Western District of Washington
Press releases recorded for this federal judicial district.
Business Owner Who Lied in Bankruptcy Proceedings Pleads Guilty to PerjuryRead the Press Release
The operator of a business that abused bankruptcy filings to get drivers licenses reinstated pleaded guilty to perjury this week in U.S. District Court in Tacoma, announced U.S. Attorney Annette L. Hayes. Between 2012 and 2017, TRACY J. TALLY, 46, of Poulsbo, Washington, admits she unlawfully provided legal advice and assisted people with filing fraudulent bankruptcy forms. When questioned under oath in a deposition with a United States Trustee, TALLY falsely denied such activities. TALLY faces up to five years in prison when sentenced by U.S. District Judge Robert J. Bryan on July 13, 2018.
According to records filed in the case, TALLY operated a business identified as ‘No More Drivin’ Dirty.’ For a fee, TALLY would assist clients with filing false bankruptcy forms, which were subsequently used to exploit a provision that allowed motor vehicle drivers to seek reinstatement of their licenses from the Washington State Department of Licensing upon submitting proof that a bankruptcy proceeding had commenced. The bankruptcy petitions were false and the bankruptcy proceeding was typically abandoned once the license was reinstated. In February 2017, TALLY was questioned under oath about whether she had provided unauthorized legal advice to clients. TALLY claimed she had not, even though she knew at the time she made the statement that she had given such advice to hundreds of clients.
As part of her plea agreement, TALLY will pay restitution totaling $2,100 to four clients and $15,000 to the United States Trustee. Prosecutors have agreed to recommend a three-year term of probation. The ultimate sentence is up to Judge Bryan.
The case was investigated by the FBI and U.S. Bankruptcy Trustee. The case is being prosecuted by Assistant United States Attorney Grady Leupold.
Owner of Fife, Washington Seafood Processing Company Pleads Guilty to Sea Cucumber Lacey Act ViolationRead the Press Release
The owner of Orient Seafood Production of Fife, Washington, pleaded guilty today in U.S. District Court in Seattle to conspiracy to violate the Lacey Act, announced U.S. Attorney Annette L. Hayes. HOON NAMKOONG admits that between August 2014, and November 2016, he conspired with others to underreport the amount of sea cucumbers purchased for processing by approximately 250,000 pounds. The post-processing market value of the sea cucumbers is nearly $1.5 million. HOON NAMKOONG is scheduled for sentencing in front of Chief U. S. District Judge Ricardo S. Martinez on July 20, 2018.
According to records filed in the case, HOON NAMKOONG purchased sea cucumbers from both tribal and non-tribal fishers in the Puget Sound region. Sea cucumbers are classified as shellfish, and harvests are regulated by both Washington State and Tribal authorities. To protect the resource, the harvests are tracked by fish tickets signed by both the fisher and the purchaser. HOON NAMKOONG admits that he falsified fish tickets, failed to prepare fish tickets or retain confirmation of fish tickets submitted by third parties, and frequently paid fishers in cash for their sea cucumbers so there would be no financial record of the total amount of sea cucumbers taken. Falsifying fish tickets, and processing and selling in interstate or foreign commerce illegally obtained shellfish is a violation of the Lacey Act, the federal law that prohibits illegal trafficking in wildlife, fish, and plants.
HOON NAMKOONG’s company processed the sea cucumbers and sold and transported them to wholesale seafood buyers in both the U.S. and in Asia, for a gain of nearly $1.5 million.
Under the terms of the plea agreement, HOON NAMKOONG will pay up to $1,499,999 in restitution. Prosecutors agreed to recommend no more than 30 months in prison for HOON NAMKOONG. The ultimate sentence will be up to Chief Judge Martinez.
Conspiracy to Violate the Lacey Act is punishable by up to 5 years in prison and a $250,000 fine.
The case was investigated by the NOAA Office of Law Enforcement and the Washington State Department of Fish and Wildlife.
The case is being prosecuted by Assistant United States Attorneys Matthew Diggs and Seth Wilkinson.
Former President & CEO and Former Vault Manager of now Bankrupt Precious Metals Firm Indicted for Fraud SchemeRead the Press Release
The former President & CEO and the former vault manager of Northwest Territorial Mint, a now-bankrupt company dealing in precious metals, were indicted last week for 20 federal felonies resulting from a Ponzi-like scheme that defrauded customers of millions of dollars, announced U.S. Attorney Annette L. Hayes. BERNARD ROSS HANSEN, 57, aka Ross B. Hansen and DIANE RENEE ERDMANN, 45, aka Diane Renee, both of Auburn, Washington will make their initial appearances on the indictment at 2:00 Monday, April 16, 2018.
Northwest Territorial Mint (NWTM) operated both a custom business that involved the manufacturing of medallions, coins, and other awards, and a bullion business that involved the selling, buying, exchanging, storing, and leasing of gold, silver, and other precious metals. The company had offices in Federal Way and Auburn, Washington, but declared bankruptcy on April 1, 2016.
The indictment alleges that between 2009 and 2017, HANSEN and ERDMANN defrauded NWTM customers in a variety of ways. HANSEN and ERDMANN lied about shipping times for bullion, improperly used customer money to expand the business to other states, and used customer money to pay their own personal expenses. By at least 2012, the company lacked enough assets to fulfill customer orders and used new customer money to pay off older customers in a Ponzi-like scheme. In total, over 3000 customers paid for orders, or made bullion sales or exchanges, that were either never fulfilled or never refunded. The total loss to these customers was more than $25,000,000.
In addition to the customer fraud, in April 2016, more than fifty people who stored their bullion with NWTM found all of part of their bullion worth $4.9 million was missing; twenty customers involved in a bullion leasing program were also defrauded of more than $5 million; and a Canadian silver bullion producer was defrauded of more than $1 million in silver bullion.
Between 2012 and 2016, HANSEN and ERDMANN took more than $1 million dollars out of the company accounts for their own use. In addition, during this time frame, they transferred some $120,000 in cash from the company to ERDMANN’s checking account and used $400,000 in company funds to pay their personal credit card bills. Finally, between March 2016 and June 2017, ERDMANN sold more than $700,000 worth of precious metals, including gold and silver bullion, and used the proceeds for the benefit of herself and HANSEN.
The indictment charges the pair with ten counts of mail fraud and ten counts of wire fraud. Each of the charges are punishable by up to 20 years in prison.
The charges contained in the indictment are only allegations. A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.
The case is being investigated by the FBI and Internal Revenue Service Criminal Investigation (IRS-CI). The case is being prosecuted by Assistant United States Attorney Brian Werner.
Seattle Area Man Sentenced to 33 Years in Prison for Sex Trafficking Teens and Young WomenRead the Press Release
A 52-year old Lynnwood, Washington man was sentenced today in U.S. District Court in Seattle to 33 years in prison for his predatory and exploitive scheme to recruit young women and teens to prostitution for his own enrichment, announced U.S. Attorney Annette L. Hayes. DAVID D. DELAY was convicted of 17 federal felonies following a ten-day jury trial in November 2017. At today’s sentencing hearing U.S. District Judge Robert S. Lasnik said “He deserves a long sentence and a sentence that sends a message to the community that these crimes will not be tolerated.”
“The long prison sentence imposed in this case is just punishment for the devastating impact this defendant had on his victims,” said U.S. Attorney Hayes “As they bravely testified in court, the defendant’s conduct left his victims with deep and lasting emotional scars. There simply is no place in civilized society for the kind of sexual exploitation that this defendant engaged in without so much as a second thought.”
“Delay used fraud and fear against vulnerable young women and girls to coerce them into commercial sex, turning them into sexual commodities for his own profit,” said Acting Attorney General John Gore of the Civil Rights Division. “The Department of Justice will continue to vigorously pursue sex traffickers and today’s sentence is an example of our ongoing efforts to hold traffickers accountable for their horrific crimes and vindicate the rights of their victims.”
According to evidence presented in court, including the testimony of seven victims, the defendant targeted vulnerable teenagers and young women in their early 20s by claiming to be a famous film producer with a multi-million dollar contract from HBO to produce a documentary on prostitution. Delay enticed his victims, several of whom he convinced to travel across the country to be with him, into working for him as prostitutes by falsely claiming that they would make up to $20 million by participating in his documentary. In order to convince the victims that his assertions were true, DELAY sent them falsified bank account screenshots supposedly depicting the profits of his other films, a photograph of himself outside of an HBO office, and seemingly official, binding contracts that he asked them to sign that obligated them to pay him over a thousand dollars per week in prostitution proceeds. DELAY falsely promised some of his victims that he was negotiating for them to star in a reality television show produced by Ryan Seacrest. Representatives from HBO and Ryan Seacrest Productions testified that the companies did not have any business dealings with DELAY.
Once the victims arrived in Seattle, the defendant coerced them into prostituting themselves for his profit. He manipulated them emotionally, psychologically, and sexually; isolated them; made them completely dependent on him; and in some instances threatened legal action against them, falsely claiming that the victims had violated their contracts and were subject to civil penalties. In furtherance of his sex trafficking scheme, the defendant also enticed two minor victims to produce graphic pornographic photographs and videos for him, and in two instances threatened to release sexually explicit video images of his victims unless they complied with his demands.
“The FBI remains committed to working with federal, state and local partners to combat such egregious criminal activities " said Special Agent in Charge Jay Tabb, of the FBI’s Seattle Field Office. “In this case, the FBI worked closely with the Redmond Police Department and the US Attorney’s Office to get survivors the help they need, and traffickers the justice they deserve. Given the complexity of Mr. Delay’s criminal schemes, our team included multiple experts all working as part of the Child Exploitation Task Force, a unit which continues to identify other victims and predators so we can disrupt cycles of abuse. ”
“We are proud of the excellent work done by the Redmond Police in partnership with the FBI. Our close working relationship with our law enforcement partners allowed us to bring the needed resources to bear to ensure the defendant was arrested and convicted of his crimes,” said Redmond Police Chief K. Wilson.
Judge Lasnik ordered DELAY to pay $76,700 in restitution to his victims, plus additional costs for counseling and medical care. Following prison DELAY must register as a sex offender and will be on supervised release for the rest of his life. Because DELAY has continued to harass his victims on social media, the judge requested the prison system and U.S. Probation limit his access to social media and computers.
Co-defendant Marysa Comer, 23, of Matthews, North Carolina, previously pleaded guilty on November 16, 2015, to one count of conspiracy to commit sex trafficking for her role in Delay’s scheme. She was sentenced to 36 months in prison on December 1, 2017.
The case was investigated by the FBI’s Seattle Field Office and the Redmond Police Department, along with assistance from the FBI’s Chicago Field Office, the King County Sheriff’s Office, the King County Prosecuting Attorney's Office, the Beaverton, Oregon Police Department, and the Bureau of Prisons. The case was prosecuted by Assistant U.S. Attorney Kate Crisham and Trial Attorney Matthew Grady of the Civil Rights Division’s Human Trafficking Prosecution Unit.
Bothell, Wa Man Indicted for Sex Crimes Involving 14-Year-Old ChildRead the Press Release
A 24-year-old Bothell, Washington resident was indicted today by a federal grand jury on three counts of traveling for sex with a minor and one count of production of child pornography, announced U.S. Attorney Annette L. Hayes. THOMAS MAHONEY faces a mandatory minimum sentence of 15 years in prison if convicted. MAHONEY was arrested on state charges in October 2017, and was transferred to federal custody last month. Arraignment on the indictment will be scheduled later this month.
According to records filed in the case, Facebook notified the National Center for Missing and Exploited Children (NCMEC) about sexual conversations and photos being exchanged between an adult and child over its network. The information was provided to law enforcement in California where the young victim was located, and to the Seattle Internet Crimes against Children Task Force (ICAC) which traced the internet address to MAHONEY. Law enforcement served a court authorized search warrant on MAHONEY’s residence and obtained his electronic devices for analysis. Travel records confirm information from the victim that MAHONEY traveled to California three times in 2016 and 2017 to have sex with the victim. The victim was 12 years-old when MAHONEY ‘friended’ the victim on Facebook and was 14 years-old when MAHONEY initiated sex. MAHONEY made videos of the sexual contact, thereby producing child pornography.
The charges contained in the indictment are only allegations. A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.
The case is being investigated by Homeland Security Investigations (HSI) in coordination with the Seattle Police Department and the Internet Crimes Against Children Task Force (ICAC). The Contra County California District Attorney’s Office, the U.S. Attorney’s Office in the Northern District of California, and the Snohomish County Sheriff’s Department are key partners in the investigation.
The case is being prosecuted by Special Assistant United States Attorney Cecelia Gregson, with assistance from Assistant United States Attorney Christina McCall of the Northern District of California. Ms. Gregson is a Senior King County Deputy Prosecutor specially designated to prosecute child exploitation crimes in federal court.
Former Owner of Indoor Soccer Team Indicted for Massive Tax FraudRead the Press Release
A former Seattle college soccer star, currently jailed on sexual assault charges in Arizona, was indicted April 4, 2018, by a federal grand jury for a massive tax fraud scheme, announced U.S. Attorney Annette L. Hayes. During the course of the scheme, 46-year old DION L. EARL purchased the Seattle Impact FC franchise, a professional indoor soccer club. The indictment alleges that between 2008 and 2014, EARL used false documents to lie about his income, the amount of tax dollars withheld by employers, and his mortgage deductions, so that he could claim tax refunds of more than $1.1 million. Because EARL currently faces sexual assault charges in Arizona, his arraignment on the indictment has not been scheduled.
In the 1990’s EARL was a soccer star at Seattle Pacific University. According to the indictment, between 2008 and 2014 EARL claimed to be making huge salaries working for car dealers in the Puget Sound region, and as the owner/operator of Dion Earl’s Total Soccer & Tennis Camps, LLC, d/b/a Total Business Ventures. For example, the indictment alleges that in 2012, EARL claimed on his 2011 Form 1040 tax return that he made $880,000 working for five different car dealers. EARL claimed the dealers withheld more than $330,000 of his wages for taxes. EARL then falsely claimed mortgage interest payments on four different properties, reducing his ‘tax liability.’ With the scheme, EARL obtained a tax refund of $329,198. In fact, EARL made less than $80,000 that year, had no tax payments withheld, and paid limited mortgage interest.
