Molotov cocktail thrown at the windshield of a police vehicle, bouncing off, and exploding in flames on the sidewalk outside the Nordstrom store.  A review of Jackson’s internet activity demonstrated that he accessed web-based information on how to construct Molotov cocktails.

Writing to the Court, prosecutors noted the danger to “hundreds of people who were standing in the vicinity of the police cars that Jackson attacked.  Many of these people were just a few feet away from the vehicles and even closer to the fires Jackson caused on the sidewalks adjacent to the vehicles.  And, all of them were in harm’s way if one of the vehicles had exploded upon detonation of the Molotov cocktails.”

Jackson pleaded guilty to two counts of possession of a destructive device on January 6, 2021.

“While other individuals were expressing their First Amendment-protected rights, Mr. Jackson used this opportunity to destroy property and create chaos,” said Donald M. Voiret, FBI Special Agent in Charge of the Seattle Field Office. “This instigator researched his arsons and, on multiple occasions, endangered the safety of those nearby, as he helped to overshadow peaceful protests and escalate the environment into violence.”

“Jackson clearly planned not to come and peacefully protest, but to come and perpetrate criminal acts,” said ATF Seattle Special Agent in Charge Jonathan T. McPherson.   “We respect everyone’s right to free speech, but free speech does not come in the form of a Molotov cocktail.  His premeditated actions and complete disregard for the safety of those around him warrant this sentence.”

The case was investigated by the FBI and the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF), with assistance from the Seattle Police Department, the Edmonds Police Department, and the Mountlake Terrace Police Department.

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

Seattle – A member of the Tulalip Tribes who engaged in sexual acts with a 14‑year-old child was sentenced today in U.S. District Court in Seattle to 33 months in prison, announced Acting U.S. Attorney Tessa M. Gorman.  Thomas Day, 24, repeatedly violated a no contact order issued by the Tulalip Tribal Court when he pursued sex acts with the 14-year-old.  At the sentencing hearing, Chief U.S. District Court Judge Ricardo S. Martinez said, “he kept up this conduct even after he knew he was under law enforcement investigation.”

According to records filed in the case, between July and August 2019, Day continued to communicate with the 14-year-old a despite court order barring contact.  Day met up with the child and took her to a residence on the Swinomish Tribal Reservation where they engaged in sex acts.  The child was almost ten years younger than Day, and he had been told repeatedly by courts, law enforcement, and family members to leave the teen alone.

Day will be on supervised release for ten years following the prison term and will be required to register as a sex offender.

The case was investigated by the Tulalip Tribal Police, Swinomish Police Department and the FBI.

The case was prosecuted by Assistant United States Attorney Rebecca Cohen.

Seattle – A 32-year-old enrolled member of the Tulalip Tribes was sentenced today in U.S. District Court in Seattle to 3 years in prison for sexual abuse of a minor, announced Acting U.S. Attorney Tessa M. Gorman.  Brandon Charles Hatch was 30 years old in 2018, when he sexually abused a 14-year-old female tribal member.  Judge John C. Coughenour ordered Hatch to be on supervised release for 5 years following prison and to register as a sex offender.

At the sentencing hearing, the minor’s guardian spoke eloquently about how Hatch’s actions harmed a member of the next generation of his Tribal community.  The guardian directed her comments to Hatch stating, “You groomed, seduced, and sexualized a child and created a chaos that will take years, a lifetime to undo…took one of your own people, our Indigenous girls after you were told to stop and used her for your own sexual gratification.” 

According to records filed in the case, between March and November 2018, Hatch sexually abused the female teen, who was just 14 years old.  Hatch knew the teen’s age and lured her with heroin and meth to continue to have access to her.  He was confronted by his mother and others about the abuse, and he ignored them.  Hatch was arrested in May 2019.  He pleaded guilty in December 2020.

Hatch is prohibited from having contact with the victim or other children during the period of supervised release.

The case was investigated by the FBI and the Tulalip Police Department.

The case was prosecuted by Assistant United States Attorneys Ye-Ting Woo and Chantelle Dial.

Tacoma – A Portland, Oregon, resident was sentenced today in U.S. District Court in Tacoma to 20 months in prison and 3 years of supervised release for being a felon in possession of a firearm and possession of heroin and oxycodone with intent to distribute, announced Acting U.S. Attorney Tessa M. Gorman.  HUSHAM ZEYAD AL-ANI, 31, was arrested in October 2019, following an undercover law enforcement operation where AL-ANI, who goes by the name “Ash,” purchased two assault rifles from an undercover agent.  At the sentencing hearing, U.S. District Judge Robert J. Bryan said, “You’ve gotten into a lot of trouble and committed a lot of crimes.”

According to records filed in the case, AL-ANI has felony convictions in Washington (possession of heroin with intent to deliver and illegal firearm possession–2014) and Oregon (burglary–2017) which prohibit him from possessing firearms.  Nevertheless, in the fall of 2019, law enforcement got word that AL-ANI was attempting to purchase firearms.  An undercover agent with the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) posed as a gun seller offering firearms for sale.  AL-ANI arrived at the meet location in a parking lot in Vancouver and inspected two AK-47-type assault rifles.  AL-ANI paid the agent and took possession of the guns, whereupon he was immediately arrested by Vancouver Police and ATF agents. 

Following the arrest, law enforcement discovered AL-ANI had a 9mm Glock-style unserialized, privately made polymer pistol stowed in his car, and had heroin, a small amount of methamphetamine, and oxycodone pills in his possession.

AL-ANI pleaded guilty in November 2020.

The case was investigated by the ATF and the Vancouver Police Department.

The case was prosecuted by Assistant United States Attorney Gregory A. Gruber.

Seattle – A prolific Swiss computer hacker, TILL KOTTMANN, 21, was indicted today by a grand jury in the Western District of Washington for computer intrusion and identity and data theft activities spanning 2019 to the present.  KOTTMANN, aka “deletescape” and “tillie crimew,” who initially was charged in September 2020, remains in Lucerne, Switzerland, and has received notice of pending U.S. charges.

“Stealing credentials and data, and publishing source code and proprietary and sensitive information on the web is not protected speech–it is theft and fraud,” said Acting U.S. Attorney Tessa M. Gorman.  “These actions can increase vulnerabilities for everyone from large corporations to individual consumers.  Wrapping oneself in an allegedly altruistic motive does not remove the criminal stench from such intrusion, theft, and fraud.”

According to the indictment, since 2019, KOTTMANN and coconspirators have hacked dozens of companies and government entities and posted the private victim data of more than 100 entities on the web. 

Specifically, the indictment alleges that KOTTMANN used a variety of hacking techniques and predominantly targeted “git” and other source code repositories belonging to private companies and public sector entities.  KOTTMANN cloned the source code, files, and other confidential and proprietary information, which at times included hard-coded administrative credentials, access keys, and other means of further system or network access.  KOTTMANN then used such means of access to further infiltrate the internal infrastructure of victims and copy additional files, records, and information.

KOTTMANN then published, or “leaked,” victim data obtained through the actors’ and others’ hacking conduct.  The FBI recently seized a website domain operated by KOTTMANN and used by KOTTMANN’s group to publish hacked data.  In order to recruit others, grow the scheme, and further promote the hacking activity and KOTTMANN’s own reputation in the hacking community, KOTTMANN actively communicated with journalists and over social media about computer intrusions and data theft.

The indictment alleges various examples of hacks KOTTMANN committed.  For instance, in February 2020, KOTTMANN illegally accessed computers belonging to a security device manufacturer located in the Western District of Washington and stole proprietary data.  Likewise, in April 2020, KOTTMANN victimized the manufacturer of tactical equipment.  In the latter instance, KOTTMANN improperly used the credentials of an employee to access illegally the manufacturer’s source code databases.  In August, KOTTMANN hacked a Washington state agency and a U.S. government contractor and stole source code related to various web applications.  And, more recently, in January 2021, KOTTMANN similarly conducted cyberattacks on an automobile manufacturer and a financial investment company.  KOTTMANN published data stolen through these hacks, among many others, on KOTTMANN’s website and used social media to promote the hacking activity and the theft and release of proprietary information. 

On Friday, March 12, 2021, authorities in Switzerland executed search warrants related to the criminal activity.

“A cyber-criminal could be anywhere in the world.  Thanks to our foreign partnerships, international borders won't provide a haven for their illegal activities,” said Donald Voiret, FBI Special Agent in Charge, Seattle.  “This indictment demonstrates the FBI’s commitment to working with our partners around the globe to disrupt and dismantle criminal enterprises that target Americans and their businesses.”

Conspiracy to commit computer fraud and abuse is punishable by up to 5 years in prison.  Wire fraud and conspiracy to commit wire fraud are punishable by up to 20 years in prison.  Aggravated identity theft is punishable by a mandatory minimum 24 months in prison to run consecutive to any sentence imposed on other counts of conviction.

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

The case is being investigated by the FBI Seattle Cyber Task Force.  The case is being prosecuted by Assistant United States Attorneys Steven Masada and Jehiel Baer with assistance from DOJ’s Office of International Affairs (OIA), as well as Canton of Luzerne Police, the Canton of Luzerne Prosecutor's Office, and the Swiss Federal Office of Justice. 

kottmann_indictment_filed.pdf

Seattle – A Seattle man employed as a cyber security consultant was indicted today by a federal grand jury for conspiracy to engage in cyberstalking, three counts of cyberstalking in violation of criminal order,  and two counts of cyberstalking, announced Acting U.S. Attorney Tessa M. Gorman.  SUMIT GARG, 31, was transferred to federal custody last week and was ordered detained at the Federal Detention Center at SeaTac on March 15, 2021.  GARG will be arraigned on the indictment Thursday March 25, 2021.

According to a detailed criminal complaint and the indictment in the case, GARG has been involved in an extensive campaign of threats and sexually explicit messaging and posts about a woman who used to share an apartment with GARG’s spouse.  Using personal information GARG accessed after he moved into the apartment with his spouse, GARG has threatened and tormented the former roommate in violation of court order.  GARG allegedly also used his computer skills to threaten multiple people in the former roommate’s life, including her uncle who represented her in obtaining a civil protection order; her current boyfriend; the Seattle Police Detective who investigated the threats; and even the Deputy Prosecuting Attorney who filed charges against GARG for his illegal stalking conduct.  GARG used his computer skills to try to hide who was sending the threats or making the posts.  At one point in his scheme, GARG was videotaped in the lobby of the victim’s new apartment building at the same time photos were taken and sent of that location to frighten the victim.

Conspiracy to engage in cyberstalking is punishable by up to five years in prison.  Cyberstalking in violation of criminal order is punishable by a mandatory minimum of one year and a maximum of five years in prison.  Cyberstalking is punishable by up to five years in prison.

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

The case is being investigated by the United States Secret Service with assistance from the Seattle Police Department.

The case is being prosecuted by Assistant United States Attorney Francis Franze-Nakamura.

garg_indictment.pdf

Seattle – A Washington tech executive pleaded guilty today to wire fraud and money laundering in connection with his scheme to obtain over $5.5 million in Paycheck Protection Program (PPP) loans and laundering the proceeds, announced Acting U.S. Attorney Tessa M. Gorman for the Western District of Washington.

Mukund Mohan, 48, of Clyde Hill, Washington, was charged in July 2020.  He is scheduled for sentencing in front of U.S. District Judge John C. Coughenour on July 20, 2021.

According to the plea agreement and other records filed in the case, Mohan submitted at least eight fraudulent PPP loan applications on behalf of six different companies to federally insured financial institutions.  In support of the fraudulent loan applications, Mohan made numerous false and misleading statements about the companies’ respective business operations and payroll expenses. 

