Central District of California

LOS ANGELES – A Long Beach man has been arrested on a federal criminal complaint alleging he traveled with a 14-year-old runaway from Arizona – whom he met in a Reddit internet forum – across state lines to his apartment, where he engaged in criminal sexual activity with her, the Justice Department announced today.

Trevon Nathaniel Langstaff, 32, is charged with transportation of a minor with intent to engage in criminal sexual activity.

Langstaff was arrested at his residence early Wednesday morning. He is scheduled to make his initial appearance this afternoon in United States District Court in downtown Los Angeles.

According to an affidavit filed with the complaint, law enforcement officials on Tuesday received a report of a missing 14-year-old girl who ran away from a residence in Arizona. Early Tuesday morning, the victim’s family discovered she was missing.

The victim’s family searched for the girl in the neighborhood and reached out to her friends for information about the victim’s whereabouts and learned that the victim – one week earlier – said that she was planning to run away from home. The victim also told a friend that she had met a man who harbored runaways and who currently had two other teenagers staying with him, and that he would give her a cellphone and a room in which to stay, the affidavit alleges.

The victim and Langstaff allegedly met on a Reddit internet forum about runaways. A phone record search revealed numerous contacts between the victim and Langstaff, according to the affidavit.

Early Wednesday morning, law enforcement officials visited Langstaff’s Long Beach apartment to locate and rescue the victim. The victim was found hidden in a closet at Langstaff’s apartment, the affidavit alleges.

The victim said Langstaff and she engaged in sexual contact after their arrival at his apartment.

A criminal complaint is merely an allegation, and the defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

If convicted, Langstaff would face a mandatory minimum sentence of 10 years in federal prison and a statutory maximum sentence of life imprisonment.

The FBI and the Long Beach Police Department are investigating this matter.

Assistant United States Attorney Damaris Diaz of the Violent and Organized Crime Section is prosecuting this case.

RIVERSIDE, California – A San Bernardino County man who worked as a school bus driver has been charged in federal court with possessing more than 10,000 images of child sexual abuse material (CSAM), the Justice Department announced today.

Donal James Seaver, 49, of Hesperia, made his initial appearance this afternoon in United States District Court in Riverside. A federal magistrate judge ordered Seaver jailed without bond and scheduled an April 16 arraignment for him.

According to an affidavit filed Tuesday with a criminal complaint, law enforcement officials on March 7 executed a search warrant at Seaver’s residence. During the search, law enforcement seized a Samsung Tablet that allegedly contained more than 10,000 images and 13 videos of CSAM.

The tablet’s historical device data show that it was frequently “wiped” – or factory reset – which deleted all data on the device, and had been reset most recently on February 27.

As of March 7, Seaver was employed as a school bus driver for a private company and drove a route that included 10 elementary school students with special needs.

He was arrested and charged in state court prior to a federal criminal case being brought against him.

A criminal complaint is merely an allegation, and the defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

If convicted, Seaver would face a statutory maximum sentence of 20 years in federal prison.

The FBI and the San Bernardino County Sheriff’s Department are investigating this matter.

Assistant United States Attorney Sonah Lee of the Riverside Branch Office is prosecuting this case.

SANTA ANA, California – The former senior director of fiscal services at an Orange County public school district pleaded guilty today to embezzling approximately $15.9 million from the district over several years.

Jorge Armando Contreras, 53, of Yorba Linda, pleaded guilty to one count of embezzlement, theft and intentional misapplication of funds from an organization receiving federal funds, a felony offense that carries a statutory maximum sentence of 10 years in federal prison.

Law enforcement so far has seized approximately $7.7 million in personal and real property traced to the scheme, including a home in Yorba Linda, a 2021 BMW automobile, 57 luxury designer bags (mostly Louis Vuitton), various pieces of jewelry, designer clothes and shoes, and eight bottles of Clase Azul Ultra luxury tequila. 

Contreras was the senior director of fiscal services at Magnolia School District, which serves students in Anaheim and Stanton. In this role, Contreras, whom the school district hired in 2006, managed the district’s fiscal operations. The schools in this district educate children from preschool through sixth grade – 81% of whom are classified as socio-economically disadvantaged.

According to his plea agreement, Contreras managed and had access to various school district bank accounts as well as the student body bank account. Contreras caused checks from these accounts to be deposited into his personal bank account.

Contreras wrote checks in small dollar amounts written to “M S D,” with the letters spaced out, and, after receiving the proper signatures from others, would include fictitious names and increase the amounts of the checks and deposit the checks into his personal bank account via ATMs. To conceal his fraud, Contreras provided bank reconciliation packets to others at the school district with falsified bank statements and records.

In total, Contreras admitted to embezzling approximately $15,920,042 from the school district.  

The school district placed Contreras on administrative leave in August 2023 and filed a lawsuit against him in Orange County Superior Court.

United States District Judge Fred W. Slaughter scheduled a July 25 sentencing hearing for Contreras, who is free on $450,000 bond.

The FBI, IRS Criminal Investigation, and the United States Department of Education’s Office of Inspector General are investigating this case.

Assistant United States Attorneys Billy Joe McLain of the Public Corruption and Civil Rights Section, Brett A. Sagel of the Corporate and Securities Fraud Strike Force, and James E. Dochterman of the Asset Forfeiture and Recovery Section are prosecuting this case.

LOS ANGELES – A former deputy mayor and long-time Los Angeles city official was found guilty by a jury today of accepting tens of thousands of dollars in bribe money and facilitating illicit payoffs from property developers to then-Los Angeles City Councilmember José Huizar as part of a long-running conspiracy that corrupted the approval of city real estate projects.

Raymond She Wah Chan, 67, of Monterey Park, was found guilty of all 12 felony counts he faced: one count of conspiracy to violate the Racketeer Influenced and Corrupt Organizations (RICO) Act, seven counts of honest services wire fraud, three counts of bribery, and one count of making false statements to a federal government agency.

“Chan used his leadership position in City Hall to favor corrupt individuals and companies willing to play dirty,” said United States Attorney Martin Estrada. “The residents of Los Angeles deserve much better. With today’s verdict, we send a strong message that the public will not stand for corruption and that pay-to-play politics has no place in our community.” 

“Mr. Chan made decisions to enrich himself and his corrupt colleagues instead of advancing projects to benefit the residents of Los Angeles, and then lied about it when confronted with the facts,” said Mehtab Syed, the Acting Assistant Director in Charge of the FBI’s Los Angeles Field Office. “The ‘Casino Loyale’ investigation has shined a light on the city of Los Angeles, and the FBI will continue to weed out corruption to ensure local government operates honestly to improve the lives of Angelenos.” 

Chan formerly was the general manager of the Los Angeles Department of Building and Safety (LADBS) and, later, served as the city’s deputy mayor of economic development from 2016 to 2017.

Huizar, 55, of Boyle Heights, represented Council District 14 (CD-14) on the Los Angeles City Council from December 2005 until his resignation in October 2020. CD-14 encompassed downtown Los Angeles and some of its surrounding areas. During his years on the City Council, Huizar chaired the Planning and Land Use Management (PLUM) Committee, which oversaw all major commercial and residential development projects in the city.

Huizar was sentenced on January 26 to 13 years in federal prison and also was ordered to pay $443,905 in restitution to the City of Los Angeles and $38,792 in restitution to the IRS. He pleaded guilty in January 2023 to one count of racketeering conspiracy and one count of tax evasion.

According to evidence presented at a 12-day trial, Chan and Huizar operated the “CD-14 Enterprise,” a criminal conspiracy that tainted the city approval of real estate projects in the downtown area. Huizar led the enterprise from at least February 2013 until July 2020 and Chan played a key role in ensuring the enterprise’s success during that period.

As part of the conspiracy, while he was the general manager of LADBS and a deputy mayor, Chan established a secret business partnership with real estate development consultant George Chiang, securing a lucrative real estate consulting agreement with Chinese real estate developer Shenzhen Hazens. As part of that agreement, Chan agreed to accept hundreds of thousands of dollars in bribes to advise and pressure city officials in favor of Hazens’ Luxe Hotel redevelopment project. 

To maintain the conspiracy’s political power, Chan also facilitated a $100,000 campaign contribution commitment from Hazens in support of Huizar’s wife’s candidacy for the CD-14 seat in exchange for Huizar’s votes to approve the project. A central goal of the enterprise was the succession plan of Huizar’s wife taking over Huizar’s council seat so that Huizar would still have control over downtown through his wife.

Hazens’ U.S. subsidiary, Jia Yuan USA Co. Inc., which was seeking to redevelop the Los Angeles Luxe City Center Hotel, has paid $1.05 million to resolve the government’s investigation into its conduct related to this case, which included bribery and illegal campaign contributions.

Chan also facilitated payment of more than $1 million in bribes to Huizar from billionaire developer Wei Huang, 58, a resident of Shenzhen, China, including $600,000 to settle a sexual harassment lawsuit and luxury-laden gambling trips. At the time he provided these bribes, Huang’s company, Shen Zhen New World I LLC, was planning to redevelop the L.A. Grand Hotel into the tallest tower west of the Mississippi, which would require city approvals and Huizar’s help.

At Huizar’s and Chan’s request – and after Huizar had helped save Chan’s city position by helping to prevent a planned merger that would have eliminated Chan’s department – Huang paid $600,000 to fund a settlement of a sexual harassment lawsuit filed against Huizar by a former CD-14 staffer that threatened his 2015 re-election campaign and thus the enterprise’s political power base. Chan also lied to FBI agents in November 2018 about his involvement in facilitating and structuring the $600,000 settlement, that Huang had no real estate projects needing Huizar’s political support, and that Huang had never asked Huizar for any help with his properties.

Huang, who is charged with several felonies, has yet to make a court appearance in this case and is considered a fugitive believed to be in China.  

Following today’s guilty verdicts, United States District Judge John F. Walter scheduled a June 10 sentencing hearing, at which time Chan will face a statutory maximum sentence of 20 years in federal prison for each count of racketeering conspiracy and honest services wire fraud, up to 10 years in federal prison for each bribery count, and up to five years in federal prison for the false statements count.

Previously, in June 2022, real estate developer Dae Yong Lee, a.k.a. “David Lee,” 59, of Bel Air, and one of his companies, 940 Hill LLC, were convicted of providing $500,000 in cash to Huizar and Esparza in exchange for their help in resolving a labor organization’s appeal of their downtown Los Angeles development project. Lee is serving a six-year federal prison sentence. 940 Hill LLC was sentenced to five years’ probation, was fined $1.5 million, and was ordered to pay the costs of prosecution.

In November 2022, Huang’s downtown Los Angeles-based company Shen Zhen New World I LLC was convicted of eight felonies for – through the actions of its owner, Huang – paying more than $1 million in bribes – including luxury trip expenses, casino gambling chips and the $600,000 sham loan – to Huizar to obtain city approval to build a 77-story skyscraper. The company was sentenced to five years of probation, fined $4 million, and ordered to pay the costs of prosecution.

Prosecutors also have secured guilty pleas from Chiang, George Esparza, Huizar’s former special assistant, political fundraiser Justin Jangwoo Kim, and lobbyist Morrie Goldman for their roles in the CD-14 Enterprise. Each of these defendants cooperated with the government, testified during at least one trial, and awaits sentencing.

The FBI investigated this matter.

Assistant United States Attorney Mack E. Jenkins, Chief of the Criminal Division, and Assistant United States Attorneys Cassie D. Palmer, Susan S. Har, and Brian R. Faerstein of the Public Corruption and Civil Rights Section are prosecuting this case.

Any member of the public who has information related to this or any other public corruption matter in the City of Los Angeles is encouraged to send information to the FBI’s email tip line at https://tips.fbi.gov or to contact the FBI’s Los Angeles Field Office at (310) 477-6565.

LOS ANGELES – A San Fernando Valley man was found guilty by a jury today of dozens of felonies for extorting Koreatown karaoke companies and sometimes violently attacking victims who refused to pay, including carjacking one of them after beating him with a baseball bat.

Daekun Cho, 39, of Woodland Hills, was found guilty of 55 counts of interference with commerce by extortion, one count of attempted interference with commerce by extortion, and one count of carjacking.

According to evidence presented at a five-day trial, from at least November 2020 to March 2023, Cho demanded “protection” money from karaoke businesses in Koreatown, as well as from drivers of “doumis” – or hostesses – employed by patrons of the karaoke establishments.

Cho extorted money in person and on Venmo monthly from victims who operated companies or drove people to and from karaoke bars in Koreatown in Los Angeles. He physically attacked, threatened, and instilled fear in his victims to induce them to pay him. Payments, which Cho called “protection fees,” typically ranged from $100 to $1,000 per month.

“This defendant carried out his shakedown operation for years by preying on an immigrant community and intimidating his victims into silence,” said United States Attorney Martin Estrada. “Today’s verdict sends a message that we are focused on rooting out violent actors and holding them accountable for their actions.”

For example, in May 2021, when one of Cho’s victims – a doumi driver – refused to pay him more money, Cho and his accomplice beat the victim with baseball bats until knocking him unconscious and then stole his minivan. The victim suffered a broken arm and multiple cuts and bruises. In response, the victim and his business partner closed their karaoke driving company, and the business partner left California.

During a separate incident in July 2022, a different victim was dropping two doumis off at a karaoke bar in Koreatown when Cho – who appeared to have something in his hoodie pocket – approached the victim’s car, opened the door with his sleeve so as to not leave fingerprints, got halfway inside the vehicle, and told the victim that the victim’s company was not permitted to drop off doumis. As the victim drove away, he heard gunshots, breaking the car’s glass, which hit a doumi in the neck.

In January 2023, Cho assaulted another karaoke driver who for years had paid him in cash and then via Venmo a monthly extortion fee. Cho began accepting electronic extortion payments during the COVID-19 pandemic. When the victim stopped paying, Cho assaulted the victim, stole $1,000 from him, and threatened to kill him.

“Today’s verdict should send a strong message to those willing to use violence and threats of violence to intimidate Los Angeles communities,” said HSI Special Agent in Charge Eddy Wang. “HSI Los Angeles and our partners will not tolerate this egregious activity and will work diligently to ensure that dangers to society will be punished to the fullest extent of the law.”

United States District Judge Fernando L. Aenlle-Rocha scheduled an August 16 sentencing hearing, at which time Cho will face a statutory maximum sentence of 20 years in federal prison for each extortion-related count and up to 25 years in prison for the carjacking count.

Homeland Security Investigations and the Los Angeles Police Department investigated this matter.

Assistant United States Attorneys Jena A. MacCabe and Kevin J. Butler of the Violent and Organized Crime Section are prosecuting this case.

LOS ANGELES – An El Monte man and two Chinese nationals living elsewhere in Los Angeles County were sentenced today to terms in federal prison for laundering gift cards purchased by telephone-scam fraud victims at Target stores across the United States.

Blade Bai, 35, of El Monte; Bowen Hu, 28, of Hacienda Heights; and Tairan Shi, 29, of Diamond Bar; were sentenced to terms of 15 years, 10 years, and eight years in federal prison, respectively.

United States District Judge André Birotte Jr. also ordered the defendants to pay restitution in the amounts of $97,815 for Bai, $57,156 for Hu, and $39,416 for Shi.

Bai has been in federal custody since February 2022. Hu and Shi were remanded into custody after the guilty verdicts against them were read in September 2023.

“These defendants were part of a sophisticated, transnational fraud operation that targeted mostly older adults to cheat them out of their savings,” said United States Attorney Martin Estrada of the Central District of California. “Protecting our most vulnerable community members is critically important, and we will hold accountable those who reach into our country to engage in these sorts of egregious fraud schemes.”

The defendants were part of a network of individuals who laundered proceeds of fraud stored on Target gift cards. Telephone scammers fraudulently induced victims across the country to buy gift cards, often $500 each, and to provide the card numbers and access codes to the scammers. The scammers included government imposters falsely claiming to be police and other government personnel and retail and tech support impersonators falsely offering to fix nonexistent issues with the victims’ online account or computer.

The defendants acquired more than 5,000 gift card numbers and access codes from a group in the People’s Republic of China calling itself the “Magic Lamp,” and funneled the gift cards to “runners” to liquidate at Target stores in Southern California.  Those runners, at the defendants’ direction, would quickly use the cards to purchase high-value consumer electronics and conduct other transactions. The rapid transactions prevented victims from recouping the value on the cards when they contacted Target to report the scam.

At the conclusion of a 10-day trial in September 2023, a jury found the defendants guilty of a money laundering conspiracy that spanned from approximately June 2019 to November 2020. The jury also found Bai guilty of a second money laundering conspiracy, in which he enlisted an associate to help sell a batch of gift cards with fraudulent proceeds after his initial arrest in the case. One of the defendants’ main “runners,” Yan Fu, 61, of Chino Hills, pled guilty and was previously sentenced to 20 months in federal prison.

“Transnational fraud schemes typically rely on complicated networks designed to launder victim proceeds,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “This case is a testament to the commitment of the department and our partners to ensuring that all those who knowingly facilitate fraud face justice.”

“The FBI and its partners are committed to going after networks that perpetuate fraud even when they are targeting the American people from thousands of miles away and over the phone,” said Executive Assistant Director Timothy Langan of the FBI’s Criminal, Cyber, Response and Services Branch. “Today’s sentencing should make it known to individuals that participate in this sort of illegal activity that they can expect to face the consequences of their actions.”

“HSI Los Angeles’ El Camino Real Financial Crimes Task Force will continue to aggressively target greedy criminals and organizations that seek to line their pockets by defrauding unsuspecting victims,” said Special Agent in Charge Eddy Wang for HSI Los Angeles. “The defendants’ desire for easy money will lead to them doing hard time.”

The Los Angeles Field Offices of Homeland Security Investigations and the FBI investigated the case, with assistance from the Social Security Administration’s Office of the Inspector General and numerous local police departments across the United States, including the Brea Police Department, the La Palma Police Department, and the Menifee Police Department.

Assistant United States Attorney Monica E. Tait of the Major Frauds Section and Trial Attorneys Wei Xiang and Meredith B. Healy of the Justice Department’s Consumer Protection Branch prosecuted the case.

If you or someone you know is age 60 or older and has experienced financial fraud, experienced professionals are standing by at the National Elder Fraud Hotline: 1-833-FRAUD-11 (1-833-372-8311). This U.S. Department of Justice hotline, managed by the Office for Victims of Crime, can provide personalized support to callers by assessing the needs of the victim and identifying relevant next steps. Case managers will identify appropriate reporting agencies, provide information to callers to assist them in reporting, connect callers directly with appropriate agencies, and provide resources and referrals, on a case-by-case basis. Reporting is the first step. Reporting can help authorities identify those who commit fraud and reporting certain financial losses due to fraud as soon as possible can increase the likelihood of recovering losses. The hotline is open Monday through Friday from 7 a.m. to 3 p.m. PT. English, Spanish and other languages are available.

More information about the Department’s efforts to help American seniors is available at its Elder Justice Initiative webpage. For more information about the Consumer Protection Branch and its enforcement efforts, visit its website at https://www.justice.gov/civil/consumer-protection-branch. Elder fraud complaints may be filed with the FTC at https://reportfraud.ftc.gov/ or at 877-FTC-HELP. The Department of Justice provides a variety of resources relating to elder fraud victimization through its Office for Victims of Crime, which can be reached at https://www.ovc.gov.

A California man and two Chinese nationals were sentenced today to 15, 10 and eight years in prison, respectively, for laundering gift cards purchased by telephone-scam fraud victims at Target stores across the United States.

According to court documents, Blade Bai, 35, of El Monte, Bowen Hu, 28, of Hacienda Heights, California, and Tairan Shi, 29, of Diamond Bar, California, were part of a network of individuals who laundered proceeds of fraud stored on Target gift cards. Telephone scammers fraudulently induced victims across the country to buy gift cards, often $500 each, and to provide the card numbers and access codes to the scammers. The scammers included government imposters falsely claiming to be police and other government personnel and retail and tech support impersonators falsely offering to fix nonexistent issues with the victims’ online account or computer.

The defendants acquired more than 5,000 gift card numbers and access codes from a group in the People’s Republic of China calling itself the “Magic Lamp,” and funneled the gift cards to “runners” to liquidate at Target stores in southern California.  Those runners, at the defendants’ direction, would quickly use the cards to purchase high-value consumer electronics and conduct other transactions.  The rapid transactions prevented Target from recouping the value on the cards for the original victim-purchasers.

