Central District of California

LOS ANGELES – Ten people were arrested in multiple cities over the past day in relation to two federal indictments charging members of an organized crime syndicate who allegedly conspired to traffic and import hundreds of kilograms of cocaine and other controlled substances from Mexico through Los Angeles for export to Canada or re-distribution throughout the United States.

Arrest and search warrants were executed this morning by a coalition of international law enforcement partners in various cities, including Los Angeles; Sacramento, California; Miami; Odessa, Texas; and the Canadian cities of Montreal, Toronto and Calgary.

In addition to those arrested, two defendants were already in state custody, and seven defendants are fugitives, including three Mexicans who allegedly supplied wholesale quantities of narcotics to the traffickers in the United States and Canada.

The investigation, known as “Operation Dead Hand,” resulted in two federal grand jury indictments returned under seal in Los Angeles earlier this month.  The indictments, which were unsealed today, collectively charge 19 individuals for their alleged roles in the organized crime syndicate, including Mexico-based suppliers who brought large quantities of narcotics into the United States, United States distributors, a Canadian who led an exportation organization, Canadian-based semi-truck drivers who operate in the United States, and a large-scale Canadian trafficker and Italian organized crime figure, Robert Scoppa, whom investigators allege was purchasing massive quantities of drugs on a wholesale basis.

“Today’s charges and arrests across North America reflect the Justice Department’s close coordination with our Mexican and Canadian partners to disrupt international narcotics trafficking,” said Deputy Attorney General Lisa O. Monaco. “These cases provide yet another example of how our agents and prosecutors work side-by-side to uncover and dismantle organized criminal networks peddling and profiting from deadly drugs.”

“Drug trafficking is a global problem being driven by sophisticated, organized crime groups who put profits over people’s lives,” said United States Attorney Martin Estrada. “Motivated by greed, these criminals destroy lives, devastate families, and wreak havoc in our community. But this case shows that we will collaborate with our international partners to bring these criminal networks to justice. Those who traffic in highly addictive and dangerous drugs will be held accountable.”  

“Until today, the organized members of this conspiracy operated with impunity throughout the many thousands of miles that comprise the North American continent, poisoning communities along the way,” said Donald Alway, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “The strength of this partnership cannot be overstated. The agents and detectives on this case did an outstanding job of pooling resources and worked seamlessly across borders toward a mutual goal of putting this massive drug pipeline out of business.” 

Investigators developed information indicating the organized crime group used Canadian “handlers” and “dispatchers” who travelled from Canada to Los Angeles for short amounts of time. The handlers coordinated the pick-up and delivery of large shipments of cocaine and methamphetamine, which were loaded onto long-haul semi-trucks destined for Canada. Wholesale quantities of fentanyl were seized as a result of the investigation. The transportation was coordinated by a network of drivers working with dozens of trucking companies who made numerous border crossings from the United States to Canada via the Detroit Windsor Tunnel, the Buffalo Peace Bridge, and the Blue Water Bridge.

The indictments allege illicit drug trafficking activity cumulatively involving approximately 845 kilograms (1860 pounds) of methamphetamine, 951 kilograms (2,092 pounds) of cocaine, 20 kilograms (44 pounds) of fentanyl and 4 kilograms (nearly 9 pounds) of heroin. Over $900,000 in cash was seized during the investigation. The estimated wholesale value of the narcotics seized was between $16-28 million.

“Today, organized crime knows no boundaries,” said Michel Moore, the Chief of Police of the Los Angeles Police Department. “It is through the international cooperation between LAPD, the FBI, the United States Attorney’s Office for the Central District, the Royal Canadian Mounted Police and others that we were able to apprehend and charge multiple individuals who have imported significant amounts of drugs into this country.  I am proud of our continued work with our federal and international partners to bring safety to our respective communities, and reduce the lives lost by these illicit drugs.”

“Organized crime groups continue to bring increasingly toxic drugs into our communities, a trend that has had a devastating impact on many Canadians, and most regrettably, our children and youth,” said Royal Canadian Mountain Police Chief Superintendent, Mathieu Bertrand. “As Canada's national police force, the RCMP is dedicated to disrupting the flow of illegal drugs into our country, looking beyond our borders to where these threats originate and stopping them at the source. Operation Dead Hand demonstrates the close work we do with our international partners to combat transnational organized crime, helping keep our communities safe on both sides of the border.”

“Customs and Border Protection’s partnerships with international, federal, state and local law enforcement agencies are a key component of our efforts to combat the transnational organized crime threat and prevent the movement of dangerous illicit drugs,” said Cheryl M. Davies, the Director of Field Operations for U.S. Customs and Border Protection’s Los Angeles Field Office. “CBP will continue to invest in these partnerships as we work together to keep dangerous drugs out of our communities.”

“California is safer today thanks to this collaborative effort between our federal and local law enforcement partners,” said California Attorney General Rob Bonta. “Illicit drugs such as fentanyl can kill and have no place in our neighborhoods. I am proud of the task force officers working hard in our L.A IMPACT task force, and inspired by their commitment to ensuring the safety and well-being of all Californians.”

U.S. v. Sandoval:

An 18-count indictment returned on January 4 charges 10 defendants for their roles in an organization which allegedly began operating on an unknown date and continued to on or about March 2023.  The charges in the indictment allege two drug trafficking conspiracies; conspiracy to import cocaine; drug exportation conspiracy; distribution/possession with intent to distribute controlled substances; possession of a firearm in furtherance of drug trafficking and being a felon in possession of ammunition.

The defendants charged in this indictment are:

• Jesus Ruiz Sandoval Jr., 45, of Guadalajara, Mexico;
• John Joe Soto, 42, of Guadalajara, Mexico;
• Eduardo Carvajal, 50, of Guadalajara, Mexico;
• Roberto Scoppa, 55, of Montreal, Canada;
• Ayush Sharma, 25, of Brampton, Canada;
• Subham Kumar, 29, of Calgary, Canada;
• Carlos Barragan, 51, of Long Beach, California;
• Corell Carbajal Garcia, 38, of Hemet, California;
• Humberto Luis Bermejo, 26, of Odessa, Texas; and
• Esteban Sinhue Mercado, 24, of San Jacinto, California.

Sandoval Jr., who is currently a fugitive, is believed to be a large-scale drug trafficker involved in importing drugs from Mexico into the United States for distribution.  John Joe Soto is believed to work under Sandoval. Eduardo Carvajal, also an alleged large-scale drug-trafficker, is believed to export drugs from the United States to Canada.  Robert Scoppa is an alleged Canadian drug trafficker with close ties to an Italian organized crime family in Montreal. Barragan is an alleged drug trafficker who lives in the United States. Sharma and Kumar are semi-truck drivers involved in exporting drugs to Canada.

U.S. v. Sidhu: 

A 23-count indictment returned on January 3 charges nine defendants for their roles in a related criminal enterprise which allegedly operated from at least September 2020 through February 2023.  In addition to a drug trafficking conspiracy, the indictment alleges a drug exportation conspiracy and substantive counts of distribution/possession with intent to distribute controlled substances.

The defendants charged in this indictment are:

• Guramrit Sidhu, 60, of Brampton, Canada;
• Ivan Gravel Gonzalez, 32, a resident of both the Dominican Republic and Montreal, Canada;
• Daniel Antonio Trejo Huerta, 43, of Riverside, California;
• Ignacio Lopez, 53, a resident of Santa Ana, California;
• Daniel Joseph Alan Herrera, 27, of Miami;
• Orlando Velasco Jr., 29, of Stanton, California;
• Angel Larry Sandoval, 32, of Bell Gardens, California;
• Jorge Pina Nicols, 22, of Long Beach, California; and
• Bryan Ureta Valenzuela, 24, of Ontario, California.

Sidhu is alleged to have orchestrated the trafficking and exportation of large-scale quantities of controlled substances to Canada working with several co-defendants described as suppliers.  Ivan Gravel Gonzalez is alleged to be part of Sidhu’s exportation team based in the United States.  Sidhu, also known as “King,” is charged with one count of engaging in a continuing criminal enterprise. According to the indictment, Sidhu occupied a position of organizer, supervisor and manager, and in this role obtained substantial income and resources.

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, each defendant would face maximum penalties ranging from 40 years to life in federal prison. If convicted, Sidhu would face a mandatory minimum penalty of 20 years in prison. If convicted, Sandoval and Carvajal each would face a mandatory minimum penalty of 15 years in prison.

This case is part of an ongoing investigation by international law enforcement partners including the FBI, the Los Angeles Police Department and the Los Angeles Interagency Metropolitan Police Apprehension Crime Task Force (LA IMPACT), the Royal Canadian Mounted Police, U.S. Customs and Border Protection, and law enforcement authorities in Mexico. Significant assistance was provided by Homeland Security Investigations and the Drug Enforcement Administration.

The Justice Department’s Office of International Affairs; the FBI’s Legal Attaché Offices in Mexico City, Ottawa and New Delhi; and the FBI Field Offices in Miami, El Paso and Buffalo provided substantial assistance and support.

Operation Dead Hand is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state and local law enforcement agencies against criminal networks.

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

LOS ANGELES – The United States Attorney’s Office hosted its third “United Against Hate” outreach event on Friday, January 26, at UCLA in Westwood, where approximately 200 participants from federal, state, and local civil rights enforcement agencies joined with community leaders to work together to combat the growing problem of hate crimes and incidents.

The event featured remarks by Dolores Huerta, one of the most influential labor activists of the 20th century and a leader of the Chicano civil rights movement, and United States Attorney Martin Estrada.

“As the chief federal law enforcement officer in the nation’s most populous and culturally diverse district, I am troubled by the acts and rhetoric of hate we see across the country,” U.S. Attorney Estrada said. “Hate is meant to divide us, so it is imperative that we come together as a community to reject these acts and embrace the diversity of this nation, which has always been its strength. United, we can overcome hate.”

United Against Hate is a nationwide Department of Justice initiative to inform communities about hate crimes and reporting hate-related incidents. The Department launched the initiative in 2022 with the goal of building trust, opening lines of communication, and strengthening coordination between relevant partners and the community to help combat a growing number of hate and bias-related incidents since 2021.

Today’s event included a panel discussion regarding federal, state, and local initiatives to combat hate that featured leaders of the U.S. Department of Justice’s Civil Rights Division, the California Civil Rights Department, the California Commission on the State of Hate, and L.A. Civil Rights.

Participants at today’s event also received training on identifying, reporting and responding to hate crimes and hate incidents. Additionally, there were presentations by the Justice Department’s Community Relations Service and LA Civil Rights.

Following the event, UCLA hosted a reception for community and governmental leaders.

This is the third United Against Hate event hosted by the United States Attorney’s Office. The office will continue to host presentations throughout the district to help communities understand what hate crimes are, how federal agencies respond to hate crimes, and what people can do to help victims. Community organizations or leaders that wish to partner with the United States Attorney’s office to hold a United Against Hate event in their community should send their request to USACAC.CV-CivilRights@usdoj.gov.

Anyone who feels they have been the victim of a hate crime or may have witnessed a hate crime should immediately report the crime to state or local police by dialing 911, then quickly report it to the FBI through their online portal or by calling 1-800-CALL-FBI (1-800-225-5324). In addition, please report the incident to the Department of Justice’s Civil Rights Division or by filing a civil rights complaint with the United States Attorney’s Office.

LOS ANGELES – A Tarzana man was sentenced today to 30 months in federal prison for running a nearly $6 million scheme in which he knowingly sold used skin-tightening medical devices that were deliberately misbranded as new, as well as counterfeit devices that he claimed were to be used with fat-reducing laser machines.

Kambiz Youabian, 50, was sentenced by United States District Judge Dale S. Fischer, who also ordered him to pay $5,937,049 in restitution and ordered the forfeiture of $1,685,396 in seized assets.

Youabian pleaded guilty in January 2023 to one count of mail fraud and one count of introducing a misbranded medical device into interstate commerce.

Youabian owned and operated MSY Technologies Inc., a West Los Angeles-based company that did business under the names “Thermagen” and “Global Electronic Supplies” (GES).

From March 2016 to June 2022, Youabian purchased used transducers, which are medical devices used to tighten the skin of dermatology patients by delivering ultrasound energy to a patient’s skin. Used properly, transducers are designed to provide no more than 2,400 treatments. After this number is reached, the devices are considered depleted and should be disposed of in accordance with health code regulations.

Through GES, Youabian purchased depleted transducers for nominal sums, typically $50. Youabian then remanufactured the depleted transducers and added fabricated serial numbers to make the transducers appear to be new.

Then, through his Thermagen company, Youabian fraudulently marketed and sold – for many times more than he paid for them – the remanufactured transducers to health care providers and customers as “new” transducers with 2,400 remaining treatments. To conceal his connection to Thermagen, Youabian used names of fabricated Thermagen employees on correspondences with victim providers and used out-of-state commercial mailboxes for Thermagen’s return of address on shipments, which he sent through the U.S mail.

For example, in February 2020, Youabian, through Thermagen’s website, sold a device falsely advertised as “new” and “containing 2,400 lines” – and with a retail price of $1,695 – to a buyer. Youabian then shipped the device – which contained a fake serial number – from Los Angeles to Florida via the United States Postal Service.

Youabian also shipped counterfeit PAC keys, medical devices used to operate laser machines designed to reduce fat on patients, through the mail.

He then transferred his ill-gotten gains to bank account his controlled, including accounts he opened in the names of MSY Technologies, himself, and his au pair.

In June 2022, law enforcement executed search warrants at Youabian’s home and the GES-Thermagen office in West Los Angeles. In the GES-Thermagen office, law enforcement seized 75 transducers in various states of refurbishment, a manufacturing workstation containing tools and transducer parts, and detailed records of GES and Thermagen’s expenses.

Youabian unlawfully sold thousands of medical devices, including transducers and PAC keys, and receiving at least $5,821,474 in fraudulent proceeds that should have been paid to the companies that are the sole U.S. distributors for these devices. Youabian also caused reputational harm to the device manufacturers and distributors of these medical devices.

The U.S. Food and Drug Administration Office of Criminal Investigations and the United States Postal Inspection Service investigated this matter.

Assistant United States Attorney Daniel G. Boyle of the Environmental Crimes and Consumer Protection Section prosecuted this case.

LOS ANGELES – A San Fernando Valley man pleaded guilty today to a federal charge of stalking and admitted to engaging in a 14-month campaign in which he threatened a victim and threatened to shoot synagogues and “exterminate” Jewish people and Asian Americans.

Andre Morrow Lackner, 35, of Northridge, pleaded guilty to one count of stalking.

According to court documents, from June 2021 to October 2022, Lackner sent a series of abusive text messages to the victim. In these messages, Lackner directed a series of anti-Semitic remarks to the victim, including, “Hitler was right about you people,” “I want to see every single Jew exterminated from this earth,” “Would you like to celebrate the next synagogue shooting?” and “I will make sure I kill a Jew before I leave this Earth.”

Lackner also texted the victim multiple racist statements against Asian Americans, including “We need to start more Asian hate and wipe” Asian people “off the planet too.”

The text messages Lackner sent the victim placed her in reasonable fear of death and serious bodily injury to herself or one of her immediate family members, according to court documents.

Lackner has been in federal custody since December 2022.

