District of Arizona

PHOENIX – Yesterday, U.S. District Judge David G. Campbell sentenced Harold Halman, II, 58, and Alexander Schaap, 62, to 36 and 30 months in prison, respectively. Both must serve 3 years of supervised release following their prison sentences.  The Court also ordered them to pay $4.5 million in restitution. Craighton Boates, 44, New River, Ariz., was also sentenced to 5 years’ probation.

     Evidence showed that Halman, Schaap, and Boates were principals in a now defunct company known as Global Medical Equipment of Arizona (“GMEA”). They defrauded the Small Business Administration, Metro Phoenix Bank, and Republic Bank of Arizona by submitting loan applications containing false information that included the percentage of GMEA ownership, the use of the loans for pre-existing debts, forged emails and letters misrepresenting that down payments had been made by the principals, and a concealed kickback. The defendants defaulted on nearly $4.5 million in loans.

     "These loans should have been granted to qualified small business owners. Instead the defendants effectively denied an opportunity to legitimate small businesses deserving access to capital,” stated Elizabeth A. Strange, First Assistant U.S. Attorney for the District of Arizona. “The United States Attorney’s Office will continue to aggressively investigate and seek criminal prosecution or civil remedies when fraud is perpetrated by corrupt borrowers who attempt to obtain financial assistance through the SBA’s guaranteed loan programs. We would like to thank the SBA-OIG, IRS-CID, and the FBI for their thoroughness and dedicated professionalism throughout this investigation."

     “SBA’s 7(a) program is intended to provide capital to grow the nation’s small businesses not line one’s pockets,” said Acting Inspector General Hannibal “Mike” Ware.  “Schemes to unjustly enrich oneself will be rooted out, and those responsible will be brought to justice.  I want to thank the U.S. Attorney’s Office for their dedication and leadership throughout this investigation.”

     “A sophisticated scheme involving millions in illegally obtained loans does not happen without forethought and criminal intent.  The defendants made false statements and omissions to the banks who relied on them to be truthful,” stated IRS-Criminal Investigation Special Agent in Charge Ismael Nevarez, Jr. “We hope this prosecution discourages others from taking the path of fraud in their business ventures."

     "These three individuals knowingly executed a scheme to defraud banks out of more than $6 million then conspired to launder the money," said Michael DeLeon, Special Agent in Charge of the FBI Phoenix Field Office. "The guilty pleas of these individuals should send a message. The FBI will continue to work alongside our law enforcement partners to investigate these types of crimes and protect the community from schemes to defraud financial institutions insured by the FDIC."

     The investigation in this case was conducted by the U.S. Small Business Administration, Office of Inspector General, Internal Revenue Service-Criminal Investigation Division and Federal Bureau of Investigation.  The prosecution was handled by Kevin M. Rapp Assistant United States Attorney, District of Arizona, Phoenix.

 

CASE NUMBER:                      CR-01015/00946/010159 DGC-1         

RELEASE NUMBER:              2018-039_ Halman etal

 

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For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/

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PHOENIX - Yesterday, Fany Madrigal-Lopez, 45, of Peoria, Ariz., pleaded guilty to the distribution of fentanyl resulting in death and conspiracy to distribute and to possess with the intent to distribute controlled substances.  A conviction for the distribution of fentanyl resulting in death carries a minimum-mandatory sentence of 20 years’ imprisonment and a maximum sentence of life imprisonment. 

     Three of Madrigal-Lopez’s adult children also pleaded guilty to different controlled substance offenses.  Paulina Madrigal-Macias, 26, of Hawaii, pleaded guilty to conspiracy to distribute and to possess with the intent to distribute controlled substances.  Adolfo Macias-Madrigal, 27, of Peoria, Ariz., and Luis Angel Macias, 21, of Phoenix, Ariz., both pleaded guilty to unlawful use of a communications facility as part of a drug conspiracy. 

     According to publicly-filed court documents, between the fall of 2015 and August 2017, Fany Madrigal-Lopez obtained quantities of oxycodone, blue “M-30” pills that looked like oxycodone but contained fentanyl, cocaine, and alprazolam from others in Arizona.  The four defendants then sold these substances to customers.  On Nov. 16, 2016, Fany Madrigal-Lopez sold blue “M-30” pills to a customer who later died after consuming them.

     Sentencing is set before the Honorable Douglas L. Rayes, United States District Judge, on June 19, 2018 for Adolfo Macias-Madrigal and Luis Angel Macias, on July 2, 2018, for Fany Madrigal-Lopez, and on July 9, 2018 for Paulina Macias.

     The investigation in this case was conducted by the Drug Enforcement Administration and the Internal Revenue Service-Criminal Investigation, who were assisted by the Peoria Police Department and the Arizona National Guard.  The prosecution is being handled by Carolina Escalante Konti, D.J. Pashayan, and Jeffrey Borup, Assistant U.S. Attorneys, District of Arizona, Phoenix.     

 

CASE NUMBER:           CR-17-1110-PHX-DLR

RELEASE NUMBER:    2018-040_Madrigal-Lopez et al.

 

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For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/

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TUCSON, Ariz. – On Monday, April 16, 2018, Jaime Joshua Benitez, Jr., 28, of Tucson, Ariz., was sentenced by U.S. District Judge Rosemary Marquez to 30 months’ imprisonment.  Benitez had previously pleaded guilty to assault with the use of a dangerous weapon.  

     Benitez assaulted an acquaintance, a member of the Pascua Yaqui Indian Tribe, on the Pascua Yaqui Indian Reservation by striking him on the head with a simulated gun during a robbery of the victim.

     The investigation in this case was conducted by the Pascua Yaqui Police Department. The prosecution was handled by Raquel Arellano, Assistant U.S. Attorney, and Kendrick A. Wilson, Special Assistant U.S. Attorney, District of Arizona, Tucson.

CASE NUMBER:          CR-17-00754-TUC-RM (LAB)    

RELEASE NUMBER:    2018-037_Benitez

 

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TUCSON, Ariz. – Today, Jose Pastrano-Rios, 53, of Mazatlán, Sinaloa, Mexico, was sentenced by U.S. Chief District Judge Raner C. Collins to 60 months in prison with three years of supervised release to follow. Pastrano-Rios had previously pleaded guilty to one count of bringing in illegal aliens for profit.   

     Pastrano-Rios was arrested on May 19, 2017, for guiding a group of nine illegal immigrants, including two unaccompanied minors, into the United States. Agents were able to determine that Pastrano-Rios was known as “El Bigotes” and was a known human smuggler.  He was previously identified as a foot guide for groups of illegal immigrants who were smuggled into the United States on three occasions in 2016.

     The investigation in this case was conducted by the United States Border Patrol, the United States Department of Homeland Security-Homeland Security Investigations, and the Tohono O’odham Police Department. The prosecution was handled by Rui Wang and Frances Kreamer Hope, Assistant U.S. Attorneys, District of Arizona, Tucson.

 

CASE NUMBER:           CR-17-0926-RCC          

RELEASE NUMBER:    2018-038_ Pastrano-Rios

 

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PHOENIX– This week, Harrison Jumbo, 46, of Many Farms, Ariz., was sentenced by U.S. District Judge Diane J. Humetewa to 72 months’ imprisonment. Jumbo had previously pleaded guilty to involuntary manslaughter.

     In March 2014, Jumbo drove his vehicle while under the influence of alcohol and prescribed medication. Jumbo collided with another vehicle causing the death of the victim.  Jumbo is a member of the Navajo Nation, as was the victim.

     Navajo Nation Criminal Investigations conducted the investigation. The prosecution was handled by Kiyoko Patterson, Assistant U.S. Attorney, District of Arizona, Phoenix

 

CASE NUMBER:            CR-17-8075-PCT-DJH   

RELEASE NUMBER:    2018-036_Jumbo

 

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For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/

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Banner Health has agreed to pay the United States over $18 million to settle allegations that 12 of its hospitals in Arizona and Colorado knowingly submitted false claims to Medicare by admitting patients who could have been treated on a less costly outpatient basis, the Justice Department announced today.  Headquartered in Arizona, Banner Health owns and operates 28 acute-care hospitals in multiple states.

 

“Taxpayers should not bear the burden of inpatient services that patients do not need,” said Acting Assistant Attorney General Chad A. Readler for the Justice Department’s Civil Division.  “The Department will continue its efforts to stop abuses of the nation’s health care resources and to ensure that patients receive the most appropriate care.”

 

The settlement resolves allegations that 12 Banner Health hospitals knowingly overcharged Medicare patients unnecessarily.  In particular, the United States alleged that from Nov. 1, 2007 through Dec. 31, 2016, Banner Health billed Medicare for short-stay, inpatient procedures provided at the 12 hospitals that should have been billed on a less costly outpatient basis.  The settlement also resolves allegations that Banner Health inflated in reports to Medicare the number of hours for which patients received outpatient observation care during this time period.

   

“This enforcement action is another example of this office’s commitment to protecting the Medicare program,” said Elizabeth A. Strange, First Assistant United States Attorney for the District of Arizona.  “The United States Attorney’s Office, working with our law enforcement partners, will continue to protect Medicare by aggressively pursuing False Claims Act allegations of wrongdoing in the health care industry.”

 

Banner Health also entered into a corporate integrity agreement with the U.S. Department of Health and Human Services – Office of Inspector General (HHS-OIG) requiring the company to engage in significant compliance efforts over the next five years.  Under the agreement, Banner Health is required to retain an independent review organization to review the accuracy of the company’s claims for services furnished to federal health care program beneficiaries.

 

“Hospitals that bill Medicare for more expensive services than are necessary will be held accountable,” said Christian J. Schrank, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services.  “Medical decisions should be made based on patients’ conditions and needs, not on providers’ profits.”

 

This settlement resolves a lawsuit filed in the U.S. District Court for the District of Arizona by Cecilia Guardiola, a former employee of Banner Health, under the qui tam or whistleblower provisions of the False Claims Act, which permit private citizens to bring lawsuits on behalf of the United States and obtain a portion of the government’s recovery.  Guardiola will receive roughly $3.3 million.  The case is captioned United States ex rel. Guardiola v. Banner Health and NCMC, Inc. No. 2:13-cv-02443. 

 

The government’s resolution of this matter illustrates the government’s emphasis on combating health care fraud.  One of the most powerful tools in this effort is the False Claims Act.  Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).

 

The settlement was a result of a coordinated effort by the Civil Division, the U.S. Attorney’s Office for the District of Arizona and the HHS-OIG.  The claims resolved by this settlement are allegations only and there has been no determination of liability.
 

PHOENIX – Banner Health has agreed to pay the United States over $18 million to settle allegations that 12 of its hospitals in Arizona and Colorado knowingly submitted false claims to Medicare by admitting patients who could have been treated on a less costly outpatient basis, the United States Attorney’s Office for the District of Arizona announced today.  Headquartered in Arizona, Banner Health owns and operates 28 acute-care hospitals in multiple states.