In support of the fraudulent loan applications, Mohan submitted fake and altered documents, including fake federal tax filings and altered incorporation documents.  For example, Mohan misrepresented to a lender that, in 2019, his company Mahenjo Inc., had dozens of employees and paid millions of dollars in employee wages and payroll taxes.  In support of Mahenjo’s loan application, Mohan submitted incorporation documents showing that he incorporated the company in 2018 and filed federal unemployment tax forms for 2019.  In truth, Mohan purchased Mahenjo on the Internet in May 2020 and, at the time he purchased the company, it had no employees and no business activity.  The incorporation documents he submitted to the lender were altered and the federal tax filings he submitted were fake.

Quick action by federal law enforcement resulted in the seizure of all but just over $16,000 of federal loan funds from Mohan’s accounts. 

Under the terms of the plea agreement, prosecutors will recommend the low end of the federal sentencing guidelines range.  Both prosecution and defense will recommend that Mohan pay a $100,000 fine in addition to his restitution obligation.

Wire fraud is punishable by up to 20 years in prison.  Money laundering is punishable by up to 10 years in prison.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act is a federal law designed to provide emergency financial assistance to millions of Americans who are suffering the economic effects resulting from the COVID-19 pandemic.

This case was investigated by the Federal Housing Finance Agency – Office of Inspector General, IRS-Criminal Investigation, the U.S. Treasury Inspector General for Tax Administration, and the Federal Deposit Insurance Corporation – Office of Inspector General.  Trial Attorney Christopher Fenton of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Andrew Friedman of the Western District of Washington are prosecuting the case.

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 Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

A Washington man pleaded guilty today to wire fraud and money laundering in connection with his scheme to obtain over $5.5 million in Paycheck Protection Program (PPP) loans and laundering the proceeds.

Mukund Mohan, 48, of Clyde Hill, was charged in July 2020. According to the plea agreement and other records filed in the case, Mohan submitted at least eight fraudulent PPP loan applications on behalf of six different companies to federally insured financial institutions. In support of the fraudulent loan applications, Mohan made numerous false and misleading statements about the companies’ respective business operations and payroll expenses. 

In support of the fraudulent loan applications, Mohan submitted fake and altered documents, including fake federal tax filings and altered incorporation documents. For example, Mohan misrepresented to a lender that, in 2019, his company Mahenjo Inc. had dozens of employees and paid millions of dollars in employee wages and payroll taxes. In support of Mahenjo’s loan application, Mohan submitted incorporation documents showing that he incorporated the company in 2018 and filed federal unemployment tax forms for 2019. In truth, Mohan purchased Mahenjo on the Internet in May 2020 and, at time he purchased the company, it had no employees and no business activity. The incorporation documents he submitted to the lender were altered and the federal tax filings he submitted were fake.

Quick action by federal law enforcement resulted in the seizure of nearly all of the federal loan funds from Mohan’s accounts. Mohan is scheduled to be sentenced on July 20 and faces a maximum 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.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act is a federal law enacted on March 29, 2020, designed to provide emergency financial assistance to the millions of Americans who are suffering the economic effects caused by the COVID-19 pandemic. One source of relief provided by the CARES Act was the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses through the PPP. In April 2020, Congress authorized over $300 billion in additional PPP funding.

The PPP allows qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of 1%. Businesses must use PPP loan proceeds for payroll costs, interest on mortgages, rent, and utilities. The PPP allows the interest and principal to be forgiven if businesses spend the proceeds on these expenses within a set time period and use at least a certain percentage of the loan towards payroll expenses.

Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division and Acting U.S. Attorney Tessa M. Gorman of the U.S. Attorney’s Office for the Western District of Washington made the announcement.

The Federal Housing Finance Agency – Office of Inspector General, IRS-Criminal Investigation, U.S. Treasury Inspector General for Tax Administration, and Federal Deposit Insurance Corporation – Office of Inspector General are investigating the case. 

Trial Attorney Christopher Fenton of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Andrew Friedman of the Western District of Washington are prosecuting the case.

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 Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

Seattle –Acting U.S. Attorney Tessa M. Gorman and FBI Special Agent in Charge Donald M. Voiret today highlighted the federal role in countering hate crimes and bias acts—especially those targeting Asian Americans and Pacific Islanders.

“Currently federal prosecutors and the FBI are reviewing two cases involving assaults on our Asian-American neighbors that have been charged by the King County Prosecuting Attorney’s Office,” said Acting U.S. Attorney Tessa Gorman.  “These crimes, and other acts of hate and bias, have no place in our community.  I urge members of our community to report hate-based crimes to either local or federal law enforcement and to contact our office’s civil rights line with information about discrimination in areas like housing, employment, education, or public accommodations.”

The FBI and U.S. Attorney’s Office review information about potential hate crimes from members in the community and also provide assistance to local, state, and tribal law enforcement with investigations of hate crimes.  Office personnel have been reaching out to community groups to explain the federal role and encourage reports to local and/or federal law enforcement.

“The FBI is tasked with enforcing criminal civil rights in the U.S. and may initiate hate crime investigations when credible allegations exist of a federal statue violation,” said Donald M. Voiret, FBI Special Agent in Charge of the Seattle Field Office. “Especially during the COVID-19 pandemic, we want to emphasize that a criminal act against Asians, because of their ethnicity or national origin, is a hate crime. The FBI will use all authority under federal law to investigate and bring the offenders to justice.”

 

The most recent statistics on hate crimes are available here 2019 Hate Crime Statistics from the FBI’s Uniform Crime Report.

Additional resources regarding hate crimes and bias incidents are here:

https://civilrights.justice.gov/#your-rights

https://www.fbi.gov/investigate/civil-rights/hate-crimes#FBI-Resources

For information about contacting the U.S. Attorney’s Office in the Western

District of Washington visit: www.justice.gov/usao-wdwa/civil-rightsThe FBI’s Washington office can be reached at 206-622-0460, or submit a tip online at: https://tips.fbi.gov/.

Seattle – A 44-year-old Inglewood, California, man pleaded guilty today in U.S. District Court in Seattle to an email compromise scheme that stole more than $3.3 million from a boat-building company, announced Acting U.S. Attorney Tessa M. Gorman.  LESLIE REDD III, pleaded guilty to conspiracy to commit wire fraud and wire fraud.  He is scheduled for sentencing before Chief U.S. District Judge Ricardo S. Martinez on June 25, 2021.

According to records filed in the case, including the plea agreement, in October 2018, REDD entered a scheme with a co-conspirator in Pennsylvania and others.  The scheme began when a malicious link was sent to an email address of an employee at the engine-building company.  The link allowed the conspirators to gain access to the company’s email system and review various emails such as invoices.  The conspirators then posed as a billing executive at the engine manufacturing company and sent the boat-building company instructions to wire the payment funds to a specific bank account.  The conspirators had set up a fake company and the account at a Pennsylvania bank specifically to receive these funds.  The false emails indicated the engine-building company’s usual bank account was undergoing an audit and said that the engine-building company therefore needed to use a different bank than it had previously. 

On October 29, 2018, the boat builder paid the invoice for $3,316,730 by wiring the funds as directed by the fraudulent emails.  The co-conspirator in Pennsylvania quickly forwarded $3,074,500 to bank accounts controlled by REDD and other co-conspirators.  Of the ill-gotten funds, REDD kept $857,350 in accounts he controlled.  Investigators were able to seize $420,817 from those accounts.

As part of his plea agreement REDD has agreed to forfeit the money in his bank account and make restitution in an amount to be agreed upon at sentencing.  Both wire fraud and conspiracy to commit wire fraud are punishable by up to 20 years in prison.

The case is being investigated by the FBI Seattle Office Cyber Task Force.

The case is being prosecuted by Assistant United States Attorney Andrew Friedman.

Seattle – A man originally from Georgia pleaded guilty today in U.S. District Court in Seattle to arson and possession of a stolen firearm for his conduct during civil unrest on May 30, 2020, announced Acting U.S. Attorney Tessa M. Gorman.  TYRE WAYNE MEANS, JR., 25, faces a mandatory minimum 5 years in prison and up to 20 years in prison when he is sentenced by U.S. District Judge Richard A. Jones on June 11, 2021.

According to records filed in the case, just after 4 p.m. on May 30, 2020, MEANS, JR., was captured on video lighting a paper towel and placing it in the back of a Seattle Police patrol car parked outside of Nordstrom on Sixth Avenue in downtown.  Other persons in the crowd fed the fire with lighter fluid and other accelerants, and the vehicle was destroyed by fire.  After he lit one patrol car on fire, MEANS, JR., is observed on video reaching through the destroyed rear window of a different patrol car and removing a rifle bag.  MEANS, JR., opened the bag and looked inside.  MEANS, JR., is seen fighting with an unidentified man who tried to retrieve the rifle bag before MEANS, JR., ran from the scene.  A subsequent surveillance video on Pine Street, around the corner from where the rifle was stolen, shows MEANS, JR., in a fight with another man.  While MEANS, JR., and the man are throwing punches, an unidentified man picks up the rifle bag and ultimately walks away.  Later that day, the rifle was anonymously returned to the Seattle Police West Precinct.

MEANS, JR., was identified as the suspect in the video by his distinctive clothing, jewelry, tattoos, and association with a female who also had distinctive tattoos and a significant social media presence.  MEANS, JR., was arrested in Bremerton, Washington, where he was meeting with his Washington State Department of Corrections probation officer.

MEANS, JR., is prohibited from possessing firearms due to two felony convictions in the state of Georgia: serious injury by vehicle and obstructing law enforcement by use of threats or violence.  In Washington, MEANS, JR., has a felony conviction for domestic violence that includes a no-contact order–that order also prohibits him from possessing firearms.

Arson is punishable by a mandatory minimum 5 years in prison and up to 20 years in prison.  Possession of a stolen firearm is punishable by up to 10 years in prison.  Both the prosecution and defense will recommend a 5-year prison term; however, the ultimate sentence is up to Judge Jones after considering the sentencing guidelines and other factors.

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

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

Seattle – Heart Center Research, LLC, a Huntsville, Alabama, medical research company, entered into a settlement with the U.S. Department of Justice to resolve allegations that its member physicians referred patients for genetic testing in exchange for kickbacks from a Seattle-area testing company, announced Acting U.S. Attorney Tessa M. Gorman.  Heart Center Research has agreed to pay a total of $1.1 million to resolve the allegations. 

According to the settlement agreement, between 2012 and 2013, the company was alleged to have accepted payments from now-defunct testing company Natural Molecular Testing Corporation (NMTC) in return for the company’s member physicians ordering genetic tests from NMTC, which NMTC then billed to Medicare.  The scheme was alleged to be in violation of the Anti-Kickback Statute and the civil False Claims Act.

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

In August 2019, three doctors and one medical practice entered into settlements with the U.S. Department of Justice to resolve allegations that they referred patients for genetic testing in exchange for kickbacks from NMTC.  Those settlements totaled $1.1 million.

NMTC declared bankruptcy in 2013.  The Centers for Medicare and Medicaid Services has an unsecured claim against NMTC for $70 million but has little chance of recovering those funds as there are few remaining assets.

The matter was investigated by the Department of Health and Human Services Office of Inspector General (HHS-OIG).  The settlement was negotiated by Assistant United States Attorney Ashley Burns.

Tacoma - A former guard at the Green Hill School, a juvenile rehabilitation facility in Chehalis, Washington, was indicted late Wednesday by a federal grand jury for taking bribes in exchange for delivering contraband, including illegal drugs, into the secure facility.  JULIO W. HAYES, 40, was terminated as a staffer in February 2020 following an FBI operation that uncovered HAYES was accepting bribes and smuggling drugs and other contraband.  HAYES will be arraigned on the indictment on March 16, 2021.