“My office will remain steadfast in standing up to hate and working to unite our community,” said United States Attorney Martin Estrada.  “We must hold accountable those like this defendant who make vile, anti-Semitic, and racist threats that put victims in fear for their lives. I applaud law enforcement for acting decisively to intervene and protect the victim.”

“The defendant's abhorrent words and actions caused his victim to experience fear of harm and death,” said Donald Alway, the Assistant Director in Charge of the FBI's Los Angeles Field Office. “The FBI urges victims of stalking to contact law enforcement to make a report.”

United States District Judge Dale S. Fischer scheduled a June 3 sentencing hearing, at which time Lackner will face a statutory maximum sentence of five years in federal prison.

The FBI investigated this matter.

Assistant United States Attorney Amanda B. Elbogen of the Terrorism and Export Crimes Section is prosecuting this case.

SANTA ANA, California – A Riverside County man was sentenced today to 144 months in federal prison for the armed robbery of a convenience store in Orange County – his tenth such robbery committed during a two-day crime spree in late 2022.

George Arizon, 28, of Corona, was sentenced by United States District Judge Cormac J. Carney, who also ordered him to pay $3,658 in restitution.

Arizon pleaded guilty in August 2023 to one count of interference with commerce by robbery (Hobbs Act) and one count of brandishing a firearm in furtherance of a crime of violence.

On November 8, 2022, Arizon robbed a 7-Eleven store in Westminster. During the robbery, he brandished a semi-automatic handgun and used it to threaten a store employee. In fear for his safety, the employee handed Arizon $80 in cash and two packs of cigarettes. This was the tenth robbery Arizon committed during a two-day spree.

In his plea agreement, Arizon admitted to committing nine other armed robberies of businesses – eight restaurants and one hair salon – in Santa Ana, Garden Grove, and Westminster over a span of two days. In each of those robberies, Arizon brandished a firearm to threaten and intimidate the businesses’ employees.

Police officers responding to calls about the Westminster robberies later recovered and retained a black sweatshirt, black hat, and mask that Arizon wore during the crimes, according to court documents. Officers also recovered the black semi-automatic handgun, with a gold-colored barrel, which had been discarded nearby. Security camera footage showed Arizon wearing this apparel, court documents state.

Arizon stole a total of $3,658 during his crime spree.

“[Arizon] repeatedly pointed a ghost gun at victims to force them to hand over the stores’ money,” prosecutors argued in a sentencing memorandum. “When investigators arrested him and searched his house, they found another firearm, ammunition, high-capacity magazines, spent shell casings, and drugs.”

The Bureau of Alcohol, Tobacco, Firearms and Explosives’ Orange County Violent Crime Task Force investigated this matter, and received assistance from the Santa Ana Police Department, the Garden Grove Police Department, and the Westminster Police Department.

Assistant United States Attorney Jena A. MacCabe of the Violent and Organized Crime Section prosecuted this case.

LOS ANGELES – A Canadian man was sentenced today to 72 months in federal prison for distributing hundreds of pounds of cocaine out of stash houses in the San Gabriel Valley community of Alhambra.

Sam Nang Bou, 41, of Edmonton, Canada, was sentenced by United States District Judge Percy Anderson.

Bou pleaded guilty in December 2022 to one count of distribution of cocaine.

In June 2022, Bou operated two stash houses in Alhambra in which he used to store and prepare bulk quantities of narcotics for distribution and eventual importation into Canada. On June 28, 2022, Bou knowingly and intentionally transported approximately 104.6 kilograms (230.6 pounds) of cocaine from one of the Alhambra stash houses to a location in Hesperia.

While in Hesperia, Bou handed over four boxes containing the cocaine to a truck driver for exportation into Canada.

Bou engaged in eight other similar distributions of cocaine and methamphetamine from September 2021 to September 2022. In total, for these eight additional distributions, Bou distributed approximately 341 kilograms (752 pounds) of cocaine and approximately 729.7 kilograms (1,608.7 pounds) of methamphetamine.

In September 2022, Bou operated and controlled a Dodge Caravan with two hidden trap compartments that he used to store bulk quantities of drugs. He also controlled a storage unit in Alhambra, which he rented using an alias. On September 1, 2022, Bou drove the vehicle into the storage unit and locked the unit with the vehicle inside of it.

Inside of the Dodge Caravan’s two hidden trap compartments, Bou possessed approximately 47.3 kilograms (104.3 pounds) of cocaine and 325 grams of methamphetamine.

At one of the Alhambra stash houses, Bou possessed storage tubs, dozens of rolls of tape, numerous duffle bags and boxes, vacuum sealed bags, heat sealers, boxes of dryer sheets, scales, and a money counter. He also had industrial-size containers of various chemicals used to clean the drugs, coveralls, various sets of gloves, numerous bowls and containers, several masks, and a respirator.

The FBI and the Los Angeles HIDTA Task Force investigated this case. The Royal Canadian Mounted Police, the Los Angeles Violent Transnational Organized Crime Task Force, the Las Vegas Metropolitan Police Department, the California Highway Patrol, the Barstow Police Department, the Mohave Area General Narcotics Enforcement Team, and the Kern County Sheriff's Office provided substantial assistance in this matter.

The case against Bou is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.

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

LOS ANGELES – A Russian man was found guilty by a jury today of a federal crime for boarding a flight from Denmark to Los Angeles International Airport (LAX) without a ticket, passport or visa last November.

Sergey Vladimirovich Ochigava, 46, who held both Russian and Israeli passports, was found guilty of one count of being a stowaway on an aircraft, a crime that carries a statutory maximum sentence of five years in federal prison.

According to evidence presented at a three-day trial, on November 3, 2023, Ochigava tailgated an unsuspecting passenger through a security turnstile at Copenhagen Airport in Denmark so that he could enter one of the airport’s terminals without a boarding pass. The next day, he passed through the boarding gate undetected and stowed away aboard a Scandinavian Airlines flight to Los Angeles. During the flight, the cabin crew noticed Ochigava because he moved between multiple unassigned seats.

When the flight landed in Los Angeles on the afternoon of November 4, Ochigava encountered Customs and Border Protection (CBP) officers at the immigration checkpoint at LAX. CBP officers were unable to find any record of Ochigava and discovered that he was not listed as a passenger on that particular Scandinavian Airlines flight or any other incoming international flight. Ochigava was unable to produce a passport, a visa, or other travel document to enter the United States.

In response to CBP officers’ questions, Ochigava gave false and misleading information about his travel to the United States, including telling CBP that he left his passport on the airplane.

Ochigava has been in federal custody since his arrest at LAX on November 4, 2023.

United States District Judge George H. Wu scheduled a February 5 sentencing hearing for Ochigava.

The FBI and CBP investigated this matter.  The United States received additional assistance from the Copenhagen Airport Police.

Assistant United States Attorneys Jason A. Gorn and Brandon E. Martinez-Jones of the General Crimes Section are prosecuting this case.

SANTA ANA, California – An associate of the Mexican Mafia prison gang has been found guilty by a jury of federal charges for participating in an attack on a fellow Orange County jail inmate in 2019, an assault that left the victim with his throat slashed, the Justice Department announced today.

Robert Amezcua, 52, a.k.a. “Flaco,” of Santa Ana, was found guilty Thursday afternoon of one count of committing a violent crime in aid of racketeering (VICAR), namely, attempted murder and assault with a deadly weapon.

According to evidence presented at a three-day trial, Amezcua is a member of the Madison Park clique of the Santa Ana-based Lopers street gang and an associate of the Mexican Mafia.

On December 31, 2019, Amezcua took part in the assault of another inmate at the Theo Lacy Facility in Orange. Amezcua delivered more than 20 blows to the victim while another inmate, using a razor blade, slashed the victim’s throat. The victim survived the attack. Amezcua is one of 31 defendants charged in a 33-count federal grand jury indictment brought in 2022.

United States District Judge Cormac J. Carney scheduled a May 20 sentencing hearing at which time Amezcua will face a statutory maximum sentence of 30 years in federal prison.

Of the other two inmates charged with this assault and attempted murder, Mher Darbinyan, 48, a.k.a. “Hollywood Mike,” of Los Angeles, pleaded guilty on January 3 to conspiracy to commit assault resulting in serious bodily injury, and admitted in his plea agreement that he and two co-conspirators assaulted the victim. Darbinyan’s sentencing hearing is scheduled for April 22. Robert Martinez, 41, a.k.a. “Lil Rob” and “Blacky,” of Placentia, another defendant charged in the 2019 attack, is scheduled for trial on June 25 on this charge and additional charges.

Of the 31 defendants charged in the original indictment, a total of four have been convicted at trial, consisting of three convicted of VICAR murder in October 2023, and Amezcua. An additional 15 have pleaded guilty. Three defendants remain for trial scheduled in April on charges of VICAR murder. An additional nine defendants remain scheduled for trial on racketeering, VICAR murder, and related charges on June 25.

The FBI; the Santa Ana Police Department; the Orange County Sheriff’s Department; the Federal Bureau of Prisons; the Anaheim Police Department; the Fullerton Police Department; the Orange County Probation Department; and the California Department of Corrections and Rehabilitation investigated this matter.

Assistant United States Attorneys Greg Scally and Greg Staples of the Santa Ana Branch Office and Trial Attorneys Chris Matthews and Grace Bowen of the Justice Department’s Violent Crime and Racketeering Section are prosecuting this case.

LOS ANGELES – Former Los Angeles City Councilmember José Luis Huizar was sentenced today to 156 months in federal prison for using his powerful position at City Hall to enrich himself and his associates, as well as for cheating on his taxes.

Huizar, 55, of Boyle Heights, was sentenced by United States District Judge John F. Walter, who also ordered him to pay $443,905 in restitution to the City of Los Angeles and $38,792 in restitution to the IRS. Judge Walter ordered Huizar to surrender to federal authorities no later than April 30.

At today’s hearing, Judge Walter said public corruption carries “the real potential to destroy the delicate fabric of our democracy” and causes the public “to disengage in the democratic process” and “give up all hope of participating” with the government.

Huizar pleaded guilty in January 2023 to one count of conspiracy to violate the Racketeer Influenced and Corrupt Organizations (RICO) Act and one count of tax evasion. He represented Council District 14 (CD-14), which includes downtown Los Angeles and its surrounding communities, from 2005 until his resignation in 2020.

“No one is above the law,” said United States Attorney Martin Estrada. “Today’s sentence shows that even a powerful elected official like Huizar will be held accountable for engaging in criminal misconduct. Huizar was elected to serve the interests of the hard-working people of Los Angeles, but he instead served his own personal interests in a long-running, pay-to-play, bribery scheme. Our community deserves better.” 

“This years-long investigation uncovered one of the most audacious public corruption cases in this city’s history,” said Donald Alway, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “This case would not have been possible without the dedication of agents and prosecutors – and importantly – the cooperation of many citizens who were fed up with rampant malfeasance by public officials. Mr. Huizar ignored the needs of his constituents and instead, served his own interests by accepting bribes and a wide assortment of luxury perks from wealthy real estate moguls and others who could afford Huizar’s political favors at the taxpayer’s expense. My hope is that this case brings more citizens forward to the FBI when they suspect corrupt practices and foreign influence.”

For years, Huizar led what prosecutors in court documents called the CD-14 Enterprise, a criminal conspiracy that operated a pay-to-play scheme with three key goals: gain financial enrichment through bribes, maintain Huizar’s political power, and avoid detection by law enforcement.

By leveraging his position as CD-14’s councilmember and chair of the Planning and Land Use Management (PLUM) Committee, which oversaw all major commercial and residential development projects throughout the entire city, Huizar – assisted by others – sought nearly $2 million worth of benefits in bribes from real estate developers and their proxies.

The benefits ranged from cash bribes, casino gambling chips, prostitution services, political contributions, flights on private jets and commercial airlines, stays at luxury hotels and casinos, expensive meals, tickets to concerts and sporting events, and other things of value. In exchange for these benefits, Huizar used his positions of public office to take official acts and give favorable treatment towards the projects of the paying real estate developers.

Huizar facilitated at least five bribery schemes. In one of the schemes, Huizar solicited $500,000 in cash for himself and his co-conspirators from developer David Lee in exchange for taking an official act to resolve an appeal by a labor organization against Lee’s project. In another scheme, Huizar accepted more than $1 million in benefits from billionaire real estate developer, Wei Huang, in exchange for pushing future approvals of the redevelopment of Huang’s hotel into the tallest tower west of the Mississippi. 

To maintain his political seat, which was threatened by a sexual harassment lawsuit in 2013, Huizar also schemed to surreptitiously route $600,000 in the form of collateral from Huang through a foreign shell company, which Huizar used to confidentially settle the lawsuit. Huizar similarly concealed his many other bribes, including by laundering cash through his mother and brother, and by omitting his financial benefits on his tax returns.

When Huizar’s final term for the CD-14 Council seat was set to expire in 2020, Huizar pushed his wife, who had never held public office, to run as his successor, then used the CD-14 Enterprise and the pay-to-play scheme to extract campaign contributions that would allow him to maintain political power through her. Instead, Huizar, while he was still in office, was ultimately indicted in July 2020 on the charges in this case, and he resigned from his council and committee positions later that year. 

As part of his plea agreement, Huizar also admitted to obstructing justice, including by tampering with two witnesses, and lying to federal prosecutors and federal agents.

In a sentencing memorandum, prosecutors described how Huizar chose “to place his own lust for money and power above the rights and interests of the people he was elected to serve” and “[i]n the wake of his criminal activity…helped gut the public’s confidence in the integrity of its local government – and beyond – and eroded a sense of fair play therein.”

“Mr. Huizar was entrusted with making decisions in the best interest of Angelenos.  Instead, he leveraged his position to enrich himself and his close allies in a mafia-style organization. His greed further emboldened him to hide his criminally gained profits from the IRS, which was a big mistake,” said Special Agent in Charge Tyler Hatcher, IRS Criminal Investigation, Los Angeles Field Office. “IRS Criminal Investigation is the best in the world at following the money, and by teaming with our federal partners we will aggressively investigate corruption at every level.”

Other defendants charged alongside Huizar in the indictment are:

• Dae Yong Lee, 59, a.k.a. “David Lee,” of Bel-Air, a real estate developer who is serving a six-year prison sentence for his convictions for honest services wire fraud, bribery, and falsification of records in a federal investigation.
• 940 Hill LLC, a Lee-controlled Los Angeles-based company, which was convicted of the same crimes as Lee and sentenced in July 2023 to five years of probation, fined $1.5 million, and ordered to pay the costs of prosecution.
• Wei Huang, 58, of Shenzhen, China, a billionaire real estate developer who is charged with several felonies, has yet to make a court appearance in this case and is a fugitive believed to be in China.
• Shen Zhen New World I LLC, a downtown Los Angeles-based company convicted – through the actions of its owner, Huang – of paying more than $1 million in bribes to Huizar, including the $600,000 sham loan. The company was sentenced in May 2023 to five years of probation, fined $4 million, and ordered to pay the costs of prosecution.
• Raymond She Wah Chan, 67, of Monterey Park, a former Los Angeles deputy mayor, has pleaded not guilty to charges of RICO conspiracy, bribery, honest services fraud and lying to federal agents. His retrial is scheduled to begin on March 12.