     The settlement resolves allegations that 12 Banner Health hospitals knowingly overcharged Medicare patients unnecessarily.  In particular, the United States alleged that from November 1, 2007, through December 31, 2016, Banner Health billed Medicare for short-stay, inpatient procedures provided at the 12 hospitals that should have been billed on a less costly outpatient basis.  The settlement also resolves allegations that Banner Health inflated in reports to Medicare the number of hours for which patients received outpatient observation care during this time period.

     “Taxpayers should not bear the burden of inpatient services that patients do not need,” said Acting Assistant Attorney General Chad A. Readler for the Justice Department’s Civil Division.  “The Department will continue its efforts to stop abuses of the nation’s health care resources and to ensure that patients receive the most appropriate care.”

     “This enforcement action is another example of this office’s commitment to protecting the Medicare program,” said Elizabeth A. Strange, First Assistant United States Attorney for the District of Arizona.  “The United States Attorney’s Office, working with our law enforcement partners, will continue to protect Medicare by aggressively pursuing False Claims Act allegations of wrongdoing in the health care industry.”

     “Hospitals that bill Medicare for more expensive services than are necessary will be held accountable,” said Christian J. Schrank, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services.  “Medical decisions should be made based on patients’ conditions and needs, not on providers’ profits.”

     Banner Health also entered into a corporate integrity agreement with the U.S. Department of Health and Human Services – Office of Inspector General (HHS-OIG) requiring the company to engage in significant compliance efforts over the next five years.  Under the agreement, Banner Health is required to retain an independent review organization to review the accuracy of the company’s claims for services furnished to federal health care program beneficiaries.

     This settlement resolves a lawsuit filed in the United States District Court for the District of Arizona by Cecilia Guardiola, a former employee of Banner Health, under the qui tam or whistleblower provisions of the False Claims Act, which permit private citizens to bring lawsuits on behalf of the United States and obtain a portion of the government’s recovery.  Ms. Guardiola will receive roughly $3.3 million.  The case is captioned United States ex rel. Guardiola v. Banner Health and NCMC, Inc., No. 2:13-CV-02443.

     The government’s resolution of this matter illustrates the government’s emphasis on combating health care fraud.  One of the most powerful tools in this effort is the False Claims Act.  Individuals with information regarding fraud, waste, or abuse related to Medicare or other federal programs are encouraged to file a complaint with the United States Attorney’s Office through the office’s website, http://www.justice.gov/usao/az/, or by calling (602) 514-7500.

     The settlement was a result of a coordinated effort by the Civil Division, the United States Attorney’s Office for the District of Arizona, and the HHS-OIG.  The claims resolved by this settlement are allegations only, and there has been no determination of liability.

 

RELEASE NUMBER:    2018-035_Banner

 

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Earlier this week, the Justice Department announced the seizure of Backpage.com, the Internet’s leading forum for prostitution ads, including ads depicting the prostitution of children, and the unsealing of a 93-count federal indictment against seven Backpage principals.  Today, the Justice Department announced that Backpage’s co-founder and CEO, Carl Ferrer, 57, of Frisco, Texas, has pleaded guilty to conspiracy to facilitate prostitution using a facility in interstate or foreign commerce and to engage in money laundering.  Additionally, several Backpage-related corporate entities, including Backpage.com LLC, have entered guilty pleas to conspiracy to engage in money laundering.    

Attorney General Jeff Sessions, Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, First Assistant U.S. Attorney Elizabeth A. Strange for the District of Arizona, FBI Director Christopher A. Wray, U.S. Postal Inspection Service Chief Postal Inspector Guy Cottrell and Chief Don Fort of Internal Revenue Service Criminal Investigation (IRS-CI) made the announcement.

“For far too long, Backpage.com existed as the dominant marketplace for illicit commercial sex, a place where sex traffickers frequently advertised children and adults alike,” said Attorney General Sessions.  “But this illegality stops right now.  Last Friday, the Department of Justice seized Backpage, and it can no longer be used by criminals to promote and facilitate human trafficking. I want to thank everyone who made this important seizure possible: all of our dedicated and committed professionals in the Child Exploitation and Obscenity Section and our U.S. Attorney’s Office in the District of Arizona, the FBI, our partners with the IRS Criminal Investigation, our Postal Inspectors, and the Texas and California Attorney Generals’ offices. With their help, we have put an end to the violence, abuse, and heartache that has been perpetrated using this site, and we have taken a major step toward keeping women and children across America safe.”

“Backpage has earned hundreds of millions of dollars from facilitating prostitution and sex trafficking, placing profits over the well-being and safety of the many thousands of women and children who were victimized by its practices,” said First Assistant U.S. Attorney Elizabeth A. Strange.  “It is appropriate that Backpage is now facing criminal charges in Arizona, where the company was founded, and I applaud the tremendous efforts of the agents who contributed to last Friday’s enforcement action and who assisted in obtaining the indictment in this case.  Some of the internal emails and company documents described in the indictment are shocking in their callousness.”

“This website will no longer serve as a platform for human traffickers to thrive, and those who were complicit in its use to exploit human beings for monetary gain will be held accountable for their heinous actions,” said FBI Director Wray.  “Whether on the street or on the Internet, sex trafficking will not be tolerated. Together with our law enforcement partners, the FBI will continue to vigorously combat this activity and protect those who are victimized.”

“The events of last Friday and this week are a big win, not only for the agents who investigated these crimes, but more importantly for the victims, including children, who were harmed as a consequence of the alleged actions of Backpage.com,” said Chief Postal Inspector Cottrell.  “By laundering the illegal gains of an enterprise, Backpage perpetuated the exploitation of victims and continued to finance their business. The U.S. Postal Inspection Service is committed to protecting our customers by stopping the money laundering to ensure the cycle of victimization ends.”

“An indictment of this magnitude is particularly troubling when you look at the various layers of corruption and exploitation that are alleged to have occurred,” said IRS-CI Chief Fort.  “The masterminds behind Backpage are not only alleged to have committed egregious amounts of financial crimes such as money laundering, they did so at the expense of innocent women and children.  While these types of investigations can be made more challenging with the use of virtual currency, offshore banking, and the anonymity of the Internet, it should serve as an example to all criminals that there is not a place they can hide where we will not find them.”

According to the factual basis of his plea agreement, Ferrer admitted that he had long been aware that the great majority of Backpage’s “escort” and “adult” advertisements are, in fact, advertisements for prostitution services, which are not protected by the First Amendment and which are illegal in 49 states and in much of Nevada.  Ferrer further admitted that he conspired with other Backpage principals to find ways to knowingly facilitate the state-law prostitution crimes being committed by Backpage’s customers.  For example, he worked with his co-conspirators to create “moderation” processes through which Backpage would remove terms and pictures that were particularly indicative of prostitution and then publish a revised version of the ad.  Ferrer admitted that these editing practices were only one component of an overall, company-wide culture and policy of concealing and refusing to officially acknowledge the true nature of the services being offered in Backpage’s “escort” and “adult” ads. 

In the factual basis of his plea agreement, Ferrer also admitted that he conspired with other Backpage principals to engage in various money laundering offenses.  According to the factual basis, since 2004, Backpage has earned hundreds of millions of dollars in revenue from publishing “escort” and “adult” ads.  Over time, many banks, credit card companies, and other financial institutions refused to do business with Backpage due to the illegal nature of its business.  In response, Ferrer admitted that he worked with his co-conspirators to find ways to fool credit card companies into believing that Backpage-associated charges were being incurred on different websites, to route Backpage-related payments and proceeds through bank accounts held in the name of seemingly unconnected entities, and to use cryptocurrency-processing companies for similar purposes. 

Ferrer’s plea agreement also requires him to take all steps within his power to immediately shut down the Backpage website, including providing technical assistance to the United States to effectuate the shutdown, and to take all steps within his power to forfeit to the United States all corporate assets and other property owned or controlled by various Backpage-related entities.  The plea agreement provides that, if Ferrer fails to comply with either of these requirements, the plea agreement shall be null and void and the United States may bring additional charges against Ferrer.  Ferrer’s plea agreement, and the corporate plea agreements, also consent to the forfeiture of certain assets and items of property, including various domain names associated with the Backpage website.

The seven defendants charged in the 93-count indictment were all arrested on Friday, April 6.  They are Michael Lacey, 69, of Paradise Valley, Arizona; James Larkin, 68, of Paradise Valley, Arizona; Scott Spear, 67, of Scottsdale, Arizona; John E. “Jed” Brunst, 66, of Phoenix, Arizona; Daniel Hyer, 49, of Dallas, Texas; Andrew Padilla, 45, of Plano, Texas; and Jaala Joye Vaught, 37, of Addison, Texas.  On April 6, Vaught had her initial court appearance before U.S. Magistrate Judge Eileen Willett of the District of Arizona and was released from custody pending trial.  Lacey, who also had his initial court appearance on April 6 before Judge Willett, subsequently had a detention hearing on April 11 before U.S. Magistrate Judge Bridget S. Bade of the District of Arizona and was ordered to temporarily remain in custody until his continued hearing on Friday, April 13.  On April 9, Larkin, Spear, and Brunst had their initial court appearances before Judge Bade.  Larkin has since been ordered to temporarily remain in custody until a continued detention hearing on Monday, April 16, and Spear and Brunst were released from custody pending trial.  Also on April 9, Hyer had his initial court appearance before U.S. Magistrate Judge David L. Horan in the Northern District of Texas and was released from custody pending trial, and Padilla had his initial court appearance before U.S. Magistrate Judge Christine A. Nowak in the Eastern District of Texas and was released from custody pending trial. 

The charges and allegations contained in an indictment are merely accusations.  The defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law. 

The effort to seize Backpage was led by the Justice Department’s Child Exploitation and Obscenity Section and the U.S. Attorney’s Office for the District of Arizona, with significant support from the U.S. Attorney’s Office for the Central District of California, the office of the California Attorney General, and the office of the Texas Attorney General.  The law enforcement agencies conducting the investigation and seizure include the FBI Phoenix Field Office, the U.S. Postal Inspection Service and IRS-CI.  The criminal case is being prosecuted by Assistant U.S. Attorneys Kevin Rapp, Dominic Lanza, and Margaret Perlmeter of the District of Arizona and Senior Trial Attorney Reginald E. Jones of the Criminal Division’s Child Exploitation and Obscenity Section.  Assistant U.S. Attorney John Kucera of the Central District of California is handling the asset forfeiture aspects of the case

 

PHOENIX – Yesterday, U.S. District Judge G. Murray Snow sentenced Carlita Frances O’Neal, 43, of Phoenix, Ariz., to 13 months in federal prison, followed by three years of supervised release.  O’Neal had previously pleaded guilty to making false a claim against the United States in connection with her filing of a false tax return.  O’Neal’s co-defendant, Jeannine Lynn Clark, 58, of Florence, Ariz., was sentenced to eight months in federal prison, followed by three years of supervised release.  Clark had also previously pleaded guilty to making a false claim in connection with her filing of a false tax return.  Both women were ordered to pay restitution to the Internal Revenue Service.