“This illegal conduct at a juvenile facility sends exactly the wrong message to young people trying to rehabilitate,” said Acting U.S. Attorney Tessa M. Gorman.  “This defendant demonstrated that for a price, he would defeat the restrictions at Green Hill School—restrictions that are aimed at maintaining safety, as well as helping youth return to a productive path.  This case should serve as a warning to others tempted to trade their ethics for financial gain.”

According to the indictment, HAYES began working as a guard at Green Hill School in November 2018.  Despite the fact that HAYES had significant training regarding his ethical obligations as an employee of the Department of Children, Youth and Families (which operates Green Hill School), HAYES began accepting bribes from offenders or their family and friends in May 2019 for smuggling marijuana, iPhones, vape pens, and chewing tobacco into the facility.  HAYES was paid in cash and via electronic payments such as Cash App and accepted more than $11,000 before his employment was terminated in February 2020.

The indictment describes various text messages and electronic payments where HAYES essentially took orders from offenders as to the types of contraband they wanted him to bring to the facility.  HAYES and the offenders would set the pricing and payment amounts for his services.  On February 25, 2020, law enforcement conducted a traffic stop on HAYES on his way to work.  In his possession, HAYES had marijuana packaged for smuggling into the facility, as well as three vape cartridges containing liquid marijuana.

HAYES is charged with seven counts of Hobbs Act Extortion Under Color of Official Right, punishable by up to 20 years in prison.  He is also charged with conspiracy to distribute controlled substances and possession of controlled substances with intent to distribute.  Those charges are also punishable by up to 20 years in prison.

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

The case is being investigated by the FBI with assistance from the Chehalis Police Department and the Joint Narcotics Enforcement Team (JNET) in Lewis County.

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

hayes_indictment.pdf

Seattle – The U.S. Department of Justice today appointed Tessa M. Gorman as Acting U.S. Attorney for the Western District of Washington.  Ms. Gorman is a 24‑year veteran of the Department of Justice, having served in high-profile leadership roles for both the U. S. Attorney’s Office and the Federal Bar Association.  Acting U.S. Attorney Gorman takes over from Brian T. Moran who resigned the post February 28, 2021, as is traditional with the change in administration.

As First Assistant United States Attorney, Tessa Gorman provided guidance to the Civil, Criminal, and Appellate Divisions of the United States Attorney’s Office.  She is involved in the ongoing supervision of the Seattle Police Department Consent Decree and other civil rights litigation.  Ms. Gorman has supervised some of the most high profile cases in the office, such as the prosecution of Huawei for theft of trade secrets, cybercrime cases such as the hack on Capital One, and the investigation and civil settlement with Bradken Inc., over metal it supplied to Navy submarines.  Gorman supervised cases involving pain clinics belonging to a Seattle doctor who defrauded the government and the criminal prosecution of an environmental disposal firm that was committing fraud by falsely claiming it met environmental protection standards.

Earlier in her career, Ms. Gorman prosecuted a wide variety of cases from violent crime to complex frauds.  In 2008, Ms. Gorman and the trial team were honored with a Director’s Award for the successful prosecution of the Washington Nomads chapter of the Hells Angels Motorcycle Club as a racketeering-influenced criminal organization (RICO).  The gang was convicted for crimes including murder and assault, and the verdicts represented the first RICO jury verdicts against the Hells Angels in twenty-five years.

As an Assistant United States Attorney, Ms. Gorman also prosecuted complex fraud cases, including a $30 million Ponzi scheme and a bank fraud case that grew out of the failure of a south sound bank, as well as homicides and sexual assaults in Indian Country.  Ms. Gorman began her career with the Department of Justice in 1998 as part of the highly selective Honors Program in Washington, D.C.  In 2001, she was hired by the U.S. Attorney’s Office, Western District of Washington.

Ms. Gorman has been active in the Federal Bar Association in Western Washington, serving in leadership roles and as President in 2015-16.  In 2015, the District Court Judges in Western Washington chose Ms. Gorman to serve a three‑year term as a District Court Lawyer Representative to the Ninth Circuit.  Ms. Gorman has taught Trial Advocacy at the University of Washington School of Law and has served as a professional mentor for students at both University of Washington and Seattle University Schools of Law.

Tessa M. Gorman grew up in Olympia, Washington and is a graduate of Yale College.  She earned her law degree at University of California’s Berkeley Law School.

Tacoma – A 27-year-old Bremerton, Washington, man is now charged federally for possessing Molotov cocktails–unregistered destructive devices–following a traffic stop last December, announced U.S. Attorney Brian T. Moran.  DEVAN LEE KLUGE was stopped by Bremerton Police the evening of December 24, 2020, due to an outstanding warrant.  The Molotov cocktails were found in KLUGE’s vehicle’s trunk.  KLUGE has been in state custody since his arrest.  He will make his initial appearance on the federal charge tomorrow (2/25) at 2:30 p.m. in U.S. District Court in Tacoma.

According to records filed in the case, a Bremerton Police Department officer recognized KLUGE as someone being sought on an escape warrant from the Washington State Department of Corrections.  KLUGE was removed from his car, and he gave permission for officers to search the vehicle.  Inside, officers found three glass jars containing diesel fuel with apparent cloth wicks—devices commonly referred to as “Molotov cocktails,” which are destructive devices under federal law.  In addition to those destructive devices, law enforcement found brass knuckles, a crowbar, bolt cutters, a sledgehammer, walkie-talkie radios, and white plastic full-face masks.

Possession of an unregistered destructive device is punishable by up to ten 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 Bremerton Police Department with assistance from the FBI and the Bureau of Alcohol, Tobacco, Firearms & Explosives.

The case is being prosecuted by Assistant United States Attorney Will Dreher.

kluge_complaint.pdf

Seattle –Three people were arrested on an indictment today charging a conspiracy to distribute fentanyl in Whatcom County, Washington, announced U.S. Attorney Brian T. Moran.  The defendants will make their initial appearance at 2:00 today and tomorrow in U.S. District Court in Seattle.

“This undercover investigation revealed these defendants were responsible for the distribution of thousands of pills tainted with potentially deadly fentanyl,” said U.S. Attorney Brian T. Moran.  “A recent analysis by the King County Medical Examiner’s Office showed a significant drop in overdose deaths following large law enforcement seizures in federal drug cases.  I am pleased our federal partners worked closely with Whatcom County law enforcement and other local authorities to reduce the flow of dangerous pills into our communities.”

“Saving lives is a priority of the Drug Enforcement Administration,” said DEA Special Agent in Charge Frank Tarentino. “Today’s enforcement action illustrates the commitment and sense of urgency the men and women of DEA routinely demonstrate as they carry out their mission of enforcing the federal narcotic laws of the United States.   We must continue to focus our valuable resources and leverage our much needed and well established partnerships with the United States Attorney’s Office and local, state, county and federal law enforcement agencies to stem the tide of the systemic and widespread abuse of opioids in our communities.”

All three men named in the indictment are charged with conspiracy to distribute fentanyl.  Each is charged with other specific distribution counts as well between September 2020 and January 2021.

JAIME HERNANDEZ HERNANDEZ, 21, of Ferndale, Washington, is charged with three additional counts of fentanyl distribution.

GORGE ORTIZ, 23, of Lynden, Washington, is charged with three additional counts of fentanyl distribution.

STANLEY STUBBS, 51, of Bellingham, Washington, is charged with possession of fentanyl with intent to distribute and being a felon in possession of a firearm.

Today, eight search warrants were executed, and law enforcement seized more than 5,000 fentanyl pills.  Over the course of the investigation law enforcement has seized thousands of fentanyl pills and pound quantities of heroin and methamphetamine.

Due to the amount of fentanyl involved in this case, all three men face mandatory minimum ten-year sentences if convicted.

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

This effort is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation.  OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach.  Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.

The investigation was conducted by the U.S. Drug Enforcement Administration (DEA) HIDTA Bellingham Residence Office, which is comprised of DEA, the Whatcom County Sheriff’s Office, Washington State Patrol, Homeland Security Investigations, and U.S Customs and Border Protection.  In addition, these law enforcement agencies assisted with the arrests and search warrants executed today:  Whatcom County SWAT, Washington State Patrol SWAT, Homeland Security Special Response Team, Skagit County Interlocal Drug Enforcement Unit, Ferndale and Lynden Police Departments.

The case is being prosecuted by Assistant United States Attorney Stephen Hobbs.

 

Seattle - A 63-year-old Renton, Washington, man was sentenced today in U.S. District Court in Seattle to three years of probation, including six months of home detention with electronic monitoring, and 40 hours of  community service for lying to federal agents about a fraud scheme carried out by a former Drainage District Commissioner and his wife, announced U.S. Attorney Brian T. Moran.  In September 2020, DARRELL N. WINSTON pleaded guilty to making a false statement.  At the sentencing hearing, U.S. District Judge Richard A. Jones told him he had not shown respect for the law, saying “on these occasions to break the chain of multiple lies, you chose not to do so.” 

According to records filed in the case, WINSTON repeatedly misled FBI agents about his agreement with and work for former Drainage District Commissioner Allan Thomas and his wife.  WINSTON operated a business called City Biz and originally told agents he had submitted a bid and been hired by Thomas to clean some of the drainage ditches in the district.  In fact, WINSTON and his company did little or no work but were paid more than $50,000 by King County based on fake invoices.  WINSTON paid most of the money back to Allan Thomas and his wife, and the two used the money for their own benefit.  WINSTON lied to investigators on multiple occasions.

WINSTON has agreed to pay $12,958 in restitution to victims of the crime.  The amount is the total he received as part of the fraud scheme.

Last summer, the grand jury returned a superseding indictment against Allan B. Thomas and Joann E. Thomas charging them with 15 federal crimes, including conspiracy, mail fraud, wire fraud, money laundering, and aggravated identity theft in connection with their six-year scheme to divert more than $400,000 in local tax dollars to their own use.

Allan B. Thomas served as Commissioner for Drainage District 5 in King County for more than 30 years.  As a Commissioner, Thomas was involved in estimating the costs of drainage maintenance for the district so that the county auditor could set and assess the appropriate taxes.  The Commissioners then authorized payment to service providers who were supposed to do maintenance work on the drainage system.

As early as 2012, Joann E. Thomas set up a joint bank account with Allan Thomas’ son from a previous marriage.  The account was a business account for a company called A C Services.  Over the next six years, Allan Thomas had $413,323 of local tax dollars paid to A C Services claiming it was for drainage ditch maintenance.  However, financial records indicate that over the six years, shortly after the tax dollars were deposited into the A C Services account, the money was quickly transferred to other accounts belonging to the Thomases, or was used to pay their expenses for such things as hay, mortgage payments, or property taxes.  More than $70,000 was withdrawn as cash.

In 2018, after the couple became aware of an investigation into their conduct, they began funneling the tax dollars through WINSTON’s company, City Biz.

In all, the indictment alleges the Thomases defrauded taxpayers of $468,165.

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

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

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

Tacoma - A former Tacoma resident, who was residing in South Bend, Indiana, at the time of his arrest, was sentenced today in U.S. District Court in Tacoma to 15 years in federal prison for production of child pornography, announced U.S. Attorney Brian T. Moran.  SAMUEL PHILLIPS, 27, must register as a sex offender upon release from prison and will be supervised by federal probation for 25 years.  At the sentencing hearing, U.S. District Judge Benjamin Settle said, “This involves the abuse of those who are the most vulnerable – young children…. A young child has been given a life sentence of this trauma.”

