Western District of Washington

          A long-time investment advisor in Redmond, Washington pleaded guilty today in U.S. District Court in Seattle to defrauding some 15 investors of more than $3 million, announced U.S. Attorney Brian T. Moran.  DENNIS GIBB, 72, the President and owner of Sweetwater Investments Inc., pleaded guilty to wire fraud and falsification of records with the intent to obstruct a matter within the jurisdiction of the Securities and Exchange Commission (SEC).  Simultaneously, GIBB and Sweetwater investment entered into a consent decree with the SEC liquidating the Sweetwater Income Flood LP Fund and barring GIBB from further investment activity.     Chief U.S. District Judge Ricardo S. Martinez scheduled sentencing in the criminal case for June 28, 2019.

            “Sadly, this defendant sold his investors a dream of a safe retirement, representing that he would use a sophisticated investment strategy, including investing in government bonds, to produce stable returns.  Instead, Dennis Gibb used investor funds to pay business expenses for Sweetwater Investments, as well as mortgage and car payments and other living expenses,” said U.S. Attorney Brian T. Moran.  “He told investors there was $7.8 million in the fund – the reality was there was less than $2 million. The investors no longer have the safe retirement income they were promised.”

            According to the criminal case filings and the SEC consent decree, GIBB created Sweetwater Income Flood Limited Partnership, a private fund Gibb managed, in 2008.  As early as 2007, he began soliciting investors for the fund targeting those who wanted steady retirement income in the near future.  According to the SEC between 2007 and 2018, about 20 investors put about $7.3 million into the fund.  GIBB secretly transferred more than $3.1 million from the fund for his own expenses.  To hide his theft, GIBB sent investors falsified quarterly account statements.  When the SEC began an examination of the Sweetwater Investments in May 2018, GIBB provided false records to examiners indicating the fund had been liquidated. 

            In his plea agreement GIBB agrees to forfeit a money judgment in the amount of $3,197,401.  Gibb will also owe full restitution for the amount he stole.  The government will recommend that any money collected on the money judgment go toward the defendant’s restitution obligation.  The SEC is ordering GIBB to liquidate the approximately $1.8 million remaining in the Income Flood Fund and provide it to the SEC for disbursement to victims. 

            Wire fraud is punishable by up to 20 years in prison.  Falsification of records is punishable by up to three years in prison.  Prosecutors have agreed to recommend no more than 78 months in prison.  The court is not bound by the recommendation, the sentence will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.

            The case was investigated by the SEC and the FBI.  The case is being prosecuted by Assistant United States Attorney Matthew Diggs. 

           The SEC order is available here.

 

          Three members of an international drug trafficking organization pleaded guilty today in U.S. District Court in Seattle to distributing more than a thousand kilograms of illegal marijuana, announced U.S. Attorney Brian T. Moran.  The defendants admit in their plea agreements that they used money from conspirators in the Peoples Republic of China (PRC) to purchase homes in the Puget Sound area that they used for marijuana production.  QIFENG LI, 41, his wife XIAMIN HUANG, 38, and brother QIWEI LI, 45, all face a mandatory minimum five years in prison and up to 40 years in prison when sentenced by U.S. District Judge John C. Coughenour on June 18, 2019.

            “The entry of organized crime into the marijuana marketplace is of increasing concern in the Western District of Washington,” said U.S. Attorney Brian T. Moran.  “This conduct brings crime to our neighborhoods, artificially fuels the housing market, and creates a blight of toxic abandoned grow houses.  With this case, the defendants are forfeiting more than a million dollars of equity in properties and more than $350,000 in cash – putting a dent in the organized crime profits.”

            According to the facts admitted in the plea agreement, between July 2015 and May 2018, the conspirators purchased homes in Burien, Kent, Seattle and Tukwila, which they used exclusively for marijuana production.  More than $598,000 was wired to the conspirators from China to fund the purchases.  The defendants shipped more than 1,000 kilograms of marijuana to the New York City area, via FedEx, UPS, the U.S. Postal Service and a private freight forwarder.  Ultimately, in an effort to streamline distribution the conspirators established a shipping company, Pony Movers, LLC, to transport their marijuana from Western Washington to a warehouse in Little Ferry, New Jersey.  The defendants then deposited the profits from the marijuana enterprise into their bank accounts in amounts less than $10,000 to avoid financial reporting requirements.            

            QIFENG LI and XIAMIN HUANG are U.S. citizens.  QIWEI LI is a Lawful Permanent Resident who likely will face deportation following his prison term.

            This was an Organized Crime and Drug Enforcement Task Force (OCDETF) investigation, providing supplemental federal funding to the federal and state agencies involved.

         The Investigation was led by DEA and Homeland Security Investigation (HSI).  Significant investigative assistance was also provided by the Seattle Police Department and FBI.

            The case is being prosecuted by Special Assistant United States Attorney Joe Silvio and Assistant United States Attorney Marie Dalton.  Mr. Silvio is an attorney with Homeland Security Investigations, specially designated to prosecute cases in federal court.

          One of two men who attempted to rob a federal agent working on an illegal firearms investigation, was sentenced today in U.S. District Court in Seattle to 14 years in prison, announced U.S. Attorney Brian T. Moran.  ABDIRASHID HARET, 20, of Des Moines, Washington, pleaded guilty in December 2018, 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.  At the sentencing hearing U.S. District Judge James L. Robart noted the defendant had a “fascination with guns,” that created “a situation that is dangerous to yourself, the people you are with, and the community.”

