Western District of Washington
Press releases recorded for this federal judicial district.
Dutch Citizen Sentenced to 12 Years in Prison for Computer Hacking Scheme that Stole and Sold Credit Card InfoRead the Press Release
A Dutch citizen who was arrested and extradited from Romania was sentenced today to 12 years in prison for a computer hacking and credit card fraud scheme that victimized people around the world, announced U.S. Attorney Jenny A. Durkan. DAVID BENJAMIN SCHROOTEN, 22, also known in the hacking world as ‘Fortezza’ pleaded guilty in November 2012 to Conspiracy to Commit Access Device Fraud and Bank Fraud, Access Device Fraud, Bank Fraud, Intentional Damage to a Protected Computer, and Aggravated Identity Theft. At sentencing U.S. District Judge Ricardo S. Martinez asked him, “I don’t think you would ever consider walking into someone’s home, pulling out a gun and robbing them… Did it ever occur to you that you were doing that to all your victims?”
“By trafficking over 100,000 credit card numbers stolen by hackers, this defendant helped create the profitable black market for stolen data,” said U.S. Attorney Jenny A. Durkan. “We will target every link of the cyber crook business model. The hacker who stole the numbers was sentenced to seven years in prison, the broker who sold them online was sentenced today to 12 years in prison, and next before the court will be the leader of a criminal gang that was using these credit card numbers for fraud.”
SCHROOTEN and co-conspirator Christopher A. Schroebel, 21, of Keedysville, Maryland marketed stolen credit card numbers via internet sites. Schroebel hacked into the computers of two Seattle area businesses and stole credit card information. According to the records in the case, SCHROEBEL hacked into the point of sale computer in a restaurant in the Magnolia neighborhood of Seattle, and a restaurant supply store in Shoreline, Washington. Schroebel inserted malicious code onto the victim’s computers that copied the personal information of the credit card transactions at the point of sale terminals. Schroebel conspired and worked with SCHROOTEN to build “carding websites,” in order to make the stolen credit card numbers available to criminals for fraud. Investigators estimate that tens of thousands of people were victimized by having their stolen credit card numbers trafficked by SCHROOTEN – with a damage figure of more than $63 million.
Charles Tony Williamson, 33, of Torrance, California, is charged with 22 counts of various felony offenses including Conspiracy to Access Protected Computers to Further Fraud, Access Device Fraud; Bank Fraud; and Aggravated Identity Theft for his role purchasing and using the stolen credit card numbers. Williamson is scheduled for trial this spring.
“David Benjamin Schrooten's on-line criminal activities victimized thousands of U.S. citizens, and defrauded U.S. banking intuitions out of millions of dollars. Mr. Schrooten’s arrest and conviction demonstrates the Secret Service’s ability to pursue criminal actors beyond the borders of the United States and should serve notice to other online criminals,” said Jim Helminski, Special Agent in Charge of the U.S. Secret Service in Seattle. “I would like to commend the team of Seattle Electronic Crime Task Force Investigators, the many law enforcement organizations both domestic and international, and the prosecutors from the United States Attorney’s Office, Western District of Washington who worked many hours to investigate, and ensure extradition back to the United States to bring David Schrooten to justice
Credit card fraud costs financial institutions $40 billion annually. In the Western District of Washington more than 180,000 stolen credit card numbers have been identified in recent cyber cases.
The case is being investigated by the U.S. Secret Service Electronic Crimes Task Force and Seattle Police Department as part of the Task Force. The U.S. Marshals Service assisted with extraditing SCHROOTEN from Romania. The case is being prosecuted by Assistant United States Attorney Kathryn Warma. Substantial assistance was provided by the Department of Justice Criminal Division Office of International Affairs.
Former Bank VP Sentenced to 10 Years in Prison for Mortgage Fraud SchemeRead the Press Release
A former Senior Vice President and loan officer at Pierce Commercial Bank was sentenced today in U.S. District Court in Tacoma to 10 years in prison and five years of supervised release for a mortgage fraud scheme that resulted in the collapse of the bank, announced U.S. Attorney Jenny A. Durkan. SHAWN L. PORTMANN, pleaded guilty September 18, 2012, to Conspiracy to Make False Statements in Loan Applications and to Make False Statements to the Department of Housing and Urban Development (HUD) and one count of Making a False Statement in Loan Applications. At sentencing U. S. District Judge Benjamin H. Settle called it a fraud on multiple layers that “escaped detection because it involved people at every level participating in the fraud.”
“Shawn Portmann’s greed destroyed dreams, ruined careers and defrauded millions from taxpayers,” said U.S. Attorney Jenny A. Durkan. “He now will face the consequences of the damage he did to so many. The depth of his fraud helped bring down a bank, and haunted innocent homeowners whose communities were degraded with vacant, foreclosed homes and a precipitous decline in property values.”
According to the facts in the plea agreement, between 2004 and 2008, PORTMANN and other members of the conspiracy submitted false documents within various loan documents and applications. They falsified information about the borrowers’ qualifications as well as their intention to reside in the homes being financed. A review of a sample of conventional and HUD loans showed that PORTMANN and his co-conspirators closed over 300 loans with false and fraudulent documents and information. More than half of this sample of loans have defaulted or otherwise caused loss, causing an estimated loss of more than $10 million to Pierce Commercial Bank, secondary investors and HUD/FHA. Court records detail multiple false statements included in loan documents regarding an applicant’s employment, income, and intention to reside in the property. Pierce Commercial Bank was closed by regulators in November 2010. Pierce Commercial Bank received $6.8 million from Troubled Asset Relief Program (TARP) in January 2009. This money was never repaid.
“Portmann’s greed resulted in the loss of the entire $6.8 million in TARP funds invested in Pierce Commercial Bank, directly contributed to the bank’s failure, and caused additional, significant financial losses for other TARP banks,” said Christy Romero, Special Inspector General for TARP (SIGTARP). “Most importantly, the consequences of Portmann’s mortgage fraud scheme will have a lasting impact on the community, which relies on local banks such as Pierce Commercial to serve as the mainstay for lending to its businesses and citizens. I want to praise the work of U.S. Attorney Jenny Durkan and our other law enforcement partners for their commitment to fighting fraud related to TARP.”