PHILLIPS pleaded guilty in September 2020.  In March 2018, PHILLIPS was residing in a Tacoma apartment with a 5-year-old child, when he made video recordings of the sexual abuse.  PHILLIPS relocated to Indiana in early 2019.  His spouse discovered the videos on his phone.  PHILLIPS was arrested by South Bend Police, who alerted the Tacoma Police Department.  PHILLIPS was charged federally with production of child pornography on April 30, 2019.  Charges in state court for sexual abuse of the child are pending.

This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice.  Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims.  For more information about Project Safe Childhood, please visit www.justice.gov/psc.

The case was investigated by the Tacoma Police Department and FBI, with assistance from the South Bend, Indiana, Police Department.

The case was prosecuted by Assistant United States Attorneys Angelica Williams and Matt Hampton.

Seattle – A 37-year-old SeaTac, Washington, man pleaded guilty today in U.S. District Court in Seattle to four federal felonies related to child sexual abuse, announced U.S. Attorney Brian T. Moran.  BRANDAN L. WILKINS pleaded guilty 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.  WILKINS faces a mandatory minimum 10 years in prison and up to 30 years in prison when sentenced by U.S. District Judge John C. Coughenour on May 18, 2021.

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.  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 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 was employed as a TSA agent at Sea-Tac airport.  He has been in custody since his arrest in December 2018.

Enticement of a minor carries a mandatory minimum ten years in prison.  Traveling to engage in illegal sexual conduct is punishable by up to 30 years in prison.  Possession of child pornography is punishable by up to 20 years in prison.  Receipt of child pornography is punishable by a mandatory minimum 5 years in prison and up to 20 years in prison.

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 is being 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.

Seattle – A 52-year-old Everett, Washington, man was sentenced today in U.S. District Court in Seattle to four years in prison and four years of supervised release, announced U.S. Attorney Brian T. Moran.  TODD A. PETERMAN-DISHION pleaded guilty in December 2019 to conspiracy to distribute controlled substances.  At the sentencing hearing, U.S. District Judge Robert S. Lasnik noted the overdose deaths across the country, saying the defendant “didn’t know what happened when he shipped drugs via mail… he didn’t know if the customer was 16 or 14.”

“This defendant was busily sending packages of powerful and deadly drugs out into our communities as often as twice a day,” said U.S. Attorney Moran.  “He posted on the dark web that his drugs were powerful and potentially deadly, but even with that knowledge he had no hesitation sending them to addicts he knew only by their screen name and address.”

According to records filed in the case, the investigation revealed that in 2018, and until June 2019, PETERMAN-DISHION was shipping heroin and methamphetamine to customers across the country.  PETERMAN-DISHION posted on the dark web about the drugs he had for sale: black tar heroin and crystal methamphetamine.  He posted about the drugs’ purity and noted they were “not for beginners.”  He made more than 1,650 drug sales.

When law enforcement executed a Court-authorized search warrant at the long‑stay hotel where PETERMAN-DISHION and his wife were living, they found heroin that was intended for sale to his dark web customers.

The case was investigated by the U.S. Postal Inspection Service and the FBI.

The case was prosecuted by Assistant United States Attorney Thomas Woods.

Seattle – U.S. Attorney Brian T. Moran today announced that he will leave his post as U.S. Attorney on February 28, 2021.  Mr. Moran plans to return to the private practice of law.  

Today the Department of Justice asked each presidentially appointed U.S. Attorney to resign by February 28, 2021.  DOJ will name an interim U.S. Attorney to serve until a new presidentially appointed U.S. Attorney is confirmed by the U.S. Senate.

U.S. Attorney Moran was confirmed by the U.S. Senate as U.S. Attorney and was sworn into office on January 17, 2019.  Mr. Moran led the office during a particularly tumultuous two years, taking office during the longest-ever government shutdown and steering the office during an unprecedented global pandemic.

In his resignation statement, Mr. Moran said, “I want to thank Senators Murray and Cantwell for supporting my nomination during the confirmation process.  It has been my experience as U.S Attorney that, regardless of how and from where we approached it, local, state, and federal officials in the Western District of Washington have and will continue to find common ground on public safety and advancing the cause of justice.  

Above all, I owe a tremendous debt of gratitude to the men and women of the United States Attorney’s Office and the federal law enforcement community.  I remain inspired by their dedication to the people they serve, and I am deeply humbled to have been their colleague.”    

Chief U.S. District Judge Ricardo S. Martinez commended the working relationship he forged with the U.S. Attorney saying, “Brian Moran was a superb United States Attorney in the Western District of Washington who continued the great tradition we have always enjoyed of having professional, non-partisan prosecutors as our U.S. Attorneys.”

During his time as U.S. Attorney, Moran focused on strategies to reduce gun violence, stem the flow of deadly fentanyl and other opioids into Western Washington, and encouraged the prosecution of hate crimes and neo-Nazi conspirators such as “Atomwaffen.”  Moran reached out to our tribal partners to work on improving community safety in our tribal communities.  Mr. Moran led a team of federal investigators and Assistant United States Attorneys who are working to recover funds stolen in massive frauds on the Washington State Employment Security Department.

Ray Duda served as Special Agent in Charge of the FBI in Seattle during Mr. Moran’s tenure.  “The leadership and the passion for the rule of law exhibited by Brian Moran during his tenure as U.S. Attorney, and throughout his many roles in public service, are to be admired.  As a citizen of the Western District of Washington, I was honored to have him as our senior law enforcement official and know that our communities are safer because of his leadership.”

U.S. Attorney Moran worked closely with attorneys focused on protecting civil rights and particularly in the area of enforcing the Americans with Disabilities Act (ADA) in the year of its 30th anniversary.  Meeting with those impacted by the work of the Department of Justice was especially impactful.

Drug Enforcement Administration Special Agent in Charge Keith Weis commended U.S. Attorney Moran for steadfast leadership.  “During Brian Moran’s tenure, he was extremely dedicated to enforcing the rule of law, but what really set him apart was his compassion and empathy towards those unfortunate individuals caught in the grip of addiction.  He routinely met with the families who lost loved ones and championed highlighting their plight by continually pushing this important messaging to highest levels of the Department of Justice.  The DEA wishes U.S. Attorney Moran the best in his next endeavors, he has been a true leader and will be greatly missed by law enforcement.” 

Brian Moran previously served as Chief Deputy Attorney General for the Washington State Attorney General.  Prior to his selection as the Chief Deputy, Mr. Moran served as the Chief Criminal Prosecutor for the Washington State Attorney General’s Office.  As Chief Criminal Prosecutor, he and his staff assisted Washington’s 39 county prosecuting attorneys’ offices, pursuing criminal cases and civil commitment of sexually violent predators.

Seattle – A Seattle woman who was employed as a contract bookkeeper and accountant for a high-end mountain bike company appeared in federal court today, indicted for her embezzlement of at least $188,000 from the company, announced U.S. Attorney Brian T. Moran.  JOAN C. TROWER, 50, is charged with nine counts of wire fraud, four counts of aggravated identity theft, and one count of destruction of records.  Trial before Chief U.S. District Judge Ricardo S. Martinez is scheduled for April 12, 2021.

According to the indictment, TROWER worked as a contract bookkeeper and accountant for the mountain bike company from July 2015 to May 2018.  Her contract was terminated when the embezzlement was discovered.  TROWER used a variety of schemes to steal from company accounts: creating checks using the company software system, forging signatures, claiming expenses and compensation she did not earn, and making transfers from company accounts to accounts she controlled in the names of phony tax accounting businesses.  For example, while most employees received at most three checks per month (two for salary and one for expenses), TROWER wrote as many as thirteen checks to herself in one month.  TROWER put false descriptions in the memo line, sometimes falsely claiming the funds were to reimburse her for an outside tax accounting firm she claimed to have hired.  TROWER transferred money from company accounts to accounts she controlled—transferring more than $26,000 to her account in the span of just a few months in 2015.  TROWER and her boyfriend used the money to, among other things, gamble at area casinos.

The indictment alleges that TROWER committed aggravated identity theft when she forged the signature of company executives on fraudulent checks and when she submitted false invoices in the name of a third-party tax accountant to justify reimbursements to TROWER.

Finally, TROWER allegedly attempted to destroy and alter company records in the company’s accounting software to hide her embezzlement from law enforcement.

Wire fraud and destruction of records are both punishable by up to 20 years in prison.  Aggravated identity theft is punishable by a mandatory minimum two‑year prison term to run consecutive to any term imposed on other charges.

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

The case is being investigated by the FBI.  The case is being prosecuted by Assistant United States Attorney William Dreher.

trower_indictment.pdf

Seattle – A federal grand jury has indicted four Seattle-area men who were arrested and charged following an FBI sting operation focused on adults seeking to sexually assault children, announced U.S. Attorney Brian T. Moran.  The investigation revealed that some of the defendants had molested other children or collected images of child sexual abuse before they were identified by law enforcement.

“Law enforcement reports increasing concern about online sexual exploitation of children during the pandemic,” said U.S. Attorney Moran.  “Tragically, we saw this week that in service to the safety and innocence of children, two FBI agents lost their lives in Florida, and three others were wounded.  I commend our local agents for their work on this matter, and indeed, all of law enforcement who risk much in pursuit of those who prey on our most vulnerable.”

According to records filed in the case, in September and October 2020, defendants allegedly communicated with undercover agents and officers via internet platforms with the intent to sexually abuse children, some as young as 6 years old.  When the defendants were arrested, their electronic devices were seized, as well as items which were to be used in the planned sexual assaults.

The defendants indicted in this operation include:

• ERIC HOGAN, 33, Seattle – Attempted enticement of a minor – allegedly communicated with undercover agent about sexually assaulting the agent’s fictitious 6- and 12-year-old daughters.
• JUSTICE GALLOWAY, 26, Everett, Washington – Attempted enticement of a minor – allegedly communicated with undercover agent about sexually assaulting the agent’s fictitious 6- and 11-year-old daughters.
• CHRISTOPHER SINFIELD, 28, Woodinville, Washington – Attempted enticement of a minor and possession of child pornography – allegedly communicated with undercover agent posing as a 13-year-old girl and possessed images of child sex abuse on an electronic device at the time of his arrest.
• MARCUS WILLIAM LOWE, 33, Kirkland, Washington – Attempted enticement of a minor, possession of child pornography, and assault on a federal officer – allegedly communicated with undercover agent about sex assault of fictitious 10-year-old daughter.  LOWE attempted to flee from agents at the arrest location, pinning and injuring an agent between his car and another vehicle.  Further investigation revealed possession of images of child sexual abuse and molestation of a child under the age of 12.

“During this time of social distancing, we are relying on the Internet more than ever,” said Donald M. Voiret, FBI Special Agent in Charge of the Seattle Field Office.  “Although electronic resources are so pervasive in our daily lives, we must remain ever vigilant and remember how powerful and far-reaching they can be, both for good and for harm.  This case demonstrates the ongoing commitment of the FBI to protect our most vulnerable citizens: our children.”

Attempted enticement of a minor is punishable by a mandatory minimum 10 years in prison and up to life in prison.  Possession of child pornography is punishable by up to 20 years in prison.  Assault on a federal officer is punishable by up to 20 years in prison.

The charges contained in the indictments 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 cases are being investigated by the FBI. The operation was conducted in cooperation with the Seattle Police Department, and the Kirkland Police Department.  The cases are being prosecuted by Special Assistant United States Attorney Laura Harmon and Assistant United States Attorney Matthew Hampton.  Ms. Harmon is a King County Deputy Prosecutor specially designated to pursue child sexual exploitation cases in federal court.