Other defendants in related criminal cases stemming from this corruption matter are:

• Justin Jangwoo Kim, 57, of Mar Vista, a political fundraiser who pleaded guilty in June 2020 to one count of bribery and is scheduled for sentencing on June 21.
• Morris Roland Goldman, 61, of Porter Ranch, a lobbyist who pleaded guilty in September 2020 to one count of conspiracy to commit bribery and honest services fraud and is scheduled for sentencing on July 12.
• George Chiang, 45, of Granada Hills, a real estate development consultant who pleaded guilty in June 2020 to one count of racketeering conspiracy and is scheduled for sentencing on July 19.
• George Esparza, 37, of Boyle Heights, Huizar’s former special assistant, who pleaded guilty in July 2020 to one count of racketeering conspiracy and is scheduled for sentencing on July 26.
• Salvador Huizar, 57, of Boyle Heights, José Huizar’s brother, who testified as a witness for the prosecution in the Shen Zhen trial and pleaded guilty in October 2022 to a felony charge of making false statements to federal investigators. His sentencing hearing is scheduled for August 2.

The FBI investigated this matter with assistance from IRS Criminal Investigation.

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 tip line at tips.fbi.gov or to contact the FBI’s Los Angeles Field Office at (310) 477-6565.

LOS ANGELES – The former president of the MGM Grand casino has pleaded guilty to a federal criminal charge for failing to file reports of suspicious transactions his casino was required to make pursuant to the Bank Secrecy Act (BSA), the Justice Department announced today.

In related matters that resolve an investigation into alleged violations of money laundering laws and the BSA, MGM Grand and The Cosmopolitan of Las Vegas casinos have entered into settlements that require them to pay a combined $7.45 million, undergo external review, and enhance their anti-money laundering (AML) compliance program.

Scott Sibella, 61, of Las Vegas, pleaded guilty late Wednesday afternoon to one count of failure to file reports of suspicious transactions required to be made by casinos.

According to his plea agreement, Sibella was the president of the MGM Grand from at least August of 2017 until February of 2019, during which time he knew that a casino patron, Wayne Nix, ran and operated an illegal bookmaking business. Despite this knowledge, Sibella allowed Nix to gamble at MGM Grand and affiliated properties with illicit proceeds generated from the illegal gambling business without notifying the casino’s compliance department.

Not only did Sibella allow Nix to gamble at the casino, he also authorized Nix to receive complimentary benefits at the casino, including meals, room, board and golf trips with senior executives and other high net-worth customers of the casinos to further encourage Nix to patronize the casino and/or other affiliated properties.

Despite being trained and having knowledge of his duties, Sibella failed to report to MGM compliance personnel that Nix was an illegal sports bookmaker. Because of Sibella’s failure to report the suspicious activity by Nix, MGM Grand failed to file at least one suspicious activity report regarding Nix’s source of funds in relation to Nix’s cash payments to MGM Grand.

According to court documents unsealed today, Sibella admitted to law enforcement in 2022 that he believed Nix was involved in illegal sports bookmaking, but “didn’t want to know because of my position,… If we know, we can’t allow them to gamble…. I didn’t ask, I didn’t want to know I guess because he wasn’t doing anything to cheat the casino.”

Sibella pleaded guilty before United States District Judge Dolly M. Gee, who scheduled a May 8 sentencing hearing, at which time Sibella will face a maximum penalty of five years in prison and a fine of $250,000.

Nix pleaded guilty in April 2022 to one count of conspiracy to operate an illegal gambling business and one count of subscribing to a false tax return. He is scheduled to be sentenced on March 6.

“Financial institutions have a duty under the law to report criminal or suspicious activity occurring at the institution though SARs,” said First Assistant United States Attorney Joseph McNally. “Our office will aggressively prosecute corporate executives and employees who turn a blind eye to criminal actors depositing illegal funds at casinos and financial institutions.”

“Turning a blind eye to laundering of illicit funds and knowingly avoiding reporting requirements puts public safety at risk,” said HSI Los Angeles Assistant Special Agent in Charge Jennifer Reyes. “The El Camino Real Financial Crimes Task Force is uniquely prepared to investigate, disrupt, and prosecute the bad actors, holding them accountable for their actions.”

“Mr. Sibella’s willful violation of Bank Secrecy Act obligations to report suspicious activities put the credibility of the MGM Grand at risk,” said Special Agent in Charge Tyler Hatcher, IRS Criminal Investigation, Los Angeles Field Office. “The BSA mandates reporting of suspicious activities to protect financial institutions from becoming participants in money laundering activities often benefitting criminal or terrorist organizations. While president of MGM Grand, Mr. Sibella undermined the trust and confidence of his employees, customers and regulating agencies, and for that he will be held accountable. Additionally, the non-prosecution agreements with MGM Grand Hotel, LLC and The Cosmopolitan of Las Vegas should serve as notice to other casinos and financial institutions that evading BSA obligations can carry severe consequences, and we will investigate suspected non-compliance.”

The MGM Grand and The Cosmopolitan casinos have entered Non-Prosecution Agreements (NPAs) to resolve a related investigation into alleged money laundering and violations of the BSA. In their respective NPAs, MGM Grand and the Cosmopolitan each accepted responsibility for laundering Nix’s illicit funds and failing to properly file suspicious activity reports (SARs) on Nix, who conducted numerous transactions involving millions of dollars at the casinos between 2017 and 2020. MGM Grand also accepted responsibility for failures by the casinos’ compliance department to use all available information when performing “know your customer” (KYC) reviews of Nix.

Under the BSA, casinos like MGM Grand and The Cosmopolitan are required to implement and maintain programs designed to prevent criminals from using casinos to launder the large sums of cash that illegal activity can generate. For example, the BSA requires casinos to file reports documenting suspicious activity, such as instances where a client’s source of funds cannot be determined or are suspected to be related to crime.

As part of its NPA, MGM Grand admitted that Sibella and two casino hosts knew about Nix’s illegal gambling business, allowed Nix to continue to gamble with MGM Grand and affiliate properties, allowed Nix to present and use illicit proceeds at the casino properties, and provided Nix complementary benefits to encourage him to spend his illicit proceeds at the casino. MGM Grand also admitted that Nix at times used the golf trips with MGM Grand’s high-net-worth customers to solicit new customers for his illegal gambling business. By 2020, MGM Grand had accepted $4,079,830 in cash that were illicit proceeds from Nix’s illegal gambling business.

MGM Grand also admitted that its anti-money laundering compliance program failed to instruct the compliance team to use all available information, as required by the BSA, when performing KYC reviews to determine whether to file SARs, or to identify and verify customer information, including source of funds, for transactions found to be suspicious. Compliance personnel did not regularly reach out to the marketing hosts, even where the compliance team could not substantiate or identify the customer’s source of funds, despite the fact that other departments would routinely reach out to hosts in connection with, for example, the collection of funds owed to the casino. Because of the deficiencies in the AML compliance program, MGM Grand failed to detect and report the extent of Nix’s suspicious activities in SARs and failed to prevent Nix’s money laundering.

The Cosmopolitan admitted in its NPA that one of its hosts was aware that Nix ran an illegal gambling business, allowed Nix to present and use illicit proceeds at The Cosmopolitan without notifying the casino’s compliance department, and provided Nix complementary benefits to encourage Nix to spend his illicit proceeds at the casino. By 2020, The Cosmopolitan had accepted $928,600 in cash in illicit proceeds from Nix’s illegal gambling business.

While The Cosmopolitan’s AML compliance program was designed to use all available information, it did not do so with respect to Nix. The Cosmopolitan host failed to report to compliance personnel or law enforcement the source of the illicit proceeds that Nix used while gambling at the casino. Because of this failure, The Cosmopolitan failed to file one or more SARs regarding the source of Nix’s funds.

In their NPAs, both casinos agreed to enhance their joint compliance program and to implement additional review and reporting requirements to ensure future BSA compliance. This includes spending at least $750,000 over two years on an external compliance reviewer, who will provide reporting to the United States Attorney’s Office. They will also amend internal audit protocols and review certain prior SARs, related customer files and transactions.

The agreements also require MGM Grand and The Cosmopolitan to cooperate with law enforcement in any additional investigations or proceedings arising from the conduct described in the agreement’s statement of facts.

Federal prosecutors entered into the NPAs in recognition of the casinos’ remedial efforts to strengthen their AML programs, their acceptance of responsibility, their cooperation with authorities during the investigation, their agreement to pay fines, and their agreement to invest an additional $750,000 for an external compliance review and further reporting requirements designed to prevent future violations of federal law.

Under the NPAs, MGM Grand agreed to pay a monetary fine of $6,527,728, and to forfeit $500,000 in proceeds traceable to the violation, which will be counted towards the fine. The Cosmopolitan agreed to pay a monetary fine of $928,600, and to forfeit $500,000 in proceeds traceable to the violation, which also will be counted towards the fine. 

            Homeland Security Investigations (HSI) and IRS Criminal Investigation investigated this matter as part of HSI’s El Camino Real Financial Crimes Task Force. The Justice Department’s Money Laundering and Asset Recovery Section, Bank Integrity Unit provided assistance during the investigation.

            Assistant United States Attorneys Jeff Mitchell of the Major Frauds Section; Rachel N. Agress of the International Money Laundering, Narcotics, Money Laundering, and Racketeering Section; and Dan G. Boyle of the Environmental Crimes and Consumer Protection Section are prosecuting Sibella and negotiated the settlement agreements with the two casinos. 

LOS ANGELES – Four alleged members of a San Fernando Valley-based drug trafficking crew were arrested today on a 15-count federal grand jury indictment charging them with running an operation that sold cocaine, methamphetamine, and fentanyl.

The following four defendants were arrested this morning are scheduled to be arraigned this afternoon in United States District Court in downtown Los Angeles:

• Giselle Buraye, 23, a.k.a. “Giselle Haidy Dykhouse,” “Bandida,” “bandida.loka,” of Van Nuys;
• Efren Meraz, Jr., 35, a.k.a. “Jr.,” “Junior,” of Sylmar;
• Max Roman-Betancourt, 41, of Sunland; and
• Esteban Armas, 36, of Panorama City.

Of the remaining three defendants, Oscar Alejandro Melendez, 50, a.k.a. “Ozzy,” “Oz,” of Van Nuys, and Robert Carlton Lavilette, 68, of Ventura, are expected to be arraigned in the coming days. Sarkis Kyurkchian, 40, a.k.a. “Z,” aka “Sam,” of North Hollywood, is a fugitive and being sought by law enforcement.

All seven defendants have been charged with conspiracy to distribute and possess with the intent to distribute controlled substances. Buraye is also charged with possession and intent to distribute methamphetamine, possession and intent to distribute fentanyl, and distribution of fentanyl.

As part of this investigation, law enforcement seized 19 kilograms (42 pounds) of methamphetamine, 58 kilograms (128 pounds) of cocaine, 3 kilograms (6.6 pounds) of fentanyl powder, and two firearms. Law enforcement estimates that the value of the drugs seized exceeds $1 million. Throughout this case, more than $150,000 in U.S. currency has been seized.

During search warrants executed today at five locations in the San Fernando Valley, law enforcement seized more than 14 firearms, 2 pounds of methamphetamine, $153,000 in U.S. currency and various narcotics.

“Powerfully addictive drugs such as fentanyl and methamphetamine devastate families and communities,” said United States Attorney Martin Estrada. “With these charges we have dismantled a drug trafficking organization that put profits over people’s lives. We will continue to do everything in our power to make sure every resident has an opportunity to live in safety.”

“Reducing violent crime in our community and throughout our country is the priority of ATF,” said ATF Los Angeles Field Division Special Agent in Charge Christopher Bombardiere. “This case illustrates the importance of genuine relationships between law enforcement agencies to keep our communities safe. Stopping the illegal and highly dangerous flow of narcotics by this ring will make the Valley safer tonight.”

“The culmination of this investigation is an example of the strong partnerships built between federal and local law enforcement agencies focused on combatting drug and gun trafficking,” said DEA Ventura Resident Office, Resident Agent in Charge Ryan Olson. “Members of this criminal organization were involved in the distribution of fentanyl and other dangerous drugs that are poisoning our communities. DEA is committed to making our communities safer by removing violent offenders and dangerous drugs from the streets. We will continue to push forward and utilize all necessary resources to dismantle the largest criminal organizations negatively impacting our communities.”

According to the indictment returned on Tuesday, Buraye, Melendez, and Meraz spearheaded the operation by obtaining the fentanyl pills, methamphetamine, and cocaine. The trio, along with Kyurkchian, allegedly provided the drugs to Lavilette and Bentancourt, who then sold the drugs in the streets. Armas allegedly stored the narcotics and Buraye and Melendez allegedly sold the drugs to customers.

On April 14, 2021, Buraye and Mendez allegedly sold approximately 1,000 fentanyl pills, and were charged with aiding and abetting, and distribution of fentanyl.

In March 2022, Buraye allegedly sold more than 700 fentanyl pills.

A search warrant executed in May 2022 at Armas’s residence resulted in the seizure of 2,504 grams (approximately 5.5 pounds) of fentanyl powder, 57 kilograms (approximately 125 pounds) of cocaine, 10.92 kilograms (approximately 24 pounds) of methamphetamine and $152,602 in drug proceeds, according to court documents.

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 Bureau of Alcohol, Tobacco, Firearms and Explosives; the Drug Enforcement Administration; and the Los Angeles Police Department are investigating this matter. The Los Angeles Interagency Metropolitan Police Apprehension Crime Task Force (L.A. IMPACT), IRS Criminal Investigation, and the Ventura County Sheriff’s Office assisted in this investigation.

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, ATF, 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 MiRi Song of the International Narcotics, Money Laundering, and Racketeering Section is prosecuting this case.

SANTA ANA, California – A Romanian man was found guilty by a judge today of stealing victims’ identities to withdraw money from their public-assistance accounts without their permission.

Florin Duduianu, 39, whose last known residence was in Mission Viejo, was found guilty by United States District Judge John W. Holcomb after a two-day bench trial of two counts of aggravated identity theft.

According to evidence presented at trial, in August 2023, law enforcement was conducting an operation to combat Electronic Benefits Transfer (EBT) fraud at various banks and ATMs in Placentia. Police saw Duduianu, accompanied by a passenger, drive up to a Wells Fargo ATM and make multiple withdrawals on different cards. Based on this information, officers pulled Duduianu over. Duduianu lied to the officers, telling them he was depositing, not withdrawing, money from the ATM.

During a search of Duduianu’s passenger, officers found four Visa gift cards, three Wells Fargo ATM receipts, and $1,850 in cash. The Visa gift cards were encoded with EBT card numbers. Those numbers were run through an EBT database, which showed that they belonged to four different people. Based on the Wells Fargo receipts, Duduianu used two of the cards to make three withdrawals totaling $1,850 from the ATM.

Police contacted the accountholders for the two EBT accounts from which Duduianu made withdrawals. The accountholders said that they did not know Duduianu or his car passenger and did not give permission to anyone to withdraw funds from their accounts.

During a search of Duduianu’s cellphone, law enforcement found dozens of photos and videos related to ATM skimming as well as tools and techniques used to skim EBT information. Law enforcement also found photos of large sums of cash and hundreds of EBT numbers from multiple states. In the chat history of Duduianu’s phone, the government found an article about EBT fraud that was sent from his phone to four other phone numbers.