A jury convicted the defendants of a money laundering conspiracy that spanned from approximately June 2019 to November 2020. The jury also convicted Bai of a second money laundering conspiracy, in which he enlisted an associate to help sell a batch of gift cards with fraudulent proceeds after his initial arrest in the case. One of the defendants’ main “runners,” Yan Fu, 61, of Chino Hills, California, pleaded guilty and was previously sentenced to 20 months in federal prison.

“Transnational fraud schemes typically rely on complicated networks designed to launder victim proceeds,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “This case is a testament to the commitment of the department and our partners to ensuring that all those who knowingly facilitate fraud face justice.”

“These defendants were part of a sophisticated, transnational fraud operation that targeted mostly older adults to cheat them out of their savings,” said U.S. Attorney Martin Estrada for the Central District of California. “Protecting our most vulnerable community members is critically important, and we will hold accountable those who reach into our country to engage in these sorts of egregious fraud schemes.” 

“The FBI and its partners are committed to going after networks that perpetuate fraud even when they are targeting the American people from thousands of miles away and over the phone,” said Executive Assistant Director Timothy Langan of the FBI’s Criminal, Cyber, Response and Services Branch. “Today’s sentencing should make it known to individuals that participate in this sort of illegal activity that they can expect to face the consequences of their actions.”

“HSI Los Angeles’ El Camino Real Financial Crimes Task Force will continue to aggressively target greedy criminals and organizations that seek to line their pockets by defrauding unsuspecting victims,” said Special Agent in Charge Eddy Wang for HSI Los Angeles. “The defendants’ desire for easy money will lead to them doing hard time.”

Homeland Security Investigations’ El Camino Real Financial Crimes Task Force and the FBI investigated the case, with assistance from the Social Security Administration’s Office of the Inspector General and numerous local police departments across the United States, including the Brea Police Department, La Palma Police Department and Menifee Police Department. The El Camino Real Financial Crimes Task Force is part of HSI’s National El Dorado Task Force Initiative and is a multi-agency task force comprised of federal and state investigators focused on financial crimes in Southern California.  

Assistant U.S. Attorney Monica E. Tait for the Central District of California and Trial Attorneys Wei Xiang and Meredith B. Healy of the Civil Division’s Consumer Protection Branch prosecuted the case.

If you or someone you know is age 60 or older and has experienced financial fraud, experienced professionals are standing by at the National Elder Fraud Hotline at 1-833-FRAUD-11 (1-833-372-8311). This Justice Department hotline, managed by the Office for Victims of Crime, can provide personalized support to callers by assessing the needs of the victim and identifying relevant next steps. Case managers will identify appropriate reporting agencies, provide information to callers to assist them in reporting, connect callers directly with appropriate agencies and provide resources and referrals, on a case-by-case basis. Reporting is the first step. Reporting can help authorities identify those who commit fraud and reporting certain financial losses due to fraud as soon as possible can increase the likelihood of recovering losses. The hotline is open Monday through Friday from 10:00 a.m. to 6:00 p.m. ET. English, Spanish and other languages are available.

More information about the department’s efforts to help American seniors is available at its Elder Justice Initiative webpage. For more information about the Consumer Protection Branch and its enforcement efforts, visit www.justice.gov/civil/consumer-protection-branch. Elder fraud complaints may be filed with the FTC at www.reportfraud.ftc.gov/ or at 877-FTC-HELP. The Justice Department provides a variety of resources relating to elder fraud victimization through its Office for Victims of Crime, which can be reached at www.ovc.gov.

LOS ANGELES – A federal grand jury has indicted Los Angeles attorney Milton C. Grimes with the evasion of payment of his individual income taxes and willful failure to pay taxes, the Justice Department announced today.

The indictment filed Thursday afternoon charges Grimes with one count of attempted tax evasion and four counts of willful failure to pay taxes. He is expected to be arraigned in United States District Court on April 10.

According to the indictment, Grimes owed the IRS more than $1.7 million in taxes for tax years 2010 and 2014. The IRS tried to collect the unpaid taxes from Grimes by, among other things, levying his personal bank accounts. In response to IRS collection efforts, from 2014 through 2020, Grimes allegedly engaged in a scheme to thwart the tax levies by keeping his personal bank account balances low. Grimes deposited the money he earned from representing clients into his law firm’s business bank accounts, and then he routinely purchased cashier’s checks and withdrew cash from those business bank accounts, the indictment states. By not depositing income earned into his personal accounts, Grimes allegedly avoided IRS collection efforts. With this scheme, Grimes allegedly withdrew approximately $16 million in funds from the business accounts in cashier’s checks during those years, rather than paying the amount owed to the IRS.

Grimes also allegedly filed individual income tax returns for tax years 2018 through 2021 reporting that he owed approximately $700,000 in taxes. Grimes allegedly did not, and has not, paid the taxes that he self-reported he owes.

In total, Grimes is alleged to have caused a tax loss of approximately $2,418,050 to the IRS.

An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

If convicted, Grimes faces up to five years in prison for the tax evasion count and up to one year in prison for each count of willful failure to pay taxes. A federal district court judge will determine any sentence after considering the United States Sentencing Guidelines and other statutory factors.

IRS Criminal Investigation is investigating this matter.

Assistant United States Attorney Valerie L. Makarewicz of the Major Frauds Section and Trial Attorney Sara A. Henderson of the Justice Department’s Tax Division are prosecuting the case.

LOS ANGELES – A former Beverly Hills-based licensed marriage and family therapist has been indicted by a federal grand jury for allegedly distributing child sexual abuse material, the Justice Department announced today.

Ron Gad, 49, of the Pico-Robertson area of Los Angeles, was charged Thursday with one count of distribution of child pornography.

Gad, whose marriage and family therapist license expired in November 2023, is free on $250,000 bond. He is expected to be arraigned on May 3 in United States District Court in downtown Los Angeles.

According to the indictment, on December 2, 2021, Gad knowingly distributed child sexual abuse material (CSAM) involving a pre-teen via the internet and which had been shipped in interstate commerce.

Court documents previously filed in this case state that in the fall of 2022, law enforcement became aware that Gad, who maintained a Beverly Hills office for his therapy practice, had engaged in sexually explicit online chats with someone he believed was a 13-year-old girl, but who in fact was an undercover law enforcement officer.

In October 2022, Gad allegedly drove more than 180 miles from Beverly Hills to San Luis Obispo to a public park, an arranged meeting site where he believed he was to meet the “girl.” Law enforcement conducted a traffic stop, arrested Gad and seized several digital devices, according to an affidavit filed with a criminal complaint in this matter.

A search of Gad’s digital devices pursuant to a search warrant led to evidence of Gad’s distribution of CSAM, as well as communications with suspected minors and internet searches related to sex with minors, the affidavit alleges.

The San Luis Obispo County District Attorney’s Office previously charged Gad in state court. That case was dismissed so Gad could be charged in federal court.

An indictment and a complaint contain allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.

If convicted, Gad would face a mandatory minimum sentence of five years in federal prison and a statutory maximum sentence of 20 years in federal prison.

Homeland Security Investigations and the San Luis Obispo County Sheriff’s Office are investigating this matter.

Anyone who may have additional information concerning this case is encouraged to call HSI's tip line at (866) 347-2423.

Assistant United States Attorneys Damaris Diaz of the Violent and Organized Crimes Section and Angela C. Makabali of the Cyber and Intellectual Property Crimes Section are prosecuting this case.

LOS ANGELES – Federal and local law enforcement officials today announced the launch of Operation Safe Cities, an initiative that includes new protocols, enhanced partnerships and a renewed emphasis on violent crime designed to increase federal prosecutions of the region’s most violent criminals, particularly those involved in commercial robberies, kidnappings, extortions and gun offenses.

Combatting violent crime is one of the Justice Department’s top priorities, and this United States Attorney’s Office is strengthening existing partnerships and creating new connections between federal and local law enforcement to take the most violent and repeat offenders off the streets.

Operation Safe Cities builds on long-standing connections between local authorities, federal agents and federal prosecutors. These relationships have yielded numerous significant and impactful cases over the years, and federal authorities now are strengthening these partnerships by conducting outreach to the officers and detectives who typically have the best knowledge of the most dangerous criminals and by streamlining the process to present cases to federal prosecutors.

The FBI and the Bureau of Alcohol, Tobacco, Firearms and Explosives will bring federal resources to investigations, which will be particularly helpful when, for example, robbery crews operate across jurisdictional lines or when sophisticated investigative tools are needed to develop leads, process evidence or track firearms. The Los Angeles County Sheriff’s Department, the Los Angeles Police Department and the Ventura County Sheriff’s Office are part of the initiative, and other local agencies are expected to join in the near future.

Defendants charged in United States District Court with violent and gun-related offenses face significant sentences in federal prison, where there is no parole. For example, commercial robbery offenses charged under the Hobbs Act each carry up to 20 years in federal prison, and these sentences can be significantly increased if the perpetrator used – or simply possessed – a firearm. Under federal law, armed career criminals with three prior convictions for violent offenses face a mandatory minimum sentence of 15 years in federal prison for possessing a firearm.

“Both individual victims and entire communities are being traumatized by the epidemic of gun violence, and the Justice Department is committed to saving lives and improving public safety by using every possible tool to target offenders,” said United States Attorney Martin Estrada. “We are increasing our collaboration among law enforcement agencies to lock up offenders who are a demonstrated threat. Violent crime threatens everyone’s sense of security, which is why we are fully committed to improving and expanding our response to the most dangerous criminals.”

“Violent criminals that inflict harm in our communities and threaten public safety need to be held accountable with the full weight of the justice system,” said Los Angeles County Sheriff Robert Luna. “Our coordinated efforts with local, state, and federal partners will safeguard our communities and keep dangerous, career criminal off the streets.”

“Violent crime has no place in any of our communities,” said Los Angeles Police Chief Dominic Choi. “Together, we are more effective, stopping gun and violent crime throughout the region. I am proud of our partnership with the U.S. Attorney, other Federal partners, as well as regional partners as we work towards safer communities collaboratively.”

“We are excited about strengthening an already solid relationship with our federal partners,” said Ventura County Sheriff Jim Fryhoff. “Having the full weight of the federal government behind our efforts to keep our communities safe from violent crime is not only important, it’s crucial. I appreciate the ongoing partnership with the United States Attorney’s Office as well as our alliance with other federal and local law enforcement agencies.”

Operation Safe Cities establishes strategic enforcement priorities with an emphasis on prosecuting the most significant drivers of violent crime. Across this region, the most damaging and horrific crimes are committed by a relatively small number of particularly violent individuals. The United States Attorney’s Office has established protocols for the intake of cases that will go beyond the traditional federal-state task force model that has long been in place. Federal prosecutors will train state law enforcement partners on identifying and supporting federal prosecutions in these areas. A team of federal prosecutors will also be assigned to identify investigations and cases appropriate for prosecution. This strategic enforcement approach is expected to increase the number of arrests, prosecutions and convictions of recidivists engaged in the most dangerous conduct. It is designed to improve public safety across the region by targeting crimes involving illicit guns, prohibited persons possessing firearms, or robbery crews that cause havoc and extensive losses to retail establishments.

“We have limited enforcement resources, but we can multiply our efforts by collaborating with our colleagues at local police agencies to have the most significant impact on violent crime,” U.S. Attorney Estrada stated. “Operation Safe Cities will allow us to identify and use the best available intelligence and information to assess the violent crime problem and the offenders who drive that violence.”

“The FBI and our partners in local law enforcement work together on task forces throughout the United States to investigate a range of violent and gun-related offenses targeting innocent victims,” said Amir Ehsaei, the Acting Assistant Director in Charge of the FBI’s Los Angeles Field Office. “We look forward to the enhanced resources provided by the United States Attorney’s Office through the Safe Cities initiative in order to further pursue federal charges for crimes harming our communities.”

“Last year the ATF’s Los Angeles Field Division initiated almost 500 cases with 93% of those cases being firearms-related investigations,” said Special Agent in Charge Christopher Bombardiere of ATF Los Angeles Field Division. “ATF reduces violent crime by partnering with the federal, state and local law enforcement as a force multiplier. By enhancing our existing partnership and providing federal investigate tools we aim to create safer cities throughout the Los Angeles area. ATF will continue to work tirelessly with its partners to target violent criminals, as well as identify, investigate and arrest those who illegally supply firearms to prohibited individuals.” 

The United States Attorney’s Office has worked with its law enforcement partners for years to address gun-related crime and recently has increased the number of federal cases against violent criminals engaged in Hobbs Act violations, including commercial robberies and extortions. Already this year, the office has obtained four indictments naming a total of nine defendants who allegedly participated in commercial robberies, with three of those cases involving firearms and one alleging a “smash and grab” robbery at a jewelry store.

In 2023, grand juries indicted 16 Hobbs Act robbery cases (two of which involved carjackings), eight bank robbery cases, a stand-alone carjacking case, a Hobbs Act extortion and a kidnap for ransom case.

In 2022, federal prosecutors secured indictments in 18 Hobbs Act robbery cases, three bank robbery cases and three postal robberies, one of which involved a postal carrier robbed at gunpoint. These 24 cases charged a total of 40 defendants.

Since the beginning of 2022, the United States Attorney’s Office has charged nearly 600 defendants with illegal gun possession offenses, and nearly 30% of these cases involved “ghost guns.” Approximately 450 of the defendants in these firearms cases were allegedly felons in possession of firearms or ammunition. Dozens of other defendants were charged with possessing machine guns and other illegal firearms, including short-barreled rifles and silencers.

Some of the recent cases handled by the office and involving partners in Operation Safe Cities include:

• A robbery crew dubbed the “all-armed bandits”

Federal prosecutors this week charged two additional defendants who allegedly were part of a 2023 string of armed robberies of pharmacies, restaurants and marijuana dispensaries – a total of 19 robberies that spanned Los Angeles County. Even after authorities arrested three of the alleged robbers in late October, members of the robbery crew continued committing crimes. On November 24, following the robbery of a CVS store, Inglewood police responded and, following a high-speed pursuit that ended with a vehicle collision, arrested two adults and a minor. A federal criminal complaint filed Tuesday charges the two adults – Adrian Timothy Bedran, 23, of Rosemead, and Kevin Antwan Gadley, 19, of San Fernando – meaning that six defendants have now been charged in federal court. Bedran and Gadley, who are currently in state custody, each are charged in the complaint with Hobbs Act robbery and using a firearm in relation to a crime of violence. They are expected to be arraigned sometime next week. A federal grand last year returned a 26-count indictment that charged the three original defendants and fourth who allegedly participated in the robberies. A trial for these four defendants is currently scheduled for June 18. If convicted at trial, the ringleaders of the “all-armed bandits” would face mandatory minimum sentences of more than 40 years in federal prison, and potentially life imprisonment.  The FBI and the Los Angeles County Sheriff’s Department are the lead investigating agencies on this matter, which is being prosecuted by Assistant United States Attorneys Kevin Butler and Jena MacCabe of the Violent and Organized Crime Section.

• Massage parlor robberies

Two Los Angeles County men were indicted earlier this month for allegedly conducting a series of armed robberies of massage parlors earlier this year in Orange County and Torrance. Andy Cuellar, 28, of Hawthorne, and Arturo Morales, 27, of Downey, were arrested one month ago today. The 12-count indictment specifically charges the two defendants with robbing five massage parlors – two on January 22 – and using a firearm in all the incidents. Cuellar and Morales are also charged with being felons in possession of firearms and ammunition, with the indictment alleging that Cuellar has prior convictions for burglary and a scheme to import methamphetamine and that Morales was previously found guilty of conspiracy and threaten with intent to terrorize. Both men are being held without bond and are currently scheduled to be tried on April 30. If they were to be convicted, Cuellar and Morales each would face potential sentences of more than 100 years in federal prison. The ATF, several Orange County police agencies and the LAPD are investigating this matter. AUSAs MacCabe and Butler are prosecuting this case.

• Felon in possession cases

In a case filed Tuesday, Rodolfo Hernandez Jr., 28, of Oxnard, was charged with being a felon in possession of a firearm and ammunition, specifically a .38-caliber revolver and several types of ammunition. Hernandez, who is currently in Ventura County Jail, was arrested February 28 after Oxnard Police officers stopped him in relation to a robbery investigation. When police searched his vehicle, they also recovered a Mac-11 machine gun. According to the federal criminal complaint, Hernandez has five prior felony convictions, including for assault with a deadly weapon, felon in possession of a firearm, and possession of a controlled substance while armed. The FBI and the Oxnard Police Department under the auspices of the Ventura County Violent Gang Task Force, which includes the Ventura County Sheriff’s Department, is conducting the investigation in this matter. Assistant United States Attorney Joseph DeLeon filed the federal charges in this case.

An Inland Empire man – Frank Escobar Jr., 35, of San Bernardino – was sentenced in February to 15 years in federal prison for possession of ammunition, receiving the mandatory minimum sentence for being an armed career criminal. On May 13, 2023, Escobar threatened family members at their residence with a loaded firearm and discharged the gun multiple times. In a sentencing memo that recounts how Escobar fired the gun at the feet of the victims and into a wall of the residence, prosecutors argued that this “[d]efendant’s criminal history is marked by a pattern of extreme and repeated acts of violence.” Assistant United States Attorney Kelsey A. Stimson of the General Crimes Section prosecuted this matter, which was investigated by the ATF.

Assistant United States Attorneys Kevin Butler and Jena MacCabe, both of the Violent and Organized Crime Section, and Ian Yanniello and Ben Balding, both supervisors in the General Crimes Section, have been designated as Violent Crime Coordinators to implement the initiative, conduct further outreach and training to local police agencies, and oversee the prosecution of cases under Operation Safe Cities.

RIVERSIDE, California – An Orange County man and a Colorado man pleaded guilty today to federal criminal charges for shooting three wild burros (donkeys) to death in the Mojave Desert in San Bernardino County in late 2021.

Christopher James Arnet, 32, of Loveland, Colorado, and Cameron John Feikema, 36, of Yorba Linda, California, each pleaded guilty to one felony count of possession of an unregistered firearm, namely a short-barreled rifle, and one misdemeanor count of maliciously causing the death of a burro on public lands.

According to their plea agreements, on November 5, 2021, the defendants drove in Arnet’s truck to public land north of the town of Yermo, in San Bernardino County. Arnet and Feikema eventually got out of Arnet’s truck and were dressed in tactical gear, including ballistic helmets equipped with night vision goggles. Arnet and Feikema each possessed an AR-style firearm.

At approximately 1 a.m. on November 6, 2021, Arnet and Feikema collectively fired at least 13 rounds from their firearms, striking and killing three wild burros. Arnet fired at least five rounds from his firearm while Feikema fired at least four rounds from his weapon.  One burro was shot near its spine towards its hind legs, which paralyzed the burro’s hind legs and caused the animal severe pain before it died. A bullet removed from that burro was fired from Arnet’s firearm.

Law enforcement later seized the firearms involved in the burro shootings at Arnet and Feikema’s residences. When the firearms were seized, each was a short-barreled rifle and therefore required to be registered under federal law. Neither of the firearms was registered.

United States District Judge Jesus G. Bernal scheduled July 8 sentencing hearings for the defendants, who will face a statutory maximum sentence of 10 years in federal prison for the firearm count and up to one year in federal prison for the burro death count. As part of the plea agreements, defendants agreed to forfeit or abandon the illegally possessed rifles, over 4,000 rounds of ammunition, night vision goggles, and other tactical gear.

The Bureau of Land Management investigated this matter.

Assistant United States Attorneys Cory L. Burleson, of the Riverside Branch Office, and Alexander Su, of the Asset Forfeiture & Recovery Section, are prosecuting these cases.

LOS ANGELES – A San Fernando Valley woman has been sentenced to 240 months in federal prison for fraudulently obtaining ownership of real estate and money via identity theft and forged power-of-attorney forms in a near-$3.9 million scheme that included dismembering and disposing of a dead body to prevent the discovery of this victim’s death, the Justice Department announced today.

Caroline Joanne Herrling, 44, a.k.a. “Carrie Phenix,” of West Hills, was sentenced late Friday by United States District Judge Maame Ewusi-Mensah Frimpong. Judge Frimpong also ordered Herrling to pay $3,887,051 in restitution.