            “This defendant illegally carried and trafficked firearms, bringing violence to our community,” said U.S. Attorney Brian T. Moran.  “He was a convicted felon – arrested for assault and carrying a stolen gun – who returned to crime within months of his juvenile conviction.  He threatened an undercover law enforcement agent – the very person we trust to do the dangerous work needed to keep us safe. This long prison sentence is warranted to protect our community.”

            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 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.

            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.

            A 36-year-old member of the Tulalip Tribes was sentenced March 21, 2019, in U.S. District Court in Seattle to 71 months in prison for multiple horrific assaults on his intimate partner, announced U.S. Attorney Brian T. Moran.  MORGAN BRYANT pleaded guilty in December 2018 to two counts of assault resulting in serious bodily injury, assault by strangulation, assault with a dangerous weapon, and domestic assault by a habitual offender.  According to records filed in the case, BRYANT assaulted his live-in partner on numerous occasions: punching her, kicking her, hitting her with a hammer and a wrench, and strangling her.  When treated by medical professionals, the victim had a broken wrist, broken ribs, and broken bones in her face.  At the sentencing hearing, U.S. District Judge Robert S. Lasnik said, “He cannot do this ever again to any woman.”

            “Such violent, vicious assaults deserve significant federal prison time,” said U.S. Attorney Brian T. Moran.  “The Tribal Liaisons in my office are using important tools such as the Habitual Offender Domestic Assault statute to ensure domestic violence assaults are investigated, prosecuted and punished to protect the vulnerable in our Tribal communities.”

            According to records filed in the case, in March 2018, the victim sent her family and friends text messages asking for help.  She included a photo that showed she had one black eye, an eye swollen shut, and bruises on her face.  Tulalip Tribal Police responded to check on the victim.  Because no one inside would answer the door, the police obtained a search warrant.  Inside they found the victim with severe injuries, including a bloody head-wound with a towel super-glued in place, and broken bones in her face.  The victim was taken to the hospital and later disclosed months of abuse, including a November 2017 fight where BRYANT broke her wrist and a January 2018 argument where BRYANT punched and kicked her, struck her with a wrench and hammer while keeping her locked in a bathroom for hours, strangled her, and hit her over the head with a plate.  Finally, in the March 2018 assault that led to his arrest, BRYANT repeatedly punched her leaving her bruised and bloody. 

            BRYANT has previous convictions in Everett Municipal Court and Tulalip Tribal Court for domestic violence assaults on other victims.

            The case was investigated by the Tulalip Tribal Police and the FBI.  The case was prosecuted by Assistant United States Attorney Rebecca Cohen.

          A Seattle man with three prior federal convictions was sentenced today in U.S. District Court in Seattle to 61 months in prison for witness tampering and absconding from federal supervision, announced U.S. Attorney Brian T. Moran.  DAVID POSEY, 52, of Seattle, was arrested in June 2018 after he traveled to Portland, Oregon, without notifying his probation officer.  POSEY had convinced an autistic woman whom he met at a local community college to travel with him.  The investigation revealed that he pressured the 19-year-old victim to lie to law enforcement about sexual activity.  The woman has a guardian because she is considered vulnerable and unable to make certain financial and personal decisions.  At sentencing, U.S. District Judge Robert S. Lasnik said POSEY “is a crook and a fraudster….  A fraudster taking advantage of a situation and manipulating it to his advantage.”

            According to records filed in the case, POSEY was released into the community from his 65-month federal prison sentence on June 4, 2017.  Barely a year later, an arrest warrant was issued when he failed to check in with his probation officer.  POSEY was located and arrested June 20, 2018, in a Portland motel room with a developmentally disabled 19-year-old.  Following his arrest, POSEY communicated repeatedly with the woman by mail and telephone to get her to change the information she provided to law enforcement.  Ultimately, a court-authorized search of mobile phones belonging to POSEY revealed the truth of the sexual contact and his efforts to get the witness to lie to law enforcement.  In November 2018, POSEY pleaded guilty to tampering with a witness.

            POSEY has criminal convictions dating back to 1985, including federal convictions for: being a felon in possession of a firearm, mail fraud, and conspiracy (1997); two counts of mail fraud (2004); and being a felon in possession of a firearm, unlawful production of identity documents, and counterfeiting (2011).

            The case was investigated by the FBI with assistance from the U.S. Marshal Service Fugitive Task Force.

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

          A 32-year-old Kent, Washington resident was convicted today of distributing methamphetamine following a three day jury trial, announced U.S. Attorney Brian T. Moran.  JOHNNY JAVIER MOREL-PINEDA faces a mandatory minimum 5 years in prison and up to 40 years in prison when sentenced by Chief U.S. District Judge Ricardo S. Martinez on June 14, 2019.  MOREL-PINEDA is a citizen of Honduras who likely will be deported following his prison term.

            According to testimony at trial and records filed in the case, MOREL- PINEDA came to the attention of law enforcement as a source of methamphetamine in the South King County area.  A confidential informant, working with law enforcement, set up a drug deal with MOREL- PINEDA.  The telephone calls setting up the April 2018 drug deal, as well as the drug sale in MOREL- PINEDA’s car were audio recorded.  In the calls and via text message the two speak in code, calling an ounce of methamphetamine a “taco,” and pricing “four tacos” at $1200.