Although this sentencing does not erase the financial and emotional harm caused by Mr. Portmann to numerous victims—spanning homeowners harmed by the artificially inflated housing market to innocent bank employees who lost their jobs—I hope that they receive a measure of relief knowing that this unscrupulous predator is facing justice for his actions,” said Laura M. Laughlin, Special Agent-in-Charge of the FBI Seattle office. “The FBI and its partners remain committed to investigating criminal activity underlying the broader financial crisis. This case sends a message to all those who exploit others for personal gain: fraud in the mortgage industry is unacceptable and will not be tolerated.”
“Mortgage fraud has done a lot of damage to our communities and to our individual concept of the American Dream,” said Kenneth J. Hines, the Special Agent in Charge of IRS Criminal Investigation in the Pacific Northwest. “This sentencing is a reminder of the serious consequences of mortgage fraud, and of the relentless pursuit that the IRS and our law-enforcement partners are making to hold accountable people whose greed got the better of them.”
“The sentence handed down today is proof positive to anyone who uses the US Mail to commit mortgage fraud: If you are a purveyor of fraudulent mortgage schemes and you use the US Mail, you will be caught and you will serve time in federal prison,” said Bradley Kleinknecht, Inspector in Charge US Postal Inspection Service.
Seven other defendants in this case have already been sentenced to prison terms for their roles in the fraud.
This case was brought as part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
The case was investigated by the FBI, the HUD Office of Inspector General (HUD-OIG), Internal Revenue Service Office of Criminal Investigation (IRS-CI), the Washington State Department of Financial Institutions and the United States Postal Inspection Service. The case was prosecuted by Assistant United States Attorneys Brian Werner and Arlen Storm.
Seattle Repeat Offender Sentenced to Ten Year Prison TermRead the Press Release
A repeat offender who was arrested dealing crack cocaine in downtown Seattle was sentenced today in U.S. District Court to 10 years in prison and three years of supervised release for possession of crack cocaine with intent to distribute, announced U.S. Attorney Jenny A. Durkan. DEVIN JENNINGS, 35, had been out of federal prison for only five months when he was arrested for dealing crack cocaine in the 1500 block of Second Avenue in downtown Seattle. Chief U.S. District Judge Marsha J. Pechman imposed two years of the sentence for supervised release violations on the sentence imposed for his 2004 conviction. In that case JENNINGS was sentenced to 100 months in prison for being a felon in possession of a firearm and possession of a firearm with an obliterated serial number. “Your addictions are controlling your decision making,” said Judge Pechman. “If drugs give you a hair trigger temper… you need to leave them behind.”
According to records filed in the case, Seattle Police began surveillance of the area around Second and Pike in downtown Seattle because of persistent street drug dealing. Officers observed JENNINGS selling what appeared to be crack cocaine to multiple customers on August 16, 2012. JENNINGS was arrested and resisted officers when they attempted to search him. JENNINGS was told he would be more thoroughly searched at the police station and was placed in the back of an empty patrol car. En route to the precinct, JENNINGS began kicking violently at the rear passenger door, bending it from its frame. JENNINGS threatened the officers as they removed him from the car. On the back seat and floorboards of the car officers discovered crack cocaine that JENNINGS had attempted to discard through the damaged car door. JENNINGS pleaded guilty in October 2012.
In asking that JENNINGS be sentenced to ten years in prison, prosecutors wrote to the court, that JENNINGS “has now been convicted of ten felony offenses and nearly twice as many non-felony offenses. In light of Jennings’ extremely long, and often times violent, criminal history, the United States believes that a substantial term of imprisonment is appropriate. We also believe that the seriousness of the offense also warrants a lengthy sentence. While the offense did not involve a large quantity of drugs, the amount of crack cocaine was substantial. Moreover, the fact that he returned to dealing drugs so quickly after his release from prison is concerning, as was his post-arrest behavior (i.e., damaging the patrol car, threatening the arresting officers, etc.). Unfortunately, Jennings continues to be a person the community needs to be protected from.”
The case was investigated by the Seattle Police Department and was prosecuted by Assistant United States Attorney Andrew Colasurdo.
Washington Man Sentenced to Ten Years for Sex TraffickingRead the Press Release
WASHINGTON – Joseph McDaniels, 43, of Shoreline, Wash., was sentenced today in U.S. District Court for interstate transportation of a 22 year old woman for purposes of prostitution. Judge James L. Robart sentenced McDaniels to 10 years in prison followed by three years of supervised release. Requirements during the supervised release include registration under the Sex Offender Registration and Notification Act, sexual deviancy evaluation and treatment, restrictions and monitoring of his use of computers and restrictions on contact with minors.
On Sept. 28, 2012 McDaniels pleaded guilty to interstate transportation for prostitution. The indictment alleged that between August 2011 and April 2012, McDaniels compelled the woman to engage in commercial sex acts through force, fraud and coercion and that McDaniels transported her between Washington state and Oregon for purposes of prostitution.According to court filings, McDaniels is a registered sex offender and had completed serving a 15-year sentence for a series of robberies in the mid-1990’s when he was released from state prison in early 2011. Only a few months later, McDaniels met and recruited the woman, preying upon her youth and drug addiction to coerce her into engaging in acts of prostitution.
According to court documents, McDaniels advertised the woman on Backpage.com, transported her to prostitution dates, took all of her money and supplied her with drugs. He threatened to harm her and her family, and in December 2011, McDaniels was arrested and later convicted in state court for assaulting the woman. He was arrested again in May 2012 after he had taken her to Portland, Ore., for prostitution, and then attempted to have the woman withdraw a state-issued no contact order against him.