     Between 2011 and 2013, O’Neal and Clark prepared false tax returns for themselves and their acquaintances using made up income and withholding information, which enabled them to qualify for the Earned Income Tax Credit and increase the false tax refund claimed on the returns.  Initially, Clark recruited individuals into the fraudulent scheme by claiming she could get them a large tax refund using only basic information such as their name, address, Social Security number, and date of birth.  O’Neal then used the personally identifying information gathered by Clark to prepare fraudulent federal income tax returns and submit them to the IRS electronically.  To increase the amount of the false tax refund, O’Neal used fictitious wage and withholding information for the taxpayers.  O’Neal received a portion of each false tax refund and paid Clark a referral fee for each individual Clark recruited.  O’Neal and Clark later stopped working together, but both of them continued preparing false tax returns on their own using the same fraudulent methods.  In total, between 2011 and 2013, O’Neal and Clark prepared and filed approximately 75 fraudulent tax returns, which falsely claimed tax refunds totaling more than $300,000.      

     The investigation in this case was conducted by the Internal Revenue Service-Criminal Investigation.  The prosecution was handled by Bridget Minder, Assistant U.S. Attorney, District of Arizona, Phoenix.

 

CASE NUMBER:           CR-17-00732-GMS           

RELEASE NUMBER:    2018-034_O’Neal_Clark

 

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     PHOENIX –The Justice Department announced the seizure of Backpage.com, the Internet’s leading forum for prostitution ads, including ads depicting the prostitution of children.  Additionally, seven individuals have been charged in a 93-count federal indictment with the crimes of conspiracy to facilitate prostitution using a facility in interstate or foreign commerce, facilitating prostitution using a facility in interstate or foreign commerce, conspiracy to commit money laundering, concealment money laundering, international promotional money laundering, and transactional money laundering. 

     The seven defendants charged in the indictment are Michael Lacey, 69, of Paradise Valley, Ariz., James Larkin, 68, of Paradise Valley, Ariz., Scott Spear, 67, of Scottsdale, Ariz., John E. “Jed” Brunst, 66, of Phoenix, Ariz., Daniel Hyer, 49, of Dallas, Tex., Andrew Padilla, 45, of Plano, Tex., and Jaala Joye Vaught, 37, of Addison, Tex.

     Attorney General Jeff Sessions, Deputy Attorney General Rod Rosenstein, Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, First Assistant U.S. Attorney Elizabeth A. Strange for the District of Arizona, Special Agent in Charge of the FBI Phoenix Field Office Michael DeLeon, IRS Criminal Investigation Special Agent in Charge Ismael Nevarez Jr., and Inspector in Charge Nichole Cooper, Los Angeles Division of the U.S. Postal Inspection Service made the announcement.

     “For far too long, Backpage.com existed as the dominant marketplace for illicit commercial sex, a place where sex traffickers frequently advertised children and adults alike,” said Attorney General Sessions.  “But this illegality stops right now.  Today, the Department of Justice seized Backpage, and it can no longer be used by criminals to promote and facilitate human trafficking. I want to thank everyone who made this important seizure possible: all of our dedicated and committed professionals in the Child Exploitation and Obscenity Section and our U.S. Attorney’s Office in the District of Arizona, the FBI, our partners with the IRS Criminal Investigation, our Postal Inspectors, and the Texas and California Attorney Generals’ offices. With their help, today we put an end to the violence, abuse, and heartache that has been perpetrated using this site, and we take a major step toward keeping women and children across America safe.”

     “Backpage has earned hundreds of millions of dollars from facilitating prostitution and sex trafficking, placing profits over the well-being and safety of the many thousands of women and children who were victimized by its practices,” said First Assistant U.S. Attorney Elizabeth A. Strange.  “It is appropriate that Backpage is now facing criminal charges in Arizona, where the company was founded, and I applaud the tremendous efforts of the agents who contributed to last Friday’s enforcement action and who assisted in obtaining the indictment in this case.  Some of the internal emails and company documents described in the indictment are shocking in their callousness.”

     "The FBI will aggressively investigate those who exploit young children and women to facilitate sex trade activities and associated money laundering schemes. The FBI, along with our partners at the Department of Justice, United States Attorney's Office, Internal Revenue Service,  and U.S. Postal Service are committed to combating this type of crime to protect victims and ensure the safety and wellbeing of our citizens and communities," stated Michael DeLeon, Special Agent in Charge of the FBI Phoenix Field Office.

     “Special Agents with IRS-CI are experts at investigating complex financial cases, including those involving the internet. IRS-CI is committed to assisting the U.S. Attorney’s Office in protecting the public from harm and delivering justice to those who are victimized by transnational internet crimes,” stated IRS Criminal Investigation Special Agent in Charge Ismael Nevarez Jr.

     “The charges brought today reflect the dedication of law enforcement to stop the exploitation of victims, including children,” said Inspector in Charge Nichole Cooper of U.S. Postal Inspection Service Los Angeles Division.  “Postal Inspectors have a history of investigating complex financial schemes used to maintain criminal enterprises, and we will continue our efforts to hold those engaged in such terrible crimes accountable for their actions.”             

     The charges and allegations contained in an indictment are merely accusations.  The defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law. 

     The effort to seize Backpage was led by the U.S. Attorney’s Office for the District of Arizona and the Justice Department’s Child Exploitation and Obscenity Section, with significant support from the U.S. Attorney’s Office for the Central District of California, the office of the California Attorney General, and the office of the Texas Attorney General.  The law enforcement agencies supporting the seizure include the FBI, the U.S. Postal Inspection Service, and the Internal Revenue Service-Criminal Investigation Division.  The criminal case is being prosecuted by Assistant U.S. Attorneys Kevin Rapp, Dominic Lanza, and Margaret Perlmeter of the District of Arizona and Senior Trial Attorney Reginald E. Jones of the Criminal Division’s Child Exploitation and Obscenity Section.  Assistant U.S. Attorney John Kucera of the Central District of California is handling the asset forfeiture aspects of the case.

 

backpage_0.pdf CASE NUMBER:           CR-18-00422-PHX (BSB)

RELEASE NUMBER:    2018-033_Backpage

 

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PHOENIX – On April 6, 2018, Philip Anthony Osife, 28, a member of the Gila River Indian Community, was sentenced by U.S. District Judge John J. Tuchi to 25 years in prison.  Osife had previously pleaded guilty to second-degree murder.  On March 23, 2017, Osife shot one victim twice in the face, and he shot a second victim in the neck, killing them both.  Osife took the one victim’s car and left the victims there near a canal bank.  A passing motorist found the victims two days later and then called the police.     

     The investigation in this case was conducted by the Gila River Police Department and the Federal Bureau of Investigation. The prosecution was handled by Raynette Logan and Todd Allison, Assistants U.S. Attorney, District of Arizona, Phoenix.

 

CASE NUMBER:           CR-17-00892-PHX-JJT

RELEASE NUMBER:    2018-032_ Osife

 

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PHOENIX – On March 28, 2018, U.S. District Judge Diane J. Humetewa sentenced Farzaneh Akhavi, 59, to 84 months in prison and ordered her to pay $1.7 million in restitution. Akhavi had previously pleaded guilty to bank and wire fraud, transactional money laundering, and tax evasion.  Akhavi was immediately taken into custody.

     Evidence showed that Akhavi used her influence to systematically defraud victims out of $1.7 million.  First, she convinced victims to move from Orange County, Cal. to the Phoenix metropolitan area, using one victim’s name and Social Security number to open credit accounts and take out loans. Akhavi further used the victims’ money to buy a car and a house for herself, two properties for her daughter, items at high end clothing stores, and on travel related expenses. She convinced the victims to give her additional money by falsely promising to form a business partnership that included operating a restaurant and museum in Mesa, Ariz. She also exaggerated her political connections in an effort to convince the victims that she would advance their political careers in Arizona. Last, she committed tax evasion by failing to file taxes and account for the money she stole from the victims.  In 2017, Akhavi purported to enter into a plea agreement that would have resulted in a prison sentence of less than 84 months, but the Court rejected it after discovering Akhavi had included a notation on the plea agreement, handwritten in Farsi, that translated to “innocent.”  The final plea agreement in this case did not include such a notation. 

     “Through lies and deceit, Akhavi financially and emotionally devastated the victims,” stated First Assistant United States Attorney Elizabeth A. Strange. “The seven-year sentence in this case appropriately reflects the magnitude and brazen nature of her crimes.” 

     The investigation in this case was conducted by Internal Revenue Service-Criminal Investigation and the Federal Bureau of Investigation.  The prosecution was handled by Kevin M. Rapp and Mark K. Kokanovich, Assistant United States Attorneys, District of Arizona, Phoenix.

CASE NUMBER:                CR14-01066-PHX-DJH (MHB)

RELEASE NUMBER:           2018-031_ Akhavi

 

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PHOENIX – On March 28, 2018, Thomas Mario Costanzo, a.k.a. Morpheus Titania, of Mesa, Ariz., was found guilty of five counts of money laundering by a federal jury in Phoenix. The case was tried before U.S. District Judge G. Murray Snow. Sentencing is set before Judge Snow on June 11, 2018.

     The evidence at trial showed that federal agents initiated an investigation of Costanzo in 2014, after identifying an advertisement he posted on a peer-to-peer bitcoin exchange website.  In the advertisement, Costanzo advertised that he was willing to engage in cash transactions up to $50,000.  When undercover federal agents approached Costanzo and told him that they were drug dealers, Costanzo provided them with bitcoin and told them it was a great way to limit their exposure to law enforcement.  The jury found that over a two-year period, Costanzo took $164,700 in cash from the agents (whom he believed to be heroin and cocaine traffickers) and exchanged it for bitcoin in order to conceal and disguise the nature, location, source, ownership, and control of the drug proceeds.  The evidence at trial also showed that Costanzo used bitcoin to purchase drugs from others and that he provided bitcoin to individuals who were buying drugs via the internet.

     The evidence at trial also showed how bitcoin operates.  Bitcoin is a decentralized form of electronic currency.  Bitcoin may be used for legitimate purposes, and anyone can obtain bitcoin from a commercial on-line exchange by paying about 1.5% as a commission and providing identity information to the exchange.  In contrast, Costanzo charged between 7% and 10% in his peer-to-peer transactions and did not learn his customers’ identities.