The Indictment further alleges that even after the IRS began a civil audit on EARL, he continued to make false claims and provided false information to the IRS. As late as 2015, EARL claimed he and his wife made $765,000 from Dion Earl’s Total Soccer & Tennis Camps, LLC, d/b/a Total Business Ventures, and the Seattle Impact FC. EARL claimed $180,000 was withheld and attempted to get a tax refund of $137,554. That refund was not paid. In all EARL sought $1.6 million in fraudulent tax refunds, and was paid approximately $1.1 million.
EARL is also charged in connection with false income information he submitted to Key Bank in 2008 to qualify for a home equity line of credit.
The five-count indictment charges EARL with three counts of false statement on tax returns, corrupt endeavor to impede administration of the Internal Revenue laws, and false statement on a loan application.
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.
If convicted EARL faces up to ten years in prison.
The case is being investigated by the Internal Revenue Service Criminal Investigation (IRS-CI) and is being prosecuted by Assistant United States Attorney Arlen Storm.
earl_indictment_0.pdfProminent Southwest Washington Fishing Guide Convicted of Disability Fraud SchemeRead the Press Release
A prominent Southwest Washington fishing guide, who was convicted last year of killing two protected wild salmon, was convicted today in U.S. District Court in Tacoma of a disability fraud scheme, announced U.S. Attorney Annette L. Hayes. BILLY JIM SWANN, 53, was convicted following a three-day trial before U.S. District Judge Robert J. Bryan. Judge Bryan found SWANN guilty of perjury, wire fraud, and Social Security fraud for his 8-year scheme to obtain disability benefits to which he was not entitled. Judge Bryan set sentencing for June 22, 2018.
According to records filed in the case and testimony at trial, SWANN applied for Social Security disability benefits in 2006, claiming that he had been disabled and unable to work since 2003. When Social Security denied the claim, SWANN appealed and swore before an administrative law judge that his only work activity was as a volunteer for a few weeks in the summer at an Alaska fishing camp. When SWANN’s claims for disability benefits were again denied, SWANN filed an appeal in U.S. District Court, again with numerous false claims about his alleged disabilities. SWANN claimed his disability interfered with his ability to walk, climb stairs and use his hands, and that he needed a cane to walk. SWANN claimed that the accident that caused his disability in 2003, also caused him cognitive problems, limiting his ability to carry on a conversation.
Contrary to SWANN’s claims, between 2006 and 2014, he had a busy and successful business known as Swanny’s Guided Fishing. SWANN offered guided fishing trips in Washington, Oregon, Idaho and Alaska. SWANN was featured on the cover of Northwest Sportsman Magazine, was sponsored by numerous outdoor equipment brands, and was a regular guest on fishing shows carried on the radio. In 2012, the year he told an administrative law judge that he had not worked at all, SWANN took in $92,503 for his fishing guide business.
SWANN’s applications for benefits were repeatedly denied by Social Security. Had SWANN been successful in his scheme, he and his family would have collected more than $200,000 in benefits.
Perjury and Social Security fraud are punishable by up to five years in prison. Wire fraud is punishable by up to 20 years in prison. Those are the maximum penalties, and the actual sentence imposed will be determined by Judge Bryan based on a number of sentencing factors.
The fraud scheme was uncovered during a 2016 investigation of SWANN’s illegal conduct on the Cowlitz River. On October 1, 2014, SWANN led a promotional fishing trip on the Cowlitz River. The trip was being broadcast over the internet. SWANN encouraged his clients to catch two native Coho salmon. Native Coho on the Cowlitz are protected by the Endangered Species Act and Washington law, and may not be removed from the water. After the clients landed the fish, SWANN clubbed both of them and then cut off the adipose fins on each fish to make it appear they were hatchery fish and therefore legal to catch and keep. However, evidence of the catching and clubbing of the wild and protected fish was caught on the web broadcast, and the illegal conduct was reported to the Washington State Department of Fish and Wildlife. SWANN entered a guilty plea to violating the Endangered Species Act. In March 2017, SWANN was fined $7,500 for the federal misdemeanor conviction.
The case was investigated by the Social Security Administration Office of Inspector General (SSA-OIG) and NOAA Fisheries Office of Law Enforcement.
The case is being prosecuted by Assistant United States Attorney Seth Wilkinson and Special Assistant United States Attorney Benjamin Diggs. Mr. Diggs is an attorney with the Social Security Administration specially designated to prosecute fraud cases in federal court.
Twenty Charged in Drug Conspiracy Distributing Heroin and Methamphetamine throughout King, Pierce, Snohomish, and Thurston CountiesRead the Press Release
A task force led by the Drug Enforcement Administration today arrested 15 people and continues to search for an additional six defendants charged in connection with a long-term investigation of drug trafficking, announced U.S. Attorney Annette L. Hayes. Law enforcement served search warrants at eight locations and searched more than a dozen vehicles. At locations in Tacoma, Seattle, Auburn, Fife, Renton, Bonney Lake, and Tumwater, officers and agents seized more than a dozen weapons, 11 pounds of heroin and more than $40,000 in cash. The defendants arrested today will appear at 2:30 today in U.S. District Court in Tacoma.
"I commend the strong partnership between federal, state and local law enforcement that led to charges against twenty defendants responsible for pumping the misery of methamphetamine into south King County and beyond,” said U.S. Attorney Annette L. Hayes. “Working together we were able to use federal tools such as wiretaps to unmask those behind the drug crimes that have plagued many of our suburban neighborhoods and communities.”
The lead defendant in this case is DERRICK DONNELL TAYLOR-NAIRN, 32, of Seattle, who was at the center of the drug trafficking conspiracy. Four other defendants, JESSICA PLASCENCIA HERNANDEZ, 34, of Renton, JOSE MARGARITO MALDONADO, 38, of Bonney Lake, LEBRET MARQUIS RICHARDSON, 37 of Fife, and ANDREW LEIE YOUNG, 34, of Seattle, allegedly supplied large quantities of methamphetamine and face longer potential sentences due to the drug quantities involved.
The 15 additional defendants named in the indictment are:
LISA ANN ADAMS, 42, of Lake Stevens
DAVID EARL BEEMAN, 51, of Tukwila
IAN EDWARD DISTRITO, 41, of Auburn
SHAIINE RODNEY JARDINE, 29, of Puyallup
ARTHUR ALONZO JEFFERSON, 59, of Lynnwood
DE’ANDRE AARON JONES, 39, of Auburn
SHANNON MARIE LEUPOLD, 44, of Tumwater
RIJAONA C. LASHAE LINDSEY, 26, of Seattle
LAURA ANN PALPALLATOC, 64, of Renton
SOURIYANH L. PASOMSOUK, 43, of Federal Way
CHAD MICHAEL STAHLMAN, 24, of Bonney Lake
CORI NICOLE TROMBLEY, 33, of Tacoma
SERESA MAE WALTERS, 40, of Tacoma
CRYSTAL MARLENE WEAVER, 36, of Bellevue
JACK NY YIM, 47, of Federal Way
One additional defendant was arrested today and charged by criminal complaint. CRAIG FELLERS, SR., 49, of Seattle, was charged with making a false statement in connection with an attempted firearms purchase. In September 2017, FELLERS attempted to purchase a semi-automatic assault pistol at the direction of drug ring-leader TAYLOR-NAIRN. FELLERS allegedly lied on purchase forms claiming the gun was for his personal use, when monitored telephone calls revealed the gun was being purchased for someone who is prohibited from possessing firearms. After being alerted by law enforcement the gun store refused to sell FELLERS the gun.
“We are very proud of our partnership with the Tahoma Narcotics Enforcement Taskforce,” said Puyallup Chief of Police Scott Engle. “Our partnership reveals the strength of federal and local agencies working together to make our communities safer. I am proud of all the hard work done by detectives and task force officers.”
DEA Special Agent in Charge Keith Weis said, “Today’s success is due to the strong partnerships built within the law enforcement community which collectively came together with the vision to remove an armed drug trafficking group representing imminent danger to our communities.”
The charges contained in the indictment and criminal complaint are only allegations. A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.
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 DEA Tacoma, the Tahoma Narcotics Enforcement Team (TNET), and the Puyallup Police Department, with significant assistance from Bonney Lake, Auburn and Kent Police Departments. The investigation was supported by agents from Homeland Security Investigations, and the Bureau of Alcohol, Tobacco, Firearms, and Explosives, deputies from the United States Marshal’s Service, and analysts from the Northwest High Intensity Drug Trafficking Area (HIDTA) and National Guard.
The case is being prosecuted by Assistant United States Attorneys Marci L. Ellsworth and C. Andrew Colasurdo.
Lower Elwha Klallam Tribal Member Pleads Guilty to Being a Habitual Domestic Abuser in Midst of TrialRead the Press Release
An enrolled member of the Lower Elwha Klallam Tribe pleaded guilty Tuesday in U.S. District Court in Tacoma to Domestic Assault by a Habitual Offender, announced U.S. Attorney Annette L. Hayes. MATTHEW TYLER CHARLES, 31, of Port Angeles, pleaded guilty following one day of testimony about his history of assaulting his intimate partner. CHARLES was indicted federally following the October 21, 2017 assault of a woman with whom he had a long-term relationship. CHARLES faces up to five years in prison when sentenced by U.S. District Judge Ronald B. Leighton on June 15, 2018.
According to records filed in the case and testimony at trial, in the early morning hours to October 21, 2017, the victim arrived at the Lower Elwha Casino. Shortly after her car pulled into the parking lot, the surveillance video shows CHARLES arriving in another vehicle. The video shows CHARLES assaulting the victim, violently shoving her back into the car and physically restraining her when she tried to flee. At one point during the incident, CHARLES brandished a knife. Two witnesses who were in the parking lot alerted casino security. CHARLES left the scene, but was later taken into custody.
CHARLES has four previous convictions related to domestic violence in either state or Tribal court. Two of these convictions arise from assaults in 2006 and 2014 on this same victim that were prosecuted in Clallam County District Court and Superior Court, respectively, and two convictions in Lower Elwha Klallam Tribal court for 2004 and 2010 assaults on this victim and another victim, respectively. Those convictions subject him to prosecution in federal court as a habitual offender.
The case was investigated by the FBI and the Lower Elwha Klallam Tribal Police. The case was prosecuted by Assistant United States Attorneys Rebecca S. Cohen and J. Tate London.
Everett Resident Who Sent Explosive Powder to more than a Dozen Washington DC Area Locations Charged in Federal CourtRead the Press Release
A 43-year-old Everett resident made his initial appearance in U.S. District Court today charged by criminal complaint with shipping of explosive materials, announced U.S. Attorney Annette L. Hayes. THANH CONG PHAN, was arrested Monday March 26, 2018 after a number of packages containing small amounts of black explosive powder were received at various mail-screening locations in the Washington DC area. The mailings were addressed to the White House, the FBI, and various government and military installations. The investigation to locate and isolate all of the packages is ongoing. No packages have exploded or caused any injuries.
PHAN became a suspect in the case when a U.S. Postal Service inspector traced the tracking information on one of the packages to the Mill Creek, Washington post office self-service kiosk. Surveillance photos from the time of the mailing appeared to show PHAN. Writings contained in the package were also similar to previous correspondence from PHAN to various government agencies. PHAN had been known to police previously because of the writings, and due to frequent contact with the 9-1-1 emergency dispatch system. PHAN was taken into custody without incident.
Shipping of explosive materials is punishable by up to ten years in prison.
The charges contained in the complaint are only allegations. A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.
The case is being investigated by the FBI, the U.S. Postal Inspection Service and the U.S. Secret Service.
Former Seattle Police Officer Sentenced to Six Years in Prison for Role in Marijuana Smuggling ConspiracyRead the Press Release
A former Seattle Police Officer was sentenced today to 6 years in prison, and his co-conspirator in an interstate marijuana distribution scheme was sentenced today to 14 years in prison, in U.S. District Court in Seattle, announced U.S. Attorney Annette L. Hayes. Former officer ALEX CHAPACKDEE, 44, of Seattle pleaded guilty in November 2017 to conspiracy to distribute marijuana and conspiracy to commit money laundering. Ring leader TUAN VAN LE, 43, of Maple Valley pleaded guilty in December 2017 to conspiracy to distribute marijuana and conspiracy to commit money laundering. At Chapackdee’s sentencing hearing U.S. District Judge Thomas S. Zilly said Chapackdee’s actions resulted in “[a] shame on his badge, his department, and on this community . . . and deserves to be punished accordingly.”
“These defendants – including a sworn law enforcement officer – flouted all applicable law when they shipped hundreds of pounds of marijuana to the East Coast in order to make the biggest possible buck,” said U.S. Attorney Annette L. Hayes. “Marijuana remains illegal under federal law and shipping unlicensed and untaxed marijuana across state lines certainly is illegal under state law as well. We will continue working with our federal, state, local and tribal partners to ensure that federal drug and money laundering laws are properly enforced.”
An investigation by the FBI’s Public Corruption Squad, the Drug Enforcement Administration (DEA), the Seattle Police Department, and Homeland Security Investigations revealed that on multiple occasions between January of 2015, and April 2017, LE and others made repeated trips between Seattle and Baltimore. While LE often flew one way or roundtrip, other members of the conspiracy made the trip by driving virtually non-stop. The vehicles carried hundreds of pounds of marijuana to the Baltimore area and the cash proceeds back to Seattle. CHAPACKDEE participated in multiple trips, driving his RV one or both ways in September, October and November, 2016, as well as in March and April 2017. CHAPACKDEE -- who was an SPD officer throughout the conspiracy -- admits that while he was furthering the conspiracy he was armed and carried his Seattle Police Department badge. CHAPACKDEE, LE and the other conspirators linked up at both ends of the trip, distributing the marijuana on the East Coast and then returning with the cash proceeds to Western Washington. Bank records indicate CHAPACKDEE repeatedly deposited his share of the cash in his personal account, in amounts just under $10,000, thereby avoiding reports to law enforcement. CHAPACKDEE used his status as a police officer to cover and protect the conspiracy.
The bulk of the proceeds were laundered into a marijuana growing/processing business, Tetra Holding Company (THC) that was ostensibly “legal” under Washington law and in the process of applying for a license from the State of Washington. On paper, the business was owned by two of the co-defendants, LE’s nephew, Hoang Le and his girlfriend, MEIFANG YU, 45. In reality, TUAN VAN LE was the primary investor, and was in control of the business. However, as a convicted felon, TUAN VAN LE is prohibited under Washington State law from being an owner/investor in any permitted marijuana business. TUAN VAN LE nonetheless provided his nephew, often through his girlfriend, with very large amounts of money to get THC up and running – close to $1 million dollars.