On another smartphone law enforcement recovered during Duduianu’s arrest, law enforcement found additional videos related to ATM skimming. Phone records and EBT records showed that this phone was used to check the balance of the EBT accounts of the victims in this case, five days before Duduianu withdrew $1,850 from those same accounts.

Previously in this case, Duduianu pleaded guilty on January 5 to three counts of bank fraud and unlawful use of unauthorized access devices.

Judge Holcomb scheduled a March 29 sentencing hearing, at which time he will face a statutory maximum sentence of 30 years in federal prison for each bank fraud count, up to 20 years in federal prison for the unauthorized access devices count, and a mandatory two-year prison sentence consecutive to his underlying sentence for each aggravated identity theft count.

The FBI and the Placentia Police Department investigated this matter.

Assistant United States Attorneys David Y. Pi of the Major Frauds Section and Diane B. Roldán of the General Crimes Section are prosecuting this case.

RIVERSIDE, California – An Arizona man was sentenced today to 312 months in federal prison for committing armed robberies of nine stores in Southern California and Arizona during a crime spree in summer 2022 that ended in a high-speed chase in which he fired upon federal agents and, after police rammed his car, shot himself.

Samuel Sven Smith, 28, of Phoenix, was sentenced by United States District Judge Jesus G. Bernal, who also ordered him to pay $8,873 in restitution.

In May 2023, Smith pleaded guilty to two counts of interference with commerce by robbery (Hobbs Act) and two counts of brandishing and discharging a firearm during a crime of violence.

From July 31, 2022, until his arrest on August 20, 2022, Smith went on an armed robbery spree in Los Angeles, Orange and San Bernardino counties, as well as in Arizona. Specifically, Smith admitted robbing a Big Lots store in Riverside and PetSmart stores in Signal Hill, Orange, San Bernardino, Fontana, Pico Rivera, Redlands, Phoenix and Rancho Cucamonga.

In each of these nine robberies, Smith brandished a firearm to control store employees.

“Smith showed complete disregard for the safety of others when he went on his crime spree, threatening store employee with firearms and then opening fire on federal agents,” said United States Attorney Martin Estrada. “We cannot accept such blatant violence on our streets and my office is committed to doing all it can to protect the people of our district.”

After Smith robbed the Rancho Cucamonga PetSmart store on August 20, 2022, stealing $400 from a store employee, he exited the store and was met by law enforcement, which included federal officers. Smith then opened fire at the officers.

Smith then entered his vehicle and sped off, leading law enforcement on a high-speed chase, during which he fired his gun numerous times at pursuing officers. The chase ended when law enforcement rammed into Smith’s vehicle.

According to court documents, when law enforcement approached Smith’s car, they determined he had suffered a gunshot wound underneath his chin. Smith told officers who were performing life saving measures, that when they rammed into his vehicle, he accidentally shot himself, according to an affidavit filed with a criminal complaint in this case.

“This is the type of vicious career criminal that ATF’s task force in Orange County targets daily,” said the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Los Angeles Field Division Special Agent in Charge Christopher Bombardiere. “We work with our law enforcement partners to put these offenders in prison to stop their terrorizing of our communities. I want to thank all the men and women on the task force who risk their lives daily.”

The ATF Orange County Violent Crime Task Force investigated this matter. The task force, which is responsible for investigating serial robberies around Southern California, is composed of investigators with the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF); the Brea Police Department; the Fullerton Police Department; the Santa Ana Police Department; and the Orange County District Attorney’s Office. The San Bernardino County Sheriff’s Department provided assistance in this matter.

Assistant United States Attorney Kevin J. Butler of the Violent and Organized Crime Section prosecuted this case.

LOS ANGELES – A member of the South Los Angeles-based Florencia 13 street gang who admitted to distributing kilograms of methamphetamine and cocaine and to selling of dozens of firearms and 16 machine gun conversion kits, was sentenced today to 188 months in federal prison for distributing thousands of fentanyl pills, which weighed a total of nearly two pounds.

Jose Luis Alonso, 28, a.k.a. “AK-47,” of Huntington Park, was sentenced today by United States District Judge David O. Carter. Alonso has been in federal custody since October 2022.

Alonso, the lead defendant in this case, pleaded guilty in August 2023 to one count of distribution of fentanyl.

In his plea agreement, Alonso admitted to distributing approximately 8,944 fentanyl pills, 855 grams of fentanyl powder, and further admitted to 2.5 kilograms of methamphetamine, and four kilograms of cocaine.

He also admitted to selling 36 firearms and 16 machine gun conversion kits from May 2022 to October 2022 without a license and to illegally possessing firearms as a felon. 

Alonso’s prior felony convictions include a 2016 conviction in Los Angeles Superior Court for robbery, as well as a 2020 conviction in Kern County Superior Court for prison assault with force likely to cause great bodily injury. Alonso’s criminal conduct in this case occurred while he was on probation for his conviction for prison assault.

Each of Alonso’s co-defendants has pleaded guilty to conspiring with Alonso to engage in the business of selling firearms without a license. Jasmine Pereira, 26, of Los Angeles, was sentenced today to 24 months in federal prison. Kevin Alonso, 27, also of Los Angeles, is due to be sentenced on February 26, and Berenice Segura, 23, of Huntington Park, is scheduled for sentencing on April 8. 

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

Assistant United States Attorney Declan T. Conroy of the General Crimes Section prosecuted this case.

LOS ANGELES – A former Long Beach resident was sentenced today to 121 months in federal prison for leading a telemarketing scheme in which boiler room tactics were used to scam dozens of timeshare owners out of more than $5 million by giving them false promises of financial relief.

Michael McDonagh, 43, who currently resides in Cohasset, Massachusetts, was sentenced by United States District Judge David O. Carter, who also ordered him to pay $5,469,271 in restitution.

McDonagh pleaded guilty in May 2023 to one count of wire fraud.

This criminal case’s lead defendant, McDonagh founded and/or controlled several telemarketing companies – Irvine-based Global Transfer Inc., Costa Mesa-based Global Transfer SoCal Inc., Santa Ana-based Nationwide Transfer Inc., and Signal Hill-based Nationwide Exit Specialist Inc. – that purported to offer timeshare relief. Once one telemarketing company became inundated with consumer complaints, McDonagh would form a new telemarketing company to perpetuate the fraud.

From 2015 to May 2019, “openers” who worked for the McDonagh-controlled telemarketing companies contacted timeshare owners and offered to help them terminate their timeshare interest for a fixed fee. If the timeshare owner expressed interest in the telemarketing companies’ services, the call was transferred to a “closer” who convinced victims to sign contracts with the telemarketing companies to get them out of their timeshare for a “one-time fee.”

Within weeks of the victim paying the fee, the victims were contacted and told a series of lies to induce them to pay more money. For example, some victims were falsely told that they would obtain – for an additional fee – a large settlement payment based on purported litigation against the victim’s timeshare company.

McDonagh and his co-schemers also made false promises of securing – for an additional fee – a large “restitution” payment from the victim’s timeshare company because the timeshare company had purportedly rented out the victim’s timeshare property without the victim’s permission.

More than $5 million in actual losses were caused by McDonagh or his co-schemers whom he employed at his telemarketing companies.

The other four defendants charged with along with McDonagh also have pleaded guilty to one count of wire fraud and await sentencing.

“[McDonagh] and those who operated in the scheme he orchestrated defrauded over 500 victims, robbing many of them of significant savings – and some of over $100,000,” prosecutors argued in a sentencing memorandum. “During the multi-year scheme, [McDonagh] exhibited callousness to the plight of his victims, including telling his co-schemers to take ‘no prisoners’ and have ‘[n]o remorse.’”

The United States Secret Service and the Huntington Beach Police Department investigated this matter.

Assistant United States Attorneys Thomas F. Rybarczyk of the Public Corruption and Civil Rights Section and Ian V. Yanniello of the General Crimes Section prosecuted this case.

LOS ANGELES – The former president and CEO of a Whittier medical clinic was sentenced today to 124 months in federal prison for submitting fraudulent billings to a Medi-Cal health care program that provides family planning services to low-income Californians who lack health insurance.

Vincenzo Rubino, 59, of Valencia, was sentenced by United States District Judge Otis D. Wright II, who also ordered him to pay $3,815,478 in restitution and entered a money judgment of $2,308,028.

Rubino pleaded guilty in August 2023 to nine counts of health care fraud and two counts of aggravated identity theft. Rubino pleaded guilty mid-trial when the prosecution had nearly finished presenting its case to the jury.

Rubino founded, owned and operated Santa Maria’s Children and Family Center, a Whittier-based medical clinic based registered as a non-profit public benefit corporation and enrolled as a Family Planning, Access, Care and Treatment (Family PACT) provider run through Medi-Cal.

From November 2014 to August 2017, the center submitted fraudulent claims totaling nearly $5 million to the Family PACT program for family planning services that were never provided, often using the information of patients who were recruited at off-site locations with offers of free diabetes testing.

To submit many of these claims, Rubino used the names of two medical providers who were not employed at Santa Maria’s. The patients did not see these providers – a physician’s assistant and an elderly doctor who was himself a patient in a skilled nursing facility during much of the scheme.

The Medi-Cal program paid more than $2.3 million dollars on the fraudulent claims, as well as an additional approximately $1.5 million to a pharmacy and laboratory for claims stemming from referrals from Santa Maria based on the same services that were never delivered.

“This defendant took advantage of health-care services intended for people in need,” said United States Attorney Martin Estrada. “Instead of allowing that money to go where it was intended, Rubino stole millions of dollars through sham claims to Medi-Cal for family planning services that either were unnecessary or unprovided. Today’s sentence highlights my office’s resolve to protect the most vulnerable in our community.”

“Vulnerable families across California trusted Santa Maria’s Children and Family Center to receive high quality care for their health,” said California Attorney General Rob Bonta. “Yet, the defendant knowingly exploited patients and healthcare benefit programs for their personal gain. At the California Department of Justice, we remain committed to holding bad actors, like Vincenzo Rubino accountable for defrauding Californians and stealing from taxpayer-funded programs. I want to thank the U.S. Department of Justice for their partnership in this investigation.”

The United States Department of Health and Human Services Office of Inspector General and the California Department of Justice investigated this matter.

Assistant United States Attorneys Kristen A. Williams of the Major Frauds Section and David H. Chao of the General Crimes Section prosecuted this case. Assistant United States Attorney Tara B. Vavere of the Asset Forfeiture and Recovery Section is handling the asset forfeiture portion of this case.

LOS ANGELES – A Texas man pleaded guilty today to kidnapping a 13-year-old girl at gunpoint last year in San Antonio, admitting that he drove her to California, threatened her with a firearm, and sexually assaulted her multiple times before his arrest in Long Beach.

Steven Robert Sablan, 62, of Cleburne, Texas, pleaded guilty to one count of kidnapping. Sablan has been in federal custody since July 2023.

According to his plea agreement, on July 6, 2023, in San Antonio, Sablan abducted the victim, held her, and transported her in his gray Nissan Sentra to Long Beach, California. The victim told Sablan she was 13 years old. During this ordeal, Sablan used a firearm to threaten and control the victim.

Sablan confined the victim until she was rescued on July 9, 2023, in Long Beach after a Good Samaritan called 911 after seeing her holding a “Help Me” sign in the window of Sablan’s car.

Sablan admitted in his plea agreement that during the Texas-to-California journey, he sexually assaulted the victim. At the time of the crime, Sablan had no legal custody or familial relationship to the victim.

United States District Judge Fernando L. Aenlle-Rocha scheduled an October 25 sentencing hearing, at which time Sablan will face a mandatory minimum sentence of 20 years in federal prison and a statutory maximum sentence of life imprisonment.

The FBI and the Long Beach Police Department investigated this matter. The Cleburne (Texas) Police Department provided assistance.

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

LOS ANGELES – A Long Beach man was sentenced today to life plus an additional 30 years in federal prison for building and planting a package bomb that detonated inside an Aliso Viejo day spa in May 2018, killing his ex-girlfriend, severely injuring two spa clients, and causing significant damage to a commercial office building.

Stephen William Beal, 64, was sentenced by United States District Judge Josephine L. Staton, who said at today’s hearing, “The cold, calculated nature of this crime is chilling.”

At the conclusion of a four-week trial, a federal jury in July 2023 found Beal guilty of four felonies: use of a weapon of mass destruction resulting in death, malicious destruction of a building resulting in death, use of a destructive device during and in relation to a crime of violence, and possession of an unregistered destructive device.

Judge Staton sentenced Beal to life imprisonment on the first two counts, a consecutive 30-year prison sentence on the third count, and a 10-year concurrent sentence on the fourth count.

“Mr. Beal callously murdered a loving mother, maimed two other victims, and put at risk many others in the vicinity, including children and teachers at a nearby preschool,” said United States Attorney Martin Estrada. “Mr. Beal’s wanton disregard for the lives of others warranted the severe sentence that the court imposed, which should send a clear message that our community will not tolerate such acts of violence.  We send our prayers to the victims and our heartfelt thanks to the first responders and investigators whose tireless work uncovered Mr. Beal’s dastardly crime.”     

“In addition to the cruel and senseless murder of Ildiko Krajnyak, Stephen Beal severely injured two victims and terrorized the Aliso Viejo community and beyond,” said Donald Alway, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “We are gratified that Beal will spend the rest of his life in prison where he will no longer be in a position to indiscriminately harm others, nor torment the survivors of his crime. This case brought together many who shared a commitment to finding the truth, including tenacious investigators at multiple agencies, forensic teams that sifted through and analyzed a massive debris field following the attack, and dedicated prosecutors. Today is the culmination of five years of collaboration, and a day to honor the victims.”

“It took extreme commitment and dedication by our personnel and federal partners to ensure justice was realized for the victims and their families, and I am grateful to see a conclusion for this horrific act of violence,” said Orange County Sheriff Don Barnes. “We must never forget Ms. Krajnyak’s family and the two surviving victims who will forever navigate life bearing the pain of that day. I hope today’s sentencing provides them some semblance of comfort.”

The bomb exploded at a commercial office building in Aliso Viejo at approximately 1:05 p.m. on May 15, 2018. The explosion instantly killed 48-year-old Ildiko Krajnyak – who owned Magyar Kozmetika, a day spa located in the office building – and permanently injured two of her clients: a mother and her daughter.

One of the surviving victims testified at trial that she saw Krajnyak standing behind her desk opening a cardboard box immediately before the explosion. The surviving victim pulled her mother from the rubble, and together they escaped the burning building through a blown-out wall. The survivors suffered second- and third-degree burns, and one lost an eye.

“There is no question that these injuries caused both excruciating pain and suffering,” prosecutors wrote in a sentencing memorandum.

During a search of Beal’s residence after the explosion, law enforcement found more than 130 pounds of explosive precursor chemicals and completed explosive mixtures, as well as electric matches and wires. Beal had years of experience building high-powered model rockets and homemade pyrotechnics, and laboratory testing determined that the explosive mixture Beal used in the bomb contained the same chemical he had at his home.

The FBI’s Evidence Response Team spent more than two weeks collecting and processing evidence from the scene of the bombing. The FBI recovered parts of a 9-volt battery and wire fragments that were embedded in the ceiling above the blast site. The wires used in the bomb’s fusing system were of the same unique type as electric matches and wires found at Beal’s home.