     Each of the five convictions for money laundering carries a maximum penalty of 20 years in prison, a $250,000 fine, or both. The bitcoin involved in the final transaction is also subject to forfeiture by the United States.

     The investigation in this case was jointly conducted by Internal Revenue Service Criminal Investigation, the Drug Enforcement Administration, and the U.S. Immigration and Customs Enforcement Homeland Security Investigations, and the Scottsdale Police Department, with assistance from the Maricopa County Sheriff’s Office and the United States Postal Inspection Service. The prosecution was handled by Carolina Escalante, Gary Restaino, and Matthew Binford, Assistant U.S. Attorneys, District of Arizona, Phoenix.

 

CASE NUMBER:                CR-17-00585-PHX-GMS

RELEASE NUMBER:           2018-030_Costanzo

 

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PHOENIX – Yesterday, Frank Lynn Kisto, 60, of Chandler, Ariz., was sentenced by U.S. District Judge Douglas L. Rayes to 30 months in prison followed by three years of supervised release for assaulting a woman on the Gila River Indian Community.  Kisto had previously pleaded guilty to domestic assault by a habitual offender. 

     Kisto assaulted the victim by punching her in the face in January 2017.  Kisto was previously convicted of similar assaults against domestic partners in 1999 and 2009 in tribal court on the Gila River Indian Community.  Both Kisto and the victim are enrolled members of the Gila River Indian Community. 

     The investigation in this case was conducted by the Gila River Police Department.  The prosecution was handled by Christine Ducat Keller, Assistant U.S. Attorney, District of Arizona, Phoenix.

 

CASE NUMBER:            CR-17-00993-PHX-DLR

RELEASE NUMBER:    2018-029_Kisto

 

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TUCSON, Ariz. – Last week, Timothy Alan Veninga, 48, of Tucson, Ariz., was sentenced by U.S. District Judge James A. Soto to 78 months’ imprisonment and a judgment of forfeiture of over $61,000. Veninga had previously pleaded guilty to conspiracy to defraud the United States, aiding and abetting false statements in firearms transactions, false statements to government agency, tampering, and identity theft. On July 6, 2017, Veninga’s co-defendant, Joe Valles, a former Tucson Police Department officer, was also sentenced to 78 months’ imprisonment for his role in the trafficking scheme. 

     Veninga, owner of Ballistic Firearms in Tucson and Valles, a business partner who operated a firearm painting business on the premises of Ballistic Firearms, were involved in a scheme in which they paid individuals who were not the actual purchasers of firearms to complete and sign ATF Forms 4473 (Firearms Transaction Record), while leaving the date and firearm information section blank.  Veninga and Valles also used the identities of two other people (which had been obtained while Valles was working as a police officer for Tucson Police Department) who were not the actual purchasers of firearms without their permission to complete and sign Forms 4473.  Veninga and Valles used the fraudulent Forms 4473 to document multiple firearms transactions and create records retained by Veninga, which falsely represented the identities of the purchasers, thereby concealing the identities of the true buyers.  The conspiracy involved a minimum of 31 firearm transactions involving 24 semi-automatic pistols (varying calibers) and seven rifles, including one semi-automatic assault rifle, one semi-automatic high-capacity rifle, and two .50 caliber semi-automatic rifles.  Evidence from the investigation established that these firearms were sold to members from Mexico drug cartels and that the firearms were intended for Mexico. 

     The investigation in this case was conducted by Bureau of Alcohol, Tobacco, Firearms, and Explosives. The prosecution was handled by Serra M. Tsethlikai and Karen Rolley, Assistant U.S. Attorneys, District of Arizona, Tucson.

 

CASE NUMBER:            CR-16-1059-TUC-JAS   

RELEASE NUMBER:    2018-028_Veninga

 

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Today, Ahmed Alahmedalabdaloklah, a Syrian national who had been living in Iraq, was convicted by a jury, following a six-week trial, of conspiring and supporting the 1920s Revolutionary Brigades, an insurgent group that planted road-side bombs to attack and kill American soldiers in Iraq. A jury convicted Alahmedalabdaloklah on Conspiracy to Use a Weapon of Mass Destruction, Conspiring to Maliciously Damage or Destroy United States Property by Means of an Explosive, Aiding and Abetting Other Persons to Possess a Destructive Device in Furtherance of a Crime of Violence, and Conspiracy to Possess a Destructive Device in Furtherance of a Crime of Violence. Sentencing is set for June 5, 2018 before District Judge Roslyn O. Silver.

Assistant Attorney General for National Security John C. Demers, Elizabeth A. Strange, First Assistant United States Attorney for the District of Arizona, and Michael Deleon, Special Agent in Charge, Federal Bureau of Investigation, Phoenix Field Office, made the announcement.

“Alahmedalabdaloklah conspired with a violent Iraqi insurgent group to kill American soldiers in Iraq,” said First Assistant Strange. “Today’s verdict underscores our commitment to use every available resource to bring justice to American soldiers who were killed or injured by such terrorist acts. I commend the FBI and the prosecution team for their tremendous efforts in securing this conviction.”

"The FBI's highest priority is preventing acts; both in the United States and abroad," said Phoenix FBI Special Agent in Charge Michael DeLeon. "We want to thank the Department of Justice and the Arizona U.S. Attorney's Office, the FBI's Joint Terrorism Task Force, agents, analysts, and both local and foreign partners for working together to bring Ahmed Alahmedalabdaloklah to justice. This is a prime example of the FBI's commitment to pursuing justice even in the most complex and difficult cases. The FBI also wants to voice our sympathy and condolences to the victims, their families and friends. The FBI will continue our mission of preventing terrorist acts and pursuing those who plan to do us harm. "

Between 2006 and 2011, United States soldiers were deployed to Iraq to support the fledgling Iraqi government and to provide security to the Iraqi people. Multiple insurgent groups, including the 1920 Revolution Brigades (“1920s”), opposed the Iraqi government and committed violent acts in an effort to destabilize Iraq and expel American forces from the country. American soldiers faced daily attacks from snipers, small team ambushes, and deadly improvised explosive devices (“IEDs”) planted along major military supply routes.

Alahmedalabdaloklah supported the 1920s by designing, making, and supplying parts for remote-controlled IED initiator switches for roadside bombs. In August 2006, during a search and seizure weapons clearing mission, American soldiers located an apartment in Baghdad that had been converted into an IED switch-making factory. Soldiers seized numerous items used to detonate IEDs, including receivers, transmitters, cell phones, key fobs, modified hands-free headsets, and ready-to-use IED switches. Over a thousand finger and palm prints belonging to Alahmedalabdaloklah were discovered on the items found there, including instructions for making IEDs.

The investigation in this case was conducted by the Federal Bureau of Investigation. The prosecution was handled by Trial Attorney Joseph Kaster from the National Security Division of the U.S. Department of Justice, and Assistant U.S. Attorneys David Pimsner, Melissa Karlen, and Bill Solomon,  from the U.S. Attorney’s Office, District of Arizona.

PHOENIX – Today, Ahmed Alahmedalabdaloklah, a Syrian national who had been living in Iraq, was convicted by a jury, following a six-week trial, of conspiring and supporting the 1920s Revolutionary Brigades, an insurgent group that planted road-side bombs to attack and kill American soldiers in Iraq.  A jury convicted Alahmedalabdaloklah on Conspiracy to Use a Weapon of Mass Destruction, Conspiring to Maliciously Damage or Destroy United States Property by Means of an Explosive, Aiding and Abetting Other Persons to Possess a Destructive Device in Furtherance of a Crime of Violence, and Conspiracy to Possess a Destructive Device in Furtherance of a Crime of Violence. Sentencing is set for June 5, 2018 before District Judge Roslyn O. Silver.

     The verdict was announced by Elizabeth A. Strange, First Assistant United States Attorney for the District of Arizona and Michael Deleon, Special Agent in Charge, Federal Bureau of Investigation, Phoenix Field Office

     “Alahmedalabdaloklah conspired with a violent Iraqi insurgent group to kill American soldiers in Iraq,” said First Assistant Strange.  “Today’s verdict underscores our commitment to use every available resource to bring justice to American soldiers who were killed or injured by such terrorist acts.  I commend the FBI and the prosecution team for their tremendous efforts in securing this conviction.”

     "The FBI's highest priority is preventing acts; both in the United States and abroad," said Phoenix FBI Special Agent in Charge Michael DeLeon. "We want to thank the Department of Justice and the Arizona U.S. Attorney's Office, the FBI's Joint Terrorism Task Force, agents, analysts, and both local and foreign partners for working together to bring Ahmed Alahmedalabdaloklah to justice.  This is a prime example of the FBI's commitment to pursuing justice even in the most complex and difficult cases.  The FBI also wants to voice our sympathy and condolences to the victims, their families and friends. The FBI will continue our mission of preventing terrorist acts and pursuing those who plan to do us harm. "

     Between 2006 and 2011, United States soldiers were deployed to Iraq to support the fledgling Iraqi government and to provide security to the Iraqi people.  Multiple insurgent groups, including the 1920 Revolution Brigades (“1920s”), opposed the Iraqi government and committed violent acts in an effort to destabilize Iraq and expel American forces from the country. American soldiers faced daily attacks from snipers, small team ambushes, and deadly improvised explosive devices (“IEDs”) planted along major military supply routes.

     Alahmedalabdaloklah supported the 1920s by designing, making, and supplying parts for remote-controlled IED initiator switches for roadside bombs.  In August 2006, during a search and seizure weapons clearing mission, American soldiers located an apartment in Baghdad that had been converted into an IED switch-making factory.  Soldiers seized numerous items used to detonate IEDs, including receivers, transmitters, cell phones, key fobs, modified hands-free headsets, and ready-to-use IED switches.  Over a thousand finger and palm prints belonging to Alahmedalabdaloklah were discovered on the items found there, including instructions for making IEDs.

     The investigation in this case was conducted by the Federal Bureau of Investigation. The prosecution was handled by David Pimsner, Melissa Karlen, and Bill Solomon, Assistant U.S. Attorneys from the U.S. Attorney’s Office, District of Arizona, and Joseph Kaster, Trial Attorney from the National Security Division of the U.S. Department of Justice.

 

CASE NUMBER:            CR-12-01263-PHX-ROS

RELEASE NUMBER:    2018-027_ Alahmedalabdaloklah

 

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PHOENIX – On March 12, 2018, Roscoe Peter Begay, 37, of Tonalea, Ariz., and a member of the Navajo Nation, was sentenced by U.S. District Judge Douglas L. Rayes to 12 years in prison, followed by a term of five years of supervised release.  Begay had previously pleaded guilty to kidnapping.  