            The jury deliberated about 90 minutes before reaching the guilty verdict.           

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

            The case was prosecuted by Assistant United States Attorneys Joshua Ferrentino and Amy Jaquette.

          The nationwide flooring company Spectra Contract Flooring with an office in Tukwila, Washington, has agreed to pay $133,718 to settle allegations it improperly provided kickbacks to a defense contractor, announced U.S. Attorney Brian T. Moran.  The civil settlement comes after a criminal investigation, and false tax return conviction, of an employee of a government defense contractor who accepted benefits from Spectra.  Spectra is a wholly owned subsidiary of Shaw Industries Group Inc.  The criminal case, U.S. v Meisner, was resolved in May 2017.  In the settlement announced today, Spectra does not admit any wrongdoing but chooses to resolve the claims.

            According to records filed in the criminal case and the settlement agreement, in 2009, Spectra was one of the subcontractors working on a seismic upgrade at the Delta Pier Support Facility at the Bangor Submarine Base near Silverdale.  The contractor leading the Bangor job was Cherokee General Corporation, a subsidiary of Doyon Government Group, headed by Brent S. Meisner.  Meisner was in the midst of a remodel of his Gig Harbor, Washington, residence.  Invoices submitted by Spectra reveal that the company billed the Navy for the work at Meisner’s residence under the seismic upgrade contract.  Meisner paid nothing for the flooring services provided at his home.  As is allowed by law in False Claims cases, Spectra is settling the matter for three times the cost of the false billing: $133,718. 

            In May 2017, Meisner was sentenced to 18 months in prison.

          "The announced settlement is representative of the law enforcement community's dogged efforts to hold accountable those who engage in unethical business practices that stifle fair competition and ultimately result in a loss to the American taxpayer," said Bryan Denny, Special Agent in Charge, Western Field Office, Defense Criminal Investigative Service (DCIS).  "As in this case, any unscrupulous actions by government contractors and subcontractors that tarnish and corrupt the integrity of the defense procurement process will be reviewed and vigorously investigated by DCIS and its law enforcement partners."

            The False Claims Act allegations were investigated by the Defense Criminal Investigative Service (DCIS), the Naval Criminal Investigative Service (NCIS), Army CID Major Procurement Fraud Unit and the Internal Revenue Service Criminal Investigation (IRS-CI).

            The civil settlement was negotiated for the government by Assistant United States Attorney Kayla C. Stahman.

          A former long-time Skagit County Sheriff’s Deputy was sentenced today in U.S. District Court in Seattle to 60 days in prison and six months of home confinement with electronic home monitoring in connection with his theft of more than $30,000 from a police dog handlers organization, announced U.S. Attorney Brian T. Moran.  BRIAN A. LEHR, 53, of Sedro Wooley, Washington, was the Secretary/Treasurer of the Pacific Northwest Police Detention Dog Association.  For at least six years, LEHR stole money from the organization to use for his own expenses, such as restaurant bills, hotel and event expenses, and even his cable TV and cell phone bills.  By the time the theft was discovered, LEHR had stolen $33,641.  At the sentencing hearing U.S. District Judge John C. Coughenour noted the theft was a “breach of trust.”

            According to records filed in the case, LEHR took his leadership position with the Association in 1998.  The Association, which was founded by canine law enforcement officers, seeks to promote high-quality training of detection dog teams in the Pacific Northwest.  LEHR had complete control over the Association finances, and there was little oversite.  In 2013, LEHR prepared a financial report suggesting the Association had nearly $20,000 in its bank account, when in fact he had stolen all but $276.79.  LEHR stole the money by simply making payments from the Association accounts to his credit card bills or cable and cell phone bills or by using the Association debit card at stores, restaurants, hotels, and event ticket sites.  LEHR also withdrew cash from the accounts for his own expenses.

            The thefts harmed the Association in ways beyond the financial cost.  The Association has not been able to bring in trainers to work with narcotic detection dogs, and it has been unable to purchase equipment and update its website with information for members.  The embezzlement damaged its reputation in the law enforcement community and hurt its efforts to recruit members in law enforcement.

            LEHR pleaded guilty to wire fraud in December 2018.

            The case was investigated by the FBI.  The case was prosecuted by Assistant United States Attorney Andrew Friedman.

Seattle – Attorney General William P. Barr and U.S. Attorney Brian T. Moran today announced the largest coordinated sweep of elder fraud cases in history, surpassing last year’s nationwide sweep.  The cases during this sweep involved more than 260 defendants from around the globe who victimized more than two million Americans, most of them elderly.

In the Western District of Washington, three defendants operating various money‑transmitting schemes agreed to cease operation following civil complaints alleging that they were a critical part of tech support fraud schemes based in India.  The operators, in Seattle, Shoreline, and Gold Bar, Washington, collected the fraud proceeds, kept a percentage, and forwarded the bulk of the money to the telemarketing centers in India.  In one case, the Shoreline based conspirator sent more than $320,000 to India between December 2017 and May 2018.  A fourth company sued civilly in the Western District of Washington is one of the fraudulent tech support companies using telemarketing centers to defraud seniors in Western Washington.