WASHINGTON — A member of the Proud Boys, a nationalist organization, was arrested today and charged in federal court in the District of Columbia with obstructing or impeding an official proceeding, among other charges.

Ethan Nordean, aka Rufio Panman, 30, of Washington state, was charged by criminal complaint in federal court in the District of Columbia with obstructing or impeding an official proceeding, which carries a maximum penalty of 20 years in prison; aiding and abetting, which carries a maximum penalty of 10 years in prison; and knowingly entering or remaining in restricted building or grounds and violent entry and disorderly conduct on Capitol grounds, which each carry a maximum penalty of one year in prison. Nordean will appear in federal court in the Western District of Washington at 2:00 PST.

According to charging documents, Nordean is the self-described “Sergeant of Arms” of the Seattle Chapter of the Proud Boys, a group self-described as a “pro-Western fraternal organization for men who refuse to apologize for creating the modern world; aka Western Chauvinists.”

It is alleged that Nordean was observed marching at the front of a group of known Proud Boys shortly before the riot began. It is further alleged that Nordean was among those who entered the U.S. Capitol building after rioters, including certain persons associated with the Proud Boys, forced entry into the Capitol by means of destruction of Federal property. It is also alleged that Nordean was near the front of the crowd of rioters, who collectively approached, confronted, and vastly outnumbered Capitol Police.

Prior to Jan. 6, 2021, Nordean posted on social media certain indications of an intent to organize a group that intended to engage in conflict. For example, around Dec. 27, 2020, Nordean posted a message asking for donations of “protective gear” and “communications equipment.” On Jan. 4, 2021, Nordean posted a video on social media, which he captioned, “Let them remember the day they decided to make war with us.”

On or about the same day, Nordean posted a video of a discussion that Nordean had with another member of the Proud Boys. During the course of the hour long video, Nordean discussed what he described as “blatant, rampant voter fraud” in the Presidential election. Nordean went on to say that, rather than being complacent, the Proud Boys were going to “bring back that original spirit of 1776 of what really established the character of what America is. And it’s not complacency, it’s not low standards. It’s ‘this is how it’s going to be, and I don’t give a god damn.’” Later in the video, Nordean said, “Democracy is dead? Well, then no peace for you. No democracy, no peace.”

The day before the riots, Nordean posted the following statement to social media: “It is apparent now more than ever, that if you are a patriot, you will be targeted and they will come after you, funny thing is that they don’t realize is, is we are coming for them. You’ve chosen your side, black and yellow teamed with red, white and blue against everyone else.”

On Jan. 8, 2021, Nordean posted a photo on social media of a U.S. Capitol Police officer administering pepper spray on Jan. 6, 2021, with the following caption: “if you feel bad for the police, you are part of the problem. . .”

The case is being prosecuted by Assistant U.S. Attorneys Jason B.A. McCullough and James B. Nelson of the U.S. Attorney’s Office for the District of Columbia and Taryn Meeks of the Department of Justice’s National Security Division’s Counterterrorism Section. Valuable assistance was provided by the U.S. Attorneys’ Offices for the Western District of Washington. The case is being investigated by the FBI’s Washington Field Office, with assistance by the FBI’s Seattle Division.   

The ATF and FBI continue to urge the public to report suspected use of explosive devices, or violent, destructive acts associated with the recent unrest. Anyone with information can call 1-888-ATF-TIPS (1-888-283-8477), email [email protected] or submit information anonymously via ReportIt.com.

The FBI is looking for individuals who may have incited or promoted violence of any kind. Anyone with digital material or tips can call 1-800-CALL-FBI (800-225-5324) or submit images or videos at https://tips.fbi.gov/.

The charges contained in the complaint are allegations.  The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law. 

The maximum penalty is prescribed by Congress and provided here for informational purposes. Any sentence actually imposed is required to be imposed based on the specific factors of the offense and the defendant, in consultation with the U.S. Sentencing Guidelines. 

nordean_-_complaint_affidavit.pdf

Tacoma, Washington – A 51-year-old Lakewood, Washington, man pleaded guilty today in U.S. District Court in Tacoma to aiding in preparation and presentation of false tax returns for his multi-year fraudulent tax preparation scheme, announced U.S. Attorney Brian T. Moran.  REED, Jr., created “Just Us Tax Services” and later merged it with “Young’s Tax Services.”  The companies filed tax returns fraudulently claiming inflated amounts of Earned Income Tax Credits (EITC) in order to increase clients’ tax refunds and therefore the fee they would receive for tax preparation.  CLEO J. REED, Jr., admits operating the tax fraud scheme even after his father was sentenced to prison for the same conduct.  Sentencing is scheduled for May 10, 2021 in front of U.S. District Judge Benjamin H. Settle.

According to records filed in the case, in 2011 and 2012, even as REED Jr.’s father’s tax preparation business was under investigation for preparing fraudulent returns, REED, Jr., opened and operated “Just Us Tax Service” so that his father could continue filing tax returns on behalf of clients, by filing them in the name of a tax preparation firm that was different than the name of the tax preparation firm the IRS was investigating.  After opening Just Us Tax Services to assist his father, REED, Jr., also started filing fraudulent tax returns on behalf of some clients, however.  In doing so, he used the same fraudulent technique utilized by his father’s tax preparation business. 

When the IRS terminated REED Jr.’s tax preparation registration, he had an acquaintance open and register “Young’s Tax Service” in 2014 and continued filing tax returns with fraudulent entries for Earned Income Tax Credit.  REED, Jr., filed the false returns from his home and from Everyday Essentials, the marijuana dispensary he owned and operated in Puyallup.

The total amount of tax loss to which REED, Jr., is admitting criminal liability is $39,899.  REED, Jr., has agreed to make restitution to the IRS in that same amount.  The IRS may still assess interest and civil tax penalties.

On October 31, 2013, the United States District Court Judge Benjamin H. Settle sentenced REED, Jr.’s father, CLEO REED, Sr., to a term of 30 months’ imprisonment for his role in the scheme.  While he waited to report to prison, REED, Sr., told former clients that he was turning the tax preparation business over to his son as a result of both the criminal investigation of REED, Sr., and his failing health.

Aiding in preparation and presentation of false tax returns is punishable by up to three years in prison.

The case is being investigated by the Internal Revenue Service Criminal Investigation (IRS-CI).  The case is being prosecuted by Assistant United States Attorney Arlen Storm.

Seattle – The manager of an Everett, Washington, call center pleaded guilty today in U.S. District Court in Seattle to a conspiracy to defraud approximately 1,000 distressed homeowners facing foreclosure, announced U.S. Attorney Brian T. Moran.  EDWIN JOSUE HERRERA ROSALES aka “Josh Herrera,” 34 , pleaded guilty to one count of conspiracy to commit wire fraud in connection with his operation of call centers that operated under the names “Sound Solutions Group,” “Community Assistance Center,” and California-based “Sienna Support Network.”

HERRERA ROSALES and his co-conspirators sent solicitation mailers to distressed homeowners nationwide.  The mailers promised that HERRERA ROSALES’ organization could reduce homeowners’ mortgage debts and lower their monthly payments.  When homeowners called the call center, operators put the callers through a phony “underwriting” process and then told the callers that the company’s legal and underwriting staff had determined it could negotiate a favorable mortgage modification in exchange for an upfront fee of $3,000.  In fact, the call center had no legal or underwriting staff, and many of the homeowners did not receive the promised modifications. 

HERRERA ROSALES is scheduled for sentencing by U.S. District Judge John C. Coughenour on May 4, 2021.

According to records filed in the case, HERRERA ROSALES conspired with others based in Southern California to operate the scheme.  Each week the operation sent approximately 4,000 mailers to distressed homeowners across the country.  The mailers stated that that the homeowner had been “pre-approved” for a new government program, under which HERRERA ROSALES’s organization could negotiate a mortgage modification.  For example, one mailer said that HERRERA ROSALES’s organization could reduce a borrower’s loan balance by over $140,000 and could reduce the interest rate to 2%.  The mailers urged the homeowners to call the Everett call center for assistance.

HERRERA ROSALES oversaw a staff of call center operators.  When homeowners contacted the call center, HERRERA ROSALES directed the operators to follow a script designed to make it appear as if each caller’s mortgage was being reviewed by the company’s “underwriting” and “legal department” to make sure the homeowner qualified for the supposed federal program.  In fact, the call center had no legal staff or underwriting department.  Instead, operators were instructed simply to put each caller on hold for a pre-determined amount of time, to make it appear a review was underway.  The operator then would return to the line and tell each victim that he or she was one of the “very select few” who qualified for the program—but only if the homeowner paid the call center a $3,000 fee.  If the homeowner balked at the fee, the call center staff had another script with certain “hot button” statements to persuade them to sign the documents.  It is impermissible under federal regulations to charge upfront fees for mortgage modification services.

Once the contracts were signed, the call center submitted the homeowner’s paperwork to a California-based loan processing group, which made some minimal efforts to restructure the debt.  While a limited number of customers obtained a lower monthly payment, the vast majority had no change or, in some cases, a higher monthly payment.  The call center used a phony address, and operators used aliases to disguise their identities. 

Between March 2016 and May 2018, about 1,000 customers paid over $2.5 million to the various entities operated by HERRERA ROSALES.  After HERRERA ROSALES paid the expenses of the call centers and paid a share to his co-conspirators, he kept approximately $360,000.

Conspiracy to commit wire fraud is punishable by up to five years in prison.

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

herrera_rosales_information.pdf

Seattle – A 20-year-old Alaska man pleaded guilty today to conspiracy to commit arson in connection with the fire he set Monday, August 24, 2020, at the Seattle Police Department’s East Precinct, announced U.S. Attorney Brian T. Moran.  DESMOND DAVID-PITTS was arrested shortly after the fire.  DAVID‑PITTS faces up to five years in prison when sentenced by U.S. District Judge John C. Coughenour on April 27, 2021.

According to records filed in the case, DAVID-PITTS had arrived in Seattle from Alaska just three days before the arson.  After marching with the group of protestors in downtown Seattle, DAVID-PITTS is seen on surveillance video piling up trash against the sally-port door at the Seattle Police East Precinct.  Over an eleven-minute period, the surveillance video captures DAVID-PITTS not only piling up the trash, but repeatedly lighting it on fire and feeding the flames with more trash.  While DAVID-PITTS was lighting the fire, other people who appeared on the surveillance were attempting to use crowbars and cement-like materials to try to disable the door next to the sally-port to prevent officers from exiting the building.  At various times, DAVID-PITTS was communicating with the black-clad individuals who were attempting to disable the door and light other fires around the building.  Despite efforts to disable the door, officers were able to get outside and extinguish the flames.  DAVID-PITTS was seen on surveillance working with the others to cut through a chain-link fence that was a barrier around the building.  All the fires were extinguished by Seattle Police Officers and members of the Seattle Fire Department.

DAVID-PITTS was identified less than an hour later in the crowd outside the precinct because of the distinctive pink camouflage trousers he was wearing.  He was arrested without incident.

Conspiracy to commit arson is punishable by up to five years in prison.  Prosecutors have agreed to recommend a sentence within the guidelines range calculated by the Court.  The ultimate sentence is up to Judge Coughenour based on a number of sentencing factors.

DAVID-PITTS has agreed to pay restitution to the Seattle Police Department for damage to the building.

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

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

Seattle – A 30-year-old SeaTac, Washington, man was indicted yesterday by a grand jury for two counts of mail fraud related to his participation in a scheme to defraud elderly victims across the country, announced U.S. Attorney Brian T. Moran.  ARIFKHAN PATHAN was arrested on a criminal complaint January 4, 2021.  According to the indictment, between August and December 2020, PATHAN played a role in defrauding victims of more than $400,000.