     On Feb. 7, 2017, the Navajo Nation Department of Law Enforcement responded to a domestic violence call at Begay’s residence.  When officers arrived, Begay ran into the home and locked the door.  While inside, Begay kept the victim in the back bedroom of the home and would not answer the door or respond to multiple commands by law enforcement to allow them entry into the home.  Begay refused to allow officers into the home until he was told that a Special Response Team and the Federal Bureau of Investigation were being contacted.  The victim is also a member of the Navajo Nation and the kidnapping occurred on the Navajo Nation Indian Reservation.

     The investigation in this case was conducted by the Federal Bureau of Investigation and the Navajo Nation Department of Law Enforcement.  The prosecution was handled by Christina J. Reid-Moore, Assistant U.S. Attorney, District of Arizona, Phoenix.

 

CASE NUMBER:            CR-17-08094-PHX-DLR

RELEASE NUMBER:    2017-025_Begay

 

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PHOENIX– On March 12, 2018, Bennie Lee Holtsoi, 27, of Chinle, Ariz., was sentenced by U.S. District Judge Douglas L. Rayes to 59 months’ imprisonment. Holtsoi had previously pleaded guilty to assault resulting in serious bodily injury.  

     In June 2016, Holtsoi assaulted his then girlfriend, a member of the Navajo Nation, resulting in multiple lacerations and abrasions to her scalp and body. Holtsoi is also a member of the Navajo Nation.

     Navajo Nation Criminal Investigations and the Federal Bureau of Investigation conducted the investigation. The prosecution was handled by Kiyoko Patterson, Assistant U.S. Attorney, District of Arizona, Phoenix.

 

CASE NUMBER:            CR-16-8266-PCT-DLR  

RELEASE NUMBER:    2018-026_Holtsoi

 

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TUCSON, Ariz. – On March 7, 2018, the grand jury returned an indictment charging Marco Antonio De La Garza Jr., 37, of Hereford, Ariz., with three counts related to passport fraud and false statements on his federal law enforcement background application. Specifically, it is alleged that De La Garza is a Mexican citizen who knowingly used a fraudulently obtained Texas birth certificate to apply for a United States passport. Additionally, the indictment charges he knowingly and willfully used the same fraudulently obtained birth certificate to assert United States citizenship on his five-year background check to maintain employment as a United States Customs and Border Protection Officer.

     An indictment is simply a method by which a person is charged with criminal activity and raises no inference of guilt. An individual is presumed innocent until competent evidence is presented to a jury that establishes guilt beyond a reasonable doubt.

     The investigation preceding the indictment was conducted by the Department of State-Diplomatic Security Service and the Department of Homeland Security-Office of Inspector General. The prosecution is being handled by Lori Price and Heather Siegele, Assistant U.S. Attorneys, District of Arizona.

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CASE NUMBER:            CR-18-00353-TUC-RCC

RELEASE NUMBER:    2018-024_Franco

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PHOENIX – This week, Juan Carlos Burns, 20, of the Salt River Pima-Maricopa Indian Community was sentenced by U.S. District Judge David G Campbell to 34 years in prison. A federal jury had found Burns guilty of second degree murder and discharging a firearm causing death.

     On Sept. 25, 2017, at the Auk Mor 2 gas station located on the Salt River Pima-Maricopa Indian Community, Burns, a member of the Salt River Pima-Maricopa Indian Tribe, shot the victim one time in the back of the head with a 9 mm handgun. The victim died within minutes. Evidence showed that Burns shot the victim as a result of a derogatory comment made by the victim toward Burns.

     The investigation in this case was conducted by the Salt River Police Department and the Mesa Police Department and Crime Lab, to include the Safe Trails Task Force. The prosecution was handled by Thomas Simon and Robert Brooks, Assistant U.S. Attorneys, District of Arizona, Phoenix.

CASE NUMBER:            CR-17-00445-PHX-DGC 

RELEASE NUMBER:    2018-023_Burns

 

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TUCSON, Ariz. – Today, Emmanuel Ahumada Flores, 32, of Tucson, Ariz., was sentenced by U.S. District Judge Jennifer G. Zipps to 14 years’ imprisonment.  Flores had previously pleaded guilty to one count of abusive sexual contact with a child.           

     Flores admitted to engaging in abusive sexual contact with a child under the age of 12 between January 2013 and August 2015.  Both Flores and the victim are members of the Pascua Yaqui Nation.

     The investigation in this case was conducted by the Federal Bureau of Investigation and Pascua Yaqui Police Department, with assistance provided by the Arizona Department of Public Safety.  The prosecution was handled by Matthew C. Cassell and Heather N. Siegele, Assistant U.S. Attorneys, District of Arizona, Tucson.

CASE NUMBER:                   CR-16-0638-TUC-JGZ-LAB

RELEASE NUMBER:           2018-022_Flores

 

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PHOENIX – Yesterday, Edgar Louis Rogers, 43, of Hotevilla, Ariz., was sentenced by U.S. District Judge G. Murray Snow to a total of 21 months in prison for assaulting a federal officer while on supervised release.  Rogers had previously pleaded guilty to assault on a federal officer and admitted to violating the terms of his supervised release in a separate case.  Judge Snow sentenced Rogers to 18 months in prison for the assault and an additional three months in prison for violating his supervised release.

     The incident occurred when the victim, a law enforcement officer with the Bureau of Indian Affairs, approached Rogers while he was present on the Hopi Reservation.  Rogers resisted the contact and a scuffle ensued, which resulted in an injury to the officer’s finger.  At the time of the incident, Rogers was on supervised release for a violent domestic assault he committed on the Hopi Reservation in 2013. 

     The investigation in this case was conducted by the Bureau of Indian Affairs.  The prosecution was handled by Christine Ducat Keller, Assistant U.S. Attorney, District of Arizona, Phoenix.

 

CASE NUMBER:            CR-17-08161-PCT-GMS and CR-14-08007-PCT-GMS 

RELEASE NUMBER:    2018-021_Rogers

 

 

 

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PHOENIX – Earlier this week, Richard Joseph Herrera, 35, of Camp Verde, Ariz., was sentenced by U.S. District Judge Steven P. Logan to 36 months in federal prison, followed by three years of supervised release.  Herrera had previously pleaded guilty to assault resulting in substantial bodily injury.

     On March 27, 2017, Herrera assaulted the victim, his domestic partner and a member of the Yavapai-Apache Nation, resulting in substantial bodily injury.  

     The investigation in this case was conducted by the Federal Bureau of Investigation and the Yavapai-Apache Nation Police Department. The prosecution was handled by Christina Covault, Assistant U.S. Attorney, District of Arizona, Phoenix.

CASE NUMBER:            CR-17-8101-PCT-SPL   

RELEASE NUMBER:    2018-020_Herrera

 

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TUCSON, Ariz. – Yesterday, Jesus Manuel Franco, a  former United States Border Patrol Agent, 39, of Vail, Ariz., was sentenced by U.S. District Judge Cindy K. Jorgenson, to 18 months’ imprisonment for theft of firearm parts and equipment valued at approximately $100,000 and for the unlawful possession and transfer of  two machinegun conversion devices.  Franco had been previously found guilty of these offenses after a jury trial.                 

     The evidence at trial demonstrated that in 2014, Franco accepted a temporary assignment to the Customs and Border Protection (CBP) Armory in Harper’s Ferry, W. Va.   During a two-month period, Franco unlawfully transferred 47 boxes of firearm parts and equipment from the Armory to the Wilcox, Ariz. CBP Station without authorization and for personal use.  One of the boxes transferred by Franco contained two machine gun conversion devices that qualified under federal law as machineguns.  Franco also charged the government for shipping costs.

     The investigation in this case was conducted by the Department of Homeland Security, Office of Inspector General. The prosecution was handled by Jane L. Westby and Sarah B. Houston, Assistant U.S. Attorneys, District of Arizona, Tucson.

 

CASE NUMBER:            CR-16-00268-TUC-CKJ

RELEASE NUMBER:    2018-19_Franco

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TUCSON, Ariz. – On Feb. 22, 2018, Leopoldo Rubio-Quinonez, of Sinaloa, Mexico, was sentenced by U.S. District Judge Cindy K. Jorgenson to 78 months in prison. Rubio-Quinonez had previously pleaded guilty to assaulting a federal officer and reentry of a removed alien.  

     On Dec. 24, 2016, Rubio-Quininez assaulted a United States Border Patrol Agent who was arresting him for an immigration violation. In the process, Rubio-Quinonez bit the agent's thumb causing a severe injury. Rubio-Quininez also attempted to grab the agent's firearm. During the assault, Rubio-Quinonez told the agent that he was going to kill him.

     The investigation in this case was conducted by the United States Border Patrol. The prosecution was handled by Jesse Figueroa and Karen Rolley, Assistant U.S. Attorneys, District of Arizona, Tucson.

 

CASE NUMBER:           CR-17-0094-TUC-(LAB) 

RELEASE NUMBER:    2018-17_ Rubio-Quinonez

 

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PHOENIX– Yesterday, Earlson Tso, 39, of Chinle, Ariz., was sentenced by U.S. District Judge Douglas L. Rayes to 108 months’ imprisonment. Tso had previously pleaded guilty to abusive sexual contact with a minor.

     In June 2016, the victim, a minor and member of the Navajo Nation, reported inappropriately being touched by Tso while sleeping. Tso is also a member of the Navajo Nation.

     Navajo Nation Criminal Investigations and the Federal Bureau of Investigations conducted the investigation. The prosecution was handled by Kiyoko Patterson, Assistant U.S. Attorney, District of Arizona, Phoenix.

 

CASE NUMBER:           CR-16-8227-PCT-DLR  

RELEASE NUMBER:    2018-018_Tso

 

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PHOENIX – On Friday, Feb. 23, 2018, Edsel Aaron Badoni, 34, of Blue Gap, Ariz., was sentenced by U.S. District Judge G. Murray Snow to 166 months’ imprisonment.  Badoni had previously been convicted at trial of assault with a dangerous weapon, assault resulting in serious bodily injury, and discharging a firearm during a crime of violence.

Badoni had a history of discharging a firearm in the victim’s neighborhood, and when the victim approached him to tell him to stop, Badoni shot the victim in the chest.  Officers of the Navajo Nation began an investigation, which led to Badoni’s arrest and prosecution.  Badoni is a member of the Navajo Nation, and the crime occurred within the Navajo Nation Reservation.

     The investigation was conducted by the Federal Bureau of Investigation and the Navajo Nation Department of Public Safety.  Badoni’s trial was handled by Assistant U.S. Attorney Roger Dokken, now retired.  His sentencing was handled by Assistant U.S. Attorney William G. Voit, District of Arizona, Phoenix.