“Crimes against the elderly target some of the most vulnerable people in our society,” Attorney General William P. Barr said.  “But thanks to the hard work of our agents and prosecutors, as well as our state and local partners, the Department of Justice is protecting our seniors from fraud.  The Trump administration has placed a renewed focus on prosecuting those who prey on the elderly, and the results of today’s sweep make that clear.  Today we are announcing the largest single law enforcement action against elder fraud in American history.  This year’s sweep involves 13 percent more criminal defendants, 28 percent more in losses, and twice the number of fraud victims as last year’s sweep.  I want to thank the Department’s Consumer Protection Branch, which led this effort, together with the Department’s Criminal Division, the more than 50 U.S. Attorneys’ offices, and the state and local partners who helped to make these results possible.  Together, we are bringing justice and peace of mind to America's seniors.”

“Using our civil authority, we are stopping a key cog in the wheel of tech support fraud,” said U.S. Attorney Brian T. Moran.  “By taking out those who process the payments for the fraudsters, we stop the flow of ill-gotten gain to those preying on our senior citizens.  This is a warning shot–a return to this fraud could result in additional sanctions.”

The Department took action in every federal district across the country, through the filing of criminal or civil cases or through consumer education efforts. In each case, offenders allegedly engaged in financial schemes that targeted or largely affected seniors.  In total, the charged elder fraud schemes caused alleged losses of millions of more dollars than last year, putting the total alleged losses at this year’s sweep at over three fourths of one billion dollars. 

The charges are merely allegations, and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

Since President Trump signed the bipartisan Elder Abuse Prevention and Prosecution Act (EAPPA) into law, the Department of Justice has participated in hundreds of enforcement actions in criminal and civil cases that targeted or disproportionately affected seniors.  The Justice Department has likewise conducted hundreds of trainings and outreach sessions across the country since the passage of the Act.  The Western District of Washington also has formed an Elder Justice Taskforce.  To file a complaint with the District, please do so on the Western District webpage.

The four cases filed in the Western District of Washington are:

U.S. v. Joy Emmanuel, 19-cv-309

U.S. v. Jasvit S. Tahim, 19-cv-307

U.S. v. Christine Reeves and VCARE USA LLC, 19-cv-325

U.S. v.  Elagoon Business Solutions PVT LTD, 19-cv-00324

Assistant United States Attorney Kayla Stahman leads the Elder Justice Task Force in the Western District of Washington.

          A Seattle area man with a prior history of promoting prostitution was convicted on March 6, 2019, in U.S. District Court in Seattle of five federal felonies including sex trafficking of a minor, announced U.S. Attorney Brian T. Moran.  The jury deliberated less than three hours following an eight-day trial before convicting 32-year-old AUBREY TAYLOR, also known as “Uno,” of all counts.  During the trial multiple victims testified about how Taylor used threats, violence, sexual assault, and manipulation to control them and force them to engage in commercial sex acts in cities in Washington, Idaho, and Nevada and then give him the money they earned.  TAYLOR faces a mandatory minimum 15 years in prison when sentenced by U.S. District Judge Robert S. Lasnik on May 21, 2019.

            According to records filed in the case and testimony at trial, TAYLOR forced one young victim into prostitution on a trip to Wenatchee in October 2014 when she was 17 years old.  Three other victims testified about how TAYLOR controlled them with mental and physical abuse or promises of love and a better life.  The women were transported to as far away as Las Vegas to engage in commercial sex acts.  One victim was controlled by rationing doses of heroin–using her addiction to keep her working as a prostitute.  Other victims were instructed to get tattoos of TAYLOR’s name and nicknames as a form of branding and to demonstrate TAYLOR’s control over them.

            The victims under TAYLOR’s control were violently assaulted by him on multiple occasions.  When law enforcement or medical professionals tried to get the victims to cooperate with law enforcement, they expressed fear of TAYLOR.  Text messages seized in the case reveal TAYLOR’s attempts to recruit numerous additional women and his use of threats and violence.

            “He is a sex trafficker and a predator,” Assistant United States Attorney Kate Crisham said in closing arguments.  “He sold his victims a dream of a bright future…but what they got instead was a nightmare.” 

          “I commend the dedicated law enforcement officers and trial team who worked diligently to investigate and prosecute these crimes,” said U.S. Attorney Brian T. Moran.  “And I want to recognize the strength and courage of the victims who came to court and described their darkest moments to the jury in order to hold this defendant accountable.”

            The case was investigated by the FBI, the City of Kent Police Department, the City of Auburn Police Department, the Bellingham Police Department, the Wenatchee Police Department, and the Snohomish County Sheriff’s Office.  The case was prosecuted by Assistant United States Attorneys Kate Crisham and Rebecca Cohen.

          A 37-year-old Staff Sergeant stationed at Joint Base Lewis-McChord (JBLM) was arrested today on a criminal complaint charging him with traveling with the intent to engage in illicit sexual contact and possession of child pornography, announced U.S. Attorney Brian T. Moran.  MOEUN YOEUN made his initial appearance in U.S. District Court in Tacoma this morning following his arrest at JBLM.  YOEUN had been residing in Steilacoom, Washington.  YOEUN will remain in custody pending a detention hearing next week.

            According to the criminal complaint, YOEUN came to the attention of law enforcement when Facebook notified the National Center for Missing and Exploited Children (NCMEC) that a person associated with four user accounts was enticing minors to send images of sexually explicit conduct and was making travel plans to go to the Philippines to engage in sex with minors.  The messages linked to the account indicate YOEUN traveled to the Philippines in February 2019.