“This defendant’s misconduct was both greedy and grotesque, causing profound pain to the victims and their loved ones,” said United States Attorney Martin Estrada. “There must be serious consequences for those who prey on vulnerable communities, such as older adults, and my office will remain steadfast in bringing these offenders to justice.”

“The U.S. Postal Inspection Service will continue to work diligently with our local law enforcement partners to protect our communities from criminals who target our most vulnerable population,” said Inspector in Charge Carroll Harris of the Los Angeles Division. “Today’s sentencing shows that justice will be served to those who commit such criminal acts.”

“The LAPD would like to thank our federal partners at the US Postal Inspection Service and the United States Attorney’s Office, without whom a resolution in this case would not have been possible,” said Los Angeles Police Deputy Chief Alan Hamilton.

According to court documents, Herrling and her co-conspirators preyed on vulnerable victims by searching for properties in affluent neighborhoods that appeared unkempt. For example, Herrling used online mapping programs and visited nicer neighborhoods to search for algae-filled swimming pools or overgrown shrubs to identify houses with vulnerable victims who were unable to care for their properties.

After finding such a home in Sherman Oaks in 2020, Herrling and her co-conspirators broke into the residence, where an elderly victim resided. At some point in September 2020, the victim died – investigators are uncertain how – and they believe that Herrling and others took over the property while his body decomposed in his home. Rather than reporting his death, Herrling and others in the conspiracy left his body in his house while they looted his assets. Herrling used a forged power-of-attorney form so she could pretend to act on the victim’s behalf while stealing his real estate and financial accounts.

In October 2021, law enforcement began investigating the case when neighbors reported the victim missing. According to court documents, Herrling identified herself to police as a close friend of the victim and his family. She also was listed as the trustee of the victim’s family trust – which purportedly had been created by the victim’s mother, who died in June 2017 – but in fact was a forgery. She told police that the victim had moved from Sherman Oaks to Carpinteria, which was not true because the victim was already dead.

After Herrling learned of the police investigation into the missing victim, her co-conspirators and she executed an elaborate scheme to ensure his body was never found and his death remain unreported, this to support the idea that the victim agreed to distribute his assets to Herrling and her co-conspirators.

Herrling and her co-conspirators moved the victim’s body to her apartment in West Los Angeles, where they attempted to dissolve his body in a concoction of chemicals, investigators found. When that did not work, Herrling and her co-conspirators dismembered the body, placed the pieces in vacuum-sealed bags and moved the victim’s body to the Bay Area. Another member of the conspiracy who owned a sailboat assisted in disposing of the mutilated remains of the deceased victim into San Francisco Bay, the investigation revealed. The victim’s remains have never been found.

During Friday’s sentencing hearing, Judge Frimpong said this victim was “a man and a human being,” but Herrling “did not see that” and instead treated him “like a cash register.”

The deceased victim was the listed executor and beneficiary to the will of another victim, but this document was another forgery that Herrling claimed to have “discovered” in a safe deposit box rented by the deceased victim’s mother, court papers state. Based on this forged will, the missing victim was to inherit an estate worth more than $1.7 million – assets that ultimately fell under Herrling’s control as the trustee for his estate.

Herrling and her co-conspirators also defrauded a third victim and sold his home without his consent by using a conspirator with fake identity documents to pose as the victim. Herrling set up accounts to receive the proceeds of the sale of this victim’s real estate, a transaction that generated approximately $1.5 million. According to court documents, this victim, who was already suffering from mental health issues, took his own life after losing his home. Herrling later used her ill-gotten gains to purchase a residence in West Hills.

The total loss in this case was $3,887,051.

Herrling pleaded guilty in March 2023 to one count of conspiracy to commit wire fraud. She has been in federal custody since January 2023.

One of Herrling’s accomplices – Matthew Jason Kroth, 50, of Tarzana – pleaded guilty in October 2023 to one count of conspiracy to commit wire fraud and one count of possession with intent to distribute methamphetamine. He faces up to 20 years in federal prison for wire fraud, and up to 40 years for methamphetamine trafficking when he is sentenced on June 7.

The United States Postal Inspection Service and the Los Angeles Police Department, Valley Bureau Homicide are investigating this matter. Significant assistance was provided by the Los Angeles Joint Regional Intelligence Center.

Assistant United States Attorney Andrew Brown of the Major Frauds Section prosecuted this case.

SANTA ANA, California – A former Orange County tax preparer was sentenced today to 120 months in federal prison for leading multi-year tax fraud conspiracies across three countries, which claimed more than $10 million from the IRS and dozens of state tax authorities in fraudulent tax refunds and led these authorities to lose more than $1.2 million.

Stephen Jake McGonigle, 67, of Victorville, was sentenced by United States District Judge James V. Selna, who also ordered him to pay $1,230,175 in restitution. Judge Selna also ordered that the $300,000 McGonigle previously paid to be free on bond in this case be applied to the restitution order.

At the conclusion of an eight-day trial, a jury in November 2023 found McGonigle guilty of one count of conspiracy to defraud the United States, one count of conspiracy to commit wire fraud, and one count of aggravated identity theft.

McGonigle recruited others to help convince the IRS and dozens of state governments to issue millions of dollars in fraudulent tax refunds.

To perpetrate the massive fraud that began in 2013 and lasted until McGonigle’s arrest in 2019, McGonigle sent one co-conspirator to Thailand to obtain fake identification documents that used stolen victim identities, and then he directed other co-conspirators to use those fake identifications to obtain prepaid debit cards, as well as numerous commercial mailboxes across Orange County and elsewhere.

After having the prepaid debit cards sent to these untraceable mailboxes, McGonigle and his co-conspirators filed fraudulent tax returns using the identity theft victims’ Social Security numbers. Those fraudulent tax returns sought millions of dollars in tax refunds to be deposited into these prepaid debit cards or other bank accounts that they controlled.

With more than a decade of tax preparation experience in Southern California, McGonigle used his knowledge to lead the fraud scheme. The IP addresses used to file the fraudulent returns were traced back to various cities in Southern California, including McGonigle’s home in Fallbrook and various office spaces leased by McGonigle in Lake Forest, Costa Mesa, Fountain Valley, and Carlsbad. Some IP addresses were traced back to Costa Rica, where law enforcement surveillance and travel records confirmed that McGonigle and his co-conspirators opened an office and hired employees to help file additional fraudulent returns.

McGonigle’s scheme fraudulently sought more than $10 million from federal and state tax authorities and caused an actual loss of $1,230,175. Prosecutors have secured guilty pleas from two co-defendants, who are also scheduled to be sentenced in the coming months.

IRS Criminal Investigation, Homeland Security Investigations, and the United States Postal Inspection Service investigated this matter. The Missouri Department of Revenue and the U.S. Secret Service provided substantial assistance during the investigation.

Assistant United States Attorneys Sue Bai of the Terrorism and Export Crimes Section and Colin Scott of the General Crimes Section prosecuted this case.

RIVERSIDE, California – A Michigan man was found guilty by a jury today of maliciously setting fires to six semi-trailers belonging to a major commercial trucking company in the Inland Empire and High Desert during a 10-month span.

Viorel Pricop, 66, of Allen Park, Michigan, was found guilty of six counts of arson of vehicle or property in interstate commerce. Pricop has been in federal custody since October 2022.

According to evidence presented at a 16-day trial, from December 2021 to September 2022, Pricop maliciously set fire to six semi-trailers belonging to Swift Transportation, a Phoenix-based commercial trucking company. Four of the arsons occurred in San Bernardino County (Newberry Springs, Ludlow, Barstow, and Hesperia) and two occurred in Riverside County (Coachella).

In each of the incidents, the Swift-owned trailer was parked at or near a truck stop when a fire occurred on the trailer portion of the vehicle, mainly on or near the trailer tires.

Pricop set on fire at least 18 additional Swift Transportation semi-trailers in other states from June 2020 to March 2022, according to an affidavit previously filed in this case. These incidents occurred at locations spanning from Barstow, California to McCalla, Alabama, with most incidents occurring along Interstate 10 and Interstate 40, the affidavit states. Federal criminal charges associated with some of these fires were filed against Pricop in the District of New Mexico and the District of Arizona.

“This defendant went on a rampage of retaliation against a victim of his last crime,” said United States Attorney Martin Estrada. “Rather than take advantage of the second chance offered to him, he chose an incredibly reckless and dangerous path. We will not accept arson and other violent crime on our streets, and I am grateful that this defendant will now be held to account.” 

“We have methodically worked each of the fire scenes, collected evidence, interviewed witnesses, and reviewed video footage to help us solve these arson cases,” said Special Agent in Charge Brendan Iber of the Bureau of Alcohol, Tobacco, Firearms and Explosives’ (ATF) Phoenix Field Division. “ATF’s certified fire investigators will continue to enforce federal laws pertaining to arson and support our state and local police and fire investigators.”

“Since beginning the work to solve this case, our arson investigators did a great job of looking at each fire to put the pieces together,” said New Mexico State Fire Marshal Randy Varela. “We know how important our partnerships with other agencies are, especially with a case that spans across multiple states, and we are proud of the work that we were able to do together to catch this arsonist.”

Swift Transportation hired a fire investigation consultant to assist with fire scene examinations. A pattern began to develop when multiple reports noted substantially similar methods of lighting the trailers on fire, including where on the vehicles the fires began, and the fact the fires occurred during the middle of the night.

A review of cell tower data near some of the fires showed that a specific device – later found to be a navigation device installed in a commercial tractor-style truck – connected to cell towers near many of the fires at or around the times of the fires. Law enforcement determined that this device was installed on a vehicle operated by Pricop. Law enforcement also identified the cellphone subscribed to Pricop and, after obtaining court authorization, obtained historical cellular data and real-time location information for Pricop’s cellphone. Analysis of this data showed that Pricop’s cellphone was present in the general area of all California fires, as well as the 18 additional fires across the country.

In September 2022, search warrants were executed on Pricop’s tractor-trailer, personal vehicle and residence, yielding additional evidence corroborating his involvement in this series of arsons. This evidence included a gas torch, torch-style lighters, and record keeping documents containing location information, such as cargo pickup and delivery dates which coincided with the time and location of several fires in the series of 24 fires across the country.

Swift Transportation and other trucking companies were victims of thefts between 2010 and 2014. Swift initiated its own investigation into those thefts and utilized bait trailers to catch thieves. In 2015, someone broke into one of the bait trailers and took boxes of electronic goods containing tracking devices. Swift investigators tracked those boxes to a storage facility in Michigan, and local law enforcement in Michigan arrested Pricop in possession of the boxes of electronic goods from the bait trailer.

Pricop was convicted in 2018 in the Eastern District of Michigan for a tax offense and for transportation of stolen goods, charges stemming from the investigation conducted by Swift. Pricop was sentenced to time served in that case, amounting to approximately 26 months’ imprisonment. His term of supervised release ended in June 2019, approximately one year before the arsons in this case began.

United States District Judge Sunshine S. Sykes scheduled a June 7 sentencing hearing, at which time Pricop will face a mandatory minimum sentence of five years in federal prison and a statutory maximum of 20 years in federal prison for each count.

ATF and the New Mexico State Fire Marshal’s Office investigated this matter.

Assistant United States Attorneys Cory L. Burleson, Sean D. Peterson and Mitchell M. Suliman of the Riverside Branch Office are prosecuting this case.

LOS ANGELES – A Chinese man has been charged in a four-count indictment alleging he trafficked eastern box turtles, a protected wildlife species, from the United States to China for the global pet trade black market, the Justice Department announced today.

Sai Keung Tin, 53, a.k.a. “SK Tin,” Ricky Tin,” and “Ji Yearlong,” of Hong Kong, was charged on Friday with four counts of exporting merchandise contrary to law.

Tin was arrested February 25 at John F. Kennedy (JFK) International Airport in New York City and made his initial appearance the following day in federal court in Brooklyn. His arraignment is expected in the coming weeks in U.S. District Court in Los Angeles.

According to the indictment returned Friday, Tin in June 2023 knowingly and illegally aided in the exportation of 40 eastern box turtles to be sent from the United States to Hong Kong. Wildlife inspectors at an international mail facility in Torrance intercepted four packages addressed to “Ji Yearlong,” a name believed to be one of Tin’s aliases, and which were to be shipped to Tin’s home in Hong Kong, according to court documents. Tin allegedly falsely labeled the packages containing the protected turtles as containing almonds and chocolate cookies.

Three of the packages contained between eight and 12 live eastern box turtles each – all bound in socks, according to court papers. The fourth package contained seven live eastern box turtles and one deceased eastern box turtle. A special agent also searched property records and learned that the name listed as the sender on each of the packages was fake.

The eastern box turtle (Terrapene carolina carolina) is a subspecies of the common box turtle and is native to forested regions of the eastern United States with some isolated populations in the Midwest. Turtles with colorful markings are especially prized in the domestic and foreign pet trade market, particularly in China and Hong Kong. These animals are protected by the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), an international agreement to protect fish, wildlife and plants that are or may become threatened with extinction. The United States and China are parties to this agreement.

An affidavit that was filed with a criminal complaint filed with this case on February 26 says that Tin was associated with Kang Juntao, 27, of Hangzhou City, China, a convicted felon and international turtle smuggler. Kang recruited turtle poachers and suppliers in the United States to ship turtles domestically to middlemen, who would then bundle the turtles into other packages and export them to Hong Kong. The turtles were bound in socks to protect their shells and so they could not move and alert authorities.

Court papers allege that from June 2017 to December 2018, Kang caused at least 1,500 turtles – with a market value exceeding $2.25 million – to be shipped from the United States to Hong Kong. Middlemen shipped approximately 46 packages containing turtles from New York and New Jersey, which were routed through an international mail facility at JFK, to addresses in Hong Kong, including Tin’s.

Kang pleaded guilty to a money laundering charge after his extradition from Malaysia in 2019, and later was sentenced to 38 months in federal prison. Since Kang’s arrest, prosecution, and conviction, law enforcement has continued to intercept packages addressed to Tin and others, court papers state.

An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.

If convicted, Tin would face a statutory maximum sentence of 10 years in federal prison for each count.

The United States Fish and Wildlife Service is investigating this matter. Homeland Security Investigations and United States Customs and Border Protection are assisting in this investigation.

Assistant United States Attorney Dominique Caamano of the Environmental Crimes and Consumer Protection Section and Senior Trial Attorney Ryan Connors and Trial Attorney Lauren Steele, both of the Justice Department’s Environmental Crimes Section, are prosecuting this case.

LOS ANGELES – A former Orange County resident has been indicted by a federal grand jury for allegedly threatening to kill a superior court judge who presided over his family law case, the Justice Department announced today.

Byrom Zuniga Sanchez, 32, formerly of Laguna Niguel, but whose most recent residence was in Morella, Mexico, is charged in an indictment returned Friday with two counts of threats by interstate and foreign communication.

Zuniga was arrested February 27 in San Diego and remains in federal custody there. His arraignment is expected to occur in the coming weeks in United States District Court in downtown Los Angeles.

“There has been a troubling increase in threats against public servants, including judicial officers,” said United States Attorney Martin Estrada. “These threats undermine the rule of law, are anathema in our democracy, and will not be tolerated. As such, my office will continue to aggressively prosecute all such violent criminal conduct.”

“The chilling threats allegedly made by Zuniga Sanchez via e-mail and online caused profound fear for many people in the legal and law enforcement community, and forced some to take extra security precautions,” said Amir Ehsaei, the Acting Assistant Director in Charge of the FBI’s Los Angeles Field Office. “The FBI and our partners take such threats extremely seriously so that judges and others who make difficult decisions every day don’t suffer needlessly for simply carrying out their duties.”

According to court documents previously filed in this case, from May 2023 to July 2023, Zuniga sent multiple death threats via email to the victim judge. Zuniga allegedly also threatened to kill or harm others, including other judges, lawyers, and law enforcement officials.

For example, in July 2023, Zuniga allegedly emailed the victim judge’s former courtroom, “I am more committed to murdering you than I am to being present as a father.”

In the same email, Zuniga allegedly also wrote, “You’re already dead. The remainder of my life will be dedicated to assassinating judges, attorneys, and a police station’s entire shift staff.”

In September 2023, Zuniga allegedly posted on his Instagram account, “With access to a weapon, it is easier for me to walk into a courthouse and indiscriminately assasinate [sic] because I notified lawyers and judges.” This statement was directed at the courthouse in Orange where he had been involved in family law proceedings from 2019 to 2021. Zuniga also allegedly in October 2023 threatened to conduct an active shooting at the same courthouse.

These communications were sent via interstate commerce, and law enforcement believes Zuniga was in Mexico when he sent the threatening messages. Zuniga was arrested last week after attempting to enter the United States.

An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.

If convicted, Zuniga would face a statutory maximum sentence of five years in federal prison for each count.

The FBI is investigating this matter.

Assistant United States Attorney J’me K. Forrest of the Violent and Organized Crime Section is prosecuting this case.

LOS ANGELES – A former supervising attorney at a nonprofit that provides legal representation to foster children in juvenile dependency court was arraigned today on federal criminal charges alleging he possessed and distributed child sexual abuse material (CSAM).

Charles Aghoian, 61, of Camarillo, is charged with three counts of distribution of child pornography and one count of possession of child pornography. He voluntarily surrendered this morning to federal law enforcement.

He pleaded not guilty at his arraignment this afternoon in United States District Court in downtown Los Angeles. A federal magistrate judge set his bond at $1 million and a May 6 trial date has been scheduled in this matter.

According to an indictment that a federal grand jury returned on March 1, Aghoian in December 2020 and January 2021 knowingly distributed sexually explicit videos featuring children. In April 2021, Aghoian also allegedly possessed on his smartphone images of child sexual abuse material including children under the age of 12 years.

At the time of the alleged conduct, Aghoian was a supervising attorney at the Children’s Law Center of California, which maintains offices in Monterey Park, Sacramento, and Lancaster. The organization provides legal representation for abused, neglected, or abandoned children who fall under the jurisdiction of the state’s juvenile dependency court system. Its attorneys serve Los Angeles, Sacramento, and Placer counties.

An indictment is merely an allegation, and the defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

If convicted, Aghoian would face a mandatory minimum sentence of five years in federal prison on each child pornography distribution charge and a statutory maximum sentence of 20 years in federal prison for each child pornography possession and distribution charges.

The FBI is investigating this matter.

Assistant United States Attorneys Nisha Chandran of the Cyber and Intellectual Property Crimes Section and Alexandra Kelley of the General Crimes Section are prosecuting this case.

SANTA ANA, California – A South Bay man is scheduled to be arraigned this afternoon on a five-count federal grand jury indictment that alleges he kidnapped a woman, forced her to work for him as a prostitute in Orange County, and then raped her in the Angeles National Forest.

Leslie Anthony Bailey, 32, who lives on a boat docked in Wilmington, was arrested Thursday by special agents with Homeland Security Investigations and members of the Orange County Human Trafficking Task Force. Bailey is expected to be arraigned today in United States District Court in Santa Ana.

The indictment returned Wednesday and unsealed Thursday afternoon charges Bailey with sex trafficking, kidnapping, aggravated sexual abuse and two counts of using a cellphone to facilitate his business involving prostitution, pimping and pandering.

The victim identified as “J.H.” was kidnapped on February 5, 2022, held for several days, and was subjected to force, threats of force and coercion that caused her to engage in at least one commercial sex act, according to the indictment. That kidnapping continued until February 8, 2022, when Bailey drove the victim into the Angeles National Forest, where he raped her “by using force against victim J.H. and by threatening victim J.H. and placing victim J.H. in fear that victim J.H. would be subject to death, serious bodily injury, and kidnapping,” the indictment states.

“Sex traffickers prey upon vulnerable people, turning their misery into profits,” said United States Attorney Martin Estrada. “This defendant is charged with using threats, coercion and physical violence to control his victim. We are committed to fighting human trafficking and bringing perpetrators to justice.”

“HSI Los Angeles and our partners at the Orange County Human Trafficking Task Force and the Los Angeles County Sheriff’s Department are committed to ensuring that violent sexual criminals and their heinous conduct have no place in our community,” said HSI Los Angeles Special Agent in Charge Eddy Wang. “My office will hold these predators accountable and will provide victims with a pathway towards restorative justice.”

Bailey allegedly used a “facility of interstate commerce” – a cellphone – as part of a business enterprise in which he “caused victim J.H. to engage in prostitution and supervised, directed, and collected the proceeds of victim J.H.’s prostitution.”