“The exploitation and sexual abuse of a vulnerable young woman is intolerable and the Justice Department will continue to prosecute and seek justice for victims of such abhorrent crimes,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division.“We will continue our battle against human trafficking in western Washington,” said U.S. Attorney for the District of Washington Jenny A. Durkan. “We are fortunate to have committed local, state and federal officers working together to find and stop sexual predators like the defendant. Today the court ensured that other young women will not be exploited by him.”
The FBI’s Innocence Lost Task Force provides a rapid and effective investigative response to reported federal crimes involving the victimization of children. The task force strives to reduce the vulnerability of children to acts of sexual exploitation and abuse and strengthens the capabilities of federal, state and local law enforcement through training programs and investigative assistance.
This case was investigated by the Kent Police Department, Auburn Police Department, and the FBI’s Innocence Lost Task Force, and prosecuted by Assistant U.S. Attorney Ye-Ting Woo and Trial Attorney Daniel H. Weiss of the Civil Rights Division’s Human Trafficking Prosecution Unit.U.S. Attorney Reports to White Center Community on 'Hot Spot' InitiativeRead the Press Release
U.S. Attorney Jenny A. Durkan reported to the White Center Community today about law enforcement efforts to enhance the safety of the community. In the fall of 2011, White Center was the focus of a coordinated 'Hot Spot' initiative, designed to bring concerted law enforcement and community resources together in one geographic area.
The multi-agency, federal and local law enforcement operation, called “Center of Attention,” that ended in late October 2011, focused on violent offenders who used White Center to engage in criminal activity. The King County Prosecutor’s Office and the U.S. Attorney’s Office have been working hard with our law enforcement partners to bring those offenders to justice.
Among the 25 federal defendants, nearly all have now been convicted and sentenced. Two dozen have pleaded guilty or were convicted at trial, including the successful prosecution of an armed career criminal just before the end of the year. That defendant, Michael Gradney, faces a 15-year mandatory minimum sentence.
To date, 21 defendants have been sentenced to prison, including significant prison time for defendants selling large amounts of dangerous drugs and firearms. In fact, the total amount of prison time that judges have imposed on the federal Center of Attention defendants is nearly 1400 months, or 115 years.
Here are two of the press releases announcing significant sentences:
http://www.justice.gov/archive/usao/waw/press/2012/November/rosas-martinez.html
http://www.justice.gov/archive/usao/waw/press/2012/November/magna.htmlOf the 26 state prosecutions, some have resulted in guilty findings while many are still pending. State prosecutors are pursuing convictions and sentences in line with the goals of “Center of Attention.”
In addition to “Center of Attention” defendants, the owner of the former G.A.M.E. marijuana lounge pleaded guilty to a federal felony and was sentenced to six months of federal probation. Federal probation is very rigorous, with close supervision by a federal probation officer and the possibility of prison time for up to three years if the defendant does not follow the probationary conditions. Judge Ricardo Martinez indicated he would be watching very closely to ensure the owner of G.A.M.E. did not violate any conditions of his probation.
And, just last week, as part of our ongoing enforcement efforts, prosecutors in our office convicted a man who committed an armed robbery of the Chase bank located at SW 100th Street and 16th Avenue.
Your can read the U.S. Attorney's Letter to the community here:
white_center_ltr.pdfTwo Southwest Washington Men Sentenced to Long Prison Terms for Methamphetamine TraffickingRead the Press Release
Two Southwest Washington men who trafficked more than three pounds of highly pure methamphetamine were each sentenced today to more than 10-years in prison, announced U.S. Attorney Jenny A. Durkan. STEVEN MCCRACKEN, 32, of Kelso, Washington and JESUS RAMIREZ-LUCIO, 33, of Washougal, Washington were each sentenced to 14 years in prison and five years of supervised release. The men were convicted of conspiracy to distribute methamphetamine in October 2012, following a six day jury trial. RAMIREZ-LUCIO was also convicted of distribution of methamphetamine, and MCCRACKEN was convicted of possession of methamphetamine with intent to distribute. At sentencing U.S. District Judge Ronald B. Leighton said, “Methamphetamine destroys families. The community has a right to protect itself from those who would ply them with methamphetamine.”
According to records filed in the case and testimony at trial, a person working with police alerted members of the Clark Vancouver Regional Drug Task Force that MCCRACKEN and RAMIREZ-LUCIO were planning the drug deal. The men met at a Kelso, Washington home on March 25, 2011, where MCCRACKEN paid RAMIREZ-LUCIO more than $34,000 for three pounds of methamphetamine. After the drug deal, both men were followed by law enforcement as they left the house. Police pulled MCCRACKEN over on I-5. As the law enforcement officer approached the driver’s window, MCCRACKEN pulled out into traffic, leading police on a chase at speeds up to 90 MPH. On the Route 432 bridge, MCCRACKEN pulled to the side of the road, left the car running and threw bags of methamphetamine into the Cowlitz River. MCCRACKEN was arrested, and other officers retrieved bags of meth floating in the river. Some of the meth was damaged, but one of the bags was intact. RAMIREZ-LUCIO was arrested as he traveled back to Vancouver with more than $34,000 in cash in a shopping bag in his car. In a search of RAMIREZ-LUCIO’s home police recovered four firearms and a marijuana grow with more than 700 plants.
MCCRACKEN has been convicted three prior times in state court for distributing methamphetamine: Cowlitz County Superior Court, 1999; Clark County Superior Court 2002 and Josephine County Circuit Court (Oregon) 2006.
The case was investigated by the FBI’s Safe Streets Task Force, which includes officers from the FBI and the Vancouver Police Department, the Cowlitz-Wahkiakum Narcotics Task Force, which includes officers from the Kelso Police Department and the Cowlitz County Sheriff’s Office, among others, and the Clark Vancouver Regional Drug Task Force.
The case was prosecuted by Assistant United States Attorneys Brian Werner and Michael Lang.