          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.

          Traveling with intent to engage in illicit sexual conduct is punishable by up to 30 years in prison.  Possession of child pornography is punishable by up to 20 years in prison..The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes.  If convicted, the sentence of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.

          FBI and U.S. Army CID are investigating the case as part of the South Sound Child Exploitation Task Force.  The case is being prosecuted by Assistant United States Attorneys Matthew Hampton and Grady Leupold.

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

          A 20-year-old enrolled member of the Puyallup Tribe was sentenced today in U.S. District Court in Seattle to 18 months in prison and three years of supervised release for assault by strangulation, announced U.S. Attorney Brian T. Moran.  SHAWN MICHAEL SAM of Tacoma was indicted in November 2017 for an assault that occurred on the Swinomish Reservation on October 15, 2017.  SAM punched and strangled his then-girlfriend to the point that she lost consciousness.  U.S. District Judge John C. Coughenour imposed the sentence.

            According to records filed in the case, the victim suffered significant injuries including black eyes, tenderness, and swelling.  After SAM strangled his victim, he continued to punch and hit her after she regained consciousness.  Following his arrest for this assault, SAM was released with electronic monitoring.  However, he cut the monitoring bracelet on May 2, 2018, and was ultimately located nearly four weeks later at his sister’s home in Tacoma.  When law enforcement arrived, SAM ran from police but was taken into custody following a foot chase.

            Swinomish Chairman Brian Cladoosby wrote to the court, “We take these matters very seriously and we will not tolerate this behavior in our community.  The Violence Against Women Act is important for our State and Nation and protects the most vulnerable in our communities. We support Judge Coughenour to uphold justice for the victims and support his decision.”

            SAM pleaded guilty August 29, 2018.

            The case was investigated by the Swinomish Police Department and the FBI.  The case was prosecuted by Assistant United States Attorneys Rebecca Cohen and J. Tate London.  Ms. Cohen and Mr. London serve as Tribal Liaisons for the U.S. Attorney’s Office specially designated to prosecute cases involving Tribal communities.

          Chateau Ste. Michelle Winery has agreed to make numerous improvements to its public spaces following an American with Disabilities Act (ADA) complaint from a patron who uses a wheelchair, announced U.S. Attorney Brian T. Moran.  The patron complained to the U.S. Attorney’s Office after encountering physical barriers during her attendance at a summer concert at the venue.  She also alleged that she was told she had to purchase more expensive concert tickets in order to obtain wheelchair accessible seating.  In response, investigators and an outside architectural firm reviewed plans for the facility in June 2017 and made a site visit in October 2017, confirming barriers to accessibility.  Although Chateau Ste. Michelle disputed the complainant’s ticketing claims, it has agreed to make numerous structural changes to its facilities by June 2019 and to conduct training for its public-facing employees to better serve patrons with disabilities.

            “I commend Chateau Ste. Michelle for recognizing the need to correct barriers to equal access in its facilities, so that all those who want to visit the winery or enjoy a concert can do so,” said U.S. Attorney Brian T. Moran.  “Equal access is a bedrock of our society and seemingly simple things like heavy doors, loose carpets, or table heights can significantly limit access for people using mobility devices.”

            Under the agreement, some of the improvements Chateau Ste. Michelle has agreed to make include: multiple changes to bathrooms at the winery to make them accessible; improvements to table and threshold heights in the tasting room; securing loose rugs which can impede assistive devices and pose a tripping hazard; increasing the width of aisles and of accessible seating areas in the amphitheater; increasing the number of accessible parking spaces, and improving the slope and paths from the parking spaces to the amphitheater.  In addition, the winery has agreed to pay the original complainant $500 to settle the claims.

            DOJ will monitor compliance for one year following the improvements.  If no further issues arrive the matter will be closed.

            The settlement was negotiated for the U.S. Attorney’s Office by Assistant United States Attorney Christina Fogg.

          A 52-year-old Federal Way, Washington resident was convicted late yesterday of eight counts of aiding and assisting in preparing false income tax returns, announced U.S. Attorney Brian T. Moran.  LINA PASTARS ran a tax preparation business out of her home and collected higher fees from customers by falsely inflating their deductions, so that her clients received a bigger refund.  The jury deliberated about three hours following three days of testimony.  Chief U.S. District Judge Ricardo S. Martinez scheduled sentencing for June 28, 2019.

          According to testimony at trial and records filed in the case, the investigation of PASTARS began in 2015, when the IRS audited one of her clients whose 2012 tax return claimed more than $30,000 in unreimbursed business expenses.  The clients claimed PASTARS has claimed the deductions without their knowledge.  The IRS Scheme Development Center then began a review of returns prepared by PASTARS between 2012 and 2014 and discovered the returns had unreimbursed employee business expenses that far exceeded the average claims in the Puget Sound region.  The statistical analysis revealed PASTARS claimed unreimbursed business expenses for clients that were three to four times the average claim.

          On two different occasions in March and April 2015, undercover IRS Criminal Investigation (IRS-CI) agents went to PASTARS posing as clients for tax preparation.  Both were very clear that they had no employee business expenses.  They told PASTARS that all their expenses were reimbursed by their employers.  Nevertheless, PASTARS claimed thousands of dollars in unreimbursed expenses so that the returns showed a refund.  She increased the fee that she charged each undercover agent saying “If I do deduction I charge more.”  Undercover audio and video of these exchanges were admitted into evidence and played for the jury.

