Western District of Washington
Press releases recorded for this federal judicial district.
Member of Violent South King County Street Gang Sentenced to Prison for Dealing Heroin and Illegal Firearms PossessionRead the Press Release
A known member of the Callejones Escondidos Sureños (CES), a violent street gang based in King County’s South Park neighborhood, was sentenced today in U.S. District Court in Seattle to 66 months in prison, announced U.S. Attorney Brian T. Moran. MARIO PARRA-CETINO, 28, of Kent, Washington pleaded guilty to conspiracy to distribute heroin and being a felon in possession of a firearm. PARRA-CETINO dealt drugs while he was on state probation for domestic violence, including residential burglary, assault, and harassment. At the sentencing hearing U.S. District Judge James L. Robart said this defendant “seems to have no respect for the law... distributing heroin, with children in close proximity. When arrested he ran from police with a handgun in his pocket.”
“Under the guise of being a devoted father, this defendant pedaled heroin throughout south King County – putting a child at risk of exposure to heroin and the violence that comes with drug dealing,” said U.S. Attorney Brian T. Moran. “Federal and local law enforcement have joined forces in a concerted effort to target gang and gun violence in King County. These successful prosecutions are taking dangerous felons off the streets.”
According to records filed in the case, PARRA-CETINA was identified for federal prosecution after he was arrested for illegally possessing a firearm in June 2017, shortly after his release from prison. While that state charge was pending, PARRA-CETINA repeatedly sold heroin to a person working with law enforcement. On August 9, 2018, PARRA-CETINA was arrested while headed to a drug deal, with a 22-month old child riding in the car. In front of the child’s car seat was 65 grams of heroin. In the child’s diaper bag, adjacent to a sippy cup, officers found another 72 grams of heroin. A search of PARRA-CETINA’s residence turned up two firearms as well as additional heroin.
PARRA-CETINA was arrested in Operation East Watch. All eight defendants in Operation East Watch have pleaded guilty. Three of the eight await sentencing later this year.
- Anthony Ripley, 46, of Tacoma, was sentenced in November 2018, to ten years in prison for drug and gun possession crimes.
- Eddie Tarik Musa Bell, Jr was sentenced in November to four years in prison for distribution of methamphetamine and being a felon in possession of a firearm.
- Devon Parramore, 50 of Kent, was sentenced last month to 33 months in prison for distribution of methamphetamine.
- Allen Betts III, 40, of Kent, pleaded guilty of conspiracy to distribute methamphetamine and unlawful possession of a firearm and was sentenced last month to four years in prison.
- Anthony Colbert, 48, of Seattle, pleaded guilty to conspiracy to distribute methamphetamine and is scheduled for sentencing February 22, 2019.
- Neal Stringer, 46, of Kent and Des Moines, pleaded guilty to conspiracy to distribute methamphetamine and being a felon in possession of a firearm. He is scheduled for sentencing in April 2019.
- Kenyon Taylor, 39, of Federal Way, pleaded guilty in December 2018, to distribution of methamphetamine and possession of a firearm in furtherance of a drug trafficking crime. He is scheduled sentencing in March 2019.
This case was brought as part of Project Safe Neighborhoods (PSN), a program that has been historically successful in bringing together all levels of law enforcement to reduce violent crime and make our neighborhoods safer for everyone. The Department of Justice has made turning the tide of rising violent crime in America a top priority. In October 2017, as part of a series of actions to address this crime trend, DOJ leadership announced the reinvigoration of PSN and directed all U.S. Attorney’s Offices to develop a district crime reduction strategy that incorporates the lessons learned since PSN launched in 2001.
The operation was led by the Bureau of Alcohol, Tobacco, Firearms & Explosives’ (ATF) Puget Sound Regional Crime Gun Task Force and the Kent Police Department. The task force contains agents and officers from King County Sheriff’s Office, Washington State Department of Corrections, Washington State Patrol, Drug Enforcement Agency, U.S. Marshals Service, Seattle Police Department, and Valley Narcotics Enforcement Team.
The cases are being prosecuted by Assistant United States Attorney Amy Jaquette and Special Assistant United States Attorney Jessica Manca. Ms. Manca is a Senior Deputy King County Prosecutor specially designated to prosecute gun crimes in federal court.
Former Microsoft Director of Sports Marketing Pleads Guilty to Wire FraudRead the Press Release
The former Director of Sports Marketing and Alliances at Microsoft pleaded guilty today in U.S. District Court in Seattle to wire fraud for his scheme to profit by stealing from Microsoft, announced U.S. Attorney Brian T. Moran. JEFF TRAN, a/k/a TRUNG TRAN, 45 of Seattle, used his position at Microsoft to attempt to steal more than $1.5 million through the creation and submission of fraudulent invoices and the unauthorized use of other Microsoft assets. Chief U.S. District Judge Ricardo S. Martinez scheduled sentencing for May 10, 2019.
According to the plea agreement and other records in the case, TRAN oversaw Microsoft’s promotional relationship with the National Football League (NFL). In March 2017, TRAN caused a fraudulent $775,000 invoice to be issued to Microsoft, supposedly for services related to the 2017 Super Bowl. Tran caused the $775,000 payment from Microsoft to be routed through two Microsoft vendors and then to Tran’s personal bank account. Tran then attempted to cause Microsoft to make a second payment for $670,000, based on another fraudulent invoice. Tran intended to route that payment to a company Tran controlled. When Microsoft vendors became suspicious of Tran’s activity and reported the conduct to Microsoft, Tran destroyed electronic communications and told the vendors to lie to Microsoft about the $775,000 payment. After Microsoft confronted Tran, Tran returned the $775,000.
Tran also stole blocks of Super Bowl tickets and Super Bowl Party tickets belonging to Microsoft. Because of his position, Tran was responsible for determining which Microsoft employees would receive Microsoft Super Bowl tickets. However, instead of distributing all of the tickets to Microsoft employees, TRAN sold over 60 of the tickets through a ticket broker and pocketed more than $200,000. In one instance, TRAN accepted payment from a Microsoft co-worker for Super Bowl tickets claiming that he had personally paid for the tickets – in fact TRAN was selling the other employee tickets belonging to Microsoft.
Wire Fraud is punishable by up to 20 years in prison. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes. The sentence of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors. Prosecutors have agreed to recommend a sentence of no more than three years in prison.
TRAN has already paid restitution to Microsoft of $1,036,000. No further restitution is anticipated.
The case was investigated by the FBI. The case is being prosecuted by Assistant United States Attorney Seth Wilkinson.
Operator of Unlicensed Marijuana Distribution Business Pleads Guilty to Maintaining a Drug Involved Premises and Possession of Oxycodone and Marijuana with Intent to DistributeRead the Press Release
The operator of a Rainier Valley marijuana business pleaded guilty today in U.S. District Court in Seattle to two felonies: operating a drug involved premises, and possession of oxycodone and marijuana with intent to distribute, announced U.S. Attorney Brian T. Moran. KELED ALI, 28, of Seattle was arrested in October 2018, following an ATF and Seattle Police Department investigation of drug activity and gang related shootings near ‘One Stop,’ a marijuana distribution business in the 5300 block of Rainier Avenue South. Chief U.S. District Judge Ricardo S. Martinez scheduled sentencing for May 24, 2019.
According to records filed in the case, law enforcement became aware of gang activity related to the marijuana distribution business following a fatal shooting in December 2017 and a drive-by shooting in March 2018. ‘One Stop’ was not a licensed marijuana distributor under state or federal law. When undercover officers sought to investigate activities at the storefront, they were told marijuana could only be sold to customers introduced by other “members of their club.” On March 5, 2018, law enforcement executed a court authorized search warrant at the store. From a safe in the store officers recovered a 9 mm semi-automatic firearm, and they seized more than three pounds of marijuana from the store.
In October 2018, ALI was arrested after law enforcement observed him make numerous drug sales. In ALI’s car law enforcement found more than two pounds of marijuana and 45 oxycodone pills packaged for resale.
Maintaining a drug involved premises, and possession of marijuana and oxycodone with intent to distribute are both punishable by up to 20 years in prison. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes. The sentence will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
The case was 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.
Chinese Telecommunications Device Manufacturer and its U.S. Affiliate Indicted for Theft of Trade Secrets, Wire Fraud, and Obstruction of JusticeRead the Press Release
WASHINGTON - A 10-count indictment unsealed today in the Western District of Washington State charges Huawei Device Co., Ltd. and Huawei Device Co. USA with theft of trade secrets conspiracy, attempted theft of trade secrets, seven counts of wire fraud, and one count of obstruction of justice. The indictment, returned by a grand jury on January 16, details Huawei’s efforts to steal trade secrets from Bellevue, Washington based T-Mobile USA and then obstruct justice when T-Mobile threatened to sue Huawei in U.S. District Court in Seattle. The alleged conduct described in the indictment occurred from 2012 to 2014, and includes an internal Huawei announcement that the company was offering bonuses to employees who succeeded in stealing confidential information from other companies.
“Today we are announcing that we are bringing criminal charges against telecommunications giant Huawei and its associates for nearly two dozen alleged crimes” Acting Attorney General Matthew G. Whitaker said. “As I told Chinese officials in August, China must hold its citizens and Chinese companies accountable for complying with the law. I’d like to thank the many dedicated criminal investigators from several different federal agencies who contributed to this investigation and the Department of Justice attorneys who are moving the prosecution efforts forward. They are helping us uphold the rule of law with integrity.”
“The charges unsealed today clearly allege that Huawei intentionally conspired to steal the intellectual property of an American company in an attempt to undermine the free and fair global marketplace,” said FBI Director Wray. “To the detriment of American ingenuity, Huawei continually disregarded the laws of the United States in the hopes of gaining an unfair economic advantage. As the volume of these charges prove, the FBI will not tolerate corrupt businesses that violate the laws that allow American companies and the United States to thrive.”
“This indictment shines a bright light on Huawei’s flagrant abuse of the law – especially its efforts to steal valuable intellectual property from T-Mobile to gain unfair advantage in the global marketplace,” said First Assistant U.S. Attorney Annette L. Hayes of the Western District of Washington. “We look forward to presenting the evidence of Huawei’s crimes in a court of law, and proving our case beyond a reasonable doubt. Fair competition and respect for the rule of law is essential to the functioning of our international economic system.”
According to the indictment, in 2012 Huawei began a concerted effort to steal information on a T-Mobile phone-testing robot dubbed “Tappy.” In an effort to build their own robot to test phones before they were shipped to T-Mobile and other wireless carriers, Huawei engineers violated confidentiality and non-disclosure agreements with T-Mobile by secretly taking photos of “Tappy,” taking measurements of parts of the robot, and in one instance, stealing a piece of the robot so that the Huawei engineers in China could try to replicate it. After T-Mobile discovered and interrupted these criminal activities, and then threatened to sue, Huawei produced a report falsely claiming that the theft was the work of rogue actors within the company and not a concerted effort by Huawei corporate entities in the United States and China. As emails obtained in the course of the investigation reveal, the conspiracy to steal secrets from T-Mobile was a company-wide effort involving many engineers and employees within the two charged companies.
As part of its investigation, FBI obtained emails revealing that in July 2013, Huawei offered bonuses to employees based on the value of information they stole from other companies around the world, and provided to Huawei via an encrypted email address.
Under the maximum sentencing provisions applicable to corporate entities, Conspiracy and Attempt to Commit Trade Secret Theft are punishable by a fine of up to $5,000,000 or three times the value of the stolen trade secret, whichever is greater. Wire Fraud and Obstruction of Justice are punishable by a fine of up to $500,000.
The charges contained in the indictment are only allegations. A defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes. If convicted of any offense, the sentencing of the defendants will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
The case is being investigated by the FBI. The case is being prosecuted by Assistant U.S. Attorneys Todd Greenberg and Thomas Woods of the Western District of Washington, with assistance from the Department of Justice’s National Security Division’s Counterintelligence and Export Control Section.
U.S. Attorney Brian T. Moran has been recused from this matter because of legal representations he undertook before he joined the Department of Justice. Per direction from ethics officials in the Department of Justice, First Assistant U.S. Attorney Annette L. Hayes will act as U.S. Attorney with respect to this matter pursuant to the authority conferred by 28 U.S.C. § 515.
huawei_indictment_pacer_1.pdfChinese Telecommunications Device Manufacturer and its U.S. Affiliate Indicted for Theft of Trade Secrets, Wire Fraud, and Obstruction of JusticeRead the Press Release
A 10-count indictment unsealed today in the Western District of Washington State charges Huawei Device Co., Ltd. and Huawei Device Co. USA with theft of trade secrets conspiracy, attempted theft of trade secrets, seven counts of wire fraud, and one count of obstruction of justice. The indictment, returned by a grand jury on January 16, details Huawei’s efforts to steal trade secrets from Bellevue, Washington based T-Mobile USA and then obstruct justice when T-Mobile threatened to sue Huawei in U.S. District Court in Seattle. The alleged conduct described in the indictment occurred from 2012 to 2014, and includes an internal Huawei announcement that the company was offering bonuses to employees who succeeded in stealing confidential information from other companies.
“Today we are announcing that we are bringing criminal charges against telecommunications giant Huawei and its associates for nearly two dozen alleged crimes” Acting Attorney General Matthew G. Whitaker said. “As I told Chinese officials in August, China must hold its citizens and Chinese companies accountable for complying with the law. I’d like to thank the many dedicated criminal investigators from several different federal agencies who contributed to this investigation and the Department of Justice attorneys who are moving the prosecution efforts forward. They are helping us uphold the rule of law with integrity.”
“The charges unsealed today clearly allege that Huawei intentionally conspired to steal the intellectual property of an American company in an attempt to undermine the free and fair global marketplace,” said FBI Director Wray. “To the detriment of American ingenuity, Huawei continually disregarded the laws of the United States in the hopes of gaining an unfair economic advantage. As the volume of these charges prove, the FBI will not tolerate corrupt businesses that violate the laws that allow American companies and the United States to thrive.”
“This indictment shines a bright light on Huawei’s flagrant abuse of the law – especially its efforts to steal valuable intellectual property from T-Mobile to gain unfair advantage in the global marketplace,” said First Assistant U.S. Attorney Annette L. Hayes of the Western District of Washington. “We look forward to presenting the evidence of Huawei’s crimes in a court of law, and proving our case beyond a reasonable doubt. Fair competition and respect for the rule of law is essential to the functioning of our international economic system.”
According to the indictment, in 2012 Huawei began a concerted effort to steal information on a T-Mobile phone-testing robot dubbed “Tappy.” In an effort to build their own robot to test phones before they were shipped to T-Mobile and other wireless carriers, Huawei engineers violated confidentiality and non-disclosure agreements with T-Mobile by secretly taking photos of “Tappy,” taking measurements of parts of the robot, and in one instance, stealing a piece of the robot so that the Huawei engineers in China could try to replicate it. After T-Mobile discovered and interrupted these criminal activities, and then threatened to sue, Huawei produced a report falsely claiming that the theft was the work of rogue actors within the company and not a concerted effort by Huawei corporate entities in the United States and China. As emails obtained in the course of the investigation reveal, the conspiracy to steal secrets from T-Mobile was a company-wide effort involving many engineers and employees within the two charged companies.
As part of its investigation, FBI obtained emails revealing that in July 2013, Huawei offered bonuses to employees based on the value of information they stole from other companies around the world, and provided to Huawei via an encrypted email address.
Under the maximum sentencing provisions applicable to corporate entities, Conspiracy and Attempt to Commit Trade Secret Theft are punishable by a fine of up to $5,000,000 or three times the value of the stolen trade secret, whichever is greater. Wire Fraud and Obstruction of Justice are punishable by a fine of up to $500,000.
The charges contained in the indictment are only allegations. A defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes. If convicted of any offense, the sentencing of the defendants will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
The case is being investigated by the FBI. The case is being prosecuted by Assistant U.S. Attorneys Todd Greenberg and Thomas Woods of the Western District of Washington, with assistance from the Department of Justice’s National Security Division’s Counterintelligence and Export Control Section.
U.S. Attorney Brian T. Moran has been recused from this matter because of legal representations he undertook before he joined the Department of Justice. Per direction from ethics officials in the Department of Justice, First Assistant U.S. Attorney Annette L. Hayes will act as U.S. Attorney with respect to this matter pursuant to the authority conferred by 28 U.S.C. § 515.
Brian T. Moran Sworn in as U.S. Attorney for the Western District of WashingtonRead the Press Release
U.S. Attorney Brian T. Moran became the chief federal law enforcement officer in the Western District of Washington today, following his confirmation by the U.S. Senate. U.S. Attorney Moran will lead the office of 76 attorneys and 67 professional staff dedicated to prosecuting federal criminal cases, and serving as legal counsel for the U.S. government. Mr. Moran comes to the office with a deep record of public service at both the Washington State Attorney General’s Office and the Kitsap County Prosecuting Attorney’s Office.
“I'm truly humbled and honored to lead this office of dedicated professionals,” U.S. Attorney Moran said. “I am pleased to return to public service in an office whose sole mission is to serve the citizens of the Western District of Washington.
I also want to thank Annette Hayes for serving in the interim as U.S. Attorney until her successor could be confirmed. Annette has ensured that the important work of the office continued seamlessly and she has been an invaluable resource to me as I transition into office.”
U.S. Attorney Moran previously served as Chief Deputy Attorney General for the Washington State Attorney General, managing more than 500 attorneys and 27 legal divisions. In that role, he played a significant role in shaping legal strategy in areas such as consumer protection, privacy and data breach investigations. Mr. Moran was a key partner and legal advisor for state and local law enforcement. 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.
Prior to his work with the Washington State Attorney General, Mr. Moran served as a Senior Deputy Prosecutor with the Kitsap County Prosecutor’s Office. His extensive trial experience includes prosecuting numerous high profile murder cases, white-collar fraud cases and the prosecution of environmental crimes.