MEIFANG YU was sentenced today to 3 years of probation, including 180 days of home confinement and 150 hours of community service for her role in the conspiracy.
In addition to the prison terms both LE and CHAPACKDEE will be on federal supervision following prison of 5 years and 4 years, respectively. Both men have been in custody since their arrest on May 8, 2017.
Coconspirator Samath Khanhphongphane was sentenced to 5 years in prison on February 8, 2018. Defendants Phi Nguyen and Hoang Le will be sentenced on April 12, 2018.
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 the FBI, DEA, Seattle Police Department and Homeland Security Investigations (HSI). Multiple agencies assisted with the arrests and the serving of search warrants including the Port of Seattle Police Department.
The case is being prosecuted by Assistant United States Attorneys Vince Lombardi and Justin Arnold.
Former Bothell Resident Sentenced to 24 Years in Prison for Producing, Possessing, and Distributing Images of Child MolestationRead the Press Release
DONALD MCCOY JR , 53, of Bothell, Washington, was sentenced today in U.S. District Court in Seattle to twenty-four years in prison and lifetime supervised release for production, distribution and possession of child pornography, announced U.S. Attorney Annette L. Hayes. MCCOY was arrested in October 2016, and has been in federal custody since that time. At the sentencing hearing U.S. District Judge James L. Robart said “that his sentence was intended to remove [the defendant] from society so he cannot do this anymore.”
“No sentence – no matter how long -- will ever address the harm this defendant did,” said U.S. Attorney Annette L. Hayes. “Not only did he commit a horrific crime when he molested young children, but he also harmed other children when he participated in the trading of images and videos of their abuse. I commend the dedication of the law enforcement officers who ensure that offenders are taken off the internet and out of our communities so they can no longer hurt our kids.”
According to records filed in the case, MCCOY came to the attention of federal law enforcement in 2016, when an undercover agent using peer-to-peer file sharing software observed images of child rape being shared from a computer tied to an internet protocol address that traced back to MCCOY’s residence. After obtaining the address and a court authorized search warrant, law enforcement executed the search at MCCOY’s home. Forensic examination of various electronic devices revealed that MCCOY had produced images of his molestation of four young children between the ages of 6 and 13 years-old. MCCOY molested several of the children while they were asleep.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc
The case was investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) with assistant with the Seattle Internet Crimes Against Children Task Force. The case was prosecuted by Assistant United States Attorney Matthew Hampton.
Canadian Who Arranged Drug Smuggling Helicopter Flights Across Northern Border Pleads GuiltyRead the Press Release
A Canadian national who was extradited in January 2018 in connection with a 2008-2009 international drug smuggling scheme, pleaded guilty today in U.S. District Court in Seattle to conspiracy to possess with intent to distribute controlled substances, announced U.S. Attorney Annette L. Hayes. COLIN HUGH MARTIN, 46, from British Columbia, Canada, was indicted in 2010. At his sentencing hearing on June 29, 2018, MARTIN faces a mandatory minimum five years in prison and up to 40 years in prison. Prosecutors have agreed to recommend no more than ten years in prison. The ultimate sentence will be determined by U.S. District Judge Robert S. Lasnik.
According to records filed in the case, MARTIN conspired with others to transport cocaine north across the Canadian border via helicopter. The cargo coming south was ecstasy or BC Bud marijuana. MARTIN gained a prominent role in the cross-border smuggling conspiracy following a March 2008 seizure of MDMA in Tukwila and of cocaine in California. MARTIN purchased and leased various helicopters and recruited pilots to fly the illegal drugs across the border. MARTIN recruited people to load and off load the helicopters. MARTIN and his coconspirators used encrypted Blackberry phones and code names to communicate.
The plea agreement connects MARTIN to these drug seizures: 83 kilos of cocaine that was seized in Utah in February 2009, on its way to a helicopter transport site in rural northeastern Washington; 190 kilos of marijuana flown into eastern Washington; 20 kilos of cocaine seized in Ontario, California in February 2009; and 79 kilograms of marijuana from Canada that was seized by agents from a helicopter that landed in Idaho on March 5, 2009.
Co-defendant Sean William Doak was sentenced in 2016 to seven years in prison. Other co-conspirators received sentences ranging from 18 months to ten years in prison based on their level of involvement in the drug ring.
The case was investigated by the Drug Enforcement Administration (DEA) with assistance from the Royal Canadian Mounted Police (RCMP) and the Utah Highway Patrol.
The case is being prosecuted by Assistant United States Attorney Sarah Vogel with assistance from the Department of Justice Office of International Affairs.
Seattle Police and Homeland Security Seize 315 Pounds of Methamphetamine following Sting OperationRead the Press Release
A multi-state sting operation led by Homeland Security Investigations (HSI) resulted in the arrest of ADRIAN PEREZ, 41 of San Diego, California and the seizure of more than 315 pounds of methamphetamine, announced U.S. Attorney Annette L. Hayes. PEREZ was arrested and charged by criminal complaint in Seattle last week after he tried to take possession of 18 kilos of cocaine he intended to transport for a Canadian drug trafficking organization. Quick work by law enforcement, and especially the Seattle Police Department, resulted in the seizure of more than 150 pounds of methamphetamine from the Seattle home rented by PEREZ.
“Drug trafficking organizations use the I-5 corridor to ship large quantities of their poisons into our communities -- from San Diego to Bellingham and beyond,” said U.S. Attorney Annette L. Hayes. “We work closely with our international, federal, state and local counterparts to identify those involved and disrupt their efforts.”
According to records filed in the case, in April 2017, RCMP and HSI began investigating a group smuggling drugs from San Diego into Canada. Last month agents went undercover and posed as drug couriers who had cocaine they were willing to sell to the criminal organization. On March 13, 2018, a member of the drug trafficking organization agreed to meet at a central Seattle parking lot to pick up 18 kilos of cocaine. PEREZ arrived at the meeting place, took delivery of the cocaine and was arrested by HSI. The next day Seattle Police Department officers served a search warrant at a ‘HomeAway’ rental property in the Leschi neighborhood which PEREZ had occupied for the previous four days. Inside officers found three large duffle bags containing 150 pounds of methamphetamine and $4,000 in cash. HSI obtained a court authorized warrant to search the vehicle PEREZ was driving. Inside they found an additional 165 pounds of methamphetamine.
“HSI continues to work closely with the Seattle Police Department and other partners to investigate crimes like drug trafficking,” said Brad Bench, Special Agent in Charge of HSI Seattle. “Three hundred pounds of meth and 18 kilos of cocaine can have devastating effects on a community, and the quick action of HSI and the Seattle Police Department thwarted that from happening.”
“Methamphetamine is second only to opioids when it comes to fatal drug overdoses,” said Seattle Police Chief Carmen Best. “Getting these dangerous drugs off the street is a testament to what is possible when we work together with our federal partners.”
Due to the drug quantities involved PEREZ faces a mandatory minimum ten years in prison if convicted.
The charges contained in the complaint are only allegations. A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.
The case is being investigated by HSI with critical assistance from the Seattle Police Department.
Edmonds Man Sentenced to One Year in Prison for Wire Fraud and Embezzlement from Non-Profit Sea Cadet ProgramRead the Press Release
A 49-year-old Edmonds, Washington man who defrauded the U.S. Naval Sea Cadet Corps (NSCC) of more than $77,000 was sentenced today in U.S. District Court in Seattle to one year in prison, three years of supervised release and $75,525 in restitution, announced U.S. Attorney Annette L. Hayes. In November 2017, MICHAEL NOEL LEIGHTON was convicted following a four-day jury trial of four counts of wire fraud and one count of embezzlement. At the sentencing hearing U.S. District Judge Thomas S. Zilly said “There was a lot of money that was spent improperly for personal items, for this defendant’s own personal use.”
“Fraud always undermines trust – in this case, with respect one of the cornerstones of our communities – our nonprofits,” said U.S. Attorney Annette L. Hayes. “Those who volunteer their time and hard earned funds deserve to know that they will be put to good use. Those who abuse that trust deserve to be held to account, just as this defendant was in this case.”
According to records in the case and testimony at trial, in 2011 LEIGHTON volunteered to become a training officer for a local NSCC unit based in Skagit and Snohomish Counties. In this role LEIGHTON was to organize and implement training opportunities for teen-aged students, called Sea Cadets. The program was funded by federal grants from the U.S. Navy to the NSCC. In addition, the Sea Cadets and their parents paid fees to participate in the programs. LEIGHTON and a family member had control of the bank account for the program. Between October 2011 and December 2012, LEIGHTON withdrew thousands of dollars for his personal expenses including meals, gas and the purchase of firearms and firearms accessories. Such purchases were not allowed under the program.
The Naval Sea Cadet Corps asked LEIGHTON for audit reports and receipts for his spending. In response, LEIGHTON provided fraudulent reports, attempting to cover up his illegitimate spending. When the new volunteer leaders of the group took over they discovered items purchased with the funds were missing. In the storage locker they found a few inexpensive furniture pieces, several uniforms, and camping gear. The expensive cameras, copiers and computers, as well as a number of firearms that LEIGHTON had purchased with NSCC funds were missing.
The case was investigated by the Naval Criminal Investigative Service (NCIS) and was prosecuted by Assistant United States Attorneys Seungjae Lee and Stephen Hobbs.
Canadian Arrested on Indictment Alleging Illegal Export of Petroleum Equipment to IranRead the Press Release
UPDATE
The defendant in this case, MEHRAN GHANOUNI, was acquited of the charges alleged in the indictment described in the press release below.
A Canadian citizen was arrested on arrival at Sea-Tac airport last night, following his indictment on charges of violating U.S. export laws and making false statements to federal investigators, announced U.S. Attorney Annette L. Hayes. MEHRAN GHANOUNI, 29, operated a number of companies in both the U.S. and Canada. The indictment alleges that between 2014 and 2016, GHANOUNI and his coconspirators exported $2.3 million in parts for petrochemical operations, falsely claiming they were destined for companies in Kuwait, Iraq and the United Arab Emirates. In fact, the coconspirators knew the equipment was to be transshipped to oil companies owned by the government of Iran. Such exports are illegal under federal law. GHANOUNI will make his initial appearance in U.S. District Court in Seattle at 2:00 p.m. today.
“The violation of export control requirements undermines our national security,” said U.S. Attorney Annette L. Hayes. “I commend the investigative work of Homeland Security Investigations and the Office of Export Enforcement that has resulted in this arrest and charges.”
According to the indictment, the co-conspirators attempted to illegally export the equipment on 35 different occasions. The indictment describes a February 1, 2014, export where GHANOUNI’s company, Integrated Control Systems (ICS) claimed the parts were for an oil refinery in Kuwait when in fact they were destined for Iran. In May 2014, ICS claimed parts were destined for a company in Iraq, when in fact they were for an Iranian oil company. In December 2014, U.S. Customs and Border protection seized a shipment of parts ICS was sending overseas suspecting they were headed to Iran. The company again falsely claimed they were for repairs to be made in the UAE for a project in Iraq. Other shipments in January 2015 and February 2016 were also destined for Iran, but were represented as being for companies in Iraq and the UAE. When questioned, MEHRAN GHANOUNI told a special agent with Homeland Security Investigations that his company did not do any business with Iran. GHANOUNI knew that statement was false.
Conspiracy to violate the International Emergency Economic Powers Act Making a False Statement are each punishable by up to five years of imprisonment.
The charges contained in the indictment are only allegations. A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.
The case is being investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and United States Department of Commerce, Office of Export Enforcement.
The case is being prosecuted by Assistant United States Attorney Thomas Woods with assistance from the Department of Justice National Security Division.
Registered Sex Offender Convicted of Receipt and Possession of Images of Child RapeRead the Press Release
A registered sex offender with prior convictions for raping a 12-year-old girl he met via the internet, was convicted today in U.S. District Court in Seattle of two federal felonies involving his receipt and possession of images of child pornography, announced U.S. Attorney Annette L. Hayes. RICHARD DAVID BLICK, 65, formerly of Edmonds, Washington was indicted in September 2017, following an investigation by the King County Sheriff’s Office and Homeland Security Investigation (HSI). The jury deliberated for about three hours following a two-day trial. U.S. District Judge John C. Coughenour scheduled sentencing for June 12, 2018.
According to records in the case and testimony at trial, the electronic service provider Dropbox made a report to the National Center for Missing and Exploited Children (NCMEC) that an account later linked to BLICK was uploading pictures of child pornography. The subsequent law enforcement investigation revealed BLICK owned the Dropbox account and that he was a Level 3 registered sex offender with a 2001 conviction for raping a 12-year-old girl. In August 2017, law enforcement served search warrants on BLICK’s residence, an RV in Edmonds. On BLICK’s various electronic devices were thousands of images of child pornography as well as chats and videos with a 14-year-old California child whom BLICK convinced to send him sexually explicit images. BLICK has been in federal custody since his arrest in August 2017.
In closing arguments prosecutors noted that possession and receipt of child pornography is not a victimless crime, “Children are injured each and every time an adult trades in their misery… Child pornography keeps alive in the dark recesses of the internet the suffering that they have endured,” prosecutors told the jury.
BLICK faces a mandatory minimum 15 years in prison and up to 40 years in prison for receipt of child pornography. Possession of child pornography is punishable by a mandatory minimum of 10 years in prison and a maximum of 20 years.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys= Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc
The case was investigated by the King County Sheriff’s Office and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations.
The case was prosecuted by Assistant United States Attorney Matthew Hampton and Special Assistant United States Attorney Cecilia Gregson. Ms. Gregson is a Senior King County Deputy Prosecutor specially designated to prosecute child exploitation cases in federal court.
Tukwila Man Pleads Guilty to Production of Images of Child RapeRead the Press Release
A 40-yearold Tukwila, Washington resident pleaded guilty today in U.S. District Court in Seattle to production and possession of child pornography, announced U.S. Attorney Annette L. Hayes. JESSE LEE ALLEN, was arrested in November 2016, after a witness reported that she had seen videos of the molestation of a young child on ALLEN’s cell phone. The witness made a report to Tukwila Police in October 2016 and ALLEN was located and arrested a few weeks later. ALLEN faces a mandatory minimum 15 years in prison when sentenced by U.S. District Judge Thomas S. Zilly on June 7, 2018.
According to records filed in the case, the witness was involved in a romantic relationship with ALLEN and at one point checked his phone to see if there were images of other women ALLEN might be dating. The witness instead discovered three videos that showed the sexual molestation of a 6-year-old child. The witness immediately went to police.