          As PASTARS deductions and promised refunds grew, so did her business. Most of her customers paid in cash – making her profit from the scheme difficult to trace.  But based on those customers who paid by check or via an online payment system she went from 159 returns prepared in 2012 to 366 prepared in 2015.   Over those same years her trackable income from tax prep increased ten-fold from $6,500 in 2012 to $65,470 in 2015.  Those figures do not account for clients who paid in cash.

          The statistical analysis of returns prepared by PASTARS between 2012 and 2015 reveal that she inflated the deductions for business expenses and charitable donations by as much as $4 million.  Investigators will now calculate the tax loss for purposes of sentencing.

          Aiding and assisting in preparation of false income tax returns is punishable by up to three years in prison and a $100,000 fine.  The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes.  The sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.

          The case was investigated by Internal Revenue Service Criminal Investigation. 

          The case was prosecuted by Assistant United States Attorneys Seungjae Lee and Michael Dion.

          A 35-year-old resident of Tulalip, Washington was convicted late yesterday in U.S. District Court in Seattle on four federal felonies related to illegal gun possession and trafficking, announced U.S. Attorney Brian T. Moran.  HANY VELETANLIC, a citizen of Bosnia legally residing in the United States, was found guilty of violating the Arms Export Control Act, illegally possessing two unregistered silencers, and possessing a firearm with an obliterated serial number.  The jury deliberated nearly three hours following two days of testimony.  U.S. District Judge James L. Robart scheduled sentencing for May 20, 2019.

            According to records filed in the case and testimony at trial, in February 2017, Swedish law enforcement seized a part of a Glock firearm from a residence in Fagersta, Sweden.  The serial number on the Glock firearm had been filed off, but Glock Inc. was able to trace the sale of the firearm using a specialized company code imprinted on the part.  The gun had been purchased by a resident of the Seattle area.  When contacted by law enforcement, the resident said he had privately sold the gun to VELETANLIC.  In May 2017, VELETANLIC contacted Homeland Security agents when he learned they had been asking about the firearm.  VELETANLIC told agents about his activity selling firearms on eBay and in direct sales.  After being advised of his Miranda rights, VELETANLIC ultimately admitted shipping packages of firearms overseas – as many as 20 different shipments to two different customer groups in Sweden.  He also shipped gun parts to a person in France.

            In the course of a July 2017 interview with law enforcement, VELETANLIC admitted that the customer in France had shipped him two silencers in exchange for the firearms parts.  VELETANLIC claimed the silencers had been destroyed.  However, when agents received permission to look in VELETANLIC’s gun safe, they found one of the silencers.  The second silencer was turned over by VELETANLIC to agents in August 2017.

            In May 2018, VELETANLIC was arrested on federal charges.  At the time of his arrest he was carrying a Ruger pistol with an obliterated serial number.  VELETANLIC admitted the weapon had an obliterated serial number because it had been stolen.

            Violating the Arms Export Control Act is punishable by up to 20 years in prison.  Possession of as unregistered firearm is punishable by up to ten years in prison.  Possession of a firearm with an obliterated serial number is punishable by up to five years in prison.  The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes.  The sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.

            The case was investigated by Homeland Security Investigations and Bureau of Alcohol, Tobacco Firearms & Explosives (ATF) with assistance from the Swedish National Police.

            The case was prosecuted by Assistant United States Attorneys Matthew Diggs and Marie Dalton.

          Seattle - Huawei Device Co., Ltd. and Huawei Device USA Inc. were arraigned today on charges of theft of trade secrets conspiracy, attempted theft of trade secrets, seven counts of wire fraud, and one count of obstruction of justice.  The companies entered pleas of ‘not guilty.’  Chief U.S. District Judge Ricardo S. Martinez set trial for March 2, 2020.

          The indictment, returned by a grand jury last month, 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.

          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.

          The former Chief Executive Officer of a Pacific Northwest community bank pleaded guilty today in U.S. District Court in Wisconsin to filing a false tax return, announced U.S. Attorney Brian T. Moran.  VICTOR KARPIAK, 64, now of La Crosse, Wisconsin, admits that between 2010 and 2016 he failed to report more than $2.3 million in income on his taxes.  KARPIAK previously served as President and CEO of First Savings Bank Northwest based in Renton, Washington.  He retired in 2013 and moved from the Seattle area. KARPIAK was charged in the Western District Washington, but chose to have the case resolved near his new home in Wisconsin.  Sentencing by U.S. District Judge William M. Conley is scheduled for May 17, 2019.

          According to the facts admitted as part of his plea, between 2010 and 2016, KARPIAK served as a trustee and consultant for a woman who was the beneficiary of a family and a marital trust.   Over those years KARPIAK paid himself fees of $3,265,072 but on his taxes KARPIAK reported less than a third of that income ($943,322).  The tax loss on more than $2,321,750 in income is $867,540.  In the plea agreement KARPIAK agreed to pay $867,540 to the IRS as well as any interest or civil penalties the IRS imposes in the case.   The interest alone in this case could total more than $143,647.

          Filing a false tax return is punishable by up to three years in prison and a $250,000 fine or twice the gross tax gain or loss.  The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes. The sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.

          The case was investigated by the Internal Revenue Service Criminal Investigation (IRS-CI) and is being prosecuted by Assistant United States Attorneys Steven Masada of the Western District of Washington and Elizabeth Altman of the Western District of Wisconsin.

