District of Arizona

PHOENIX – On Dec.10, 2013, Mario Lee White, 27, a member of the Gila River Indian Community, was sentenced by U.S. District Judge James Carrto 100 months in prison after previously pleading guilty to two counts of felon in possession of a firearm on June 26, 2013.

                 On Jan. 22, 2013, White was driving a vehicle within the Ak-Chin Indian Community when he was pulled over for a traffic violation.  Inside the vehicle officers found a firearm and drug paraphernalia.  On March 6, 2013, White was driving a vehicle on the Gila River Indian Community when he fled from police at a high speed with two passengers in the vehicle. He eventually rolled the vehicle off the side of the road.  Officers also found another firearm in the vehicle.  White had previously been convicted of armed robbery and aid and abet.

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

CASE NUMBER:           CR-13-00367-PHX-NVW
RELEASE NUMBER:   2013-095_White

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

PHOENIX – On Dec. 9, 2013, U.S. District Judge Susan R. Bolton sentenced Abel Doncel de la Torre-Gonzalez, 34, of Mexico D.F., Ed. De Mexico, MX, to seven years in prison for his role in a hostage taking.  De la Torre was the last of three hostage takers sentenced to prison in this matter.  Espiridion Pablo-Madrigal, 36, of San Juan Carapan, Michoacàn and Luis Bretado-Aragon, 19, of Concordia, Sinaloa, Mexico, were sentenced in November to ten and one-half years and six years imprisonment, respectively.  All three had been indicted June 12, 2013, on charges of hostage taking, conspiracy to commit hostage taking, and use, carrying and brandishing a firearm during and in relation to a crime of violence. 

U.S. Attorney John S. Leonardo reaffirmed the federal government’s commitment to prosecute human smugglers, especially those who employ violence and stated, “Federal law provides for significantly higher sentences for alien smugglers who engage in violence and use firearms as tools of their trade. We will use the statutory tools available to seek lengthy prison sentences for people who victimize their human cargo.”

The charges in the case stemmed from a human smuggling event in which the defendants raised the smuggling fees, threatened to kill the victims if the higher fees were not paid, and engaged in violent behavior toward the victims, who were in the process of being smuggled into the United States from Mexico.

The investigation in this case was conducted by U.S. Immigration and Customs Enforcement, Homeland Security Investigations.  The prosecution was handled byJoseph E. Koehler, Assistant U.S. Attorney, District of Arizona, Phoenix.

CASE NUMBER :           CR-13-835-PHX-SRB
RELEASE NUMBER:   2013-094_Pablo-Madrigal_etal.

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

TUCSON, Ariz. – On Dec. 6, 2013, Todd Russell Fries, 50, of Tucson, was sentenced by U.S. District Judge Cindy K. Jorgenson to 60 months in prison after he was found guilty by a federal jury on Aug. 13, 2013, of two counts of unlawful possession of unregistered destructive devices.Judge Jorgenson ordered that 20 months be served consecutive to the sentence of 151 months Fries previously received for unlawful possession and use of a chemical weapon.

Fries is currently serving a sentence of 151 months after being convicted in October 2012 of unlawful possession and use of a chemical weapon and providing false information to the FBI.  The chemical weapon charges stemmed from an incident that occurred on Aug. 2, 2009, when two chlorine chemical devices were placed at the home of Fries’s former clients with whom he had a billing dispute.  In that incident, the chlorine devices produced a massive cloud containing chlorine that enveloped a neighborhood on the northwest side of Tucson.  As a result of the cloud, the neighborhood had to be evacuated.  On May 13, 2011, during the course of the investigation of the chemical devices, the FBI executed a search warrant at Fries’s home in Tucson.  During the search, agents discovered 24 explosive devices; three containing added fragmentation, in a bedroom located in Fries’s residence. 

The investigation in this case was conducted by the Federal Bureau of Investigation, the Bureau of Alcohol, Firearms, Tobacco and Explosives, the Pima County Sheriff’s Department and the Pima Regional Bomb Squad. The prosecution was handled by Beverly K. Anderson, Assistant U.S. Attorney, District of Arizona, Tucson.

CASE NUMBER:           CR-11-01751-TUC-CKJ
RELEASE NUMBER:   2013-093_Fries

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

TUCSON, Ariz. – On Dec. 3, 2013, Imelda Arredondo, 37, of Rio Rico, Ariz., and Yadira Moreno, 35, of Nogales, Ariz., were sentenced by U.S. District Judge Cindy K. Jorgenson.  Each pleaded guilty to conspiring to defraud the United States by filing false federal income tax returns.  Moreno was sentenced to 12 months and 1 day imprisonment.  Arredondo, who also pleaded guilty to aggravated identity theft, was sentenced to 15 months imprisonment for conspiring with Moreno to defraud the government and a consecutive two year term of imprisonment for aggravated identity theft.

Arredondo, a tax return preparer in Rio Rico, filed false individual federal income tax returns with the Internal Revenue Service for the tax years 2008 through 2010 which included false refunds in the amount of at least $186,561. Arredondo used her clients’ tax returns to file and receive the inflated federal tax refunds by falsely inflating her clients’ wages, adding false dependents, and using false filing status all without her clients’ knowledge or permission. Moreno, Arredondo’s sister, was her tax preparation assistant.

            Arredondo was ordered to pay $191,702 in restitution, including $172,353 to the U.S. Treasury. Moreno was ordered to pay $113,213 in restitution, including $93,864.47 to the U.S. Treasury.

The investigation in this case was conducted by the Internal Revenue Service, Criminal Investigation Division.  The prosecution was handled by Jane L. Westby, Assistant U.S. Attorney, District of Arizona, Tucson, and Danny N. Roetzel, Trial Attorney, Department of Justice, Tax Division.

CASE NUMBER:           CR-4:13-CR-00151-CKJ-1           
RELEASE NUMBER:   2013-092_Arredondo&Moreno

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

PHOENIX – On Dec. 2, 2013, approximately 18 months following a large gang and drug sweep on the Ft. Apache Indian Reservation, the last of over 20 defendants was sentenced in federal district court.  Brandon Kasey, 24, of Whiteriver, Ariz., was sentenced by U.S. District Judge G. Murray Snow to 48 months imprisonment, with credit for time served, followed by three years of supervised release.  A list of related defendants and court numbers is below.

This community impact investigation was led by the Federal Bureau of Investigation’s Northern Arizona Safe Streets Task Force.  The investigation resulted in the successful federal prosecution of over 20 defendants for various charges, including drug trafficking and firearms violations, as well as gang-related assault charges and domestic violence charges.  The individual sentences ranged from probation up to 15 years imprisonment.

The investigation resulted in the seizure of a number of vehicles; in excess of $100,000 in cash; over 100 firearms, mostly military style weapons; and the dismantling of Whiteriver’s most organized street gang, the Diamond Creek Boyz.

The Federal Bureau of Investigation received substantial assistance from the Arizona Department of Public Safety, the Bureau of Indian Affairs, the Drug Enforcement Administration, the Bureau of Alcohol Tobacco Firearms and Explosives, and the Flagstaff Police Department.

Name

CR #

Eric Altaha

12-8122- PCT-PGR

12-08114-PCT-NVW

Tashina Bonito

12-8137- PCT-NVW

David Boshane

12-8117- PCT-JAT

Ardy Cosay

12-8127- PCT-NVW

Arnold Cosay

12-8116- PCT-PGR

Robert Dayaye

12-8017- PCT-NVW
12-8098- PCT-GMS

Amie Gloshay

12-8121- PCT-JAT

Feather Grimes

12-8139- PCT-GMS

Richard Grimes

12-8139- PCT-GMS

Robert Hinton

12-8098- PCT-GMS

Avalon Holden

12-8120- PCT-NVW

Jamie Johnson

12-8123- PCT-DGC

Renny Johnson

12-8123- PCT-DGC

Brandon Kasey

12-8098- PCT-GMS
12-8129- PCT-FJM

Charles Larzelere

12-8124- PCT-JAT

Dakota Lupe

12-8125- PCT-GMS

Duane Massey

12-8128- PCT-GMS
12-8202- PCT-GMS

Marcelena Minjarez

12-8126- PCT-DGC  

Thomas Pacheco

12-8118- PCT-DGC

Estiven Quintana

12-8098- PCT-GMS
12-8115- PCT-GMS
12-8035- PCT-GMS

Chad Tessay

12-8110- PCT-JAT

Garrett Thompson

12-8189- PCT-GMS

RELEASE NUMBER:   2013-091a_Ft.ApacheTakedown

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

PHOENIX – On Dec. 3, 2013, Lawrence Antonio Jackson, 22, a member of the Gila River Indian Community from Sacaton, Ariz., was sentenced by U.S. District Judge McKibbento 37 months in prison following a plea of guilty to domestic assault by a habitual offender on Sept. 16, 2013.

            On April 9, 2013, within the Gila River Indian Community, Jackson threw a full can of beer at the side of the victim’s head, causing her to momentarily black out.  He then cut her on the arms with a knife.  Prior to this assault, Jackson had been twice convicted of domestic violence in the Tribal Court.

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

CASE NUMBER:           CR-13-00856-PHX-NVW
RELEASE NUMBER:   2013-091_Jackson

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

PHOENIX – On Dec. 2, 2013, Michael James, 42, of Tohatchi, N.M., was sentenced by U.S. District Judge Howard D. McKibbento 188-months imprisonment following his plea of guilty to armed bank robbery.

On May 17, 2013, James entered the First American Credit Union, located on the Navajo Indian Reservation in Window Rock, Ariz., and displayed a BB handgun to the bank tellers – demanding money.  James was given the sum of $15,226. 

The instant offense constituted James’ third felony conviction for a crime of violence. 

The investigation in this case was conducted by the Federal Bureau of Investigation and the Navajo Criminal Investigator’s Office in Window Rock, Ariz.  The prosecution was handled by Cassie Bray Woo, Assistant U.S. Attorney, District of Arizona, Phoenix.

CASE NUMBER:           CR-13-8145-PCT-DGC
RELEASE NUMBER:   2013-090_James

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

PHOENIX – On Nov. 25, 2013, Francisco Javier Astorga-Velarde, 23, and Jose Pedro Soto-Valdez, 24, were sentenced by U.S. District Judge Susan R. Bolton to 12 years imprisonment. The third co-defendant, Noel Galindez-Marmolejo, 33, received a sentence of 10 years.  All three defendants are citizens of Mexico and pleaded guilty in August 2013 to using a firearm during a crime of violence which, in this case, was hostage taking.

                 In late 2012, the defendants held undocumented aliens hostage at a residence in Phoenix while waiting for the aliens’ smuggling fees to be paid.  The defendants increased the aliens’ smuggling fees and held them at gun point. The captors beat, pistol whipped and threatened to kill the hostages as well as broke one of the hostage’s fingers.  One hostage stated a sexual assault occurred at the house.   

The investigation in this case was conducted by the U.S. Immigration and Customs Enforcement (ICE), Homeland Security Investigations and the Phoenix Police Department. The prosecution was handled by Lisa E. Jennis, Assistant U.S. Attorney, District of Arizona, Phoenix.