Production of child pornography is punishable by a mandatory minimum 15 years in prison and up to 30 years in prison. Possession of child pornography is punishable by up to 20 years in prison.
The case was investigated by the Tukwila Police Department and U.S. Immigration and Customs Enforcement’s Homeland Security Investigation (HSI). The case is being prosecuted by Special Assistant United States Attorney Cecilia Gregson. Ms. Gregson is a Senior Deputy King County Prosecutor specially designated to prosecute child exploitation cases in federal court.
Texas Man Sentenced to Three Years in Prison for Defrauding Immigrants by Claiming He Could Provide Legal Status for MoneyRead the Press Release
A 50-year old El Paso, Texas man was sentenced today in U.S. District Court in Seattle to three years in prison and three years of supervised release for his scheme to defraud immigrants who he scammed out of more than $400,000, announced U.S. Attorney Annette L. Hayes. ALEJANDRO GURANY, collected thousands of dollars from immigrants across the U.S. after telling them he worked for a government immigration office and could provide the immigrants with legal status for a fee. GURANY was never employed by a federal immigration agency. Law enforcement identified more than 30 victims in Washington and Ohio. GURANY was ordered to pay them $140,550 in restitution.
“This defendant preyed on vulnerable people, exploiting their fear of deportation to line his pockets with their hard-earned wages,” said U.S. Attorney Hayes. “He stole not only their money, but their American dream of education and a better life for themselves and their children.”
According to records in the case, between at least December 2011 and March 2015, GURANY pretended to be an employee of the United States and told immigrants he could get them legal status in the U.S. in exchange for money. GURANY traveled to SeaTac, Washington, and met with immigrants at an airport hotel. GURANY took personal identifying information, including photographs and fingerprints from the immigrants seeking green cards or citizenship. Some of the immigrants paid GURANY thousands of dollars believing he would provide them legal status. When no legal status was provided, the victims were afraid to complain about GURANY, since he had all their personal information and they believed he could get them deported.
Judge Robert S. Lasnik accepted the defendant’s claim that Mexican cartels threatened him and his family, demanding that he pay them money. But added that such a claim does not excuse his conduct. “It was a very insidious and awful crime that Mr. Gurany committed. You cannot justify it by saying ‘I need to protect my family’ and then preying on other families.”
“Unscrupulous immigration practitioners not only exploit the trust of their often-unwitting victims,” said Shawn Fallah, resident agent in charge for ICE’s Office of Professional Responsibility, “but by filing fraudulent immigration applications, they create security vulnerabilities and compromise the integrity of our legal immigration system. We will continue to work tirelessly with our law enforcement counterparts to investigate criminals and imposters who manipulate and exploit the system for their own personal gain and see that they are brought to justice.”
The U.S. Immigration and Customs Enforcement Office of Professional Responsibility (ICE OPR) received information from a detainee in 2013 that GURANY was posing as an immigration official. Law enforcement began a financial investigation that revealed the extent of the fraud. The investigation revealed $412,775 had been paid in cash or funneled into GURANY’s bank accounts from Washington, Colorado, California, Arizona, Wyoming, Oregon, and New Mexico. Knowing of the cash payments, and the approximate dollar figures GURANY demanded, investigators believe the number of victims is likely far more than the 30 they have been able to identify.
The case was investigated by U.S. Immigration and Custom Enforcement’s Office of Professional Responsibility. The case is being prosecuted by Assistant United States Attorney Nicholas Manheim.
Former Bookkeeper for South Sound Real Estate Franchises Sentenced to Nearly 6 Years in Prison for Embezzling more than $400,000Read the Press Release
The 48-year-old former bookkeeper for two Windermere Real Estate franchises was sentenced today in U.S. District Court in Tacoma to 71 months in prison and three years of supervised release for six counts of wire fraud related to her embezzlement scheme, announced U.S. Attorney Annette L. Hayes. CINDI ALLISON, now of Ben Wheeler, Texas, used her unfettered access to the bank accounts of Windermere Puyallup and Windermere South Sound to embezzle $478,398. When the embezzlement scheme was uncovered, ALLISON went on the offensive filing spurious complaints with various state regulators to attack and distract the victim of her theft. At sentencing U.S. District Judge Ronald B. Leighton said, “What you did was despicable . . . . And doing that to a friend is not only wrong, it’s immoral. It breaks every ligament that ties civilized people together.”
“This defendant’s greed harmed a small business owner and those who depended on her business for their livelihood,” said U.S. Attorney Annette L. Hayes. “Wages were frozen, retirement savings contributions delayed, and ultimately the business was sold below market value because of this defendant’s actions.”
During a five-day jury trial in June 2017, prosecutors presented evidence that ALLISON transferred money from Windermere accounts to her own bank accounts and those of her boyfriend, ex-husband, and service providers such as a roofer in Ben Wheeler, Texas. Between 2011 and 2015, ALLISON made 782 unauthorized transfers from the two real estate franchise accounts to sixteen different accounts that all had some connection to ALLISON. As the bookkeeper, ALLISON made various entries in the records and strategically bundled various transactions together to make the transfers appear legitimate. The fraud came to light in March 2015, when the new purchaser of the businesses started investigating some of the transfers and could not get straight answers from ALLISON. ALLISON had been working remotely from Texas as the bookkeeper, and the company shut down the computer system to protect its accounts.
The impact of ALLISON’s fraud was even greater than the amount of money she embezzled. The victim had to spend more than $50,000 in forensic accounting and attorney fees to uncover the extent of the fraud scheme, and the sales price for the business was at least $100,000 below its true market value because the fraudulent entries on the business’ books made it appear less profitable than it actually was. Today Judge Leighton ordered ALLISON to pay $630,346 in restitution.
ALLISON has been in custody since being convicted following her trial in June 2017.
The case was investigated by the U.S. Secret Service. The case WAS prosecuted by Assistant United States Attorneys Andre Peñalver and Steven Masada.
Serial Bank Robber Gets 15 Year SentenceRead the Press Release
A 50-year-old serial bank robber was sentenced February 26, 2018 in U.S. District Court in Seattle to 15 years in prison and five years of supervised release for armed bank robbery and brandishing a firearm during a crime of violence, announced U.S. Attorney Annette L. Hayes. VINCENT L. FIELDS, 50, of Tacoma was arrested March 22, 2017 following a bank robbery in Renton. FIELDS tried to avoid a car-to-car search following the robbery by fleeing from police at a high rate of speed. FIELDS crashed his car into another driver and fled on foot but was ultimately taken into custody. U.S. District Judge James L. Robart imposed the sentence.
According to records filed in the case, FIELDS began his bank robbery spree in February of 2017, robbing a Tacoma Wells Fargo branch on February 15 and a University Place Key Bank on February 21. On March 7 he robbed a Wells Fargo branch in University Place and attempted to rob a different Wells Fargo branch on March 9, 2017. On March 22, 2017, FIELDS brandished a distinctive submachine style gun at a teller and demanded cash. The quick thinking teller included a GPS tracking device with the cash. Law enforcement was able to trace FIELDS’ movements and caught up with him stopped at a Renton intersection. That’s when FIELDS took off traveling in the wrong lane of travel, striking another car before being taken into custody. The gun and the cash were recovered.
FIELDS was still on federal supervision for a 2012 drug trafficking conviction. FIELDS has a prior federal conviction for trafficking crack cocaine and state convictions from 1995 for second degree murder and possession of cocaine with intent to deliver.
The case was investigated by the FBI and the Renton Police Department. The case was prosecuted by Assistant United States Attorney Vince Lombardi.
Armed Drug Dealer from Seattle’s Belltown Neighborhood Sentenced to Six Years in PrisonRead the Press Release
A Seattle man who sold heroin and meth in downtown Seattle while armed with a handgun was sentenced today in U.S. District Court in Seattle to six years in prison, announced U.S. Attorney Annette L. Hayes. JUSTIN GARRETT HARRISON, 37, used his 85-year-old grandmother’s condominium home to store and sell heroin and methamphetamine. Judge John C. Coughenour sentenced HARRISON for being a felon in possession of a firearm, possession of heroin with intent to distribute and possession of a firearm in connection with a drug trafficking crime. Judge Coughenour ordered four years of supervised release to follow the prison term.
According to records filed in the case, in late January 2017, HARRISON arranged to sell $2500 worth of heroin to an undercover agent. Police had already received numerous complaints from neighbors at HARRISON’s grandmother’s condo complex about the high volume of foot traffic coming and going from the condo. HARRISON was arrested in the lobby of the building after he returned from another drug deal. HARRISON carried a backpack containing meth, heroin, prescription pills, three cell phones, a drug ledger and a loaded handgun with additional rounds of ammunition. In the apartment law enforcement found other evidence of drug trafficking and at a room in a nearby hotel they found nearly half a pound of methamphetamine that HARRISON was storing in the room safe.
HARRISON is prohibited from possessing firearms due to a King County Superior Court conviction for assault with a deadly weapon. In that case HARRISON threatened a cab driver with a knife.
The case was investigated by the Seattle Police Department and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI). The case was prosecuted by Special Assistant United States Attorney Jessica Manca. Ms. Manca is a Senior Deputy King County Prosecutor specially designated to prosecute gun crimes in federal court.
Former Seattle Resident Pleads Guilty to Federal Crime for Use of ‘Molotov Cocktail’ at May Day 2016 ProtestRead the Press Release
A former Seattle resident pleaded guilty today in U.S. District Court to unlawful possession of a destructive device for making and throwing bottles filled with gasoline at police officers on May 1, 2016, announced U.S. Attorney Annette L. Hayes. WIL CASEY FLOYD, 33, of Elkhart Lake, Wisconsin, was arrested in April 2017, after a lengthy investigation that linked him to a so-called ‘Black Bloc’ of protestors who threw unlit incendiary devices at Seattle Police during a May Day protest. FLOYD faces up to ten years in prison when sentenced by Chief U.S. District Judge Ricardo S. Martinez on June 1, 2018.
According to the plea agreement and other records in the case, FLOYD went online to research building Molotov cocktails. He purchased the necessary supplies and constructed six of the explosive devices using beer bottles. He placed the bottles filled with gasoline in a black bag. FLOYD dressed in black, wore a black hood and a gas mask and joined the protest on the evening of May 1, 2016. FLOYD threw five of the unlit destructive devices at Seattle Police Officers. One of the Molotov cocktails thrown at police shattered at the feet of an officer and ignited his trousers when a flash-bang grenade went off. The officer suffered burns to his leg. FLOYD dropped the bag containing one remaining bottle of gasoline and changed his clothes and appearance before police could arrest him. The evidence left at the scene on 4th Avenue South and South Seattle Boulevard and a variety of videos and ultimately helped identify FLOYD as a suspect.
Under the terms of the plea agreement, prosecutors agree to recommend a sentence of no more than 37 month in prison. The ultimate sentence will be determined by Judge Martinez.
The case was investigated by the FBI’s Joint Terrorism Task Force and the Seattle Police Department, both through its membership on the JTTF and with additional investigative groups.
The case is being prosecuted by Assistant United States Attorneys Todd Greenberg and Tom Woods.
Deputy Attorney General Rosenstein Highlights Ongoing and Intensive Work to Solve 2001 Murder of Federal Prosecutor Tom WalesRead the Press Release
WASHINGTON — Deputy Attorney General Rod Rosenstein joined U.S. Attorney Annette L. Hayes, Seattle Mayor Jenny A. Durkan, the Wales family, the National Association of Former United States Attorneys Foundation, and other law enforcement partners in Seattle today to bring continued and deserved attention to the Department of Justice investigation into the 2001 murder of Assistant U.S. Attorney Thomas C. Wales.
The Department of Justice remains committed to a reward of up to one million dollars for information leading to the arrest and conviction of those responsible. In addition to and separate from the Department’s reward, the National Association of Former United States Attorneys Foundation President Mike McKay announced that his organization is offering up to a $525,000 reward to the same individuals as the Justice Department for information leading to the Department’s prosecution of those responsible for Wales’ murder. Wales worked as a federal prosecutor in the Western District of Washington for 18 years before he was shot and killed in his home the evening of Oct. 11, 2001.
“Any attack on a law enforcement officer is an attack on our entire justice system,” Deputy Attorney General Rosenstein said. “The Wales family has shown incredible strength, courage, and devotion. As Deputy Attorney General, I intend to see that we leave no stone unturned in the search for the killer who murdered Tom Wales. We will continue to pursue this case for as long as it takes to achieve justice. The killer will be held accountable.”
“The murder of Tom Wales more than 16 years ago remains an affront to the rule of law and a devastating loss to all who knew Tom and the community he so loyally served,” said U.S. Attorney Annette L. Hayes. “I am deeply grateful to the National Association of Former United States Attorneys and their foundation for establishing a separate reward in this case. As the Department of Justice has made clear time and again — we will never rest until justice is done in this case.”
A task force led by the Federal Bureau of Investigation and Seattle Police Department continues to work actively and intensively. The investigative team has been able to successfully investigate thousands leads and continues to devote resources to focused investigative avenues. In just the last 12 months, the investigative team has served nearly 50 new subpoenas and has pursued approximately 100 leads.
Investigators believe that there are people who have information and hope that the significant reward provides an additional incentive for coming forward. The task force asks the public to help partner in its efforts for justice, and closure for the Wales family.
“The FBI remains committed to bringing closure for the Wales family,” said FBI Special Agent in Charge Jay S. Tabb, Jr., of the FBI’s Seattle Field Division. “We continue to offer a reward of up to $1 million for information that helps us resolve this investigation. We know that there are people with pertinent knowledge and we are pleading with you to come forward to the FBI. Please help us solve this case for the Wales family.”
“We haven’t forgotten about Tom Wales, and are leaving no stone unturned in this investigation,” said Seattle Police Chief Carmen Best. “We will continue to work in collaboration with our federal partners to bring the individual responsible for his brutal murder to justice.”
“Local prosecutors will continue our partnership with federal investigators on this case, said Dan Satterberg, King County Prosecuting Attorney. “We are determined to solve this terrible crime.”
The Seattle Prosecutor Murder (SEPROM) Task Force is a joint effort by the FBI, the Seattle Police Department, the Department of Justice, and the King County Prosecuting Attorney’s Office. It includes agents, detectives, analysts, two Department of Justice prosecutors, a King County prosecutor, and FBI personnel assisting across the nation to cover far-ranging leads.