Enumclaw Financial Advisor Sentenced to Prison for Stealing Millions from ClientsRead the Press Release
An Enumclaw financial advisor whose crimes were uncovered when he tried to collect a half million dollar death benefit on a client who was still living, was sentenced today to seven years in prison, three years of supervised release, and restitution in the amount of $5,705,023.24, announced U.S. Attorney Jenny A. Durkan. AARON TRAVIS BEAIRD, 39, was arrested in July 2012, after he faked his suicide, traveled to Scotland for a week, and then returned to Sea-Tac airport where he was taken into federal custody for investigation of mail fraud and wire fraud. BEAIRD pleaded guilty in August 2012. At sentencing U.S. District Judge Ricardo S. Martinez said, “By stealing the money you took from the victims, you stole their hopes and dreams, but most importantly, you stole their trust.”
“These crimes were a betrayal of trust,” said U.S. Attorney Durkan. “Mr. Beaird’s friends, relatives and members of his church thought he was safeguarding their families’ future. Instead, he used their money to live well, turning their dreams into nightmares.”
According to records filed in the case, for about ten years BEAIRD held himself out as a financial advisor to friends and family and members of his church, the Church of Jesus Christ of Latter-Day Saints. BEAIRD was trusted as a leader of the church. But instead of investing conservatively in annuities and life insurance products, BEAIRD engaged in a scheme to defraud investors by falsely representing those annuity products and life insurance policies and in some cases appropriating annuity payments and policy premiums directly to his personal use. BEAIRD created false account statements that he provided to his clients making them believe their funds were safely invested and would be available when they needed them.
In the fall of 2011, BEAIRD took $500,000 from a client’s investment account without authorization, and used some of it to purchase a life insurance policy on the client. In June 2012 BEAIRD filed to receive a death benefit on the policy even though the insured was still living. The insurance company confronted BEAIRD and he disappeared from Enumclaw. Shortly after his disappearance, his car was found near Deception Pass on Whidbey Island with a suicide note inside. He had also mailed letters to several clients, confessing his fraud and advising them of his intent to take his own life. Further investigation revealed BEAIRD had taken a taxi to Sea-Tac and flown to Scotland. He returned a week later and was arrested. The loss amount of his scheme is estimated at $5.7 million.
Victim statements in the case describe how BEAIRD’s theft has robbed people of not only their life’s savings, but their trust in others. Some write about having to live in a travel trailer because they have no funds to finish building their home or have no money for their retirement or children’s education. “The sense of betrayal and distrust fostered by Mr. Beaird’s actions cannot be ignored. This pervasive reality is matched by the deep financial losses incurred with little regard for what those losses meant to the victims. In most instances, each victim’s financial well-being has been irreparably damaged. Life savings were wiped out. For some, the hope of a secure retirement has been replaced with despair and uncertainty, with little time to replace stolen funds. Taken together, the emotional and financial damages inflicted by Mr. Beaird through his fraudulent scheme are overwhelming,’ prosecutors wrote in their sentencing memo.
The case was investigated by the Federal Bureau of Investigation with assistance from the Washington State Office of the Insurance Commissioner and the City of Enumclaw Police Department.
The case was prosecuted by Assistant United States Attorney Jim Oesterle.
Drug Trafficker who Tried to Hide Behind ‘Medical Marijuana Shield’ Sentenced to PrisonRead the Press Release
The owner of a medical marijuana dispensary that billed itself as a ‘cooperative’ when it really was just a for profit drug dealing enterprise, was sentenced today to six years in prison and four years of supervised release for conspiracy to distribute marijuana and conspiracy to commit money laundering. CRAIG DOUGLAS DIEFFENBACH, 61, an owner of Seattle Cannabis Cooperative with locations in the Rainier Valley and Greenwood, pleaded guilty in August 2012. His co-defendant, and co-owner, Jing Jing Mo, 31, will be sentenced next month. At today’s sentencing Chief U.S. District Judge Marsha J. Pechman said she rejected the suggestion that he did this to help people, rather she said he saw selling marijuana as a business opportunity.
“We have made clear that truly sick people and their caregivers will not be targets of our enforcement efforts. This defendant was neither,” said U.S. Attorney Jenny A. Durkan. “A green cross in the front window does not grant a license to sell pounds of drugs out the back door.”
According to records filed in the case, DIEFFENBACH admits operating the marijuana stores for profit, selling pound quantities of marijuana to people who presented no medical authorization card. In her plea agreement, Mo admitted offering to sell 25 pounds of marijuana for distribution across the country. The couple also admitted laundering funds from the sale of marijuana to pay to modify homes for marijuana production. The pair were tied in to other drug traffickers including one distributing substantial amounts of ecstacy."Marijuana traffickers continue to have a stranglehold on this state,” said Drug Enforcement Administration Special Agent in Charge Matthew G. Barnes. "DEA will continue to do what it can to loosen their grip.”
The case was investigated by the Drug Enforcement Administration and was prosecuted by Assistant United States Attorney Vince Lombardi.
Tenino Elementary School Teacher Charged with Possession of Child PornographyRead the Press Release
A teacher at Tenino Elementary School is in custody today charged with possession of child pornography, announced U.S. Attorney Jenny A. Durkan. JAMES DONALD MOBLEY, 46, was arrested yesterday on a criminal complaint charging him with receipt and possession of child pornography. MOBLEY is also active as a volunteer in Boy Scouts and as a private tutor. The U.S. Postal Inspection Service and Tenino Police Department are investigating the case. Parents who are concerned about contact their children may have had with MOBLEY are asked to call Tenino Police at 360-264-2626.
According to records filed in the case, the U.S. Postal Inspection Service has been investigating an international company that distributed child pornography through the mails and via download to personal computers. In May 2011, foreign law enforcement executed a search of the business and seized hundreds of child pornography DVDs and business records. An analysis of those records revealed that on multiple occasions between February 2009 and January 2011, MOBLEY had purchased suspected child pornography from the company. In a search of MOBLEY’s home, law enforcement seized a computer hard drive and additional DVDs of child pornography.