CASE NUMBER:           CR-12-02104-PHX-SRB  
RELEASE NUMBER:   2013-089_Astorga-Velarde

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

PHOENIX - On Nov. 25, 2013, Renfo Lee Woody, 30, of Many Farms, Ariz., a member of the Navajo Nation, was sentenced by U.S. District Judge Neil V. Wake to 10 years imprisonment following a guilty plea to voluntary manslaughter.  Woody pleaded guilty to voluntary manslaughter on Aug. 27, 2013. 

As part of the plea agreement, Woody admitted that he entered the victim’s home on the Navajo Nation Indian Reservation on April 5, 2013, and beat the victim in the head and body with an aluminum baseball bat. The victim died the next day from injuries sustained as a result of the beating.

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

CASE NUMBER:           CR-13-08086-PCT-NVW 
RELEASE NUMBER:   2013-088_Woody

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

TUCSON, Ariz. – Alrick Michael Escalante, 21, of Sells, Ariz., and a member of the  Tohono O’odham Nation, was sentenced to 6 ½ years prison on Monday, Nov. 18, 2013, following a guilty plea to voluntary manslaughterby U.S. District Judge David C. Bury.  Escalante pled guilty to voluntary manslaughter on May 16, 2013. 

            As part of the plea agreement, Escalante admitted that in the early morning hours of July 24, 2011, in Sells, Ariz., on the Tohono O’odham Indian Nation, he stabbed the 22 year old victim, who died from a single stab wound.

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

CASE NUMBER:                  CR-12-1625-TUC-DCB (BGM)
RELEASE NUMBER:           2013-087_Escalante

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

TUCSON, Ariz. – Keith Deshawn Anderson, 39, of Las Vegas, Nev. was found guilty of four counts of transportation of a minor with intent to engage in criminal sexual activityby a federal jury in Tucson on November 12, 2013. The case was tried before U.S. District Judge Raner C. Collins. The defendant is being held after trial. Sentencing is set before Judge Collins on January 21, 2014. 

            The evidence at trial showed that during 2011 and 2012 the defendant transported a female minor multiple times from Arizona to Nevada and engaged in statutory rape.

U.S. Attorney John S. Leonardo stated, "This conviction serves as a reminder that sexual predators exist in our communities and we all need to be more vigilant."

            A conviction for transportation of a minor with intent to engage in criminal sexual activity carries a minimum mandatory term of ten years imprisonment up to life imprisonment, a maximum fine of $250,000, or both.

The investigation in this case was conducted by the Federal Bureau of Investigation and the Sierra Vista Police Department. The prosecution was handled by Nicole Savel and Karen Rolley, Assistant U.S. Attorneys, District of Arizona, Tucson.

CASE NUMBER:                  CR-12-0914-TUC-RCC (CRP)
RELEASE NUMBER:           2013-086_Anderson

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

TUCSON, Ariz. - On Nov. 12, 2013, United States District Court Judge Jennifer G. Zipps sentenced suspended Border Patrol Agents Dario Castillo, age 25, of Yuma, Ariz., and Ramon Zuniga, age 31, of San Luis, Ariz., to 24 months in prison, as a result of their convictions for civil rights offenses.  Both were ordered to self-surrender for service of their sentence on or before Jan. 14, 2014.  

On April 19, 2013, a federal jury in Tucson found Castillo guilty of four felony counts of deprivation of rights under color of law, and Zuniga guilty of four misdemeanor violations.  The case was tried before Judge Zipps from April 8 through April 19, 2013. 

            “The United States Attorney’s Office will continue to hold accountable all federal law enforcement officers in Arizona who abuse their authority in violation of their oath of office,” said United States Attorney John S. Leonardo.  “Violations of the law by those sworn to enforce it undermine public confidence in the entire criminal justice system and will not be tolerated.  The sentences imposed today reinforce the fundamental principle that no one, including a law enforcement officer, is above the law.”

            Evidence at trial showed that on Nov. 12, 2008, Zuniga and Castillo participated in a Border Patrol operation to track and contact border-crossers in Southern Arizona.  At approximately 10:30 p.m., agents located a group of persons carrying backpacks containing marijuana.  Most of these individuals fled, but four of the group were apprehended by the defendants and two other agents.  During a search of the four, Zuniga discovered a small baggie of personal-use marijuana on one of them.  He then shoved the marijuana into several of the victims’ mouths and yelled “cometela” (eat it).  The defendants ordered the victims to take off their shoes, socks, jackets, and extra shirts, which the victims had layered to protect against the cold, leaving them barefoot and wearing a single layer of clothing.  Defendant Castillo asked another agent for a cigarette lighter and then lit a fire which contained the victims’ shoes and clothing.  Zuniga and Castillo then ordered the victims to run away, without shoes or socks, and wearing only a single layer of clothing.  The four victims spent the night in the desert and were rescued the next morning by a Tribal Police Officer.

            Following the completion of their prison sentences, each defendant will serve a three year term of supervised release.

            The investigation in this case was conducted by the Department of Homeland Security’s Office of Inspector General.  The prosecution was handled by Karen Rolley and Eric Markovich, Assistant United States Attorneys, District of Arizona, Tucson.

CASE NUMBER:           11-CR-02727-JGZ
RELEASE NUMBER:   2013-085_ Zuniga&Castillo

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

PHOENIX, Ariz. – On November 5, 2013, Ivhan Herrera-Chiang, 31, a former U.S. Border Patrol agent, and Michael Lopez-Garcia, 30, a former state prison guard, were sentenced by U.S. Senior District Court Judge Paul G. Rosenblatt to prison terms of 15 years and 9 years, respectively, for their involvement in a plot to provide sensitive information to drug traffickers and to arrange for the murder of an informant.  Both defendants had previously pleaded guilty to various charges arising from the scheme.

First Assistant U.S. Attorney Elizabeth A. Strange stated, “These defendants engaged in a profound betrayal of the public trust.   The U.S. Attorney’s Office, working with our law enforcement partners, will continue to strive to ensure the integrity of every officer entrusted with the safety of the public.  These sentences send a powerful message that we will not tolerate corruption within the law enforcement ranks.”

"What began as a drug smuggling investigation quickly became more complex when HSI special agents learned a federal agent was misusing his position of trust to facilitate the commission of crimes," said Matt Allen, special agent in charge of ICE Homeland Security Investigations (HSI) Arizona. "While his actions are atypical of the dedication and integrity demonstrated by the vast majority of those who serve, this sentence should nonetheless send a message about the serious consequences facing those who would exploit their positions and violate that special trust.”

FBI Special Agent in Charge Douglas G. Price, Phoenix Division stated, "When those who are entrusted to uphold the law choose to betray the trust of the America people by committing bribery and drug trafficking it tarnishes the badge of those who honorably serve and protect our country.  Today's sentencing illustrates that justice was served in this matter. The FBI will continue to work with of law enforcement partners to combat public corruption at all levels."

“The lengthy sentences given to these defendants are very appropriate given their egregious crimes.  When those entrusted to uphold the law sink to the level of criminals they pursue for financial gain, it is a sad day for those of us in the law enforcement community," stated IRS Criminal Investigation Special Agent in Charge Dawn Mertz.

As  acknowledged  in  their  plea  agreements,   the  defendants  formed  a  “criminal partnership” to earn money by helping traffickers smuggle drugs and aliens into the United States.  As part of this multi-year partnership, Lopez-Garcia personally smuggled nearly two pounds  of methamphetamine into  the country (by hiding the drugs  under his  prison  guard uniform as he crossed through the Port of Entry) and also attempted to smuggle thirty kilograms of cocaine into the country.  Herrera assisted Lopez-Garcia (in return for bribes) by providing him with sensitive information—including sensor maps, combinations to gates located near the Mexican border, computer records concerning prior drug seizures, and the location of Border Patrol units—to which Herrera had access by virtue of his employment as a Border Patrol Agent.

During the final stages of the partnership, Lopez-Garcia attempted to arrange for the murder of a government informant after becoming fearful that the informant might be able to provide incriminating information about his activities.   As part of this plan, Lopez-Garcia obtained confidential information concerning the informant’s identity from Herrera and then relayed this information to his Mexican trafficking associates.

The investigation in this case was conducted by the Department of Homeland Security- Office of Inspector General, Homeland Security Investigations, Homeland Security Investigations-OPR, the Federal Bureau of Investigation, Customs and Border Protection-Office of Internal Affairs, and the Internal Revenue Service, Criminal Investigation.  The prosecution was handled by Dominic Lanza, Assistant U.S. Attorney, District of Arizona, Phoenix.

CASE NUMBER:           CR-12-177-PHX-PGR RELEASE NUMBER:                      2013-084_Herrera&Lopez

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

PHOENIX - On Oct. 28, 2013, Gjergj Kol Mihilli, 61, of Gilbert, Ariz., was sentenced to 51 months in prison and ordered to pay $302,420.64 by U. S. District Judge G. Murray Snow.  The defendant previously pled guilty to bank fraud and aggravated identity theft for concocting the following scheme: 

Mihilli owned and operated the Mama Mia Panaderia store in Chandler, Ariz. Between May 2010 and June 2011, the Mihilli engaged in a check-kiting type scheme by creating thousands of fraudulent money orders for deposit into the Mama Mia Panaderia business account.  The money orders were fraudulent and worthless because they were created without the receipt of actual cash from third parties and were made payable to fictitious payees.  For many of the fraudulent money orders, Mihilli used the names of Hollywood celebrities, politicians, and professional sports figures.  He routinely caused the fraudulent money orders to be deposited into his account for the purpose of artificially inflating the balance.  During the life of the scheme, Mihilli created and deposited over 10,000 fraudulent money orders with an aggregate value of over $10,000,000.

The investigation in this case was conducted by the U.S. Immigration and Customs Enforcement (ICE) Department of Homeland Security, the U.S. Internal Revenue Service, and the SABR Task Force.  The prosecution was handled by Assistant United States Attorney Raymond K. Woo, District of Arizona, Phoenix.

CASE NUMBER:                  CR-12-1794-PHX-GMS
RELEASE NUMBER:           2013-083_Mihilli

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

PHOENIX - On Oct. 28, 2013, Joseph N. Gagliano, 45, of Phoenix, was sentenced to 30 months in prison and ordered to pay $2,903,010.26 in restitution by U.S. District Court Judge G. Murray Snow.

            First Assistant U.S. Attorney Elizabeth A. Strange highlighted the significance of this sentence:  “These loans should have gone to qualified small business owners in need of financial support.  The defendant’s fraudulent conduct denied small business owners the opportunity to obtain access to capital in a difficult economy, and the United States Attorney’s Office will continue to investigate and prosecute such borrowers who obtain SBA loans through fraud.”

            “Corrupt borrowers who attempt to defraud SBA=s loan programs will be aggressively pursued by our office,” said SBA Inspector General Peggy E. Gustafson. “This successful investigation and prison sentence demonstrates our commitment to insure that SBA loans are only disbursed to deserving small businesses helping to grow our economy. We appreciate the leadership of the U.S. Attorney=s Office and the support of the FBI to bring this indictment forward.”  

            The case against Gagliano was based on an investigation by the SBA-OIG and FBI. Between June 2006 and July 2010, Gagliano sought a SBA loan for a car wash located in Chandler and mortgage loans for residential real estate located in Scottsdale and Phoenix. He submitted loan applications that falsely misrepresented that his father, who has the same name, was the actual borrower, and also made misrepresentations concerning his income, assets, liabilities and intent to occupy the residential properties as a primary residence. Gagliano also forged signatures, altered bank statements and submitted bogus lease agreements. The scheme to defraud resulted in nearly $3 million in losses to the Small Business Administration, Wells Fargo Bank, and JP Morgan Chase.