Anyone with information is encouraged to contact the FBI and can do so confidentially by phone at (206) 622-0460 or by e-mail at [email protected]. People can also send anonymous tips to the FBI at 1110 Third Avenue, Seattle, WA, 98101.
The complete library of information, including multi-media materials for download and use, the FBI Seeking Information poster, details about the tip lines, and more can be found at https://www.fbi.gov/wanted/seeking-info/thomas-crane-wales.# # #
Five Defendants Charged in Connection with Crack Cocaine Dealing in Seattle’s Pioneer Square NeighborhoodRead the Press Release
Three Seattle men are in custody, and two are being sought by law enforcement in connection with a 6-month investigation by the Seattle Police Department and DEA of significant drug trafficking in Seattle’s Pioneer Square neighborhood, announced U.S. Attorney Annette L. Hayes. PATRICK TABLES, 53 and MICHAEL TURNER, 49, were taken into custody this morning. MARVIN TRAYLOR, 49, and JONATHON RUSHING, 39, both of Seattle are being sought by law enforcement. CLYDE MCKNIGHT, 49, of Seattle was taken into custody in January 2018, when law enforcement seized significant amounts of crack cocaine, cocaine, fentanyl, and heroin from his vehicle. The defendants taken into custody today will make their initial appearance in U.S. District Court in Seattle at 2:00 PM.
According to the indictments and criminal complaint filed in the case, CLYDE MCKNIGHT, the apparent leader of the drug distribution ring was arrested outside a Portland, Oregon motel room in January 2018, following the seizure of 3 kilos of cocaine, 2 kilos of heroin, 1.5 lbs. of crack cocaine, and 187 grams of fentanyl from his vehicle in Seattle. At the time of his arrest, MCKNIGHT had $39,000 and a handgun in his vehicle. Other defendants in the case are charged with drug distribution and gun crimes. RUSHING, TABLES and TRAYLOR are charged with conspiracy to distribute controlled substances. RUSHING is charged with possession of crack cocaine and methamphetamine with intent to distribute, being a felon in possession of a firearm, and carrying a firearm during and in relation to a drug trafficking crime. TABLES is charged with multiple counts of possession of crack cocaine with intent to distribute and TRAYLOR is charged with possession of crack cocaine with intent to distribute. TURNER is charged by complaint with possession with intent to distribute crack cocaine and possession of a weapon in furtherance of drug trafficking.
RUSHING has prior convictions in King County Superior Court for second degree murder (1997) and a federal conviction for being a felon in possession of a firearm (2012).
The charges contained in the indictment are only allegations. A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.
This was an Organized Crime and Drug Enforcement Task Force (OCDETF) investigation, providing supplemental federal funding to the federal and state agencies involved.
The case is being investigated by the Seattle Police Department and the Drug Enforcement Administration (DEA).
The case is being prosecuted by Assistant United States Attorneys Vince Lombardi and Kate Vaughan.
Florida Man Who Assaulted Airline Flight Crew and Passengers Enroute to China Pleads GuiltyRead the Press Release
A Tampa, Florida, man who assaulted crew and passengers on a Delta Airlines flight bound for China pleaded guilty today in U.S. District Court in Seattle to four federal felonies in connection with the July 16, 2017 incident, announced U.S. Attorney Annette L. Hayes. JOSEPH DANIEL HUDEK IV, 24, is scheduled for sentencing by U.S. District Judge John C. Coughenour on May 15, 2018. The four federal felonies (interference with a flight crew and three counts of assault in a special aircraft jurisdiction) are punishable by up to 20 years in prison.
According to records in the case and the plea agreement signed today, HUDEK was seated in first class on the Delta flight. The aircraft had 210 passengers on board and 11 crew members. The plane had just passed over Vancouver Island and was over the Pacific Ocean when HUDEK came out of the first class bathroom and in an agitated state attempted to raise the lever of the exit door of the aircraft. Two flight attendants attempted to stop HUDEK and he threw one to the floor and punched the other. When a passenger attempted to assist the flight attendants, HUDEK hit him over the head with a wine bottle. Ultimately, multiple passengers were required to restrain HUDEK, and one lowered the exit handle of the door as the aircraft returned to Seattle.
In court filings HUDEK admits he ingested marijuana edibles before the flight. In a pretrial ruling Judge Coughnour barred HUDEK from using a mental incapacity defense based on his voluntary consumption of marijuana.
HUDEK has agreed to pay restitution to the injured passengers in an amount to be determined at the sentencing hearing.
HUDEK remains out of jail on bond, but is prohibited from traveling on aircraft.
The case was investigated by the FBI. The case is being prosecuted by Assistant United States Attorney Stephen Hobbs.
Federal Way Resident Sentenced to 18 Years in Prison for Sex Offenses, Production and Distribution of Images of Child Sexual AbuseRead the Press Release
A 38-year-old Federal Way, Washington man was sentenced today in U.S. District Court in Seattle to 18 years in prison and lifetime supervised release for five federal felonies involving the sexual exploitation of children, announced U.S. Attorney Annette L. Hayes. STEVEN MARC RIGTRUP was arrested in April 2017, and pleaded guilty in November 2017 to enticement of a minor, two counts of distribution of child pornography, possession of child pornography and production of child pornography. At the sentencing hearing U.S. District Judge James L. Robart asked him, “Where is there some acknowledgement that you have destroyed peoples’ lives? ...You must be removed from society for the protection of our community.”
According to records filed in the case, in February 2014, RIGTRUP molested a 15-year-old girl he met after placing an ad on Craigslist. RIGTRUP photographed his molestation of the teen and the photos were sent to another sex offender in southern California. In November 2014, RIGTRUP was arrested and prosecuted in King County Superior Court for soliciting sex via the internet with someone he thought was a teen-ager. In fact, the person he was trying to entice was an undercover officer. RIGTRUP was sentenced to a year in prison, but quickly became involved in child exploitation offenses again following his release. Law enforcement received a CyberTip from the National Center for Missing and Exploited children that images of child sexual abuse had been uploaded from an email account associated with RIGTRUP. When law enforcement searched RIGTRUP’s residence and electronic devices in February 2017, they discovered more than 588 images and four videos of children being raped and molested.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys= Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
The case was investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI). The case was prosecuted by Assistant United States Attorney Marie Dalton.
Repeat Investment Fraudster Convicted of Wire Fraud, Securities Fraud and Aggravated Identity TheftRead the Press Release
A federal jury convicted RICHARD THOMAS ZIESKE, a Renton man who presented himself as an investment advisor, of eight federal felonies late yesterday, announced U.S. Attorney Annette L. Hayes. ZIESKE was previously convicted of federal fraud charges for defrauding members of his church and others out of over $1.2 million by posing as an investment advisor. In the present prosecution, ZIESKE was charged with a similar scheme to defraud victims he met through a Renton martial arts studio. The jury deliberated for about two hours following the three-day trial before finding ZIESKE, 48, guilty of eight federal felonies. ZIESKE was convicted of five counts of wire fraud, one count of securities fraud and two counts of aggravated identity theft. U.S. District Judge James L. Robart scheduled sentencing for April 30, 2018.
According to records in the case and testimony at trial, in 2005 ZIESKE pleaded guilty to mail fraud, securities fraud and wire fraud for a scheme in which he solicited nearly $2 million from members of his church and others, fraudulently promising big returns on investments. ZIESKE was sentenced to 41 months in prison and ordered to pay more than $1.3 million in restitution. The Washington Department of Financial Institutions also entered a cease and desist order against him.
Nevertheless, in 2013, ZIESKE overheard a member of his Renton martial arts studio talking about his 401k account. The victim had been forced to retire and limit his martial arts due to a degenerative neck condition. ZIESKE convinced the victim to allow him to manage more than $95,000 in retirement funds, promising big returns. Instead, ZIESKE used the money to purchase a limited edition Harley Davidson motorcycle, to pay for liposuction surgery, and to finance a luxury SUV. ZIESKE attempted to recruit other ‘investors,’ and convinced the founder of the martial arts studio to invest about $40,000 with him. A brokerage firm closed ZIESKE’s trading account after its check revealed ZIESKE’s prior conviction. ZIESKE then opened another brokerage account using the identity of another member of the martial arts studio. That conduct is the basis for the aggravated identity theft convictions.
Wire fraud is punishable by up to 20 years in prison. Securities fraud is punishable by up to five years in prison. Aggravated identity theft is punishable by two years in prison consecutive to any other sentence imposed on other counts of conviction.
The case was investigated by the FBI. The case was prosecuted by Assistant United States Attorneys Seth Wilkinson and Michael Dion.
Two Men Indicted for Scheme to Export Firearms to Kurds in IraqRead the Press Release
Two men were indicted by a federal grand jury in Seattle late yesterday for three federal felonies in connection with their scheme to smuggle dozens of firearms to Turkey and Iraq in violation of the Arms Export Control Act, announced U.S. Attorney Annette L. Hayes. PAUL STUART BRUNT, 51, of Bellevue, Washington, and RAWND KHALEEL ALDALAWI, 29, of Seattle, were arrested on a criminal complaint January 24, 2018. They will be arraigned on the indictment on February 8, 2018.
According to records filed in the case, between October 2016 and November 2017, BRUNT and ALDALAWI engaged in a scheme to smuggle firearms from the U.S. to people associated with the Peshmerga military in Kurdistan, a part of Iraq. 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 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.
The conspiracy is punishable by up to five years in prison and a $250,000 fine. Violating the Arms Export Control Act is punishable by twenty years of imprisonment.
The charges contained in the indictment are only allegations. A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.
The case is being investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI).
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.
brunt_and_aldalawi_indictment.pdfSix Sentenced in Connection with Organized Criminal Ring Profiting from Prostitution EnterpriseRead the Press Release
Six people have now been sentenced in U.S. District Court in Seattle for their roles in an organized crime ring involved with prostitution, announced U.S. Attorney Annette L. Hayes. The leader of the ring, FANG WANG, 29, of Queens, New York, was sentenced last month to 30 months in prison. At her sentencing hearing, U.S. District Judge Thomas S. Zilly said the “nature of the offense is very troubling to the court.”
YONGGUANG WU, 28, of Seattle and STEVEN THOMPSON, 59, of Renton, Washington, were each sentenced to 8 months in prison. YUNZHONG CHEN, 45, and YAOAN HE, 33, of Seattle, were each sentenced to one year in prison. ZHAOFENG ZHANG, 23, of Seattle, was sentenced today to 21 months in prison. ZHANG continued to post advertisements, rent apartments, and connect customers with ringleader WANG even after being contacted by law enforcement.
According to records in the case, federal and local law enforcement partners worked jointly to investigate a criminal ring making hundreds of thousands of dollars through the prostitution of Asian sex workers. In partnership with the FBI, the King County Sheriff’s Office (KCSO), and police departments in Bellevue, Redmond, Renton, Seattle, and Tukwila identified numerous brothel locations through their analysis of Backpage.com, cell phone, and other business records. The joint team of local and federal investigators then conducted surveillance of the ring’s activities. Law enforcement determined that multiple locations were linked to the organization via ads placed with websites such as Backpage.com. The investigation revealed that the same internet protocol (IP) addresses were used for placing many of the ads, and phone numbers associated with the ads were linked as well – in some instances to call centers located in New York and Washington, D.C. In other cases, the law enforcement agencies followed up on citizen complaints about apartments being operated as prostitution locations and confirmed that the organization was in fact conducting prostitution in those locations.
The investigation revealed that FANG WANG – the apparent leader of the operation – spent approximately $100,000 to increase the traffic to her ads on the Backpage.com site. Other defendants played different roles – renting apartments, transporting sex workers to various locations, purchasing supplies, collecting money from the sex workers, and placing ads. Prostitution activities associated with the ring occurred in apartments or hotels located in Bellevue, Kent, Kirkland, Lynnwood, Olympia, Lacey, Puyallup, Renton, Tukwila, Seattle, and Federal Way. Other locations where the ring operated include eastern Washington cities such as Richland, Kennewick, Wenatchee, and Spokane. The sex workers were frequently moved throughout the area.
The case was jointly investigated by the FBI, the Bellevue Police Department, the King County Sheriff’s Office, the Redmond Police Department, the Renton Police Department, the Seattle Police Department, the Tukwila Police Department, and Homeland Security Investigation (HSI).
The case was prosecuted by Assistant United States Attorney Kate Crisham.
Tacoma Man Convicted of Drug Distribution and Gun CrimeRead the Press Release
A Tacoma man was convicted today of two federal felonies involving guns and drug dealing which could lead to more than 15 years in prison, announced U.S. Attorney Annette L. Hayes. GERALD CLAUDE CARLSON, 57, was arrested in May 2016, when police serving a court authorized search warrant on his home, uncovered more than a pound of methamphetamine, 53 firearms and $34,000 in cash. Two of the firearms were loaded and located near the meth and other drug trafficking materials. The jury deliberated about two hours following the three-day trial. U.S. District Judge Ronald B. Leighton ordered CARLSON into custody and scheduled sentencing for April 20, 2018.
CARLSON came to the attention of law enforcement in early 2016, when someone working with the Pierce County Sheriff’s Department purchased methamphetamine from CARLSON. Based on those contacts law enforcement obtained a search warrant. In CARLSON’s bedroom they found the pound of meth packaged for distribution as well as identity documents and two loaded firearms: a Springfield Armory 9 mm semi-automatic pistol and a Smith and Wesson .22 caliber semi-automatic pistol.
Carlson’s girlfriend, who was present when the police executed the search warrant, pleaded guilty to drug related charges in Pierce County Superior Court.
Due to the amount of drugs in this case, possession of methamphetamine with intent to distribute is punishable by a mandatory minimum ten years in prison and up to life in prison. Possession of a firearm in furtherance of a drug trafficking crime is punishable by a mandatory minimum 5 years in prison and up to life in prison, to run consecutive to any sentence imposed on the drug possession count.
The case was investigated by the Pierce County Sheriff’s Department, Special Investigations Unit. Agents from the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF) and Drug Enforcement Administration also testified as expert witnesses at trial.
The case was prosecuted by Assistant United States Attorneys Gregory A. Gruber and Andre Penalver.