MOBLEY remains detained at the Federal Detention Center at SeaTac, Washington pending a detention hearing on Tuesday January 22, 2013. 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 Tenino Police Department and the U.S. Postal Inspection Service (USPIS).
The case is being prosecuted by Assistant United States Attorney Marci Ellsworth.
Registered Sex Offender Sentenced for Possession of Child PornographyRead the Press Release
A Des Moines, Washington, man was sentenced this afternoon in U.S. District Court in Seattle to ten years in prison for possession of child pornography, announced U.S. Attorney Jenny A. Durkan. GREGORY SEAN O’NEALL, 51, a convicted sex offender originally from Houston, Texas, was arrested in June 2012. He pleaded guilty in September 2012. Chief U.S. District Judge Marsha J. Pechman also sentenced O’NEALL to lifetime supervised release including sex offender treatment and the use of special software to monitor his computer.
According to records in the case, O’NEALL came to the attention of the Internet Crimes Against Children Task Force because of his postings on an online file sharing site. A Homeland Security Investigation agent working undercover on the site observed sexually explicit images of children being distributed from the internet protocol address at O’NEALL’s residence. The agent engaged O’NEALL in an online chat. O’NEALL discussed various photographs. Further investigation revealed that O’NEALL had posted other pictures in albums on a web site. More than 100 of the photos had been surreptitiously taken of young girls shopping with their families at retail stores. The ‘up-skirt’ photos focused on the underwear area of the young girls, but were not child pornography. Prior to his arrest O’NEALL worked for a contractor providing food samples at a Costco store in Federal Way, Washington. Some of the pictures appear to have been taken at that store.
O’NEALL has a prior sex offense conviction for molesting a 6-year-old girl who was left in his care. On December 2, 1991, he was convicted in Fort Worth, Texas, for Indecency with a Child (Contact), and sentenced to 7 years of probation.
In asking for a 135 month sentence prosecutors wrote to the court, “A substantial period of imprisonment is the only effective means to protect our community from the defendant, and it is also a fitting and just sanction for the harm he has caused.”
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.projectsafechildhood.gov.
The case was investigated by ICE’s Homeland Security Investigations (HSI) as part of the Internet Crimes Against Children Task Force (ICAC).
The case was prosecuted by Assistant United States Attorney Jerrod Patterson, who coordinates Project Safe Childhood for the U.S. Attorney’s Office.
Lynnwood Company, Owner and Executives Indicted for Trafficking in Counterfeit GoodsRead the Press Release
A Lynnwood, Washington electronics company, its owner and two company executives, and a Chinese company and its representative were indicted today in U.S. District Court in Seattle for conspiracy to traffic in counterfeit goods, announced U.S. Attorney Jenny A. Durkan. According to the indictment, CONNECTZONE.COM LLC had websites that advertised and sold computer networking products including products bearing trademarks owned by U.S. companies Cisco, but the investigation revealed the company obtained its products from multiple foreign suppliers of counterfeit goods including a Chinese firm, XIEWEI ELECTRONICS.
“Protecting the intellectual property of American companies is critical to job growth and economic recovery – especially in our high tech industries,” said U.S. Attorney Durkan. “I commend the dedicated investigators who uncovered this scheme.”
Three of the individuals charged will appear in court tomorrow, January 18, 2013. The CONNECTZONE.COM LLC defendants include: DANIEL OBERHOLTZER, 50, of Lynnwood, the company owner; WARREN LANCE WILDER, 46, of Auburn, the sales manager; and EDWARD VALES, 31, of Seattle, the production manager. SHENZHEN XIEWEI ELECTRONIC LTD, headquartered in Shanghai, China and its representative MAO MANG, aka “BOB MAO” are also indicted.
The indictment alleges that as early as 1997, while the company was operating as Electro Products, Incorporated, it was distributing counterfeit equipment manufactured in China. The indictment alleges that DANIEL OBERHOLTZER, LANCE WILDER and EDWARD VALES would advise BOB MAO and XIEWEI ELECTRONICS and other Chinese companies regarding how to manufacture products that would look like genuine Cisco trademarked goods. Some of the goods would be labeled “samples” when shipped to the U.S. to try to deceive U.S. Customs officials. The U.S. based conspirators falsely advertised the counterfeit goods as genuine and offered it for sale at a much lower price than genuine Cisco equipment. The indictment describes the various emails sent between the conspirators as they ran their scheme. In addition to the conspiracy count, the indictment also charges two counts of mail fraud and four counts of trafficking in counterfeit goods.
“Counterfeiting high dollar goods can be very lucrative for enterprising criminals,” said Brad Bench, special agent in charge of HSI Seattle. “Their illicit activities ultimately come at the expense of trademark owners and consumers. They don’t contribute to research and development and the knockoffs they sell generally don’t match the quality and safety of genuine items.”
Conspiracy to traffic in counterfeit goods is punishable by up to ten years in prison and a $2 million fine; Mail fraud is punishable by up to 20 years in prison and trafficking in counterfeit goods is punishable by up to 10 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.
This case is being investigated by the Seattle-Tacoma Border Enforcement Security Task Force (BEST) led by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigation (HSI) with the Seattle Police Department, the Port of Seattle Police Department and assistance from U.S. Customs and Border Protection Office of Field Operations (CBP OFO). BEST Seattle is comprised of full time members from HSI; CBP OFO; the U.S. Secret Service; the Port of Seattle Police Department; the U.S. Coast Guard Investigative Service; and the FBI. The BEST investigates smuggling and related crimes and combats criminal organizations seeking to exploit vulnerabilities at the Seattle and Tacoma seaports and adjacent waterways.
The case is being prosecuted by Assistant United States Attorney Norman Barbosa.