 

CASE NUMBER:           CR-12-08262-PCT-GMS

RELEASE NUMBER:    2018-16_Badoni

 

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PHOENIX – Last week, Israel Torres, 35, of Phoenix, Ariz., was sentenced by U.S. District Judge James A. Teilborg to 41 months followed by three years of supervised release. Torres had previously pleaded guilty to felon in possession of a firearm. 

     Torres has two felony aggravated DUI convictions in the Superior Court of Arizona, Maricopa County, making him a prohibited possessor of firearms and ammunition. The Federal Bureau of Investigation (FBI) discovered postings made by Torres on a website for a group he founded called BQG.  These postings depicted Torres with multiple firearms and as well as engaged in what appeared to be militia training activities.  Further investigation revealed that Torres used social media to advocate an armed resistance against the United States government and law enforcement.  On Feb. 17, 2017, the FBI executed a federal search warrant at Torres’s residence and located 10 firearms, including assault rifles, and dozens of rounds of ammunition.  The firearms, some of which were loaded, were visible and not locked in a gun safe.

     The investigation in this case was conducted by the Federal Bureau of Investigation. The prosecution was handled Assistant U.S. Attorneys Lisa E. Jennis and Jonathan Hornok, District of Arizona, Phoenix.

 

CASE NUMBER:           CR-17-00265-PHX-JAT

RELEASE NUMBER:    2018-015_Torres

 

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TUCSON, Ariz. – Earlier this month, the grand jury returned an indictment charging Lana Leshinsky, 41, of Tucson, Ariz., with several crimes related to fentanyl trafficking, including one count of distribution of fentanyl resulting in death—a crime that, under federal law, carries a mandatory-minimum sentence of 20 years in prison and a maximum sentence of life in prison.  Specifically, it is alleged that, in July 2017, Leshinky distributed fentanyl to a man who later died from ingesting it. 

     An indictment is simply a method by which a person is charged with criminal activity and raises no inference of guilt.  An individual is presumed innocent until competent evidence is presented to a jury that establishes guilt beyond a reasonable doubt.

     The investigation preceding the indictment was conducted by the Drug Enforcement Administration.  The prosecution is being handled by Stefani Hepford, Assistant U.S. Attorney, District of Arizona.

 CASE NUMBER:           CR-18-00229-RCC-JR

RELEASE NUMBER:    2018-013_Leshinsky

 

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TUCSON, Ariz. – Last week, Derek Lamont Terry, 29, of Colton, Calif., was sentenced by U.S. District Judge Cindy K. Jorgenson to 240 months’ imprisonment.  Terry previously pleaded guilty to sex trafficking of children and to two counts of transportation of minors with intent to engage in prostitution.

     The investigation revealed that Terry was managing, coordinating, and receiving the proceeds from a sex trafficking operation.  Between January and April 2016, Terry trafficked a minor female between Arizona and California.  Advertisements for escort services for the victim were posted online in California and Arizona.   The victim was rescued in April 2016 as a result of an undercover operation. 

     Shortly after, Terry recruited a second victim, another minor, bringing her from California through Arizona to Texas and back to Arizona.  The investigation revealed advertisements for escort services for the victim posted in California, Arizona, and Texas.  The victim was rescued on June 8, 2016, when she was discovered with Terry during a routine traffic stop by the Arizona Department of Public Safety near Benson, Ariz. 

     “I see you as a predator of these young teenaged girls,” commented Judge Jorgenson, as she pronounced the sentence. 

     Upon release from prison, Terry will be on lifetime supervised release.  He will have to register as a sex offender. 

     The investigation in this case was a joint effort by the Federal Bureau of Investigation, the Arizona Department of Public Safety, and the Tempe Police Department, with the cooperation of Arizona State University.  The prosecution was handled by Arturo Aguilar and Karen Rolley, Assistant U.S. Attorneys, District of Arizona, Tucson, and Margaret Perlmeter, Assistant U.S. Attorney, District of Arizona, Phoenix.

 

CASE NUMBER:                  16-CR-1350-TUC-CJK-1; 16-CR-1375-PHX-CJK-1

RELEASE NUMBER:           2018-014_Terry

 

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TUCSON, Ariz. – Yesterday, Katherine Rose Sparks, 23, of Huachuca City, Ariz., was sentenced by U.S. District Judge Rosemary Marquez to serve 84 months in prison and pay $49,930.73 in restitution. Sparks had previously pleaded guilty to possession with intent to distribute marijuana and assault on a federal officer with a dangerous or deadly weapon.  Sparks’s term of imprisonment will be followed by five years of supervised release.

     On Feb. 23, 2017, a United States Border Patrol surveillance vehicle saw an SUV near Bisbee, Ariz. being loaded with bundles.  The SUV was then observed traveling west on Highway 92.  Border Patrol Agents  (BPAs) followed the SUV west, activating their law enforcement lights, until the vehicle stopped at a red traffic light on the east side of Highway 92’s San Pedro River bridge crossing.  At the stoplight, the SUV veered off the right side of the road, traveled down a steep embankment, and began driving on the dirt area on the side of the road, maintaining a high rate of speed.  At one point, the vehicle was briefly airborne as it drove through a trench.  When it landed, the SUV came to a stop, appearing to be stuck in a ditch on the roadside.

     Two BPAs exited their vehicles, proceeding to the front doors on either side of the SUV. When the passenger refused to exit the vehicle, the agent opened the door and attempted to remove him. During this altercation, Sparks, who had still not turned off the SUV, slammed the car into reverse, causing the open passenger door to trap and drag one of the agents underneath the door of the SUV.  While the agent was trapped under the door, the passenger climbed back into the SUV and, after the agent freed himself, shut the passenger’s door.  Afterward, Sparks successfully negotiated the vehicle back onto Highway 92 traveling east. Agents located the SUV the following day, still containing the bundles of marijuana.  The driver of the SUV was later identified as Katherine Rose Sparks. 

     The injured agent was transported to Canyon Vista Medical Center in Sierra Vista, Ariz. for medical treatment.  The injuries to his knee were substantial and resulted in significant surgery. 

     The investigation in this case was conducted by Federal Bureau of Investigation, Sierra Vista. The prosecution was handled by Erica L. Seger, Assistant U.S. Attorney, District of Arizona, Tucson.

 

CASE NUMBER:            CR-17-00478-TUC         

RELEASE NUMBER:    2017-012_Sparks

 

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PHOENIX – This week, Antonio Yazzie, 25, of Lukachukai, Ariz., and a member of the Navajo Nation, was sentenced by U.S. District Judge Stephen M. McNamee to 46 months in prison followed by a term of 3 years of supervised release. Yazzie had previously pleaded guilty to robbery.

     On Jan. 18, 2017, Yazzie entered the Totsoh Trading Post on the Navajo Nation Indian Reservation and brandished a box cutter.  Yazzie threatened a store employee and demanded the employee give him money from the cash register.  The victim complied with Yazzie’s demands.  The victim is also a member of the Navajo Nation.

     The investigation in this case was conducted by the Federal Bureau of Investigation and the Navajo Nation Police and Criminal Investigations.  The prosecution was handled by Tracy Van Buskirk, Assistant U.S. Attorney, District of Arizona, Phoenix.

 

CASE NUMBER:            CR-17-08037-PCT-SMM 

RELEASE NUMBER:    2018-012_Yazzie

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PHOENIX – Yesterday, Arturo Tellez-Berrelleza, 32, a citizen of Mexico, was sentenced by U.S. District Judge James A. Soto to 21 months’ imprisonment.  Tellez-Berrelleza, who previously pleaded guilty to a drug trafficking offense, is the final defendant to be sentenced in a multi-agency investigation into a marijuana smuggling network.

     “Our office is committed to prosecuting transnational criminal organizations that seek to smuggle drugs through Arizona,” stated First Assistant U.S. Attorney Elizabeth A. Strange.  “Homeland Security Investigations and the United States Border Patrol deserve particular commendation for their painstaking efforts to apprehend the smugglers who were brought to justice during this investigation.”

     “Members of this drug trafficking organization will no longer plague the southern border with their illicit criminal activity and flood our community with large quantities of drugs,” said Scott Brown, special agent in charge of Homeland Security Investigations (HSI) Phoenix. “HSI, along with our law enforcement partners, will continue to work tirelessly to target and dismantle organizations who seek to operate in the dessert undetected.” 

     In October 2015, federal law enforcement officials initiated an investigation into the smuggling activities of a Mexican drug trafficking organization (“DTO”) operating on the Tohono O’odham Nation.  This DTO placed heavy reliance on so-called “scouts,” who are individuals who remain on high ground for extended periods of time in order to guide marijuana backpacking groups past law enforcement, and “resuppliers,” who are responsible for providing scouts with food, water, binoculars, cellphones, camping equipment, cold and hot weather clothing, and communications equipment.  During the course of the investigation, law enforcement officials seized approximately 5,478 kilograms of marijuana and successfully prosecuted at least 18 members of the DTO, who received sentences ranging up to 37 months’ imprisonment.  On one occasion, a DTO member attempted to hide near a cliff with a 15- to 20-foot drop, then assaulted a law enforcement agent who was attempting to arrest him by striking the agent, grabbing the agent’s radio, and damaging the radio so it could not be used to call for backup.  During the course of the struggle, the agent was pushed close to the edge of the cliff.            

     The investigation in this case was conducted by Homeland Security Investigations under the NATIVE Task Force and the U.S. Border Patrol Casa Grande Station.  These prosecutions were handled by Assistant U.S. Attorneys Adam Rossi and Susanna Martinez, District of Arizona, Tucson.

 

CASE NUMBERS:     4:17-CR-00480-JAS-BPV;4:17-CR-00291-RCC-LAB;4:17-CR-00480-  JAS-BPV; 4:17-CR-00557-JAS-EJM;4:17-CR-00509-JGZ-BPV;4:17-CR-00508-RCC-BPV

RELEASE NUMBER:    2018-011_ Tellez-Berrelleza et al.

 

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FLAGSTAFF, Ariz. – Deborah Hendricks, 44, of Scottsdale, Ariz., and owner of “Just Roughin’ It”, a commercial guiding company, was sentenced by U.S. Magistrate Judge Charles R. Pyle to three years of probation. The probation terms include a three-year ban for Hendricks and “Just Roughin It” from conducting business or commercial activity in the Grand Canyon National Park.  Hendricks had previously pleaded guilty to false report and violation of the terms and conditions of a permit.

     The case involved a commercial rim-to-rim guided hike across the Grand Canyon. The permit used to take a group of clients on a guided hike by “Just Roughin It” was falsified. The permit actually issued to the company was for a different location in the Grand Canyon. The permit used by “Just Roughin It” was illegally modified to look like a valid permit for a commercial rim-to-rim hike.

     The investigation in this case was conducted by Grand Canyon National Park Service Rangers.  The prosecution was handled by Camille Bibles, Assistant U.S. Attorney, District of Arizona, Flagstaff.