U.S. Attorney Moran earned his law degree in 1987 from the University of Puget Sound (now Seattle University Law School). He is a graduate of Middlebury College.
U.S. Attorney Annette L. Hayes to Step DownRead the Press Release
U.S. Attorney Annette L. Hayes announced that she is stepping down from the U.S. Attorney post on January 17, 2019, when Brian T. Moran is sworn in as the Senate confirmed, politically appointed U.S. Attorney. U.S. Attorney Hayes became Acting U.S. Attorney on October 1, 2014. She was subsequently appointed by Attorney General Eric Holder, and then the U.S. District Court for the Western District of Washington to serve on an interim basis as U.S. Attorney until a presidentially appointed U.S. Attorney was confirmed by the Senate.
“As my tenure as U.S. Attorney comes to a close, I want to reiterate what an honor it has been to lead an office of dedicated public servants focused on seeking justice and protecting the public,” said U.S. Attorney Annette L. Hayes. “Whether it was dismantling complex drug trafficking organizations, taking dangerous guns off our streets, bringing cyber criminals to justice, protecting civil rights, or a host of other impactful work, this office has worked tirelessly with our federal, state, local and tribal law enforcement partners to protect our Western Washington communities, and the nation as a whole. I am pleased to turn over the helm of the office to its next leader, Brian T. Moran.”
Under U.S. Attorney Hayes’s leadership, the office successfully prosecuted multiple international cyber intrusion cases including obtaining the conviction at trial of Russian hacker Roman Seleznev. The office also prosecuted public corruption cases including that of an IRS agent soliciting bribes from a marijuana business owner, and the fraud case against former state Auditor Troy Kelley. The office expanded its work in Indian Country, using new legal tools to prosecute habitual domestic abusers and increasing resources to combat the opioid epidemic. The office also continued to grow its efforts to enforce civil rights laws and provide alternative paths for protecting public safety, including supporting district-wide prisoner reentry efforts and our innovative federal drug court. In addition, as U.S. Attorney, Hayes worked closely with state and local counterparts to secure funding for programs to take guns out of the hands of dangerous felons, and combat violent gangs and drug trafficking organizations.
During her tenure, U.S. Attorney Hayes also was a member of several Attorney General Advisory Subcommittees focused on addressing issues of concern to the Department as a whole and the U.S. Attorney community in particular. From 2014 through early 2017, she was one of the co-chairs of the Attorney General’s Advisory Committee Working Group on Marijuana. In addition to other assignments, throughout her tenure as U.S. Attorney, she was a member of the Attorney General’s Advisory Committee Native American Issues Subcommittee, Border and Immigration Subcommittee, and Cyber and Intellectual Property Subcommittee.
Annette L. Hayes joined the U.S. Attorney’s Office in 1997 as an Assistant United States Attorney in the Criminal Division. She prosecuted a range of drug cases including large-scale, international trafficking and cartel related cases. In 2002, she became the Deputy Supervisor of the Complex Crimes Unit where she prosecuted cyber hacking and intellectual property cases while working with law enforcement on outreach to the private sector. In 2005, she became one of the supervisors of the General Crimes Unit where she worked closely with, and trained many new attorneys on a range of federal crimes including child exploitation, drug, fraud, identity theft, immigration and violent crimes cases. In 2010, Ms. Hayes became the First Assistant U.S. Attorney serving as second-in-command in the U.S. Attorney’s Office responsible for – among other things – overseeing and managing the criminal, civil, appellate and administrative divisions in the office.
Prior to joining the U.S. Attorney’s Office, Ms. Hayes spent her first six years as an attorney handling a variety of civil litigation matters at international law firms in Seattle, and Washington, D.C.
Ms. Hayes is a graduate of Cornell Law School and Williams College.
Tacoma Man Sentenced to Four Years in Prison for Dealing Drugs on the Dark WebRead the Press Release
A 31-year-old Tacoma, Washington man was sentenced today to four years in prison and three years of supervised release for his scheme to distribute MDMA and LSD on the dark web, announced U.S. Attorney Annette L. Hayes. TRAVIS PHILLIPS, was identified in April 2017, as a drug vendor on the dark web. At the sentencing hearing, U.S. District Judge Richard A. Jones noted that PHILLIPS was caught with more than 8600 tabs of MDMA, as well as guns. “Every time that you sold MDMA, that could be the start of a downward cycle for a young person,” Judge Jones said. “When you have firearms and drugs the reason is you are fearful someone will come after you.”
“Drug dealing on the dark web is the new drug dealing frontier,” said U.S. Attorney Annette L. Hayes. “Those too frightened to make a face-to-face purchase may feel emboldened to purchase via the web, expanding the circle of those who fall prey to the scourge of drug addiction. Dark web drug dealers should know they are not safe – they will be found and held to account just like anyone else peddling dangerous drugs in our communities.”
According to records filed in the case, in April 2017, the Dutch National Police alerted U.S. authorities of a shipment of 7000 tablets of MDMA headed to a private mail facility in Renton. Law enforcement seized the drugs and left the box for the recipient. The package had been shipped to a fake name. On May 2, 2017, PHILLIPS arrived to pick up the package –he had a young child in his car. Law enforcement followed PHILLIPS to his home and ultimately detained PHILLIPS. PHILLIPS allowed law enforcement to search his car and home. Agents seized MDMA powder, 155 hits of LSD, psilocybin mushrooms, fake ID and a semi-automatic handgun and rifle. PHILLIPS had also been investigated for internet drug dealing in 2016 in California.
PHILLIPS pleaded guilty in May 2018.
The case was investigated by Homeland Security Investigations and the U.S. Postal Inspection Service. The case was prosecuted by Assistant United States Attorney Thomas Woods and Special Assistant United States Attorney Joseph Silvio. Mr. Silvio is an attorney with Homeland Security Investigations specially designated to prosecute international trafficking cases in federal court.
Iraqi Citizen Sentenced to Prison for Scheme to Smuggle Firearms to Kurdish Militia in Northern IraqRead the Press Release
An Iraqi citizen who conspired to ship firearms to Kurdish militia members in Iraq, was sentenced today in U.S. District Court in Seattle to one year in prison and three years of supervised release for conspiring to smuggle goods from the United States, announced U.S. Attorney Annette L. Hayes. RAWND KHALEEL ALDALAWI, 30, was arrested January 24, 2018 in Bellevue, Washington. The investigation and arrest followed the discovery of some 47 firearms concealed in two vehicles being shipped through Turkey to Kurdistan, a part of northern Iraq. U.S. District Judge Robert S. Lasnik imposed the sentence.
“This defendant sent weapons into a war zone where U.S. troops are stationed,” said U.S. Attorney Annette L. Hayes. “We don’t know where those guns wound up – whether in the hands of those attacking innocents, U.S. troops, or other allies. This scheme increased the risks of violent attack for those living in an already dangerous part of the world – exactly what our arms export laws are enacted to protect.”
According to records filed in the case, between October 2016 and November 2017, ALDALAWI and co-defendant Paul Stuart Brunt, 52, of Bellevue, engaged in a scheme to smuggle firearms from the U.S. to people associated with the Peshmerga military in Kurdistan. Brunt purchased the firearms at gun stores and gun shows around the Puget Sound region. The men then attempted to ship the guns from the Port of Seattle through Turkey and on to Iraq, hidden in the side panels and trunk cavities of vehicles. In the first shipment in February 2017, some 30 guns were hidden in three cars. In the second shipment in November 2017, 47 firearms were concealed in two vehicles. That second shipment was discovered by authorities in Turkey, and the shipment was traced back to Brunt and ALDALAWI. The men had not obtained any export licenses for the firearms and smuggled them in violation of the Arms Export Control Act.
Co-Defendant Brunt pleaded guilty in July 2018 and is scheduled for sentencing March 1, 2019.
The case is being investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI), and the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF).
The case is being prosecuted by Assistant United States Attorney Thomas Woods. The U.S. Department of Justice National Security Division is assisting with the prosecution.
Note: During the lapse in appropriations, the U.S. Attorney’s Office for the Western District of Washington is required to curtail certain of its operations pursuant to applicable law and policy. Nevertheless, the office continues to fulfill its law enforcement responsibilities by prosecuting criminal cases. The office will continue to provide public information about certain significant cases including those impacting national security.
FBI Arrests Former Washington Resident who Fraudulently Promoted IPO Stock SchemeRead the Press Release
A 27-year-old man was arrested in Los Angeles today on a criminal complaint charging him with wire fraud, announced U.S. Attorney Annette L. Hayes. KEENAN A. GRACEY, formerly of Newcastle, Washington, defrauded Seattle-area investors and others out of millions of dollars by pretending to sell them stock that GRACEY did not own and had no right to sell. GRACEY will make his initial appearance in U.S. District Court in Los Angeles.
According to the criminal complaint, between 2016 and 2018, GRACEY posed as a British billionaire with degrees from the London School of Economics and Oxford University. He drove expensive cars such as Bentleys and Ferraris and claimed to own expensive homes in Clyde Hill, Mercer Island, and Newcastle, Washington, as well as in Beverly Hills and San Diego, California. GRACEY also used falsified bank statements to make it appear he had hundreds of millions of dollars of cash on hand. The investigation revealed that GRACEY is Canadian, not British, and rented expensive homes and cars to make it appear he was wealthy.
GRACEY told potential investors he had special access to millions of shares of “pre IPO” stock that would produce returns of as much as 60 times the initial investment. Some investors gave GRACEY as much as $745,000, believing that they were purchasing stock. In fact, GRACEY did not own any of the stock he was pretending to sell, and simply stole the victims’ money. According to the complaint, investigators have identified more than 25 investors who transferred over $3.4 million to Gracey through bank wires.
The Securities and Exchange Commission filed a civil suit against GRACEY in May 2018 and obtained a temporary restraining order barring him from selling securities. In September 2018, the order was made permanent and GRACEY was ordered to disgorge $4.4 million in cash and wire transfers that he had fraudulently obtained from investors.
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.
Wire fraud is punishable by up to 20 years in prison.
The case is being investigated by the FBI. The case is being prosecuted by Assistant United States Attorney Seth Wilkinson.
Vancouver, Washington Toxicology Testing Lab Settles Allegations it Paid Kickbacks for Government Program BusinessRead the Press Release
A Vancouver, Washington toxicology and genetic testing laboratory has agreed to pay up to $1,777,738 to settle allegations that it violated the False Claims Act by paying illegal kickbacks to obtain referrals from government healthcare insurance programs, announced U.S. Attorney Annette L. Hayes. Molecular Testing Labs is a wholly owned subsidiary of Blackfly Investments, LLC.
“The False Claims Act and Anti-Kickback Statute are aimed at making sure taxpayers get value for their money,” said U.S. Attorney Annette L. Hayes. “Those who try to game the system will be held accountable. This settlement sends a clear message that those doing business with government healthcare programs are being scrutinized to ensure they are not engaging in illegal side deals that harm government healthcare systems.”
According to the settlement, between August 2014 and July 2015, the United States claims that Molecular Testing Labs made payments to local laboratories in exchange for referrals of Medicare and TRICARE program business, in violation of the Anti-Kickback Statute. The United States further claims that by submitting claims for payment to Medicare and TRICARE based on those illegal referrals, Molecular Testing Labs violated the False Claims Act.
Paying remuneration to medical providers or provider-owned laboratories in exchange referrals encourages providers to order medically unnecessary services. The False Claims Act and the Anti-Kickback Statute function, in part, to discourage such behavior.
“Kickbacks intended to gain government program business amount to little more than thinly-veiled bribes,” said Steven J. Ryan, Special Agent in Charge of the Office of Inspector General for the U.S. Department of Health and Human Services. “Along with our law enforcement partners these cases will be thoroughly investigated and resolved.”
“Every year, fraudulent medical claims cause immeasurable damage to U.S. taxpayers by wrongly inflating health care costs,” said Special Agent in Charge Chris D. Hendrickson, Defense Criminal Investigative Service, Western Field Office. “The announced settlement between the U.S. Government and Molecular Testing Labs is a victory for the U.S. taxpayer, and representative of DCIS and our law enforcement partners’ commitment to aggressively pursue those who attempt to defraud the U.S. military’s health care program and other health care programs in order to ensure the health care system works for U.S. military personnel and their families.”
Molecular Testing Labs remains in separate litigation with the Centers for Medicare & Medicaid Services (CMS) concerning potential overpayment of claims. Depending on the outcome of that litigation, the ultimate settlement in this case could be between $180,000 and $1,777,738.
In addition to the U.S. Attorney’s Office, this matter was investigated by the Department of Health and Human Services Office of the Inspector General (HHS-OIG), the Defense Health Agency of the U.S. Department of Defense, and the FBI. Assistant United States Attorneys Pooja Faldu Davé and Kayla Stahman negotiated the settlement for the U.S. Attorney’s Office.
Man who Held ATF Undercover Agent and Confidential Informant at Gunpoint Pleads GuiltyRead the Press Release
One of two men who attempted to rob a federal agent working on an illegal firearms investigation, pleaded guilty today to three federal felonies, announced U.S. Attorney Annette L. Hayes. ABDIRASHID HARET, 20, of Des Moines, Washington, pleaded guilty today to assault on a federal officer and person assisting a federal officer, using a firearm in a crime of violence and robbery of funds belonging to the United States. When sentenced by U.S. District Judge James L. Robart on March 25, 2019, prosecutors will recommend up to 15 years in prison. The ultimate sentence will be determined by Judge Robart and the statutory maximum is life in prison.
According to the facts in the plea agreement, HARET and co-defendant OMAR ABDULLAH, 23, of Seattle, Washington, had made arrangements to sell two firearms to a man who, unknown to them, was a confidential informant (CI) working with ATF. The CI and an undercover ATF agent met with HARET and ABDULLAH in a vehicle in the parking lot of the Kent Lowe’s store. After the agent and CI got in the car, HARET and ABDULLAH used the two loaded the firearms they brought to the meeting to rob the undercover agent and the CI. The undercover agent told HARET and ABDULLAH he would get additional money out of his car. HARET followed the agent out of the car, still armed with a firearm. The undercover agent was able to pull his own gun and fired at ABDULLAH who still held the CI at gunpoint in the car. HARET dropped his gun and attempted to flee. He was struck and injured running across Pacific Highway. Both ABDULLAH and HARET were taken to medical facilities. ABDULLAH continues to get specialized treatment for his gunshot wounds.
Assault on a federal officer and person assisting a federal officer is punishable by up to twenty years in prison. Using a firearm during a crime of violence is punishable by a mandatory minimum seven years in prison and up to life in prison. Robbery of money of the United States is punishable by up to twenty years in prison.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF).
The case is being prosecuted by Assistant United States Attorney Todd Greenberg.
Former Costco Employee Sentenced to Prison for Embezzling Nearly $290,000 by Making False Entries in Customer AccountsRead the Press Release
A 20-year Costco employee was sentenced December 17, 2018, in U.S. District Court in Tacoma to one year in prison for wire fraud in connection with her five-year scheme to steal nearly $290,000 from her employer, announced U.S. Attorney Annette L. Hayes. ROBIN G. CLINE, 54, of Puyallup, Washington, was employed as an Accounts Receivable Clerk at Costco’s Fife, Washington facility from 1996 until she resigned in 2016. CLINE pleaded guilty in June 2018, admitting that between 2011 and 2016, she had manipulated entries in business customer accounts to steal from both Costco and its customers. At sentencing U.S. District Judge Benjamin H. Settle said the conduct was “outrageous,” and deserving of a significant sanction.
According to records filed in the case, as a Clerk in Accounts Receivables CLINE had authority to process payments, refunds and other credits for Costco business customers. Beginning in 2011, the investigation revealed that CLINE made false entries into customer accounts such as credits, refunds or charges. CLINE then used these false entries to funnel money from Costco and Costco business customers into her bank accounts and a bank account associated with her son. CLINE used false entries to steal money in multiple ways. She made false entries indicating a customer had returned an item or disputed a purchase resulting in a credit balance on the customer account. CLINE then funneled the credit balance to her bank account, not back to the business customer. Another way CLINE embezzled was to double bill customers for merchandise, and then ‘correct’ the double billing by refunding money to the customer – however, CLINE arranged for the refund to be funneled into her bank accounts or her son’s bank account.
The forensic examination revealed CLINE used the funds to buy a luxury car, and pay for personal expenses.
In all, CLINE posted more than 290 false entries involving more than 100 customer accounts. Costco refunded money to each customer who suffered a loss, and paid an extra 10 percent premium to each one. Writing to the court Costco executives noted that CLINE had betrayed the trust the company placed in her and damaged its reputation with the customers. Another executive noted that in order to hide her scheme CLINE made derogatory evaluations of co-workers indicating they could not learn the accounting systems – in that way she protected her theft by keeping their eyes off the books. It was not until CLINE was on an extended leave that the fraud was uncovered.
CLINE has agreed to pay restitution of $289,975.
The case was investigated by the FBI. The case is being prosecuted by Assistant United States Attorney Stephen P. Hobbs.
City of Seattle Files Audit of Crisis Intervention Efforts that Demonstrate Sustained Compliance with Consent DecreeRead the Press Release
SEATTLE – On Monday, in accordance with the Court-approved plan for demonstrating sustained compliance for two years, the City of Seattle filed an audit of crisis intervention reforms required by the consent decree it entered into with the Department of Justice (DOJ). The filing in U.S. District Court demonstrated that Seattle Police Department (SPD) has sustained compliance with its ongoing crisis intervention requirements, including continuing crisis training, engagement with the Crisis Intervention Committee, and by engaging with individuals in crisis consistent with its crisis intervention and force policies.
Both the DOJ and the Court’s independent monitor, Merrick Bobb, concluded that the City has sustained compliance with the consent decree and demonstrated a willingness and ability to critically self-assess their own progress in these areas.