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

CASE NUMBER:           CR-12-00364-PHX-GMS
RELEASE NUMBER:   2013-081_Gagliano

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

PHOENIX– On Oct. 25, 2013, Lee Kinder Tso, 51, of Many Farms, Ariz., and a member of the Navajo Nation, was sentenced by U.S. District Judge Neil V. Wake to 141 months in federal prison.  He had previously pleaded guilty on March 15, 2013, to assault with a dangerous weapon and brandishing a firearm in furtherance of a crime of violence

            On Feb. 3, 2012, Tso used his rifle to shoot two victims in the chest, causing serious injuries to the victims.  He was angry with the victims because he believed they harmed his nephews earlier in the day.  Tso and others drove to a residence and shot one victim in the chest after he answered the door.  The second victim came out of a bedroom, and Tso also shot him in the chest.  Both victims survived following lengthy hospitalizations and multiple surgeries. 

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

CASE NUMBER:           CR-08051-PHX-NVW
RELEASE NUMBER:   2013-082_Tso

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

WASHINGTON – Former U.S. Congressman Rick Renzi was sentenced today to serve 36 months in prison following his June conviction by a federal jury in Tucson, Ariz., for extortion, bribery, insurance fraud, money laundering and racketeering. Renzi’s co-defendant, James Sandlin, was also sentenced today to serve 18 months in prison for his role in the extortion, bribery and money laundering scheme.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, First Assistant U.S. Attorney Elizabeth A. Strange of the District of Arizona, Special Agent in Charge Douglas G. Price of the FBI’s Phoenix Division, and Special Agent in Charge Dawn Mertz of the Internal Revenue Service – Criminal Investigation (IRS-CI) made the announcement following sentencing by Senior U.S. District Judge David C. Bury.

Renzi, 55, of Burke, Va., and Sandlin, 62, of Sherman, Texas, were convicted on June 11, 2013. Renzi was found guilty of 17 felony offenses including conspiracy, honest services wire fraud, extortion under color of official right, racketeering, money laundering and making false statements to insurance regulators. Sandlin was convicted of 13 felony offenses including conspiracy, honest services wire fraud, extortion under color of official right and money laundering.

“Mr. Renzi abused the power – and the corresponding trust – that comes with being a member of Congress by putting his own financial interests over the interests of the citizens he had sworn to serve,” said Acting Assistant Attorney General Raman.  “He fleeced his own insurance company to fund his run for Congress, and then exploited his position for personal gain.  Mr. Renzi’s conviction and today’s sentence demonstrate the Justice Department’s commitment to fighting corruption at the highest levels of government.”

“Former Congressman Renzi disregarded his oath to uphold the law, ignoring the interests of the people he was elected to serve in favor of his own interests,” stated First Assistant U.S. Attorney Strange.  “The sentences imposed today reinforce the fundamental principle that no one, including an elected official, is above the law.”

“When our elected officials betray the trust of the American people it strikes at the very core of our democracy,” said FBI Special Agent in Charge Price.  “The sentencing of former Congressman Rick Renzi illustrates the commitment by the FBI and our law enforcement partners to investigate and prosecute corruption at all levels.   Today’s sentencing is a reminder that when a public official violates the public's trust they will be held accountable to the fullest extent of the law.”

“The public expects its elected officials to be honest, to be trustworthy and to show respect for the law," stated IRS Special Agent in Charge Mertz.  “Those in public office should be held to a higher standard and are not exempt from criminal prosecution.  The prison sentence imposed today should serve as a wake-up call to other public officials who believe there are no consequences for betraying the public trust.”

         According to evidence at trial, Renzi, then a member of Congress from Arizona’s 1st Congressional District, promised in 2005 to use his legislative influence to profit from a federal land exchange that involved property owned by Sandlin, a real-estate investor.

        At the time, Sandlin owed Renzi $700,000 in future payments from their business dealings, and Renzi threatened proponents of the land exchange that he would not support it unless they purchased Sandlin’s property in Cochise County, Ariz.  When they refused, Renzi promised a second proponent of a land exchange that he would support the exchange if they purchased Sandlin’s property.  According to an agreement reached in May 2005, Sandlin was paid $1 million in earnest money, out of which he paid $200,000 to Renzi.  Just before Sandlin received the $1.6 million balance owed on the exchange, he paid an additional $533,000 to Renzi. 

Evidence at trial further showed that from 2001 to 2003, Renzi engaged in insurance fraud by diverting his clients’ insurance premiums to fund his first campaign for Congress, and he subsequently sent false letters to his insurance customers and provided false statements to various state regulators who were investigating his activities.  

        This case was investigated by the FBI and the Internal Revenue Service – Criminal Investigation.  The prosecution was handled by Trial Attorneys David Harbach and Sean Mulryne of the Department of Justice’s Public Integrity Section and Assistant U.S. Attorneys Gary Restaino and James Knapp of the District of Arizona.

13-1144

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PHOENIX – On Oct. 21, 2013, Diego DeLeon Chavez, 26, of Mexico, was sentenced by U.S. District Judge G. Murray Snow to 97 months of incarceration and five years of supervised release.  Chavez pleaded guilty on July 25, 2013, to conspiracy to harbor and transport illegal aliens, resulting in death, after two Guatemalan nationals whom Chavez’s operation was transporting were killed in a rollover crash.  
During the month of July 2012, Chavez operated a human stash house in Phoenix where he harbored illegal aliens. Chavez coordinated the receipt of smuggling fees and the transportation of illegal aliens to other parts of the United States.  The two victims died at the scene of the rollover crash from injuries they sustained when they were ejected from the vehicle. Thirteen illegal aliens inside the vehicle survived the crash, including the driver, Israel Velasquez, and his co-driver, who has not been identified.  Velasquez, fled from the scene of the crash, but was apprehended by law enforcement four days later outside another human stash house in Phoenix.  On July 25, 2013, Velasquez also pleaded guilty to conspiracy to harbor and transport illegal aliens, resulting in death, and is pending sentencing.
The investigation in this case was conducted by U.S. Immigration and Customs Enforcement (ICE), Homeland Security Investigations and the Arizona Department of Public Safety’s Illegal Immigration Prevention Apprehension Co-op Team and Highway Patrol.  The prosecution was handled by Kristen Brook and Lisa E. Jennis, Assistant U.S. Attorneys, District of Arizona, Phoenix.

CASE NUMBER:           CR-12-1503-GMS
RELEASE NUMBER:   2013-080_Chavez

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

PHOENIX – On Sept. 30, 2013, three defendants - Duane Hamblin Slade, 42, of Austin, Tex.; Guy Andrew Williams, 42, of Mesa, Ariz.; and Brent F. Williams, 66, of Mesa, Ariz. - were sentenced to lengthy prison terms by U.S. District Judge Jack Zouhary, a visiting judge from the Northern District of Ohio, for their roles in operating a $166 million Ponzi scheme that targeted members of their church.  Slade was sentenced to 180 months (15 years), Guy Williams was sentenced to 150 months (12.5 years), and Brent Williams was sentenced to 90 months (7.5 years).  In addition, Slade was also sentenced to a concurrent 15-year sentence for his participation in a separate fraud scheme, initiated after the cessation of the previous scheme, in which he solicited more money from fellow church members under false pretenses.

            U.S. Attorney John Leonardo stated, “This case involves one of the largest, most sophisticated fraud schemes in Arizona history.  The defendants bilked hundreds of victims into investing over $166 million into a Ponzi scheme over a period of several years. They preyed on the religious bonds they shared with many of their investors and siphoned millions of dollars out of Mathon through excessive fees and a complicated web of side deals involving companies they secretly owned or controlled.  The stiff sentences imposed by Judge Zouhary appropriately hold the defendants accountable for their crimes and send a strong message to others who would engage in such misconduct.”

“Our agency hopes these lengthy prison sentences will deter others from defrauding unsuspecting investors in the future. This scheme serves as an unfortunate reminder that all investors should exercise extreme caution before trusting someone with their hard-earned money” said Dawn Mertz, Special Agent in Charge of the Phoenix Field Office of Internal Revenue Service, Criminal Investigation.

“Postal Inspectors will continue to partner with fellow law enforcement agencies to bring to justice those who use the mail to perpetuate fraud,” said Terry Donnelly, Acting Phoenix Division Postal Inspector in Charge. “The United States Postal Inspection Service remains dedicated to our mission to enforce the laws that defend the nation’s mail system from illegal use and ensure public trust in the mail.”

FBI Special Agent in Charge Douglas G. Price, Phoenix Division stated, “When individuals take advantage and defraud legitimate investors for their own financial gain it erodes the public’s trust.  The FBI and our law enforcement partners are committed to holding those accountable who intentionally defraud hard working Americans.”

Slade was convicted of both offenses via guilty plea in June 2013, and the Williamses were convicted following a two-week trial in June 2013.  According to the evidence at trial, the defendants served as founders and/or officers of a group of Mesa, Arizona-based investment funds known as the “Mathon” entities, which collected more than $166 million in funds from investors from February 2002 until April 2005.  The evidence at trial further showed that Mathon’s investors, the majority of whom were members of the Church of Jesus Christ of Latter-Day Saints and hailed from Arizona, Utah, and Nevada, were generally told that their money would be used to make short-term loans to third-party borrowers at a high interest rate and that Mathon had an extensive track record of making such loans.  In fact, the defendants and their business partners ran Mathon as a Ponzi scheme - that is, by using the overwhelming majority of incoming money from new investors to pay back initial investors. The defendants and their business partners paid themselves extravagant salaries and bonuses exceeding $10 million and also used their investors’ money to make millions of dollars of “loans” to companies they secretly controlled.

The investigation in this case was conducted by the Federal Bureau of Investigation; the Internal Revenue Service, Criminal Investigation Division; the U.S. Postal Inspection Service; and the Securities Division of the Arizona Corporation Commission.  The prosecution was handled by Assistant U.S. Attorneys Peter S. Sexton, Kevin M. Rapp, and Dominic Lanza.

CASE NUMBER:           CR-09-1492-PHX-ROS
RELEASE NUMBER:   2013-079_Mathon_etal.

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

PHOENIX -  United States Attorney John S. Leonardo announced today that operations of the Office of the U.S. Attorney for the District of Arizona, all divisions – Tucson, Phoenix, Flagstaff and Yuma, are being affected by the partial shutdown in effect since midnight, October 1, 2013.

Most criminal litigation and related work will continue with limited interruption, as these activities are deemed essential to the safety of human life and the protection of property.  The U. S. Attorney’s Office will continue to work closely with federal, state, and local law enforcement on criminal matters.  However, because of the appropriation lapse and partial shutdown, much of the office’s staff working on civil litigation is being furloughed.  Administrative and criminal support staff are also being furloughed.  All civil litigation in which the office is involved will be curtailed or postponed to the extent possible without compromising public safety or the protection of property, and always subject to the direction of the federal courts.