Beal purchased the remaining items he needed to complete the bomb just days before the bombing. Store security camera footage showed Beal using cash to buy a single 9-volt battery six days before the bombing. Beal also purchased three cardboard boxes that matched the size and shape of the box the surviving victim testified Krajnyak opened when the bomb exploded.

Beal kept tabs on Krajnyak before the bombing, checking her online schedule application and social media account. Security camera footage and cellular locational data showed that Beal, who had a key to the business, visited the spa on multiple occasions before the bombing while Krajnyak was out of the country. Beal left the package bomb for Krajnyak to open upon her return.

Judge Staton scheduled an April 12 hearing to determine how much restitution Beal should be ordered to pay victims of the bombing.

In a separate case, Beal is scheduled to be sentenced on February 23 after pleading guilty in November 2023 to wire fraud, Social Security fraud, and concealment of bankruptcy assets. Beal failed to report in a bankruptcy proceeding $350,000 he received from his late wife’s estate. He also schemed to fraudulently obtain insurance benefits and Social Security payments, resulting in his receipt of more than $1.3 million in fraudulent disability payments.

The FBI’s Joint Terrorism Task Force, the Orange County Sheriff’s Department, and the Orange County Fire Authority were the primary investigative agencies in this matter. Task Force members who participated in the investigation included IRS Criminal Investigation; the Bureau of Alcohol, Tobacco, Firearms and Explosives; Homeland Security Investigations; the Los Angeles Police Department; the Irvine Police Department; the Anaheim Police Department; and the Orange County Fire Authority. The Los Angeles County Sheriff’s Department, the California Highway Patrol, the Naval Criminal Investigative Service, the Santa Ana Police Department, the Newport Beach Police Department, and the Orange County Intelligence Assessment Center provided assistance.

The Justice Department’s National Security Division’s Counterterrorism Section, the Justice Department’s Office of International Affairs, the FBI Legal Attaché in Thailand, the United States Department of State, and the U.S. Consulate in Vietnam provided valuable assistance. United States Customs and Border Protection and Homeland Security Investigations provided substantial assistance.

Assistant United States Attorneys Mark Takla, Annamartine Salick, Solomon Kim and Sarah Gerdes, all of the Terrorism and Export Crimes Section, prosecuted this case.

LOS ANGELES – A San Luis Obispo County woman was arraigned today on a federal grand jury indictment alleging, among other crimes, that she knowingly distributed fentanyl, the use of which resulted in a victim’s fatal overdose in May 2023.

Jessica Leigh Alalia, 30, a.k.a. “Jessica Mitchell,” of Paso Robles, was arrested on Tuesday and was arraigned this afternoon at United States District Court in downtown Los Angeles on an eight-count indictment.

Also arraigned today in federal court was her boyfriend, Damian Naudh Lagunas-Garcia, 37, of Paso Robles, who was arrested on Sunday.

Alalia and Lagunas-Garcia pleaded not guilty to all charges and a March 12 trial was scheduled in this case. Both defendants are in federal custody and each of them has a detention hearing scheduled for January 22.

Alalia is charged with one count of distribution of fentanyl resulting in death. Both defendants are charged with one count of conspiracy to distribute methamphetamine and fentanyl, one count of knowingly maintaining a drug-involved premises, two counts of possession with intent to distribute methamphetamine, two counts of possession with intent to distribute fentanyl, and one count of possession of firearms in furtherance of drug trafficking crimes.

According to an indictment returned on January 11, Alalia knowingly and intentionally distributed fentanyl on May 6, 2023, the use of which resulted in the death of the victim, identified in court documents as “R.S.”

The indictment further alleges that from January 2023 to August 2023, Alalia and Lagunas-Garcia conspired with each other to distribute methamphetamine and fentanyl. The defendants allegedly used their Paso Robles house to store, pack, and facilitate the distribution of narcotics. They coordinated with each other by using coded language in text messages – using the letter “F” for fentanyl, for example – to discuss their trafficking and sales of fentanyl and methamphetamine to drug customers, according to the indictment.

Alalia and Lagunas-Garcia allegedly also used a storage unit in Templeton to store, pack and distribute the narcotics, and possessed multiple firearms inside their home to protect their drug proceeds and narcotics.

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, Alalia and Lagunas-Garcia each would face a statutory maximum sentence of life in federal prison. Alalia also would face a mandatory minimum sentence of 20 years in federal prison for the count of distribution of fentanyl resulting in death. Lagunas-Garcia would face a mandatory minimum of 10 years in federal prison for the drug conspiracy and possession with intent to distribute methamphetamine counts.

The Drug Enforcement Administration’s Overdose Justice Task Force and the San Luis Obispo County Sheriff’s Office investigated this matter. The Overdose Justice Task Force is a project designed to investigate fatal fentanyl poisonings and identify the individuals who provided the fentanyl that directly caused the deaths. Under the Overdose Justice program for the DEA’s Los Angeles Field Division, DEA agents have established collaborative relationships with local law enforcement agencies across the seven counties that make up the Central District of California. Local authorities are almost always the first to respond to an overdose death, and DEA agents have provided training to dozens of local agencies to help them analyze evidence to determine if there are circumstances that might lead to a federal criminal prosecution.

Assistant United States Attorneys Daniel H. Weiner and Alexandra Michael, both of the General Crimes Section, are prosecuting this case.

LOS ANGELES – The United States Attorney’s Office for the Central District of California and the Bureau of Alcohol, Tobacco, Firearms and Explosives’ (ATF) Los Angeles Field Division today launched a public service announcement designed to raise awareness on the dangers of machine gun conversion devices, sometimes known as “switches,” “chips” or “auto sears.”

The PSA features United States Attorney Martin Estrada and ATF Los Angeles leadership highlighting the dangers of using illegal conversion devices in firearms and how possession of these devices can lead to federal prosecution and incarceration.

“In the last five years, ATF has recovered more than 31,000 machine gun conversion devices,” said ATF LA Field Division Special Agent in Charge Christopher Bombardiere. “These devices are not gun accessories. They are illegal and considered machine guns under federal law. This current machine gun conversion device trend is similar to what we saw when ghost guns emerged more than a decade ago.”

“Protecting the public is our priority and gun ‘switches’ pose a real danger to the community,” said U.S. Attorney Estrada. “Simply possessing a conversion device can carry a sentence of up to 10 years in prison, and law enforcement is committed to eradicating them for everyone’s safety.”

Conversion devices can convert semi-automatic pistols and rifles into fully automatic weapons in less than 60 seconds. One pull of the trigger can release all the ammunition in the magazine.

The PSA encourages the public to contact the local ATF office if they know someone making, selling or possessing a conversion device. Individuals are also encouraged to contact an ATF office if they need to safely dispose of a conversion device.

Conversion devices are advertised using misleading names and deceptive descriptions intended to avoid detection by law enforcement and defeat protocols used by internet vendors. Often the devices are advertised with the assertion that the purchase and possession of the devices is lawful. This is not true. A conversion device just on its own is considered an illegal machine gun under federal law and cannot be possessed, even without a pistol or rifle. Both the National Firearms Act and the Gun Control Act regulate machine guns.

The definition of a machine gun under 26 U.S.C. § 5845(b) and 18 U.S.C. § 921(a)(23) includes:

• Any weapon which shoots, is designed to shoot, or can be readily restored to shoot, automatically more than one shot, without manual reloading, by a single function of the trigger.
• The combination of parts designed and intended for use in converting a weapon into a machine gun.

The 60-second PSA:  https://www.youtube.com/watch?v=pnlJ6HMpkMI

The 30-second PSA:  https://youtu.be/XFw7abax_EM

The 30-second radio PSA:  https://atf.widen.net/s/sg9mltzxk9/california-psa-30-sec.-radio-spot

LOS ANGELES – A federal grand jury has indicted a Koreatown lawyer with multiple felonies arising from an alleged $2.1 million bribe, which he received while serving as an officer of Nigeria’s state-owned oil company in connection with negotiating favorable drilling rights for a subsidiary of a Chinese state-owned oil company, the Justice Department announced today.

Paulinus Iheanacho Okoronkwo, 67, of Valencia, who practices immigration and personal injury law out of an office in Koreatown, was charged in a five-count indictment returned on Wednesday.

Okoronkwo is charged with three counts of engaging in monetary transactions in property derived from specified unlawful activity, one count of tax evasion, and one count of obstruction of justice.

He is expected to be arraigned in United States District Court in downtown Los Angeles in the coming weeks.

According to the indictment, Okoronkwo, who is a dual citizen of the United States and Nigeria, was a foreign official who served as the general manager of the upstream division of the Nigerian National Petroleum Corp. (NNPC), a state-owned company through which Nigeria’s government developed that nation’s fossil fuel and natural gas reserves, including through partnerships with foreign oil companies. In this role, Okoronkwo owed a fiduciary duty to the NNPC and the Nigerian people and was a public official.

In October 2015, Addax Petroleum, a Switzerland-based subsidiary of Sinopec, a Chinese state-owned petroleum, gas, and petrochemical conglomerate, wired a payment of $2,105,263 to an Interest on Lawyers’ Trust Account (IOLTA) in the name of Okoronkwo’s Los Angeles law firm, purportedly for his work as a consultant who negotiated and completed a settlement agreement with the NNPC with respect to Addax’s drilling rights in Nigeria. According to the indictment, Addax calculated that it stood to lose billions of dollars if its favorable drilling rights were not secured.

The engagement letter that Addax signed that month with Okoronkwo’s law office – with a fake address in Lagos, Nigeria – allegedly was a ruse intended to conceal the fact that its payment to Okoronkwo was a bribe in exchange for his influence in securing more favorable financial terms relating to its crude oil drilling in Nigeria.

According to the indictment, to conceal the illegal bribery scheme, Addax falsely characterized the $2.1 million payment as a payment for legal services, lied to an auditor about the payment, and fired an executive who questioned the payment’s propriety. To create the false impression that the bribe payment constituted client funds, Okoronkwo allegedly received the payment in his law firm’s IOLTA.

In November 2017, Okoronkwo allegedly used $983,200 of the illegally obtained funds to purchase a house in Valencia.

In addition to money laundering, Okoronkwo is charged with tax evasion for allegedly omitting the $2.1 million bribe payment from his 2015 federal income tax return. He is also charged with obstruction of justice for allegedly lying to investigators when interviewed in June 2022.

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, Okoronkwo would face a statutory maximum sentence of 10 years in federal prison for each money laundering count, 10 years in federal prison for the obstruction of justice count, and five years in federal prison for the tax evasion count.

The FBI and IRS Criminal Investigation are investigating this case. The Justice Department’s Office of International Affairs provided assistance.

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

RIVERSIDE, California – A Riverside County man has pleaded guilty to a federal criminal charge for running a Ponzi scheme that lasted nearly 20 years and fraudulently obtained more than $24 million from at least 200 investors, the Justice Department announced today.

Paul Horton Smith Sr., 59, of Moreno Valley, pleaded guilty late Monday afternoon to one count of wire fraud.

According to his plea agreement, Smith operated Riverside-based companies named Northstar Communications LLC, Planning Services Inc., and eGate LLC. From July 2000 to May 2020, Smith obtained money from investors by soliciting individuals – who often were elderly or retired – to invest in something Smith called “Northstar.” Some of the investors previously were Planning Services clients.

Smith communicated with the victim investors regarding Northstar in person, over the telephone, and via email and text messages. He falsely told investors that Northstar was an annuity or an investment like an annuity He falsely told other investors that Northstar invested in real estate or followed the stock market. He typically told the investors that their investment would generate a fixed rate of return and was a “safe investment.”

While Smith led most Northstar investors to believe his company reinvested their initial investment, generating the percentage they were to earn, in fact, he never invested the money. Instead, Smith deposited all investor funds into a non-interest-bearing checking account.

Smith used some money from later Northstar investors to pay earlier Northstar investors’ monthly interest payments and to repay earlier investors who wanted to withdraw their investment.

For example, in April 2019, Smith caused one victim to invest with him $400,000 – life insurance proceeds after the victim’s spouse had died. The victim wrote a personal check for that amount and the check was deposited into a bank account in Riverside, which then was electronically transferred to the bank’s Alabama headquarters for processing.

Smith promised the victim he would invest the $400,000 in a safe investment with a 5% rate of return. But Smith never invested the money. Instead, he transferred the funds to pay other victims of his Ponzi scheme. In an attempt to conceal his criminal activity, Smith made 11 payments to the victim that totaled $163,324.

As a result of the scheme, Smith fraudulently obtained more than $24 million from at least 200 investors. Of these investors, 106 victims have not been fully repaid. The total loss for these victims is $13,331,505.

United States District Judge Jesus G. Bernal scheduled an April 1 sentencing hearing, at which time Smith will face a statutory maximum sentence of 20 years in federal prison.

The FBI investigated this matter. The United States Securities and Exchange Commission, which filed a complaint and obtained a judgment against Smith and Northstar Communications LLC in 2020, provided assistance.

Assistant United States Attorney Benjamin J. Weir of the Riverside Branch Office is prosecuting this case.

LOS ANGELES – A United States Navy service member was sentenced today to 27 months in federal prison for transmitting sensitive U.S. military information to an intelligence officer from the People’s Republic of China. 

Wenheng Zhao, 26, also known as Thomas Zhao, of Monterey Park, was sentenced by United States District Judge R. Gary Klausner, who also fined Zhao $5,500.

Zhao pleaded guilty in October 2023 to one count of conspiracy and one count of receiving a bribe in violation of his official duties.   

Zhao, who was stationed at Naval Base Ventura County in Port Hueneme, held a U.S. security government clearance and underwent routine trainings on efforts by hostile nation states to acquire sensitive information.       

Between August 2021 and at least May 2023, Zhao received at least $14,866 in 14 separate bribe payments from the intelligence officer, who directed Zhao to surreptitious collect and transmit sensitive U.S. military information and offered to pay Zhao bonuses for controlled and classified information.  

In exchange for the illicit payments, Zhao repeatedly entered restricted military and naval installations to secretly collect non-public information regarding U.S. Navy operational security, military trainings and exercises, and critical infrastructure. Zhao used encrypted communications to transmit that sensitive, non-public information to the intelligence officer. Zhao transmitted plans for a large-scale maritime training exercise in the Pacific theatre, operational orders, and electrical diagrams and blueprints for a Ground/Air Task Oriented Radar system located in Okinawa, Japan. 

Zhao attempted to conceal his crimes and his relationship with the intelligence officer by destroying evidence.

“Zhao betrayed his country and disgraced himself when he accepted bribes from an intelligence officer with the People’s Republic of China,” said United States Attorney Martin Estrada. “As a result, he has now been removed from the military and will serve time in federal prison. Today’s sentence shows that my office will swiftly act to root out and punish those who seek to undermine our nation’s security.” 

“Mr. Zhao betrayed his solemn oath to defend his country and endangered those who serve in the U.S. military,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division. “Today, he is being held to account for those crimes. The Justice Department is committed to combatting the Chinese government’s efforts to undermine our nation’s security and holding accountable those who violate our laws as part of those efforts.” 