“This audit demonstrates that SPD continues to be in compliance with one of the most important aspects of the consent decree – how officers approach incidents involving people in crisis and the internal reporting and accountability of those efforts,” said Annette L. Hayes, U.S. Attorney for the Western District of Washington. “Getting this right is critical to effective and constitutional policing, and it is encouraging that encounters with people experiencing crisis are resulting in very low uses of force and high rates of diversion to services. SPD continues to critically self-analyze and evaluate reform efforts with continued oversight from its accountability system, the Court, Monitor, and DOJ.”
The audit relies in part on data and information from the 18-month period between January 1, 2017 and June 30, 2018, when SPD made 15,995 contacts with persons believed to be experiencing a behavioral crisis. Use of force against persons in behavioral crisis remains low and resolutions that result in a connection to services remains high. Of the 15,995 crisis contacts reported, 277 – or 1.74 percent – involved any use of reportable force and in three-quarters of cases no greater than the lowest level of force (Type I) was used and just five (0.9%) were Type III uses of force. Referrals to designated crisis service providers increased by 103% during 2017.
The audit also demonstrates that there are high rates of CIT certification among patrol officers (73%), rendering the vast majority of patrol officers well-equipped for encounters with people in crisis. SPD officers have kept up with demand despite a 12% increase in dispatched crisis contacts. Approximately 80% of crisis contacts involved a CIT certified officer. The high number of CIT-certified officers responding to crisis incidents may also, in turn, account for some of the outcomes Seattle has experienced with respect to people in crisis.
Further, the audit and review by the DOJ and the Monitoring Team found that when issues related to the use of force against a person in crisis did exist, the chain of command made appropriate referrals. For example, in a matter involving an officer’s failure to de-escalate and potential use of excessive force, the chain referred the matter to the Office of Police Accountability, ultimately resulting in a referral for criminal prosecution (the officer was charged with assault). Likewise, where a supervisor identified that an officer’s statements could have contributed to the eventual need to use force in an incident, the supervisor referred the officer for additional training.
The audit also highlights that SPD must focus more of its training in crisis, de-escalation, and team tactics on the designation of a tactical leader and the formation of a contact team and its positioning. Further, this training should specify that when an incident involves a person in crisis and one or more CIT-certified officers on scene, a CIT-certified officer should be designated as the tactical leader.
Background
In January 2018, the Court found the City of Seattle in “full and effective compliance” with reforms required by the consent decree signed in 2012. This finding triggered Phase II of police reform in Seattle – a two-year “sustainment period” during which the City and SPD must maintain compliance with the consent decree.
During the Phase II sustainment period, the City must demonstrate its ongoing compliance through seven quarterly reports and three types of self-assessments: audits of its practices, reviews of SPD’s policies, and outcome reports that summarize policing data for the public. Quarterly reports must include recent data on use-of-force and crisis intervention practices, an update on the activities of SPD’s Force Review Board and Unit, and a discussion of relevant activities of the accountability organizations — the Office of Police Accountability (OPA), the Office of the Inspector General (OIG), and the Community Police Commission (CPC).
The first quarterly report was filed on July 31, 2018. A quarterly report on data and activities during the months of August-October, two audits relating to use of force investigations and internal supervision, an outcome report on its crisis intervention activities, and a review of the Seattle Police Department’s (SPD’s) stops and detentions policy were filed on October 31, 2018.
California Man Sentenced to Ten Years in PrisonRead the Press Release
A Palmdale, California man was sentenced today in U.S. District Court in Tacoma to ten years in prison and five years of supervised release for possession of controlled substances with intent to distribute, announced U.S. Attorney Annette L. Hayes. DANIEL GUERRERO, 28, of Palmdale, California, was identified as a source for Mexican cartel connected fentanyl, heroin and methamphetamine in late July 2017. GUERRERO entered into a drug deal with a person working with law enforcement that resulted in the seizure in August 2017 of 11 kilos of fentanyl, one kilo of heroin, and 12 pounds of methamphetamine. The drugs were seized from a mini-van parked at an apartment complex in Puyallup, Washington. At the sentencing hearing U.S. District Judge Benjamin H. Settle said “I cannot emphasize how serious fentanyl distribution is; to call it ‘trafficking in death’ is not hyperbole.”
“More than 29,000 people died in 2017 from overdoses involving illegal fentanyl – more than five times as many deaths as occurred in 2014,” said U.S. Attorney Annette L. Hayes. “The seizure of more than 11 kilos of fentanyl took millions of doses of a very dangerous drug off the streets of western Washington communities. We will continue to use all tools available to stop the trafficking of fentanyl and save lives wherever we can.”
According to records filed in the case, GUERRERO was planning on selling the seized drugs for $350,000. GUERRERO left the California licensed mini-van at a Puyallup apartment and used a rental car to take his family to eastern Washington. Law enforcement seized the drugs and mini-van. GUERRERO quickly left Washington State for California and then traveled on to Mexico. Law enforcement officers in full haz-mat suits were called in to search the mini van. Because even a minimal amount of fentanyl can be fatal, the drugs were immediately transferred to the DEA Western Regional Laboratory in California.
GUERRERO was charged by criminal complaint and when he attempted to return to the United States at Nogales, he was arrested on the warrant. GUERRERO pleaded guilty in October 2018.
The case was investigated by the U.S. Drug Enforcement Administration (DEA) Tacoma Resident Office, along with the Tahoma Narcotics Enforcement Team (TNET), which consists of the Washington Department of Corrections, Auburn Police Department, Bonney Lake Police Department Lakewood Police Department, Tacoma Police Department, Puyallup Police Department, and the Pierce County Sheriff's Office. The case was supported by the Northwest High Intensity Drug Trafficking Area (HIDTA) and National Guard.
The case is being prosecuted by Assistant United States Attorney Marci L. Ellsworth.
Update: 43 Arrested in Multi-State International Drug Trafficking OrganizationRead the Press Release
An 18-month law enforcement operation resulted in 43 arrests and significant seizures over December 5-7, 2018, announced U.S. Attorney Annette L. Hayes. Hundreds of law enforcement officers were involved in making arrests and serving search warrants targeting a multi-state drug trafficking network led by drug cartel members in Mexico. The drug trafficking organization distributing heroin, fentanyl, cocaine, and methamphetamine was active in Washington State, New York, Arizona, Oregon, California, Tennessee, and Utah. One of the local high-level managers of the drug trafficking group, CARLOS EDUARDO LOPEZ HERNANDEZ, 22, of Kent, Washington is in federal custody.
“Drug rings that peddle dangerous drugs–especially fentanyl masquerading as oxycodone pills–are a real and present danger in our communities,” said U.S. Attorney Annette L. Hayes. “When these rings are operated by cartels in Mexico, we will bring federal resources to bear every day of the week. I commend the hard work of all our federal, state, local, and tribal law enforcement partners who banded together to take decisive action and protect our western Washington cities and towns.”
Before the recent law enforcement actions, as part of the investigation, agents and officers had seized 7 kilos of heroin, 1.5 kilos of products containing fentanyl, methamphetamine and $164,000 in cash. On December 5 through 7, 2018, law enforcement seized more than 40 pounds of heroin, 10,000 fake oxycodone pills containing fentanyl, 8 pounds of suspected fentanyl powder, 6.5 pounds of methamphetamine, 3 pounds of cocaine, 39 firearms, and more than $435,000 in cash.
In Western Washington the group distributed drugs in Pierce, Kitsap, King, Skagit, and Snohomish Counties. Over the course of the investigation law enforcement seized thousands of counterfeit oxycodone pills tainted with fentanyl, a powerful and potentially deadly opioid. Following one seizure from a vehicle, Washington State Patrol troopers were hospitalized for their accidental exposure during the investigation.
“The dangerous pills containing fentanyl flowing through this pipeline operated by this Western Washington distribution network has been shut down,” said DEA Special Agent in Charge Keith Weis. “Those profiting from pushing illicit opioids such as fentanyl and heroin into our most vulnerable communities will be met with a significant law enforcement response.”
The investigation began 18 months ago with drug seizures by the Bremerton Police Department. More recently, on November 28, 2018, law enforcement seized more than 13 pounds of heroin from the engine compartment of a semi-truck driven by a frequent smuggler for the ring. In addition to coded cell phone conversations, many of the members of the ring also communicated via Facebook messenger.
“An agency the size of Bremerton can impact crime on a larger scale when it is able to partner with agencies like the DEA,” said Bremerton Chief of Police James Burchett. “I am very proud of the hard work and dedication of all the officers and agents that made this operation a reality.”
This was an Organized Crime and Drug Enforcement Task Force (OCDETF) investigation, providing supplemental federal funding to the federal and state agencies involved. This investigation was conducted by the DEA Tacoma Resident Office and the Bremerton Police Department, with significant assistance from the Tahoma Narcotics Enforcement Team (TNET), Special Operations Division, Chantilly, Virginia, and Northwest High Intensity Drug Trafficking Area (HIDTA).
The multi-agency takedown operation was supported by DEA Seattle; DEA Los Angeles; DEA San Diego, DEA San Francisco, and DEA Phoenix; as well as Homeland Security Investigations; Bureau of Alcohol, Tobacco, Firearms & Explosives; Federal Bureau of Investigation; U.S. Marshals Service; West Sound Narcotics Enforcement Team; Joint Narcotics Enforcement Team; Grays Harbor Drug Task Force; Snohomish County Regional Drug Task Force; Valley Narcotics Enforcement Team; Skagit County Inter-local Drug Enforcement Unit; Thurston County Narcotics Enforcement Team; Lewis County Joint Narcotics Enforcement Team; Pierce County Sheriff’s Department; King County Sheriff’s Department; Kitsap County Sheriff’s Office; Snohomish County Sheriff’s Office; Aberdeen Police Department; Auburn Police Department; Bothell Police Department; Bremerton Police Department; Burlington Police Department; Fife Police Department, Seattle Police Department; Tacoma Police Department; Lakewood Police Department; Bonney Lake Police Department; Kent Police Department; Everett Police Department; Mill Creek Police Department; Quinault Nation Police Department; Hoquiam Police Department; Washington State Department of Corrections; Washington State Patrol; Mount Vernon Police Department; Oregon State Police; and Washington and Oregon National Guard.
Tactical operations were conducted by DEA’s Special Response Teams (SRT) from Seattle and San Francisco. Additional support was provided by Bremerton Special Operations Group; Lakewood Special Operations; FBI SWAT; King County SWAT; Kitsap County SWAT; Mount Vernon SWAT; North Sound Metro SWAT, Pierce County Metro SWAT; Pierce County SWAT; Seattle PD SWAT; Snohomish County SWAT; Washington State Patrol SWAT; Skagit County HRT; Valley SWAT; and the U.S. Marshal’s Pacific Northwest Violent Offender Task Force.
The cases are being prosecuted by Assistant United States Attorneys Marci Ellsworth and Karyn Johnson.
Operator of Three Edmonds, WA Childcare Centers Agrees to Improve Staff Training for Children with DiabetesRead the Press Release
The operator of three childcare centers in Edmonds, Washington settled a civil investigation with the U.S. Department of Justice by agreeing to a series of steps to accommodate attendance at the centers by children with diabetes, announced U.S. Attorney Annette L. Hayes. ‘Grow with Us’ childcare centers agreed to train managers and staff on American with Disabilities (ADA) regulations and more specifically, how to ensure the medical needs of children with diabetes are met during their time at daycare.
The agreement follows complaints from the foster parents of a child with Type I diabetes, alleging that the childcare center refused to take reasonable steps to modify their policies, practices, and procedures to accommodate the child’s medical needs.
“The ADA is clear that all children, regardless of their health status, deserve full and equal access to schools, camps and daycare centers,” said U.S. Attorney Annette L. Hayes. “I am pleased that after we began our investigation, ‘Grow With Us’ child care centers agreed to take steps to ensure their facilities were in full compliance with the ADA.”
According to the settlement agreement, the childcare centers will provide a staff member to assist children with diabetes with routine care tasks such as testing blood sugar levels and administering insulin by pen, syringe or pump. The childcare centers agree to train managers and staff and provide diabetes management information on its website. The centers also have committed to report to DOJ about those leading the training and the training materials used by the center.
Diabetes affects approximately 215,000 Americans that are 20 years or younger. In recent years DOJ has reached settlements with other childcare providers, schools and camps with regard to diabetes care including, KinderCare, YMCA of Chicago and YMCA of Philadelphia.
The investigation and settlement were handled by Assistant United States Attorney Kayla Stahman.
Member of Quileute Tribe Sentenced to Six Years in Prison for Vehicle Assault on Tribal Police OfficerRead the Press Release
A 33-year-old member of the Quileute Tribe was sentenced last week in U.S. District Court in Tacoma to 6 years in prison for assaulting a federal officer and stealing a car on tribal land, announced U.S. Attorney Annette L. Hayes. JUANITA ELENA PENN-SALAZAR, was arrested April 11, 2018, after a police chase on the Quileute Reservation in La Push, Washington. At the sentencing hearing U.S. District Judge Ronald B. Leighton imposed three years of supervised release to follow the prison term.
According to records filed in the case, PENN-SALAZAR stole a Toyota Camry outside a small store on the reservation. She had asked the car’s owner for a ride and when the owner refused, PENN-SALAZAR smashed the car window and took the vehicle. A Tribal police officer responded to the report of a stolen car. As he drove on the reservation looking for the vehicle, PENN-SALAZAR pulled out from a subdivision and struck the patrol car. PENN-SALAZAR fled in the stolen car at speeds over 80 miles-per-hour. PENN-SALAZAR drove the stolen Camry into the patrol car two more times – the final time pinning the officer in the car. Other law enforcement officers pursued PENN-SALAZAR through the reservation. At one point, she aimed and accelerated the stolen vehicle at an officer who was placing spike strips to try to stop the car. Fortunately, that officer was able to jump out of the way. Ultimately, PENN-SALAZAR was taken into custody.
Toxicology reports show PENN-SALAZAR was under the influence of methamphetamine and marijuana at the time of the chase.
In September 2018, PENN-SALAZAR pleaded guilty to assault on a federal officer and theft of a motor vehicle.
The case was investigated by the FBI. The case was prosecuted by Assistant United States Attorney Rebecca Cohen.
Seattle Man Sentenced to Prison for Cyberstalking Campaign Against a Former Friend and a Co-WorkerRead the Press Release
A former Seattle, Washington information technology professional was sentenced today in U.S. District Court in Seattle to 30 months in prison and three years of supervised release for conducting cyberstalking and threat campaigns against multiple victims, announced U.S. Attorney Annette L. Hayes. JOEL KURZYNSKI, 39, was also ordered to pay $37,682 in restitution to the victims. At the sentencing hearing U.S. District Judge Robert S. Lasnik noted that some strike terror with a gun or a bomb, but in this case KURZYNSKI “terrorized with a smart phone and a computer…. Cyberstalking and terrorizing people like this is a violent crime and there will be prison sentences.”
“This defendant tormented his victims through death threats, the creation of fake dating profiles, and waves of ceaseless harassment,” said U.S. Attorney Hayes. “He cruelly exploited his computer skills and his knowledge of these victims to make them fear for their lives and the lives of their loved ones. Such conduct cannot be tolerated and will be aggressively prosecuted by the Department of Justice.”
In September 2018, KURZYNSKI pleaded guilty to two counts of cyberstalking. According to records filed in the case, KURZYNSKI engaged in an extensive and rapidly escalating cyberstalking campaign that targeted two individuals known to him. The online campaign involved -- among other things -- death threats, body shaming, and hate speech. Beginning in March 2017, KURZYNSKI orchestrated numerous spam phone calls to Victim 1. The conduct soon escalated to fake dating profiles wherein KURZYNSKI portrayed Victim 1 as seeking sadomasochistic or underage relationships. These profiles contained photographs of Victim 1 and his contact information, resulting in solicitations and harassing messages directed toward Victim 1 from multiple strangers. KURZYNSKI then sent several anonymous death threats to Victim 1, including the threat, “faggot. Time to die.” At one point, KURZYNSKI impersonated a journalist and contacted Victim 1, claiming that an upcoming article would levy sexual misconduct allegations against Victim 1 related to Victim 1’s work with a non-profit youth organization.
KURZYSNKI also admitted that in November 2017, he began registering Victim 2 for numerous weight loss and suicide prevention programs, resulting in a wave of calls and emails from entities such as Overeaters Anonymous, Weight Watchers, Yellow Ribbon Suicide Prevention, and others. Within weeks, KURZYNSKI started sending anonymous death threats to Victim 2, many of which referenced Victim 2’s work address. One threat claimed that he was waiting for her in the lobby, and another that said, “Looking forward to seeing you today and how much you bleed. Don’t go to the bathroom alone.”
Speaking to the court today, the victims talked about how the harassment impacted them – forcing one to change jobs and move from the city. “Over a year I lived in extreme fear for my life and my character,” the victim said. The second victim told the court how her work performance suffered, because she knew her stalker was someone at her place of employment. She told the court that on her birthday she arrived at work to an email that read “Are you ready to die today?” The defendant targeted her simply because she had asked for help with her scanner and went to KURZYNSKI’s supervisor when he refused to assist her.
KURZYNSKI spoke to his victims saying, “for what I have put you through I cannot apologize enough. I have no excuse. There is no justification.”
Victims of cyberstalking campaigns such as this often may be hesitant to come forward. The Justice Department encourages individuals who may be the victims of similar schemes to contact their local law enforcement agencies to report this conduct.
The U.S. Secret Service’s Seattle Field Office investigated the case with substantial assistance from the Seattle Police Department and King County Prosecutor’s Office. Trial Attorney Frank Lin of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Francis Franze-Nakamura of the Western District of Washington are prosecuting the case.