Because of the effects of the appropriations lapse on activities of the U.S. Department of Justice, the U.S. Attorney’s Office will not be able to readily respond to media inquiries.  Press releases will be limited to urgent matters involving public safety.  The office’s website will not be actively during the shutdown.  The district will continue to receive communications from the public via mail, email and/or telephone. 

For additional information concerning the effects of the appropriations lapse and partial shutdown, visit www.justice.gov/jmd/publications/doj-contingency-plan.pdf  or http://www.justice.gov/usao/az/.  

RELEASE NUMBER:   2013-078_Shutdown

TUCSON, Ariz. – William Michael Naponelli, 69, and Bryan Atwood, 52, both from Tucson, Ariz., were sentenced to federal prison by U.S. District Court Judge Cindy K. Jorgenson for their role in a mortgage fraud scheme.  Naponelli was sentenced to 24 months in prison on Sept. 23, 2013.  Attwood was sentenced to 15 months in prison on Sept. 20, 2013.  Naponelli previously pleaded guilty to the felony offenses of conspiracy to commit bank fraud and conspiracy to commit transactional money laundering on Dec. 20, 2012.  Atwood previously pleaded guilty on Feb. 25, 2013, to conspiracy to commit wire fraud, also a felony.   

            As part of his guilty plea, Naponelli, a former real estate developer and loan officer, admitted his participation in a scheme to obtain various loans between July 2006 and May 2007.  Naponelli and another co-conspirator real estate developer purchased several properties using various business entities with which they were associated.  Thereafter, Naponelli and his fellow co-conspirator sold these properties to straw buyers. 

As part of the loan approval process, Naponelli knowingly caused to be submitted documents with knowledge that they contained material false statements including representations that the borrowers would provide the down payment or cash to close the real estate transactions.  After the fraudulently obtained loan proceeds were received, portions of these proceeds were wired or deposited into bank accounts controlled by Naponelli or another co-conspirator.

Atwood, who at the time of this conspiracy was a licensed real estate agent, admitted as part of his guilty plea that he obtained three properties through fraudulently obtained loans.  He admitted that he knew that documents provided to the lenders on his behalf relating to these properties contained one or more material false representations. 

The properties obtained as result of this mortgage fraud scheme went into foreclosure resulting in significant losses to the lenders.  As part of Naponelli’s sentence, he was ordered to pay restitution totaling approximately $3.1 million dollars.  Atwood was ordered to pay approximately $585,000. 

Naponelli and Atwood are the third and fourth co-defendants to be sentenced in this case.  Previously, co-defendants Walter Scott Fruit and Sandra Jackson were each sentenced to federal prison for their involvement in the conspiracy.  Fruit, who was also a licensed real estate agent, received a 30 month prison sentence.  Jackson, a former escrow agent, received six months in prison.    

            The investigation in this case was conducted by the Internal Revenue Service Criminal Investigation and the Federal Bureau of Investigation. The prosecution was handled by Jonathan B. Granoff, Assistant U.S. Attorney, District of Arizona, Tucson.

CASE NUMBER:                  CR-11-3046-TUC-CKJ
RELEASE NUMBER:           2013-077_Naponelli_Atwood

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

PHOENIX – Roman Borquez, 46, of Peoria, Ariz., and Ralph Moreno, 52, of Phoenix, Ariz., were found guilty by a federal jury of drug trafficking offenses including conspiracy to possess with intent to distribute methamphetamine. Borquez was also convicted of conspiring to distribute heroin. Moreno was also convicted of possessing firearm after having been convicted of a felony offense.  The case was tried before U.S. District Court Judge Roslyn O. Silver from Sept. 4-18, 2013. The defendants are being held after trial and sentencing is set before Judge Silveron Dec. 16, 2013.

            U.S. Attorney John S. Leonardo stated, “It remains a priority of the U.S. Attorney’s Office to prosecute dangerous drug traffickers, we will continue to investigate and prosecute these offenders in order to protect our community.” 

            The evidence at trial showed that in 2010, Borquez, a member of the Arizona Mexican Mafia prison gang, was serving time in federal prison when he conspired with others in Arizona to send heroin to him.  Borquez’ associates hid the heroin inside two greeting cards that were intercepted at the prison where he was being housed.

The evidence further showed that Borquez, while in prison, arranged for the sale of methamphetamine with a Hawaii-based drug dealer.  In 2011, a Phoenix-based FBI Violent Street Gang Task Force comprised of federal and state investigators infiltrated Borquez’ drug trafficking organization and seized three pounds of methamphetamine  During a search of Moreno’s residence, agents discovered an AR-15 rifle, a .40 caliber handgun, a small amount of marijuana and over $75,000 in cash.  Moreno was prohibited from possessing either weapon because of two prior felony convictions for drug trafficking.

            A conviction for conspiracy to possess with intent to distribute methamphetamine carries a maximum penalty of life in prison, a $10,000,000 fine or both.  A conviction for conspiracy to possess with intent to distribute a detectable amount of heroin carries a maximum penalty of 20 years in prison, a $1,000,000 fine or both.  A conviction for felon in possession of a firearm carries a maximum penalty of 10 years in prison, a $250,000 fine or both.

The investigation in this case was conducted by the Federal Bureau of Investigation; Drug Enforcement Administration; Bureau of Alcohol, Tobacco, Firearms and Explosives; U.S. Postal Inspection Service; Federal Bureau of Prisons; Arizona Department of Corrections;  Phoenix Police Department; and Arizona Department of Public Safety.  The prosecution is being handled by the U.S. Attorney’s Office, District of Arizona, Phoenix.

CASE NUMBER:                  CR 11-1865-PHX-ROS
RELEASE NUMBER:           2013-076_Borquez_etal

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

PHOENIX – On Sept. 19, 2013, Eddie Eugene Moreno, 33, of Sacaton, Ariz., a member of the Gila River Indian Community, was sentenced by U.S. District Judge David G. Campbell to 262 months in prison.  Moreno pleaded guilty on April 9, 2013 to second degree murder

On Dec. 24, 2012, Moreno was at his mother’s residence on the Gila River Indian Community, as was the victim.  For no apparent reason, Moreno followed the victim into a bedroom and stabbed him with a knife in the chest, just above his heart.  The victim died from internal bleeding after his blood vessel had been severed.

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 M. Logan, Assistant U.S. Attorney, District of Arizona, Phoenix.

CASE NUMBER:           CR-13-00039-PHX-DGC
RELEASE NUMBER:   2013-075_Moreno

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

PHOENIX – On Sept. 16, 2013, Border Patrol Agent Aaron Anaya, 26, of Yuma, Ariz., was sentenced by U.S. District Court Judge Roslyn O. Silverto 60 months in prison. Anaya pleaded guilty to possession of a firearm in furtherance of a drug trafficking offense on April 10, 2013.

            “Stopping employee corruption is the OIG's highest priority,” said Paul Leonard, Special Agent in Charge of the Department of Homeland Security, Office of the Inspector General. “We have zero tolerance for those who violate their oath of office and the American public's trust.”

            Douglas G. Price, FBI Special Agent in Charge, Phoenix Division, stated, “Whenever a law enforcement officer engages in illegal activity it erodes the public trust.  The actions of a few tarnish the badge of those who protect us each day from harm’s way.  Corruption by public officials at all levels is a top priority of the FBI and we remain committed to holding corrupt law enforcement officers accountable for their illegal actions.”

            On the evening of Dec. 2, 2012, Anaya was driving a fully marked U.S. Border Patrol vehicle and was on duty in his capacity as a Border Patrol Agent patrolling the U.S. international boundary with Mexico.  Anaya stopped along the fence line, exited his USBP vehicle and assisted three individuals on the Mexican side of the border in bringing large bales of marijuana over the fence and into the United States.  A total of six bales were placed in the vehicle with a combined weight of 146.9 pounds.

That same evening, Anaya’s vehicle, with the marijuana bales inside, was stopped by law enforcement and Anaya was arrested. At the time of his arrest, Anaya was wearing a USBP- issued uniform and had his service-issued firearm secured in his holster. A USBP-owned automatic rifle was in the front passenger compartment of Anaya=s USBP vehicle as well.   Anaya admitted at his change of plea proceeding that he would have utilized one or both of the firearms, if necessary, to protect himself and the marijuana from rival drug traffickers if rival drug traffickers had sought to steal the marijuana before he delivered it to its next destination.

The investigation in this case was conducted by the U.S. Department of Homeland Security, Office of the Inspector General, and the Federal Bureau of Investigation. The prosecution was handled by Howard D. Sukenic and Christina W. Covault, Assistant U.S. Attorneys, District of Arizona, Phoenix.

CASE NUMBER:           CR-12-2056-PHX-ROS
RELEASE NUMBER:   2013-074_Anaya

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

TUCSON, Ariz. – On Sept. 17, 2013, Billy Dewayne Mills, 34, of Tucson, Ariz., was sentenced to 18 years in prison, followed by a term of lifetime supervised release with stringent sex offender conditions, including registration as a sex offender. Mills pleaded guilty to knowing access of child pornography on March 7, 2013.

Mills was indicted by a federal grand jury for accessing child pornography after an investigation by Tucson Department of Homeland Security Agents revealed that Mills downloaded and shared child pornography by way of a peer-to-peer file-sharing program.  Mills had previously been convicted in Missouri of possession of child pornography in 2008 and of first degree child molestation in 2000.

This case was brought as part of Project Safe Childhood, a nationwide initiative by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse.  Led by United States Attorney’s Offices and DOJ’s Child Exploitation and Obscenity Section, Project Safe Childhood coordinates 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 Department of Homeland Security – Immigration and Custom Enforcement (ICE) Agents in Tucson. The prosecution was handled by Carin C. Duryee, Assistant U.S. Attorney, District of Arizona, Tucson.

CASE NUMBER:           CR-12-02467                  
RELEASE NUMBER:   2013-073_Mills

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

PHOENIX – On September 16, 2013, Charles Leo Thomas, 39, of Laveen, Ariz., an enrolled member of the Gila River Indian Community, was sentenced by U.S. District Judge G. Murray Snow to 18 years in federal prison, followed by a term of five years of supervised release.  Thomas pleaded guilty to second degree murder on June 27, 2013.

According to court documents, on April 18, 2012, Thomas and two of his co-defendants, Manuel Bernell Moore and Delbert Monroe Thomas got into an altercation with the victim and struck the victim multiple times.  Thomas grabbed a knife and stabbed the victim three times causing fatal injuries.  Co-defendant Delbert Thomas was sentenced to 60 months in prison on August 12, 2013, after pleading guilty to accessory after the fact. Moore is awaiting trial.

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

CASE NUMBER:           CR-12-1196-001-PHX-GMS        
RELEASE NUMBER:   2013-072_Thomas

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

BASHAS’ INC. TO PAY RESTITUTION FOR MEAT MISLABELING

PHOENIX – John S. Leonardo, United States Attorney for the District of Arizona, announced today that Bashas’ Inc. (“Bashas’”), a family-owned Arizona corporation that operates more than 100 grocery stores in Arizona, California, and New Mexico, including the line of stores known as AJ’s Fine Foods (“AJ’s”), has agreed to execute a Non-Prosecution Agreement concerning meat mislabeling practices that occurred at certain AJ’s locations between January 2010 and February 2012.  