Seattle Woman Who Defrauded Three Public Assistance Programs of more than $320,000 Sentenced in Federal CourtRead the Press Release
A Seattle woman who defrauded programs aimed at assisting the neediest in our community was sentenced today in federal court to three years of probation, announced U.S. Attorney Annette L. Hayes. DEKA HIRSI, 39, lied to obtain subsidized housing from the Seattle Housing Authority, falsely claimed that her only employment was working all night caring for her elderly parents, and claimed benefits for overnight daycare stays for her five children. In reality, HIRSI was running a small grocery store during the day, did not provide the nightly care for her parents, and her children lived in her parents’ home and did not receive daycare services. U.S. District Judge Robert S. Lasnik ordered HIRSI to pay $328,509 in restitution calling it “among the most serious frauds I have ever seen.” The judge stopped short of imposing the prison sentence requested by prosecutors saying HIRSI suffers from Post Traumatic Stress Disorder (PTSD) based on childhood trauma in Somalia. Of the fraud Judge Lasnik said “It’s wrong, it hurts people…. I want this to be a wake-up call for the community to not look the other way when you see something wrong.”
According to records filed in the case, in 2010 the Seattle Housing Authority received a complaint that HIRSI was defrauding the Section 8 program for the needy. HIRSI falsely claimed she was a single parent of five children. In fact, her husband lived with the family and was employed as a taxi driver. Investigators discovered the fraud did not stop there. HIRSI was also defrauding the COPES program (Community Options Program Entry System) which provides federal funds to caregivers. HIRSI claimed she cared for her elderly parents each night from 5 PM to 8 AM. The investigation revealed HIRSI was rarely at her parents’ home during those hours, and in some instances she claimed to have worked 80 hours in their home when she was out of the country. Finally, HIRSI claimed that because she was working all night at her parents’ home she needed overnight childcare for her five children. The false claims to the COPES and childcare programs total $270,983. The fraud on the Seattle Housing Authority totals $57,526. HIRSI used Section 8 benefits that should have gone to others since her income from the grocery store, combined with her husband’s income, means she did not qualify for subsidized housing.
When confronted by FBI investigators about the fraud, HIRSI made numerous false statements and continued to claim she qualified for the benefits.
In August 2017, HIRSI pleaded guilty to three counts of theft of government funds.
The case was investigated by the FBI, the Health and Human Services Office of Inspector General (HHS-OIG), the Housing and Urban Development Office of the Inspector General (HUD-OIG) and the Department of Social and Health Services (DSHS) Department of Fraud and Accountability.
The case was prosecuted by Assistant United States Attorney Seth Wilkinson.
Man Who Illegally Cut “Music Wood” Maple on Federal Land Sentenced to PrisonRead the Press Release
A long-time resident of the Olympic Peninsula was sentenced today in U.S. District Court in Tacoma to 30 days in prison for felling and stealing a big leaf maple on federal land near Olympic National Park, announced U.S. Attorney Annette L. Hayes. MICHAEL D. WELCHES, 63, pleaded guilty in October 2017 to depredation of government property for the timber theft that occurred in November 2013. At the sentencing hearing U.S. District Judge Robert J. Bryan said “These are very valuable trees and provide a great temptation. . . . People give into that temptation, but it's not appropriate. . . . It's just simple theft.”
“The natural resources in our federally protected lands belong to all of us, and to future generations not to thieves making a quick buck,” said U.S. Attorney Hayes. “But for an alert neighbor notifying a park ranger, this defendant would literally have gotten away like ‘a thief in the night.’”
According to records filed in the case, on November 11, 2013, a neighbor residing near the Elwha restoration project lands notified the Park Service that he had heard chainsaws in the middle of the night. The neighbor said he saw people in the woods wearing headlamps. The neighbor reported similar activity a few nights later. The ranger investigated in daylight and found a felled big leaf maple. He asked the neighbor to call him directly if he heard or saw additional activity. The next night, at 1:00 AM the neighbor alerted the ranger. Law enforcement responded and arrested WELCHES and two codefendants as they were cutting and loading the felled maple. A receipt indicated the men had sold the wood to a Quilcene, Washington music wood supplier. Wood retrieved from that supplier matched the wood from the felled maple.
The value of the timber as music wood is estimated to be $8,766. The tree as a living part of the Elwha ecosystem is irreplaceable.
In asking that WELCHES serve prison time, prosecutors noted that in 2004 he was convicted of illegally cutting trees on state timber trust land.
A second defendant, Matthew Hutto has pleaded guilty and is scheduled for sentencing next month. Defendant Richard Welches is being sought by law enforcement.
The case was investigated by the National Park Service Investigative Services Branch. The case is being prosecuted by Assistant United States Attorney Andre Penalver.
Leaders of Multi-State Drug Distribution Ring Sentenced to Long Prison TermsRead the Press Release
Three key players in a drug distribution ring that operated over a large swath of Washington State were sentenced late Tuesday in U.S. District Court in Seattle to long prison terms, announced U.S. Attorney Annette L. Hayes. The leader of the drug distribution ring BALTAZAR REYES-GARCIA 45, of Camano Island, Washington, was sentenced to eighteen years in prison; HECTOR CONTRERAS-IBARRA, 33, of Pasco, WA, was sentenced to fifteen years in prison; and ANGEL SERRANO-CARRENO, 30, of Mt. Vernon, WA was sentenced to thirteen years in prison. The drug ring distributed heroin, methamphetamine and cocaine in King, Snohomish, Skagit and Whatcom Counties. At the sentencing hearing for BALTAZAR REYES-GARCIA, U.S. District Judge James L. Robart said the quantities of drugs involved is “immensely alarming” and noted that REYES-GARCIA was a “major drug supplier.”
“The kilograms of heroin, meth and cocaine that these defendants sold ultimately became hundreds and thousands of doses of poison in addicts’ hands,” said U.S. Attorney Annette L. Hayes. “Make no mistake – these drugs kill or otherwise destroy lives. I commend our federal, state and local law enforcement partners for working together to arrest and convict these defendants who earned their living off the misery of Western Washington residents.”
All three defendants were convicted in October 2017, following a ten-day jury trial. The conspirators operated stash houses on Camano Island and in Mount Vernon, as well as in Yakima and Franklin Counties. The organization had broad connections spanning from Mexico to Nevada, Arizona and California, and north to British Columbia. Fourteen other co-conspirators charged in the case pleaded guilty in the months following their arrests in November 2016. These other defendants in the case have been sentenced to prison terms ranging from two to twelve years in prison.
As court records and evidence admitted at trial demonstrate, law enforcement investigated the drug ring in late 2015, and early 2016, utilizing pole cameras, confidential sources, wiretaps and undercover officers to document the drug distribution activity, and identify the leaders of the ring. In November 2016, law enforcement served search warrants on more than two dozen locations seizing two kilos of cocaine, more than $180,000 cash, and more than 20 firearms – including a loaded AK47. Those totals were in addition to the seizures made during the investigation: eight kilos of methamphetamine, two kilos of cocaine, nearly a kilo of heroin, and more than $117,000 in cash.
The investigation was named “Operation Car Wash” as some of the conspirators would meet up to conduct their deals at a Mount Vernon car wash.
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 the Drug Enforcement Administration (DEA) in conjunction with the FBI, Whatcom Gang & Drug Task Force and Skagit County Inter-Agency Drug Task Force. The investigation was supported by the Auburn Police Department, Snohomish County Sheriff’s Office, Snohomish County Regional Drug & Gang Task Force, Mt. Vernon Police Department, Washington State Patrol, Whatcom County Sheriff’s Office, Skagit County Sheriff’s Office, Everett Police Department and Seattle Police Department. Additional assistance was provided by HSI; CBP, and Royal Canadian Mounted Police.
The case is being prosecuted by Assistant United States Attorneys Kate Vaughan and Steven Masada.
If you, or someone you know, would like information about resources for those suffering from a heroin or other substance abuse addiction, you can call the 24 hour Washington Recovery Helpline at 866-789-1511, or go to the University of Washington Alcohol and Drug Institute website (link is external). If you are between 13 and 20 years old you can also call Teen Link at 1866TEENLINK (866-833-6546) to talk to a teen volunteer.
Repeat Offender Convicted of Illegal Firearms Possession and Conspiracy to Obstruct JusticeRead the Press Release
A repeat offender who previously served ten years for plotting to use a pipe-bomb to blow up a motel, was convicted today of four federal felonies related to his ongoing illegal weapon possession, announced U.S. Attorney Annette L. Hayes. ROBERT A. STANARD, 41, of Stanwood, Washington was convicted of illegally possessing two firearms, illegal possession of ammunition, illegal possession of an unregistered silencer and conspiracy to obstruct justice. The jury deliberated two hours following a three-day jury trial. Chief U.S. District Judge Ricardo S. Martinez set sentencing for April 13, 2018.
According to records in the case and testimony at trial, STANARD repeatedly directed his wife in person and via text message to purchase firearms for his use. The weapons included an AR-15 assault rifle and a Ruger .380 handgun. STANARD ordered more than 1,000 rounds of ammunition from online sources, as well as gun parts. He directed his wife to purchase ammunition as well. His wife was confused at the gun stores and in a series of text messages and pictures consulted STANARD about every purchase. STANARD used items he ordered online to construct a silencer for one of the weapons. STANARD was arrested in October 2016, following reports of domestic violence. While incarcerated at Snohomish County Jail and later at the Federal Detention Center, STANARD send coded emails and spoke in code on telephone calls to get a family member to retrieve a third pistol that was hidden in his pick-up truck. The conspirators called the gun a “CD player” and the family member confirmed he had retrieved it and was secreting it from law enforcement.
STANARD was prohibited from possessing firearms due to multiple prior convictions including two federal felonies. In 2004 STANARD was sentenced to ten years in prison for two unrelated crimes. In March of 2001 in Utah, STANARD illegally possessed an unregistered firearm and, while in an argument with his cousin, he fired the gun with the bullet passing through the wall of an apartment. While on pretrial release for that crime, STANARD traveled to Washington where he first pistol whipped a man in Port Angeles, and then plotted to use a pipe bomb to blow up the man’s long stay motel. But for the work of an alert Sequim Police officer who stopped STANARD’s car due to a broken tail light, the bombing could have killed many innocent people.
At trial STANARD tried to claim he had no access to the guns that his wife kept them locked away in gun safes. Text messages show that she had provided him with the lock code for one safe, and various witnesses testified that they saw STANARD accessing the safes and with the guns at his disposal. Prosecutors said in closing arguments “Stanard hid behind his wife and family to own guns.”
STANARD faces up to ten years in prison for being a felon in possession of a firearm.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF), the Snohomish County Sheriff’s Office and the Washington State Patrol.
The case was prosecuted by Assistant United States Attorneys Andrew Friedman and Joshua Ferrentino.
DOJ Settles with Everett Fire Department over Improperly Inflated Fees for Medical TransportRead the Press Release
The U.S. Department of Justice, the Washington State Attorney General’s Medicaid Fraud Control Unit, and the City of Everett Fire Department (EFD) today settled all claims that EFD had been overbilling government programs for medical transports, announced U.S. Attorney Annette L. Hayes. Under the terms of the settlement, Everett will pay the two federal programs $127,848, and will pay the Washington State Medicaid program $75,158.
“When local entities improperly bill federal programs, it increases costs for consumers and taxpayers,” said U.S. Attorney Annette L. Hayes. “This settlement, with Everett paying two times the damages they caused as allowed under federal law, sends a clear message to others who may try to ‘fudge’ the paperwork to get higher reimbursement rates than allowed.”
According to the settlement signed today, between January 1, 2010, and June 26, 2016, Everett Fire Department personnel submitted claims to federal and state health benefit programs indicating that a higher level of life support service was provided to patients covered by those programs. When the Everett Fire Department paramedics provided only basic life support (BLS), they still coded the claims as if they had provided advanced life support (ALS) which is entitled to a higher reimbursement. Analysts used a sample of claims to determine the damages appropriate in this case.
Records indicate that a whistleblower within the Everett Fire Department had expressed concern about the routine up-coding, but was ignored. The fraudulent billing allegations were first publicized by news reports on KIRO-TV. The reports triggered further examination by federal investigators from the Department of Health and Human Services and the Defense Health Agency which administers the TRICARE program for military retirees.
“Insiders willing to report illegal practices are important to safeguarding government health programs and taxpayers,” said Steven J. Ryan, Special Agent in Charge of the Office of Inspector General for the U.S. Department of Health and Human Services. “Together with our federal and state law enforcement partners we will continue to investigate entities that fraudulently bill federal health care programs.”
Everett will pay $117,581 to the Department of Health and Human Services, and $10,267 to the Department of Defense. An additional $75,158 will be paid to Medicaid Fraud Control Unit for the State of Washington.
Under the terms of the settlement, Everett is not admitting any liability.
The matter was handled for the U.S. Attorney’s Office Affirmative Civil Enforcement Unit by Assistant United States Attorney Kayla Stahman. Senior Counsel Carrie L. Bashaw handled the matter for the Washington State Attorney General’s Office.
Statement of U.S. Attorney on Court’s Decision to Grant City of Seattle’s Motion for Full and Effective Compliance with the Consent DecreeRead the Press Release
SEATTLE – Today, U.S. District Court Judge James L. Robart granted the City of Seattle’s “Motion for Full and Effective Compliance with the Consent Decree.” The City entered into the Consent Decree with the Department of Justice (DOJ) in 2012 to address findings that DOJ made with respect to use of force and related constitutional issues. Both the DOJ and the Community Police Commission filed responses in support of the City’s Motion in October, and responded to further questions from the Court in December.
The Court ruled today that the City is in “full and effective compliance” with all requirements and obligations under the Consent Decree. The Court’s ruling is based on ten assessments that cover all of the requirements of the Consent Decree and were conducted by the Monitor and DOJ. The ruling now triggers a two-year period in which the Seattle Police Department (SPD) must hold compliance with those requirements.
The following is a statement from Annette L. Hayes, U.S. Attorney for the Western District of Washington:
Today, the Court recognized that the SPD has met a major milestone in the reform process – by putting in place new policies, critical training, and systems of oversight and accountability it has met all of the obligations contained in the Consent Decree. This is a credit to the hard work of SPD and City leadership, engaged community members including the Community Police Commission, and SPD officers whose dedication to the mission is essential to reform. We know that constitutional policing and effective policing go hand in hand, and that the safety of our City and the officers that serve us is enhanced when the civil rights of all are protected.
The Court’s ruling is based on rigorous assessments that examined SPD’s compliance with all aspects of the Consent Decree. As the Court pointed out, those data driven assessments demonstrate that SPD has eliminated the pattern or practice of unconstitutional policing that led to the Department of Justice’s investigation and findings in 2011.