“Many of us keep getting those calls from someone claiming our Social Security number has been ‘compromised,’ and the best action is to just hang up,” said U.S. Attorney Moran.  “But for some, especially the elderly, the fear of losing their money or income keeps them on the line and leads them to fall prey to a scammer who drains their bank account.  This indictment goes after a key cog in the scam: the money mule.”

According to records filed in the case, in November 2020, investigators with Homeland Security Investigation and the Seattle Police Department became aware of suspicious packages arriving at Seattle UPS and FedEx locations.  The investigation revealed the packages were filled with cash and were sent by victims from as far away as New York, Texas, and Colorado.  The packages were sent to conspirators who used fake identity documents, such as driver’s licenses, to pick-up the packages.  According to multiple victims in the case, they had received a telephone call from someone who claimed to be employed by the Social Security Administration.  The caller claimed the victim’s Social Security number had been compromised, and the only way to protect the victim’s money was to withdraw thousands of dollars in cash from their bank accounts and send it via UPS or FedEx to an “agent” elsewhere in the U.S. for safe-keeping.  The callers allegedly demanded the victims withdraw as much as $30,000 in cash.  The scammers used UPS and FedEx so the co-conspirators could track the packages and pick-up the packages of cash using the fake identity documents.  The investigation revealed the callers were connected to an overseas call center.  PATHAN was allegedly a key player in the scheme, who recruited others to pick up packages of cash using fake identity documents. 

PATHAN deposited the money in various bank accounts that could be accessed by his co-schemers.  He was paid a commission on the money of about two percent.  When PATHAN’s residence was searched in early January, investigators seized additional false identity information and a ledger that revealed PATHAN had picked up and allegedly transferred at least $400,000 to his co-schemers.

Mail fraud is punishable by up to twenty years in prison.

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

The case is being investigated by the Homeland Security Investigations Border Enforcement Security Task Force (BEST) comprised of representatives from HSI, the Internal Revenue Service – Criminal Investigation Division, the U.S. Secret Service, the U.S. Postal Inspection Service, U.S. Customs and Border Protection, and the Seattle Police Department.

The case is being prosecuted by Assistant United States Attorney Casey S. Conzatti.

pathan_complaint.pdf pathan_indictment.pdf

Seattle - A Redmond, Washington, man who held himself out as a biotech expert was arrested today on a federal warrant charging him with introducing misbranded drugs into interstate commerce, announced U.S. Attorney Brian T. Moran.  JOHNNY T. STINE, 55, claims 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 a COVID-19 vaccine that he offered to inject in customers for $400-$1000 each. STINE will appear in U.S. District Court in Seattle at 2:00 today.

“Untested, untried and potentially unsafe – this defendant was injecting people with an unknown substance claiming it was a vaccine for COVID-19,” said U.S. Attorney Brian T. Moran.  “Preying on our fears in the midst of this pandemic is unconscionable.  DOJ continues to investigate and prosecute these fraud cases.”

According to the criminal complaint unsealed today, 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 made contact with 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.  Just this month, January 2021, law enforcement was alerted that at least one person who had been “vaccinated” by STINE was in the hospital battling COVID-19.

In early April, 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 “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 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.

The investigation also revealed that STINE conducted a business preying on cancer patients selling them untested “vaccines” to battle their malignant tumors.  That conduct, along with the COVID-19, vaccine is charged in a separate Information filed today in federal court.

“Unproven injectable vaccines purported to prevent or treat COVID-19, made from unknown substances under unknown conditions, present significant health risks in and of themselves.  They also can lead consumers to make lifestyle choices that increase their actual risk of infection with COVID-19, or to delay or stop appropriate medical treatment,” said Lisa L. Malinowski, FDA Office of Criminal Investigations Los Angeles Field Office. “The FDA will continue to investigate fraudulent COVID-19 treatments and bring to justice those who try to profit from the pandemic by offering unproven and illegally marketed coronavirus products.”

“The very idea that someone would prey upon fearful people seeking a COVID vaccine in the midst of a global pandemic is not only despicable, but potentially deadly behavior.  Equally appalling is the exploitation of vulnerable cancer patients and their families, desperate for treatment,” said Special Agent in Charge Robert Hammer, who oversees Homeland Security Investigations (HSI) operations in the Pacific Northwest.  “Snake oil salesmen, such as this, who endanger consumers should take this arrest as a stern warning.  HSI, along with our law enforcement partners, remain dedicated to protecting the community from these criminals and the dangerous substances they sell.”

The criminal charges filed today are misdemeanor federal crimes, unrelated to the civil cease and desist letter and civil Consent Decree.  The misdemeanors are punishable by up to one year in prison.

The charges contained in the complaint and Information 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 FDA Office of Criminal Investigations, Homeland Security Investigations, and the Seattle Police Department.

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

A Washington man pleaded guilty today to perpetrating a scheme to fraudulently obtain COVID-19 relief guaranteed by the Small Business Administration (SBA) through the Economic Injury Disaster Loan (EIDL) and the Paycheck Protection Program (PPP) under the Coronavirus Aid, Relief and Economic Security (CARES) Act.

Nicholas L. McQuaid, Acting Assistant Attorney General of the Justice Department’s Criminal Division; Brian T. Moran, U.S. Attorney for the Western District of Washington; J. Russell George, Inspector General of the U.S. Treasury Inspector General for Tax Administration (TIGTA); Gail S. Ennis, Inspector General of the Social Security Administration (SSA); Hannibal “Mike” Ware, Inspector General of the SBA, and Cardell Morant, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s Homeland Security Investigation (HSI), made the announcement.

Austin Hsu, 46, of Issaquah, pleaded guilty to an information charging him with one count of wire fraud before U.S. Magistrate Judge Michelle L. Peterson in the Western District of Washington. Sentencing has been scheduled for April 19, 2021, before U.S. District Court Judge James L. Robart.

As part of his guilty plea, Hsu admitted that he submitted nine fraudulent disaster loan applications seeking over $1.1 million. Hsu, who is the owner and CEO of a company named Blackrock Services P.S. doing business as “Back 2 Health Bellevue” (Back 2 Health), received EIDL and PPP funds for Back 2 Health, and then used the names of Back 2 Health’s current and former employees to apply for additional PPP loans under the names of four other companies that he owned and controlled. Hsu further admitted that, in support of the fraudulent PPP loan applications, Hsu submitted fake federal tax filings. 

Hsu also admitted that he incorporated a company named Blueline Capital LLC (Blueline) in June 2020 for the purpose of applying for an EIDL loan in July 2020, and then misrepresented to the SBA that Blueline had been in business since 2017 and that, as of Jan. 31, 2020, Blueline had nine employees and gross receipts of over $1.5 million. Hsu admitted that, in truth, Blueline had no business or operations.

Six of Hsu’s nine fraudulent loan applications were approved, and he fraudulently obtained more than $700,000 in COVID-19 relief funds.

The CARES Act is a federal law enacted March 29. It is designed to provide emergency financial assistance to millions of Americans who are suffering the economic effects resulting from the COVID-19 pandemic. One source of relief provided by the CARES Act is the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses through the PPP. In April 2020, Congress authorized over $300 billion in additional PPP funding, and in December 2020, Congress authorized another $294 billion in additional PPP funding.   

The PPP allows qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of one percent. Businesses must use PPP loan proceeds for payroll costs, interest on mortgages, rent and utilities. The PPP allows the interest and principal to be forgiven if businesses spend the proceeds on these expenses within a set time period and use at least a certain percentage of the loan towards payroll expenses.

The EIDL program is designed to provide economic relief to small businesses that are currently experiencing a temporary loss of revenue. EIDL proceeds can be used to cover a wide array of working capital and normal operating expenses, such as continuation of health care benefits, rent, utilities and fixed debt payments. If an applicant also obtains a loan under the PPP, the EIDL funds cannot be used for the same purpose as the PPP funds.

This case was investigated by the TIGTA, SSA – Office of Inspector General (OIG), SBA – OIG, and HSI. Trial Attorney Christopher Fenton of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Steven Masada of the Western District of Washington are prosecuting the case.

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 Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

Seattle – An Issaquah, Washington man pleaded guilty today to perpetrating a scheme to fraudulently obtain COVID-19 relief guaranteed by the Small Business Administration (SBA) through the Economic Injury Disaster Loan (EIDL) and the Paycheck Protection Program (PPP) under the Coronavirus Aid, Relief and Economic Security (CARES) Act.

Nicholas L. McQuaid, Acting Assistant Attorney General of the Justice Department’s Criminal Division; Brian T. Moran, U.S. Attorney for the Western District of Washington; J. Russell George, Inspector General of the U.S. Treasury Inspector General for Tax Administration (TIGTA); Gail S. Ennis, Inspector General of the Social Security Administration (SSA); Hannibal “Mike” Ware, Inspector General of the SBA, and Cardell Morant, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s Homeland Security Investigation (HSI), made the announcement.

AUSTIN HSU, 46, of Issaquah, pleaded guilty to an information charging him with one count of wire fraud before U.S. Magistrate Judge Michelle L. Peterson in the Western District of Washington. Sentencing has been scheduled for April 19, 2021, before U.S. District Court Judge James L. Robart.

As part of his guilty plea, HSU admitted that he submitted nine fraudulent disaster loan applications seeking over $1.1 million. HSU, who is the owner and CEO of a company named Blackrock Services P.S. doing business as “Back 2 Health Bellevue” (Back 2 Health), received EIDL and PPP funds for Back 2 Health, and then used the names of Back 2 Health’s current and former employees to apply for additional PPP loans under the names of four other companies that he owned and controlled. HSU further admitted that, in support of the fraudulent PPP loan applications, Hsu submitted fake federal tax filings. 

HSU also admitted that he incorporated a company named Blueline Capital LLC (Blueline) in June 2020 for the purpose of applying for an EIDL loan in July 2020, and then misrepresented to the SBA that Blueline had been in business since 2017 and that, as of Jan. 31, 2020, Blueline had nine employees and gross receipts of over $1.5 million. HSU admitted that, in truth, Blueline had no business or operations.

Six of HSU’s nine fraudulent loan applications were approved, and he fraudulently obtained more than $700,000 in COVID-19 relief funds.

The CARES Act is a federal law enacted March 29. It is designed to provide emergency financial assistance to millions of Americans who are suffering the economic effects resulting from the COVID-19 pandemic. One source of relief provided by the CARES Act is the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses through the PPP. In April 2020, Congress authorized over $300 billion in additional PPP funding, and in December 2020, Congress authorized another $294 billion in additional PPP funding.   

The PPP allows qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of one percent. Businesses must use PPP loan proceeds for payroll costs, interest on mortgages, rent and utilities. The PPP allows the interest and principal to be forgiven if businesses spend the proceeds on these expenses within a set time period and use at least a certain percentage of the loan towards payroll expenses.

The EIDL program is designed to provide economic relief to small businesses that are currently experiencing a temporary loss of revenue. EIDL proceeds can be used to cover a wide array of working capital and normal operating expenses, such as continuation of health care benefits, rent, utilities and fixed debt payments. If an applicant also obtains a loan under the PPP, the EIDL funds cannot be used for the same purpose as the PPP funds.

This case was investigated by the TIGTA, SSA – Office of Inspector General (OIG), SBA – OIG, and HSI. Trial Attorney Christopher Fenton of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Steven Masada of the Western District of Washington are prosecuting the case.