                 Under the Non-Prosecution Agreement, Bashas’ has admitted, accepted, and acknowledged corporate responsibility for the misconduct of the employees who were responsible for the mislabeling practices and has voluntarily undertaken a variety of remedial measures – including disciplining and/or terminating culpable employees and adopting a comprehensive compliance program to be overseen by a Chief Compliance Officer – in an effort to prevent the misconduct from ever recurring.  Bashas’ also has agreed to provide $1,472,487.20 (which represents the total sales generated from the sale of the misbranded meat) to the Tucson Community Food Bank, St. Mary’s Food Bank, United Food Bank, the Salvation Army, St. Vincent de Paul Food Bank, and the Association of Arizona Food Banks in order to provide complete restitution for the misconduct.

                 Between January 2010 and February 2012, Bashas’ operated 12 AJ’s locations in the Phoenix metropolitan area and an additional location in Tucson.  During this time period, employees within the meat departments of some of these locations followed a practice of taking beef tenderloin steaks that had been graded as “Choice” under the USDA’s meat grading system, mislabeling those steaks as “Prime” (a higher grade), and then selling the mislabeled steaks to customers.  Because “Prime” steak is usually more expensive than “Choice” steak – AJ’s typically sold “Prime” steak for $35.99/pound and sold “Choice” steak for $25.99/pound during the relevant time period – the result of these mislabeling practices was that customers were being overcharged.  In addition, during the same time period, employees within the meat departments of some of these AJ’s locations also engaged in mislabeling practices concerning American-style “Kobe” ground beef, a special breed of beef that was typically sold for $5.99/pound.  Specifically, these AJ’s locations followed a practice of adding trimmings from non-“Kobe” meat products (including “Choice” and “Prime” steaks, cuts of meat that typically sell for much more than $5.99/pound) to the “Kobe” ground beef mixture in an effort to improve the consistency of the grind.  As result, the product being sold by these AJ’s locations as “Kobe” ground beef was not, in fact, composed solely of “Kobe” ground beef.  In total, the offending AJ’s locations sold approximately 17,636 pounds of mislabeled “Prime” tenderloin steaks and 139,861 pounds of mislabeled “Kobe” ground beef to customers and generated $1,472,487.20 in total sales therefrom.

                 The United States Attorney’s Office’s decision to enter into the Non-Prosecution Agreement with Bashas’ was based on a careful consideration of the factors set out in the Department of Justice’s “Principles of Federal Prosecution of Business Organizations.”  Of particular weight were Bashas’ full and ongoing cooperation with the investigation (which was conducted by the United States Department of Agriculture); Bashas’ willingness to accept full corporate responsibility for its employees who engaged in misconduct; Bashas’ willingness and agreement to undertake significant remedial measures to ensure that such misconduct will not recur; Bashas’ agreement to disgorge all of the sales it derived from its misconduct, in the form of restitution payments to area food banks; the absence of prior instances of misconduct associated with Bashas’; the absence of proof that Bashas’ upper management was aware of, or ratified, the misconduct; and the USDA’s conclusion that the misconduct did not create any public health risk.

                 The investigation in this case was conducted by the United States Department of Agriculture.  The prosecution is being handled by Dominic Lanza and Peter Sexton, Assistant U.S. Attorneys, District of Arizona, Phoenix.

RELEASE NUMBER:   2013-071_Bashas

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

PHOENIX – On Aug. 27, 2013, Shelia Young, 49, and Deane Young, 49, of Overgaard, Ariz., were each sentenced by U.S. District Judge David G. Campbell to five years of imprisonment for submitting false tax returns to the Internal Revenue Service. The Youngs were found guilty by a federal jury on Feb. 21, 2013, of conspiring to defraud the United States and submitting false claims for tax refunds.

Evidence at trial showed that the Youngs owned and operated Accurate Consulting LLC, an accounting and tax preparation business in Heber-Overgaard, Ariz. In addition to preparing lawful tax returns, the Youngs prepared and filed fraudulent tax returns on behalf of some of their clients that claimed false refunds ranging from $12,405 to $368,102 per return. In total, the Youngs filed 122 false returns claiming nearly $10 million in fraudulent refunds. To make the false claims appear legitimate, the Youngs filed tax forms with the IRS, including the Form 1099-OID, that reported false income and tax withholding for the clients. Evidence also showed that the Youngs lied to their clients, telling them that the refund claims were based on tax loopholes unknown to the general public. They also bolstered their credentials, falsely claiming over 86 years of combined experience and assuring their clients that a federal judge had approved the filing method.

“Tax fraud is an insult to all honest, taxpaying citizens in this country,” said U.S. Attorney John S. Leonardo. “Hopefully the sentences imposed will discourage others from engaging in similar conduct.”

“The Youngs stole money from the taxpayers of the United States through their fraudulent tax return scheme.  In addition, their clients are now responsible for paying back the taxes, penalties, and interest associated with these bogus tax returns and potentially will be prosecuted,” said Dawn Mertz, Special Agent in Charge of the Phoenix Field Office of Internal Revenue Service, Criminal Investigation.  “Be wary of any tax return preparer who promises a refund that sounds too good to be true.” 

The investigation in this case was conducted by the Internal Revenue Service, Criminal Investigation. The prosecution was handled by James R. Knapp and Michael T. Morrissey, Assistant U.S. Attorneys, District of Arizona, Phoenix.

CASE NUMBER:           CR-10-8216-PCT-DGC 
RELEASE NUMBER:   2013-070_Young_etal

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

PHOENIX – On Aug. 26, 2013, Lance Buddy Jackson, 27, of Peach Springs, Ariz., and an enrolled member of the Hualapai Nation Indian Tribe, was sentenced by U.S. District Judge Stephen M. McNamee to 42 months in federal prison, followed by a term of three years of supervised release.  Jackson pleaded guilty on June 4, 2013 to robbery.

According to court documents, on Oct. 8, 2012, Jackson entered the Hualapai Lodge after midnight wearing dark clothing and a ski mask.  Jackson approached the victim, an employee of the Lodge, pulled out what appeared to be a black handgun, but was later determined to be a BB gun, and demanded money from the victim. Jackson was subsequently apprehended based on video surveillance of the robbery. 

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

CASE NUMBER:           CR-12-8260-PCT-PGR  
RELEASE NUMBER:   2013-069_ (Jackson)

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

TUCSON, Ariz. – On Aug. 19, 2013, Luis Carlos Vasquez, 33, of Douglas, Ariz. was sentenced by U.S. District Judge David C. Bury to 151 months imprisonment. Vasquez was found guilty by a federal jury on Feb. 14, 2013, of one count of conspiracy to possess with intent to distribute marijuana, one count of possession with intent to distribute marijuana, one count of conspiracy to import marijuana and one count of importation of marijuana, aid and abet

United States Attorney John Leonardo stated, “When law enforcement officers like Luis Vasquez conspire with others to violate the very laws they are sworn to enforce, it undermines public confidence in the entire criminal justice system. He is deserving of the harsh punishment he received as he has not only disgraced himself and betrayed the public trust placed in him, but he has insulted the vast majority of his fellow officers who strive every day to perform a difficult job with integrity, honesty and dedication.”

The evidence at trial showed that Vasquez used his position as an inspector at the Douglas Port of Entry to allow over 1,200 pounds of marijuana into the United States from Mexico.  On at least two occasions, Vasquez, along with other members of the conspiracy, imported a large quantity of marijuana from Mexico into the United States through the Douglas Port of Entry.  Vasquez’ role in the conspiracy was to use his position as a Customs Officer to allow pick-up trucks loaded with marijuana to cross the international border without inspection.

The investigation in this case was conducted by the Federal Bureau of Investigation, the Department of Homeland Security, Customs and Border Protection and Office of the Inspector General, and the Douglas Arizona Police Department.  The prosecution was handled by James T. Lacey, Assistant U.S. Attorney, District of Arizona, Tucson.

CASE NUMBER:           CR-11-02486-TUC-DCB 
RELEASE NUMBER:   2013-068_Vasquez

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

                 PHOENIX, Ariz.–Matthew Smith, 31, of Mohave Valley, Ariz., pleaded guilty on Aug. 15, 2013 to Second-Degree Murder, Child Abuse, and Assault Resulting in Serious Bodily Injury, in federal district court in Phoenix.  Sentencing is set before Judge Paul G. Rosenblatt on Nov. 4, 2013.

                 Between July 8, 2012 to July 11, 2012 on the Fort Mojave Indian reservation, Defendant Smith became angry with one of the minor children who lived in his home and he assaulted the child multiple times.  The child died due to multiple blunt force traumas and other injuries.  During the same period of time, Defendant also assaulted a second child who lived in the home and took the child to the bathroom, where the child remained behind a locked door for approximately two days without food or water.  The second child was hospitalized for a significant period of time and survived, but sustained serious injuries.  In investigating the death and assault of these two children, law enforcement officers observed a third child, who had a visibly distorted arm.  It was determined that during the same July time period, Defendant assaulted the third child, who suffered a broken arm. 

A conviction for Second-Degree Murder carries a minimum of 30 years in prison and a maximum penalty of life in prison, a $250,000 fine, or both.  A conviction for Child Abuse carries a minimum of 10 years in prison, a maximum penalty of 24 years in prison, a $250,000 fine, or both.  A conviction for Assault Resulting in Serious Bodily Injury carries a minimum of 10 years in prison and a maximum of life in prison.       

The investigation preceding the indictment was conducted by the Federal Bureau of Investigation and the Fort Mojave Police Department. The prosecution is being handled by Jennifer E. Green and Sharon K. Sexton, Assistant U.S. Attorneys, District of Arizona, Phoenix.

CASE NUMBER:           CR-12-8195-PCT-PGR
RELEASE NUMBER:   2013-067_Smith

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

PHOENIX – U.S. Attorney John S. Leonardo offers the following statement concerning the U.S. Department of Justice’s “Smart on Crime” initiative announced this week:

            “I fully support the Attorney General’s revised charging policy for drug offenders. It will allow us to save millions of dollars unnecessarily spent to incarcerate non-violent, low level drug offenders in overcrowded prisons and redirect those resources to the prosecution and imprisonment of high level, serious drug offenders with violent criminal histories who pose a real danger to the community. This is a common sense, positive reform that provides federal prosecutors and the courts with the discretion and the opportunity to better achieve justice while reducing costs and continuing to maintain public safety.”

RELEASE NUMBER:   2013-066_USA-SmartOnCrimeInitiative

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

PHOENIX, Ariz. – On Aug. 14, 2013, Loren Kaysang Tahbo, 33, of Parker, Ariz., and a member of the Colorado River Indian Tribes, was sentenced by U.S. District Judge David G. Campbell to 265 months in prison, five years of supervised release, and restitution.  Tahbo pleaded guilty on Jan. 23, 2013, to second-degree murder.

On Aug. 10, 2012, Tahbo stabbed and ultimately killed a man on the Colorado River Indian reservation.  Tahbo left the scene of the murder, stole the victim’s car, crashed the car into a canal, and later fled on foot to a woman’s home where tribal police apprehended him. 

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 Jennifer E. Green, Assistant U.S. Attorney, District of Arizona, Phoenix.