“Mr. Zhao abdicated his oath to the United States and put American troops in harm's way when he accessed and handed over sensitive information to China for a payout,” said Donald Alway, the Assistant Director in Charge of the FBI's Los Angeles Field Office. “Today's sentence should make it very clear that the FBI and our partners in the military and at the U.S. Attorney's Office will hold accountable anyone who succumbs to advances by the Chinese or any U.S. adversary, and in doing so, puts American secrets and American lives at risk.”

“Mr. Zhao betrayed his oath to the United States and deserves to be held fully accountable for accepting bribes in exchange for transmitting sensitive U.S. military information to an intelligence officer from the People’s Republic of China,” said Acting Special Agent in Charge Angel Cruz of the Naval Criminal Investigative Service (NCIS) Office of Special Projects. “NCIS will continue to leverage its unique law enforcement and counterintelligence authorities to vigorously pursue those who attempt to compromise our national security information. We are grateful to the FBI and Department of Justice for their substantial assistance to this lengthy investigation and greatly appreciate our continued partnership.”

The FBI’s Counterintelligence and Cyber Division of the Los Angeles Field Office and NCIS conducted the investigation. IRS Criminal Investigation provided substantial assistance.

Assistant United States Attorneys Annamartine Salick, Sarah Gerdes, Christine Ro and Kathrynne Seiden of the Terrorism and Export Crimes Section prosecuted this case, with assistance from Assistant United States Attorney Ryan Waters of the Asset Forfeiture and Recovery Section. The Counterintelligence and Export Control Section at the Department of Justice provided substantial assistance.

A U.S. Navy service member was sentenced today to 27 months in prison and ordered to pay a $5,500 fine for transmitting sensitive U.S. military information to an intelligence officer from the People’s Republic of China (PRC) in exchange for bribery payments.

According to court documents, Petty Officer Wenheng Zhao, 26, aka Thomas Zhao, of Monterey Park, California, pleaded guilty in October 2023 to one count of conspiring with the intelligence officer and one count of receiving a bribe.

“Mr. Zhao betrayed his solemn oath to defend his country and endangered those who serve in the U.S. military,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division. “Today, he is being held to account for those crimes. The Justice Department is committed to combatting the Chinese government’s efforts to undermine our nation’s security and holding accountable those who violate our laws as part of those efforts.” 

“Zhao betrayed his country and disgraced himself when he accepted bribes from an intelligence officer with the People’s Republic of China,” said U.S. Attorney Martin Estrada for the Central District of California. “As a result, he has now been removed from the military and will serve time in federal prison. Today’s sentence shows that my office will swiftly act to root out and punish those who seek to undermine our nation’s security.”

“Make no mistake, the PRC is engaged in an aggressive effort to undermine the national security of the U.S. and its partners,” said Executive Assistant Director Larissa L. Knapp of the FBI’s National Security Branch. “Zhao chose to betray the oath he took to our country and put others at risk by providing sensitive U.S. information to a PRC intelligence official. The Chinese Communist Party has repeatedly shown it will freely break any law or norm to achieve a perceived intelligence advantage. Today’s sentencing demonstrates, yet again, the inability of China’s Intelligence Services to prevent the FBI and our vital partners from apprehending and prosecuting the spies China recruits.”

“Mr. Zhao betrayed his oath to the United States and deserves to be held fully accountable for accepting bribes in exchange for transmitting sensitive U.S. military information to an intelligence officer from the People’s Republic of China,” said Acting Special Agent in Charge Angel Cruz of the Naval Criminal Investigative Service (NCIS) Office of Special Projects. “NCIS will continue to leverage its unique law enforcement and counterintelligence authorities to vigorously pursue those who attempt to compromise our national security information. We are grateful to the FBI and Department of Justice for their substantial assistance to this lengthy investigation and greatly appreciate our continued partnership.”

Zhao, who worked at Naval Base Ventura County in Port Hueneme and held a U.S. security clearance, engaged in a corrupt scheme to collect and transmit sensitive U.S. military information to the intelligence officer in violation of his official duties.

Between August 2021 and at least May 2023, Zhao received at least $14,866 in at least 14 separate bribe payments from the intelligence officer. In exchange for the illicit payments, Zhao secretly collected and transmitted to the intelligence officer sensitive, non-public information regarding U.S. Navy operational security, military trainings and exercises, and critical infrastructure. Zhao entered restricted military and naval installations to collect and record this information.

Zhao transmitted plans for a large-scale maritime training exercise in the Pacific theatre, operational orders and electrical diagrams and blueprints for a Ground/Air Task Oriented Radar system located in Okinawa, Japan.

He used sophisticated encrypted communication methods to transmit the information. He also destroyed evidence and concealed his relationship with the intelligence officer. Zhao’s conduct violated his official duties to protect such information and the oath he swore to protect the United States.

The FBI Los Angeles Field Office’s Counterintelligence and Cyber Division and NCIS conducted the investigation. IRS-Criminal Investigation provided substantial assistance.

Assistant U.S. Attorneys Annamartine Salick, Sarah Gerdes, Christine Ro and Kathrynne Seiden for the Central District of California prosecuted the case. Assistant U.S. Attorney Ryan Waters for the Central District of California and Trial Attorney Adam Barry of the National Security Division’s Counterintelligence and Export Control Section provided valuable assistance.

LOS ANGELES – A convicted murderer was sentenced today to 324 months in federal prison for robbing and attempting to rob nearly a dozen Los Angeles County businesses – including a veterinarian’s office – at gunpoint during a five-day crime spree in late 2020 while on parole from state prison for armed robbery.

Justin Washington, 34, of Gardena, was sentenced by United States District Judge Percy Anderson, who also ordered him to pay $9,019 in restitution and a special assessment of $1,100.

Washington pleaded guilty in October 2023 to 10 counts of interference with commerce by robbery (Hobbs Act) and one count of brandishing a firearm during a crime of violence.

 In mid-September 2020, Washington was released from state prison from a 10-year term for armed robbery and possession of a deadly weapon. Less than two months after his release, Washington murdered a rival gang member.

Then, from November 30 to December 4, 2020, Washington robbed and attempted to rob 10 businesses in the South Bay and in South Los Angeles. His robbery spree began at the same Gardena grocery store, which he robbed on consecutive days on November 30 and December 1, 2020. From there, in Gardena, Washington robbed a 7-Eleven store, a donut shop and attempted to rob a veterinarian’s office. He then robbed a donut shop in Torrance, and, in South Los Angeles, a wireless phone store, a dry cleaner business, two additional donut shops and, finally, a Baskin-Robbins ice cream store.

During his armed robbery of a Torrance donut shop on December 2, 2020, Washington pointed a gun at and then struck a store employee in the head, causing bodily injury. Washington then forced the victim to move to the shop’s back office to facilitate Washington’s search for money, then bound the victim’s hands.

While robbing a donut shop at gunpoint in South Los Angeles one day later, Washington pistol whipped an employee, causing serious bodily injury to the victim, then attempted to fire his gun.

In total, Washington stole $9,019 in cash and personal property during his five-day crime spree.

From December 2020 until July 2023, Washington was in state custody. He ultimately was convicted of first-degree murder and was sentenced to 75 years to life in prison. He has been in federal custody since July 2023. Twenty years of Washington’s 27-year federal prison sentence will run consecutive to his state prison sentence for murder.

“This defendant was a walking crime spree and fully deserving of a major federal prison sentence,” said United States Attorney Martin Estrada. “Removing violent criminals such as this defendant from our streets is some of the most important work my office handles and we will continue to vigorously prosecute individuals who endanger our community.”         

“Mr. Washington's short-lived criminal rampage terrorized small businesses and undoubtedly left his victims with lasting trauma,” said Donald Alway, the Assistant Director in Charge of the FBI's Los Angeles Field Office. “Federal law enforcement in league with our local partners will hold accountable violent predators who target hardworking business owners and employees, as well as the communities they serve.”        

“Data shows the average ATF defendant has 7.8 prior arrests and 2.16 prior felony convictions,” said Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Los Angeles Field Division Acting Special Agent in Charge Michael Hoffman. “We target career criminals by collaborating with our law enforcement partners to remove these individuals from our communities. The violent crimes they commit will not be tolerated.”

The FBI; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the Torrance Police Department; the Gardena Police Department; the Los Angeles Police Department; and the Los Angeles County Sheriff’s Department investigated this matter.

Assistant United States Attorney Sara Vargas of the Violent and Organized Crime Section prosecuted this case.

LOS ANGELES – A federal grand jury has indicted two men on federal fraud charges that allege a double-booking, bait-and-switch scam run through online property rental platforms – primarily Airbnb – that brought in more than $8.5 million through misleading listings and fraudulently canceling reservations, which included discrimination against Black people, the Justice Department announced today.

Shray Goel, 35, of Miami, and Shaunik Raheja, 34, of Denver, were charged Wednesday in a superseding indictment that accuses them of fraud in connection with more than 10,000 reservations linked to nearly 100 properties across 10 states.

Goel was initially charged in an indictment returned on December 13. He was arrested in Florida on December 27 and was released on bond the following day. Raheja was added as a defendant in the superseding indictment. Both defendants are expected to be arraigned in United States District Court in Los Angeles in the coming weeks.

The superseding indictment alleges that Goel and Raheja owned and operated a short-term property rental business that they used to defraud Airbnb, Vrbo and guests renting properties through those platforms. The business operated under various names, including Abbot Pacific LLC.

Goel, Raheja and others who worked with them are alleged to have owned and leased properties throughout the United States for the rental business, including properties in Los Angeles; Malibu, California; Marina Del Rey, California; Denver; Chicago; Davenport, Florida; Savannah, Georgia; Bloomington, Indiana; South Bend, Indiana; Cleveland; Nashville, Tennessee; Austin, Texas; Dallas and Milwaukee. By 2019, according to the superseding indictment, they were managing nearly 100 properties across the United States.

To carry out the fraudulent scheme, Goel and Raheja allegedly double-booked properties through multiple listings of the same property on Airbnb and Vrbo, and then invented bogus last-minute excuses – often claiming plumbing problems – to cancel overbooked guests or trick them into moving to inferior replacement accommodations. According to the superseding indictment, members of the conspiracy profited from the scheme by running a secret bidding war for the properties – meaning they posted multiple listings for the same property at different prices for the same night, allowed the highest bidder to rent a particular property, and then cancelled or switched the lower-paying guests to a different property in the area. The scheme also allegedly allowed Goel, Raheja and their co-conspirators to keep all of their properties in any given area at maximum capacity by using popular listings as bait to trick guests into booking those listings, and then steering overbooked guests at the last minute to less popular and open listings in the same area.

The superseding indictment further alleges that “Goel and Raheja made decisions about which guests to keep and which to cancel based in part on their racial prejudices and discrimination.” The defendants, according to the indictment, tried to avoid renting to guests they perceived to be Black and “in this way depriv[ed] these guests of their property interest in the reservations and otherwise caus[ed] these guests to suffer monetary losses when their reservations were cancelled.”

“This deplorable scheme victimized thousands of consumers and families across the country, some of whom allegedly were discriminated against because of racial bias,” said United States Attorney Martin Estrada. “Fueled by greed, the defendants deceived consumers about the locations and conditions of properties, canceled reservations to double-book properties and based on racial prejudices, and lied to victims leaving them scrambling to find last-minute replacement accommodations. The sheer number of victims is astonishing, as is the millions of dollars earned though the scheme that took advantage of the reputations of online rental platforms that offer a valuable service.”

“The defendants are charged with preying on unsuspecting travelers and robbing them of time and money, leaving them with no choice but to settle for inferior lodging at the last minute,” said Donald Alway, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “The conspiracy charge alleging that the defendants discriminated against potential renters based on their skin color is a reprehensible abuse which must not be tolerated in the United States. The FBI will work with our federal partners and with the private sector to ensure business practices in the vacation rental industry are free of fraud and bias.”   

“This indictment charges defendants for their alleged roles in a scheme to defraud Airbnb, Vrbo, and guests renting properties through those platforms,” said Special Agent in Charge Ryan Korner of the Federal Deposit Insurance Corporation Office of Inspector General (FDIC-OIG). “FDIC-OIG remains steadfastly committed to protecting our nation and innocent victims by identifying and bringing to justice individuals who orchestrate these types of fraudulent schemes.”

According to the superseding indictment, Goel, Raheja and their co-schemers used fake host names and, in certain instances, other people’s identities to list properties. They allegedly used these fake host accounts to conceal their own identities, to double-book properties, and to post fabricated positive reviews of their properties. They were also allegedly using the fake host accounts to continue to list properties after they had been banned from Vrbo in 2015 because of repeated host cancellations and guest complaints.

In some cases, according to the superseding indictment, Goel, Raheja and their accomplices listed fake addresses, addresses that did not have any rental housing, were unaffiliated with the schemers, or did not exist at all – using these fake addresses to create duplicate listings for a single purported property. The fake addresses also allegedly allowed them to evade local rules and regulations governing short-term rentals, and to control who had access to properties.

To further their fraud, Goel and Raheja allegedly took steps to prevent negative reviews from affecting their business by falsely discrediting such reviews and otherwise trying to hide them from prospective future guests. According to the superseding indictment, they would post bogus negative reviews about the guests who had panned their listings or called out the fraudulent and deceptive listing practices, and they would remove negatively reviewed listings and then re-list the properties using new listing identifiers, thereby purging the bad reviews from the properties. 

According to the superseding indictment, Goel and Raheja used these and other lies and misrepresentations to trick guests into booking properties they would not have otherwise booked and to keep payments from guests entitled to refunds. The last-minute nature of the cancellations also caused guests and the rental platforms to suffer losses when guests were forced to find alternative lodging at the last minute.

“In 2018 and 2019, in the course of the scheme and in furtherance of it, defendants Goel and Raheja and others working with them and at their direction booked more than 10,000 reservations through Airbnb, receiving more than $7 million in payouts on those reservations; they booked additional and sometimes conflicting reservations through Vrbo and received more than $1.5 million in additional payouts from those reservations,” according to the indictment.

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

The superseding indictment charges Goel and Raheja with conspiracy to commit wire fraud and 13 counts of wire fraud. Goel is additionally charged with two counts of aggravated identity theft.

The conspiracy and wire fraud charges each carry a statutory maximum penalty of 20 years in federal prison. There is a two-year mandatory consecutive sentence for the aggravated identity theft counts.

The FBI and FDIC-OIG are investigating this matter. The Federal Housing Finance Agency – Office of Inspector General is assisting in the investigation.

Both Airbnb and Vrbo are cooperating with the government in this investigation, and the government recognizes and appreciates that cooperation.

Assistant United States Attorney Kerry L. Quinn of the Major Frauds Section is prosecuting the case.

LOS ANGELES – A San Fernando Valley man was arrested today on a federal criminal complaint alleging he sent a series of threatening emails to the FBI, including ones in which he threatened to bomb the FBI’s Los Angeles Field Office and referenced the notorious “Unabomber.”

Mark William Anten, 52, of Sun Valley, is charged with making threats by interstate communication, a felony offense that carries a statutory maximum sentence of five years in federal prison.

FBI agents arrested Anten without incident this morning at his residence. A federal magistrate judge this afternoon ordered Anten jailed without bond and scheduled an arraignment for January 11, 2024 in United States District Court in downtown Los Angeles.