          A Longview, Washington, man who was convicted in July 2016 of a triple homicide in Vancouver was sentenced today in U.S. District Court in Tacoma to an additional ten years in federal prison for two federal felonies involving illegal weapons possession, announced U.S. Attorney Brian T. Moran.  BRENT LUYSTER, 37, was convicted following a three-day trial in November 2018 of being a felon in possession of firearms and being a felon in possession of ammunition.  At the sentencing hearing U.S. District Judge Benjamin H. Settle imposed a ten-year sentence to be served consecutive to LUYSTER’s state sentence.  Judge Settle said, “There is a great need to be concerned at protecting the public . . . this case warrants the maximum sentence.”  For the state murder convictions, LUYSTER had been ordered to serve a state sentence of life in prison with no chance of parole.  The federal sentence of ten years will follow this state sentence.

         “The hatred and violence embodied by this defendant is truly abhorrent,” said U.S. Attorney Brian T. Moran.  “This sentence is a safety net – to hold him accountable for his federal crimes – but also to ensure that regardless of his state convictions and sentence, Brent Luyster will remain locked up to protect our communities.”

          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 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 state charges were pending in Cowlitz County, 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. 

          While incarcerated at the Federal Detention Center at Sea-Tac, LUYSTER informed another inmate that he planned to assault a guard or make a violent disturbance at his trial.  A search of his cell revealed two weapons LUYSTER had crafted out of parts of his bed–one a homemade knife and the other a weapon that looked like a screwdriver.

          LUYSTER has a long and violent criminal history, including racially motivated attacks.  In 2001, he beat an African-American man who stepped on his property in search of his dogs.  Four years later, he was convicted of Malicious Harassment for shooting an African-American man in the leg.  In 2014, he threatened an African-American man in a bar.  LUYSTER also has a history of domestic abuse. 

          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.

          A one-time Crips gang member with prior convictions for assault, robbery, and drug dealing was sentenced today in U.S. District Court in Seattle to 70 months in prison for conspiracy to distribute methamphetamine, announced U.S. Attorney Brian T. Moran. ANTHONY COLBERT, 49, of Seattle pleaded guilty in September 2018, following his arrest as part of “Operation East Watch.”  The law enforcement initiative, led by the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF), focused on drug dealing and gang violence in Kent’s East Hill neighborhood.  COLBERT was fresh from a federal prison sentence for drug dealing when he was identified as a key drug conspirator at the Highland Green apartments.  COLBERT tried to hide behind others as he distributed drugs in the community.  At the sentencing hearing Chief U.S. District Judge Ricardo S. Martinez said COLBERT had “an extensive criminal history with very serious offenses – made even worse by the fact that when he committed these crimes he had just gotten off of supervised release.”

            “This defendant has already served a total of 25 years in prison for state and federal offenses and now is adding to that unenviable record,” said U.S. Attorney Brian T. Moran.  “The East Watch initiative targeted offenders causing crime and violence in an area that saw 29 shootings in 2018.  By taking these habitual offenders out of our communities we hope to make our neighborhoods safer for all of us.”

          “Mr. Colbert’s willingness in conspiring to distribute this deadly drug placed the community at great risk,” said ATF Seattle Field Special Agent in Charge Darek Pleasants.  “His actions show contempt for law and order and this sentence is justified by the danger he poses to society.”

            According to records filed in the case, just four months after being terminated from supervised release for a 2014 federal conviction for distributing oxycodone and Percocet, COLBERT came to the attention of law enforcement.  COLBERT was identified as the source of supply of methamphetamine for co-defendant Allen Betts III, who distributed the drugs out of his Highland Green apartment complex.  Law enforcement observed COLBERT bring the drugs to Betts on multiple occasions, before Betts sold the drugs to an undercover agent and a person working with law enforcement.

            COLBERT has criminal history dating back to the 1980’s for drug and gun crimes.  In 1991, he was sentenced to 65 months in prison for firing shots in a Seattle neighborhood in a turf dispute with another gang.  In 1995, within a year of his release from prison he was sentenced to 12 years in prison for robbery.  In 2006, while still on state supervision he illegally possessed a firearm and was sentenced to an additional 70 months in prison. His federal conviction followed with a three-year federal sentence.

           All eight defendants in Operation East Watch have pleaded guilty.  Two of the eight await sentencing later this year.

• Mario Parra-Cetino, 28 of Kent, Washington was sentenced earlier this month to 66 months in prison for conspiracy to distribute heroin and being a felon in possession of a firearm.
• 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 to conspiracy to distribute methamphetamine and unlawful possession of a firearm and was sentenced last month to four years in prison.
• 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 possession with intent to distribute methamphetamine and possession of a firearm in furtherance of a drug trafficking crime. He is scheduled for 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.

          A Canadian who smuggled ecstasy (MDMA) into the U.S. by hiking across rugged areas of the northern border was sentenced today in U.S. District Court in Seattle to seven years in prison, announced U.S. Attorney Brian T. Moran.  NATHAN HALL, 41, was identified as the second smuggler in an unsuccessful attempt to bring more than 20 kilos of ecstasy into the U.S. in April 2013.  HALL was identified by his co-defendant, Border Patrol agents, and information in a backpack dropped at the scene.  Authorities believe HALL was the second suspect who fired a shot when confronted by agents.  HALL denies he was the gunman but admits that he did carry a firearm on an earlier smuggling run in March 2013.  The presence of the firearm strapped to his thigh was captured by a trail camera near the border.  At the sentencing hearing, U.S. District Judge Robert S. Lasnik noted HALL “has a history of chronic lying, using fake ID, and ignoring court orders.”