CASE NUMBER:           CR-12-01773-PHX-DGC
RELEASE NUMBER:   2013-065_Tahbo

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

PHOENIX – On Aug. 12, 2013, Artemio Pena-Torrecillas, 26, of Culiacan, Sinaloa, Mexico, was sentenced by U.S. District Judge Susan R. Boltonto 40 years in prison. Pena-Torrecillas was found guilty by a federal jury on May 30, 2013, of conspiracy to possess with intent to distribute 500 grams or more of methamphetamine, conspiracy to commit money laundering, two counts of possession with intent to distribute methamphetamine, and two counts of possession of firearms in furtherance of a drug trafficking offense. 

            U.S. Attorney John S. Leonardo stated, “Through the efforts of a long-term investigation by federal and local law enforcement, a leader and other members of a drug trafficking organization have been removed from our community.  Our neighborhoods are safer as a result of the removal of these drug dealers who possessed firearms to further their illegal enterprise.”

“Drugs and violence go hand in hand. This deadly combination must be met with combined law enforcement expertise at the local, state, county and federal levels,” said DEA Special Agent in Charge Doug Coleman. “DEA is committed to keeping violent drug traffickers off the streets and putting them where they belong—behind bars.”

            Between January 2011 and April 2011, Pena-Torrecillas, along with Cruz Ortega-Ruano, led a Phoenix-based drug trafficking organization (DTO) responsible for the distribution of pound-quantities of exceptionally pure methamphetamine as well as the collection of narcotics proceeds.  Law enforcement used sophisticated investigative techniques to dismantle the DTO resulting in a five-defendant indictment against members of the DTO.  Pena-Torrecillas was responsible for obtaining pounds of methamphetamine from a source of supply, hiring drug couriers to drive vehicles equipped with sophisticated hidden compartments to transport the drugs, and distributing the drugs to customers. Other co-defendants including Gerardo Diarte-Lara, Francisco Torrecillas-Torres, and Juan Martin Tapia-Bernal assisted the DTO by acting as stash house operators and couriers.  Through the investigation into this DTO, law enforcement seized approximately 12 pounds of methamphetamine, over $200,000 in narcotics proceeds, 60 firearms including assault rifles and handguns, high capacity firearm magazines, ammunition, and vehicles from the DTO at three separate stash houses operated by the organization. 

           
In addition to Pena-Torrecillas, four co-defendants entered guilty pleas and were sentenced on Dec. 3, 2012, by U.S. District Judge Frederick J. Martone:

1. Cruz Ortega-Ruano, 32, of Mexico, was sentenced to 20 years in prison. He was responsible for coordinating the delivery of narcotics and collection of narcotics proceeds for the DTO.
2. Gerardo Diarte-Lara, 28, of Mexico, was sentenced to 17.5 years in prison.  He served as a trusted narcotics and narcotics proceeds courier for the organization. 
3. Francisco Torrecillas-Torres, 39, of Mexico, was sentenced to 10 years in prison for his role as a narcotics courier. 
4. Juan Martin Tapia-Bernal, 46, of Mexico, was sentenced to 23 years in prison.  He was a stash house operator and courier for the DTO. 

The investigation in this case was conducted by the Drug Enforcement Administration, Bureau of Alcohol, Tobacco, Firearms, and Explosives, Arizona Department of Public Safety, Mesa Police Department, Tempe Police Department, Navajo County Sheriff’s Office, and Pinal County Sheriff’s Office. The prosecution was handled by Jonell L. Lucca and John Z. Boyle, Assistant U.S. Attorneys, District of Arizona, Phoenix.

CASE NUMBER:           CR-11-00731-PHX-SRB  
RELEASE NUMBER:   2013-064_Pena-Torrecillas

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

TUCSON, Ariz. – On Aug. 9, 2013, Walter Scott Fruit, 54 and Sandra Jackson, 48, both from Tucson, Ariz., were sentenced to federal prison by U.S. District Court Judge Cindy K. Jorgenson for their role in a mortgage fraud scheme.  Fruit was sentenced to 30 months in prison; Jackson was sentenced to six months in prison.  Fruit had previously pleaded guilty on Feb. 28, 2013, to charges of conspiracy to commit bank fraud and conspiracy to commit transactional money laundering, both felonies. Jackson had previously pleaded guilty on Feb. 27, 2013, to conspiracy to commit wire fraud, also a felony.   

            As part of his guilty plea, Fruit, a real estate agent and real estate developer, admitted his participation in a mortgage fraud scheme to obtain various loans between July 2006 and May 2007.  Fruit and another co-conspirator, also a real estate developer, purchased several properties using various business entities with which they were associated.  Thereafter, Fruit and his co-conspirator sold these properties to straw buyers.  Fruit also admitted that he fraudulently inflated the true sales price of the properties. 

As part of the loan approval process, Fruit knowingly caused to be submitted documents containing false statements representing that the borrowers would provide the down payment or cash to close the real estate transactions.  Portions of the fraudulently obtained loan proceeds were wired or deposited into bank accounts controlled by Fruit or another co-conspirator.   

Jackson, a former escrow agent, admitted as part of her guilty plea that she obtained three properties through fraudulently obtained loans and that she knew that documents provided to the lenders on her behalf relating to these properties contained one or more material false representations. 

The properties obtained as result of this mortgage fraud scheme went into foreclosure resulting in significant losses to the lenders.  As part of Fruit’s sentence, he was ordered to pay a restitution judgment totaling more than $2.5 million dollars.  Jackson was ordered to pay approximately $480,000. 

            The investigation in this case was conducted by the Internal Revenue Service, Criminal Investigation and the Federal Bureau of Investigation. The prosecution was handled by Jonathan B. Granoff, Assistant U.S. Attorney, District of Arizona, Tucson.

CASE NUMBER:                  CR-11-3046-TUC-CKJ
RELEASE NUMBER:           2013-063_Fruit/Jackson

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

TUCSON, Ariz. – On Aug, 9, 2013, a federal jury in Tucson found Todd Russell Fries, a.k.a. Todd Burns, 50, of Tucson, guilty of two counts of possession of unregistered explosive devices.  The case was tried before U.S. District Judge Cindy K. Jorgenson.  Sentencing is set for Oct. 18, 2013, before Judge Jorgenson.  Fries is already serving a sentence of 151 months after being convicted last year of unlawful possession and use of a chemical weapon and providing false information to the FBI.

            According to evidence presented at trial, federal agents executed a search warrant at Fries’ home in Tucson on May 13, 2011, in connection with the investigation related to the chemical weapon charges.  Agents discovered 24 explosive devices, three containing added fragmentation, in a bedroom in the Fries residence. The chemical weapon charges stemmed from an incident that occurred on Aug. 2, 2009, when a chlorine chemical device was placed at the home of Fries’ former clients with whom he had a billing dispute.  In that incident, the chlorine device produced a huge chlorine containing cloud that enveloped a neighborhood on the northwest side of Tucson and resulted in the evacuation of the neighborhood.

            A conviction for unlawful possession of unregistered devices carries a maximum penalty of ten years in prison and not more than a $10,000 fine or both.

            The investigation was conducted by the Federal Bureau of Investigation and the Pima County Sheriff’s Department.  The prosecution was handled by Beverly K. Anderson, Assistant U.S. Attorney, District of Arizona, Tucson.

CASE NUMBER:                  CR-11-1751-TUC-CKJ
RELEASE NUMBER:           2013-062_Fries

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

PHOENIX– Christopher James, 37, of Whiteriver, Ariz., was found guilty by a federal jury on Aug. 2, 2013, of two counts of sexual abuse.  The case was tried before U.S. District Judge Neil V. Wake beginning on July 30, 2013.  The defendant is being held pending sentencing which is set for Nov. 4, 2013.

            The evidence at trial showed that on Aug. 3, 2011, on the Fort Apache Indian Reservation, James sexually abused a victim who was physically incapable of communicating an unwillingness to participate in a sex act, as a result of a physical disability, as well as cognitive and developmental delay.

            A conviction for sexual abuse carries a maximum penalty of life imprisonment, a $250,000 fine or both.

            The investigation in this case was conducted by the Bureau of Indian Affairs.  The prosecution was handled by Dimitra H. Sampson and Christina Reid-Moore, Assistant U.S. Attorneys, District of Arizona, Phoenix.

CASE NUMBER:                  CR-2011-8206-PCT-NVW
RELEASE NUMBER:           2013-061_James

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

PHOENIX – On Aug. 5, 2013, Frank Becerra Campos, 66, of San Diego, Calif., was sentenced by U.S. District Judge G. Murray Snow to five years imprisonment, followed by three years of supervised release, for his role in an advance-fee mortgage rescue scam that took place in Arizona and California. 

Campos had previously pled guilty to conspiring with two others, Miguel Carrera and Oswaldo Esqueda, to defraud more than 250 distressed homeowners out of approximately $675,000 in up-front fees with false promises of mortgage modification assistance.  Campos’ prison sentence was the maximum allowed by statute, and Campos was ordered to pay back the fees to the victims in the form of restitution. 

            FBI Special Agent in Charge Douglas G. Price, Phoenix Division, stated “Arizona has suffered greatly when the housing market collapsed.  Campos conspired with others to defraud homeowners who were on the brink of foreclosure, promising them financial assistance to save their homes.  What is most disturbing is that primarily Hispanic homeowners were the target of this mortgage fraud scheme.  The FBI’s Mortgage Fraud Task Force and the United States Attorney’s Office are committed to combat mortgage fraud and hold those individuals accountable who prey on distressed homeowners.”

Campos, Carrera and Oswaldo operated under the business names Gold Capital Investments, LLC, and Foreclosure Home Savers, LLC, making false guarantees to mostly Spanish-speaking distressed homeowners that their mortgage principal balance and monthly payments would be reduced by 25%, and then failed to pursue any form of loan modification process on behalf of the homeowners. 

When homes neared foreclosure, the homeowner was placed in bankruptcy proceedings to delay the foreclosure, but virtually all of the 250 or so victims ultimately lost their homes to foreclosure.  Carrera and Oswaldo, both citizens of Mexico, fled from the charges and are believed to be in Mexico.  Carrera is believed to be working in real estate under the name Mike Beltran.

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

CASE NUMBER:           CR-12-01699-PHX-GMS 
RELEASE NUMBER:   2013-060_Campos

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

TUCSON, Ariz. – On July 23, 2013, Anthony Mark Boscarino, 47, of Tucson, Ariz., was sentenced by U.S. District Judge Cindy K. Jorgenson to 135 months. Boscarino pleaded guilty January 23 and February 27, 2013 to 43 crimes including fraud, money laundering and tax evasion.

            Boscarino was involved in multiple frauds using his internet sports handicapping site which operated under several names including Mike’s Lock Club.  He solicited victims to invest in gambling junkets to Las Vegas, in an oil well project in Louisiana, in Collateralized Mortgage Obligations and several other scams.  He was ordered to pay restitution of $6.5 million to the 1,685 victims of his fraudulent activity and $1.3 million in unpaid taxes for 2009. The court also ordered a $4.8 million money judgment against him and forfeited several of his cars and bank accounts.

The investigation in this case was conducted by Federal Bureau of Investigation and the Internal Revenue Service, Criminal Investigations Division. The prosecution was handled by Wallace H. Kleindienst and John R. Evans, Assistant U.S. Attorney, District of Arizona, Tucson.