According to an affidavit filed with the complaint, since July 2023, Anten has sent numerous threatening communications to the FBI, including emails that reference bombing the FBI’s Los Angeles Field Office in Westwood. Specifically, on November 2, 2023, Anten allegedly emailed FBI agents saying he “embrace[d]” that he was voted most likely in his graduating class to become the next Unabomber – a reference to Theodore John Kaczynski, whose 20-year bombing campaign killed three people and injured nearly two dozen more. Kaczynski was convicted of federal crimes, spent the bulk of his prison sentence in the “SuperMax” federal prison in Colorado, and died in prison on June 10.

In the November 2 email, Anten allegedly listed similarities between himself and Kaczynski, proclaimed that he was working on a manifesto, and signed his email “Unabomber.”

On November 20, two FBI Task Force Officers interviewed Anten in front of his residence. During the interview, Anten admitted to sending the previous communications and the officers admonished him to stop contacting agents, the affidavit states. Despite the admonition, Anten’s conduct escalated.

On December 5, Anten allegedly sent a string of threatening emails to FBI agents, in which he threatened to “Unabomb” the FBI’s Los Angeles Field Office. In one email sent on December 6, Anten allegedly emailed agents, “I can go on a mass murder spree. In fact, it would be very explainable by your actions” and signed it, “SuperMax or Death.” He also sent an email that included an image depicting the results of a Google internet search for “how to make a dirty bomb.”

Later on December 6, Anten visited the FBI’s Los Angeles Field Office and later emailed agents that he visited their building and would continue to do so. Surveillance footage confirmed Anten’s presence there.

A criminal complaint contained allegations.  All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

The FBI investigated this matter.

Assistant United States Attorney J’me K. Forrest of the General Crimes Section is prosecuting this case.

LOS ANGELES – An executive at a San Luis Obispo-based real estate development company who was previously charged with paying a county supervisor nearly $100,000 in bribes has been named in a superseding indictment that alleges a scheme to defraud investors in a Texas real estate project, the Justice Department announced today.

Ryan Wright, 37, a.k.a. “Ryan Petetit,” of Grover Beach, was named in a superseding indictment returned by a federal grand jury Wednesday afternoon. The new indictment adds 14 counts of wire fraud, three counts of attempted bank fraud and one count of access device fraud. The initial three-count indictment in this case, which was filed in October 30, alleged that Wright paid bribes and engaged in a cover-up.

There is a May 14, 2024 trial date scheduled in this case.

The fraud scheme alleged in the superseding indictment relates to a proposal to develop luxury homes in Dripping Springs, Texas. Over the course of two years – from October 2021 through October 2023, when Wright knew he was under investigation in the alleged corruption scheme – Wright allegedly solicited funds for the real estate development and diverted investors’ money to pay for criminal defense attorneys retained in connection with the bribery investigation, as well as for personal expenses, including a luxury condominium in Beverly Hills.

The indictment alleges that Wright continued to solicit investor funds even after the real estate deal collapsed in August 2022. The total amount raise from investors was approximately $2 million.

Wright is also charged with fraudulently seeking over $24 million in financing for the real estate deal after the project fell apart, which included causing an account to be opened in the company’s name and temporarily inflating it with funds not intended for the project in order to deceive the lender into believing the company had sufficient cash to close on the loan.

The indictment goes on to alleges that Wright fraudulently obtained credit in 2023 by using a business associate’s credit rating to obtain access devices (credit cards). Wright fraudulently accessed approximately $450,000, some of which was spend on “Las Vegas hotel rooms, sporting events, plastic surgery, and payments to criminal defense attorneys retained in connection with the government’s federal corruption investigation,” the indictment states.

The corruption and obstruction-related charges in the initial indictment remain in the superseding indictment. Those charges relate to allegations that Wright and his company paid money and gifts totaling more than $95,000 to a San Luis Obispo County supervisor who advocated for Wright’s real estate development company’s projects and prospective projects with City of San Luis Obispo officials, and who also voted for Wright’s company’s projects while on the San Luis Obispo County Board of Supervisors. The indictment further alleges that Wright took efforts to obstruct the federal investigation into these bribery allegations, including causing his company to produce a falsified business record in response to a federal grand jury subpoena.     

Wright is currently in custody after being ordered detained after his arrest in late October. No date has been scheduled yet for his arraignment on the superseding indictment.

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 corruption conspiracy count carries a statutory maximum sentence of five years in federal prison, the obstruction of justice count has a maximum sentence of 10 years, the falsification of records count carries up to 20 years, the wire fraud counts have a maximum statutory sentence of 20 years, the attempted bank fraud charges carry a maximum sentence of 30 years, and the maximum sentence for the access device fraud charges is 10 years.

The FBI and IRS Criminal Investigation are investigating this matter.

Assistant United States Attorneys Daniel J. O’Brien and Thomas F. Rybarczyk of the Public Corruption and Civil Rights Section are prosecuting this case.

LOS ANGELES – A federal grand jury has charged a San Gabriel Valley man with producing and distributing child sexual abuse material (CSAM) depicting himself sexually abusing a toddler, the Justice Department announced today.

David Lisandro Perez Figueroa, 22, of Monrovia, is charged in a two-count federal grand jury indictment with production of child pornography and distribution of child pornography.

A federal grand jury returned the indictment on Tuesday. Figueroa’s arraignment is scheduled for December 28 in United States District Court in downtown Los Angeles. Figueroa was arrested earlier this month, and a federal magistrate judge on December 6 ordered him jailed without bond.

According to the indictment, Figueroa coerced a 2-year-old child into engaging in sexually explicit conduct with him for the purposed of making a visual depiction of the conduct.

On July 22, Figueroa allegedly distributed the CSAM by sending it on the social media platform X, formerly known as Twitter, in an account linked to Figueroa.

British law enforcement investigating a target in the United Kingdom discovered the X chat logs with CSAM and, soon after, notified federal law enforcement in the United States, according to court documents. Based on this information, federal agents executed a search warrant at Figueroa’s residence on December 5 and arrested him.

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, Figueroa would face a mandatory minimum sentence of 15 years in federal prison and a statutory maximum sentence of 50 years in federal prison.

Homeland Security Investigations is investigating this matter.

Assistant United States Attorney Amy E. Pomerantz of the Violent and Organized Crime Section is prosecuting this case.

LOS ANGELES – A federal jury has convicted a third defendant in a money laundering conspiracy that moved millions of dollars in narcotics-related funds from the United States to international drug trafficking organizations, the Justice Department announced today.

Gustavo Adolfo Aldana-Martinez, 57, of Pico Rivera, was found guilty late Friday of conspiracy to launder money following a three-day trial in United States District Court.

The evidence at trial showed that Aldana-Martinez accepted wire transfers of trafficker-directed drug proceeds sent from an undercover account run by agents with the Drug Enforcement Administration. After nearly $300,000 was sent to a bank account in the name of his bogus business, Aldana-Martinez made a series of wire transfers to unrelated companies to pay for electronic items that were then shipped to Colombia and Mexico, where they were sold to produce laundered funds for the drug traffickers. The evidence showed that Aldana-Martinez laundered approximately $15.5 million between 2015 and 2017.

The man who oversaw the money laundering enterprise – Daniel Shaun Zilke, a.k.a. “The Englishman,” 48, of Mexico City, pleaded guilty on December 8 to conspiracy to aid and abet drug distribution, conspiracy to launder money, and obstruction of an official government proceeding for stealing and attempting to cover up the theft of $150,000 in DEA undercover funds.

The third defendant in the case – Jeffrey Mark Thompson, a.k.a. “The Cowboy,” 62, of Springtown, Texas, pleaded guilty on November 27 to conspiracy to aid and abet drug distribution, conspiracy to launder money, and money laundering.

All three defendants were named in federal grand jury indictment filed in January 2023. A fourth defendant in the case – Juan Rachid Dergal-Zulbaran, 48, of Mexico City – is currently a fugitive.

According to court documents, the investigation into Zilke’s operation started in late 2015 when an undercover DEA agent posing as a money launderer contacted Zilke. When he pleaded guilty, Zilke admitted telling the undercover “he had a client in Europe who needed hundreds of millions of dollars moved to Mexico, and that he could use the bank account of a charity in Dallas, Texas to assist in laundering the money.”

The undercover agent agreed to assist Zilke by allowing him to use bank accounts associated with cash-intensive businesses. Subsequently, Zilke and his associates arranged numerous pickups of large sums of cash from drug traffickers in cities all over the country, funds that were deposited at Zilke’s direction into various bank accounts, including one controlled by Aldana-Martinez and another in the name of Thompson’s purported charity, Peace Through Water Foundation.

When he pleaded guilty, Thompson admitted that he used the Peace Through Water bank account to launder drug money.

Zilke, Thompson and Aldana-Martinez each earned a commission that was a percentage of the amount laundered through their respective accounts, according to court documents.

During the investigation, Zilke approached the DEA in 2019 and offered his cooperation to expose the money laundering organization. After being made a cooperator and agreeing to always be truthful, Zilke received $200,000 in official government funds to be delivered to defendant Thompson. The intent was for Thompson to launder the money through his bank accounts and return the money to DEA undercover accounts. However, as Zilke admitted in his plea agreement, approximately two weeks after the cash delivery, Zilke returned to Thompson’s residence and took back $150,000 without telling the DEA agents. After this theft of government funds, he repeatedly lied to the agents about the money and made excuses for why it was taking so long to receive the wire transfers for the full $200,000.

As a result of the conviction and guilty pleas, the three defendants each face potential sentences of decades in federal prison. Zilke is scheduled to be sentenced on April 1, 2024, while Thompson and Aldana-Martinez face sentencing on April 8, 2024.

DEA Seattle and DEA San Ysidro investigated this matter.

Assistant United States Attorneys Julie J. Shemitz, James A. Santiago and Kyle W. Kahan of the International Narcotics, Money Laundering, and Racketeering Section are prosecuting this case.

This effort 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 Riverside County brothers who ran a drug trafficking operation that used two Orange County-based call centers that took telephone orders for deliveries of the drug, which resulted in one fatal overdose, each were sentenced today to 288 months in federal prison.

Julio Cesar Martinez, 45, a.k.a. “Primo,” of Riverside, and Victor Martinez, 46, a.k.a. “Hector,” of Hemet, were sentenced by United States District Judge Cormac J. Carney in separate hearings.

Each Martinez brother pleaded guilty on August 16 to one count of conspiracy to distribute heroin.

“These two brothers took drug dealing to another level by operating a heroin-delivery service that profited on the addiction and affliction of others,” said United States Attorney Martin Estrada. “While they and their families lived lavishly, these defendants ignored the destruction they caused in our community. Today’s sentence sends a clear message that we will not stand for misconduct of this sort.”

From at least 2003 to July 2021, the two brothers ran a drug trafficking organization that imported heroin from Mexico into the United States by couriers who concealed the drug, sometimes in their body cavities, to Orange County. Once the heroin arrived in Orange County, Julio Martinez oversaw its distribution to various call centers that he also supervised. He also oversaw its distribution to customers.

After a customer placed a heroin order, Martinez and his accomplices arranged for the drug’s delivery using “runners,” who were directed to deliver the heroin and take the customer’s payment.

Martinez and other conspirators used coded language on the telephone while engaging in drug distribution activity. For example, the organization’s code word for heroin was “food” and its code word for one gram of heroin was “taco.”

In December 2016, a customer who purchased heroin over the telephone from Martinez’s drug trafficking organization died of acute polydrug intoxication, including heroin.

The brothers admitted in their plea agreements to distributing at least 29 kilograms of heroin onto the streets of Orange County.

To conceal the source of the income the organization generated, Julio Cesar Martinez and Victor Martinez caused the deposit of the heroin sales proceeds into bank accounts held by other conspirators. The Martinez brothers ordered their co-conspirators to structure the deposits into the bank accounts to evade federal reporting requirements by depositing the money at different banks and by breaking the deposits up into amounts $10,000 and under. The brothers used the proceeds to purchase cars and homes and to fund their lifestyles.

“Operation 'Horse Caller' targeted all levels of this international drug trafficking network, ranging from suppliers in Mexico to mules and runners delivering drugs to customers in Orange County at the direction of the Martinez brothers,” said Donald Alway, the Assistant Director in Charge of the FBI's Los Angeles Field Office. “Federal and local law enforcement agencies working in partnership led to the dismantling of the Martinez brothers' network and closed off a main pipeline of the heroin supply in Orange County that operated for years and led to deadly consequences.”

“The Martinez brothers’ efforts to conceal their drug trafficking activities by attempting to exploit minimum bank reporting requirements was to no avail,” said Special Agent in Charge Tyler Hatcher, IRS Criminal Investigation, Los Angeles Field Office. “This well-coordinated investigation is yet another example of the effectiveness of our partnerships with fellow law enforcement agencies in bringing these criminals to justice.”

Federal prosecutors have secured 16 convictions in this case.

The FBI and IRS Criminal Investigation investigated this matter. The Orange County Sheriff's Department, the Newport Beach Police Department, the Costa Mesa Police Department, the Huntington Beach Police Department, the Oxnard Police Department, the California Highway Patrol and March Air Reserve Base provided substantial assistance.

Assistant United States Attorney Kevin J. Butler of the Violent and Organized Crime Section prosecuted this case. Assistant United States Attorney Jonathan S. Galatzan of the Asset Forfeiture and Recovery Section is handling the forfeiture portion of the case.

This effort 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.

LOS ANGELES – A Mexican man was sentenced today to 110 months in federal prison for trafficking 11 undocumented individuals, as well as 45 pounds of methamphetamine, on a panga boat that landed on a Santa Barbara County beach.

Jorge Muñoz-Muñoz, 27, of Ensenada, Mexico, was sentenced by United States District Judge Dale S. Fischer.

At the conclusion of a five-day trial in December 2022, a federal jury found Muñoz-Muñoz guilty of one count of conspiracy to bring aliens into the United States, 11 counts of alien smuggling, 11 counts of alien smuggling for private financial gain, one count of conspiracy to distribute methamphetamine, one count of possession with intent to distribute methamphetamine, one count of conspiracy to import methamphetamine, and one count of importation of methamphetamine.

On the morning of September 27, 2021, law enforcement sighted a panga boat adrift off the coast of Santa Barbara County. The vessel, which was having engine trouble, ultimately made landfall at Arroyo Quemada Beach, approximately 25 miles west of Santa Barbara.

The investigation in this matter revealed that there were 15 people on the boat, including several crewmembers. Two black bags that contained a total of 40 vacuum-sealed and plastic wrapped bindles, totaling approximately 45 pounds, were thrown off the boat by passengers at Muñoz-Muñoz’s direction and later were recovered by law enforcement.

Authorities also later confirmed that all occupants of the boat were undocumented aliens. Based on interviews with the passengers, it was determined that the passengers arrived at a beach in Ensenada, Mexico to board a panga that would smuggle them into the United States for a price of approximately $15,000 each.

On July 6, Judge Fischer ordered Muñoz-Muñoz acquitted of one count of aiding and assisting an alien convicted of an aggravated felony to enter the United States.

Muñoz-Muñoz has been in federal custody since his arrest in September 2021.