            According to records filed in the case, HALL was a member of a conspiracy that transported ecstasy in backpacks by hiking over rough rural terrain at the border.  The ecstasy was then transported to California for distribution.  On a smuggling run in April 2013 near Sumas, Washington, two smugglers wearing camouflage clothing were confronted by Border Patrol Agents.  One smuggler, Jeffrey Laviolette, was taken into custody and ultimately sentenced to ten years in prison.  The second smuggler fired a shot, dropped his backpack, and ran back into Canada.  The backpack contained identification documents with HALL’s photo but a fake name.  HALL was later arrested in Canada.  The process of extraditing HALL from Canada took more than five years.  In November 2018, HALL pleaded guilty to Conspiracy to Distribute MDMA and Possession of a Firearm in Furtherance of a Drug Trafficking Offense.  HALL continues to deny he is the smuggler who fired the shot but admits carrying a firearm previously.

            HALL will likely be deported following his prison term.  He can petition for treaty transfer back to Canada.    

          This was an Organized Crime and Drug Enforcement Task Force (OCDETF) investigation, providing supplemental federal funding to the federal and state agencies involved.    

          The case was investigated by Homeland Security Investigations, U.S. Border Patrol,  U.S. Customs and Border Protection Air and Marine, Coast Guard Investigative Services, and the Whatcom County Sheriff’s Office with assistance from the Abbotsford Police Department and the Royal Canadian Mounted Police (RCMP).

            The case was prosecuted by Assistant United States Attorneys Sarah Vogel and Marie Dalton.

          Seattle - U.S. Attorney Brian T. Moran announced today that the Western District Washington collected $11,162,511 in criminal and civil actions in Fiscal Year 2018.  Of this amount, $6,797,143 was collected in criminal actions and $4,365,367 was collected in civil actions.   

          Additionally, the Western District of Washington worked with other U.S. Attorney’s Offices and components of the Department of Justice to collect an additional $39,535,912 in cases pursued jointly by these offices.  Of this amount, $15,751 was collected in criminal actions and $39,519,761 was collected in civil actions.             

          As a whole, the Justice Department collected nearly $15 billion in civil and criminal actions in the fiscal year ending Sept. 30, 2018.  The $14,839,821,650 in collections in FY 2018 represents nearly seven times the appropriated $2.13 billion ($2,136,750,000) budget for the ninety-four U.S. Attorneys’ offices.

          “While you cannot put a price on justice, sometimes a just result means victims and taxpayers get restitution thanks to the diligent work of our attorneys and professional staff,” said U.S. Attorney Brian T. Moran.  “Even years after the criminal conviction or civil settlement, members of our Financial Litigation Unit work hard to identify assets that should go to those who are victimized by fraud and other crimes.”

           “The men and women of the U.S. Attorneys’ offices across the country work diligently, day in and day out, to see that the citizens of our nation receive justice.  The money that we are able to recover for victims and this country as a whole is a direct result of their hard work,” Director James A. Crowell, IV, Executive Office for U.S. Attorneys. 

            Some of the largest collections involve false billings and fraud on government programs.  In August 2018, International Marine and Industrial Applicators LLC and Marine Equipment Supply LLC paid $2.8 million to settle claims for work which it had fraudulently billed the Navy at Puget Sound Naval shipyards.  In a second case, prominent tourist ship captain Paul D. LaMarche paid $354,769 as part of a civil settlement and criminal penalty for defrauding the Railroad Disability program.  Some of last year’s collections were from cases prosecuted as early as 2013.  Last year, the office secured $114,661 for victims of investment fraud figure Mark Spangler and $188,820 for victims of Enumclaw financial advisor Aaron Travis Beaird.

            In addition to restitution and civil settlements, the U.S. Attorney’s Office for the Western District of Washington forfeited property totaling $2,178,980.  That amount includes forfeitures in U.S. v. ONG where the government seized more than $1 million in bitcoin and $235,000 in cash.

            The U.S. Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims.  The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss.  While restitution is paid to the victim, criminal fines and felony assessments are paid to the Department’s Crime Victims Fund, which distributes the funds collected to federal and state victim compensation and victim assistance programs.

            The largest civil collections were from affirmative civil enforcement cases in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals and/or corporations for violations of federal health, safety, civil rights, or environmental laws.  In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, the Department of Health and Human Services, the Internal Revenue Service, the Small Business Administration, and the Department of Education.

 

          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.

           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.

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.

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.

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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.

          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 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.

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.

           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.    

            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.

            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.

          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.

           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. 

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.

 

           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.

          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. 

 

          

 

          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.

            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.

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. 

          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.

          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, WA

OSCAR HUMBERTO CARRILLO SALCEDO, 22, Tukwila, WA
ALLEX HUBLY, 27, Tacoma, WA
DAVID HUBLY, 30, Tacoma, WA, CHARLES JOSLYN, 38, Bonney Lake, WA

COLIN 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, WA           

            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; 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. 

          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.

          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.

          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.

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.

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.

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.

 

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.

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.