Kirkland, Washington Business Owner Sentenced to 5 Years in Prison for Two Decade Scheme to Avoid Paying Income TaxesRead the Press Release
The owner of a Kirkland, Washington interior design business was sentenced today in U.S. District Court in Seattle to five years in prison for 25 federal felonies related to a twenty-two-year scheme to avoid paying more than $560,000 in income taxes, announced U.S. Attorney Annette L. Hayes. DANIEL NIX, 58, was convicted following a four-day jury trial of 13 counts of tax evasion, 11 counts of providing fictitious financial obligations, and one count of corrupt interference with the administration of the Internal Revenue Code. At sentencing U.S. District Judge Robert S. Lasnik ordered NIX to pay restitution of $851,904 representing back taxes and interest.
According to the indictment and testimony at trial, NIX operates Dannix Design, an interior design firm for medical offices. As early as 1998 and from 2000 to 2013, NIX refused to pay his taxes on $3.9 million in gross income, and $1.9 million in net profit. NIX sought to evade more than $560,000 in federal income and self-employment taxes. For tax years 2010-2013, for example, NIX continued to use a variety of strategies to hide his income and evade his tax obligations. He set up sham religious entities and transferred assets into the names of those sham religious entities, in order to frustrate IRS efforts to put liens on his assets.
NIX enjoyed a lavish lifestyle with the proceeds of his crime. He owns a Kirkland home assessed for more than $1 million. He bought and owned at least 16 luxury vehicles over the years, including a Porsche, a Jaguar, a BMW, a Ford F-150, multiple Mercedes-Benz, Harley Davidsons, and imported motorcycles.
In February 2013, NIX paid an Arizona man to send eleven fake money orders to the IRS to make it appear he was paying his tax obligations. The total face value of the eleven fake money orders exceeded a million dollars. On several occasions, NIX harassed IRS and Department of Revenue agents, filing fraudulent liens against them. He also called other unrelated individuals who were subject to IRS liens and falsely claimed the liens filed by the government were invalid.
The case was investigated by the Internal Revenue Service Criminal Investigation (IRS-CI). The case is being prosecuted by Assistant United States Attorneys Seungjae Lee and Mark Parrent.
Multi-State International Drug Trafficking Organization Targeted in 18-Month InvestigationRead the Press Release
A law enforcement operation making arrests and serving search warrants over the last two days targeted a multi-state drug trafficking network led by drug cartel members in Mexico, announced U.S. Attorney Annette L. Hayes. The drug trafficking organization distributing heroin, fentanyl, cocaine and methamphetamine was active in Washington State, New York, Arizona, Oregon, California, Tennessee, and Utah. The group allegedly used a Manhattan Beach, California, cryptocurrency business to launder and transfer money to Mexico. The owner of that business, GREGORY DAVID WERBER, 56, was arrested last night and appeared in U.S. District Court in the Central District of California today. Other defendants appeared in U.S. District Court in Tacoma today.
“Overdoses involving fentanyl are growing at an alarming rate in Washington State,” said U.S. Attorney Annette L. Hayes. “We are committed to bringing all needed resources to identifying and prosecuting groups that distribute this deadly poison in our communities. I commend the Drug Enforcement Administration and their federal, state and local law enforcement partners who developed the evidence that led to the arrests that occurred today.”
Over December 5th and 6th, 2018, more than 400 federal, state and local law enforcement officers executed fifty-one federal arrest warrants and search warrants on more than 50 buildings and 35 vehicles. In Western Washington the group distributed heroin, crystal methamphetamine and fentanyl-laced counterfeit oxycodone pills in Pierce, Kitsap, King, Skagit and Snohomish Counties. Over the course of the investigation law enforcement seized thousands of counterfeit oxycodone pills tainted with fentanyl, a powerful and potentially deadly opioid. Following one seizure from a vehicle, Washington State Patrol troopers were treated for their accidental exposure.
“The dangerous pills containing fentanyl flowing through this pipeline operated by this Western Washington distribution network has been shut down,” said DEA Special Agent in Charge Keith Weis. “Those profiting from pushing illicit opioids such as fentanyl and heroin into our most vulnerable communities will be met with a significant law enforcement response.”
The investigation began 18 months ago with drug seizures by the Bremerton Police Department. More recently, on November 28, 2018, law enforcement seized more than 13 pounds of heroin from the engine compartment of a semi-truck driven by a frequent smuggler for the ring. In addition to coded cell phone conversations, many of the members of the ring also communicated via Facebook messenger. Today alone law enforcement seized 39 firearms and more than 4 kilos of heroin.
“An agency the size of Bremerton can impact crime on a larger scale when it is able to partner with agencies like the DEA,” said Bremerton Chief of Police James Burchett. “I am very proud of the hard work and dedication of all the officers and agents that made this operation a reality.”
Those arrested in the last 24 hours include:
CARLOS EDUARDO LOPEZ HERNANDEZ, 22, Kent, WA
JAIME HEREDIA CASTRO, 36, Burlington, WA
JUAN AVILES BERRELLEZA, 23, Kent, WA
JOSE LUIS SIERRA BARRIENTOS, 39, Burlington, WA
HECTOR MANUEL URIAS MORENO, 27, Everett, WA
URIEL ZELAYA, 22, Auburn, WA
JESUS RENE SARMIENTO VALENZUELA, 33, Kent, WA
MONIQUE GREEN, 40, Federal Way, WA
ANDREW CAIN KRISTOVICH, 34, Lynnwood, WA
BRIAN LIVELY, 44, Snohomish, WA
GERALD KEITH RIGGINS, 52, Puyallup, WA
ESTHER LA RENA SCOTT, 41, Snohomish, WA
MICHAEL JOHN SCOTT, 40, Snohomish, WA
KAREN SURYAN, 60, Seattle, WA
ORLANDO BARAJAS, 40, Burlington, WAOSCAR HUMBERTO CARRILLO SALCEDO, 22, Tukwila, WA
ALLEX HUBLY, 27, Tacoma, WA
DAVID HUBLY, 30, Tacoma, WA,
CHARLES JOSLYN, 38, Bonney Lake, WACOLIN BECCARIA, 28, Puyallup, WA
JAKE WILSON, 22, Spanaway, WA
JERRY A. RODRIGUEZ, 27, Tacoma, WA
KURTIS NEMYER, 49, Puyallup, WA
LINDSAY NEMYER, 32, Puyallup, WA
JOSH MENDIOLA, 27, Graham, WA
NATASHA DJORDJEVIC, 36, Tacoma, WA
TIMMY CRAWFORD, 60, Auburn, WA
BLAKE HYNEK, 29, Edgewood, WA
MARTIN DEAN GREGORY, 32, Puyallup, WAThis investigation was conducted by the DEA Tacoma Resident Office and the Bremerton Police Department, with significant assistance from the Tahoma Narcotics Enforcement Team (TNET), Special Operations Division, Chantilly, Virginia and Northwest High Intensity Drug Trafficking Area (HIDTA).
The multi-agency takedown operation was supported by DEA Seattle; DEA Los Angeles; DEA San Diego, DEA San Francisco and DEA Phoenix; as well as Homeland Security Investigations; Bureau of Alcohol, Tobacco, Firearms & Explosives; Federal Bureau of Investigation; U.S. Marshals Service; West Sound Narcotics Enforcement Team; Joint Narcotics Enforcement Team; Grays Harbor Drug Task Force; Snohomish County Regional Drug Task Force; Valley Narcotics Enforcement Team; Skagit County Inter-local Drug Enforcement Unit; Thurston County Narcotics Enforcement Team; Lewis County Joint Narcotics Enforcement Team; Pierce County Sheriff’s Department; King County Sheriff’s Department; Kitsap County Sheriff’s Office; Snohomish County Sheriff’s Office; Aberdeen Police Department; Auburn Police Department; Bothell Police Department; Bremerton Police Department; Burlington Police Department; Fife Police Department, Seattle Police Department; Tacoma Police Department; Lakewood Police Department; Bonney Lake Police Department; Kent Police Department; Everett Police Department; Mill Creek Police Department; Quinault Nation Police Department; Hoquiam Police Department; Washington State Department of Corrections; Washington State Patrol; Mount Vernon Police Department; Oregon State Police; Washington and Oregon National Guard.
Tactical operations were conducted by DEA’s Special Response Teams (SRT) from Seattle and San Francisco. Additional support was provided by Bremerton Special Operations Group; Lakewood Special Operations; FBI SWAT; King County SWAT; Kitsap County SWAT; Mount Vernon SWAT; North Sound Metro SWAT, Pierce County Metro SWAT; Pierce County SWAT; Seattle PD SWAT; Snohomish County SWAT; Washington State Patrol SWAT; Skagit County HRT; Valley SWAT; and the U.S. Marshal’s Pacific Northwest Violent Offender Task Force.
The cases are being prosecuted by Assistant United States Attorneys Marci Ellsworth and Karyn Johnson.
Union Officer Sentenced to Prison for EmbezzlementRead the Press Release
A former Secretary-Treasurer of a railroad employee union was sentenced today in U.S. District Court in Seattle to 18 months in prison and $217,260 in restitution for embezzling from his union, announced U.S. Attorney Annette L. Hayes. GREGORY NORMAND, 58, of Marysville, Washington, pleaded guilty in July 2018 to embezzlement from a labor organization and two counts of making false statements to the United States. NORMAND was Secretary-Treasurer with the International Association of Sheet Metal, Air, Rail and Transportation Workers (SMART) Union 324 for about six years. Over that time he stole more than $248,000. At sentencing U.S. District Judge Robert S. Lasnik said the crime was “both a financial and spiritual loss,” to the union members who felt they had been betrayed.
“Union members trusted this defendant to be a careful steward of their union dues, instead he lined his pockets with their hard-earned wages,” said U.S. Attorney Annette L. Hayes. “I commend the Department of Labor - Office of Labor Management Standards for its dogged efforts to ensure that union officials comply with the law and are good stewards of union funds.”
According to records filed in the case, NORMAND used a number of different strategies to embezzle from the union bank accounts. In multiple instances he made payments to himself indicating he had missed work during a given month due to union business. In fact he had not missed any regular work time during that month and was not entitled to the “make-whole” pay. A second embezzlement strategy involved writing checks to himself, at the same time he made electronic transfers for the same amount of money into his personal account – essentially paying himself twice. NORMAND repeatedly altered checks he wrote to himself, making them for thousands of dollars more than authorized. For example changing a check for $212 into a check for $6,212. Finally, NORMAND wrote duplicate reimbursement checks to himself for monies garnished by the IRS.
NORMAND repeatedly lied on Department of Labor reporting forms regarding the amount of money he had been paid by the union. When confronted by a union auditor in May 2017, NORMAND minimized his theft by tens of thousands of dollars and attempted to justify his actions.
Speaking in court today members of the union described how the union was suddenly broke due to the embezzlement – that it could not pay the bills. “We went without so Normand could have his $250,000 a year,” one member said. A second spoke about the damage from “lies, deceit and betrayal.”
NORMAND was charged criminally in October 2017. He has repaid approximately $30,000 of the money he stole.
The case was investigated by the Department of Labor- Office of Labor Management Standards (DOL-OLMS).
The case was prosecuted by Assistant United States Attorney Stephen Hobbs.
‘Darknet’ Drug Dealer Sentenced to Five Years in PrisonRead the Press Release
A 38-year-old Tacoma, Washington man was sentenced today in U.S. District Court in Tacoma to five years in prison for conspiracy to distribute controlled substances, announced U.S. Attorney Annette L. Hayes. ALLEN D. LINT sold drugs via the so-called Dream Market Darknet marketplace between May 2016 and September 2017. When law enforcement served a search warrant at LINT’s residence they found more than 3600 doses of LSD as well as a variety of materials used to process Darknet orders from around the country. At the sentencing hearing U.S. District Judge Benjamin H. Settle imposed five years of supervised release to follow the prison term.
“This defendant was a 21st century drug dealer,” said U.S. Attorney Annette L. Hayes. “From the anonymity of the dark web, he filled more than 1700 drug orders for customers who paid with cryptocurrency. Despite his special encryption software and other efforts to hide his criminal conduct, law enforcement was able to unmask his identity and hold him to account.”
According to records filed in the case, LINT was identified by law enforcement after his address was uncovered in multiple other Darknet investigations. From as far away as Philadelphia investigators discovered drug shipments to LINT’s Tacoma address. When law enforcement served a court authorized search warrant on LINT’s residence, they found a variety of controlled substances, a scale, packaging material, materials reflecting a full-scale shipping operation, and a drug ledger indicating dozens of customers. Law enforcement also seized significant amounts of precious metals, cash, and multiple digital devices – all of which were forfeited pursuant to the court’s order.
LINT was indicted in April 2018, and pleaded guilty in September 2018 to conspiring with the administrators of Dream Market darknet marketplace to distribute LSD and other controlled substances.
The case was investigated by the U.S. Postal Inspection Service (USPIS) and Homeland Security Investigations (HSI).
The case was prosecuted by Assistant United States Attorney Thomas Woods and Special Assistant United States Attorney Joe Silvio. Mr. Silvio is an attorney with Homeland Security, specially designated to prosecute drug trafficking cases in federal court.
Man who Impersonated FBI Agent to Steal from Area Businesses Sentenced to Prison for Robbery, Attempted Robbery and Impersonating a Federal OfficerRead the Press Release
A Lake Stevens, Washington man who used fake credentials in the names of fictional characters or famous fraudsters to commit crimes was sentenced today in U.S. District Court in Seattle to five years in prison for seven federal felonies, announced U.S. Attorney Annette L. Hayes. STEVEN W. FISHER, 44, pleaded guilty in July 2018 to one count of robbery, five counts of impersonation of a federal officer, and one count of attempted robbery. At sentencing U.S. District Judge James L. Robart said, “This was a long-term calculated crime… attacking a marginalized community. You picked the most vulnerable group of people I know…. You did a despicable thing to people who deserved better.”
“Robbery is a frightening crime -- especially when it appears to be at the hands of someone in law enforcement,” said U.S. Attorney Annette L. Hayes. “This defendant’s actions were no joke -- he did real harm to real people who were just trying to run their small businesses and thought they were responding to requests from a federal law enforcement officer. The victims will likely never look at a law enforcement officer the same way again. A lengthy sentence in federal prison sends a clear message that this kind of conduct will not be tolerated.”
According to records filed in the case, on January 25, 2017, FISHER gained access to the secure area of a small money transmitting business in Seattle’s Central District by claiming he was a federal agent investigating a suspicious transaction. FISHER flashed a badge, and handed the owner a ‘search warrant’ signed by ‘Frank Abagnale’ -- a famous serial fraudster portrayed in the movie “Catch Me if You Can.” The warrant was purchased via the website Legalfakes.com. FISHER then pulled a weapon on the owner, demanded he open the safe and locked the owner in a back room. FISHER left with a large amount of cash and took computer equipment which contained surveillance video from the security system.
FISHER was identified as the suspect following a series of incidents in July and August, 2017 at a different money transmitting business in the Rainer Valley. In those incidents, FISHER used the name “Jack Ryan,” a character in Tom Clancy novels. In July, FISHER asked the manager of the money transmitting business to meet him at a nearby parking lot to discuss information that someone was planning on robbing his business. FISHER tried to get the manager to describe the surveillance cameras at the business and suggested he remove cash from the business. The manager instead called 9-1-1 and reported the suspicious conduct to police. One month later, when FISHER showed up at the money transmitting business, again claiming to be an FBI Agent, the manager hit the panic alarm and Seattle Police officers arrived to question FISHER. FISHER was taken into custody and court authorized searches of his car, storage locker, and briefcase turned up fake federal credentials, a realistic appearing airsoft pistol with silencer, and paperwork tying him to the earlier robbery.
In the plea agreement, FISHER admitted that in June 2017, he went to two SeaTac businesses posing as a federal agent. One of the small businesses offers money transmitting services. The ‘agent’ claimed he was looking for surveillance footage because of a crime in the area. Because the store owner was suspicious about whether FISHER was actually an FBI agent, he simply said the surveillance cameras were not working. In the early morning hours following that encounter the store was burglarized and $2000 in cash, checks and phones were stolen. Some of the stolen items were later found in FISHER’s possession.
Judge Robart ordered FISHER to pay $125,000 in restitution to the victim businesses.
The case was investigated by the FBI and the Seattle Police Department. The case is being prosecuted by Assistant United States Attorney Rebecca Cohen.
First Defendants in “Operation East Watch” Sentenced to PrisonRead the Press Release
The first two defendants in a five-month operation focused on gun violence in the East Hill area of Kent, Washington were sentenced this week to significant prison terms, announced U.S. Attorney Annette L. Hayes. ANTHONY RIPLEY, 46, of Tacoma, was sentenced today in U.S. District Court in Seattle to ten years in prison for drug and gun possession crimes. At the sentencing hearing U.S. District Judge Richard A. Jones noted RIPLEY had spent much of his adult life in prison, and imposed five years of supervised release to follow the ten-year prison sentence.
“In the first half of 2018, there were 29 shots fired incidents in Kent’s East Hill neighborhood prompting law enforcement to launch a focused operation to address the problem,” said U.S. Attorney Annette L. Hayes. “Job one was to remove those who were committing crime most likely to result in additional violence. Led by ATF and local law enforcement partners, officers developed cases against eight defendants, most of whom were illegally armed as they dealt drugs in the area. As a result of the operation, eleven guns were seized from individuals whose criminal history made them ineligible to possess firearms.”
RIPLEY was involved in methamphetamine distribution while armed with two different firearms. When law enforcement searched his Tacoma home in June 2018, they recovered two handguns and discovered an illegal marijuana growing operation. RIPLEY has multiple prior felonies including a 1997 manslaughter conviction in Pierce County in connection with a gang shooting. He has prior state (1994) and federal (2006) convictions for distributing cocaine.
“It is ATF’s core commitment to protect the public from violent career offenders like Mr. Ripley, whose continued armed drug trafficking placed the community at risk and showed contempt for law and order,” said ATF Seattle Special Agent in Charge Darek Pleasants. “Sentences like this one aim to remove violent offenders from our communities and serve to deter others.”