CASE NUMBER:          17-04339MJ-001-PCT-DMF

RELEASE NUMBER:    2018-010_Hendricks

 

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TUCSON, Ariz. – On January 29, 2018, Taylor Ray Freeman, 28, of Tucson, Ariz., was sentenced by U.S. District Judge James A. Soto to serve 97 months in prison. Freeman had previously pleaded guilty to possession of child pornography.  Freeman’s term of imprisonment will be followed by lifetime supervised release, with stringent sex offender conditions, including the condition that he register as a sex offender.

     Until his arrest, Freeman was employed as a live-in “house parent” by a charitable organization that houses at-risk children.  An investigation revealed that Freeman had been distributing sexually explicit images of children online, and seeking to trade for new images.  After Freeman’s arrest, authorities found more than 440 images and videos depicting child sex abuse from his cellphone, along with non-pornographic images of some of the children in his care.

     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, 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 investigation in this case was conducted by Homeland Security Investigations, Tucson. Carin C. Duryee, District of Arizona, and Tucson handled the prosecution.

 

CASE NUMBER:            CR-17-00194-TUC         

RELEASE NUMBER:    2018-009_Freeman

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PHOENIX – Yesterday, James Robertson Young, 29, of Kayenta, Ariz., and a member of the Navajo Nation, was sentenced by U.S. District Judge Steven P. Logan to 240 months in prison followed by three years of supervised release.  Young had previously pleaded guilty to involuntary manslaughter and aggravated assault.

 

     The case involved Young driving his vehicle with a BAC level of between .171 and .20, causing a head-on collision with another vehicle carrying four minor children (aged 8, 9, 10, and 14) and their grandparents.  The victims, all of whom are members of the Navajo Nation, had been traveling to the Grand Canyon to vacation and sell hand-made Navajo jewelry.  The collision killed five of the family members and seriously injured the sixth (the 14-year-old girl).  At sentencing, the surviving victim spoke about the physical and emotional injuries she had sustained as a result of the incident, other family members spoke about the deceased grandparents’ many contributions to their community, and the mother of the deceased children talked about her children, their short lives, and how much they will be missed.  Before imposing sentence, Judge Logan told the defendant: “It is now 12:07.  The boys that you killed should be at school and in lunch hour, wondering if they are going to get chocolate milk or pizza in their lunches.  That’s what they should be thinking right now, but you took all of that away from them when you drove drunk and killed them.”

 

     The investigation in this case was conducted by the Federal Bureau of Investigation, the Navajo Nation Department of Law Enforcement, and the Arizona Department of Public Safety.  The prosecution was handled by Sharon K. Sexton, Assistant U.S. Attorney, District of Arizona.

 

CASE NUMBER:            CR-17-8132-PCT-SPL

RELEASE NUMBER:    2018-008_Young

 

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     PHOENIX – Yesterday, Sharon Marie Clark, 57, of Parker, Ariz., was sentenced by U.S. District Judge Diane J. Humetewa to 25 years in prison, followed by a term of five years of supervised release.  Clark had previously pleaded guilty to second-degree murder and aiding and abetting.  On Dec. 20, 2017, Jeffrey Scott Williams, 56, of Parker, Ariz., was also sentenced to 25 years in prison, followed by a term of five years of supervised release.  Williams had previously pleaded guilty to second-degree murder and aiding and abetting.

 

     On or between March 8 and 9, 2016, Clark and Williams took the victim to Clark’s apartment in Parker, Ariz.  At the apartment, Williams zip-tied the victim’s wrists and ankles, Clark duct-taped the victim’s mouth closed and struck the victim in the face with her fists, and Williams wrapped the victim up in plastic.  The victim was then dumped in a canal.  The medical examiner determined that the victim’s cause of death was asphyxia due to drowning.  The victim was a member of the Colorado River Indian Tribes, and the murder took place on the Colorado River Indian Tribes Indian Reservation. 

 

     The investigation in this case was conducted by the Federal Bureau of Investigation and the Colorado River Indian Tribes Police Department.  The prosecution was handled by Christina J. Reid-Moore and Dimitra H. Sampson, Assistant U.S. Attorneys, District of Arizona, Phoenix.

 

CASE NUMBER:            CR-16-01397-DJH         

RELEASE NUMBER:    2018-007_Clark & Williams

 

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PHOENIX – On Monday, Eric Begay, 44, of Red Valley, Ariz., was sentenced by U.S. District Judge David G. Campbell to 42 months’ imprisonment, to be followed by 15 years of supervised release with sex offender conditions.  Begay had previously pleaded guilty to sexual abuse of a minor.

 

     In January of 2017, the victim, a member of the Navajo Nation, reported that Begay had been inappropriately touching the victim.  Agents of the Federal Bureau of Investigation promptly began an investigation, which led to Begay’s arrest and prosecution.  Begay is also a member of the Navajo Nation, and the abuse occurred within the Navajo Nation Reservation.

 

     The investigation in this case was conducted by the Federal Bureau of Investigation.  The prosecution was handled by Assistant U.S. Attorney William G. Voit, District of Arizona, Phoenix.

 

CASE NUMBER:           CR-17-08081-DGC

RELEASE NUMBER:    2018-006_Begay

 

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TUCSON, Ariz.  – Robert Francis Krebs, 75, of Daytona Beach, FL., was arrested on Jan. 13, 2018 and subsequently charged by complaint with bank robbery with the use of a dangerous weapon.

 

     The complaint alleges that Krebs executed a bank robbery at Pyramid Federal Credit Union in Tucson, Ariz.  Krebs approached the teller counter and orally demanded from two bank tellers all of their money and not to use any alarms.  He placed a black handgun, later identified as a BB gun, on top of a small black bag with the handgun pointed at the bank tellers’ torso.  The tellers gave Krebs money (including bait money) totaling over $8000.  Bank tellers described the robber as wearing large brown-rimmed reading glasses and wearing a sport coat.  The Tucson Police Department received information the following day of the location of a man who fit the description of the robber, and Krebs was subsequently arrested.  A subsequent search of Krebs’ hotel room resulted in the recovery of bait money and a black BB gun, similar to the one used in the bank robbery.

 

     At the initial appearance/detention hearing held today, the court ordered that Krebs remain detained in custody

 

     A conviction for bank robbery with the use of a dangerous weapon carries a maximum penalty of 25 years of imprisonment and a $250,000 fine.

 

     A criminal complaint is simply the method by which a person is charged with criminal activity and raises no inference of guilt.  An individual is presumed innocent until competent evidence is presented to a jury that establishes guilt beyond a reasonable doubt.

 

     The investigation in this case was conducted by the Tucson Police Department and the Federal Bureau of Investigation.  The prosecution is being handled by Raquel Arellano, Assistant U.S. Attorney, District of Arizona, Tucson.

 

CASE NUMBER:                  Mag#-18-MJ-02822M

RELEASE NUMBER:           2018-005_Krebs

 

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PHOENIX – Today, Herbert Dini III, 43, of Supai Village, Ariz., was sentenced by U.S. District Judge Steven P. Logan to one year of imprisonment, to be followed by three years of supervised release.  Dini had previously pleaded guilty to assault on a federal officer.

 

     On June 8, 2017, an officer with the Bureau of Indian Affairs – Office of Justice Services responded to a report of a disturbance at a home in Supai Village.  When he arrived, he found Dini at the home, causing a disturbance and heavily intoxicated.  The officer informed Dini he was under arrest for Havasupai Tribal Code offenses relating to his conduct.  Dini, a member of the Havasupai Tribe, subsequently ran from the officer, assaulting him during his flight, including grabbing the officer’s vest and swinging his fists at the officer.

 

     The investigation in this case was conducted by the Federal Bureau of Investigation.  The prosecution was handled by Assistant U.S. Attorney Alexander Samuels, District of Arizona, Phoenix.

 

CASE NUMBER:           CR-17-8162-PCT-SPL

RELEASE NUMBER:    2018-004_Dini

 

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PHOENIX – First Assistant United States Attorney Elizabeth A. Strange announced today that the U.S. Attorney’s Office for the District of Arizona collected $13,751,877 in criminal and civil actions in Fiscal Year 2017.  Of this amount, $5,903,640 was collected in criminal actions and $7,848,237 was collected in civil actions. 

 

     The District of Arizona also worked with other U.S. Attorney’s Offices and components of the Department of Justice to collect an additional $3,464,078 in cases pursued jointly with those offices.  Of this amount, $16,301 was collected in criminal actions and $3,447,777 was collected in civil actions.         

             

     Overall, the Justice Department collected just over $15 billion in civil and criminal actions in the fiscal year ending Sept. 30, 2017. 

 

     The U.S. Attorneys’ Offices, along with the Justice Department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims. 

 

     Federal law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss.  Criminal restitution is paid directly to the victims and criminal fines and felony assessments are paid to the department’s Crime Victims Fund, which distributes the funds to state victim compensation and victim assistance programs.

 

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

 

     Additionally, the U.S. Attorney’s Office for the District of Arizona, working with partner agencies and divisions, collected $3,100,141 in asset forfeiture actions in FY 2017.  Forfeited assets deposited into the Department of Justice Assets Forfeiture Fund are used to restore funds to crime victims and for a variety of law enforcement purposes.

 

RELEASE NUMBER:    2018-003_FY2017Collections

 

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FLAGSTAFF – Last week, Gary Cody Francis, 55, of Chinle, Ariz., was sentenced by Senior U.S. District Judge Stephen M. McNamee to 156 months in federal prison, followed by lifetime supervised release.  Francis had previously pleaded guilty to one count of abusive sexual contact with a minor.

 

     On Sept. 8, 2016, Francis, an enrolled member of the Navajo Nation, knowingly engaged in sexual contact with the minor victim, who is also an enrolled member of the Navajo Nation. 

 

     The investigation in this case was conducted by the Federal Bureau of Investigation and the Navajo Division of Public Safety Criminal Investigations. The prosecution was handled by Christina Covault, Assistant U.S. Attorney, District of Arizona, Phoenix.

 

CASE NUMBER:            CR-16-8267-PCT-SMM

RELEASE NUMBER:    2018-002_Francis

 

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PHOENIX – On Jan. 8, 2018, Sergio Charley, 37, of Tonalea, Ariz., and a member of the Navajo Nation, was sentenced by U.S. District Judge Douglas L. Rayes to 46 months in prison followed by a term of 3 years of supervised release. Charley had previously pleaded guilty to assault with a dangerous weapon.

 

     On April 12, 2016, Charley assaulted the victim with a knife, causing the victim to sustain serious bodily injury.  The victim is also a member of the Navajo Nation and the assault occurred on the Navajo Nation Indian Reservation.