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 Hotline at 866-720-5721 or via the NCDF Web Complaint Form at:  https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

Seattle – A current Woodinville, Washington Water District Commissioner, who is also a general contractor, pleaded guilty today in U.S. District Court in Seattle to possession of child pornography, announced U.S. Attorney Brian T. Moran.  DALE KNAPINSKI, 67, was indicted in November 2019.  KNAPINSKI is scheduled for sentencing by U.S. District Judge John C. Coughenour on April 20, 2021.

According to records filed in the case, in April and May 2019, the FBI, through the Internet Crimes Against Children Task Force (ICAC), began an investigation of an IP address in Woodinville, Washington.  An electronic device at the IP address was using a peer-to-peer file sharing program to download images of child rape and abuse. On July 9, 2019, agents executed a court authorized search warrant at the address and seized a laptop computer belonging to KNAPINSKI.  A subsequent forensic evaluation revealed approximately 280 images of child rape and abuse.

Possession of child pornography is punishable by up to 20 years in prison.  Prosecutors have agreed to recommend a sentence at the low end of the guidelines range determined by the court at sentencing.  KNAPINSKI is required to register as a sex offender.

This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.

The case was investigated by the FBI as part of the Internet Crimes Against Children Task Force.  The case was prosecuted by Assistant United States Attorney William Dreher.

Seattle - A Florida-based corporation that manufactures, imports, and distributes products used in residential and commercial construction has agreed to pay the United States $160,933 to resolve allegations that it imported roofing underlayment product manufactured in China without country of origin markings, announced U.S. Attorney Brian T. Moran.  The United States alleges that between December 2017 and July 2019, Gardner-Gibson, Inc., violated customs laws by importing products that did not bear any mark indicating to the ultimate purchaser in the United States the country of origin of the article.

“It is important that all U.S. businesses have a fair playing field,” said U.S. Attorney Moran.  “This case began with a relator alerting the government to the unlawful conduct, helping the government police the import marketplace to ensure fairness.”

The settlement with Gardner-Gibson resolves a lawsuit filed under the qui tam provisions of the False Claims Act.  The False Claims Act permits a private individual, called a relator, to sue on behalf of the government for false claims and to share in any recovery.  The relator in this case alleged that Gardner-Gibson violated the False Claims Act by evading customs duties owed to the United States as a result of Gardner-Gibson’s knowing failure to mark properly imported products with their country of origin.  The relator will receive approximately 20% of the $160,933 settlement.  Gardner-Gibson will also pay the relator’s attorney fees of more than $40,000.

The resolution in this matter is the result of a coordinated effort between the U.S. Attorney’s Office for the Western District of Washington, U.S. Customs and Border Protection, and the U.S. Department of Homeland Security Office of Inspector General. 

The settlement was negotiated by Assistant United States Attorney Ashley Burns.  The claims resolved by this settlement are allegations only, and there has been no determination of liability.  The lawsuit is captioned United States of America ex rel. Aylwin v. Gardner-Gibson, Inc., No. 18-CV-1487-RAJ. 

Tacoma – A former Pierce County Housing Authority executive pleaded guilty today to wire fraud in connection with her scheme to steal nearly $7 million, announced U.S. Attorney Brian T. Moran.  According to the plea agreement, between March 2016 and July 2019, COVA CAMPBELL, aka Cova Hunter, used a variety of schemes to divert $6.9 in public money to her own bank accounts.  CAMPBELL faces up to 20 years in prison when sentenced by U.S. District Judge Robert J. Bryan on April 8, 2021.

According to records filed in the case, CAMPBELL initiated wire transfers of as much as $500,000 from Pierce County Housing Authority accounts to her own bank accounts.  One of the transfers was in connection with the purchase of land in Oklahoma.  CAMBELL also prepared and submitted false invoices to PCHA and made them appear they were from an outside vendor.  PCHA paid the invoices, and the money went into CAMPBELL’s bank accounts.  CAMPBELL covered up her fraud by labeling these fraudulent charges as “investments,” “insurance,” or “maintenance” in the PCHA accounting records.

According to the plea agreement, CAMPBELL used the money to play for land and improvements to that land in Oklahoma, for improvements to her home in Lakewood, Washington, and for travel including trips to Las Vegas and the chartering of a private jet.  She used some of the money for the purchase of two cars.  She also diverted large amounts of the money for gambling and internet gaming.

The Washington State Auditor’s Office uncovered the financial irregularities, and CAMPBELL’s employment was terminated by the Housing Authority on August 8, 2019.

CAMPBELL was arrested in March 2020 in Redbird, Oklahoma.

Wire fraud is punishable by up to twenty years in prison.  CAMPBELL is required to make restitution of $6,997,486.

The case is being investigated by the FBI and HUD-OIG.  The case is being prosecuted by Assistant United States Attorney Brian Werner.

Tacoma -  A Port Townsend, Washington, man who abandoned a heroin overdose victim in a car outside a hospital emergency room was sentenced today in U.S. District Court in Tacoma to a total of 66 months in prison for drug trafficking and illegal firearms possession charges, announced U.S. Attorney Brian T. Moran.  ADAM MICHAEL KELLY, 38, pleaded guilty in August 2020 to possession of controlled substances with intent to distribute and being a drug user in possession of firearms.  At the sentencing hearing, U.S. District Judge Benjamin H. Settle noted the letters he had received from the Port Townsend community mourning the loss of the victim.  Judge Settle said KELLY would have to “live with” the fact that he had likely played a role in the tragic death of the overdose victim “for the rest of [Kelly’s] life.” 

According to the facts in the plea agreement, on March 27, 2019, KELLY and his then-girlfriend abandoned a 43-year-old overdose victim in a car outside the hospital emergency room.  They later called the hospital asking staff to check on the victim.  The victim, who had no pulse when he was found by hospital staff, died within twenty minutes.  Law enforcement traced the phone call to KELLY’s residence.  When questioned by police, KELLY admitted that the victim had used drugs in his home, that the victim became unresponsive, and that KELLY had left him at the emergency room entrance when he could not revive him.

Police obtained a search warrant for KELLY’s home and found a sophisticated drug lab in the basement with pill presses, lab equipment, vent hoods, and over 75 pounds of Schedule III controlled substances, primarily steroids.  Records seized at the lab indicate KELLY had a lucrative business selling and shipping illegal steroids across the country.  The victim had become unresponsive in KELLY’s drug lab.

In addition to the drug lab, KELLY had a wide variety of firearms, silencers, and tactical gear.  In the lab, KELLY had a.40 caliber Glock that was both loaded and fitted with a silencer.  In his bedroom, he had six guns, including two Glock handguns, a Bersa .22 caliber, a Winchester shotgun, a Remington 700, and a Bushmaster AR-15.  A second silencer was found in the bedroom.  Law enforcement seized a variety of ammunition, as well as a tactical vest. 

As an admitted drug user, it is illegal for KELLY to possess firearms.  When KELLY was arrested, he had both heroin and methamphetamine in his possession. 

KELLY is currently serving a 68-month state sentence for controlled substance homicide, a charge arising out of this same investigation and based on the overdose victim’s death.  KELLY’s sentence in this case, including the recommendation that the sentence run concurrent to the state sentence, was jointly recommended by the parties to resolve globally KELLY’s state and federal charges.  The judgment for a 44-month federal sentence that Judge Settle imposed is in addition to and reflects the 22 months KELLY has already served in state and federal custody on these and related state charges, for a total effective sentence of 66 months. 

If KELLY completes his state sentence first, he will then be transferred to federal custody to serve the federal time.  KELLY has been in custody since his arrest on March 28, 2019.

The case was investigated by the Port Townsend Police Department, Jefferson County Sheriff’s Office, and Federal Bureau of Investigation, with assistance from other local and federal law enforcement agencies.

The case was prosecuted by Assistant United States Attorney William Dreher.

Seattle – A 22-year-old Mount Vernon, Washington, woman pleaded guilty today in U.S. District Court in Seattle to conspiracy to distribute fentanyl, announced U.S. Attorney Brian T. Moran.  Rosaliana Lopez-Rodriguez sold counterfeit oxycodone pills tainted with fentanyl in Skagit and Whatcom Counties.  The pills are connected to at least two overdoses, including the overdose death of a Bellingham 17-year-old.  Lopez-Rodriguez and a co-conspirator were arrested in December 2019 after an investigation to track down the source of the tainted pills.  Both defendants have been in custody since their arrests.

According to records filed in the case, a family member found the 17-year-old victim unresponsive on November 9, 2019.  Despite efforts of emergency responders to resuscitate him, the victim died; his cause of death was later determined to be fentanyl overdose.  Investigators found a whole and a partial pill near the 17-year-old victim.  These pills were designed to look like oxycodone 30-milligram pills, with “M” and “30” stamped on them.  But they were fakes tainted with fentanyl.  Similar pills have been linked to other overdose deaths throughout the Puget Sound region.  In fact, a friend of the 17-year-old victim nearly died after smoking one of the pills in November 1, 2019.  Lopez-Rodriguez knew of that near-fatal overdose when she sold the 17-year-old victim more pills on November 9, 2019.

As part of her plea agreement, Lopez-Rodriguez also admitted selling an undercover law-enforcement officer fentanyl pills, which Lopez-Rodriguez stated she had received from the co-conspirator.  In addition, Lopez-Rodriguez admitted that during this investigation, law enforcement served court-authorized search warrants at each defendant’s residence.  At Lopez-Rodriguez’s residence, in her bedroom, law enforcement found two and a half fentanyl pills.  At the co-conspirator’s residence, law enforcement found a safe containing hundreds of fake oxycodone pills that matched the appearance of the fentanyl-laced pills linked to the fatal overdose.  Lopez-Rodriguez admitted that the co-conspirator had provided her with the pills that killed the Bellingham 17-year-old.

The co-conspirator is scheduled for trial in May 2021.

Lopez-Rodriguez faces a mandatory minimum five years in prison and up to forty years in prison when sentenced by Chief Judge Ricardo S. Martinez on April 16, 2021.  Under the terms of the plea agreement, the prosecution and defense will each recommend a term of imprisonment between five and eight years.  Chief Judge Martinez is free to impose any sentence allowed under the statute.

The case is being investigated by the Whatcom County Sheriff’s Office, the Drug Enforcement Administration (DEA), the Skagit County Interlocal Drug Enforcement Unit (SCIDEU) and the Whatcom County Drug and Gang Task Force, which is made up of members of the Whatcom County Sheriff’s Office, Bellingham Police Department, U.S. Customs and Border Protection (CBP), and Homeland Security Investigations.  The case is being prosecuted by Assistant United States Attorney Jonas Lerman.

Seattle –Insitu Inc., headquartered in Bingen, Washington, has agreed to pay $25 million to settle allegations that it violated the False Claims Act by knowingly submitting materially false cost and pricing data for contracts with the United States Special Operations Command (SOCOM) and the Department of the Navy (Navy) to supply and operate Unmanned Aerial Vehicles (UAVs), the Department of Justice announced today.   

“We expect companies that seek to do business with the government to provide complete and accurate information so contract prices can be negotiated on a level playing field,” said Acting Assistant Attorney General of the Justice Department’s Civil Division Jeffrey Bossert Clark.  “This settlement demonstrates the Justice Department’s commitment to take appropriate action when it determines that taxpayer dollars have been misused.” 

Between January 1, 2009, and December 31, 2017, Insitu entered into five contracts with the Navy and two contracts with SOCOM for the supply and operation of UAVs, also known as “drones,” at various sites identified in the contracts.  The settlement resolves allegations that Insitu knowingly induced the government to award it these seven, noncompetitively bid contracts at inflated prices by proposing cost and pricing data for new parts and materials in support of its contract proposal while planning to and in fact using less expensive recycled, refurbished, reconditioned, and/or reconfigured parts to perform the contracts.