“This is another great example of what can be accomplished when Federal Agencies like the ATF and local Law Enforcement agencies work together to address violent criminals in our communities,” said Kent Police Chief Rafael Padilla. “My thanks to the task force agents and officers who conducted the investigation that led to this great outcome.”
Of the eight defendants arrested in Operation East Watch, seven have pleaded guilty and one has a change of plea hearing scheduled next week.
Eddie Tarik Musa Bell, Jr was sentenced November 26, 2018 to four years in prison for distribution of methamphetamine and being a felon in possession of a firearm.
These defendants are awaiting sentencing:
Allen Betts III, 40, of Kent, pleaded guilty of conspiracy to distribute methamphetamine and unlawful possession of a firearm.
Anthony Colbert, 48, of Seattle, pleaded guilty to conspiracy to distribute methamphetamine.
Neal Stringer, 46, of Kent and Des Moines, pleaded guilty to conspiracy to distribute methamphetamine and being a felon in possession of a firearm.
Devon Parramore, 50 of Kent, pleaded guilty to distribution of methamphetamine.
Mario Parra-Cetina, 28, of Kent, pleaded guilty to being a felon in possession of a firearm, and conspiracy to distribute heroin.
Kenyon Taylor, 39, of Federal Way, is scheduled for a change of plea hearing next week. He is currently charged with three counts of distribution of methamphetamine.
This case was brought as part of Project Safe Neighborhoods (PSN), a program that has been historically successful in bringing together all levels of law enforcement to reduce violent crime and make our neighborhoods safer for everyone. The Department of Justice has made turning the tide of rising violent crime in America a top priority. In October 2017, as part of a series of actions to address this crime trend, DOJ leadership announced the reinvigoration of PSN and directed all U.S. Attorney’s Offices to develop a district crime reduction strategy that incorporates the lessons learned since PSN launched in 2001.
The operation was led by the Bureau of Alcohol, Tobacco, Firearms & Explosives’ (ATF) Puget Sound Regional Crime Gun Task Force and the Kent Police Department. The task force contains agents and officers from King County Sheriff’s Office, Washington State Department of Corrections, Washington State Patrol, Drug Enforcement Agency, U.S. Marshals Service, Seattle Police Department, and Valley Narcotics Enforcement Team.
The cases are being prosecuted by Assistant United States Attorney Amy Jaquette and Special Assistant United States Attorney Jessica Manca. Ms. Manca is a Senior Deputy King County Prosecutor specially designated to prosecute gun crimes in federal court.
Owners of Northwest’s Largest Electronics Recycling Firm Plead Guilty to Wire Fraud ConspiracyRead the Press Release
The owners and Chief Executive Officers of Total Reclaim, the Northwest’s largest recycler of electronic waste, pleaded guilty today in U.S. District Court in Seattle to conspiracy to commit wire fraud, announced U.S. Attorney Annette L. Hayes.
CRAIG LORCH, 61, of Seattle, and JEFF ZIRKLE, 55, of Bonney Lake, Washington, admitted that they collected millions of dollars from public agencies and other organizations by falsely telling them that Total Reclaim would recycle used electronics products domestically in an environmentally-safe manner. In fact, the defendants secretly shipped millions of pounds of mercury-containing flat screen monitors to Hong Kong, where the monitors were dismantled in a manner that risked serious health consequences to workers, and damage to the environment. The two men face up to five years in prison when sentenced by U.S. District Judge Richard A. Jones on February 1, 2019. LORCH and ZIRKLE have also agreed to pay restitution of up to $1.1 million.
“These defendants held their company out as one of the good guys, signing agreements promising they would keep hazardous materials out of the environment. But even as they made that pledge, they secretly shipped millions of flat screen monitors to Hong Kong where disposal practices endangered workers and the environment,” said U.S. Attorney Annette L. Hayes. “Their actions were driven by greed and a total disregard for the promises they had made. As a result customers unknowingly ended up harming the environment rather than protecting it as they intended.”
“Total Reclaim is the largest e-waste recycler in the northwestern United States,” said Special Agent in Charge Jeanne M. Proctor of EPA’s Criminal Investigation Division. “During an eight-year period, the company exported to Hong Kong millions of pounds of electronic products containing mercury, while fraudulently reporting to customers and state agencies that they were being appropriately recycled.”
According to records filed in the case, Total Reclaim promoted itself as a responsible electronics recycler. Total Reclaim’s website stated that “our commitment to environmental responsibility is at the core of everything Total Reclaim does.” Total Reclaim signed a public pledge in which it promised not to “allow the export of hazardous E-waste we handle to be exported” to developing countries, where workers are known to disassemble electronics, which contain dangerous materials such as mercury, without safety precautions. Total Reclaim signed agreements with customers, such as the City of Seattle, in which the customers agreed to pay Total Reclaim to recycle electronics in accordance with these standards. Total Reclaim was also the biggest participant in the “E-Cycle Washington” program. E-Cycle Washington allows consumers to drop off used electronics at stations such as Goodwill Industries, and pays companies like Total Reclaim to recycle to those electronics according to Washington Department of Ecology standards.
In 2008, contrary to its promises to the public, Total Reclaim began secretly exporting flat screen monitors to Hong Kong to avoid the cost of safely recycling the monitors in the United States. Flat screen monitors are known to contain mercury, which can cause organ damage, mental impairment, and other serious health consequences to people exposed to the material. LORCH and ZIRKLE caused at least 8.3 million pounds of monitors to be shipped to Hong Kong between 2008 and 2015. To prevent customers and auditors from learning of the practice, LORCH and ZIRKLE falsified documents, made false statements to customers, and stored the monitors at an undisclosed facility while they awaited shipping.
Defendants’ fraud was discovered in 2014 by a non-governmental organization known as the Basel Action Network (“BAN”). BAN, which studies the export of electronic waste, placed electronic trackers on flat screen monitors and deposited them for recycling. The trackers showed that the monitors were collected by Total Reclaim and then exported to Hong Kong. When BAN representatives followed the tracking devices to Hong Kong, they discovered that the monitors were being dismantled by laborers who smashed the monitors apart without any precautions to protect the workers or the environment. After BAN notified LORCH and ZIRKLE of its findings, LORCH and ZIRKLE tried to cover up their fraud by altering hundreds of shipping records.
Conspiracy to commit wire fraud is punishable by up to 5 years in prison and a $250,000 fine.
The case was investigated by the Environmental Protection Agency Criminal Investigation Division (EPA-CID). The case is being prosecuted by Assistant United States Attorney Seth Wilkinson.
Two Residents of Lebanon Arrested in Seattle in Connection with Scheme to Illegally Export Firearms to LebanonRead the Press Release
HICHAM DIAB, of Tripoli, Lebanon and NAFEZ EL MIR, a Canadian citizen residing in Lebanon, were arrested yesterday after they traveled to a Seattle warehouse and began hiding firearms in a vehicle they planned to ship to Lebanon. DIAB and EL MIR appeared in federal court this afternoon, charged with conspiracy to violate the Arms Export Control Act. Both men were detained pending additional hearings.
Assistant Attorney General for National Security John C. Demers and U.S. Attorney for the Western District of Washington Annette L. Hayes made the announcement.
According to a criminal complaint unsealed today, in 2016, DIAB began communicating with a person in the U.S. who DIAB believed was willing to locate firearms for him to smuggle to Lebanon. The person in the U.S. alerted Homeland Security Investigations (HSI) about the contact. Over the course of 2017 and 2018, undercover HSI agents posed as people able and willing to supply firearms sought by DIAB in furtherance of his smuggling scheme. In October 2018, DIAB made plans to come to the U.S. and successfully wired funds for the purchase of firearms and a vehicle in which to hide the firearms. DIAB arrived in Seattle on November 7, 2018 and was accompanied by EL MIR who, according to DIAB, had experience smuggling firearms hidden in automobile panels.
On November 7 and 8, DIAB went with the undercover agents to a warehouse containing firearms that had been secured by HSI and the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF), and inspected the firearms, which included: twenty Glock handguns, a Smith & Wesson .50 revolver, one FN Fiveseven pistol, an AR15 rifle kit and a M203 grenade launcher. DIAB and EL MIR, during their November 8 warehouse visit, began hiding the firearms in door panels and bumper space inside a sport-utility vehicle. EL MIR also discussed ways to get the vehicle shipped to Lebanon with the hidden weapons. The men were arrested the evening of November 8 as they exited the warehouse.
Conspiracy to violate the Arms Control Export Act is punishable by up to five years in prison.
The charges contained in the complaint are only allegations. A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes. If convicted of any offense, the sentencing of the defendants will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
The case is being investigated by HIS and ATF. The case is being prosecuted by Assistant United States Attorney Thomas Woods with assistance from the U.S. Department of Justice’s Counterintelligence and Export Control Section.
Two Residents of Lebanon Arrested in Seattle in Connection with Scheme to Illegally Export Firearms to LebanonRead the Press Release
Hicham Diab, of Tripoli, Lebanon, and Nafez El Mir, a Canadian citizen residing in Lebanon, were arrested yesterday after they traveled to a Seattle warehouse and began hiding firearms in a vehicle they planned to ship to Lebanon. Diab and El Mir appeared in federal court this afternoon, charged with conspiracy to violate the Arms Export Control Act.
Assistant Attorney General for National Security John C. Demers and U.S. Annette L. Hayes for the Western District of Washington made the announcement. Both men were ordered detained pending additional hearings set for next week.
According to a criminal complaint unsealed today, in 2016, Diab began communicating with a person in the U.S. who Diab believed was willing to locate firearms for him to smuggle to Lebanon. The person in the U.S. alerted Homeland Security Investigations (HSI) about the contact. Over the course of 2017 and 2018, undercover HSI agents posed as people able and willing to supply firearms sought by Diab in furtherance of his smuggling scheme. In October 2018, Diab made plans to come to the U.S. and successfully wired funds for the purchase of firearms and a vehicle in which to hide the firearms. Diab arrived in Seattle on Nov. 7, and was accompanied by El Mir who, according to Diab, had experience smuggling firearms hidden in automobile panels.
On November 7 and 8, Diab went with the undercover agents to a warehouse containing firearms that had been secured by HSI and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), and inspected the firearms, which included: twenty Glock handguns, a Smith & Wesson .50 revolver, one FN Fiveseven pistol, an AR15 rifle kit and a M203 grenade launcher. Diab and El Mir, during their November 8 warehouse visit, began hiding the firearms in door panels and bumper space inside a sport-utility vehicle. El Mir also discussed ways to get the vehicle shipped to Lebanon with the hidden weapons. The men were arrested the evening of Nov. 8, as they exited the warehouse.
Conspiracy to violate the Arms Control Export Act is punishable by up to five years in prison.
The charges contained in the complaint are only allegations. A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes. If convicted of any offense, the sentencing of the defendants will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
The case is being investigated by HSI and the ATF. The case is being prosecuted by Assistant U.S. Attorney Thomas Woods, with assistance from the Department of Justice’s National Security Division’s Counterintelligence and Export Control Section.
Seattle Man Who Distributed Deadly Fentanyl Sentenced to 12 Years in PrisonRead the Press Release
A Seattle man who distributed narcotics, including deadly fentanyl analogues imported from China, was sentenced today in U.S. District Court in Seattle to 12 years in prison announced U.S. Attorney Annette L. Hayes. GREGORY L. SMITH, 34, was arrested in August 2017, following an investigation that traced more than 70 shipments of fentanyl analogues from China to SMITH. When law enforcement searched the home SMITH shared with his wife and young daughter they found fentanyl, heroin, cocaine, thousands of pills of oxycodone and sixteen firearms strewn throughout the house. The law enforcement investigation tied an April 2017 death to the fentanyl SMITH distributed in Seattle’s Capitol Hill neighborhood. “He was a drug dealer dealing poison to people that killed them on the streets,” said U.S. District Judge Robert S. Lasnik. “He is one of the menaces to society that is peddling poison.”
“Not only was this defendant a major dealer of fentanyl and other opioids on Capitol Hill, he kept selling even after learning his drugs had caused an overdose death,” said U.S. Attorney Annette L. Hayes. “Fentanyl is a killer that regularly leaves misery in its wake. We will continue to seek long sentences for anyone who profits from selling this terrible drug in our western Washington communities.”
According to records filed in the case, SMITH used bitcoin to pay for shipments of fentanyl from China that were delivered to his home or a post office box. The toxic fentanyl was so powerful that the powder – that can be absorbed through the skin – could kill with a single touch. Following an overdose death in April 2017, the fentanyl involved was traced to SMITH due in part to its distinctive packaging and to text messages recovered that showed SMITH knew the drugs he provided were linked to the deadly overdose. SMITH continued to import and distribute the drugs even after the death. In addition to 33 packages of fentanyl recovered from SMITH’s home, law enforcement seized more than $773,000 in cash and seized cryptocurrency worth $95,000. In all, law enforcement has seized more than $1 million from SMITH in connection with his drug dealing.
“The accused was leader of an international drug trafficking conspiracy that inundated our streets with the deadliest of illicit drugs solely out of greed for personal profit. HSI is committed to doing its part, along with our law enforcement partners, to hold those who place our communities in danger accountable to the fullest extent of our federal laws,” said Brad Bench, Special Agent in Charge for HSI Seattle. “Fentanyl, 50 to 100 times more potent than morphine, often leads to overdose and death. Thanks to the collaboration between HSI, the U.S. Postal Inspection Service, the Seattle Police Department, FBI and other local law enforcement agencies, American lives have been saved.”
SMITH was indicted in September 2017, and pleaded guilty to conspiracy to distribute controlled substances and possession of firearms in furtherance of a drug trafficking crime.
“Battling synthetic opioids entering the US through international mail is one of the Postal Inspection Service’s highest priorities. Through the hard work and dedication of Bellevue Police Department, Homeland Security, the U.S. Attorney’s Office, the U.S. Postal Inspection Service, and the Federal Bureau of Investigation, a principal dealer of opioids in the Seattle region was identified, arrested, and prosecuted to the fully extent of the law,” said Anthony Galetti, Inspector in Charge of U.S. Postal Inspection Service, Seattle Division. “The U.S. Postal Inspection Service continues to pursue traffickers of all illegal substances with the goal to inhibit the spread of illegal substances and to protect the employees and customers of the U.S. Postal Service from violence related to trafficking.”
The case was investigated by U.S. Postal Inspection Service (USPIS) and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) with significant assistance from the Federal Bureau of Investigation, Seattle Police Department, and Bellevue Police Department.
The case is being prosecuted by Special Assistant United States Attorney Joseph Silvio and Assistant United States Attorney Marie Dalton. Mr. Silvio is an attorney with Homeland Security Investigations specially designated to prosecute cross border cases in federal court.
Cowlitz County Man Convicted of Illegal Weapons PossessionRead the Press Release
A Longview, Washington man who was convicted last year of a triple homicide in Vancouver, was convicted today in U.S. District Court in Tacoma of federal felonies for illegal weapons possession, announced U.S. Attorney Annette L. Hayes. BRENT LUYSTER, 37, was convicted following a three day trial of being a felon in possession of a firearm and being a felon in possession of ammunition. When sentenced by U.S. District Judge Benjamin H. Settle on February 25, 2019, LUYSTER faces up to twenty years in federal prison. LUYSTER is currently serving a state sentence of life in prison with no chance of parole.
According to the evidence at trial in the case, Cowlitz County Sheriff’s deputies were called to a Longview home in May 2016, after a woman fled to a neighbor’s home saying she had been assaulted and her child was missing. The woman told responding officers that LUYSTER had hit her in the head with a gun. Another neighbor reported hearing gunshots. Ultimately, officers located LUYSTER on a hillside behind the house and convinced him to surrender. He had ammunition in his pockets and at the location where he had been concealed on the hillside, officers recovered three firearms: a Bushmaster rifle, a Glock .40 caliber handgun and a Keltec .12 gauge shotgun. Additional ammunition was also discovered on the hillside. Inside the house where LUYSTER lived, law enforcement found five additional rifles and a handgun. The investigation revealed that LUYSTER’s live-in girlfriend had purchased the weapons for LUYSTER. LUYSTER was prohibited from possessing firearms due to multiple felony convictions including convictions for assault, burglary, theft, malicious harassment and riot with a deadly weapon.
Following the May 16 assault, while charges were pending, LUYSTER shot and killed three people and critically injured a fourth on July 15, 2016 at a home near Woodland, Washington. He was convicted of three counts of aggravated first degree murder in November 2017.
The case was investigated by the Cowlitz County Sheriff’s Office, Longview Police Department, the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF), and the Federal Bureau of Investigation (FBI). The case is being prosecuted by Assistant United States Attorneys Bruce Miyake and Ye-Ting Woo.
District Election Officer on Duty for November 2018 ElectionsRead the Press Release
United States Attorney Annette L. Hayes announced today that Assistant United States Attorney Arlen Storm will lead the Office’s work in connection with the Justice Department’s nationwide Election Day Program for the upcoming November 6, 2018, general election. AUSA Storm is the District Election Officer (DEO) for the Western District of Washington, and in that capacity is responsible for overseeing the District’s handling of complaints of election fraud and voting rights abuses in consultation with the Justice Department in Washington D.C.
“It is imperative that anyone who has specific information about discrimination or election fraud provide that information in a timely manner to the U.S. Attorney’s Office, the FBI, or the Civil Rights Division,” said United States Attorney Annette L. Hayes. “Every citizen must be able to vote without interference or discrimination and to have that vote counted without fraud in the election process. The Department of Justice will act promptly and aggressively to protect the integrity of the election process.”
The Department of Justice has an important role in deterring election fraud and discrimination, and combating these violations whenever and wherever they occur. The Department’s long-standing Election Day Program furthers these goals, and also seeks to ensure public confidence in the integrity of the election process by providing local points of contact within the Department for the public to report possible election fraud and voting rights violations while the election is ongoing.