CASE NUMBER:            CR- 10-01942-PCT-CKJ
RELEASE NUMBER:     2013-058_Boscarino

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

PHOENIX – John Rowland Mills, 49, of Glendale, Ariz., a former policy analyst for the Arizona House of Representatives, was found guilty of nine counts of wire fraud by a federal jury in Phoenix.  The case was tried before U.S. District Judge James A. Teilborg from July 9 through July 23, 2013.  Sentencing is set before Judge Teilborgon Tuesday, Oct. 8, 2013.

            “The theft and misuse of approximately $133,000 of campaign funds, consisting primarily of contributions from individuals, is a serious offense.  My office stands ready to assist the people of Arizona in guaranteeing that campaign workers are not tempted to steal or misuse such funds in the future,” said John S. Leonardo, U.S. Attorney, District of Arizona.

FBI Special Agent in Charge Douglas G. Price, Phoenix Division, stated “Whenever an individual utilizes their position to defraud the public for their own personal gain by taking campaign contributions it tarnishes our political process.  John Rowland Mills’ actions were fostered by greed.  The voice of justice has spoken with a jury of his peers holding him accountable for defrauding the public.  The FBI and the United States Attorney’s Office are committed to investigating and prosecuting those who choose to line their pockets with public funds.”

            The evidence at trial showed that from December 2006 through January 2009, Mills embezzled approximately $133,000 from the James P. Weiers 2008 campaign account (which consisted primarily of contributions from individuals) and used the embezzled funds to make mortgage payments, to pay for personal items such as clothing, food, and credit card bills, and to make various investments, including investments via multiple E*Trade accounts.  Mills also made a variety of false statements in an attempt to avoid detection, including forging the candidate’s signature on nine campaign account checks and filing six campaign finance reports with the Arizona Secretary of State that falsely overstated the amount of money in the campaign account.  Finally, just before the 2008 election, Mills deposited money back into the campaign account in an attempt to avoid detection.

            Each conviction for wire fraud carries a maximum penalty of 20 years, a maximum fine of $250,000, or both. 

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

CASE NUMBER:                  CR-12-1660-PHX-JAT (LOA)
RELEASE NUMBER:           2013-059_Mills

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

PHOENIX – On July 22, 2013, Terry Harris Lee, 66, of Peach Springs, Ariz., an enrolled member of the Hualapai Nation Indian Tribe, was sentenced by U.S. District Judge David G. Campbell to 180 months in federal prison, followed by a term of lifetime supervised release.  Lee pleaded guilty on May 2, 2013 to sexual abuse of a minor.

According to the plea agreement, on March 18, 2012, the 12 year old victim was having a sleepover with a friend at Lee’s residence located on the Hualapai Nation Indian Reservation.  Lee entered the bedroom where the victim was staying, and sexually abused the victim.    

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

CASE NUMBER:            CR-12-8247-PCT-DGC  
RELEASE NUMBER:     2013-057_Lee

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

PHOENIX – On July 19, 2013, Michael Rocky Lane, 51, of Cave Creek, Arizona, was found guilty of conspiracy to manufacture and distribute controlled substance analogues and possession with the intent to distribute controlled substance analogues by a federal jury in Phoenix. The case was tried before U.S. District Judge David G. Campbell from June 25, 2013 through July 19, 2013. Sentencing is set before Judge Campbell on October 21, 2013.

            “The manufacture and distribution of designer drugs, which are often mislabeled as innocuous household items and contain chemicals similar to scheduled drugs, are a tremendous problem in our community and across the United States.  Individuals who manufacture and distribute these mislabeled designer drugs are responsible for products that have been linked to overdoses, deaths, and hallucinations.  My office stands ready to enforce the Analogue Enforcement Act and combat this growing problem,” said John S. Leonardo, U.S. Attorney, District of Arizona.

            “Friday’s verdict serves notice to those who are contemplating entering this emerging area of the illegal drug industry,” said DEA Special Agent in Charge Doug Coleman.   This DEA-led investigation and trial brought to light the fact that controlled substance analogues are highly addictive stimulants and no different than cocaine or methamphetamine.  The criminals behind the importation, distribution and selling of these drugs have scant regard for human life in their reckless pursuit of illicit profits.” 

            The evidence at trial showed that, beginning in early 2011, Michael Rocky Lane worked with Nicholas Pascal Zizzo at Consortium Distribution in Phoenix, Arizona.  Consortium Distribution manufactured a designer drug called “Eight Ballz Bath Salts,” which contained a powerful stimulant MDPV.  In October of 2011, the Drug Enforcement Administration (DEA) made MDPV a Schedule I controlled substance, and subsequently Lane worked to find a replacement chemical to use in a new designer drug, which was re-labeled as “Eight Ballz Ultra Premium Glass Cleaner.” “Eight Ballz” was never intended as a legitimate glass cleaner or bath salt, but was designed specifically to intoxicate users.

            In the fall of 2011, Lane started his own designer drug manufacturing company in Tempe called Dynamic Distribution.  There, Lane manufactured and distributed other mislabeled designer drugs including “Amped Lady Bug Attractant Exuberance Powder,” “White Water Rapid Lady Bug Attractant Exuberance Powder,” and “Snowman Glass Cleaner.”  These products were neither legitimate glass cleaners nor insect attractants.  Instead, they were all powerful stimulants, including APVP, APBP, MPPP, and Pentedrone, each of which contained substances similar to controlled scheduled drugs.  Lane made nearly $8000 a day from domestic internet sales of these products to individual customers alone.

            On July 25, 2012, DEA executed hundreds of search warrants at Consortioum, Dynamic and other locations across the country as part of “Operation Log Jam,” a nationwide, coordinated investigation led by the Department of Justice and DEA to combat the growing epidemic of designer drug manufacturing and distribution here in the United States.  Other conspirators prosecuted in this investigation and who are awaiting sentencing include, Nicholas Pascal Zizzo of Phoenix; Benjamin Joshua Lowenstein of Phoenix, Arizona; Vincent Collura of New Jersey; David Titus of Phoenix; Andrew Scott Freeman of Minnesota; Clinton Strunk of Mesa; Scott Stone of Minnesota; and Daniel Pollock of Escondido, California.

            A conviction for conspiracy to manufacture and distribute a controlled substance analogue carries a maximum penalty of 20 years, a $1,000,000.00 fine or both.

            The investigation in this case was conducted by the Drug Enforcement Administration and was assisted by the Arizona Department of Public Safety, the Phoenix Police Department, and the Buckeye Police Department. The prosecution was handled by D. J. Pashayan and Theresa Rassas, Assistant U.S. Attorneys, District of Arizona, Phoenix.

CASE NUMBER:                   CR-12-1419-PHX-DGC (LOA)
RELEASE NUMBER:            2013-056_Lane

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

PHOENIX, Ariz. – On July 17, 2013, Rosalio Perez Gutierrez, Jr., 26, of Camp Verde, Arizona, was sentenced by U.S. District Judge James A. Teilborg to 15 years imprisonment. 

Gutierrez pleaded guilty on May 6, 2013 to the charge of Kidnapping, which involved an assault that occurred on March 26, 2012.  After becoming angry during a domestic dispute, Gutierrez chased after another man who was walking down the street and wrestled him to the ground.  While the victim was on the ground, Gutierrez held him down, pulled out a knife and began stabbing him multiple times in the head and arms.  The victim sustained serious and life threatening injuries as a result of the assault.  The kidnapping and related attack occurred on the Yavapai Apache Indian Reservation.

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

CASE NUMBER:            CR-12-8190-PCT-JAT   
RELEASE NUMBER:     2013-055­_Gutierrez

# # #

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

PHOENIX – On July 8, 2013, Indalecio Castro-Ponce, 40, of San Luis, Ariz. was sentenced by U.S. District Judge Susan R. Boltonto 240 months imprisonment and a $3,000 fine. Castro-Ponce was found guilty by a federal jury on April 12, 2013, of one count of conspiracy to possess with intent to distribute methamphetamine and two counts of possession with intent to distribute methamphetamine

                 “We place a very high priority on the prosecution of those like Castro-Ponce who cause the ruin of so many lives by spreading the poison of methamphetamine in our communities,” said U.S. Attorney John S. Leonardo.  “We will continue to do all that we can to hold such people accountable for their actions.”

                 “I commend the dedicated investigative work of HSI special agents and our law enforcement partners in Arizona and across the Western U.S.,” said Matt Allen, special agent in charge of ICE Homeland Security Investigations (HSI) Arizona. “Thanks to their efforts, this meth trafficker will spend 20 years in federal prison. This strong sentence should serve as a deterrent to those who would seek to profit by bringing dangerous, highly-addictive drugs into our neighborhoods.”

The evidence at trial showed that Castro-Ponce conspired with others, including his wife and teenaged son, to distribute methamphetamine on more than 20 occasions to various locations in the Southwestern United States, including Salt Lake City, Utah; Las Vegas, Nev.; Fresno, Calif.; Sunland, Calif.; and Moreno Valley, Calif.  Following visits by Castro-Ponce, law enforcement seized more than three pounds of 96% pure “ice” methamphetamine from a location in Fresno, Calif., and more than seven pounds of methamphetamine from a location in Moreno Valley, Calif., along with more than $200,000 cash. Castro-Ponce, a first-time offender, received sentencing enhancements for having involved his minor children in his drug trafficking activities, being a leader and organizer of a drug trafficking organization, and obstructing justice by committing perjury under oath at trial.

The investigation in this case was conducted by U.S. Customs and Enforcement (ICE) Homeland Security Investigations (HSI) in Yuma, Ariz., with assistance from HSI-Fresno, HSI-Riverside County, HSI-Salt Lake City, HSI-Las Vegas, and HSI-Phoenix, the Drug Enforcement Administration, the Federal Bureau of Investigation, the LA-IMPACT Task Force, the INCA Task Force, and the Fresno County Sheriff’s Office. The prosecution was handled by Krissa Lanham and William Bryan, Assistant U.S. Attorneys, District of Arizona, Phoenix.

CASE NUMBER:            CR-12-1363-PHX-SRB
RELEASE NUMBER:     2013-054_ Castro-Ponce

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

PHOENIX, Ariz. – On July 8, 2013, Joshua Samuel Jenkins, 33, of Mohave Valley, Ariz. and a member of the Fort Mojave Indian Tribe, was sentenced by U.S. District Judge David G. Campbell to 63 months in prison, three years of supervised release, and forfeiture of a firearm and ammunition.  Jenkins pled guilty on May 28, 2013 to the offense of Felon in Possession of a Firearm.  He had been previously convicted of four felony offenses, and in this incident possessed a sawed-off or shortened shotgun and ammunition.

The investigation in this case was conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Fort Mojave Tribal Police Department.  The prosecution was handled by Jennifer E. Green, Assistant U.S. Attorney, District of Arizona, Phoenix.

CASE NUMBER:            CR-13-8007-PCT-DGC  
RELEASE NUMBER:     2013-053_Jenkins

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

TUCSON, Ariz. – On July 1, 2013, Patagonia, Arizona residents Fabian Monge, 34, Isabel Monge-Sierras, 43, Mary Francis (Monge) Carlson, 32, and Frank Lopez, 49 were sentenced by U.S. District Judge Raner C. Collinsto serve terms of imprisonment of 12.5 years, 7 years, 5 years, and 7.5 years, respectively.  After the conclusion of a three-week trial, on September 27, 2012, a federal jury found the defendants guilty of conspiring to possess with the intent to distribute over 1,000 kilograms of marijuana.  Fabian Monge was additionally found guilty of two separate counts of aiding and abetting the possession with intent to distribute over 100 kilograms of marijuana.  Frances Monge was acquitted at trial.