The fifth count in the indictment alleges that between March 7 and April 25, 2023, Bailey used the internet and a cellphone to further the prostitution, pimping and pandering of a second victim.

An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.

The sex trafficking offense in the indictment carries a mandatory minimum sentence of 15 years in federal prison and a potential sentence of life imprisonment. Both the kidnapping and the aggravated sexual abuse charges carry a maximum statutory penalty of life. The two counts alleging the use of a facility in interstate commerce in aid of unlawful activity each carry up to five years in federal prison.

Homeland Security Investigations (HSI), the Orange County Human Trafficking Task Force and the Los Angeles County Sheriff’s Department are investigating this matter. The Task Force includes HSI, the Anaheim Police Department, the Irvine Police Department, the Santa Ana Police Department, and the California Highway Patrol.

Assistant United States Attorney Kristin N. Spencer of the Santa Ana Branch Office is prosecuting this case.

LOS ANGELES – A man from the Mid-City area of Los Angeles was sentenced today to 33 months in federal prison for illegally selling more than two dozen firearms, including machine gun conversion devices – sometimes known as “switches” – and “ghost guns,” or firearms that lack serial numbers.

Ellourth Eladio Simon, 33, was sentenced by United States District Judge George H. Wu.

Simon pleaded guilty in May 2023 to one count of engaging in the business of dealing firearms without a license and one count of possessing a machine gun.

From no later than September 2021 to January 2023, Simon repeatedly arranged illegal and unlicensed firearms deals. He admitted in his plea agreement to engaging in eight illegal gun transactions, several of which involved multiple firearms, including a November 10, 2021, sale for $8,400 in which Simon sold an ATF undercover agent four handguns and a “ghost gun” AR-type rifle. Simon also admitted to unlawfully possessing a machine gun in October 2021.

Simon’s primary firearms source, William Nirion Peña, 41, of the Koreatown neighborhood of Los Angeles, was convicted of conspiracy to engage in the business of dealing in firearms without a license. Peña is serving a 40-month prison sentence in this case.

From at least September 2021 until late February 2022, Peña provided Simon with information about the prices and nature of numerous firearms – frequently sending photographs of firearms that Simon could sell to Simon’s gun customers. Peña provided approximately 16 firearms and a substantial amount of ammunition that were sold by Simon to an undercover agent. The firearms included two silencers without serial numbers and a Glock switch. The government asserted that Simon also had other sources of the firearms that he sold to the undercover federal agent in the eight purchases.

“Peña and Simon frequently coordinated efforts to sell [guns to the undercover agent] by communication over the phone about the price and availability of firearms and firearms components, and arranging the logistics of specific sales to customers during evening transaction in supermarket parking lots and similar locations,” according to court documents. Evidence presented at trial indicated that Peña was obtaining firearms from sources in other states, primarily Arizona.

“[Simon’s] criminal conduct was dangerous, long-standing and serious,” prosecutors argued in a sentencing memorandum. “[Simon] not only illegally sold large quantities of powerful handguns and rifles, and ammunition, but he also sold firearms silencers, items whose harmfulness and illegality were obvious on their face.”

The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated this matter. This case is the result of an investigation by the Los Angeles Firearms Trafficking Strike Force, which is spearheaded by the ATF and the United States Attorney’s Office.

The Violent and Organized Crime Section prosecuted this case.

SANTA ANA, California – A former executive at an Orange County commercial real estate agency was sentenced today to 33 months in federal prison for embezzling more than $2.7 million from his employer by submitting fictitious invoices for services that were never performed or for greatly inflated amounts.

Varun Aggarwal, 42, of Irvine, was sentenced by United States District Judge Cormac J. Carney, who also ordered him to pay $2,729,718 in restitution.

Aggarwal pleaded guilty in August 2023 to one count of wire fraud.

From 2008 to January 2022, Aggarwal worked in the internal auditing department of the Newport Beach-based KBS Realty Advisors and rose to the level of the department’s director. Beginning at least as early as January 2012 and continuing until January 2022, Aggarwal used his position at KBS to embezzle his employer’s money.

As a member of the company’s internal auditing group, Aggarwal was familiar with KBS’s policies and procedures for payments to vendors. Aggarwal used his knowledge of KBS’s policies and procedures to have his friends and family serve as approved vendors to do contracting work for KBS.

After several of these companies became approved vendors for KBS, Aggarwal used these approved vendors to submit fraudulent invoices for consulting services that were not performed for the company or were submitted for work at inflated prices. He then funneled the payments on the invoices from KBS to his own bank accounts – through the approved vendors – at times without informing the vendors that the invoices and the payments on the invoices were for his own benefit.

In carrying out this scheme, Aggarwal fraudulently obtained approximately $2,729,718 from KBS that he caused it to pay to the approved vendors that ultimately went to himself.

Aggarwal resigned from KBS in January 2022 after the company began investigating the invoices, according to court documents.

“[Aggarwal] was not driven to commit his crimes by need, desperation, or the inability to legitimately earn a living,” prosecutors argued in a sentencing memorandum. “Despite the advantages defendant enjoyed – including a first-rate education and a well-compensated professional career – [Aggarwal] chose to commit the underlying criminal conduct causing great losses and abusing his position of trust over a lengthy period of time.”

The FBI investigated this matter.

Assistant United States Attorney Brett A. Sagel of the Corporate and Securities Fraud Strike Force is prosecuting this case.

LOS ANGELES – A former Antelope Valley physician was sentenced today to 37 months in federal prison for illegally dispensing prescriptions for often-abused controlled substances – including opioid-based medications – during telemedicine sessions with “patients” from across the United States.

Raphael Tomas Malikian, 39, who resides in Llano and Palmdale, was sentenced by United States District Judge Dale S. Fischer, who also ordered him to pay a fine of $20,000.

Malikian pleaded guilty in October 2023 to one count of aiding and abetting the acquisition of a controlled substance by fraud and one count of distribution of oxycodone.

The Medical Board of California suspended Malikian’s medical license in November 2021. His license expired in November 2022.

From at least December 2019 to August 2021, Malikian was a licensed physician in California and, in this role, was authorized by the Drug Enforcement Administration (DEA) to prescribe medication. Malikian also owned and operated Happy Family Medicine, a medical clinic that was advertised as being in a co-working space in the Hollywood, but primarily offered telehealth services via telephone or text message communications.

Malikian issued prescriptions for controlled substances to customers without first obtaining the person’s full medical history, conducting a physical examination, requiring medical testing, or utilizing diagnostic tools. Malikian did not verify his customers’ identities before prescribing controlled substances, and he allowed customers to obtain prescriptions in the names of others.

He also worked with two co-conspirators, who provided Malikian with false names, addresses, dates of birth, and Malikian issued controlled substance prescriptions accordingly, which the co-conspirators then filled and re-sold on the black market.

Many of Malikian’s fraudulent controlled substance prescriptions contained notes on the prescriptions or accompanying documentation that falsely urged pharmacies not to verify such prescriptions because medications were emergently needed and the failure to dispense could be life threatening because of the COVID-19 pandemic.

Malikian issued hundreds of false prescriptions for liquid promethazine with codeine during this period – including to people he knew were fictitious patients and which totaled more than 82 liters – and directed them to be sent to various pharmacies across the nation for co-conspirators to obtain.

From April to July of 2020, Malikian prescribed to a buyer 702 pills of 10 milligrams oxycodone and 240 milliliters of promethazine with codeine. The customer, in fact, was an undercover law enforcement officer. Malikian issued each prescription to this buyer without conducting proper medical evaluations or verifying the buyer’s identity and was performed outside the scope of professional practice and without a legitimate medical purpose.

In addition, from May to July of 2020, Malikian prescribed to a customer – who also was an undercover law enforcement officer – 234 pills of the painkiller Norco, which contained a total of 2,340 milligrams of the opioid hydrocodone, and 180 pills of alprazolam, an anxiety medication sold under the brand name Xanax. Once again, Malikian issued each prescription to this buyer without conducting proper medical evaluations or verifying the buyer’s identity and was performed outside the scope of professional practice and without a legitimate medical purpose.

“Considering the nature and circumstances of these offenses, there is no question that [Malikian’s] criminal conduct is serious and that the scope of [his] diversion scheme was expansive,” prosecutors argued in a sentencing memorandum. “The amount of drugs that [Malikian] prescribed without any medical justification is substantial and contributed to this country’s opioid crisis.”

The DEA investigated this matter. The California Department of Justice, Bureau of Medi-Cal Fraud and Elder Abuse provided substantial assistance.

Assistant United States Attorney Brittney M. Harris of the International Narcotics, Money Laundering, and Racketeering Section prosecuted this case.

LOS ANGELES – A Lompoc man was found guilty by a jury today of aiding and abetting the distribution of fentanyl that resulted in the death of a fellow inmate at a Santa Barbara County jail and in the serious bodily injury of another jail inmate.

Kaelen Jacobkeali Wendel, 32, was found guilty of one count of distribution of fentanyl resulting in death and serious bodily injury, a felony that carries a 20-year mandatory minimum prison sentence and a possible sentence of life imprisonment.

According to evidence presented at a five-day trial, in October 2022, Wendel smuggled fentanyl into a unit of the Santa Barbara County North Branch Jail. He packaged the powerful synthetic opioid in candy containers, according to court documents.

As the new inmate, Wendel handed some fentanyl to his co-defendant, Michael Villapania, 36, of Lompoc, in the expectation that he would receive jail commissary goods in exchange. Villapania then sold the drug to a victim identified in court documents as “J.V.” J.V. then shared the fentanyl with another victim, who is identified in court documents as “E.E.”

After ingesting the drug during the early morning hours of October 20, 2022, E.E. and J.V. overdosed. After an inmate alerted a custody deputy about the overdose, deputies and nurses administered multiple doses of Narcan – a life-saving medication used to reverse opioid overdoses – and performed CPR on both inmates. They revived J.V., but E.E. died.

United States District Judge Maame Ewusi-Mensah Frimpong scheduled a June 21 sentencing hearing for Wendel.

Villapania pleaded guilty on February 1 to one count of distribution of fentanyl. His sentencing hearing is scheduled for June 7, at which time he will face up to 20 years in federal prison.

The Drug Enforcement Administration and the Santa Barbara County Sheriff’s Office investigated this matter.

Assistant United States Attorney Suria M. Bahadue of the Criminal Appeals Section and Assistant United States Attorneys Alexandra Sloan Kelly and Kenneth R. Carbajal of the General Crimes Section are prosecuting this case.

RIVERSIDE, California – A Riverside County woman was sentenced today to 57 months in federal prison for embezzling nearly $1 million from her employer, which managed the financial affairs for homeowner associations, primarily in the Inland Empire.

Jenev Boyd, 60, of Corona, was sentenced by United States District Judge Sunshine S. Sykes, who also ordered her to pay $780,810 in restitution.

Boyd pleaded guilty in December 2023 to one count of wire fraud and one count of aggravated identity theft.

Boyd was a long-time employee of and the director of accounting for Encore Property Management, a Corona-based company that provided property management services to its homeowner association clients.

From January 2012 to August 2020, Boyd reactivated retired or non-active client accounts in a software program Encore used to falsely reflect that these were still active clients. She then changed the selected vendor’s information to reflect her own name and address. Through manipulation of Encore's internal accounting software, Boyd was able to mask payments to herself from client accounts as vendor payments. Boyd kept the monthly amounts in line with other vendor payments therefore hiding the embezzlement.

Boyd also forged signatures, including that of Encore’s president, on each check she fraudulently issued to herself. She also misled the company’s clients about the checks she wrote to herself out of their accounts, including by describing the transactions as being for operating expenses rather than as a payment to her based on a bogus invoice.

In total, Boyd defrauded her employer and its clients out of $931,077.

“[Boyd] abused the trust of her friends and co-workers and convinced them they did not need to look more carefully at reports from banks, which she doctored before providing an accounting to each client she had embezzled from,” prosecutors argued in a sentencing memorandum. “As a result of her fraud, employees left the business, and those who considered her a friend, like a sister, felt blindsided and betrayed.”

The FBI investigated this matter.

Assistant United States Attorney Sean D. Peterson of the Riverside Branch Office prosecuted this case.

A California man pleaded guilty today to a firebombing attack on a Planned Parenthood clinic in Costa Mesa in March 2022 and planning to attack an electrical substation in Orange County, and further admitted to plotting an attack on Dodger Stadium last year on a night celebrating LGBTQI+ pride.

Tibet Ergul, 22, of Irvine, pleaded guilty to one felony count of conspiracy to damage an energy facility and one misdemeanor count of intentional damage to a reproductive health services facility. He is scheduled to be sentenced on May 30 and faces a maximum penalty of 21 years in prison.

According to his plea agreement, in February and March 2022, Ergul and Chance Brannon, 24, of San Juan Capistrano, California, agreed to use a Molotov cocktail to damage a Planned Parenthood clinic in Orange County. Ergul and Brannon, who at the time was an active-duty U.S. Marine, targeted the clinic because it provided reproductive health services and they wanted to encourage others to engage in similar violent acts. Ergul and Brannon also wanted to make a statement about abortion; scare pregnant women away from obtaining abortions; deter doctors, staff and employees at the clinic from providing abortions; and intimidate the clinic’s patients.

On March 12, 2022, in Ergul’s garage, Ergul and Brannon knowingly assembled a Molotov cocktail. During the early morning hours of March 13, 2022, Ergul and Brannon – disguised in dark clothing, masks, hoods and gloves – drove to a Planned Parenthood clinic in Costa Mesa, ignited the Molotov cocktail and threw it at the clinic’s entrance, intentionally starting a fire. Due to the fire and the damage it caused, the clinic was forced to temporarily close and reschedule approximately 30 patient appointments.

Ergul further admitted that in June 2022, following the Supreme Court’s decision to overturn Roe v. Wade, he and Brannon planned to use a second Molotov cocktail to attack another Planned Parenthood clinic. Ergul and Brannon abandoned this plan after seeing law enforcement near the targeted clinic.

Ergul also conspired with others, including Brannon, to damage a Southern California Edison electrical substation to debilitate Orange County’s power grid. Ergul and his accomplices planned to attack the substation by using firearms or a Molotov cocktail that Ergul possessed in his garage. Ergul and Brannon consulted with an associate about surveillance, drone operations and firearms. In March 2023, Ergul messaged an associate to say he had found a substation in Orange to target. Ergul sent the associate aerial photographs of the substation and suggested doing a “drive-thru” at 3 a.m. Ergul also sent Brannon a letter in which he wrote: “The rifle is in a box in my room waiting to be used in the upcoming race war,” and he discussed a desire to murder politicians and journalists. Ergul and Brannon did not carry out this attack prior to their arrest in this case.

During the early summer of 2023, Ergul and Brannon also discussed and researched how to attack the Dodger Stadium parking lot or the stadium’s electrical room on a night celebrating LGBTQI+ pride, including by using a device that could be detonated remotely, Ergul admitted in his plea agreement. Brannon and Ergul exchanged sabotage manuals and discussed doing “dry runs” to “case” the stadium. Law enforcement arrested Ergul and Brannon two days before Dodger Stadium’s scheduled “Pride Night.”

Ergul, who has been in federal custody since June 2023, is the third and final defendant to plead guilty in this case.

Brannon, who also has been in federal custody since June 2023, pleaded guilty in November to four crimes: conspiracy, malicious destruction of property by fire and explosives, possession of an unregistered destructive device and intentional damage to a reproductive health services facility – a violation of the Freedom of Access to Clinic Entrances Act. Brannon’s sentencing hearing is scheduled for April 15.

Xavier Batten, 21, of Brooksville, Florida, who has been in federal custody since July 2023, pleaded guilty on Jan. 19 to one count of possession of an unregistered destructive device and one count of intentional damage to a reproductive health services facility. Batten’s sentencing hearing is scheduled for May 15.

The FBI’s Joint Terrorism Task Force and the Naval Criminal Investigative Service investigated this matter. The Costa Mesa Police Department and the Costa Mesa Fire Department provided substantial assistance.

Assistant U.S. Attorney Kathrynne N. Seiden for the Central District of California is prosecuting this case, with valuable assistance from the National Security Division’s Counterterrorism Section.

SANTA ANA, California – An Orange County man pleaded guilty today to firebombing a Planned Parenthood clinic in Costa Mesa in March 2022 and planning to attack an electrical substation in Orange, and further admitted to plotting an attack on Dodger Stadium last year on a night celebrating LGBTQ pride.

Tibet Ergul, 22, of Irvine, pleaded guilty to one felony count of conspiracy to damage an energy facility and one misdemeanor count of intentional damage to a reproductive health services facility.

“This defendant’s hateful ideology led him down a dark path of plotting to harm others,” said United States Attorney Martin Estrada. “The breadth of his and his co-conspirators’ violent plans is chilling. They planned to attack the power grid to start a race war, target Dodger Stadium on Pride Night, and bomb a second reproductive health services clinic. This reminds us of why it is critical that all of us unite against hate in our community.”  

“Mr. Ergul put lives at risk when he firebombed the clinic and yet continued to plan acts that had the potential to cause death and destruction,” said Amir Ehsaei, the Acting Assistant Director in Charge of the FBI's Los Angeles Field Office. “Using terroristic violence to further an ideology is a serious crime with severe consequences and, as a result, Mr. Ergul faces significant jail time when sentenced for his cowardly choices.”

“NCIS is committed to the interagency coordination as part of the FBI Joint Terrorism Task Force investigation,” said Special Agent in Charge Todd Battaglia of the NCIS Marine West Field Office. “This case should serve as a warning to those who perpetrate acts of terror against our fellow Americans and hate that threatens access to reproductive health services.”

According to his plea agreement, in February and March of 2022, Ergul and Chance Brannon, 24, of San Juan Capistrano, agreed to use a Molotov cocktail to damage a Planned Parenthood clinic in Orange County. Ergul and Brannon, who at the time was an active-duty United States Marine, targeted the clinic because it provided reproductive health services and they wanted to encourage others to engage in similar violent acts. Ergul and Brannon also wanted to make a statement about abortion; scare pregnant women away from obtaining abortions; deter doctors, staff and employees at the clinic from providing abortions; and intimidate the clinic’s patients.

On March 12, 2022, in Ergul’s garage, Ergul and Brannon knowingly assembled a Molotov cocktail. During the early morning hours of March 13, Ergul and Brannon – disguised in dark clothing, masks, hoods, and gloves – drove to a Planned Parenthood clinic in Costa Mesa, ignited the Molotov cocktail and threw it at the clinic’s entrance, intentionally starting a fire. Due to the fire and the damage it caused, the clinic was forced to temporarily close and reschedule approximately 30 patient appointments.

Ergul further admitted that in June 2022, following the Supreme Court’s decision to overturn Roe v. Wade, he and Brannon planned to use a second Molotov cocktail to attack another Planned Parenthood clinic. Ergul and Brannon abandoned this plan after seeing law enforcement near the targeted clinic.

Ergul also conspired with others, including Brannon, to damage a Southern California Edison electrical substation to debilitate Orange County’s power grid. Ergul and his accomplices planned to attack the substation by using firearms or a Molotov cocktail that Ergul possessed in his garage. Ergul and Brannon consulted with an associate about surveillance, drone operations and firearms. In March 2023, Ergul messaged an associate to say he had found a substation in Orange to target. Ergul sent the associate aerial photographs of the substation and suggested doing a “drive-thru” at 3 a.m. Ergul also sent Brannon a letter in which he wrote: “The rifle is in a box in my room waiting to be used in the upcoming race war,” and he discussed a desire to murder politicians and journalists. Ergul and Brannon did not carry out this attack prior to their arrest in this case.

During the early summer of 2023, Ergul and Brannon also discussed and researched how to attack the Dodger Stadium parking lot or the stadium’s electrical room on a night celebrating LGBTQ pride, including by using a device that could be detonated remotely, Ergul admitted in his plea agreement. Brannon and Ergul exchanged sabotage manuals and discussed doing “dry runs” to “case” the stadium.  Law enforcement arrested Ergul and Brannon two days before Dodger Stadium’s scheduled “Pride Night.”

The plea agreement in this case is “binding,” which means the court must accept or reject all aspects of it. United States District Judge Cormac J. Carney scheduled a May 30 sentencing hearing, at which time he is expected to announce whether he will accept the agreement. Should the court reject the plea agreement, any party may withdraw from it. Should the court accept the plea agreement, Ergul will face a prison sentence ranging from 60 months to 78 months.