Today’s ruling does not end the City’s hard work. SPD must sustain compliance for at least two years, and demonstrate that compliance to the Court and DOJ. The Court has indicated that it will continue to closely monitor SPD over the next two years before deciding whether termination of all or part the Consent Decree is warranted. We all must continue to hold SPD accountable to its commitments in the Consent Decree – to de-escalation, new and better approaches to people in crisis, and the internal supervision and independent civilian-led accountability systems that address problems when they arise.
We look forward to the continued engagement of the entire community in this next phase of the Consent Decree to ensure that reform in Seattle is real and lasting. There is no question that there remain parts of our City that expect more from their police department. Their engagement will continue to be important as we move forward. I know the new Mayor, City Attorney and City Council have made police reform a top priority, and I have full confidence that with that commitment, and the continued work by rank and file officers and command staff alike, SPD will continue its success under the Consent Decree
Pierce County Woman Sentenced to Five Years in Prison for Bombing Car Belonging to Person She Considered a Police ‘Snitch’Read the Press Release
A Tacoma, Washington woman was sentenced today in U.S. District Court in Tacoma to 60 months in prison for unlawful possession of a destructive device, announced U.S. Attorney Annette L. Hayes. KENNI JO BENNETT, 41, of Tacoma, and an accomplice, placed the explosive device under a Kia Forte sedan parked outside a Tacoma home occupied by a family, including several children. The device exploded, blasting a hole in the trunk area of the car and scattering debris around the area, including the lawns of homes across the street. No one was injured. At the sentencing hearing, U.S. District Judge Ronald B. Leighton described the crime as a “very, very dangerous offense,” and told BENNETT that her conduct showed she was a “renegade” who sought “rough justice [on] her terms.”
“This defendant tried to keep the truth about her drug dealing and other crimes from coming out,” said U.S. Attorney Annette L. Hayes. “Not only did she not succeed, she will now serve five years in a federal prison for her actions. I commend the Bureau of Alcohol, Tobacco and Firearms and the Tacoma Police Department for their work on this case, and am grateful that the small children sleeping in a room near the explosion were not injured in this attack.”
According to the plea agreement, between August and October 2016, BENNETT became convinced that the victim was providing information to law enforcement concerning BENNETT’s drug trafficking activities. BENNETT recruited an accomplice to help her blow up the victim’s car. BENNETT purchased an explosive device about the size of a soda can from someone she knew on the Puyallup Indian Reservation. In the early morning hours of October 13, 2016, BENNETT cruised the victim’s neighborhood and saw his car parked in the driveway of his home. She texted her accomplice, picked him up, and brought him back to the target vehicle. BENNETT used a lit cigarette to ignite the fuse of the device and instructed her accomplice where to place it. BENNETT used her smart phone to record the explosion. The two then left the area.
BENNETT was arrested by Tacoma Police and charged in state court in November 2016. A forensic review of BENNETT’s phone revealed multiple text messages in which she bragged about the bombing and joked with her friends about it. While in custody, BENNETT asked other people to intimidate witnesses or attempt to erase electronic evidence. In May 2017, BENNETT was charged federally and has remained in federal custody.
BENNETT pleaded guilty in October 2017.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF) and the Tacoma Police Department. The case is being prosecuted by Assistant United States Attorney Erin H. Becker.
Key Player in Oxycodone Distribution Ring Sentenced to Seven Years in PrisonRead the Press Release
A key player in a prescription forgery ring that distributed hundreds of thousands of pills of oxycodone was sentenced today in U.S. District Court in Tacoma to 84 months in prison and 3 years of supervised release, announced U.S. Attorney Annette L. Hayes. STOSH SATKOWSKI, 24, of Tacoma, pleaded guilty in October 2017 to conspiracy to distribute oxycodone, being a felon in possession of a firearm and failure to appear in court. SATKOWSKI was a key player in the ring led by forger Anthony Ballenger, 29. SATKOWSKI recruited others to the ring who used the forged prescriptions and false identities to obtain drugs from unsuspecting pharmacies. At the sentencing hearing U.S. District Judge Ronald B. Leighton commented in sentencing the defendant: “The Rule of Law is the ligament that binds us together.”
“This defendant was a critical member of a ring that forged prescriptions and sold highly addictive drugs to fatten their wallets – oblivious to the desperation they left in their wake,” said U.S. Attorney Annette L. Hayes. “The opioid crisis is hitting communities in Western Washington hard. I commend the partnership between the federal and local law enforcement that developed the evidence necessary to hold this defendant to account.”
According to records filed in the case, Ballenger was the leader of a sophisticated ring that stole the identity information of medical professionals to forge prescriptions for powerful painkillers. SATKOWSKI was Ballenger’s key associate. The conspirators used stolen DEA registration numbers to create phony prescriptions while using various online tools to make it appear that the prescriptions had been issued by actual medical providers. In order to lull pharmacies into filling the prescriptions, Ballenger illegally accessed various online databases, including government databases, and altered the contact information for the medical professionals to divert inquiries from pharmacies to himself. Ballenger also posed as the medical professionals whose identities he stole when accessing online prescription-delivery systems, which he then used to send electronic prescriptions to pharmacies throughout Western Washington. SATKOWSKI took the forged prescriptions and fake identity documents and recruited others known as ‘runners’ who posed at patients picking up the medications at dozens of pharmacies. SATKOWSKI transported the runners and collected the pills after the transactions. Ballenger and SATKOWSKI distributed the pills to users throughout the Puget Sound region. SATKOWSKI sometimes charged his customers well above street level prices, preying on their addictions.
SATKOWSKI also pleaded guilty to illegally possessing a firearm. In October 2016, SATKOWSKI illegally possessed a Beretta handgun. He was prohibited from possessing a firearm due to his prior felony convictions for burglary, unlawful possession of a firearm, and harassment. SATKOWSKI also pleaded guilty to failing to appear for trial in May 2017, when he cut off his GPS locator and absconded from supervision.
In June 2017, Ballenger was sentenced to 76 months in prison.
The case was investigated by the Drug Enforcement Administration’s Tactical Diversion Squad which includes task force officers from Tacoma and Seattle Police Departments and the Washington State Patrol. The U.S. Marshals Service and the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF) assisted with the investigation, as did local police agencies from throughout King and Pierce Counties.
The case is being prosecuted by Assistant United States Attorney Siddharth Velamoor.
U.S. Attorney Annette L. Hayes Statement on Federal Marijuana Prosecutions in the Western District of WashingtonRead the Press Release
SEATTLE – The following is a statement from United States Attorney for the Western District of Washington Annette L. Hayes:
Today the Attorney General reiterated his confidence in the basic principles that guide the discretion of all U.S. Attorneys around the country, and directed that those principles shepherd enforcement of federal law regarding marijuana. He also emphasized his belief that U.S. Attorneys are in the best position to address public safety in their districts, and address the crime control problems that are pressing in their communities. Those principles have always been at the core of what the United States Attorney’s Office for Western Washington has done – across all threats to public safety, including those relating to marijuana. As a result, we have investigated and prosecuted over many years cases involving organized crime, violent and gun threats, and financial crimes related to marijuana. We will continue to do so to ensure – consistent with the most recent guidance from the Department – that our enforcement efforts with our federal, state, local and tribal partners focus on those who pose the greatest safety risk to the people and communities we serve.
Two Aliens Plead Guilty in Connection with Labor Trafficking Scheme That Targeted Guatemalan National for Forced LaborRead the Press Release
Antonia Marcos Diego, 42, of Forks, Washington, pleaded guilty yesterday in federal court in Tacoma, Washington, to one count of document servitude in furtherance of forced labor, announced Acting Assistant Attorney General John M. Gore of the Justice Department’s Civil Rights Division and U.S. Attorney Annette L. Hayes of the Western District of Washington. Antonio Francisco-Pablo, 60, of Forks, Washington, previously pleaded guilty on December 18, 2017, to one count of forced labor. U.S. District Judge Ronald B. Leighton scheduled sentencing for March 23, 2018.
According to documents filed in court, defendant Antonia Marcos Diego and her husband, Antonio Francisco-Pablo, lured Diego’s sister to enter the United States from Guatemala, falsely promising that they would provide her with a home, a job earning a lot of money, and a good life. Contrary to these promises, however, the defendants imposed a significant debt on the victim upon her arrival in the United States, and informed her that she would work off the debt by picking salal, a brush commonly used by florists. The defendants retained all of the victim’s earnings and increased her debt by imposing additional charges on her for food, housing, transportation, and utilities. The defendants also kept the victim’s identification documents and threatened her with deportation if she ever tried to leave them. According to court documents, the defendants similarly lured another relative to the United States from Guatemala, and also imposed a significant debt upon him after his arrival.
“These two defendants recruited their own family members on false and fraudulent promises, using the American dream of freedom and opportunity to lure their victims,” said Acting Assistant Attorney General John Gore. “The Department of Justice will continue to pursue labor traffickers like these defendants, who erode our ideals of freedom, opportunity, and the rule of law in order to exploit others for their own greed.”
“These defendants took advantage of a young non-English speaking relative, who was alone in a foreign country, and exploited her for their own enrichment,” said U.S. Attorney Annette L. Hayes. “Their actions were cruel and a clear violation of federal law. We will continue to prioritize protecting such vulnerable victims and prosecuting those who prey on them.”
Antonio Francisco-Pablo faces a possible sentence of up to 20 years in prison while Antonia Marcos Diego faces a possible sentence of up to five years in prison. Per the terms of the plea agreements, both defendants have agreed to make restitution to both victims in an amount to be determined at the time of sentencing.
The case is being prosecuted by Assistant United States Attorney Bruce F. Miyake and Trial Attorney Matthew T. Grady of the Civil Rights Division’s Human Trafficking Prosecution Unit. The case was investigated by the Department of Homeland Security’s Homeland Security Investigations and the Federal Bureau of Investigation, with assistance from the Clallam County Sheriff’s Office, Port Angeles Police Department, and Washington State Patrol Crime Laboratory.
Former Bothell Resident Pleads Guilty to Production, Distribution and Possession of Images of Child MolestationRead the Press Release
A 53-year old Bothell, Washington, man pleaded guilty today in U.S. District Court in Seattle to production, distribution and possession of child pornography, announced U.S. Attorney Annette L. Hayes. DONALD MCCOY JR was arrested in October 2016, and has been in federal custody since that time. MCCOY faces a mandatory minimum 15 years in prison and up to 30 years in prison when sentenced by U.S. District Judge James L. Robart on March 12, 2018.
According to records filed in the case, MCCOY came to the attention of federal law enforcement in 2016, when an undercover agent using peer-to-peer file sharing software observed images of child rape being shared from a computer tied to an internet protocol address that traced back to MCCOY’s residence. After obtaining the address and a court authorized search warrant, law enforcement executed the search at MCCOY’s home. Forensic examination of various electronic devices revealed that MCCOY had made images of the molestation of four young children between the ages of 6 and 13 years-old. MCCOY molested several the young children while they were asleep.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc .
The case was investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) with assistant with the Seattle Internet Crimes Against Children Task Force. The case was prosecuted by Assistant United States Attorney Matthew Hampton.
Feds Focus on Mail Theft Based Identity Theft Crimes during Busy Holiday Shipping SeasonRead the Press Release
Five people have been charged federally in five separate mail theft cases brought in joint effort with the U.S. Postal Inspection Service to combat identity theft, announced U.S. Attorney Annette L. Hayes. Mail and package theft is a heightened problem in the busy holiday shipping season. These cases have taken some of the worst offenders off the street over the last few months. Some of those charged have already entered guilty pleas, and face mandatory minimum sentences for aggravated identity theft.
“Over the last several months we have worked with investigators from the Postal Inspection Service to federally prosecute mail thieves who repeatedly steal from homes, apartment buildings and other locations around western Washington,” said U.S. Attorney Annette L. Hayes. “These cases should serve as a warning that there are significant consequences for those who steal mail and victimize so many people.”
“The arrest and prosecution of prolific mail thieves is a top priority of the Postal Inspection Service,” said Inspector in Charge Tony Galetti.
Some of the cases pursued in this initiative include:
CHARLLETTE MILLER, 35, of Olympia, Washington pleaded guilty to access device fraud and will be sentenced in March 2018. MILLER used stolen mail, including drivers’ licenses to open bank and credit accounts in the names of her victims and then ran up thousands of dollars in fraudulent charges.
JESSE FRANKLIN DENHAM, 27, is scheduled for trial in January 2018 on an eight-count indictment charging bank fraud, access device fraud and aggravated identity theft. Using stolen mail, DENHAM allegedly opened bank and credit accounts, and forged balance transfer checks associated with the accounts. When arrested, DENHAM had mail from more than 50 victims in his car. DENHAM remains in custody.
SHAWLEE GEIGER, 41, of Seattle, is scheduled for trial in June 2018 on an eight-count indictment charging her with multiple counts of bank fraud and aggravated identity theft. GEIGER allegedly used stolen checks to inflate the balances of bank accounts she controlled and then quickly withdrew cash before the bank was notified that the checks were invalid.
DENNIE DENG, 27, of Auburn, Washington is scheduled for trial in March 2018 on a four-count indictment charging him with bank fraud and aggravated identity theft. DENG allegedly used stolen checks to inflate the balance of his bank account and then withdrew cash. In some instances he altered the stolen checks to further increase the amount of money fraudulently deposited in his account.
TRAVIS SICKLOVAN, 34, pleaded guilty in October to bank fraud, aggravated identity theft and possession of stolen mail. SICKLOVAN was arrested in November 2016, in a Snohomish County hotel with stolen mail from more than 60 victims. SICKLOVAN used the stolen mail to make and cash fraudulent checks and to obtain fraudulent credit cards.
Defendants convicted of aggravated identity theft face a mandatory minimum two years in prison in addition to any other sentence imposed based on other convictions.
The charges contained in a criminal complaint or indictment are only allegations. A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.
The Seattle Division of the U.S. Postal Inspection Service employs a multi-faceted approach to address mail theft in western Washington. Using prevention and investigative efforts to combat mail theft, postal inspectors work with local, state and federal agencies across the area. Targeted enforcement data is used to identify, arrest and prosecute the mail thieves who are having the biggest impact on the community. The inspection service also seeks out ways to improve the security of postal facilities and mailboxes leading the effort to secure US Mail to prevent access to would-be thieves. Lastly, the Postal Inspection Service educates the public on ways to mitigate their risk of mail theft and to report it in a timely manner when it does happen.