“This successful prosecution reflects our cooperation with our law enforcement partners in combating drug trafficking organizations that choose to operate in our smaller Arizona communities. These prison terms represent a significant blow to this organization and sends a message to those who work at all levels of such drug trafficking organizations that they will be held accountable,” said U.S. Attorney John S. Leonardo, “I want to thank the federal, state, and local law enforcement agencies for their team effort in this investigation.”

"For years, Fabian Monge operated a family run drug trafficking organization with impunity," said DEA Special Agent in Charge Doug Coleman.  “Their sentencing is another example that DEA and its law enforcement partners will use every tool at our disposal to identify and bring to justice those individuals who think they will never have to pay the price for their illegal activity".  From the kingpins to the street dealers our combined goal is to disrupt and dismantle drug trafficking organizations and put them out of service."

The trial testimony showed that the Monge family, from Patagonia, belonged to a family-run Drug Trafficking Organization (DTO) which was led by Fabian Monge and closely followed by his older sister Isabel Santos-Sierra (Monge).  Their younger sister Mary Francis Carlson (Monge) also played a role in the DTO and Frank Lopez was one of the stash house operators for the organization.  Witnesses testified that the Monge DTO have been smuggling marijuana from Mexico into the United States and transporting the bulk marijuana to Tucson and Phoenix since at least 2006.  The Monge DTO was responsible for trafficking multi-ton quantities of marijuana from Patagonia until their arrests in 2010. 

Collectively, this conspiracy investigation resulted in over 40 defendants charged in federal court in separate indictments comprising of coordinators, stash house operators, marijuana load drivers, and individuals who registered vehicles for the DTO.  This investigation was a collaborative effort initiated by DEA-Nogales, U.S. Border Patrol-Sonoita, Cochise County Sheriff’s Office, the Sierra Vista Police Department, and the Patagonia Police Department.  The prosecution was handled by Liza M. Granoff and Jeffrey D. Martino, Assistant U.S. Attorneys, District of Arizona, Tucson.

CASE NUMBER:            CR-10-863-TUC-RCC   
RELEASE NUMBER:     2013-052_Monge

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

PHOENIX, Ariz. - Jay Kevin Perry, 38, of Phoenix, Ariz., was sentenced today by U.S. District Court Judge Paul G. Rosenblatt to 44 months in prison for engaging in a bankruptcy fraud scheme that targeted elderly investors.  Another hearing before Judge Rosenblatt, to resolve the nearly $1 million in restitution claims filed against Perry, is currently scheduled for August 6, 2013.

            "Unfortunately, the problem of investment scams targeting the elderly has become rampant,” said John S. Leonardo, United States Attorney.  “This case sends a strong message that the United States Attorney’s Office, the United States Secret Service, and the FBI are committed to the investigation and prosecution of investment managers who defraud the most vulnerable members of our community.  The fact that some of the victims of this scheme were infirm, in their 90s, and lost their life savings makes this defendant particularly deserving of a prison sentence."

            Perry defrauded elderly estate-planning clients, many of whom lived in Sun City, Ariz., and ranged in age from the 60s to the late 90s, by convincing them to liquidate annuities and loan money to him.  Although Perry promised reasonable returns on these “loans,” he made few if any payments to his clients.  In some cases, Perry secured his clients’ “loans” with a commercial property on which he had failed to make payments.  Unbeknownst to his clients, Perry also filed for bankruptcy, and in his bankruptcy petition he intentionally omitted the addresses of his clients (which had the effect of concealing that he was attempting to discharge the debts he owed them).

            The investigation in this case was conducted by the United States Secret Service and the Federal Bureau of Investigation.  The prosecution was handled by Assistant U.S. Attorney Kevin M. Rapp.

CASE NUMBER:                   CR 11-2291-PHX-PGR
RELEASE NUMBER:             2013-051_Perry
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For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/

PHOENIX. –  Guy Andrew Williams, 42, and Brent F. Williams, 66, both of Mesa, Ariz., were convicted by a federal jury in Phoenix on June 28, 2013, of 38 counts of conspiracy, wire fraud, mail fraud, and money laundering. The two-week trial was conducted by U.S. District Judge Jack Zouhary, a visiting judge from the Northern District of Ohio. 

            U.S. Attorney John Leonardo stated, “Affinity fraud is a particularly reprehensible crime because it depends upon a betrayal of trust to defraud victims of their money. The defendants preyed upon those with whom they made connections through church or in the community.  This verdict holds the defendants accountable for their crimes and sends a message to others who would engage in such misconduct.”

FBI Special Agent in Charge Douglas G. Price, Phoenix Division stated, "The guilty verdict rendered in this matter holds Guy and Brent Williams accountable for their actions.  The FBI and the IRS are committed to investigating and pursuing those who conspire and prey on trusting individuals for their own personal gain. The FBI and our law enforcement partners will continue to combat fraud as it relates to money laundering, wire and mail fraud."

            "The defendants lived lavish lifestyles and enriched themselves at the expense of their unsuspecting investors. This classic Ponzi scheme serves as an unfortunate reminder that everyone should exercise extreme caution before committing their hard-earned money to investment opportunities that promise returns that sound too good to be true" said Dawn Mertz, Special Agent in Charge of the Phoenix Field Office of Internal Revenue Service, Criminal
Investigation.

"This verdict should serve as a strong deterrent to others who would misuse our nation's mail system to commit mail fraud," said Acting Phoenix Division Postal Inspector in Charge Adrian Gonzalez. "The United States Postal Inspection Service remains dedicated to our mission to enforce the laws that defend the nation’s mail system from illegal use and ensure public trust in the mail.  Postal Inspectors will continue to partner with fellow law enforcement agencies to bring those perpetuating fraud to justice."

According to the evidence at trial, Guy Andrew Williams and his father, Brent F. Williams, served as the managing director and chief financial officer, respectively, of a group of Mesa, Ariz.-based investment funds known as the “Mathon” entities.  The evidence at trial showed that the Mathon entities collected more than $100 million in funds from investors from February 2002 until April 2005.

            The evidence at trial further showed that Mathon’s investors, the majority of whom were members of the Church of Jesus Christ of Latter-Day Saints and hailed from Arizona, Utah, and Nevada, were generally told that their money would be used to make short-term loans to third-party borrowers at a high interest rate and that Mathon had an extensive track record of making such loans.  In fact, the evidence at trial showed that the defendants, and their business partners, ran Mathon as a Ponzi scheme—that is, by using the overwhelming majority of incoming money from new investors to pay back initial investors.  Finally, the evidence at trial showed that the defendants and their business partners paid themselves extravagant salaries and bonuses exceeding $10 million and also used their investors’ money to make millions of dollars of “loans” to companies they secretly controlled.

            The sentencing of Guy Andrew Williams and Brent F. Williams is currently scheduled for Sept. 30, 2013, before Judge Zouhary.  Also scheduled to be sentenced on that date are Duane Hamblin Slade and Russell Laurence Sewell, two other members of Mathon’s management team who pleaded guilty to related charges before trial. 

            The defendants face a potential maximum sentence of 20 years in federal prison on each count of conspiracy, wire fraud, and mail fraud, and a potential maximum sentence of 10 years in federal prison on each count of money laundering.  Each count also carries a maximum fine of $250,000.

            The investigation in this case was conducted by Federal Bureau of Investigation, the Internal Revenue Service, Criminal Investigations Division, the U.S. Postal Inspection Service, and the Securities Division of the Arizona Corporation Commission.  The prosecution was handled by Assistant U.S. Attorneys Peter S. Sexton, Kevin M. Rapp, and Dominic Lanza.

CASE NUMBER:                   CR-09-1492-PHX-ROS
RELEASE NUMBER:            2013-050_Williams

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

TUCSON, Ariz. – Dino Sisneros, 42, of Tucson, Ariz., after a trial of thirteen days, was found guilty as charged by a federal jury on June 25, 2013. The charges against the defendant included three counts of wire fraud and two counts of transactional money laundering greater than $10,000.  The case was tried before U.S. District Judge Cindy K. Jorgenson who will sentence Sisneros on Sept. 5, 2013. 

            The evidence presented at trial demonstrated that Sisneros orchestrated a real estate investment fraud scheme between 2006 – 2008 during which Sisneros misled investors by promising them high rates of return in exchange for their money which he said would be used to invest in real estate.  However, instead of investing in real estate, he used large portions of his victims’ money for his own personal use, including paying for a ski trip to Colorado; paying a $7,900 hotel bill in Santa Monica, Calif.; car payments for a Cadillac Escalade, Cadillac CTS, two Nissan 350-Z’s, a Nissan Altima, and a Ford Expedition.  The evidence further demonstrated that Sisneros used victim commingled funds toward his own rent payments so he could live in a multimillion dollar, 4-story home with an elevator.  Sisneros received more than $900,000 from his victims but failed to pay his victims in return for their investments as he had promised.   

            A conviction for each count of wire fraud carries a maximum penalty of 20 years, a $250,000 fine or both.  A conviction for each count of transactional money laundering greater than $10,000 carries a maximum penalty of 10 years, a $250,000 fine or both. 

            The investigation in this case was conducted by the Internal Revenue Service, Criminal Investigation. The prosecution was handled by Jonathan Granoff and Cory Picton, Assistant U.S. Attorneys, District of Arizona, Tucson.

CASE NUMBER:                   CR-12-0174-TUC-CKJ(CRP)
RELEASE NUMBER:            2013-049_Sisneros

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

PHOENIX, Ariz. – On June 24, 2013, Walter David Garcia, ­23, of Sinaloa, Mexico, was sentenced to 16 years in federal prison by District Judge Neil V. Wake stemming from his commission of multiple bank robberies in Phoenix, Sun City and Surprise.  Garcia previously pleaded guilty to four counts of Bank Robbery, two counts of Armed Bank Robbery, and one count of Use of a Firearm During a Crime of Violence.   

According to Garcia’s plea agreement, he committed seven bank robberies from August 1, 2011 through April 12, 2012.  Garcia brandished a handgun during one of the robberies and also committed carjackings in connection with two of the bank robberies.  He was dubbed the “Home Town Bandit” due to his affinity for wearing local sports team paraphernalia when committing the robberies.   

The investigation in this case was conducted by the Federal Bureau of Investigation (FBI) and its Bank Robbery Task Force as well as the Surprise Police Department.  The Bank Robbery Task Force is a partnership of FBI, the Phoenix Police Department, the Maricopa County Sheriff’s Office, the Mesa Police Department, the U.S. Attorney’s Office, and the Maricopa County Attorney’s Office, whose focus is to investigate and apprehend bank robbers in the Phoenix metropolitan area.  More information on the Bank Robbery Task Force can be found at www.bandittrackerarizona.com.  The prosecution was handled by Christine D. Keller and Alison Bachus, Assistant U.S. Attorneys, District of Arizona, Phoenix.

CASE NUMBER:            CR-12-1145
RELEASE NUMBER:    2013-047_Garcia   

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