Ergul, who has been in federal custody since June 2023, is the third and final defendant to plead guilty in this case.

Brannon, who also has been in federal custody since June 2023, pleaded guilty in November to four crimes: conspiracy, malicious destruction of property by fire and explosives, possession of an unregistered destructive device, and intentional damage to a reproductive health services facility – a violation of the Freedom of Access to Clinic Entrances Act. Brannon’s sentencing hearing is scheduled for April 15.

Xavier Batten, 21, of Brooksville, Florida, who has been in federal custody since July 2023, pleaded guilty on January 19 to one count of possession of an unregistered destructive device and one count of intentional damage to a reproductive health services facility. Batten’s sentencing hearing is scheduled for May 15.

The FBI’s Joint Terrorism Task Force and the Naval Criminal Investigative Service investigated this matter. The Costa Mesa Police Department and the Costa Mesa Fire Department provided substantial assistance.

Assistant United States Attorney Kathrynne N. Seiden of the Terrorism and Export Crimes Section is prosecuting this case with substantial assistance from Justice Department Trial Attorney Jacob Warren from the National Security Division’s Counterterrorism Section.

LOS ANGELES – Southern California Edison (SCE) has agreed to pay the United States $80 million to resolve claims on behalf of the U.S. Forest Service to recoup costs and damages associated with the 2017 Thomas Fire in the Los Padres National Forest, the Justice Department announced today.

The settlement finalized Friday afternoon is the largest wildfire cost recovery settlement by the United States in the Central District of California. The Thomas Fire burned more than 280,000 acres – approximately 440 square miles – including over 150,000 acres of National Forest System lands in Ventura and Santa Barbara counties.

The Thomas Fire ignited in two locations on the evening of December 4, 2017. The first ignition was in Anlauf Canyon north of the City of Santa Paula. The second ignition occurred at the top of Koenigstein Road in Upper Ojai. The two fires joined and came to be known as the Thomas Fire.

In 2020, the United States filed a lawsuit on behalf of the Forest Service against SCE to recover costs incurred fighting the Thomas Fire and for the extensive damages that it caused to the Los Padres National Forest.

The United States alleged that SCE owned, maintained and operated power lines that caused both ignitions of the Thomas Fire. In Anlauf Canyon, the United States alleged that SCE power lines made contact with each other during a high-wind event, causing heated material to ignite dry vegetation below the conductors. On Koenigstein Road, the United States alleged that an SCE power pole transformer failed and caused an energized power line to fall to the ground, igniting adjacent dry vegetation.

“This record settlement provides significant compensation to taxpayers for the extensive costs of fighting the Thomas Fire and for the widespread damage to public lands,” said First Assistant United States Attorney Joseph T. McNally. “The United States Attorney’s Office will continue to aggressively pursue compensation from any entity that causes harm to our forests and other precious national resources.”

SCE agreed to pay the settlement without admitting wrongdoing or fault. SCE agreed to pay the $80 million settlement within 60 days of the effective date of the settlement agreement, which was February 23.

Assistant United States Attorneys Jill S. Casselman and Matthew Smock of the Complex and Defensive Litigation Section negotiated the settlement in this case.

LOS ANGELES – The former chief financial officer at a downtown Los Angeles bank has pleaded guilty to embezzling more than $700,000 of his employer’s funds and admitted stealing bank employees’ identities to open life insurance policies in their names to benefit his wife, the Justice Department announced today.

Sammy Sims, 61, of West Covina, pleaded guilty Thursday afternoon to one count of bank fraud. 

According to his plea agreement, the Chinatown-based Eastern International Bank hired Sims in September 2017 as the lender’s CFO. As a condition of his employment, Sims agreed that he would not use the bank’s confidential information for his personal benefit or for others. The bank’s policy also required Sims to promptly disclose any conflicts or appearances of conflict with the bank’s interests. Sims’s scheme to defraud his employer lasted from February 2018 until at least April 2021.

From August 2018 to October 2020, Sims wired $86,000 in bank funds to the United States Treasury and California Franchise Tax Board to make payments towards the personal federal and state income taxes for himself and his wife. Sims concealed these transactions by creating false entries in the bank’s general ledger that falsely represented that the payments were for the bank’s tax accounts.

In April 2019, Sims used approximately $14,161 in bank funds to a debt collection agency to help pay off a debt that he had incurred. Sims concealed this transaction by creating a false entry in the bank’s general ledger that falsely stated the payment was for data processing software.

From April 2019 to December 2020, Sims took approximately $113,264 in money belonging to the bank to pay the balances on his personal credit card. Sims hid these expenses in the bank’s general ledger by falsely labeling them as bank expenses. During this time, he also siphoned approximately $81,815 from the bank by using a bank credit card, meant for work purposes, for his personal expenses, including steak dinners and a trip to Las Vegas.

Sims, from February 2020 to April 2021, also lied to several bank employees by telling them they had to switch their bank-funded life insurance policies because of their age. What neither the employees nor the bank knew was these policies were obtained through Sims’s wife, a licensed life insurance broker who received a commission for each life policy she sold. For some employees, Sims obtained their personal identifying information without their consent and then used this information to purchase life insurance policies from his wife. Sims used a checking account belonging to the bank to wire approximately $311,608 of the bank’s money to several life insurance companies to partially pay for the premiums for these policies.

When Sims was later confronted about the life insurance policies opened using bank employees’ personal identifying information, he lied by saying the employees’ identities could have been stolen through a cybersecurity hack or by unauthorized disclosures by the bank’s personnel department. Sims resigned from the bank shortly after being confronted about the life insurance policies.

In total, Sims unlawfully took at least $737,849 of bank funds for his personal use and benefit.

United States District Judge Maame Ewusi-Mensah Frimpong scheduled a May 10 sentencing hearing, at which time Sims will face a statutory maximum sentence of 30 years in federal prison.

The FBI and the Federal Deposit Insurance Corporation Office of Inspector General investigated this matter.

Assistant United States Attorney Jason C. Pang of the Major Frauds Section is prosecuting this case.

LOS ANGELES – A Paramount-based clothing wholesale company executive was sentenced today to 48 months in federal prison for undervaluing imported garments in a scheme to avoid paying millions of dollars in customs duties.

Mohamed Daoud Ghacham, 40, of Bell, was sentenced by United States District Judge Maame Ewusi-Mensah Frimpong, who also ordered him to pay $6,390,781 in restitution.

Ghacham pleaded guilty in December 2022 to one count of conspiracy to pass false and fraudulent papers through a customhouse.

Ghacham’s company, Ghacham Inc., which does business under the “Platini” brand name, imported clothing from China and submitted fraudulent invoices to U.S. Customs and Border Protection (CBP) that undervalued the shipments, allowing the company to avoid paying the full amounts of tariffs owed on the imports.

At Mohamed Ghacham’s direction, Chinese suppliers would prepare two invoices for the clothing ordered by Ghacham Inc. – a true invoice, which reflected the actual price paid for the goods, and a fraudulent “customs invoice,” which reflected an understated price. Ghacham Inc. submitted the customs invoices to CBP and customs brokers to fraudulently reduce the tariffs owed on the imports, while it maintained the true invoices in its accounting records.

From July 2011 to February 2021, Ghacham Inc. and Mohamed Ghacham undervalued imported garments by more than $32 million and failed to pay approximately $6,390,792 in customs duties.

Ghacham Inc. pleaded guilty in December 2022 to one count of conspiracy to pass false and fraudulent papers through a customhouse and one count of conspiracy to engage in any transaction or dealing in properties of a specially designated narcotics trafficker under a statute known as the Foreign Narcotics Kingpin Designation Act for doing business with María Tiburcia Cazarez Pérez.

Cazarez Pérez previously was listed as a Specially Designated Narcotics Trafficker under the Kingpin Act for her involvement in the financial network of Ismael “El Mayo” Zambada García and Victor Emilio Cazares Salazar, two leaders of the Mexico-based Sinaloa Cartel. Cazares Salazar was sentenced to 15 years in federal prison for drug trafficking activities in federal cases out of San Diego and New York City.

In December 2023, Judge Frimpong fined Ghacham Inc. $4 million, ordered it to pay $6,390,781 in restitution, and placed it on probation for five years.

Mohamed Ghacham was not charged in connection with the Kingpin Act violation.

Homeland Security Investigations and CBP investigated this matter. The U.S. Department of Commerce Office of Export Enforcement, the Treasury Department’s Office of Foreign Assets Control, and IRS Criminal Investigation provided significant assistance.

Assistant United States Attorney Alexander B. Schwab of the Corporate and Securities Fraud Strike Force prosecuted this case.

This case is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.  

SANTA ANA, California – Two Los Angeles County men were charged today in a federal criminal complaint alleging they committed more than a dozen armed robberies of massage parlors in Los Angeles and Orange counties.

Andy Cuellar, 28, of Hawthorne, and Arturo Morales, 27, of Downey, were arrested last Friday and are scheduled to make their initial appearances tomorrow in United States District Court in Santa Ana.

The defendants are charged with interference with commerce by robbery (Hobbs Act) and using and carrying a firearm during a crime of violence. Their arraignment is expected in the coming weeks.

According to an affidavit filed with the complaint, on the evening of February 16, Cuellar drove the getaway vehicle – a black Jeep Grand Cherokee – with Morales as the passenger to multiple massage parlors before robbing one such business in Torrance. After the robbery, Cuellar and Morales allegedly were located less than two miles away at a gas station, standing at the back of the Jeep and going through items taken in the robbery, throwing some of them in the trash.

Once law enforcement arrived on scene, the defendants allegedly fled on foot and discarded items they had stolen. At the time of his arrest, Morales was found to have approximately $4,000 in cash on his person while Cuellar carried $400 and was found to have the same type of clothing – including a blue Los Angeles Dodgers baseball cap – identified in previous robberies of massage parlors, the affidavit alleges.

After the defendants were arrested, law enforcement searched the Jeep, in which they found a .38-caliber firearm that had been reported stolen in 2018, according to the affidavit.

Law enforcement believes that Cuellar and Morales are responsible for at least 12 additional armed robberies, including the alleged robberies of massage parlors from January 12 to January 29 in Santa Ana, Reseda, Venice, Orange, Bellflower, and Redondo Beach.

A criminal complaint is merely an allegation, and the defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

If convicted, Cuellar and Morales will face statutory maximum sentences of 20 years in federal prison for the robbery charge and life in federal prison for the firearm charge.

The Bureau of Alcohol, Tobacco, Firearms and Explosives’ (ATF) Orange County Violent Crime Task Force (OCVCTF) is comprised of federal and local law enforcement agencies, including the ATF, the Brea Police Department, the Santa Ana Police Department, the Orange County District Attorney’s Office, and the Fullerton Police Department. 

Assistant United States Attorneys Kevin J. Butler and Jena A. MacCabe of the Violent and Organized Crime Section are prosecuting this case.

LOS ANGELES – Two Temecula brothers pleaded guilty today to defrauding the United States Postal Service (USPS) out of more than $2.3 million by filing thousands of fraudulent Priority Mail insurance claims.

Anwer Fareed Alam, 35, and Yousofzay Fahim Alam, 31, each pleaded guilty to one count of mail fraud.

According to their plea agreements, from October 2016 to May 2019, the Alam brothers purchased from the USPS Priority Mail packages and postages that included $100 in insurance for lost or damaged parcel contents. Anwer Alam wrapped empty packages or packages containing little or no value and then sent them via Priority Mail to fake recipients at fictitious addresses.

Yousofzay Alam then submitted to USPS fraudulent insurance claims via the Postal Service’s website and falsely certified that the packages contained items of higher value than they did and lied that the packages were lost or had been damaged in transit. Yousofzay Alam also included false invoices as well as photographs of goods that were not actually inside the parcels. The Alam brothers used aliases and fake business names to hide the number of false insurance claims they submitted.

Relying on the false information in the fraudulent insurance claim forms, USPS issued checks to the Alam brothers to cover their purported losses up to $100 in value plus the cost of shipping. USPS sent the insurance claim checks by mail to the Alam brothers to various addresses in Temecula, which included their home addresses, their business addresses, and approximately 15 different post office boxes at two different post offices. The brothers then deposited the fraudulently obtained funds into their bank accounts.

For example, in November 2018, the Alam brothers fraudulently caused to be sent in the mail via USPS a $106.59 Priority Mail claim check, which was mailed to a business address in Temecula.

The total loss caused to USPS through this scheme was at least $2,367,033.

United States District Judge Wesley L. Hsu scheduled a November 1 sentencing hearing for the Alam brothers, at which time each of them will face a statutory maximum sentence of 20 years in federal prison.

The United States Postal Service Office of Inspector General investigated this matter.

Assistant United States Attorney Courtney N. Williams of the Riverside Branch Office is prosecuting this case.

LOS ANGELES – An Oklahoma man who grew up in Los Angeles pleaded guilty today to a federal criminal charge for telephoning bomb threats to five Los Angeles schools, including two elementary schools, and threatened to shoot the children as they exited one of the elementary schools.

Marcus Jamal Sanchez, 45, a.k.a. “Marcus James Buchanan,” of Blackwell, Oklahoma, pleaded guilty to one count of making a threat through interstate commerce to damage and destroy buildings by fire and explosives.

Sanchez, who was arrested in June 2022, has been free on bond since July 2022.

“Sanchez put children, teachers, and staff at risk through his reckless and irresponsible actions,” said United States Attorney Martin Estrada. “Schools should be safe havens for our kids, and my office will use the force of federal law – when necessary – to prosecute individuals who threaten the educational safety of our young people.”

“The depraved act of making death threats to vulnerable schoolchildren is incomprehensible to most and will not be tolerated by the FBI, nor the American people,” said Amir Ehsaei, the Acting Assistant Director in Charge of the FBI's Los Angeles Field Office. “When threats such as these are reported, they must always be treated as credible and so they continue to drain valuable resources from law enforcement at the expense of the taxpayers who fund them.”

“The Los Angeles School Police Department’s commitment to the safety of our school communities is our top priority,” said Lieutenant Nina Buranasombati, LASPD spokesperson. “We are pleased with the significant step toward justice for the affected school communities. We sincerely appreciate the dedication and collaboration of all parties involved in the judicial process.”

According to his plea agreement, during a period of less than two hours on the morning of February 28, 2022, Sanchez called in bomb threats to two elementary schools, two middle schools, and a high school in Los Angeles. In a call to one of the elementary schools, Sanchez threatened to shoot the children as they exited the building.

On April 27 and 28, Sanchez made additional bomb threats to two of the Los Angeles schools he previously threatened, threatening to shoot and kill children at other schools. On the afternoon of April 27, Sanchez called an elementary school and said to a school employee, “There is a bomb at your school, and we will shoot the kids when they get out of the school. That is what you get for not accepting me in ’86,” according to his plea agreement.

After receiving the threat, the school staff notified police and placed the school on lockdown. Police searched the campus for explosives or unusual items but found none.

On April 28, Sanchez called the same school again and said there was a pipe bomb placed at the school’s address. After receiving the bomb threat, the school staff notified police and placed the school on lockdown. Police searched the campus for explosives or unusual items but found none.

That same day, Sanchez called a different elementary school and said, “Stop playing games; you know who this is. I am going to shoot the school. I know the kids are there.” Afterwards, the school was placed on lockdown, but – as with all the incidents – no explosives or unusual items were found.

United States District Judge Josephine L. Staton scheduled a June 7 sentencing hearing in this case, at which time Sanchez will face a statutory maximum sentence of 10 years in federal prison.

The FBI and the Los Angeles School Police Department investigated this matter.

Assistant United State Attorney Jena A. MacCabe of the Violent and Organized Crime Section is prosecuting this case.

LOS ANGELES – A San Bernardino man with multiple felony domestic violence convictions has been sentenced to 180 months in federal prison for unlawfully possessing ammunition – the fired cartridge cases of which law enforcement found in the man’s shared family home after he had fired them during a domestic dispute, the Justice Department announced today.

Frank Escobar, Jr., 35, was sentenced on Wednesday afternoon by United States District Judge Hernán D. Vera.

Escobar pleaded guilty in November 2023 to one count of being a felon in possession of ammunition. He has been in federal custody since August 2023.

In May 2023, Escobar knowingly possessed ammunition, specifically, three rounds of .25-caliber ammunition and four rounds of 12-gauge shotgun ammunition. Law enforcement found two of the .25-caliber rounds in the form of fired cartridge cases in Escobar’s shared family residence after he had fired the bullets during a domestic dispute.  He was not permitted to possess the firearm and ammunition because of his criminal history, which includes four convictions for felony domestic violence.

“Firearm restrictions are particularly impactful and necessary for offenders like [Escobar] with a history of domestic violence,” prosecutors argued in a sentencing memorandum. “Possession of a firearm by an abuser significantly increases the risk of death for a victim of domestic violence…While in possession of a firearm that he was legally prohibited from possessing, [Escobar] fired the gun multiple times in close proximity to his family members inside their shared residence.”

The Bureau of Alcohol, Tobacco, Firearms, and Explosives, and the San Bernardino Police Department investigated this matter.

Assistant United States Attorney Kelsey A. Stimson of the General Crimes Section prosecuted this case.

LOS ANGELES – The owner of an Encino tax preparation company pleaded guilty today to helping a client file a false individual tax return that deliberately underreported the client’s income, admitting that this and other false tax returns for the same the client caused a loss to the IRS of more than $400,000.

Bijan Kohanzad, 62, of Calabasas, pleaded guilty to one count of aiding and assisting the filing of a false tax return.

According to his plea agreement, beginning in mid-2015 and lasting until May 2017, Kohanzad helped and counseled a client to reduce the client’s taxable income. He did so illegally by falsely increasing the client’s business expenses reported on the client’s federal tax returns.

On the client’s corporate tax return for the year 2015, the client’s company claimed $150,000 in advertising expenses, a claim that Kohanzad knew was false. This false expense claim reduced the company’s ordinary business income from more than $326,000 to over $176,000, and fraudulently reduced the income the client would then report on his individual tax return. 

In September 2016, Kohanzad also knowingly and willfully helped and advised the same client to file a false individual income tax return for the year 2015. On this return, the client failed to report the approximately $150,000 in concealed income that the client had received through his company. As a result, the client’s personal tax return falsely reported a taxable income of $127,878, when the actual amount exceeded $278,000.

For the tax year 2016, Kohanzad admitted that he again prepared and filed corporate and individual income tax returns for the same client that he knew were false. As with the false 2015 tax returns, the 2016 corporate tax return falsely claimed $886,325 in business expenses, which reduced the company’s reported ordinary business income, and fraudulently reduced the client’s taxable income as reported on his individual tax return from more than $1.3 million to less than $450,000.

The total loss Kohanzad caused to the IRS for these two tax years was approximately $401,436. Kohanzad admitted in his plea agreement that he acted willfully and that he voluntarily and intentionally violated federal law. 

United States District Judge André Birotte Jr. scheduled a July 12 sentencing hearing, at which time Kohanzad will face a statutory maximum sentence of three years in federal prison. Kohanzad is free on $100,000 bond.

IRS Criminal Investigation is investigating this matter.

Assistant United States Attorney Monica E. Tait of the Major Frauds Section is prosecuting this case.

LOS ÁNGELES – Esta tarde está programada una audiencia de acusación formal para el último inculpado al que se arrestó en virtud de la determinación de un jurado de acusación federal, que alega la existencia de un plan para ingresar fentanilo, metanfetaminas y heroína por contrabando desde México a Estados Unidos. Estos narcóticos habrían sido introducidos en extintores de incendios y ocultos en cargamentos de chatarra.  

La organización de narcotráfico utilizó camiones con acoplado para importar extintores rellenos con drogas a través de la frontera entre Estados Unidos y México, según surge de documentos judiciales. Durante la investigación, que se extendió por dos años y recibió el nombre de Operación “Smoke Jumpers”, las autoridades realizaron 13 incautaciones en las que se obtuvieron cerca de 680.992 píldoras de fentanilo, 3 kilogramos de polvo de fentanilo, 17 kilogramos de heroína y 10.418 píldoras que contenían metanfetaminas.   

Nueve acusados fueron arrestados durante operativos policiales que comenzaron el 8 de febrero y continuaron durante el día lunes. Un acusado ya se encontraba bajo custodia de las autoridades estatales. Hay otros siete acusados que están prófugos y se cree que se encuentran en México.   