 

     The investigation in this case was conducted by the Federal Bureau of Investigation and the Navajo Nation Department of Law Enforcement.  The prosecution was handled by Christina J. Reid-Moore, Assistant U.S. Attorney, District of Arizona, Phoenix.

 

 

CASE NUMBER:           CR-17-08144-DLR        

RELEASE NUMBER:    2018-001_Charley

 

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TUCSON, Ariz. – Roberto Ramirez, 21, of Tucson, Ariz., was arrested on Dec. 24, 2017 and subsequently charged by complaint with multiple offenses, including transportation of illegal aliens resulting in serious bodily injury, high-speed flight from a border patrol checkpoint, assault on a federal officer, and use of a firearm in furtherance of a violent crime.

 

     The complaint alleges that Ramirez arrived at the Border Patrol checkpoint on I-19 near Amado while transporting two suspected illegal aliens.  When agents referred Ramirez for further inspection, Ramirez fled from the checkpoint and drove northbound on I-19 at a high rate of speed.  Several border patrol agents pursued Ramirez in their vehicles.  During the pursuit, Ramirez fired several gunshots at the agents and attempted to ram their vehicles.    Ramirez eventually lost control of his vehicle and crashed.  One of Ramirez’s passengers was ejected during the crash and suffered serious injuries. 

 

     At the initial appearance/detention hearing held today, the court ordered that Ramirez remain detained in custody.

 

     Several of the charges carry a maximum penalty of 20 years of imprisonment and a $250,000 fine. 

 

     A criminal complaint is simply the method by which a person is charged with criminal activity and raises no inference of guilt. An individual is presumed innocent until competent evidence is presented to a jury that establishes guilt beyond a reasonable doubt.

 

     The investigation in this case was conducted by Homeland Security Investigations and the United States Border Patrol. The prosecution is being handled by Liza M. Granoff and Matthew C. Cassell, Assistant United States Attorneys, District of Arizona, Tucson.

 

CASE NUMBER:                   Mag#-17-MJ-06045M

RELEASE NUMBER:           2017-126_Ramirez

 

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PHOENIX – This week, U.S. District Judge G. Murray Snow sentenced Mary Bauer (aka Mary Almassy) to 33 months in federal prison, followed by three years of supervised release.  Bauer was also ordered to pay more than $1 million in restitution.  Bauer had previously pleaded guilty to wire fraud. 

 

     Bauer defrauded nearly two dozen local and national charities out of more than a million dollars in consulting fees.  Bauer held herself out as an experienced fundraiser who could help charities get large donations from wealthy philanthropists.  Bauer falsely claimed that she and her employees and associates had special access to certain out-of-state donors who wanted to make large charitable gifts.  Those donors did not exist.  Bauer made up the fictitious donors, as well as fictitious employees and associates, and fabricated numerous documents to conceal her fraud and lull her victims into continuing to pay her large monthly fees.  Bauer’s victims include charities dedicated to curing debilitating diseases, educating Arizona’s schoolchildren, and rehabilitating injured wildlife.

 

     “Frauds against charities are far-reaching, because they hurt not only the organizations, but the people the charities seek to serve, and the persons who have given to support the cause,” stated Elizabeth A. Strange, First Assistant U.S. Attorney.  “Our office will continue to aggressively prosecute anyone who targets charitable organizations.”

     “A prison sentence is very appropriate for someone who defrauded organizations dedicated to charitable causes and especially someone that took numerous steps to try to conceal her fraudulent activity,” said Ismael Nevarez Jr., Special Agent in Charge of the Phoenix Field Office of IRS-Criminal Investigation.

 

     The investigation in this case was conducted by the Internal Revenue Service-Criminal Investigation.  The prosecution was handled by Bridget Minder, Frank Galati, and Monica Klapper, Assistant U.S. Attorneys, District of Arizona, Phoenix.

 

CASE NUMBER:           CR-16-001157-GMS           

RELEASE NUMBER:    2017-125_Bauer

 

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PHOENIX – On Dec. 18, 2017, Marvin Benally, 47, of Leupp, Ariz., and a member of the Navajo Nation, was sentenced by U.S. District Judge David G. Campbell to 264 months in prison followed by lifetime supervised release and sex offender conditions.  Benally had previously pleaded guilty to abusive sexual contact of a child.

 

     The case involved Benally repeatedly sexually abusing a child, who was then between the ages of 11 and 12 and also a member of the Navajo Nation.   

 

     The investigation in this case was conducted by the Federal Bureau of Investigation and the Navajo Nation Police Department.  The prosecution was handled by Sharon K. Sexton, Assistant U.S. Attorney, District of Arizona, Phoenix.

 

CASE NUMBER:            CR-17-8130-PCT-DGC

RELEASE NUMBER:    2017-123_ Benally

 

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PHOENIX – Yesterday, Jason Todd Mogler, 49, formerly of Phoenix, Ariz., was sentenced by U.S. District Judge Steven P. Logan to 24 years and 4 months in prison.  Mogler had previously pleaded guilty to charges of conspiracy, wire fraud, and money laundering stemming from his role as one of the leaders in an $18 million investment fraud affecting 225 victims.   

 

     “Mogler’s crimes were particularly heinous, and deserving of a lengthy prison sentence, because he stole the life savings of everyday citizens, many of whom were near the end of their earning years,” stated Elizabeth A. Strange, First Assistant United States Attorney.  “Our district will continue to work closely with the FBI to catch and prosecute financial predators like Mogler.”

 

      "This sentence sends a strong message to criminals committing financial crimes. A single scam can destroy a company, devastate families by wiping out their life savings, or cost investors millions of dollars," said FBI Special Agent in Charge Michael DeLeon. “The FBI would like to remind investors to be diligent and gather as much information as possible before making any investment.  The FBI will continue to work aggressively with our law enforcement partners to investigate and prosecute those who break the law and violate public trust."

 

     From 2006 to 2012, Mogler and several others solicited millions of dollars from victims for purported investment in a variety of projects and companies, including land development in Mexico, recycling companies in Las Vegas and Chicago, and distressed real estate ventures in Phoenix. Mogler and his co-conspirators promoted their fraudulent investment schemes in legitimate-appearing seminars, magazine articles, and radio broadcasts, and they issued private offering documents that gave the fraudulent investments the appearance of legitimacy. 

 

     In reality, the solicitations and offering documents were riddled with false statements about the education and experience of Mogler and his co-conspirators, the ownership of property to be used in the projects and to serve as collateral, the feasibility of the projects and guaranteed returns, and other important matters.  Ultimately, Mogler and his co-conspirators used the investor funds not only to line their own pockets, but also to make Ponzi payments to certain investors and to create the façade of a legitimate business.  Mogler was also ordered to pay restitution to the victims for losses they incurred.

 

     The investigation in this case was conducted by the Phoenix Division of the FBI.  The prosecution was handled by Monica Klapper and Peter Sexton, Assistant U.S. Attorneys, District of Arizona, Phoenix.

 

CASE NUMBER:            CR-15-01118-PHX-SPL

RELEASE NUMBER:    2017-124_ Mogler

 

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For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/

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PHOENIX – Today, Yomtov Scott Menaged, 40, of Phoenix, Ariz., was sentenced by U.S. District Judge G. Murray Snow to 17 years in prison for orchestrating multiple fraud schemes resulting in more than $30 million in losses.  Menaged had previously pleaded guilty to bank fraud, money laundering, and aggravated identity theft.  The Court also ordered Menaged to pay the various victims $33,558,407.76 in restitution.  

 

     Menaged, who operated a real estate investment business as well as retail furniture stores, embezzled millions in loans meant for real estate purchases and provided fake real estate purchase documents to conceal the fraud.  Menaged used the embezzled money to support his lavish lifestyle that included travel, million dollar homes, and luxury vehicles. 

     When Menaged no longer had access to the embezzled funds, he orchestrated an elaborate identity theft scheme involving purported customers of his various retail furniture stores.  Menaged obtained the names and personal identification information of recently deceased individuals and used their information to submit fake credit applications from his furniture stores to various banks.  In fact, no real furniture purchases ever took place.  The ID theft scheme resulted in more than $2 million losses to the banks. 

     “Menaged engaged in a multi-year fraud scheme and brazenly stole from his victims -- their money, their identities, and ultimately their trust,” stated First Assistant United States Attorney Elizabeth A. Strange.  “Today’s lengthy sentence is a fitting punishment for his egregious crimes.”

 

     “While the harm and damage the defendant caused by swindling more than $33 million from innocent investors can never be repaired, the 200 plus victims can now take some small measure of satisfaction that he is now looking at 17 years in federal prison and a substantial forfeiture as repayment for his crimes.” said Scott Brown, special agent in charge of Homeland Security Investigations (HSI) in Phoenix. “HSI special agents dedicated to uncovering financial fraud will continue to aggressively investigate those who seek to profit by taking advantage of others.”

 

     “The criminal conduct by defendant Menaged was extensive.  His actions caused personal and financial harm to many individuals, including his former business partner,” stated IRS-Criminal Investigation Special Agent in Charge Ismael Nevarez Jr. “The sentence is very appropriate based on the $33 million loss from his fraud scheme and the tragic human suffering he caused.”

 

     The investigation in this case was conducted by the Department of Homeland Security, Homeland Security Investigations and Internal Revenue Service-Criminal Investigation.  The prosecution was handled by Monica B. Edelstein and Kevin M. Rapp, Assistant U.S. Attorneys, and Jennifer A. Giaimo, Special Assistant U.S. Attorney, District of Arizona, Phoenix.

 

CASE NUMBER:            CR-17-000680-PHX-GMS           

RELEASE NUMBER:    2017-122_Menaged

 

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For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/

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PHOENIX – On Dec. 12, 2017, Morris Singer, 54, of Kayenta, Ariz., and a member of the Navajo Nation, was sentenced by U.S. Senior District Judge Stephen M. McNamee to 37 months in prison, followed by 3 years of supervised release.  Singer had previously pleaded guilty to involuntary manslaughter.

 

     The case involved Singer driving his vehicle while intoxicated.  The victim, also a member of the Navajo Nation, was the passenger in Singer’s vehicle. Singer lost control of the vehicle and it rolled several times, ejecting the victim.  The victim died from injuries sustained from the crash, which occurred within the Navajo reservation.

 

     The investigation in this case was conducted by the Federal Bureau of Investigation and the Navajo Nation Police Department.  The prosecution was handled by Sharon Sexton and Alex Samuels, Assistant United State Attorneys, District of Arizona, Phoenix.

 

CASE NUMBER:           CR-17-8049-PCT-SMM

RELEASE NUMBER:    2017-121_Singer

 

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For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/

Follow the U.S. Attorney’s Office, District of Arizona, on Twitter @USAO_AZ for the latest news.