Federal law protects against such crimes as intimidating or bribing voters, buying and selling votes, impersonating voters, altering vote tallies, stuffing ballot boxes, and marking ballots for voters against their wishes or without their input. It also contains special protections for the rights of voters, and provides that they can vote free from acts that intimidate or harass them. For example, actions of persons designed to interrupt or intimidate voters by questioning or challenging them, or by photographing or videotaping them in the voting process, under the pretext that these are actions to uncover illegal voting may violate federal voting rights law. Further, federal law protects the right of voters to mark their own ballot or to be assisted by a person of their choice where voters need assistance because of disability or illiteracy.
The right to vote is the cornerstone of American democracy. We all must ensure that those who are entitled to the franchise are able to exercise it if they choose, and that those who seek to corrupt it are brought to justice. In order to respond to complaints of election fraud or voting rights abuses, including on November 6, 2018, and to ensure that such complaints are directed to the appropriate authorities, United States Attorney Annette L. Hayes stated that AUSA/DEO Storm is on duty while voting is ongoing in Western Washington. He can be reached by the public at the following telephone number: 206-553-7970.
In addition, the FBI will have special agents available in each field office and resident agency throughout the country to receive allegations of election fraud and other election abuses while voting is ongoing, including on November 6, 2018. The local FBI field office can be reached by the public at 206 622-0460.
Complaints about possible violations of the federal voting rights laws can be made directly to the Civil Rights Division’s Voting Section in Washington, DC by phone at 1-800-253-3931 or (202) 307-2767, by fax at (202) 307-3961, by email to [email protected] or by complaint form at http://www.justice.gov/crt/complaint/votintake/index.php.
City of Seattle Files Assessments of Work to Sustain Police Reforms and Remain in “Full and Effective Compliance” with Consent DecreeRead the Press Release
SEATTLE – Today, in accordance with the Court-approved plan for demonstrating sustained compliance for two years, the City of Seattle filed self-assessments of its ongoing work under the police reform consent decree it entered into with the Department of Justice (DOJ). The filings in U.S. District Court included a quarterly report on data and activities during the months of August-October, two audits relating to use of force investigations and internal supervision, an outcome report on its crisis intervention activities, and a review of the Seattle Police Department’s (SPD’s) stops and detentions policy.
For each of the areas assessed by the City under the consent decree, both the DOJ and the Court’s independent monitor, Merrick Bobb, concluded that the City has sustained compliance with the Consent Decree.
“These Phase II assessments are important opportunities for SPD to demonstrate critical self-analysis with continued oversight from the Court, Monitor, DOJ and the community,” said Annette L. Hayes, U.S. Attorney for the Western District of Washington. “This two-year period of sustained compliance is designed to be thorough, transparent and ensure all concerned that the work of police reform continues in all areas covered by the consent decree. DOJ continues to work with the City, Monitor and community to develop methodologies, examine data, and validate results so that everyone can have confidence that hard-won reforms will not slip. Today’s filings demonstrate that thus far, the City of Seattle remains on the right track.”
In January 2018, the Court found the City of Seattle in “full and effective compliance” with reforms required by the consent decree signed in 2012. This finding triggered Phase II of police reform in Seattle – a two-year “sustainment period” during which the City and SPD must maintain compliance with the consent decree.
During this sustainment period, the City must demonstrate its ongoing compliance through seven quarterly reports and three types of self-assessments: audits of its practices, reviews of SPD’s policies, and outcome reports that summarize policing data for the public. Quarterly reports must include recent data on use-of-force and crisis intervention practices, an update on the activities of SPD’s Force Review Board and Unit, and a discussion of relevant activities of the accountability organizations — the Office of Police Accountability (OPA), the Office of the Inspector General (OIG), and the Community Police Commission (CPC). The first quarterly report was filed on July 31, 2018.
Quarterly Report. During the third quarter of 2018, the report filed today showed that 513 (84.79%) of the reported applications of force involved no greater than low-level, Type I force, 87 (14.38%) involved Type II force, and five (less than 1%) involved Type III force. There were no officer-involved shootings. In the context of overall encounters, force is rarely used. Between January and July 2018, there were 103,553 unique events to which officers were called by a dispatcher or observed or were alerted to while on patrol. Three hundred eighty-three (383) – or slightly more than one third of one percent of all of these events – involved one or more reportable uses of force. Fifty-three (five one-hundredths of one percent) of all events ultimately involved a more serious use of force (Type II or Type III). These rates generally are consistent with previous reporting periods, like, for example, when the City’s use of force report for 2017 showed that Type I uses of force constituted nearly 77% of all uses of force. Contacts with those experiencing crisis are discussed more fully below.
The internal mechanisms established to examine the most serious uses of force – the Force Review Unit and Force Review Board – continue to evaluate incidents, make disciplinary referrals, and recommend policy changes in accordance with their mandates. And, as demonstrated by the audit of the investigation and review of Type I (low-level force that may involve transitory pain) and Type II (causes or is reasonably expected to cause physical injury greater than transitory pain, but not substantial bodily harm) levels of force, SPD continues to comply with its reporting and investigation obligations under the consent decree.
Use of Force Investigations and Reporting Audit. According to the City’s audit – and validated by both DOJ and the Monitor – SPD officers continue to comply with reporting, review, and investigation obligations set forth by the consent decree for Types I and II uses of force. In particular, the audit revealed that officers consistently wrote complete and thorough reports of their uses of force and their chain of command consistently conducted high quality reviews, including thorough documentation of relevant evidence. Further, the audit found that supervisors addressed shortcomings in a timely and appropriate manner, ensuring that the quality of reporting and investigation will continue to improve.
Supervision Audit. Although aspects of supervision are covered by a number of other audits in Phase II, this “general” supervision audit specifically examined the adequacy of the numbers of supervisors to perform requirements under the consent decree, “unity of command,” and training for long-term acting sergeants. The audit found – and DOJ and the Monitor concur – that SPD has demonstrated compliance with its ongoing requirements, including that:
- SPD deploys an adequate number of qualified first-line supervisors/sergeants to ensure the provisions of the consent decree are implemented, including responding to the scene when force is used, investigating uses of force, documenting uses of force, and providing direction to officers who use force as needed;
- Operational field officers are assigned to a single, consistent, clearly identified first line supervisor who works the same days and hours as the officers they supervise; and
- Personnel assigned to a planned assignment of acting sergeant for longer than 60 days receive training as an acting sergeant in a timely manner.
Crisis Intervention Outcome Report. In the 18-month period between January 1, 2017 and June 30, 2018, SPD made 15,995 contacts with persons believed experiencing a behavioral crisis (of which 92% were responses to calls from the public reporting an incident). This analysis of crisis contacts shows that in the first six months of 2018, dispatched crisis contacts increased by 26% compared to the same period last year and on-viewed crisis contact (i.e., those initiated by an officer) were up almost 30% compared to the first six months of 2017. Despite the increase in crisis contacts, use of force against persons in behavioral crisis remains low and resolutions that result in a connection to services remains high. Of the 15,995 crisis contacts reported, 277 - fewer than 2% - involved any use of reportable force and in three-quarters of cases no greater than the lowest level of force (Type I) was used and just five (0.9%) were Type III uses of force.
All officers receive at least eight hours of annual crisis intervention training (CIT) and an additional 118 officers became “CIT certified” officers in 2017 by receiving 40 hours of training. In nearly 80% of crisis calls, a CIT-certified officer was on-scene.
Voluntary Contacts, Terry Stops, and Detentions Policy Review. Following a systematic and inclusive review process that included multiple parts of SPD, the Monitor, DOJ, OPA, OIG and the CPC, the City has submitted revisions to SPD’s Voluntary Contacts, Terry Stops, and Detentions Policy. Agreed-to changes include clarifying provisions that SPD and other stakeholders identified as “confusing, ambiguous, or legalistic in a way that limited practical usefulness.” For example, the revised policy is more explicit that frisks must be based on articulable and reasonable safety concerns that a person is armed and presently dangerous and also now reflects officers cannot act based on pretext under Washington state law, even if an objectively reasonable basis for the stop exists. The goal in ongoing policy reviews is to assess current applications of the policies and to identify best police practices and incorporate those findings into SPD policies.
The next round of filings, including the quarterly report and crisis intervention audit, will be filed in December 2018.
Attorney General Jeff Sessions Recognizes Department Employees and Others for their Service at 66th Annual Attorney General AwardsRead the Press Release
WASHINGTON – Attorney General Jeff Sessions recognized 244 department employees for their distinguished public service today at the 66th Annual Attorney General’s Awards Ceremony. Thirty-six other individuals outside of the department were also honored for their work. This annual ceremony recognizes employees and other individuals who have demonstrated exceptional achievements, leadership, and service to the Department of Justice and the American people. This year’s award includes an award for exceptional heroism to U.S. Marshal Senior Inspector Basilio S. Perez, Jr., for his courageous actions to protect and aid victims of the October 1, 2017, mass shooting in Las Vegas, Nevada.
“Service in the Department of Justice is more than a normal job; it is a calling to the highest standards of professionalism,” Attorney General Jeff Sessions said. “That is true for all of the 115,000 Department of Justice employees. But it is especially true for these award winners. And so I want to thank them and their families for their exemplary service to this Department and to the American people. They have made this Department proud.”
“For more than 17 years Gretchen Courtney has worked tirelessly for justice for Tom Wales, the Wales family and all of us who knew and loved this talented and dedicated Assistant United States Attorney,” said U.S. Attorney Annette L. Hayes. “She has managed what is now the largest case file at the FBI, and provided support to the joint Federal and State team working to bring a killer to justice.”
This year’s program honors individuals across the department and our federal, state, local, and tribal partners for their self-less efforts, protecting our national security and our civil rights, addressing rising violent crime in our communities, going after gangs and those trafficking in dangerous narcotics and human beings. The awards also honor the work of civil and environmental litigation, which enforces the rule of law and upholds our Constitution. They also recognize employees whose ideas and efforts save taxpayer dollars and help our government operate more effectively and efficiently, among other contributions to public safety and good governance.
In making the award to Paralegal Specialist Gretchen Courtney, the Attorney General noted that she had spent a significant portion of her professional life supporting the investigation of the October 11, 2001 shooting death of Assistant United States Attorney Thomas Crane Wales. Mr. Wales was shot and killed at his home by an unknown assailant who stood outside a backyard window. If, as investigators believe, Wales was killed in connection with his work, he would be the first Assistant United States Attorney killed in the line of duty.
The award to Paralegal Specialist Gretchen Courtney notes her “unwavering commitment” to the investigation, and “invaluable contributions have included managing the collection, analysis, and maintenance of the largest case file in the Federal Bureau of Investigation… Her service is a tribute to the U.S. Department of Justice’s fierce determination to ensure those responsible for the murder are held accountable for the crime.”
Two Charged in Murder of Woman Whose Body was found on Federal Land at Joint Base Lewis-McchordRead the Press Release
Two men are under arrest and charged with second degree murder for the homicide of 34-year-old Jessica Shaunti Jackson, a single-mother whose body was found on Joint Base Lewis-McChord in September 2018, announced U.S. Attorney Annette L. Hayes. BOBBIE ANSON PEASE, 49, of Tacoma and JEREMY JAY WARREN, 30, of Forks, Washington, are charged in a criminal complaint with killing Jackson on September 4, 2018. WARREN will appear in U.S. District Court in Tacoma at 2:30 today. PEASE will make his appearance in U.S. District Court in Tacoma in the near future.
According to the complaint, Jackson was reported missing on September 8, 2018. The Tacoma Police Department investigation revealed she was last seen on September 4, 2018, at a convenience store in Tacoma with the defendants. Jackson’s body was discovered on September 13, 2018, in a wooded area near Spanaway, Washington that is part of Joint Base Lewis-McChord. Because the victim was killed on federal land where there is exclusive federal jurisdiction, the FBI is the lead investigative agency and jurisdiction is in federal court.
Information in the complaint reveals that surveillance video shows PEASE’ car driving to and from the general area of the murder scene at the approximate time Jackson was killed. A firearm believed used in the killing was recovered from the Puyallup River. The investigation into the murder continues.
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 investigation is being led by the FBI with assistance from the Tacoma Police Department. The case is being prosecuted by Assistant United Sates Attorneys Grady Leupold and Ye-Ting Woo.
Department of Justice and Department of Interior Team up for Major Expansion of Tribal Access to National Crime Information DatabasesRead the Press Release
WASHINGTON— U.S. Attorney Annette L. Hayes joined the Department of Justice and the Department of the Interior in announcing a significant expansion of the federal government’s key program that provides tribes with access to national crime information databases, the Justice Department’s Tribal Access Program for National Crime Information (TAP). The expansion includes the Chehalis, Swinomish, Lower Elwha, Quinault, and Port Gamble S'Klallam Tribes.
“With the addition of five more, we will have a total of nine tribes in Western Washington participating in the Tribal Access Program – ensuring better data sharing across law enforcement and thus more public safety in the communities we serve,” said U.S. Attorney Annette L. Hayes. “The TAP program has already resulted in some significant successes. The Suquamish Tribal Police were among the first ten tribes to join the system in 2015, and were able to use the system to locate and rescue an elderly tribal member who had been taken from his home. The information obtained via TAP provided key clues that allowed the matter to be safely resolved.”
TAP provides federally recognized tribes the ability to access and exchange data with national crime information databases for both civil and criminal purposes. This allows tribes to more effectively serve and protect their communities by ensuring the exchange of critical data. By the end of 2019, the Justice Department will expand the number of TAP participating tribes by more than 50 percent—from 47 tribes to 72. The Department of the Interior (DOI) will fund the instillation of TAP Kiosks at three locations where the BIA-Office of Indian Services (BIA-OIS) deliver direct social services by the end of 2019 and DOI aims to expand TAP access at all 28 BIA-Office of Justice Services (BIA-OJS) operated law enforcement agencies and detention service centers. These BIA locations will provide some degree of access to TAP for services delivered to more than 50 tribal communities that currently do not have any direct access.
“Access to information is vital to effective law enforcement,” said Trent Shores, U.S. Attorney for the Northern District of Oklahoma and the Chairman of the Attorney General’s Advisory Subcommittee on Native American Issues. “The Tribal Access Program will enhance and improve the ability of tribal law enforcement officers to serve their communities. The Native American Issues Subcommittee is proud to support the continued expansion of this tool throughout Indian Country.”
The Native American Issues Subcommittee (NAIS) is comprised of United States Attorneys with Indian Country in their federal districts. They advise the Attorney General regarding the development and implementation of policies pertaining to justice in Indian Country. The NAIS identified ‘increased law enforcement resources’ as one of four priority areas to improve justice services in Indian Country. Support for and increased dissemination of the TAP was unanimously supported by the US Attorneys at a recent NAIS meeting in Indian Country in Tulsa, Oklahoma.
TAP, offered in two versions, TAP-FULL and TAP-LIGHT, allows tribes to more effectively serve and protect their communities by fostering the exchange of critical data through several national databases via the FBI’s Criminal Justice Information Systems (CJIS) network, including the National Crime Information Center (NCIC), Next Generation Identification (NGI), National Data Exchange (N-DEx), National Instant Criminal Background Check System (NICS), Law Enforcement Enterprise Portal (LEEP) as well as other national systems such as the International Justice and Public Safety Network (Nlets). TAP enhances tribal efforts to register sex offenders pursuant to the Sex Offender Registration and Notification Act (SORNA); have orders of protection enforced nationwide; protect children; keep firearms away from persons who are disqualified from receiving them; improve the safety of public housing, and allow tribes to enter their arrests and convictions into national databases so they can be recognized by law enforcement across the country.
The following tribes have been selected for the next phase of TAP FULL:
Absentee-Shawnee Tribe of Indians of Oklahoma
Blackfeet Tribe of the Blackfeet Indian Reservation of Montana
Confederated Tribes of the Chehalis Reservation (Washington)
Cheyenne and Arapahoe Tribes, Oklahoma
Cheyenne River Sioux Tribe of the Cheyenne River Reservation, South Dakota
Eastern Shoshone Tribe of the Wind River Reservation, Wyoming
Fort McDowell Yavapai Nation, Arizona
Hopi Tribe of Arizona
Lower Elwha Tribal Community (Washington)
Northern Arapahoe Tribe of the Wind River Reservation, Wyoming
Penobscot Nation (Maine)
Quinault Indian Nation (Washington)
Rosebud Sioux Tribe of the Rosebud Indian Reservation, South Dakota
Salt River Pima-Maricopa Indian Community of the Salt River Reservation, Arizona
Sault Ste. Marie Tribe of Chippewa Indians, Michigan
The Seminole Nation of Oklahoma
Swinomish Indian Tribal Community (Washington)
Turtle Mountain Band of Chippewa Indians of North Dakota
The following tribes have been selected for the next phase of TAP LIGHT:
Bishop Paiute Tribe (California)
La Jolla Band of Luiseno Indians, California
Lac Vieux Desert Band of Lake Superior Chippewa Indians of Michigan
Mashpee Wampanoag Tribe (Massachusetts)
Morongo Band of Mission Indians, California
Port Gamble S'Klallam Tribe (Washington)
San Pasqual Band of the Diegueno Mission Indians of California
For more information on TAP, visit www.justice.gov/tribal/tribal-access-program-tap
For more information about the Justice Department’s work on tribal justice and public safety issues, visit: www.justice.gov/tribal
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Universal American Mortgage Company, LLC Agrees to Pay $13.2 Million to Settle False Claims Act InvestigationRead the Press Release
Universal American Mortgage Company, LLC (UAMC) has agreed to pay the United States $13.2 million to resolve allegations that it violated the False Claims Act by falsely certifying that it complied with Federal Housing Administration (FHA) mortgage insurance requirements in connection with certain mortgages, announced U.S. Attorney Annette L. Hayes. UAMC is a mortgage lender headquartered in Miami, Florida, doing business across the country, including in the Western District of Washington.
The United States alleged that between January 1, 2006, and December 31, 2011, UAMC knowingly submitted loans for FHA insurance that did not qualify. The United States further alleged that UAMC improperly incentivized underwriters and knowingly failed to perform quality control reviews, which violated HUD requirements and contributed to UAMC’s submission of defective loans.