California Rap Artist Under Indictment Rearrested for Continuing Credit Card FraudRead the Press Release
A Southern California rap artist who performs under the name “Guerilla Black,” was arrested this morning following allegations he committed new financial frauds while he was on pretrial release, announced U.S. Attorney Jenny A. Durkan. CHARLES TONY WILLIAMSON, 33, of Torrance, California, was taken into custody this morning following a lengthy investigation by the Manhattan Beach Police Department and the U.S. Secret Service (USSS) Electronic Crimes Task force in Seattle and USSS Los Angeles Fraud Task Force. On June 20, 2012, WILLIAMSON was charged with 22 counts of various felony offenses including Conspiracy to Access Protected Computers to Further Fraud, to Commit Access Device Fraud, and to Commit Bank Fraud; Accessing a Protected Computer without Authorization to Further Fraud; Access Device Fraud; Bank Fraud; and Aggravated Identity Theft. The new filing alleges WILLIAMSON continued to use illegally obtained credit card numbers for fraud, even after his indictment in the Western District of Washington.
WILLIAMSON is scheduled to appear in U.S. District Court in the Central District of California today.
According to records filed in the case, Manhattan Beach Police became aware of WILLIAMSON’s ongoing frauds in mid-November 2012. Their investigation revealed that WILLIAMSON was using different ‘runners’ in the Los Angeles area to use counterfeit credit cards to purchase gift cards at a variety of stores. The runners kept some of the gift cards but allegedly returned the bulk of the ill-gotten gain to WILLIAMSON. Working with the U.S. Secret Service Electronic Crimes Task Force in Seattle and Los Angeles, investigators were able to trace the numbers on some of the seized counterfeit cards, discovering that many of the numbers were issued by foreign banks: Corner Banca, (Switzerland); Guaranty Trust Bank (Nigeria); National Westminster Bank (England); and Poste Italiante (Italy). Because the banks are overseas, it can take longer for the fraud to be detected and the card numbers cancelled. Evidence uncovered in the case revealed WILLIAMSON was purchasing the credit card data from various “carding” sites operated by criminals in Eastern Europe.
WILLIAMSON is already indicted for a scheme where he purchased that same type of information from two co-conspirators who have already pleaded guilty in U.S. District Court in the Western District of Washington. David Benjamin Schrooten, 21, a Dutch citizen arrested in Romania, where he operated a carding website, is scheduled for sentencing next month. Christopher A. Schroebel, 21, of Keedysville, Maryland, who hacked into point of sale systems to steal credit card information was sentenced to seven years in prison in August 2012.
The case is being investigated by the Manhattan Beach Police Department, the U.S. Secret Service Electronic Crimes Task Forces in Seattle and the U.S. Secret Service Los Angeles Fraud Task Force (LAFTF). The Seattle Police Department is a key part of the Seattle Task Force. The case is being prosecuted by Assistant United States Attorney Kathryn Warma.
Mortgage Fraud Co-Schemers Sentenced in Case that Crippled Pierce Commercial BankRead the Press Release
Three Pierce County women who played important roles in a mortgage fraud scheme that crippled now defunct Pierce Commercial Bank were sentenced yesterday in U.S. District Court in Tacoma, announced U.S. Attorney Jenny A. Durkan. All three of the women worked for years with scheme leader Shawn Portmann, whose fraudulent loans resulted in losses of more than $10 million. Portmann will be sentenced later this month. U.S. District Judge Benjamin H. Settle will determine restitution later this year.
Loan Underwriter JEANETTE R. SALSI, 55, of Bonney Lake, Washington was sentenced to seven months in prison, four months of home confinement and three years of supervised release for conspiracy. In 2004, SALSI followed Portmann from a different mortgage lender to PC Bank Home Loans (a subsidiary of Pierce Commercial Bank.) Portmann paid SALSI 60 percent more than she made at her prior employer and she became the primary underwriter of loans originated by Portmann. SALSI approved fraudulently generated loan applications despite the fact that they were filled with fraudulent documents. SALSI knew the files contained false statements and phony documents regarding the applicant’s employment, debts, current residence and plans to reside in the home. SALSI’s sign-off meant the loans were approved and sold to other financial institutions and the FHA. After Portmann was fired at PC Bank Home Loans, SALSI followed him to two other mortgage companies.
Personal Assistant ALICE LORRAINE BARNEY, 54, of Graham, Washington was sentenced to two months in prison, four months of electronic home confinement, 100 hours of community service and three years of supervised release. BARNEY was Portmann’s long-time assistant who created and inserted some of the false documents into loan files. BARNEY participated in submitting at least 60 fraudulent loan files. After Portmann was fired from PC Home Loans, BARNEY followed him to his three next employers.
Pierce Commercial Vice President and Residential Lending Manager SONJA LIGHTFOOT, 53, of Tacoma, Washington was sentenced to one month in prison, four months of home confinement, 60 hours of community service and three years of supervised release for her role in the conspiracy. LIGHTFOOT joined the bank in 2002, before Portmann began his scheme. Between 2004 and 2009 it was LIGHTFOOT’s job to lock the loans and sell them on the secondary market to other larger banks. LIGHTFOOT knew that some of the loans contained false statements from borrowers but sold them anyway. When the fraud was discovered the loans reverted back to Pierce Commercial Bank. The risk that additional loans would revert back to the bank ultimately forced the closure of the bank.
“Mortgage fraud can turn the American Dream of homeownership into a nightmare for our communities. Law enforcement will not sit idly by when greed causes professionals to abandon their integrity and become fraudsters,” said Kenneth J. Hines, Special Agent in Charge of IRS Criminal Investigation in the Pacific Northwest.
From 2004 to 2008, Shawn Portmann closed almost $1 billion in loans and he earned over $1.7 million per year. A review of a sample of conventional and FHA loans revealed that Portmann and his staff closed over 300 loans with false and fraudulent information. More than half of these loans have defaulted or otherwise caused loss to Pierce Commercial Bank, secondary investors, and/or the FHA, resulting in an estimated loss of $10 million.
Shawn Portmann is scheduled for sentencing January 28, 2013. At that time Judge Benjamin H. Settle will set a restitution amount, a share of which will be owed by all the defendants in the conspiracy.