“Estos acusados usaron una red sofisticada para el contrabando de grandes cantidades de fentanilo a nuestro país”, señaló el fiscal federal Martin Estrada. “Sabemos que cada píldora de fentanilo puede ser letal, pero a estos acusados no les importaba la destrucción generalizada que estaban causando. Nuestra institución seguirá trabajando de manera inteligente y enérgica para llevar ante la justicia a organizaciones internacionales de narcotráfico”.   

“La autoridades de aplicación de la ley siguen estando a la altura de los desafíos que plantean las organizaciones de narcotráfico cuyos miembros siempre encuentran nuevas formas de ocultar las sustancias venenosas que importan de México a ciudades y pueblos en Estados Unidos”, expresó Amir Ehsaei, director adjunto interino a cargo de la Oficina de Campo del FBI en Los Ángeles. “El FBI y nuestros socios en el Equipo Especial están buscando a siete fugitivos en relación con este caso y piden que toda persona que tenga información sobre su paradero se ponga en contacto con el FBI”.   

La imputación formal, que consta de 15 cargos, se publicó el 8 de febrero y acusa a varias personas de cargos de tráfico de drogas y conspiración para el lavado de dinero. Los nueve acusados que fueron arrestados son:   

• Oscar Ahumada Leyva, de 43 años, de México;  

• Miguel Antonio Rabago Valenzuela, de 42 años, de México; 

• Gustavo Rivero Rodríguez, de 39 años, de México;  

• Carlos Espinoza, de 38 años, de Alhambra;  

• Erick Roque Ángeles, de 39 años, de Fontana;  

• David Sánchez Balderas, 26 años, de Denver;  

• Fernando Salgado, de 36 años, de Riverside;  

• Rocío Guadalupe Acevedo Tonche, de 32 años, de Ontario; y  

• Efren Quibrera Espinoza, de 29 años, de Cudahy.

Seis de los acusados quedaron bajo custodia en las regiones de Los Ángeles e Inland Empire. Cinco de esos acusados han sido imputados formalmente, se declararon no culpables y se dispuso su vinculación a juicio el 2 de abril. Está previsto que Erick Roque Ángeles sea imputado formalmente en el Tribunal Federal de Distrito en Los Ángeles hoy más tarde. Un décimo acusado —Toniel Báez-Duarte, de 33 años, oriundo de Apple Valley— ya se encontraba bajo custodia de las autoridades estatales.   

Conforme a una orden que autoriza a examinar un teléfono incautado cuando Carlos Espinoza fue arrestado la semana pasada, la investigación se centró en Carin Trucking, una organización perteneciente a Leyva y con sede en San Diego que operaba al menos seis camiones con acoplado que ingresaban habitualmente a Estados Unidos desde México para llevar a cabo la entrega de presuntos narcóticos en el área de Los Ángeles. Las drogas, que incluían píldoras falsificadas conteniendo fentanilo se encontraban ocultas en extintores inicialmente disimulados como de chatarra y, posteriormente, en extintores que simulaban ser legítimos, según indica la orden de registro presentada el lunes.   

“Los investigadores han observado múltiples transacciones de drogas que involucran a conductores de camiones y sus camiones con acoplado”, según indica una declaración jurada en apoyo a la orden de registro. “El conductor del camión conducía a Estados Unidos desde México y cruzaba la frontera, generalmente llevando una carga de chatarra, pero oculto entre la chatarra se encontraba un extintor que contenía drogas. El conductor del camión se dirigía entonces a Los Ángeles para reunirse con un mensajero, quien recogería los extintores cargados con drogas para su ulterior distribución”.   

En el documento de acusación formal se exponen señalamientos de que un inculpado ha cometido un delito. Se presume que todo acusado es inocente hasta que se demuestre su culpabilidad en un tribunal de justicia.   

La acusación alega dos cargos de conspiración relacionada con narcóticos y 12 delitos de tenencia de drogas, para cada uno de los cuales se prevé una pena mínima obligatoria de 10 años en una prisión federal y posible pena perpetua. El cargo 15, que alega la existencia de una conspiración con fines de lavado de dinero, conlleva una pena máxima de 20 años de prisión.  

La Operación Smoke Jumpers fue dirigida por el Equipo Especial del FBI en Los Ángeles, que es parte de una Iniciativa de Equipos Especiales de los Grupos Operativos contra las Drogas y la Criminalidad Organizada (Organized Crime Drug Enforcement Task Forces, OCDETF) y prevé el establecimiento de grupos operativos permanentes de carácter interinstitucional que trabajan codo a codo en el mismo lugar. Este modelo de ubicación compartida permite que agentes de diferentes organismos colaboren en operaciones en múltiples jurisdicciones basadas en datos de inteligencia para interceptar y desarticular a los traficantes de drogas, responsables de lavado de dinero, bandas y organizaciones delictivas transnacionales más importantes.   

Además del FBI, participaron en la investigación la Oficina de Aduanas y Protección Fronteriza de EE. UU., el Departamento de Policía de South Gate, el sector de Investigación Penal del IRS e Investigaciones de Seguridad Nacional.   

La Administración para el Control de Drogas, la Patrulla de Carreteras de California, el Departamento de Policía de Pasadena, el Equipo Regional Interior de Control de Narcóticos del Departamento de Alguaciles del Condado de San Bernardino, el Departamento de Policía de Alhambra, el Departamento de Policía de Rialto y el Departamento de Policía de Fontana proporcionaron asistencia fundamental.   

Los fiscales federales auxiliares Christopher C. Kendall y Jehan Pernas de la Sección de Narcóticos Internacionales, Lavado de Dinero y Extorsión impulsan la acción penal en esta causa.   

LOS ANGELES – An arraignment is scheduled this afternoon for the final defendant arrested on a federal grand jury indictment that alleges a scheme to smuggle fentanyl, methamphetamine and heroin from Mexico into the United States – narcotics that allegedly were packed into fire extinguishers and concealed in scrap metal loads.

The drug trafficking organization used semi-trucks to import fire extinguishers filled with drugs across the United States-Mexico border, according to court documents. During the two-year investigation, called Operation “Smoke Jumpers,” authorities made 13 seizures that yielded approximately 680,992 fentanyl pills, 3 kilograms of fentanyl powder, 17 kilograms of heroin, and 10,418 pills containing methamphetamine.

Nine defendants were arrested during law enforcement operations that began on February 8 and continued through Monday. One defendant was already in state custody. Seven additional defendants are fugitives believed to be in Mexico.

“These defendants used a sophisticated network to smuggle immense amounts of fentanyl into our country,” said United State Attorney Martin Estrada. “We know that every fentanyl pill can kill, but these defendants did not care about the widespread destruction they were causing. Our office will continue to work intelligently and aggressively to bring international drug-trafficking organizations to justice.”

“Law enforcement continues to meet the challenges presented by drug trafficking organizations whose members constantly find novel ways to hide the poison they’re importing from Mexico to U.S. towns and cities,” said Amir Ehsaei, the Acting Assistant Director in Charge of the FBI’s Los Angeles Field Office. “The FBI and our partners on the Strike Force are seeking seven fugitives in this case and ask that anyone with information as to their whereabouts contact the FBI.”

The 15-count indictment unsealed on February 8 charges various defendants in drug trafficking counts and a money laundering conspiracy. The nine defendants who were arrested are:

• Oscar Ahumada Leyva, 43, of Mexico;
• Miguel Antonio Rabago Valenzuela, 42, of Mexico;
• Gustavo Rivero Rodriguez, 39, of Mexico;
• Carlos Espinoza, 38, of Alhambra;
• Erick Roque Angeles, 39, of Fontana;
• David Sanchez Balderas, 26, of Denver;
• Fernando Salgado, 36, of Riverside;
• Rocio Guadalupe Acevedo Tonche, 32, of Ontario; and
• Efren Quibrera Espinoza, 29, of Cudahy.

Six of the defendants were taken into custody in the Los Angeles and Inland Empire regions. Five of those defendants have been arraigned, entered not guilty pleas, and ordered to stand trial on April 2. Erick Roque Angeles is scheduled to be arraigned in United States District Court in Los Angeles later today. A tenth defendant – Toniel Baez-Duarte, 33, of Apple Valley – was already in state custody.

According to a warrant to search a phone seized when Carlos Espinoza was arrested last week, the investigation focused on Carin Trucking, a San Diego-based outfit owned by Leyva that operated at least six semi-trucks that regularly entered the United States from Mexico to deliver suspected narcotics to the Los Angeles area. The drugs, including counterfeit pills containing fentanyl, were concealed in fire extinguishers initially disguised as scrap metal and later in extinguishers that appeared legitimate, according to the search warrant filed Monday.

“Investigators have observed multiple drug transactions involving truck drivers and their semi-trucks,” according to the affidavit in support of the search warrant. “The truck driver would drive into the United States from Mexico, and cross the border usually carrying a load of scrap metal, and concealed inside will be a scrap metal fire extinguisher containing drugs. The truck driver would then make his way up to Los Angeles, to meet a courier, who would pick up the drug packed fire extinguishers for further distribution.”

An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.

The indictment alleges two narcotics conspiracies and 12 drug possession offenses, each of which carry a mandatory minimum sentence of 10 years in federal prison and a potential life sentence. Count 15, which alleges a money laundering conspiracy, carries a statutory maximum penalty of 20 years in prison.

Operation Smoke Jumpers was led by the FBI Los Angeles Strike Force, which is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) Strike Force Initiative and provides for the establishment of permanent multi-agency task force teams that work side-by-side in the same location. This co-located model enables agents from different agencies to collaborate on intelligence-driven, multi-jurisdictional operations to disrupt and dismantle the most significant drug traffickers, money launderers, gangs, and transnational criminal organizations.

In addition to the FBI, U.S. Customs and Border Protection, the South Gate Police Department, IRS Criminal Investigation, and Homeland Security Investigations participated in the investigation.

The Drug Enforcement Administration, the California Highway Patrol, the Pasadena Police Department, the San Bernardino County Sheriff’s Department’s Inland Regional Narcotic Enforcement Team, the Alhambra Police Department, the Rialto Police Department, and the Fontana Police Department provided substantial assistance.

Assistant United States Attorneys Christopher C. Kendall and Jehan Pernas of the International Narcotics, Money Laundering, and Racketeering Section are prosecuting this case.

LOS ANGELES – A San Fernando Valley man was sentenced today to 210 months in federal prison for using stolen identities to fraudulently obtain more than $1,568,000 in COVID-19 pandemic-related unemployment benefits, and for stealing title to dozens of cars by presenting forged documents to the California Department of Motor Vehicles (DMV).

Eduard Gasparyan, 38, a.k.a. “Rudy Pineda” and “Papin Galstyan,” of Granada Hills, was sentenced by United States District Judge Josephine L. Staton, who also ordered him to pay $2,232,767 in restitution.

Gasparyan pleaded guilty in February 2023 to one count of conspiracy to commit wire fraud.

From at least 2020 to September 2022, Gasparyan and his then-fiancée, Angela Karchyan, 39, of Granada Hills, stole the identities of victims and used them to apply for unemployment insurance benefits from the California Employment Development Department (EDD), which administers the state’s unemployment insurance program.

As the COVID-19 pandemic worsened in 2020, Congress implemented Pandemic Unemployment Assistance (PUA) provisions to expand access to unemployment benefits to self-employed workers, independent contractors, and others who would not otherwise be eligible for them.

After the bogus unemployment insurance benefits applications were approved, Gasparyan and Karchyan used debit cards containing the fraudulently obtained benefits to withdraw cash at ATMs.

For example, on August 23, 2021, Gasparyan was filmed via surveillance camera at a bank ATM withdrawing $4,500 from nine debit cards within a 7-minute span. Three of the debit cards were issued in Gasparyan’s name while the other six debit cards were in the names of other individuals, court documents state.

From February 2020 to August 2022, EDD paid out approximately $544,089 in fraudulently obtained jobless benefits on at least 32 claims using the same address in Van Nuys that Gasparyan used as a mailing address, according to court documents. During that same time, EDD paid out approximately $307,012 in jobless benefits on at least 16 claims to a Granada Hills address linked to Gasparyan.

Gasparyan and Karchyan purchased vehicles using their own names as well as the names of identity theft victims but provided the sellers with worthless checks or bank account numbers to purportedly pay for the vehicles.

Gasparyan and his co-conspirators also used stolen identities to rent vehicles and then caused the DMV to remove the true owners – rental car companies – from the registration for those vehicles by using forged documents.

“The primary victims of [Gasparyan’s] conspiracy are the taxpayers, whose efforts to ameliorate the suffering of those who lost their jobs during the COVID pandemic [Gasparyan] took for himself, and the owners of the automobiles he stole,” prosecutors argued in a sentencing memorandum. “Of course, many individual victims of [Gasparyan’s] identity theft also suffered the anxiety of destroyed credit ratings, and the tremendous effort necessary to prove to lenders and landlords that they are not deadbeats, but rather victims of [Gasparyan’s] scheme.”

Karchyan pleaded guilty in February 2023 to one count of conspiracy to commit wire fraud. She is serving a 41-month prison sentence and was ordered to pay $2,232,767 in restitution.

The United States Department of Labor – Office of Inspector General, California Employment Development Department – Criminal Investigations, and the Orange County Auto Theft Task Force investigated this matter.

Assistant United States Attorney Andrew Brown of the Major Frauds Section prosecuted this case.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at (866) 720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

LOS ANGELES – The United States Attorney’s Office for the Central District of California, the Justice Department’s Antitrust Division, and the Procurement Collusion Strike Force (PCSF) today hosted a summit where procurement officials and law enforcement partners from across Southern California convened to discuss emerging threats and raise awareness.

United States Attorney (USA) Martin Estrada, Deputy Assistant Attorney General (DAAG) Manish Kumar of the Justice Department’s Antitrust Division, PCSF Director Daniel Glad and law enforcement partners were joined by representatives from over a dozen state and local government agencies.

During the summit, USA Estrada and DAAG Kumar reflected on the PCSF’s growth and success since its inception in 2019. They also detailed additional resources the department has dedicated to combat procurement collusion, emphasized the importance of law enforcement partnerships and a whole-of-government response to persistent threats in government spending and sharpened the PCSF’s focus on the challenges, risks and opportunities posed by increased federal spending in Southern California.

Summit participants discussed the importance of defending critical programs under the Infrastructure Investment and Jobs Act, the Inflation Reduction Act of 2022 and the Creating Helpful Incentives to Produce Semiconductors (CHIPS) and Science Act of 2022 from procurement collusion risk. USA Estrada and DAAG Kumar also outlined the ways that state and local government agencies can partner with the PCSF to address these emerging threats.

Summit participants included representatives from the FBI; Naval Criminal Investigative Service; the Department of Commerce, Office of Inspector General; the Department of Veterans Affairs, Office of Inspector General; and the Defense Criminal Investigative Service.

The PCSF is the Justice Department’s coordinated, national law enforcement effort to combat antitrust crimes and related fraudulent schemes that impact procurement, grant and program funding at all levels of government – federal, state and local. The PCSF is comprised of the Antitrust Division, multiple U.S. Attorneys’ Offices around the country, the FBI and the Inspectors General for multiple federal agencies.

Since its inception in November 2019, the PCSF has opened more than 100 criminal investigations and trained more than 31,000 people. In that time, the PCSF and Antitrust Division have investigated and prosecuted over 65 companies and individuals involving over $500 million worth of government contracts. The summit marks the department’s continued support of the PCSF as it enters its fifth year. To learn more about the PCSF, or to report collusion affecting government contracts, please visit www.justice.gov/atr/procurement-collusion-strike-force.

Assistant United States Attorney Jeff Mitchell and Antitrust Division Trial Attorneys Nolan Mayther and Ken Sakurabayashi are the PCSF coordinators for the Central District of California.

LOS ANGELES – A Santa Clarita man who is a former Navy SEAL was sentenced today to 20 years in federal prison for producing child sexual abuse material (CSAM) for surreptitiously filming nude minor victims with hidden cameras in a residential setting.

Robert Quido Stella, 51, of Canyon Country, was sentenced by United States District Judge George H. Wu.

At the conclusion of a four-day trial in May 2023, a jury found Stella guilty of three counts of production of child pornography. In April 2023, prior to trial, Stella pleaded guilty to access with intent to view child pornography and two counts possession of child pornography.

In 2021, Homeland Security Investigations (HSI) received a tip that Stella had accessed a dark web child pornography website.

On July 15, 2021, agents found collections of CSAM on Stella’s computer and two external hard drives. Stella concealed some of the collections in digital folders structures bearing misleading titles such as “federal contracts” and “tax returns.”

During the investigation, HSI agents also found hidden cameras that Stella placed, including one disguised as a USB charging block. According to evidence presented at trial, Stella used that hidden camera to film his minor victims as they undressed to shower and used the bathroom.

HSI later located approximately 17 videos and over 100 screenshots from those videos of minor victims naked and partially undressed. Stella hid these images under multi-level digital folder structures on a hard drive bearing misleading titles such as “course work.”

Stella has been in custody since his arrest in July 2021.

HSI investigated this matter.

Assistant United States Attorneys Catharine A. Richmond and Lyndsi C. Allsop of the Violent and Organized Crime Section prosecuted this case.

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

In two separate cases out of U.S. Attorneys’ Offices on opposite coasts, several individuals are charged – one of whom was arrested yesterday – in connection with sophisticated schemes to transfer sensitive technology, goods, and information for the benefit of hostile foreign adversaries, in violation of U.S. law.

In the Eastern District of New York, two Iranian nationals are charged with conspiring to export equipment used in the aerospace industry to the Government of Iran, in violation of the International Emergency Economic Powers Act (IEEPA), in connection with an alleged conspiracy to illegally export U.S. goods and technology without the required licenses.

In the Central District of California, a man was arrested for allegedly stealing trade secrets developed for use by the U.S. government to detect nuclear missile launches and track ballistic and hypersonic missiles.

“One year ago, I launched the Disruptive Technology Strike Force to strike back against adversaries trying to steal our nation’s most powerful technology and use it against us,” said Deputy Attorney General Lisa O. Monaco. “Since then, working with our partners at the Commerce Department, we have arrested more than a dozen corporate executives, engineers, distributors, and other high-profile targets on charges that include sanctions and export control violations, and other offenses involving the unlawful transfer of sensitive information and technology. Today’s charges against three additional defendants for seeking to illegally transfer U.S. software and semiconductor technology with military applications to benefit Iran and China highlight the critical importance of our fight against this national security threat.”

“The FBI continues to take aggressive investigative action to hold accountable those who seek to violate sanctions and illegally provide sensitive technology to foreign adversaries,” said FBI Deputy Director Paul Abbate. “Stealing U.S. trade secrets and technology, especially when it can be used for military purposes, will not be tolerated. We will continue to work closely with our partners in the Disruptive Technology Strike Force to stop such activity and protect the national security of the United States.”

“In its first year, the Disruptive Technology Strike Force has strengthened enforcement and disrupted numerous criminal schemes to smuggle highly-sensitive technology that foreign adversaries wield to advance their military and other malign agendas,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division. “The cases announced today underscore the commitment of the Justice Department and our partners to disrupt illegal efforts to siphon off U.S. ingenuity and to safeguard American security and innovation. “

“In the just one year since the launch of the Disruptive Technology Strike Force, we’ve stood up over a dozen local investigative cells, opened scores of investigations, and brought criminal charges against more than a dozen individuals and companies associated with nation-state adversaries,” said Assistant Secretary for Export Enforcement Matthew S. Axelrod. “Today’s announcement provides the latest example of our unwavering mission — keeping our country’s most sensitive technologies out of the world’s most dangerous hands.”

United States v. Bazzazi (EDNY)

According to court documents, between January 2008 and August 2019, Abolfazi Bazzazi, 79, of Iran, and his son Mohammad Resa Bazzazi, 43, of Iran, and their co-conspirators sought to evade U.S. sanctions and export laws by working to procure goods and technology, including aeronautical ground support equipment, ultraviolet flame detectors, and firefighting equipment, from U.S. companies for end users in Iran, including the Government of Iran, without obtaining the required licenses or other authorization from the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC).

“As alleged, the Bazzazis devised an intricate scheme to evade U.S. export laws in obtaining U.S. equipment and technology to be exported to Iran and for the Government of Iran which has been designated by the United States government as a state sponsor of terrorism,” said U.S. Attorney Breon Peace for the Eastern District of New York. “The defendants allegedly attempted to obtain commercial and military aircraft items from multiple U.S. companies that supply the military, aerospace, and firefighting industries. These charges demonstrate the resolve of this office and the Department of Justice to prosecute those who seek to aid the Government of Iran, in violation of U.S. sanctions.”