These cases are being prosecuted by Assistant United States Attorneys Andre Penalver, Stephen Hobbs and Seungjae Lee.
Former Washington State Auditor Convicted of Nine Criminal Counts for Fraud Relating to Business He Operated Prior to Statewide Elective OfficeRead the Press Release
Former Washington State Auditor TROY X. KELLEY was convicted today in U.S. District Court in Tacoma of possession of stolen property, making false declarations in a court proceeding, and tax fraud announced U.S. Attorney Annette L. Hayes. The jury deliberated for two days following a five-week trial. The charges stem from a business KELLEY operated before being elected to statewide office. KELLEY is scheduled for sentencing on March 30, 2018.
“Troy Kelley stole money from thousands of homeowners, then tried to hide it by passing it through a variety of accounts – ultimately he committed tax fraud to try to hide the theft and keep as much of the ill-gotten gain as he could,” said U.S. Annette L. Hayes. “I commend the investigators and the trial team that worked diligently to present a complex case, and the jury who carefully reviewed all the evidence before returning this verdict.”
According to testimony at trial, between 2003 and 2008, KELLEY operated a business that was paid by real estate title companies to track documents related to real estate sales and refinancing. KELLEY had agreements with those companies that he would charge a flat $15 or $20 for each of the title documents his employees tracked on county websites. While the title companies withheld $100-$150 on each loan to pay the fee and any other potential costs, unneeded money was to be returned to the borrower. But beginning in 2005, in virtually every case, KELLEY kept the entire amount withheld on each loan resulting in nearly $3 million in stolen money. When the fees became the subject of class action litigation in 2008, KELLEY moved the stolen money through various bank accounts to hide it. One of the title companies sued KELLEY for the fees and he settled the case by paying more than $1 million. KELLEY was convicted of possession of stolen property, two counts of making false declarations, and six counts of tax fraud. The jury found him not guilty on five counts of money laundering.
In closing arguments, prosecutors said TROY KELLEY “had found the perfect crime,”… because no one was watching what was happening to the money that should have been refunded to homeowners. Prosecutors said, “Kelley engaged in ten years of lies to steal millions of dollars and to hide the money he had stolen.”
This is the second trial on these charges. The first trial in March 2016 ended with the jury able to reach a verdict on only one count, acquitting KELLEY on lying to the Internal Revenue Service agent who questioned him about his scheme in 2013.
Possession and concealment of stolen property is punishable by up to ten years in prison. False declarations and false statements are punishable by up to 5 years in prison. The remaining charges are punishable by up to three years in prison.
The case was investigated by the Internal Revenue Service Criminal Investigation (IRS-CI) and the FBI.
The case is being prosecuted by Assistant United States Attorneys Arlen Storm, Andrew Friedman, Seth Wilkinson and Katheryn Frierson. Appellate attorney Michael Morgan provided significant assistance.
Former Amazon Financial Analyst Sentenced to Prison for Insider TradingRead the Press Release
A former financial analyst at Amazon.com, Inc., was sentenced today in U.S. District Court in Seattle to 6 months in prison, a $2500 fine and two years of supervised release for securities fraud involving insider trading, announced U.S. Attorney Annette L. Hayes. BRETT D. KENNEDY, 27, currently of Blaine, Washington, pleaded guilty in September 2017, admitting that in April 2015, he provided non-public quarterly financial results to a friend who then purchased Amazon stock and sold it at a profit once the results were made public. The friend paid KENNEDY for this inside information. KENNEDY is no longer employed by Amazon. At sentencing Chief U.S. District Judge Ricardo Martinez said, “This is a serious offense. If the public cannot have confidence in the financial markets it impacts the entire country.”
“Those who trade on inside information fundamentally undermine the trust that is necessary for our financial markets to operate,” said U.S. Attorney Annette L. Hayes. “Those responsible – like the defendant in this case – will be held accountable. I commend the Federal Bureau of Investigation and the Securities and Exchange Commission for their work to ensure that those responsible for this type of financial crime are held to account.”
According to the information filed in the case, KENNEDY began work as a financial analyst at Amazon in 2013. As part of his employment he signed a confidentiality statement that he would not disclose Amazon’s non-public financial information outside the company. The policy specifically mentions information such as earnings and losses as material confidential information. In April 2015, KENNEDY used his access to view and write down Amazon first quarter earnings that were going to be announced later in the month. KENNEDY provided this information to his friend. After viewing the information, the friend purchased 4400 shares of Amazon stock for $1.7 million. When the positive earnings news was announced publicly, and the stock price rose, the friend sold the shares for a gain of nearly $116,000. The friend paid KENNEDY $10,000 in cash for the information.
Speaking to the court, Kennedy apologized to his family and to Amazon saying, “I threw my success away in an instant . . . I wish every day I could go back and not be so stupid and reckless.”
The Securities and Exchange Commission filed civil charges against KENNEDY. In its complaint it identifies the friend as Maziar Rezakhani, and names him as a defendant. Rezakhani, 28, is currently serving a five year prison term for defrauding a bank, Apple, Inc., and various shipping and insurance companies. The insider trading investigation grew out of the investigation into Rezakhani’s frauds. The SEC is seeking disgorgement of all profits from Rezakhani’s alleged illegal trading. KENNEDY agreed to a settlement with the SEC. Details of the SEC action are available here.
The case was investigated by the FBI. The case was prosecuted by Assistant United States Attorney Brian Werner.
Two Tribal Members Sentenced to Prison in Separate Sex Crime CasesRead the Press Release
An enrolled member of the Quinault Indian Nation was sentenced last week to 12 years in prison and 20 years of supervised release for rape of a child, announced U.S. Attorney Annette L. Hayes. DEVELIN L. HOWTOPAT, 33, pleaded guilty in December 2016, admitting that he sexually molested a young child in Taholah, Washington. The abuse occurred in 2008 when the child was 7 or 8-years-old. The molestation was reported to the Hoquiam Police Department in 2015 and was investigated by Hoquiam Police, the Quinault Nation Police Department and the FBI. HOWTOPAT was arrested in April 2016, and has remained in custody since that time. On December 1, 2017, U.S. District Judge Ronald B. Leighton sentenced HOWTOPAT to the 12-year prison term calling the crime “despicable.”
In a second, unrelated sex assault case, an enrolled member of the Spirit Lake Tribe of North Dakota, was sentenced to five years in prison and five years of supervised release, for the sexual assault of a 19-year-old woman. AARON JOSEPH MITZEL, 37, has been in federal custody since his arrest on October 9, 2015. The assault occurred on October 4, 2015, in an apartment on the Puyallup Indian Reservation where the victim was sleeping. The victim awoke to MITZEL sexually assaulting her and he then bit her ear and smothered her with a pillow. At today’s sentencing hearing, U.S. District Judge Ronald B. Leighton said, “this is a very horrendous, serious offense.”
The MITZEL assault was investigated by the Puyallup Tribal Police Department and the FBI.
Both cases were prosecuted by J. Tate London and Rebecca Cohen who serve as Tribal Liaisons for the U.S. Attorney’s Office, prosecuting criminal cases in Indian Country.
Statement of U.S. Attorney Annette L. Hayes on Seattle Police Department Chief Kathleen O’TooleRead the Press Release
Kathleen O’Toole has been a true partner in progress on police reform and a leader in advancing innovative approaches to public safety in Seattle, and by her example, around the country. I am grateful for her professionalism, wisdom, and friendship.
Under her leadership, the Seattle Police Department transformed how it served the City of Seattle by implementing new policies, training and accountability around uses of force, crisis intervention, and biased policing. Chief O’Toole guided the department during this transformational period, set clear expectations and high standards for every officer, and built strong relationships with the many communities and neighborhoods that the Department serves. She also demonstrated clearly that civil rights reform goes hand-in-hand with increased public and officer safety.
The hallmark of reform is that it must be bigger than any one person or leader. As we made clear in our most recent filing with the Court, under Chief O’Toole’s leadership, we believe that SPD has come into compliance with the first phase of the consent decree and has the systems and structures in place to continue its reform efforts. I look forward to working with Interim Chief Carmen Best to continue pushing reform forward and keeping the people of Seattle safe.
U.S. Attorney Announces New Grant to Expand Efforts to Combat Gun ViolenceRead the Press Release
U.S. Attorney Annette L. Hayes announced today the expansion of the Project Safe Neighborhood program in the Puget Sound region, with additional focus on crime gun intelligence in South King and Pierce Counties. The U.S. Department of Justice awarded $500,000 to the program which will enhance intelligence sharing between law enforcement agencies so that guns used in crimes can be linked, helping law enforcement build cases for prosecution.
“Forensic tools from ATF, and intelligence sharing between law enforcement agencies have been key to identifying felons with guns who need to be off the street,” said U.S. Attorney Annette L. Hayes. “In three of the cases we are highlighting today, the guns recovered have been tied to multiple shootings – in one case as many as 9 shots fired incidents in a short period of time. Combating gun violence is a top priority of the Justice Department and my office.”
The Project Safe Neighborhood grant provides funding for a Special Assistant United States Attorney to review every firearms case in King County to see if it is appropriate for federal prosecution. Grant money in 2017-2018 will provide for additional personnel to leverage the Gun Crime Intelligence Center to make connections between shooting incidents in south King and Pierce Counties. This information helps law enforcement identify, arrest and prosecute high-impact offenders.
“ATF is proud to partner with local law enforcement and the U.S. Attorney’s Office to bring the most advanced forensic science to the battle against gun crime,” said Darek Pleasants, Special Agent in Charge, ATF Seattle. “The National Integrated Ballistic Information Network (NIBIN) is the only national network that allows for the capture and comparison of ballistic evidence to aid in solving and preventing violent crimes involving firearms. Since the program’s inception in 1999 through 2016, NIBIN partners have captured approximately 2.8 million images of ballistic evidence and confirmed more than 74,000 NIBIN hits.”
Unveiled in May 2001, Project Safe Neighborhoods (PSN) is a comprehensive and strategic approach to gun law enforcement. PSN is a nationwide commitment to reduce gun crime in America by networking both new and existing local programs that target gun crime and then providing them with the resources and tools they need to succeed. Implementation at the local level has fostered close partnerships between federal, state and local prosecutors and law enforcement.
Former Seattle Police Officer Pleads Guilty for Role in Drug Conspiracy Transporting Large Amounts of Marijuana to East CoastRead the Press Release
A former Seattle Police Officer pleaded guilty today for his role in a drug ring smuggling hundreds of pounds of marijuana from the Seattle area to Baltimore, Maryland, announced U.S. Attorney Annette L. Hayes. ALEX CHAPACKDEE, 44, of Seattle, was a 16-year veteran of SPD, who resigned shortly after his arrest in May 2017. CHAPACKDEE pleaded guilty to conspiracy to distribute marijuana and conspiracy to commit money laundering. Under the terms of the plea agreement, both sides will recommend the mandatory minimum five-year sentence when CHAPACKDEE is sentenced on March 1, 2018. U.S. District Judge Thomas S. Zilly is not bound by the recommendation and can impose any sentence up to the statutory maximum of 40 years in prison.
In his plea agreement CHAPACKDEE admits he conspired with his brother-in-law, alleged ringleader Tuan Van Le, 42, of Maple Valley, Washington; 32-year-old Phi Nguyen; and 38-year-old Samath Khanhphongphane, to distribute hundreds of pounds of marijuana and transport and launder the proceeds from the drug sales. CHAPACKDEE has remained in custody since his arrest in May 2017.
An investigation by the Drug Enforcement Administration (DEA), the Seattle Police Department, Homeland Security Investigations and the FBI’s Public Corruption Squad revealed that on multiple occasions between June 2013, and April 2017, Le made trips between Seattle and Baltimore. While Le often flew one way or roundtrip, other members of the conspiracy made the trip by driving virtually non-stop. The vehicles carried marijuana to the Baltimore area and the cash proceeds back to Seattle. CHAPACKDEE participated in multiple trips driving his RV one or both ways in September, October and November, 2016. CHAPACKDEE -- who was an SPD officer throughout the conspiracy -- admits that while he was furthering the conspiracy he was armed and carried his Seattle Police Department badge. CHAPACKDEE, Le and the other conspirators linked up at both ends of the trip, apparently distributing drugs and the cash proceeds. Bank records indicate CHAPACKDEE deposited cash in his account in amounts just under $10,000 thereby avoiding reports to law enforcement. In his plea agreement CHAPACKDEE admits that he used his status as a police officer to cover and protect the conspiracy.
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 the FBI, DEA, Seattle Police Department and Homeland Security Investigations (HSI). Multiple agencies assisted with the arrests and the serving of search warrants including the Port of Seattle Police Department.
The case is being prosecuted by Assistant United States Attorney Vince Lombardi.
Port Angeles Man Sentenced to Prison for Sexual Abuse of Young Child on National Park LandRead the Press Release
A Port Angeles, Washington man was sentenced today in U.S. District Court in Tacoma to 97 months in prison and ten years of supervised release for aggravated sexual assault of a minor, announced U.S. Attorney Annette L. Hayes. CHARLES JASON BUTCHER, 46, admitted the assault in a recorded phone call with his victim in 2016. The assault on the young child occurred in 2001. At sentencing U.S. District Judge Ronald B. Leighton said, “The nature of this offense is extremely odious.”
“For fifteen years the defendant denied sexually abusing the two young victims in this case, compounding a horrific betrayal,” said U.S. Attorney Annette L. Hayes. “I commend the courage of the victims and the commitment of the Park Service investigator who took what was considered a “cold case” and developed the evidence necessary to convict.”
According to records filed in the case, two young children, ages 7 and 4, were visiting a resort operated by BUTCHER and his family near Lake Crescent on Olympic National Park land. Following the visit, the children’s mother suspected sexually abusive contact and medical exams showed signs of sexual molestation. BUTCHER was interviewed and denied any sexual abuse. In late 2015, the victim and the victim’s mother reached out to law enforcement, and a National Park Service Special Agent was assigned the case as part of a cold case review. The victims agreed to additional forensic interviews. Ultimately, one of the victims agreed to place a recorded phone call to BUTCHER in which he admitted the abuse. BUTCHER later admitted the molestation of one of the victims to law enforcement.
The case was investigated by the National Park Service and the FBI. The case is being prosecuted federally because the assault occurred on National Park land. The case is being prosecuted by Assistant United States Attorney Grady Leupold.