The case was investigated by the FBI, the HUD Office of Inspector General (HUD-OIG), Internal Revenue Service Office of Criminal Investigation (IRS-CI) and the United States Postal Inspection Service. The case is being prosecuted by Assistant United States Attorneys Brian Werner and Arlen Storm.
Former Des Moines, Washington Resident Sentenced to 32 Years in Prison for Attack on Guard at Federal Detention CenterRead the Press Release
A 22-year-old Des Moines, Washington man will spend 32 years in prison for the January 2012 beating of a prison guard, and for the forced labor of two juveniles in the sex trades, announced U.S. Attorney Jenny A. Durkan. SABIR SHABAZZ was in federal custody for sex trafficking two 13-year-old girls, when on January 3, 2012 he and another inmate assaulted a guard at the Federal Detention Center at SeaTac. SHABAZZ beat the guard with a pipe. The men claimed the attack was an escape attempt, but video of the assault shows it was just a brutal attack. Other inmates intervened in the assault, likely saving the guard’s life. At sentencing U.S. District Judge James L. Robart said the attack was carefully planned… “the blows were done to injure.“
“This brutal assault on a prison guard rightfully earned this defendant a lengthy term behind bars,” said U.S. Attorney Jenny A. Durkan. “He preyed on vulnerable 13-year-old girls while on the streets and viciously attacked one of the people we trust to keep our prisons and communities safe and secure. This conduct will not be tolerated.”
According to records filed in the case, in September 2010, SHABAZZ was arrested in connection with the sex trafficking of two 13-year-old girls. SHABAZZ posted ads featuring the girls on backpage.com and with a co-conspirator took the earnings the young girls made in the sex trades. SHABAZZ was being held on the sex trafficking charges when he assaulted the guard at the federal detention center. The guard suffered significant head wounds, which were nearly fatal. He has required surgery and significant rehabilitation. He likely will never be able to return to work as a prison guard.
In their sentencing memo prosecutors wrote, “It is hard to imagine a worse set of offenses - an assault calculated at killing a defenseless jail guard and involvement in the commercial sexual exploitation of two 13 year old girls…. Both girls were runaways and looking for shelter. Unfortunately, they sought help from two people, including SHABAZZ, who viewed the two girls as tools to make money without regard for their well being.”
The Tacoma Police Department and the FBI’s Innocence Lost Task Force investigated the sex trafficking case; the FBI and Federal Bureau of Prisons (BOP) and the Washington State Patrol Crime Scene Response Team (CSRT) investigated the prison assault. The cases against SHABAZZ are being prosecuted by Assistant United States Attorneys Bruce Miyake and Mike Lang.
Tulalip Tribal Member Charged in Death of ToddlerRead the Press Release
An enrolled member of the Tulalip Tribes was charged today with second degree murder and two counts of criminal mistreatment related to the October, 2012 death of her young daughter and the neglect of her second daughter, announced U.S. Attorney Jenny A. Durkan. CHRISTINA D. CARLSON will make her initial appearance in U.S. District Court in Seattle at 2:30 today.
CARLSON was transferred to federal custody this morning and the criminal complaint was unsealed. The complaint describes how on October 8, 2012, emergency crews were called to an address on Marine Drive NE on the Tulalip Tribal Reservation where CARLSON was performing CPR on her 19-month-old daughter who was unresponsive on a blanket on the ground. The child was unconscious, not breathing and covered in urine and feces. A second child, a 33-month old girl, was found strapped in her car seat in a nearby vehicle. The child was pale, unresponsive and covered in urine and feces. The girl was transported to the hospital and later recovered. The 19-month old child died and the Snohomish County Medical examiner classified the manner of death as homicide by parental neglect. According to the report the child was malnourished and dehydrated, weighing only 19 pounds. The child’s skin in the diaper area was excoriated and infested with maggots. Her hair was infested with lice.
The investigation revealed that CARLSON had been living in the car with the girls on the property since mid-September. On October 8, 2012 CARLSON had left the girls in the car while she went to use a phone at the residence on the property. CARLSON was away from the car for more than an hour by some estimates. About 20 minutes after the neighbors told her to go back to the car and her children, CARLSON returned asking them to call 9-1-1 because the youngest child was unresponsive.
Second Degree Murder is punishable by up to life in prison. Criminal mistreatment 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 Tulalip Tribal Police and the FBI.
Lummi Nation Tribal Members Sentenced to Prison for Stabbing DeathRead the Press Release
Two Lummi Nation members who fought with a third Tribal member, with one of them stabbing him to death, were sentenced today in U.S. District Court in Seattle to prison terms for involuntary manslaughter, announced U.S. Attorney Jenny A. Durkan. JOHNATHAN CASEY PHAIR, 25, was sentenced to five years in prison and three years of supervised release, and DEZI-REY THOMAS LOUIE, 22, was sentenced to four years in prison and three years of supervised release. The two pleaded guilty in September 2012 to the December 17, 2011, stabbing death of Lamar Felipe James at a home on Lummi Tribal land. At today’s sentencing U.S. District Judge Richard A. Jones said, “This was a brutal and devastating crime. And what caused both of you to be involved? Drugs.”
According to the plea agreements, LOUIE and PHAIR went to the home on Lummi Tribal land to purchase drugs. LOUIE brought some electronics to the house to sell or exchange for drugs. LOUIE met with James in a back room of the home. The two men got into a physical fight. PHAIR rushed into the room with a butcher knife and stabbed James multiple times. One of the wounds severed an artery. PHAIR and LOUIE ignored James’ serious wounds and failed to call for help. Instead they fled the home and tried to conceal their guilt by burning their clothes. PHAIR was arrested three days after the attack. LOUIE was arrested on December 24, 2011.
The case was investigated by the Lummi Police and the FBI. The case was prosecuted by Assistant United States Attorneys Susan Roe and J. Tate London. Ms. Roe and Mr. London serve as Tribal Liaisons for the United States Attorney’s Office.