According to the indictment, the defendants sought to obtain components that could be used by Iran’s aerospace industry. Additionally, they disguised the final destination of U.S. goods by attempting to forward them through intermediaries in Europe and elsewhere. As alleged, the Bazzazis acted on behalf of the Government of Iran.

The Bazzazis are charged with conspiracy to violate the IEEPA, which carries a maximum penalty of 20 years in prison; and smuggling goods from the United States, which carries a maximum penalty of 10 years in prison. The defendants remain at large.

The Commerce Department’s Bureau of Industry and Security (BIS) and FBI are investigating the case.

Assistant U.S. Attorneys Francisco J. Navarro, Jonathan P. Lax, Nomi D. Berenson, and Adam Amir for the Eastern District of New York are prosecuting the case, with assistance provided by Trial Attorney Adam Small of the National Security Division’s Counterintelligence and Export Control Section.

United States v. Gong (CDCA)

As alleged, Chenguang Gong, 57, of San Jose, California, was arrested yesterday in San Jose and is expected to make his initial appearance today in the Northern District of California. Gong is a native of China and became a United States citizen in 2011.

Gong is charged in a criminal complaint with theft of trade secrets. According to court documents, Gong transferred more than 3,600 files from the research and development company where he worked — identified in court documents as the victim company — to personal storage devices during his brief tenure with the company last year. The files Gong allegedly transferred include blueprints for sophisticated infrared sensors designed for use in space-based systems to detect nuclear missile launches and track ballistic and hypersonic missiles, and blueprints for sensors designed to enable U.S. military aircraft to detect incoming heat-seeking missiles and take countermeasures, including by jamming the missiles’ infrared tracking ability. Some of these files were later found on storage devices seized from Gong’s temporary residence in Thousand Oaks, according to the affidavit in support of the complaint.

Together with the U.S. government and others, the affidavit states, the victim company “has invested tens of millions each year for more than seven years to develop the technology,” and it “would be extremely damaging economically” to the victim company if the technology were obtained by its competitors and “dangerous to U.S. national security if obtained by international actors.”

“We will do everything to protect our nation’s security, including from foreign threats,” said U.S. Attorney Martin Estrada for the Central District of California. “Mr. Gong, who had previously sought to provide the People’s Republic of China with information to aid its military, stole sensitive and confidential information related to detecting nuclear missile launches and tracking ballistic and hypersonic missiles. We know that foreign actors, including the PRC, are actively seeking to steal our technology, but we will remain vigilant against this threat remain vigilant against this threat by safeguarding the innovations of American businesses and researchers.”

“The FBI is committed to protecting our nation’s critical technologies and to pursuing those who look to steal trade secret information for their benefit or for the benefit of foreign adversaries,” said Assistant Director in Charge Donald Alway of the FBI Los Angeles Field Office. “The theft of trade secrets, especially of sensitive military technology, undermines our national security, erodes U.S. competitiveness in the global market, and harms the businesses and individuals who have invested time, resources, and creativity into developing innovative technologies. Our actions today send a strong message that anyone willing to steal proprietary information from U.S. businesses will face consequences in the criminal justice system.”

As alleged in the affidavit, the victim company hired Gong in January 2023 to work at one its laboratories as an application-specific integrated circuit design manager responsible for the design, development and verification of its infrared sensors. Beginning on approximately March 30, 2023, and continuing until his termination on April 26, 2023, Gong transferred thousands of files from his work laptop to three personal storage devices, including hundreds of files after he had accepted a job on April 5, 2023, at one of the victim company’s main competitors.

Many of the files Gong allegedly transferred contained proprietary and trade secret information related to the development and design of a readout integrated circuit that allows space-based systems to detect missile launches and track ballistic and hypersonic missiles while providing resilience and a readout integrated circuit that allows aircraft to track incoming threats in low visibility environments. Gong also allegedly transferred trade secret files relating to the development of “next generation” sensors capable of detecting low observable targets while demonstrating increased survivability in space, as well as the blueprints for the mechanical assemblies used to house and cryogenically cool the victim company’s sensors. This information was among the victim company’s most important trade secrets worth hundreds of millions of dollars, according to the complaint, and many of the files were marked “[VICTIM COMPANY] PROPRIETARY,” “FOR OFFICIAL USE ONLY,” “PROPRIETARY INFORMATION,” and “EXPORT CONTROLLED.”

During the investigation, the affidavit states, the FBI discovered that, between approximately 2014 and 2022 while employed at several major technology companies in the United States, “Gong submitted numerous applications to ‘Talent Programs’ administered by the People’s Republic of China government.” The affidavit explains that “the PRC has established talent programs through which it identifies individuals located outside the PRC who have expert skills, abilities, and knowledge that would aid in transforming the PRC’s economy, including its military capabilities.” To entice applicants, “the PRC government rewards Talent Recruits with significant financial and social incentives,” noting that the “salaries often meet or exceed salaries the Talent Recruits draw through their non-PRC employment.”

In 2014, while employed at a U.S. information technology company headquartered in Dallas, Texas, the affidavit states that Gong sent a business proposal to a contact at the 38th Research Institute of the China Electronics Technology Group Corporation, a high-tech research institute in China focused on both military and civilian products. In his proposal, translated from Chinese, Gong described a plan to produce high-performance analog-to-digital converters similar to those produced by his employer, noting that the global market for those products “is basically monopolized by several companies in the United States” and that the export of those items from the United States requires a “government export license.” On May 8, 2023, the FBI executed a search warrant at Gong’s temporary residence in Thousand Oaks, California, and recovered several digital devices containing hundreds of documents marked as confidential or proprietary belonging to the U.S. information technology company, the affidavit alleges.

In another Talent Program application in September 2020, the affidavit states, Gong proposed to develop “low light/night vision” image sensors for use in military night vision goggles and civilian applications. In a video presentation included with Gong’s submission, Gong used a video containing the model number of a sensor developed by an international defense, aerospace, and security company where Gong worked from 2015 to 2019.

According to the affidavit, Gong also travelled to China several times to seek Talent Program funding to develop sophisticated analog-to-digital converters. In his Talent Program applications, Gong underscored that the high-performance analog-to-digital converters he proposed to develop in China had military applications, explaining that they “directly determine the accuracy and range of radar systems” and that “[m]issile navigation systems also often use radar front-end systems.” In a 2019 email, translated from Chinese, Gong remarked that he “took a risk” by traveling to China to participate in the Talent Programs “because [he] worked for . . . an American military industry company[]” and thought he could “do something” to contribute to China’s “high-end military integrated circuits.” The affidavit states that Gong “continued to seek funding from Chinese government programs through at least March 2022.”

BIS and the FBI are investigating the case.

Assistant U.S. Attorneys Nisha Chandran and David Lachman for the Central District of California are prosecuting the case, with valuable assistance provided by Trial Attorney Brendan Geary of the National Security Division’s Counterintelligence and Export Control Section.

These cases were coordinated through the Disruptive Technology Strike Force, an interagency law enforcement strike force co-led by the Departments of Justice and Commerce designed to target illicit actors, protect supply chains, and prevent critical technology from being acquired by authoritarian regimes and hostile nation-states. Under the leadership of the Assistant Attorney General for National Security and the Assistant Secretary of Commerce for Export Enforcement, the Strike Force leverages tools and authorities across the U.S. government to enhance the criminal and administrative enforcement of export control laws.

An indictment and a criminal complaint are merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

LOS ANGELES – Five alleged members of an international drug trafficking ring based in the San Gabriel Valley were arrested today on a 27-count federal grand jury indictment charging them with conspiring to distribute and possess with intent to distribute methamphetamine.

Two of the defendants also have been charged with maintaining a drug premises where the methamphetamine was stored and packaged. Specifically, the defendants are engaged in the mailing and shipping of methamphetamine from Los Angeles County to New Zealand and Australia.

The following defendants were arrested this morning are scheduled to be arraigned tomorrow in United States District Court in Santa Ana:

• Yangqiang Chen, 45, of Monterey Park;
• Jie Chen, 40, of Rosemead;
• MeiMei Chen, 41, of Rosemead;
• Guorong He, 50, of Rosemead; and
• Yien He, 32, of Rosemead.

Zuxing Lin, 44, of Rosemead is currently a fugitive. Xingyun Chen, 54, is currently in Louisiana in immigration custody.

As part of this investigation, law enforcement has seized 91 packages of methamphetamine destined for foreign countries. In those packages, law enforcement seized almost 200 kilograms of methamphetamine. The value of the drugs seized, if sold in Australia and New Zealand, exceeds $20 million, according to law enforcement estimates.

During search warrants executed today at three locations in Rosemead and Monterey Park, law enforcement seized approximately 40 pounds of methamphetamine, more than $100,000 in cash, and more than 1,000 gift cards from various retailers.

According to the indictment returned on Tuesday, defendants Yangqiang Chen and Jie Chen ordered and received items from online retailers, such as spools of 3D printing filament, utility cases, wine opener sets, and drive shafts, for use in concealing methamphetamine in international shipments to foreign drug customers. 

Zuxing Lin, Meimei Chen, Xingyun Chen, Guorong He, and Yien He packaged the methamphetamine, at a residence in Monterey Park and elsewhere, for delivery to foreign drug customers. Yangqiang Chen, Zuxing Lin, Meimei Chen, Xingyun Chen, and Yien He delivered the packages containing methamphetamine to UPS stores and international shipping companies so they could be shipped to foreign drug customers.

An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.

If convicted of all charges, each defendant would face a statutory maximum sentence of life in federal prison and a mandatory minimum sentence of 10 years in federal prison.

The FBI; the Drug Enforcement Administration; Homeland Security Investigations; IRS Criminal Investigation; the Los Angeles Police Department; the Los Angeles County Sheriff’s Department; and the United States Postal Inspection Service are investigating this matter.

This case is the result of an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation led by the United States Attorney’s Office for the Central District of California, FBI, DEA, and IRS. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking, firearms trafficking, and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply. OCDETF uses an intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.

Assistant United States Attorney Jennifer L. Waier of the Santa Ana Branch Office is prosecuting this case.

LOS ANGELES – A former engineer at a Southern California company has been arrested on federal charges alleging he stole trade secret technologies developed for use by the United States government to detect nuclear missile launches and to track ballistic and hypersonic missiles, the Justice Department announced today.

Chenguang Gong, 57, of San Jose, California, was arrested Tuesday morning. Gong, who is a native of China and became a United States citizen in 2011, is being held in custody until a detention hearing scheduled for later today.

Gong is charged in a criminal complaint with theft of trade secrets. According to court documents unsealed today, Gong transferred more than 3,600 files from a Los Angeles-area research and development company where he worked – identified in court documents as the victim company – to personal storage devices during his brief tenure with the company last year. The files Gong allegedly transferred include blueprints for sophisticated infrared sensors designed for use in space-based systems to detect nuclear missile launches and track ballistic and hypersonic missiles, as well as blueprints for sensors designed to enable U.S. military aircraft to detect incoming heat-seeking missiles and take countermeasures, including by jamming the missiles’ infrared tracking ability. Some of these files were later found on storage devices seized from Gong’s temporary residence in Thousand Oaks, according to the affidavit in support of the complaint.

Together with the United States government and others, the victim company “has invested tens of millions each year for more than seven years to develop the technology,” the affidavit states, and it “would be extremely damaging economically” to the victim company if the technology were obtained by its competitors and “dangerous to U.S. national security if obtained by international actors.”

“We will do everything to protect our nation’s security, including from foreign threats,” said United States Attorney Martin Estrada. “Mr. Gong, who had previously sought to provide the People’s Republic of China with information to aid its military, stole sensitive and confidential information related to detecting nuclear missile launches and tracking ballistic and hypersonic missiles. We know that foreign actors, including the PRC, are actively seeking to steal our technology, but we will remain vigilant against this threat by safeguarding the innovations of American businesses and researchers.”

“The FBI is committed to protecting our nation’s critical technologies and to pursuing those who look to steal trade secret information for their benefit or for the benefit of foreign adversaries,” said Donald Alway, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “The theft of trade secrets, especially of sensitive military technology, undermines our national security, erodes U.S. competitiveness in the global market, and harms the businesses and individuals who have invested time, resources, and creativity into developing innovative technologies. Our actions today send a strong message that anyone willing to steal proprietary information from U.S. businesses will face consequences in the criminal justice system.”

As alleged in the affidavit, the victim company hired Gong in January 2023 to work at one its laboratories as an application-specific integrated circuit design manager responsible for the design, development and verification of its infrared sensors. Beginning on approximately March 30, 2023, and continuing until his termination on April 26, 2023, Gong transferred thousands of files from his work laptop to three personal storage devices, including more than 1,800 files after he had accepted a job on April 5, 2023, at one of the victim company’s main competitors.

Many of the files Gong allegedly transferred contained proprietary and trade secret information related to the development and design of a readout integrated circuit that allows space-based systems to detect missile launches and track ballistic and hypersonic missiles and a readout integrated circuit that allows aircraft to track incoming threats in low visibility environments. Gong also allegedly transferred trade secret files relating to the development of “next generation” sensors capable of detecting low observable targets while demonstrating increased survivability in space, as well as the blueprints for the mechanical assemblies used to house and cryogenically cool the victim company’s sensors. This information was among the victim company’s most important trade secrets worth hundreds of millions of dollars, according to the complaint, and many of the files were marked “[VICTIM COMPANY] PROPRIETARY,” “FOR OFFICIAL USE ONLY,” “PROPRIETARY INFORMATION,” and “EXPORT CONTROLLED.”

During the investigation, the affidavit states, the FBI discovered that, between approximately 2014 and 2022, while employed at several major technology companies in the United States, “Gong submitted numerous applications to ‘Talent Programs’ administered by the People’s Republic of China government.” The affidavit explains that “the PRC has established talent programs through which it identifies individuals located outside the PRC who have expert skills, abilities, and knowledge that would aid in transforming the PRC’s economy, including its military capabilities.”

In 2014, while employed at a U.S. information technology company headquartered in Dallas, the affidavit states that Gong sent a business proposal to a contact at a high-tech research institute in China focused on both military and civilian products. In his proposal, translated from Chinese, Gong described a plan to produce high-performance analog-to-digital converters similar to those produced by his employer.

On May 8, 2023, the FBI executed a search warrant at Gong’s temporary residence in Thousand Oaks, California, and recovered several digital devices containing hundreds of documents marked as confidential or proprietary belonging to the information technology company, the affidavit alleges.

In another Talent Program application in September 2020, the affidavit states, Gong proposed to develop “low light/night vision” image sensors for use in military night vision goggles and civilian applications. In a video presentation included with Gong’s submission, Gong used a video containing the model number of a sensor developed by an international defense, aerospace, and security company where Gong worked from 2015 to 2019.

According to the affidavit, Gong also travelled to China several times to seek Talent Program funding to develop sophisticated analog-to-digital converters. In his Talent Program applications outlined in the affidavit, Gong underscored that the high-performance analog-to-digital converters he proposed to develop in China had military applications, explaining that they “directly determine the accuracy and range of radar systems” and that “[m]issile navigation systems also often use radar front-end systems.” In a 2019 email, translated from Chinese, Gong remarked that he “took a risk” by traveling to China to participate in the Talent Programs “because [he] worked for…an American military industry company” and thought he could “do something” to contribute to China’s “high-end military integrated circuits.”

The affidavit states that Gong “continued to seek funding from Chinese government programs through at least March 2022.”

A criminal complaint is merely an allegation, and the defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

The charge of theft of trade secrets carries a statutory maximum penalty of 10 years in federal prison.

The FBI’s Los Angeles Field Office is investigating this matter. The FBI’s San Francisco Field Office and the U.S. Attorney’s Office for the Northern District of California provided substantial assistance.

Assistant United States Attorneys David C. Lachman of the Terrorism and Export Crimes Section and Nisha Chandran of the Cyber and Intellectual Property Crimes Section are prosecuting this case. Department of Justice Trial Attorney Brendan Geary of the National Security Division’s Counterintelligence and Export Control Section is providing substantial assistance.

LOS ANGELES – A La Verne woman was sentenced today to 85 months in federal prison for being a “secretary” to an imprisoned Mexican Mafia “shot caller” who controlled Latino gangs in Pomona, including facilitating an armed robbery and shooting, as well as distribution of narcotics and extortion.

Kelly Deshannon, 42, was sentenced by United States District Judge George H. Wu.

At the conclusion of a five-day trial, a federal jury in July 2023 found Deshannon guilty of one count of conspiracy to violate the Racketeer Influenced and Corrupt Organizations (RICO) Act, one count of committing a violent crime in support of racketeering activity (VICAR), and one count of using a firearm in furtherance of a violent crime.

Deshannon served as a secretary to Seferino Gonzalez, an imprisoned shot caller of the Michael Lerma Cell of the Mexican Mafia. From prison, Gonzalez exerted control over Latino gangs, including overseeing drug trafficking and other offenses committed in Pomona. As a secretary, Deshannon helped facilitate an attempted armed robbery of car keys to a Mercedes-Benz SUV on July 14, 2013, which resulted in the shooting of a victim. Deshannon knew the victims’ address, that the victims had access to the car keys, and had spoken to the victims. On the night of the shooting, Deshannon brought the shooter and other defendants with her to the victims’ address and pointed out a victim to her accomplices. The victim, though wounded, survived the attack.

Deshannon’s other criminal conduct included broking drug sales and collecting extortionate taxes in Lerma Cell territory. 

Lerma, who is this case’s lead defendant, was indicted in 2018 and has pleaded not guilty to RICO conspiracy and multiple other federal charges. His trial is scheduled for July 23. He is in federal custody.

The FBI San Gabriel Valley Safe Streets Task Force investigated this matter.  The FBI San Gabriel Valley Safe Streets Task Force was formed in 2008 and is based out of the Pomona Police Department. One of the primary missions of the FBI’s San Gabriel Valley Safe Streets Task Force is to work with the Los Angeles County Sheriff’s Department to combat, investigate, and dissuade gang violence from occurring within the Los Angeles County Jail and surrounding Los Angeles area. The Covina Police Department assisted in the investigation.

Assistant United States Attorneys Jason C. Pang of the Major Frauds Section and Varun Behl of the International Narcotics, Money Laundering, and Racketeering Section are prosecuting this case.

LOS ANGELES – Federal criminal charges were filed today against an analyst for a newsletter promoting unregistered securities and over-the-counter stocks, his money-laundering associate, and the CEO of a Beverly Hills company, all of whom participated in a bribery scheme in which leaders of various companies paid more than $4.2 million in undisclosed compensation to have their stocks touted by the newsletter.

The following defendants have been charged:

• Jonathan William Mikula, 38, of Woodstock, Georgia; who worked as a stock analyst and writer for an investment newsletter;
• Christian Fernandez, 33, a.k.a. “Christian Crockwell,” of Smyrna, Georgia, who was a business associate and friend of Mikula’s; and
• Amit Raj Beri, 47, of Hobe Sound, Florida, who was the CEO of a Beverly Hills-based business.

All three defendants have been charged via information with one count of conspiracy to tout securities for undisclosed compensation. Mikula also has been charged with one count of touting securities for undisclosed compensation.

According to an information filed January 30 in United States District Court, Mikula worked as an analyst for “Palm Beach Venture,” an investment newsletter with subscribers nationwide. This newsletter published promotional pieces for offerings of securities, including unregistered securities marketed pursuant to the U.S. Securities and Exchange Commission’s Regulation A, as well as microcap stocks traded “over the counter.” There, securities are lower-priced, illiquid securities traded not on liquid public exchanges but instead through securities dealers known as “market makers.”

Federal law requires full and public disclosure from anyone who has received payment – directly or indirectly – from an issuer for publishing, publicizing, or circulating any advertisement or communication that describes the issuer’s security offered for sale.

From December 2019 to August 2022, in exchange for Mikula touting certain securities issuances through “Palm Beach Venture,” Beri and others provided Mikula and Fernandez with both cash payments as well as undisclosed, indirect compensation, including lavish meals, beverages, and other illicit entertainment.

Fernandez opened and operated foreign and shell companies and bank accounts – some based in Mexico – whose purpose was to conceal the nature of the bribes and kickbacks. In exchange, Fernandez took a hefty cut – sometimes half – of the funds.