“Mortgage lenders may not ignore material FHA requirements designed to reduce the risk that borrowers will be unable to afford their homes and federal funds will be wasted,” said Assistant Attorney General Joseph H. Hunt for the Justice Department’s Civil Division. “We will hold accountable entities that knowingly fail to follow important federal program requirements.”
“In a quest for profits, mortgage companies have ignored important lending standards” said U.S. Attorney for the Western District of Washington, Annette L. Hayes. “Not only does this harm the borrowers leaving them over their heads in debt and underwater on their mortgages, it harms taxpayers because the mortgages are backed by government insurance. This settlement should serve as a warning to other lenders to diligently follow the rules.”
During the period covered by the settlement, UAMC participated as a direct endorsement lender (DEL) in the U.S Department of Housing and Urban Development’s (HUD’s) FHA insurance program. A DEL has the authority to originate, underwrite and endorse mortgages for FHA insurance. If a DEL approves a mortgage loan for FHA insurance and the loan later defaults, the holder of the loan may submit an insurance claim to HUD, FHA’s parent agency, for the losses resulting from the defaulted loan. Under the DEL program, the FHA does not review a loan for compliance with FHA requirements before it is endorsed for FHA insurance. DELs are therefore required to follow program rules designed to ensure that they are properly underwriting and certifying mortgages for FHA insurance and to maintain a quality control program that can prevent and correct deficiencies in their underwriting practices.
United States Attorney Joseph Harrington for the Eastern District of Washington said, “FHA mortgages are vital to first-time homebuyers and to families whose credit and assets were damaged by the 2008 economic crisis. FHA underwriting and other requirements are critical to safeguarding the integrity of the public money used to operate this important program. We will continue to work with our law enforcement partners to ensure that mortgage lenders and others who profit from this program, while ignoring its rules, will be held accountable.”
“One of our principle responsibilities is to protect and ensure the integrity of federal housing programs for the benefit of all Americans,” said Jeremy M. Kirkland, Acting Deputy Inspector General, U.S. Department of Housing and Urban Development, Office of Inspector General. “This settlement demonstrates our resolve and should signal to irresponsible lenders that this conduct will not be tolerated.”
“FHA depends upon the lenders we do business with to apply our standards and to truthfully certify that they’ve done so,” said David Woll, HUD’s Deputy General Counsel for Enforcement. “Working with our federal partners, HUD will enforce these lending standards so we can protect families from preventable foreclosure and to protect FHA from unnecessary losses.”
The settlement resolves allegations originally brought by Kat Nguyen-Seligman, a former employee of a related UAMC entity, in a lawsuit filed under the whistleblower provisions of the False Claims Act, which allows private parties to bring suit on behalf of the federal government and to share in any recovery. The whistleblower will receive $1,980,000 as her share of the federal government’s recovery in this case.
This matter was handled on behalf of the government by the Justice Department’s Civil Division, the U.S. Attorney’s Offices for the Eastern District of Washington and Western District of Washington, the Department of Housing and Urban Development, and the Department of Housing and Urban Development’s Office of the Inspector General. case is captioned United States ex rel. Kat Nguyen-Selgiman v. Lennar Corporation, Universal American Mortgage Company, LLC, and Eagle Home Mortgage of California, Inc., 14-cv-1435 (W.D. Wash.). The claims resolved by this settlement are allegations only, and there has been no admission of liability.
The settlement agreement is being handled by Assistant United States Attorney Kayla Stahman.
Vancouver, Washington Man Indicted for Scheme to Claim Disability Benefits while Working under a False IdentityRead the Press Release
An engineer employed with technology manufacturing companies in the Vancouver, Washington area was indicted today by a federal grand jury for a scheme to collect disability benefits under his own identity while working under a false identity, announced U.S. Attorney Annette L. Hayes. STEVEN LYNN ROSS, 67, is accused of stealing more than $360,000 in government benefits. ROSS possessed identity documents he had fraudulently obtained in the names of children who died in the 1950s and 1960s. ROSS was arrested earlier this month and will be arraigned on the indictment in U.S. District Court in Tacoma on October 29, 2018.
According to records filed in the case, in 1987 ROSS assumed the identities of at least two deceased children in order to open Social Security accounts in their names. One of the children had died in a car accident as a toddler, the other died in a plane crash in 1968 at age thirteen. ROSS used these identities in various ways, obtaining drivers licenses, bank accounts and passports in various names. In 2001, ROSS began collecting Social Security Disability payments in his true name, saying he was unable to work due to physical ailments. In fact, at the same time that he was collecting disability payments, ROSS continued to work under one of the identities he had stolen. In this way, ROSS collected more than $360,000 in disability payments even though he was not disabled under program rules.
The Washington State Department of Licensing began investigating when facial recognition software flagged that ROSS’s image appeared in more than one driver’s license photo. The case was turned over to the Social Security Office of Inspector General (SSA-OIG) and U.S. State Department Diplomatic Security Service (DSS). The DSS determined that ROSS had obtained passports in his own name as well as the names of the two deceased children, and that all three passports contain ROSS’ picture. Between 1998 and 2011, ROSS traveled out of the country 22 times with one of the stolen identities, even as he also traveled internationally using his own name and passport as well.
ROSS is charged with two counts of wire fraud, five counts of theft of public funds, one count of access device fraud and one count of aggravated identity theft.
Wire fraud is punishable by up to 20 years in prison. The other federal felonies are punishable by up to ten years in prison. Aggravated identity theft is punishable by a mandatory two-year term to run consecutive to any sentence imposed on the 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 was investigated by the Social Security Office of Inspector General (SSA-OIG), the U.S. Department of State Diplomatic Security Service (DSS), and the Washington State Department of Licensing License Integrity Unit (DOL/LIU).
The case is being prosecuted by Special Assistant United States Attorney Benjamin Diggs. Mr. Diggs is an attorney with the Social Security Administration specially designated to prosecute benefit fraud cases in federal court.
Former Microsoft Director of Sports Marketing Indicted for Five Counts of Wire FraudRead the Press Release
The former Director of Sports Marketing and Alliances at Microsoft was indicted today by a federal grand jury for five counts of wire fraud for his scheme to profit by stealing from Microsoft, announced U.S. Attorney Annette L. Hayes. JEFF TRAN, a/k/a TRUNG TRAN, 45 of Seattle, is alleged to have used his position at Microsoft to attempt to steal more than $1.5 million through the creation and submission of fraudulent invoices and the unauthorized use of other Microsoft assets. TRAN will be arraigned on the charges in U.S. District Court in Seattle in the next ten days.
According to the allegations in the indictment, TRAN oversaw Microsoft’s promotional relationship with the National Football League (NFL). The indictment alleges that in March 2017, TRAN caused a fraudulent $775,000 invoice to be issued to Microsoft, supposedly for services related to the 2017 Super Bowl. Tran caused the $775,000 payment from Microsoft to be routed through two Microsoft vendors and then to Tran’s personal bank account. Tran then attempted to cause Microsoft to make a second payment for $670,000, based on another fraudulent invoice. Tran intended to route that payment to a company Tran controlled. When Microsoft vendors became suspicious of Tran’s activity and reported the conduct to Microsoft, Tran destroyed electronic communications and told the vendors to lie to Microsoft about the $775,000 payment. After Microsoft confronted Tran, Tran returned the $775,000.
The indictment also alleges that Tran stole blocks of Super Bowl tickets belonging to Microsoft. Because of his position, Tran was responsible for determining which Microsoft employees would receive Microsoft Super Bowl tickets. However, instead of distributing all of the tickets to Microsoft employees, TRAN sold over 60 of the tickets through a ticket broker and pocketed more than $200,000.
Wire Fraud is punishable by up to 20 years in prison.
The charges contained in the indictment are only allegations. A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.
The case was investigated by the FBI. The case is being prosecuted by Assistant United States Attorney Seth Wilkinson.
Owner of Sports Memorabilia Stores Sentenced to Prison for Failing to Pay Employment TaxesRead the Press Release
The owner of two Pierce County sports memorabilia and card gaming shops was sentenced today in U.S. District Court in Tacoma to 30 days in prison, ten months of home detention with electronic monitoring, three years of supervised release and $234,769 in restitution for failing to pay employment taxes on more than 50 employees, announced U.S. Attorney Annette L. Hayes. DONALD A. KNUTSEN, 54, owned Northwest Sportscards, which had locations in Tacoma and University Place, Washington. KNUTSEN pleaded guilty in April 2018, admitting that between 2008 and 2016 he withheld a total of $234,769 in income, Social Security, and Medicare taxes from the paychecks of at least 51 different employees, but failed to accurately report and pay the tax withholdings and an additional $122,350 in employer-owed taxes to the Internal Revenue Service. At sentencing U.S. District Judge Robert J. Bryan said, “Our whole government system is based upon citizens voluntarily completing their paperwork and paying taxes. Our system, the very foundation of our liberties, is dependent on citizens doing this civic duty.”
“This defendant not only failed to pay his own taxes, he stole funds he was supposed to pay for Social Security and Medicare taxes for his employees,” said U.S. Attorney Annette L. Hayes. “Employees rely on their employers complying with the law and protecting their hard earned retirement benefits, not succumbing to naked greed. As a result of this prosecution, not only is the defendant spending time in prison, he is required to pay restitution so that his victims can be made whole.”
According to records filed in the case, KNUTSEN operated the two sports cards and memorabilia stores for more than 27 years. The investigation revealed that as early as 2002, KNUTSEN stopped paying employment taxes, including Social Security and Medicare taxes on his employees. KNUTSEN withheld the money from the employee paychecks but never paid it to the IRS or filed the required forms accounting for the payments. Instead, KNUTSEN used the money to acquire inventory and promote his business. In addition, KNUTSEN failed to file any personal income tax returns after 2000.
Before today’s hearing KNUTSEN delivered a check to the court for $82,500 as a partial payment for his $234,769 restitution obligation. In addition, after the IRS calculates his civil tax liability and interest, KNUTSEN will pay that amount as well.
Because KNUTSEN was not filing tax forms or paying taxes to the IRS, the employees working at his shops did not accrue individual Social Security benefits during the relevant years. Under the terms of his plea agreement, KNUTSEN will work with the IRS to correct those past tax records.
The case is being investigated by the Internal Revenue Service Criminal Investigation. The case is being prosecuted by Assistant United States Attorney Steven Masada.
Lower Elwha Klallam Tribal Member Sentenced to Prison for Being a Habitual Domestic AbuserRead the Press Release
An enrolled member of the Lower Elwha Klallam Tribe was sentenced today in U.S. District Court in Tacoma to 5 years in prison for Domestic Assault by a Habitual Offender, announced U.S. Attorney Annette L. Hayes. MATTHEW TYLER CHARLES, 31, of Port Angeles, pleaded guilty in March 2018, following one day of testimony about his history of assaults on an intimate partner. CHARLES was indicted federally following the October 21, 2017 assault of a woman with whom he had a long-term relationship. At sentencing, U.S. District Judge Ronald B. Leighton said CHARLES “has to pay for what he has done, the havoc he perpetrated in this community.”
“This defendant repeatedly and viciously attacked those he professed to care most about,” said U.S. Attorney Annette L. Hayes. “And when law enforcement stepped in, the defendant tried to pressure the victim to stop co-operating with investigators and prosecutors. But the victim persevered and today justice is served. We will continue to use all available tools to protect the victims of crime in our tribal communities.”
According to records filed in the case and testimony at trial, in the early morning hours of October 21, 2017, the victim arrived at the Lower Elwha Casino. Shortly after her car pulled into the parking lot, the surveillance video shows CHARLES arriving in another vehicle. The video shows CHARLES assaulting the victim, violently shoving her back into the car and physically restraining her when she tried to flee. At one point during the incident, CHARLES brandished a knife. Two witnesses who were in the parking lot alerted casino security. CHARLES left the scene, but was later taken into custody.
CHARLES has four previous convictions related to domestic violence in either state or Tribal court. Two of these convictions arose from assaults in 2006 and 2014 with respect to this same victim that were prosecuted in Clallam County District Court and Superior Court, respectively, and two convictions in Lower Elwha Klallam Tribal court for 2004 and 2010 assaults with respect to this victim and a second victim. Those convictions subject him to prosecution in federal court as a habitual offender.
The case was investigated by the FBI and the Lower Elwha Klallam Tribal Police. The case was prosecuted by Assistant United States Attorneys Rebecca S. Cohen and J. Tate London.
Couple Sentenced to Lengthy Prison Terms for $12.7 Million Affinity Investment FraudRead the Press Release
SUNG HONG, 47, and HYUN JOO HONG, 42, of Clyde Hill, Washington were sentenced today in U.S. District Court in Seattle to lengthy prison terms for defrauding more than 55 clients out of $12.7 million, announced U.S. Attorney Annette L. Hayes. SUNG HONG, aka LAURENCE HONG or LAWRENCE HONG, was sentenced to 15 years in prison. His wife, HYUN JOO HONG, aka GRACE HONG, was sentenced to six years in prison. From 2010 until their arrest in June 2017, the couple held themselves out as experienced investment advisors with a track record of performance in order to solicit investor funds for their hedge fund, Pishon Holdings, and for management through separately managed accounts. In fact, SUNG HONG had just completed a 33 month sentence for committing investment fraud when he launched this new scheme in 2010. At the sentencing hearing U.S. District Judge Thomas S. Zilly said, “This scheme was a serious, complex fraud over seven years. You targeted religious victims. You used God as a way to gain trust…. You have emotionally and spiritually damaged these victims and most of them will never recover.”
“Using faith and fraud, this couple stole millions from people whose dreams of a better life have now been shattered,” said U.S. Attorney Annette L. Hayes. “Both repeatedly lied to their investors, all while spending their hard earned money on high-end shopping sprees, luxurious vacations, a yacht and an expensive rental home. Their victims now live paycheck to paycheck with college and retirement funds depleted and a very different financial future than they expected.”
According to records filed in the case, the HONGs recruited investors using religious organizations and shared religious beliefs. The couple claimed that LAURENCE HONG privately invested billions of dollars for wealthy Korean families and that GRACE HONG held a Series 65 securities license and previously worked for a large international investment firm. None of these statements were true. Likewise, the defendants did not disclose LAURENCE HONG’s past criminal conviction for investment fraud. The couple sent potential investors misleading and false investment prospectuses that contained an inaccurate record of their past investment performance and other plagiarized investment outlooks.
Throughout their fraudulent scheme, the HONGs used stolen investor funds for their own benefit, including payments for a 9,000 square foot rental home in Clyde Hill; a 45-foot yacht; multiple high-end vehicles, such as BMWs, a Maserati, an Aston Martin, and a Lamborghini; and numerous expensive vacations to locations such as the Bahamas and Beverly Hills.
One church in California invested $1 million with the HONGs and lost about $300,000 on a single trade. Still, despite the steep losses and a fee arrangement based on investment gains, the HONGs withdrew almost $150,000, ostensibly as advisor fees, from the church’s account. Another couple allowed the HONGs to manage their $180,000 in retirement funds only to lose $100,000 within less than a year. After meeting with the HONGs, that couple then invested their remaining retirement funds in the HONGs’ hedge fund, only for those funds to be redirected into GRACE HONG’s personal account. The HONGs used those funds to pay credit card bills and other personal expenses, including a $16,000 payment to a resort in the Bahamas for a HONG family vacation.
Speaking to LAWRENCE HONG, Judge Zilly noted his prior conviction for a similar fraud: “You clearly did not learn anything from the fact you were convicted and sentenced to prison…. You are one of those con men who will never be able to stop conning people.” Judge Zilly noted that GRACE HONG played “an intricate and important role in the entire scheme. She misrepresented her credentials… she took God’s name – she used that to entice investors to put money in their pockets.”
Judge Zilly ordered the pair to pay more than $12.7 million in restitution. The losses for certain investors represented their entire life or retirement savings.
The case was investigated by the FBI. The United States Attorney’s Office thanks the Commodity Futures Trading Commission (CFTC) for its assistance in the investigation.
The case is being prosecuted by Assistant United States Attorneys Justin Arnold and Steven Masada.
DOJ Awards more than $3.5 Million to Improve Forensic Science and Address DNA BacklogRead the Press Release
The U.S. Department of Justice National Institute of Justice has awarded grants worth more than $3.5 million to improve forensic science and address DNA testing backlogs in Washington State, announced U.S. Attorney Annette L. Hayes. The grants will help the Washington State Patrol keep up with an increasing number of referrals for DNA testing, and will improve toxicology testing related to the opioid epidemic.
“We are seeing how advanced DNA testing is leading to major breaks in long unsolved criminal investigations,” said U.S. Attorney Annette L. Hayes. “These Department of Justice grants will increase the capacity of WSP and will assist individual counties as they complete investigations. In addition, the funding for quicker turnaround of toxicology screening is critical to all of our efforts to address the impact that fentanyl and other dangerous drugs are having on Washington communities.”
The Washington State Patrol Crime Labs will receive a total of $2,347,180 to enhance their capacity to analyze DNA and reduce a backlog of samples waiting for analysis. There are five casework DNA laboratories in Washington: Seattle, Tacoma, Marysville, Vancouver and Spokane. The grant monies will pay for new equipment and space renovation in the Vancouver lab to increase capacity, and will pay additional staff to work there. The grant will also pay for training for workers on the latest DNA advances and will pay for overtime to keep up with cases.
Despite an increase in productivity, the backlog of cases waiting for analysis continues to increase. In 2017, the backlog of cases waiting for analysis increased from 3,168 to 4,562 and the number of new cases sent to the lab was 5,197. The number of new cases was just slightly below the number of new cases submitted in 2016. The turnaround time for requests increased from 83 days to 208 days.
Legislation in 2015 and 2016 increased the number of sexual assault kits that must be analyzed for DNA with the resulting data entered into the FBI’s Combined DNA Index System (CODIS) database. The DOJ funding is critical for the WSP labs to keep up with the increased caseload.