“Taxpayers deserve to get what they paid for – especially in significant no-bid military contracts,” said U.S. Attorney Brian T. Moran.  “Cases such as this one should be seen as a warning to defense contractors that false claims have no place in military purchasing.”   

“The Naval Criminal Investigative Service is dedicated to protecting the taxpayer’s interests and safeguarding critical services for the war fighter,” stated Charles P. King, Special Agent in Charge, NCIS Northwest Field Office. “The success of the Department of the Navy’s war fighting ability is dependent upon a sound, transparent and honest acquisition process. I want to thank the Department of Justice and our law enforcement partners for their incredible support and dedication during this investigation.”

“Defense contractors are required to obey strict standards when proposing cost and pricing data for work to be performed on government contracts,” said Bryan D. Denny, Special Agent in Charge of the Defense Criminal Investigative Service, Western Field Office. “The pursuit and favorable settlement of this civil litigation is yet another example of our agents and law enforcement partners working together to uncover fraudulent activity and protect taxpayers' dollars entrusted to the DoD.”

The settlements resolve allegations filed in a lawsuit by D R O’Hara, a former executive of Insitu, in federal court in Seattle, Washington.  The lawsuit was filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private individuals to sue on behalf of the government for false claims and to share in any recovery.  The Act also allows the government to intervene and take over the action, as it did in this case.  Mr. O’Hara will receive $4,625,000 of the recovered funds.

The settlements were the result of a coordinated effort by the Commercial Litigation Branch (Fraud Section) of the Civil Division of the Department of Justice, the United States Attorney’s Office for the Western District of Washington, the Naval Criminal Investigative Service, the Defense Contract Audit Agency, and the Defense Criminal Investigative Service.

 

The case is captioned United States ex rel. O’Hara v. Insitu, Inc. and The Boeing Company,Case No. C15-1527-JCC (W.D.Wash.).  The claims resolved by the settlements are allegations only and there has been no determination of liability.

Assistant United States Attorney Kayla Stahman handled the matter for the U.S. Attorney's Office, Western District of Washington and DOJ's Commercial Litigation Branch was represented by Senior Trial Attorney Don Williamson.

 

Seattle — A respiratory therapist at the Veterans Affairs Medical Center (VAMC) in Seattle was sentenced today in U.S. District Court in Seattle to three months in prison and nine months of home confinement for theft of government property, announced U.S. Attorney Brian T. Moran.  GENE WAMSLEY, 42, of Bonney Lake, Washington, admits stealing a ventilator and other respiratory medical equipment in the midst of the COVID-19 pandemic and selling it for his own gain.  At the sentencing hearing, U.S. District Judge James L. Robart said, “This is an extremely serious offense, quite independent of the COVID-19 pandemic, this was exploiting patients.”

“This type of fraud strikes at the heart of our efforts to care for our elderly—especially our veterans,” said U.S. Attorney Brian Moran.  “Stealing money is bad enough, but stealing equipment needed for life-saving therapies shocks the conscience.”

According to records filed in the case, the investigation began in January 2020 when VAMC reported two bronchoscopes, used for examining a patient’s airway, went missing from the hospital.  A third bronchoscope was reported missing in April 2020.  In all, WAMSLEY admits stealing and selling three bronchoscopes worth over $100,000 for just $15,750.  WAMSLEY sold the scopes to a Florida resident via eBay.  When WAMSLEY’s home was searched in June, law enforcement seized a fourth bronchoscope and a $6,000 sleep apnea device called a WatchPat that had been stolen from the VA Medical Center.

Further investigation revealed that in April 2020, WAMSLEY also stole a $9,950 respirator and sold it via eBay to an Ohio man for just $6,000.  Records from online sales indicate WAMSLEY sold five ventilators—three of which were stolen from the VA.

In their sentencing memo prosecutors wrote that WAMSLEY was involved in the care of COVID-19 patients during the pandemic.  Therefore, his “decision to steal respiratory therapy devices for personal monetary gain is rather confounding as he was an eyewitness to the tremendous suffering of those inflicted.  By repeatedly stealing equipment from a population of ill veterans at such a critical point in time, Mr. Wamsley violated not only federal law, but ethical obligations held by nurses since the inception of the profession.”

The total loss to the United States from the thefts is $132,291; WAMSLEY was ordered to pay that amount in restitution.

The case was investigated by the Veterans Affairs Office of Inspector General (VA-OIG).  The case was prosecuted by Assistant United States Attorney Cecelia Gregson.

Seattle - A former Seattle college soccer star, currently serving time for sexual assault in Arizona and on a second sexual assault case in King County, Washington, pleaded guilty today in U.S. District Court in Seattle to making false statements on a tax return, announced U.S. Attorney Brian T. Moran.  During a massive tax fraud scheme, 48-year-old DION L. EARL purchased the Seattle Impact FC franchise, a professional indoor soccer club.  According to the plea agreement between 2008 and 2014, EARL used false documents to lie about his income, the amount of tax dollars withheld by employers, and his mortgage deductions so that he could attempt to claim tax refunds of more than $1.6 million.  Under the terms of the plea agreement, prosecutors will recommend EARL serve a one-year consecutive federal sentence following his 12-year sentence in Arizona and 33-month consecutive sentence in Washington State, for a total sentence of nearly 16 years in prison.

The actual sentence is up to U.S. District Judge Robert S. Lasnik who has scheduled sentencing for April 9, 2021. 

In the 1990’s EARL was a soccer star at Seattle Pacific University.  Between 2008 and 2014, EARL also worked in car sales in Washington State and Arizona and owned Dion Earl’s Total Soccer & Tennis Camps, LLC, d/b/a Total Business Ventures, and the Seattle Impact, FC.  In today’s plea agreement, EARL admitted that he used his association with car dealers, Dion Earl’s Total Soccer & Tennis Camps, and the Seattle Impact to commit tax fraud. 

EARL specifically acknowledged that, on his 2012 Form 1040 tax return, he claimed that (1) he made $1,600,000 working for eight different car dealers, which withheld more than $660,000 of his wages for taxes, and (2) his wife was employed by Dion Earl’s Total Soccer & Tennis Camps, which paid her $240,000 and withheld $51,000 in taxes, and (3) he made $520,000 in mortgage interest payments on four different properties.  EARL admitted that, in fact, all these claims were false.  That is, EARL admitted that during 2012, EARL made less than $45,000, from which he did not have any taxes withheld, and he paid limited mortgage interest.  Pursuant to these false claims, EARL obtained a federal tax refund of $414,160. 

EARL also admitted that even after the IRS began a civil audit of EARL’s taxes in 2013, he continued to make false claims and provide false information to the IRS.  For example, Earl admitted that, as late as 2015, he falsely claimed he and his wife made $765,000 from Dion Earl’s Total Soccer & Tennis Camps, LLC, and the Seattle Impact FC, from which the businesses withheld $180,000 in taxes.  In making these false claims, EARL sought a tax refund of $137,554.  That refund was not paid, however.  

In total, EARL sought $1.6 million in fraudulent tax refunds and was paid $1,093,534 by the IRS. 

In the plea agreement, EARL also agreed to pay $600,000 in restitution to the State of Arizona, as a result of fraudulent tax returns he filed with that state.  And, while EARL did not admit to submitting false income information to Key Bank in 2008, in order to qualify for a home equity line of credit—as was alleged in the Indictment—in the plea agreement, EARL agreed to make approximately $95,000 in restitution payments to Key Bank.         

The case was investigated by the Internal Revenue Service Criminal Investigation (IRS-CI) and is being prosecuted by Assistant United States Attorney Arlen Storm.

Seattle - A 20-year-old Edmonds, Washington, man pleaded guilty today in U.S. District Court in Seattle to two counts of unlawful possession of a destructive device for his activities at a May 30, 2020, protest that turned violent in downtown Seattle, announced U.S. Attorney Brian T. Moran.  KELLY THOMAS JACKSON faces a maximum ten years in prison when sentenced by U.S. District Judge James L. Robart on March 29,2021.

According to records filed in the case, law enforcement investigated a number of criminal acts at a May 30, 2020, protest, including the arson of several Seattle Police vehicles.  Various videos showed a white male suspect in distinctive clothing using glass containers with a flammable material and a wick to burn or attempt to burn two police vehicles.  JACKSON was identified as a potential suspect in the case after an anonymous tip to law enforcement.  A detailed review of videos from the scene confirmed the suspect resembled JACKSON.  Further, a court-authorized analysis of cell phone records placed JACKSON in the area at the time of the fires.  JACKSON was observed wearing the same distinctive clothing as in the videos.  Finally, additional evidence obtained by law enforcement includes a video of JACKSON throwing one Molotov cocktail into a police vehicle and another video of a glass bottle with a wick.  In his plea agreement, JACKSON admits he accessed web-based information on how to construct Molotov cocktails.  The second Molotov cocktail was thrown at the windshield of a police vehicle, bounced off, and exploded in flames on the sidewalk outside the Nordstrom store. 

Possession of a destructive device is punishable by up to ten years in prison.  The ultimate sentence is up to Judge Robart after considering the sentencing guidelines and other factors.

The case was investigated by the FBI and the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF), with assistance from the Seattle Police Department, the Edmonds Police Department and the Mountlake Terrace Police Department.

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

Seattle – Four men from across the Pacific Northwest were indicted this week for federal hate crimes and making false statements in connection with a December 8, 2018, racially-motivated assault, announced U.S. Attorney Brian T. Moran and Assistant Attorney General for Civil Rights Eric Dreiband. JASON DESIMAS, 44, of Tacoma, Washington; JASON STANLEY, 43, of Boise, Idaho; RANDY SMITH, 38, of Eugene, Oregon; and DANIEL DELBERT DORSON, 24, of  Corvallis, Oregon, are charged with aiding and abetting one another, as they punched and kicked a Black man and making derogatory comments about his actual and perceived race at a bar in Lynnwood, Washington.  The indictment also charges the defendants with assaulting two other men.  DORSON will appear today in U.S. District Court in Eugene, Oregon.

“The U.S. Attorney’s Office for the Western District of Washington has a long and distinguished history of prosecuting those who act on hate,” said U.S. Attorney Moran.  “Whether it is ‘The Order’ in the 1980s, the ‘Atomwaffen’ of today, or this group accused of assaulting a Black man at a local business.  These defendants will be held accountable for their criminal conduct.”

In addition to the hate crime charges, the indictment charges each defendant, separately, with giving false statements to the FBI during the investigation.  Specifically, the indictment alleges JASON DESIMAS falsely claimed that neither he nor anyone else used a racial slur during the assault; JASON STANLEY falsely asserted that he was not even in Washington on the date of the assault; RANDY SMITH allegedly lied about how he had bloodied his knuckles; and DANIEL DELBERT DORSON falsely claimed that he had not planned to attend a white supremacist’s “Martyr’s Day” observance in Washington and that he had not owned a jacket associated with white supremacy hate groups.

FBI Seattle Acting Special Agent in Charge Earl Camp said, “The FBI is committed to investigating federal hate crimes and protecting civil rights.  These violent acts motivated by bias are not only an attack on the victim, but also threaten and intimidate an entire community and are contrary to our values of equality for all Americans to live without fear.”

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

An indictment is a formal accusation of criminal conduct, not evidence of guilt. The defendants are presumed innocent unless and until each is proven guilty.

Two of the defendants, SMITH and STANLEY, are currently in custody in Oregon and Idaho respectively on unrelated charges.  They will be brought to the Western District of Washington for arraignment.

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 Attorney Ye-Ting Woo and Trial Attorney Christine M. Siscaretti of the Justice Department’s Civil Rights Division.

desimas_et_al_indictment.pdf