The conspiracy allowed some of its participants to raise tens of millions of dollars in investor funds through securities offerings described and promoted by “Palm Beach Venture” without required disclosures that such promotions had been obtained via direct and indirect payments to Mikula.

For example, in March 2020, Mikula caused to be published an article in “Palm Beach Venture” entitled, “Curing Incurable Diseases and Giving Us Over 4,900% Potential Gains.” The article touted Emerald Health Pharmaceuticals (EHP), a San Diego-based life sciences company and falsely stated that neither the newsletter nor its affiliates had received compensation and that “as publishers of financial information, we make general recommendations based on our own analysis.” In fact, negotiations were underway between EHP, Beri, Mikula, and Fernandez toward concealed payments in exchange for the article.

In total, Mikula, Fernandez, Beri and others received more than $4.2 million in undisclosed and misrepresented payments as well as hundreds of thousands of dollars of compensation in the form of undisclosed entertainment and illicit services.

Another co-conspirator, Avtar Singh Dhillon, 62, of Long Beach, a one-time board member of and an indirect shareholder in EHP, pleaded guilty in December 2022 in United States District Court for the District of Massachusetts and admitted his role in the conspiracy. His sentencing hearing is scheduled for May 23 in Boston.

The conspiracy charge carries a statutory maximum sentence of five years in federal prison. The securities touting charge also carries a statutory maximum sentence of five years in federal prison.

The FBI is investigating this matter.

The United States Securities and Exchange Commission has also charged the defendants in a separate civil enforcement action.

Any investors who believe they are a victim of the crimes alleged in this Information are encouraged to go to https://www.justice.gov/usao-cdca/united-states-v-jonathan-william-mikula-christian-fernandez-and-amit-raj-beri for further information and updates regarding this matter.

An information contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.

Assistant United States Attorney Adam P. Schleifer of the Corporate and Securities Fraud Strike Force is prosecuting this case.

LOS ANGELES – An Antelope Valley woman was arrested today on a 39-count federal grand jury indictment alleging she obtained more than $13.5 million from more than 1,000 investors for her for-women beverage company, the lion’s share of which she spent at casinos, on luxury items and cars, and renting a house.

Lupe Louise Rose, 54, of Palmdale, surrendered to federal authorities this morning. She is charged with 38 counts of securities fraud and one count of making false statements to federal investigators.

Rose pleaded not guilty at her arraignment this afternoon at United States District Court in downtown Los Angeles and a March 19 trial was scheduled. A federal magistrate judge today ordered Rose freed on $20,000 bond.

According to the indictment returned on January 18 and unsealed today, Rose in 2009 founded She Beverage Co. Inc., a Lancaster-based beverage manufacturer. Rose was the company’s president, CEO, and chairman of its board of directors. Rose promoted She Beverage as a woman-owned beverage manufacturer that marketed – primarily to female consumers – and sold beer, wine, bottled water, and other products purported designed specifically to cater to women’s needs.

From 2017 to December 2020, Rose raised investments in She Beverage amounting to more than $13.5 million from more than 1,000 investors nationwide. Specifically, she caused the company to offer and sell its shares through an offering memorandum, offering shares in the company at a price of $2.50 per share. Rose also hosted in-person meetings for current and prospective investors, some of which were livestreamed to out-of-town investors.

Even though Rose marketed She Beverage as a successful company, in fact, she allegedly used the vast majority of the $13.5 million she raised from investors personally to enrich herself, her family and friends. She also used victim investor money to “purchase” shell companies to give the false appearance that She Beverage was expanding, according to the indictment.

Contrary to Rose’s written promises to spend 30% of money raised from investors on inventory, she allegedly spent only 2.5% of investors’ money on inventory from 2015 to 2021.

From 2016 to 2021, Rose caused $6 million of victim investor funds raised in the company offerings to be used for the benefit of herself and her friends, the indictment alleges. Rose allegedly failed to inform investors that she spent more than $1 million of company funds at casinos, and she also used company money to purchase cars and trucks for family and friends. She allegedly also used company money to pay for a lease on a house she rented and used company money to purchase luxury clothing from retailers such as Gucci and Louis Vuitton.

Rose allegedly lied to investors by stating in 2018 that her company had “generated approximately $4-5 million dollars in revenue” when, in fact, that year She Beverage had sold less than $263,000 in merchandise.

She allegedly also made false statements to investors that She Beverage sold United States Food and Drug Administration-approved bottled water made with a proprietary formula that cured cancer. Rose made other alleged false claims about her prior business experience, including that she had developed McDonald’s Bagel Sandwich and the creation of Versace’s “Tribute” clothing line.

Other false statements included that there were nine-figure offers from other companies to purchase She Beverage and about Rose’s educational background, including that she received “professional certificates in the field of Medicine, Journalism,

Broadcasting, Education and Company Branding,” according to the indictment. Rose allegedly made false statements to investors and to investigators with the United States Securities and Exchange Commission (SEC).

An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

If convicted of all charges, Rose would face a statutory maximum sentence of 20 years in federal prison for each securities fraud count and up to five years in federal prison for the false statements count.

In September 2021, the SEC sued Rose for allegedly fraudulently raising millions of dollars from She Beverage investors throughout the United States. On January 16, United States District Judge Christina A. Snyder imposed a judgment finding Rose, She Beverage Co. Inc., and two others jointly and severally liable for disgorgement of $12,021,500, representing net profits from the fraud, as well as $738,774 in pre-judgment interest.

The FBI and IRS Criminal Investigation are investigating this matter.

Assistant United States Attorney Jeff P. Mitchell of the Major Frauds Section is prosecuting this case.

LOS ANGELES – A hookah lounge owner was sentenced today to 120 months in federal prison for illegally selling firearms – including several “ghost guns” – out of his business in downtown Los Angeles and for possessing with intending to distribute methamphetamine.

Hovik Dagesian, 42, of Burbank, was sentenced by United States District Judge Mark C. Scarsi.

Dagesian pleaded guilty in September 2023 to one count of engaging in the business of dealing in firearms without a license and one count of possession with intent to distribute methamphetamine.

From October 2020 to January 2021, Dagesian illegally sold 11 firearms – including firearms not bearing serial numbers, weapons that are commonly referred to as “ghost guns.” The firearms Dagesian illegally sold included a 12-gauge shotgun, an AR-15-type rifle with no serial number, and a 9mm handgun. Dagesian also admitted to selling methamphetamine to a buyer on October 30, 2020. The illegal firearm and drug sales took place at Dagesian’s hookah business in downtown Los Angeles.

In total, Dagesian sold $34,250 worth of firearms and methamphetamine to a buyer.

In January 2021, law enforcement executed a search warrant at Dagesian’s business. During the search, law enforcement seized 163.3 grams (5.8 ounces) of methamphetamine, a digital scale, approximately 215 rounds of ammunition, and many firearms he was willing to sell, including a sawed-off shotgun.

Dagesian has never been licensed as a dealer, manufacturer or importer of firearms.

The Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Los Angeles Police Department investigated this matter.

The International Narcotics, Money Laundering, and Racketeering Section prosecuted this case.

LOS ANGELES – Pomona Valley Hospital Medical Center has agreed to pay nearly $2.1 million to resolve allegations that it overbilled Medi-Cal for prescription medication purchased and reimbursed under a federal drug pricing program, the Justice Department announced today.

The settlement agreement finalized on Wednesday is the result of voluntary disclosures Pomona Valley made in 2021 and 2023. After an internal audit, Pomona Valley determined that it overbilled the United States and California, which jointly fund Medi-Cal, a government-funded program that provides health coverage for low-income individuals in California.

According to the settlement agreement, from December 2016 through September 2021, Pomona Valley improperly charged higher “usual and customary” costs, rather than lower “actual acquisition costs,” as required under the 340B Drug Pricing Program, which requires drug manufacturers to provide outpatient medication to eligible health care organizations at significantly reduced prices.

The overbilling allegedly resulted from Pomona Valley billing for its usual costs following a federal court’s temporary stay of the implementation of the California law requiring 340B providers to bill Medi-Cal at actual acquisition cost rates. But once the court lifted the temporary ban, Pomona Valley failed to implement actual acquisition cost pricing.

Pomona Valley ultimately overbilled the United States and California approximately $1.4 million. Pomona Valley has agreed to pay the United States $873,730 and California $1,225,954 to resolve the allegations, bringing the total settlement amount to nearly $2.1 million.

After making its voluntary disclosure, Pomona Valley cooperated with the investigation by federal and state authorities.

The settlement was negotiated by Assistant United States Attorney Jack D. Ross and auditor Gabriel Lam of the Civil Fraud Section, along with the U.S. Department of Health and Human Service’s Office of Inspector General and the California Department of Justice.

The settled claims are allegations only, and Pomona Valley has not admitted any wrongdoing.

LOS ANGELES – A former executive at cinema subscription service MoviePass Inc. has been found guilty by a jury of embezzling at least $260,000 from MoviePass and its parent company to repay money he borrowed to produce an event at the Coachella music festival, the Justice Department announced today.

Khalid Itum, 43, of Hollywood, was found guilty Thursday afternoon of two counts of wire fraud. The jury in the case acquitted Itum of two counts of money laundering.

According to evidence presented at a three-day trial, Itum was a MoviePass executive from November 2017 until March 2019. MoviePass was a New York-based company that charged subscribers a flat monthly fee in exchange for credits they could spend on movie tickets from any theater in MoviePass’s network of participating cinemas. In August 2017, Helios & Matheson Analytics (HMNY), a New York-based data analytics company, acquired MoviePass.

In the spring of 2017, Itum registered Kaleidoscope Productions LLC, a Los Angeles-based company that provided production and marketing services. That year, Itum, through Kaleidoscope, organized a promotional event at the annual Coachella Valley Music and Arts Festival in Indio. Neither MoviePass nor HMNY participated in the Coachella event.

Itum borrowed money from two individuals to help fund Kaleidoscope’s costs at Coachella. To repay the borrowed money, Itum later submitted sham invoices to HMNY for expenses and services purportedly rendered by Kaleidoscope. Itum caused HMNY and MoviePass employees to wire money from MoviePass and HMNY accounts to a Kaleidoscope bank account to pay the sham invoices. Itum concealed his scheme by lying to HMNY’s finance department that Kaleidoscope had been used to pay legitimate MoviePass expenses from the 2018 Coachella festival and provide other consulting services.

Itum caused HMNY and MoviePass a total loss of at least $260,000.

United States District Judge Virginia A. Phillips scheduled an April 29 sentencing hearing, at which time Itum will face a statutory maximum sentence of 20 years in federal prison for each wire fraud count.

The FBI’s New York Field Office investigated this matter. The FBI’s Los Angeles Field Office provided substantial assistance.

Assistant United States Attorneys David Y. Pi and Mark Aveis of the Major Frauds Section handled the trial in this matter.

LOS ANGELES – A trader for a group of hedge funds pleaded guilty this afternoon to participating in a scheme that manipulated penny stock prices to inflate the hedge fund’s reported profits – fraudulent gains that generated millions of dollars in management and performance fees – and caused investors to lose more than $215 million when the funds collapsed.

Colin Heatherington, 49, of Vancouver, Canada, pleaded guilty to one count of conspiring to commit securities fraud and wire fraud and admitted his role in the scheme run out of Absolute Capital Management Holdings (Absolute Funds), a Cayman Island-based company that managed eight hedge funds from offices in Mallorca, Spain.

Heatherington was a securities trader who worked closely with the founder and chief investment officer of Absolute Funds, Florian Wilhelm Jürgen Homm, 64, a German financier who was indicted in March 2013 and is currently a fugitive from justice.

As part of the scheme, Heatherington oversaw the purchase of billions of shares of United States-based penny stocks, which were then traded using various manipulative practices, such as cross trading, which fraudulently inflated the value of the stocks and, in turn, the value of the Absolute Funds.

Heatherington and others in the scheme also reaped profits through self-dealing trades in which they sold their own shares of artificially inflated penny stocks to the Absolute Funds.

After this case was indicted, Heatherington was in Canada, and the United States sought his extradition. After fighting extradition, Heatherington agreed last year to come to the United States.

Another defendant in this case – Todd Michael Ficeto, 57, a former Beverly Hills stockbroker – was sentenced to six years in federal prison after being convicted of 18 felonies relating to his managerial role in the scheme to manipulate penny stock prices, which garnered him many millions of dollars from fees and commissions and self-dealing trades. Ficeto also allowed members of the conspiracy to trade the manipulated penny stocks through his company, among other fraudulent acts.

Heatherington pleaded guilty before United States District Judge John A. Kronstadt, who scheduled a sentencing hearing for May 9, at which time, Heatherington will face a statutory maximum sentence of 25 years in federal prison.

The FBI investigated this matter. The Department of Justice’s Criminal Division’s Office of International Affairs, IRS Criminal Investigation, the United States Securities and Exchange Commission, and the Financial Industry Regulatory Authority (FINRA) provided assistance.

Assistant United States Attorneys Cassie D. Palmer of the Public Corruption and Civil Rights Section, Scott Paetty of the Major Frauds Section, and Ian V. Yanniello of the General Crimes Section are prosecuting this case.

RIVERSIDE, California – Two brothers have been sentenced to terms in federal prison for their roles in a July 2021 armed robbery of a marijuana dealer in San Bernardino, which resulted in the victim’s death from gunshot wounds, the Justice Department announced today.

Martrell Patrick Shaw, 20, of San Bernardino, one of two people who robbed the victim, was sentenced late Monday by United States District Judge Jesus G. Bernal to 20 years in federal prison.

At a separate hearing on Monday, Judge Bernal sentenced Rontrell Brainell Shaw, 22, of San Bernardino, the robbery crew’s getaway driver, to 14 years in federal prison. Both defendants were ordered to pay $14,342 in restitution to the victim’s father for funeral expenses.

Martrell Shaw pleaded guilty in May 2023 to one count of interference with commerce by robbery (Hobbs Act) and one count of discharging a firearm during a crime of violence resulting in death. Rontrell Shaw pleaded guilty in March 2023 to one count of Hobbs Act robbery.

According to court documents, on July 31, 2021, co-defendant Dillion Jones, 20, of San Bernardino, the Shaw brothers’ cousin, placed an order with the victim – identified in court documents as “D.M.” – for one pound of marijuana. Jones placed the order knowing that neither he, Martrell Shaw nor Rontrell Shaw had enough money to pay for it. Instead, the trio planned to rob the victim at gunpoint. Jones and Martrell Shaw brought a loaded firearm with them while Rontrell Shaw acted as their driver.

Once the victim arrived at what he thought was the drug deal location in San Bernardino, Martrell Shaw and Jones robbed him at gunpoint. During the robbery, one of the robbers discharged the firearm twice, striking the victim in the neck and torso. Martrell Shaw and Jones then stole the marijuana and a firearm belonging to the victim, who later died from the gunshot wounds he suffered.

Rontrell Shaw then picked up Martrell Shaw and Jones and drove away to avoid detection by law enforcement. Shortly after picking them up, Rontrell Shaw learned the victim was shot during the robbery, and he eventually learned that the victim died from his wounds.

“These defendants’ greed and violence led to the death of the victim,” said United States Attorney Martin Estrada. “Their disregard for human life has left the victim’s family and friends devastated. My office’s priority is public safety and today’s sentences show our continued determination to punish and deter violent criminals.”

“These violent individuals clearly have no regard for life,” said ATF Los Angeles Field Division Special Agent in Charge Christopher Bombardiere. “In this instance, greed outweighed humanity. Today is a win for justice and a heavy message to the community. Law enforcement will combine their resources and all our areas of expertise to find these trigger pullers. We will build the cases and win, they will lose.”

Jones pleaded guilty in September 2023 to one count of Hobbs Act conspiracy, one count of Hobbs Act robbery, one count of discharging a firearm in during a crime of violence resulting in death, and one count of possession of a stolen firearm. His sentencing hearing is scheduled for April 1, at which time he will face a statutory maximum sentence of life in federal prison.

The Bureau of Alcohol, Tobacco, Firearms and Explosives and the San Bernardino Police Department investigated this case.

Assistant United States Attorney Peter H. Dahlquist of the Riverside Branch Office is prosecuting this case.

A California man was sentenced today to 10 years in prison for conspiring to conceal his involvement in operating a laboratory and billing Medicare approximately $234 million for various lab tests, including COVID-19 and respiratory pathogen panel tests, despite his decades-long exclusion from the Medicare program.

“Criminals who cheat federal health programs and profit at the expense of American taxpayers will be met with the full force of the Justice Department,” said Attorney General Merrick B. Garland. “As our country was battling the COVID-19 pandemic, this individual was fraudulently billing Medicare for hundreds of millions of dollars. Today, thanks to the work of the Justice Department’s Criminal Division, he will now spend 10 years in federal prison for his crimes. We will continue to disrupt schemes that defraud the federal health programs the American people rely on, and we will hold accountable those who perpetrate those schemes.”

According to court documents, Imran Shams, 65, of Glendale, was convicted of Medicare and Medicaid fraud in separate 1990 and 2001 cases in New York and California, respectively. After each conviction, he was excluded from participation in Medicare and all federal health care programs, and advised by the Department of Health and Human Services Office of Inspector General (HHS-OIG) that he had to submit a written application to be considered for reinstatement in federal health care programs. Shams never sought reinstatement, yet he continued to operate health care clinics in New York that billed federal health care programs. In November 2017, Shams pleaded guilty to conspiracy to pay and receive health care kickbacks and other charges in the Eastern District of New York related to his operation of these clinics.

By 2018, Shams was an owner, operator, and manager of Matias Clinical Laboratory, doing business as Health Care Providers Laboratory (HCPL), a Baldwin Park, California-based clinical testing laboratory that billed Medicare and other federal health care programs. In order to maintain HCPL’s status as a Medicare provider and enable it to receive payments from Medicare for its testing services, Shams and a co-conspirator fraudulently concealed Shams’ role in HCPL from Medicare, including failing to submit required enrollment documentation identifying Shams’ ownership, management position, and prior convictions; causing the submission of false documentation to Medicare identifying another person as HCPL’s sole owner and managing officer; submitting false documentation concerning HCPL’s ownership and management to the California Department of Public Health; and making false statements to the U.S. Probation Office and Pretrial Services Agency while Shams was on federal court supervision following his 2017 conviction. Between August 2018 and April 2022, when the grand jury returned the indictment in this case and Shams was arrested and ordered detained without bond, HCPL fraudulently billed Medicare approximately $234 million. Medicare paid HCPL approximately $31.7 million based on these fraudulent claims.

Shams pleaded guilty in the Central District of California on Jan. 24, 2023, to conspiracy to commit health care fraud and concealment of his exclusion from Medicare.

In addition to the term of imprisonment, Shams was ordered to forfeit $31,761,286.21, including $4,513,106.30 in funds that the government previously seized from two bank accounts, as well as his interest in two residential properties and one business property in the Los Angeles area. Shams was also ordered to pay $31,761,286.21 in restitution.

“Shams engaged in a years-long scheme in which he billed American taxpayers nearly $234 million and lined his pockets with millions of dollars of funds intended for the health and welfare of patients,” said FBI Director Christopher Wray. “This case demonstrates the FBI’s commitment to rooting out fraud to help ensure critical healthcare funds go where they are needed most.”

“The integrity of the federal health care system rests, in part, on providers’ proper, lawful billing of Medicare and other HHS programs,” said Inspector General Christi A. Grimm of HHS-OIG. “Providers who violate federal health care law and defy measures intended to protect programs and patients from fraud will be held accountable. We remain steadfast and persistent in our efforts to investigate schemes targeting federal health care programs.”

The FBI Los Angeles Field Office and HHS-OIG investigated the case.

Trial Attorneys Gary A. Winters and Raymond E. Beckering III of the Criminal Division’s Fraud Section prosecuted the case. Assistant U.S. Attorney Maxwell Coll for the Central District of California handled the financial penalties.

The Fraud Section leads the Criminal Division’s efforts to combat health care fraud through the Health Care Fraud Strike Force Program. Since March 2007, this program, currently comprised of nine strike forces operating in 27 federal districts, has charged more than 5,400 defendants who collectively have billed federal health care programs and private insurers more than $27 billion. In addition, the Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, are taking steps to hold providers accountable for their involvement in health care fraud schemes. More information can be found at www.justice.gov/criminal-fraud/health-care-fraud-unit.