Monroe Resident Sentenced to Long Prison TermRead the Press Release
A Monroe, Washington man with a lengthy criminal history was sentenced today in U.S. District Court in Seattle to nine years in prison and five years of supervised release for conspiracy to distribute controlled substances and counterfeiting, announced U.S. Attorney Jenny A. Durkan. CHRISTOPHER FRICK, 38, is one of 34 people indicted in a drug trafficking conspiracy involving significant quantities of heroin, methamphetamine, and firearms, including military-style assault rifles and sniper rifles which were bound for Mexico. FRICK bought and sold meth from other co-conspirators and “washed” and passed counterfeit bills in the Monroe area. U.S. District Judge Robert S. Lasnik imposed the sentence.
According to records filed in the case, the investigation of the Berrelleza-Verduzco Drug Trafficking Organization began in 2011, and FRICK was heard on the court authorized wiretap, arranging drug deals. FRICK was ordering meth from the group, even as he was being fitted with a GPS ankle bracelet by an Everett bail bondsman. FRICK was also under investigation by the U.S. Secret Service for “washing” a $5 bill and reprinting it as a $50 bill and using the bill at a Monroe convenience store. On March 29, 2012, FRICK’s residence was searched as part of the takedown of the drug trafficking ring. Law enforcement recovered both methamphetamine and counterfeit bills at his home. In the course of the investigation law enforcement seized more than 20 pounds of heroin, more than 30 pounds of methamphetamine, more than $190,000 in cash and 31 firearms – including 10 assault style rifles.
FRICK has 31 prior convictions including burglary, escape, drug possession, various theft offenses, vehicle theft and forgery/fraud crimes. FRICK has a prior federal felony conviction related to mail theft in 1996. Following his federal sentence FRICK had additional arrests and convictions for methamphetamine possession and forgery. Prosecutors requested that Judge Lasnik recommend drug treatment for FRICK while serving his prison sentence.
FRICK is one of the first defendants in this case to plead guilty and be sentenced. Others are scheduled for trial later this year.
This was an Organized Crime and Drug Enforcement Task Force (OCDETF) investigations, providing supplemental federal funding to the federal and state agencies involved. The investigation was led jointly by the Drug Enforcement Administration, Homeland Security Investigation and Alcohol, Tobacco, Firearms & Explosives and the Snohomish Police Department. Additional participating agencies: Lake Stevens Police Department, Eastside Narcotics Task Force, Snohomish Regional Drug Task Force, Skagit County Interlocal Drug Enforcement Unit, Everett Police Department, Monroe Police Department, Marysville Police Department, Seattle Police Department, Snohomish County Police Department, Washington State Patrol, U.S. Customs and Border Protection’s Offices of Field Operations and Border Patrol.
The case is being prosecuted by Assistant United States Attorneys Vince Lombardi, Nicholas Brown, and J. Tate London.
Federal Employee Charged with Accessing Child PornographyRead the Press Release
An employee of the Social Security Office of Disability Adjudication and Review was arrested today on a criminal complaint charging him with accessing child pornography, announced U.S. Attorney Jenny A. Durkan. THOMAS JOSEPH BARRETT, 49, of Lynnwood, Washington was taken into custody at his place of work. Search warrants were executed at his home and workplace. BARRETT is employed as Senior Case Technician. SSA immediately placed BARRETT on indefinite leave. BARRETT will make his initial appearance in U.S. District Court in Seattle at 2:30 today.
According to the complaint filed in the case, SSA obtained evidence of inappropriate internet use by BARRETT during work hours in November 2012 and immediately initiated an investigation. The Social Security Administration Office of Inspector General (SSA-OIG) investigated BARRETT’s computer use, reviewing his internet history and examining his computer’s hard drive. The analysis produced evidence that BARRETT had viewed child pornography using the computer. In addition, some of the website analysis revealed that BARRETT had accessed news stories about the penalties for possessing and distributing child pornography. According to SSA, SSA’s network and data were never compromised.
Accessing child pornography with intent to view is punishable by up to ten years in prison and a $250,000 fine.
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 Social Security Administration Office of Inspector General, Homeland Security Investigation and the Washington State Patrol.
The case is being prosecuted by Special Assistant United States Attorney Seth Wilkinson and Assistant United States Attorney Marci Ellsworth. Mr. Wilkinson is an attorney with the Social Security Administration specially designated to prosecute cases in federal court.
Owner of Tacoma Western Clothing Store Sentenced to Ten Years in Prison for Heroin Distribution ConspiracyRead the Press Release
A Puyallup man who owns a western wear store in Tacoma was sentenced yesterday to ten years in prison for conspiracy to distribute heroin, announced U.S. Attorney Jenny A. Durkan. MARCOS ARAUJO URRIETA, 47, was arrested on September 17, 2011, following an investigation of heroin trafficking in the Tacoma area. ARAUJO URRIETA pleaded guilty in September 2012. U.S. District Judge Benjamin H. Settle imposed the mandatory minimum ten year sentence in the case.
According to records filed in the case, ARAUJO URRIETA owned Zapateria Tarascos located at 924 E. 72nd Street in Tacoma. The store sold western clothing including boots and other merchandise. Law enforcement served a search warrant at a stash house in Tacoma on September 17, 2011. At the house was a co-conspirator who had been sent by ARAUJO URRIETA to pick up six to eight kilos of heroin for him to distribute from his store. Law enforcement officers then searched the store and found about four pounds of heroin and $250,000 in cash. ARAUJO URRIETA admitted the cash was from drug sales as well as the sales of some store merchandise.
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 Lakewood Police Department as the lead agency, and supported by the Pierce County Sheriff’s Office, and other member agencies of the Tahoma Narcotic Enforcement Team (TNET). The Drug Enforcement Administration (DEA) Tacoma Resident Office also participated in the investigation.
The case was prosecuted by Assistant United States Attorneys Matthew Thomas, Marc Perez, and Jeffrey Backhus.