A second $500,125 grant is aimed at post-conviction testing of DNA for cases where such testing may exonerate a wrongfully convicted individual.
Finally, a $250,000 grant will pay for additional staff and equipment for the WSP Toxicology Laboratory. The lab currently has a backlog of more than 2,650 cases with a turnaround of 75 days. The opioid crisis has increased requests for analysis 45 percent over the last five years. The lab is critical to identifying new synthetic opioids that are being trafficked in our communities.
Additional information about the grant and WSP forensic laboratories please contact WSP’s Phil Hodge (206) 262-6020 or Mary Keller (206) 262-6005.
Owner of Vancouver, WA Precious Metals Firm Indicted for Multiple Counts of Wire and Mail FraudRead the Press Release
The owner of Blue Moon Coins in Vancouver, Washington was indicted by the grand jury on 11 counts of wire fraud and five counts of mail fraud for his scheme to defraud customers of more than $1.3 million, announced U.S. Attorney Annette L. Hayes. AARON MICHAEL SCOTT, 40, a resident of Portland, Oregon, is scheduled to be arraigned on the indictment in U.S. District Court in Tacoma at 10:30 on Thursday October 4, 2018.
According to the indictment, between October 2013 and April 2014, SCOTT repeatedly accepted customer money for the purchase of precious metals and coins, and then used the money for his personal and company expenses. SCOTT represented to customers that the money would be used to immediately purchase the coins and metals but instead it was used for expenses or to fulfill earlier customer orders in the form of a Ponzi scheme. When customers complained about the delay in receiving their items, SCOTT used a plethora of excuses such as: weather delays; a supplier had gone bankrupt; a corporate buyout; ice and snow; delayed armored truck delivery; and a bad flu season.
In all more than 139 customers were defrauded of more than $1.3 million. Losses to individual investors range from just over $2,000 to more than $154,000.
Wire fraud and mail fraud are 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, Vancouver Police Department and the U.S. Commodities Futures Trading Commission (CFTC). The CFTC has filed a civil enforcement action against SCOTT and Blue Moon Coins seeking restitution for the victims and a permanent registration and trading ban.
The case is being prosecuted by Assistant United States Attorney David Reese Jennings.
Former Bowling Coach Pleads Guilty to Production of Child PornographyRead the Press Release
The former coach of a South King County bowling team pleaded guilty today in U.S. District Court in Seattle to production and possession of child pornography, announced U.S. Attorney Annette L. Hayes. TY LEE TREDDENBARGER, 54, of Burien, Washington, admits he photographed and saved images of his molestation of minor victims between the ages of 13 and 16. When sentenced by U.S. District Judge John C. Coughenour on January 15, 2019, TREDDENBARGER faces a mandatory minimum 15 years in prison and up to 30 years in prison.
According to records filed in the case, in March 2017, a young victim disclosed the abuse to a parent. The Des Moines Police Department and King County Prosecutor’s Office requested assistance from Homeland Security Investigations. HSI and the Seattle Police Department executed court authorized search warrants at TREDDENBARGER’s residence, seizing electronic devices that contained images of the sexual abuse of children. Law enforcement was able to identify two additional victims. TREDDENBARGER is charged with three counts of production of child pornography -- one count for each of the victims -- and possession of child pornography.
Some of those victimized by TREDDENBARGER have not been identified. Authorities are asking anyone who has information to contact HSI Seattle at (206) 442-1469 or email information to [email protected]
The case is being investigated by Homeland Security Investigations with assistance from the Des Moines Police Department and the Seattle Police Department.
The case is being prosecuted by Special Assistant United States Attorney Cecelia Gregson. Ms. Gregson is a Senior Deputy King County Prosecutor specially designated to prosecute child exploitation cases in federal court.
Washington State School Districts Receive more than $1.5 Million in DOJ Grants to Combat School ViolenceRead the Press Release
Three Washington State school districts, an Educational Service District and the Washington Superintendent of Public Instruction will receive more than $1.5 million in grants from the U.S. Department of Justice to combat school violence, announced U.S. Attorney Annette L. Hayes. The largest grant, nearly $1,000,000 for the Superintendent of Public Instruction, will fund efforts to provide teachers and students with the tools they need to recognize and respond quickly to prevent acts of violence. Smaller grants to individual school districts will support students, teachers and law enforcement partnering to prevent school violence.
“These federal funds support all-important state and local efforts to keep kids safe in our schools,” said U.S. Attorney Annette L. Hayes. “The Department of Justice is committed to supporting all involved – including parents, administrators, teachers, students and school safety officers -- in finding ways to address the root causes of violence in our schools.”
The grant to the Superintendent of Public Instruction office will assist in developing threat assessment and crisis intervention teams, and anonymous reporting systems designed to identify threats before they materialize. Funding is provided for training students, school personnel and local law enforcement so they can prevent violence in schools.
Individual school districts are also receiving funding to enhance school security. The Ellensburg School District is receiving two grants totaling $300,000 for anti-violence programs. The Monroe School District will receive $150,000. The Quillayute Valley School District will receive $25,000 and the Northeast Washington Education Service District will receive $49,750. The grants are targeted at developing programs to recognize and assess threats including issues of mental health.
Under the terms of the grant, no funds can be used to purchase and provide firearms or training in the use of firearms to any personnel.
This funding is provided under the Bureau of Justice Assistance, STOP School Violence Prevention and Mental Health Training Program.
DOJ Targets more than $5.6 Million to Address Opioid Addiction in Washington StateRead the Press Release
The Department of Justice is awarding more than $5.6 million to agencies in the State of Washington to address the opioid epidemic through increased treatment, prescription monitoring, emergency services and drug courts, announced U.S. Attorney Annette L. Hayes. The two largest grants – a total of $1.7 million will fund efforts by the state Department of Health to link prescription monitoring data with various public health databases to help medical professionals and others make data-informed decisions on treatment and prevention of prescription drug abuse.
“From large cities to rural areas and tribal communities, the Department of Justice is dedicating resources to support local efforts to combat opioid abuse,” said U.S. Attorney Annette L. Hayes. “These funds support a range of services including drug treatment, prescription monitoring, overdose mitigation and housing support which in turn will reduce demand for opioids and the terrible damage from addiction.”
The Seattle Police Department in partnership with the Department of Corrections is receiving a $900,000 grant to provide treatment services to those in custody or re-entering society after prison. Services include counseling and stable housing to prevent a return to prison. With a $498,180 grant, the North Mason Regional Fire Authority in Belfair, Washington will partner with Peninsula Community Health Services to establish a Quick Response Team. The team composed of first responders and law enforcement works to reduce opioid abuse and overdose fatalities. The Makah Indian Tribe received a $458,285 grant to establish a team approach to provide services as an alternative path to cycling in and out of the judicial system. Finally, the Puyallup Tribe will receive $875,048 to provide community reentry services such as treatment and vouchers for housing, and transportation for those reentering the community from prison or from inpatient treatment.
Two drug courts received funding. The City of Lakewood received $550,000 for a drug court focused on the needs of veterans. Clark County received a $399,074 grant for its juvenile drug court program focusing on youth with substance abuse disorder.
The Washington State Patrol received a $250,000 grant for its crime lab program designed to reduce the backlog of cases waiting for toxicology and forensic testing. Laboratories have been overwhelmed with drug seizure testing requests as well as analysis related to opiate related deaths.
The Comprehensive Addiction and Recovery Act (CARA) Program is the first major federal substance use disorder treatment and recovery legislation in 40 years and the most comprehensive effort to address the opioid epidemic. CARA establishes a comprehensive, coordinated, and balanced strategy through enhanced grant programs that expand prevention and education efforts while also promoting treatment and recovery. The Comprehensive Opioid Abuse Site-based program was developed as part of the CARA legislation signed into law on July 22, 2016.
Captain of Prominent Tourist Sailing Ship Sentenced to Prison for Illegally Claiming DisabilityRead the Press Release
The Captain of a Seattle tourist sailboat was sentenced today in U.S. District Court in Seattle to 9 months in prison, two years of supervised release, a $5,500 fine and $324,738 in restitution and civil penalty, announced U.S. Attorney Annette L. Hayes. PAUL D. LAMARCHE, 67, pleaded guilty to wire fraud and theft of government property in March 2018, admitting he collected more than $177,000 in disability payments from the Railroad Retirement Board while operating Emerald City Charters – a tourist attraction running sailing ships on the Seattle waterfront. At the sentencing hearing U.S. District Judge James L. Robart said LAMARCHE was “…stealing from the government and lying about it…. He’s obviously made a lot of money, but he’s stealing every year… He’s a thief.”
According to records filed in the case, in June 1988, LAMARCHE claimed he could no longer work as a Burlington Northern Brakeman/Conductor due to a back injury. In August 1993, he began receiving a disability annuity from the Railroad Retirement Board. In connection with those payments, he certified annually that his medical condition had not improved, that he was unable to work and had limited earnings. In fact, from 1984 to the present, LAMARCHE owned and operated Emerald City Charters, which operates two large sea-going sailboats on Elliott Bay. While claiming disability, LAMARCHE submitted multiple forms to the U.S. Coast Guard certifying that he had no impairments that limit his physical activities or ability to pilot the sailboats.
On multiple occasions in various settings, LAMARCHE appeared in promotional videos actively sailing the boats. He made statements that he had missed “only a couple days of work in 23 years,” and he appeared in a television feature story doing yoga on a stand-up paddleboard. Even as the Railroad Board began investigating his disability claim in 2015, he continued to submit false reports claiming he was not able to “lift, pull or carry heavy items” was “unable to run or jump,” and had “debilitating headaches daily.” He now admits all those statements were false.
In addition to the $177,369 in restitution, LAMARCHE agreed to pay an additional $177,369 as a civil penalty for violating the False Claims Act. The U.S. Coast Guard has a pending action to address LAMARCHE’s Captain’s license. LAMARCHE was ordered to report to prison October 2, 2018.
The case was investigated by Special Agents of the Railroad Retirement Board Office of Inspector General (RRB-OIG) and U.S. Coast Guard Investigative Service.
The case was prosecuted by Assistant United States Attorney Stephen Hobbs and the civil investigation and settlement were handled by Assistant United States Attorney Kayla Stahman and Investigator Judy Swem.
Owner of Fife, Washington Seafood Processing Company Sentenced to Prison for Sea Cucumber Lacey Act ViolationRead the Press Release
The owner of Orient Seafood Production of Fife, Washington, was sentenced today in U.S. District Court in Seattle to two years in prison, three years of supervised release and nearly $1.5 million in restitution for his scheme to overharvest and profit on illegally taken sea cucumbers, announced U.S. Attorney Annette L. Hayes. HOON NAMKOONG, 62, pleaded guilty in April 2018, admitting that between August 2014, and November 2016, he conspired with others to underreport the amount of sea cucumbers purchased for processing by approximately 250,000 pounds. The post-processing market value of the stolen sea cucumbers is nearly $1.5 million. At sentencing Chief U.S. District Judge Ricardo S. Martinez said, by creating the market for illegal harvesters NAMKOONG did “significant damage to sea cucumber populations and habitat that may take years to repair.”
“This defendant lined his pockets by purchasing and selling illegally harvested sea cucumbers equal to as much as 20 percent of the total allowed state-wide harvest,” said U.S. Attorney Hayes. “This illegal activity damages the health of the Puget Sound ecosystem by endangering the sustainability of the sea cucumber population. Illegal harvesting undermines quotas designed to protect the resource and keep the Sound healthy for our children and generations to come.”
According to records filed in the case, over portions of three harvesting seasons, HOON NAMKOONG purchased sea cucumbers from both tribal and non-tribal fishers in the Puget Sound region. Sea cucumbers are classified as shellfish, and harvests are regulated by both Washington State and Tribal authorities. To protect the resource, the harvests are tracked by fish tickets signed by both the fisher and the purchaser. HOON NAMKOONG admits that he falsified fish tickets, failed to prepare fish tickets or retain confirmation of fish tickets submitted by third parties, and frequently paid fishers in cash for their sea cucumbers so there would be no financial record of the total amount of sea cucumbers taken. Falsifying fish tickets, and processing and selling in interstate or foreign commerce illegally obtained shellfish are violations of the Lacey Act, the federal law that prohibits illegal trafficking in wildlife, fish, and plants.
HOON NAMKOONG’s company processed the sea cucumbers and sold and transported them to wholesale seafood buyers in both the U.S. and Asia, for a gain of nearly $1.5 million. NAMKOONG was ordered to pay $1,499,999 in restitution to the state and Tribal entities.
The case was investigated by the NOAA Office of Law Enforcement and the Washington State Department of Fish and Wildlife.
The case is being prosecuted by Assistant United States Attorneys Matthew Diggs and Seth Wilkinson.
Justice Department Reaches Settlement with Northwest Trustee Services, Inc. of Bellevue, Washington for Illegally Foreclosing on Servicemembers’ HomesRead the Press Release
The U.S. Department of Justice and a Bellevue, Washington foreclosure services company today settled allegations that Northwest Trustee Services, Inc. (“Northwest”) violated the Servicemembers Civil Relief Act (“SCRA”), announced U.S. Attorney Annette L. Hayes. The complaint filed in November 2017, alleged that Northwest completed foreclosures on homes owned by servicemembers without obtaining the required court orders. Under the terms of the settlement, servicemembers who had their homes illegally foreclosed on may receive compensation for the unlawful foreclosures of up to $125,000, with a total payout to servicemembers of up to $750,000. Northwest ceased operations in December 2017 and is now being liquidated in state court receivership proceedings. This is the Department’s first SCRA lawsuit against a foreclosure trustee company.
The SCRA protects the rights of servicemembers on active duty by suspending or modifying certain civil obligations. The law prohibits foreclosing on the home of a servicemember during active military service and one year thereafter without a court order if the mortgage originated prior to the servicemember’s period of active military service.
“The Civil Rights Division will never waver in our commitment to vindicating the rights of those who devote themselves to the service of our country,” said Acting Assistant Attorney General John Gore of the Civil Rights Division. “We hope this case sends a strong message to foreclosure trustee companies and others that all foreclosures must comply with the Servicemembers Civil Relief Act.”
“Those who serve in our military deserve zealous representation of their rights,” said U.S. Attorney Annette L. Hayes. “We are working to ensure that servicemembers whose homes were illegally foreclosed on by Northwest Trustee receive up to $125,000 in compensation. Northwest Trustee may have shuttered its foreclosure business, but that does not end its obligation to do right by servicemembers.”
The Department of Justice launched an investigation into Northwest’s practices after United States Marine Corps veteran Jacob McGreevey of Vancouver, Washington submitted a complaint to the Department’s Servicemembers and Veterans Initiative in May 2016. Northwest had foreclosed on McGreevey’s home in August 2010, less than two months after he was released from active duty in Operation Iraqi Freedom. McGreevey sued both PHH Mortgage (his mortgage servicer) and Northwest in 2016, but a U.S. District Court Judge accepted PHH and Northwest’s argument that McGreevy had waited too long to file his case, and dismissed the case on that basis. The Department’s investigation revealed that, in addition to McGreevey, Northwest had unlawfully foreclosed on other homes of SCRA-protected servicemembers since 2010.
Before entering into receivership, Northwest described itself as a full-service trustee company providing foreclosure services to mortgage lenders in the Western United States. On March 28, Northwest was placed into a General Receivership under Washington State law. The company no longer provides foreclosure services. If it were to reenter the business of providing foreclosure services, the settlement requires the company to implement Department-approved policies, procedures, and training to prevent further SCRA violations.
This case was jointly handled by Assistant U.S. Attorneys Christina Fogg and Kyle Forsyth of the United States Attorney’s Office for the Western District of Washington and Trial Attorneys Alan Martinson and Nicole Siegel of the Civil Rights Division for the U.S. Department of Justice.
The Department’s enforcement of the SCRA is conducted by the Civil Rights Division’s Housing and Civil Enforcement Section, often in partnership with local United States Attorney’s Offices. Since 2011, the Department has obtained over $467 million in monetary relief for servicemembers through its enforcement of the SCRA. The SCRA provides protections for servicemembers in areas such as evictions, rental agreements, security deposits, prepaid rent, civil judicial proceedings, installment contracts, credit card interest rates, mortgage interest rates, mortgage foreclosures, automobile leases, life insurance, health insurance and income tax payments. For more information about the department’s SCRA enforcement, please visit www.servicemembers.gov.
Servicemembers and their dependents who believe that their rights under the SCRA have been violated should contact the nearest Armed Forces Legal Assistance Program Office. Office locations may be found at http://legalassistance.law.af.mil/content/locator.php.
DOJ Funds Services for Victims of Domestic Violence and Sexual AssaultRead the Press Release
The U.S. Department of Justice’s Office of Violence against Women has awarded a three- year $600,000 grant to provide legal assistance to victims of domestic violence and sexual assault in Skagit County, Washington announced U.S. Attorney Annette L. Hayes. The grant was awarded to the Northwest Justice Project, headquartered in Seattle, in partnership with Skagit Domestic Violence and Sexual Assault Services.
“These funds will support victims of crime and enhance the ability of local organizations to reach out to victims who may be isolated geographically or have limited English-speaking skills,” said U.S. Attorney Annette L. Hayes. “The work supported by thee grants is important to ensuring justice reaches everyone in our Western Washington communities.”
According to the grant award, the funding will increase civil and criminal legal assistance programs for victims of domestic violence, dating violence, sexual assault and stalking. The funds provide legal services, at minimal or no cost, to victims who are seeking relief through the courts arising out of domestic abuse or violence. Some of the services include assisting with protection orders and victim impact statements; attending court in support of victims; and providing culturally relevant education programs about domestic abuse and sexual violence to immigrant, Native American and limited English-speaking populations.
For more information on this grant, please contact the Northwest Justice Project or DOJ’s Office on Violence Against Women.