Roel Aranzubia-Álvarez, 45, of Sinaloa, Mexico, the panga boat’s captain, was convicted at trial with Muñoz-Muñoz of alien smuggling charges in this case and was sentenced to five years in federal prison.

Another defendant and panga boat crewmember, Caín Camargo-López, 46, of Sinaloa, Mexico, pleaded guilty in April 2022 to two counts of alien smuggling and one count of conspiring to allow an alien convicted to aggravated felonies to enter the United States. On August 7, Judge Fischer sentenced Camargo-López to five years in federal prison.

Homeland Security Investigations investigated this matter. United States Customs and Border Protection, the Santa Barbara County Sheriff’s Office, and the California Department of Parks and Recreation provided substantial assistance.

Assistant United States Attorney Haoxiaohan Cai of the General Crimes Section and Justice Department Trial Attorney Siobhan M. Namazi prosecuted this case.

LOS ANGELES – A leader of the Bounty Hunter Bloods (BHB) street gang was sentenced today to 168 months in federal prison for leading a manufacturing and distribution of crack cocaine organization in and around the gang’s “territory” of the Nickerson Gardens public housing projects in the Watts neighborhood of Los Angeles.

Damion Baker, 46, a.k.a. “Fatts,” of the Harbor Gateway area of Los Angeles, was sentenced by United States District Judge Fernando L. Aenlle-Rocha. Baker pleaded guilty on February 17 to one count of conspiracy to manufacture, distribute, and possess with intent to distribute cocaine, and one count of being a felon in possession of a firearm.

Baker was the lead defendant in an indictment targeting members and associates of the BHB street gang for drug- and firearm-related crimes. He has been in federal custody since his April 2021 arrest in this case.

From August 2019 to May 2020, Baker organized and led a drug trafficking conspiracy in which he and his accomplices agreed to distribute cocaine. Specifically, Baker arranged to obtain powder cocaine from at least two drug suppliers. He then directed his co-conspirators to cook, and would himself cook, the powder cocaine and manufacture it into crack cocaine to sell to customers, including back to his powder cocaine suppliers to sell in crack form.

Baker directed his accomplices in the packaging, sale, and delivery of crack cocaine to customers, which included co-conspirators and other BHB gang members. Baker also directed the receipt and storage of drug proceeds throughout BHB-claimed territory in South Los Angeles.

As part of these activities, Baker arranged for an accomplice’s residence in the Nickerson Gardens housing projects in Watts to be used as a stash house in which Baker and his co-conspirators continuously sold crack cocaine over a period of many months. Baker recruited and hired co-conspirators to work at the Watts stash house and directed them in selling narcotics to customers there and in nearby areas, restocking the stash house’s drug supply, and transporting drug proceeds to Baker and other accomplices at various locations.

Baker admitted in his plea agreement to possessing a firearm in May 2020. He was not permitted to do so because he previously had been convicted of felonies in Los Angeles Superior Court, including a cocaine possession charge in 1998 and a domestic violence-related charge in 2001. He has admitted that he possessed the firearm for the purpose of protecting his crack cocaine distribution business.

Baker also agreed to forfeit the firearm and $44,600 in cash law enforcement seized at his residence in Los Angeles and at another residence in Compton.

“A member of the BHB gang, [Baker] was the most culpable and essential figure in this serious criminal conspiracy that plagued BHB territory in and around the Nickerson Gardens Housing Projects in Watts…and elsewhere in Los Angeles,” prosecutors argued in a sentencing memorandum.

The other 11 defendants in this indictment either have pleaded guilty or signed plea agreements in this case and await sentencing. Another BHB gang member, and Baker’s second in command in the drug trafficking conspiracy, Tony Carr, 52, a.k.a. “T-Bone,” of Watts, pleaded guilty in July 2022 to one count of cocaine trafficking conspiracy and one count of being a felon in possession of a firearm. In October 2022, Judge Aenlle-Rocha sentenced Carr to 188 months in federal prison.

The FBI’s Los Angeles Metropolitan Task Force on Violent Gangs, which consists of the FBI, the Los Angeles Police Department, the Los Angeles County Sheriff’s Department, and the California Department of Corrections and Rehabilitation, investigated this matter.

Assistant United States Attorney Amy E. Pomerantz of the Violent and Organized Crime Section prosecuted this case.

LOS ANGELES – Two Orange County men have been arrested on a three-count federal grand jury indictment alleging they ran a transnational drug trafficking organization that exported wholesale amounts of cocaine and methamphetamine – concealed within commercial products such as instant noodle packets, car parts, emergency kits, and subwoofers – to Australia, Papua New Guinea, and New Zealand, the Justice Department announced today.

Hoang Xuan Le, 42, a.k.a. “Big Bro,” “Blue,” and “Knockout,” of Tustin, and Tri Cao Buinguyen, 38, a.k.a. “Bro” and “Mango,” of Garden Grove, were arrested Thursday. They are scheduled for arraignment this afternoon at United States District Court in Los Angeles.

In total, four defendants – including Trung Buinguyen, 40, of Lakewood, and Narongsak Champy, 28, of Long Beach – have been charged with one count of conspiracy to export controlled substances and one count of conspiracy to distribute controlled substances. Le and Tri Buinguyen are charged with one additional count of distribution of methamphetamine.

Trung Buinguyen and Champy are being sought by law enforcement.

As part of this case, law enforcement seized a total of 755 kilograms (1,664 pounds) of methamphetamine and more than 100 kilograms of cocaine. Law enforcement estimates that the value of the drugs seized exceeds $65 million and ranges up to $160 million.

According to the indictment, from at least February 2017 to September 2022, Le and Tri Buinguyen communicated with members of the drug trafficking organization in Australia, New Zealand, and Papua New Guinea. They then arranged for the export of bulk quantities of drugs from the United States to these nations via air cargo, ocean freight, and the U.S. mail, concealing the drugs in a variety of commercial products and falsifying their true nature on the manifests and customs documents.

The defendants allegedly used phones equipped with military-grade encryption software and encrypted messaging applications, particularly “Signal,” to coordinate the export of drugs from the United States. They also allegedly used fictitious names, businesses, and email accounts to communicate with intermediaries, including vendors, freight forwarders, shipping companies, customs brokers, and customs officials in the United States and foreign countries, to fraudulently disguise the drugs as legitimate commercial products.

For example, Le and Tri Buinguyen allegedly directed the summer 2018 shipment to Australia of 390 kilograms (860 pounds) of methamphetamine concealed in packets of instant noodles and mushroom seasoning, as well as the September 2018 export of 113 kilograms (249 pounds) of methamphetamine and 100 kilograms (over 220 pounds) of cocaine disguised as garlic seasoning. Additional shipments of drugs in October 2018, November 2019, February 2020, and August 2020 were allegedly concealed in emergency kits, car parts, subwoofers, and customized metal boxes.

In June 2021, Le and Tri Buinguyen orchestrated a bulk shipment of 150 kilograms (over 330 pounds) of methamphetamine concealed in food storage buckets for export to Papua New Guinea, according to the indictment. Finally, in August and September of 2022, Tri Buinguyen allegedly arranged for the export to New Zealand of 32 kilograms (more than 70 pounds) of methamphetamine concealed in meals ready-to-eat packets.

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, each defendant would face a statutory maximum sentence of life in federal prison.

Homeland Security Investigations is investigating this matter. The following agencies have provided substantial assistance to this investigation: United States Postal Inspection Service, the Drug Enforcement Administration, United States Customs and Border Protection, the Australian Federal Police, the Australian Border Force, the Australian Department of Homeland Affairs – Intelligence Division, the Royal Papua New Guinea Constabulary, the Papua New Guinea Customs Service, and the New Zealand Customs Service.

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 and HSI. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking, weapons trafficking, and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply. OCDETF uses a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.

Assistant United States Attorney Gregg E. Marmaro of the International Narcotics, Money Laundering, and Racketeering Section is prosecuting this case.

LOS ANGELES – A former resident of the Fairfax District of Los Angeles was sentenced today to 80 months in federal prison for defrauding investors, primarily members of the Orthodox Jewish community, by getting them to invest $25 million in his security camera business and his purported real estate ventures in Israel, while actually using their money for his own expenses.

Yossi Engel, 36, who moved to Israel in March 2021 but temporarily returned to the Los Angeles area in February 2023, was sentenced by United States District Judge Maame Ewusi-Mensah Frimpong, who also ordered him to pay $11,758,030 in restitution.

Engel pleaded guilty on May 12 to one count of wire fraud. He has been in federal custody since his arrest on March 8 at Los Angeles International Airport as he was attempting to leave the United States.

Engel orchestrated a scheme in which he made false representations and used forged documents to induce victims to make investments in and provide loans for iWitness Tech Inc., a Hancock Park-based security camera company and for properties Engel falsely claimed to own and be developing in Israel.

From September 2018 to January 2021, Engel used his community relationships to defraud victims, who primarily came from the Orthodox Jewish communities in the Los Angeles and New York metropolitan areas. Engel claimed to need money in the form of short-term loans with high rates of return for iWitness’ business operations, namely the purported purchase and installation of security cameras for its customers.

Engel offered short-term investments and loans in iWitness that ranged from $15,000 to $1.3 million. The investments and loans were for two weeks to six months and would purportedly provide investors with 10% to 60% annualized interest. Victims were duped, in part, by being shown copies of false and fraudulent invoices of work iWitness purportedly did with other companies.

Engel told victims that iWitness was a large business with many clients, but in fact it did not have as much business as he claimed, and work was so slack that at times iWitness employees sat around waiting for work while Engel slept on a couch.

In another part of the scheme, Engel also falsely claimed to own and be developing real estate in Israel, telling victims that he needed money for redevelopment work, and falsely promising he would sell the properties and share the profits with investors. Engel showed victims a video depicting himself socializing with the mayor of Bnei Brak, Israel, and claimed to have met with the mayor concerning Engel’s purported real estate deals in the city. But Engel did not have a close relationship with the mayor, and he did not discuss with the mayor these real estate ventures in the city.

Engel used fraudulent Israel land documents to dupe victims into thinking he owned these properties. Through these fake documents and his own trusted position in the Orthodox Jewish community, Engel lulled existing victims and encouraged new victims to send him money.

Engel lied to investors that he needed private investments for both iWitness and the Israeli real estate projects because he was from Israel and did not have sufficient credit in the United States to obtain the lower interest rates available through U.S. banks.

But Engel did not use the victims’ money as promised, and instead used it for his personal expenses – including trips via private jets and casino visits – and to make Ponzi payments to investors to perpetuate the scheme.

Once the scheme fell apart in early 2021, Engel fled the United States for Israel.

“The consequences of [Engel’s] dishonesty are not only financial but his victims endured an emotional cost,” prosecutors argued in a sentencing memorandum. “[Engel’s] greed hurt reputations and broke relationships in the communities he solicited money.”

In January 2023, the United States Securities and Exchange Commission sued Engel, alleging he used his ties in the Orthodox Jewish community to perpetuate a multimillion-dollar affinity fraud.

The FBI investigated this matter.

Assistant United States Attorney Steven M. Arkow of the Major Frauds Section prosecuted this case.

LOS ANGELES – Two Los Angeles-area men who unlawfully sold or purchased police badges from a southeastern San Diego County tribe – one who lied to the FBI about the scheme, the other who was arrested while high on drugs while carrying a stash of firearms and claiming to be a police officer – have agreed to plead guilty, the Justice Department announced today.

The two defendants named in court papers filed Tuesday are:

• Colin Gilbert, 80, of Marina del Rey, who has agreed to plead guilty to one count of making false statements, which carries a statutory maximum sentence of five years in federal prison; and
• Akiva Grunewald, 45, of West Los Angeles, who has agreed to plead guilty to one count of bribery, a crime that carries a penalty of up to 10 years in federal prison.

Gilbert and Grunewald are expected to formally enter guilty pleas in the coming weeks.

According to court documents, beginning in 2016, Gilbert and others recruited wealthy people to join the Manzanita Tribal Police Department. Gilbert lived approximately 177 miles – three hours by car – from the Manzanita Reservation, was not a member of and had no affiliation with the Manzanita Tribe. The wealthy individuals were asked to make a large payment, ranging from $5,000 to $100,000 and sometimes styled as a “donation,” in exchange for membership in the Manzanita PD, which they wanted because of the benefits they believed having law enforcement credentials would bring them.

In August 2019, Gilbert arranged for an individual whom Gilbert understood had no prior law enforcement experience or training to become a member of the Manzanita Tribal Police Department after making a $5,000 payment. The buyer told Gilbert that his primary motivation for obtaining the badge was so he could carry a concealed firearm without a permit.

During a November 2019 interview with the FBI, Gilbert lied, in part, by telling agents “…everybody that I had brought on had proper credentials, had the proper training, had everything done correctly,” according to his plea agreement. Gilbert then falsely told the FBI that everyone, including the newest recruit, had taken a specific law enforcement training class before receiving credentials, even though Gilbert knew this individual had not. After his interview with the FBI, Gilbert called the new recruit and asked him to return the credentials and, if ever asked, deny having received them.

For his part, in July 2018, Grunewald corruptly gave the Manzanita Tribal Police Department chief $20,000, intending to obtain a tribal police badge. Grunewald had never served as, or trained to become, a law enforcement officer and had never served in the military or as a private security officer. Instead, Grunewald’s motivation was to conceal-carry firearms in California without getting a permit.

After obtaining the badge, in August 2018, Grunewald – then an addict and unlawful user of oxycodone and other narcotics – was pulled over by Culver City Police after an officer saw Grunewald run across a busy street and enter a black Range Rover that was missing a front license plate, had tinted windows, and had a rear license plate that rightfully belonged to a different car.

During the traffic stop, Grunewald displayed his Manzanita PD badge out of his window and identified himself as a police officer. Grunewald “was shaking visibly, sweating, and appeared extremely nervous,” his plea agreement states.

The police officer asked Grunewald to exit the vehicle after Grunewald said he was carrying a firearm on his right hip. During a search of the vehicle and Grunewald himself, law enforcement recovered two loaded firearms, approximately 43 oxycodone pills, a police gun belt with handcuffs, a collapsible baton, a tactical vest, pepper spray, and numerous other badges and credentials associated with other law enforcement agencies.

After his August 2018 Culver City arrest resulted in the seizure of his badges, Grunewald then asked the Manzanita Tribal Police chief for another badge. Grunewald then used these new credentials to purchase several firearms, including a semi-automatic rifle. During these gun buys, Grunewald lied on federal forms that he was not an unlawful user of, or addicted to, marijuana or any depressant, stimulant, narcotic drug, or any other controlled substance when, in fact, he was.

In May 2019, Los Angeles Police arrested Grunewald, who possessed firearms and ammunition and was under the influence of oxycodone at the time, following multiple 911 phone calls reporting indecent exposure at a gas station, with an undressed man – Grunewald – in distress, hitting himself.

Grunewald, who was sweating profusely, again identified himself as a police officer and told law enforcement he had taken Percocet and Ambien. Police found two Manzanita PD badges and other law enforcement ID on Grunewald’s person. Police searched Grunewald’s black Range Rover and found four firearms, including the semi-automatic rifle, along with more than 200 rounds of ammunition.

Federal prosecutors in October 2021 secured a guilty plea from Anthony Reyes Vazquez, 51, of Oxnard, who admitted to stealing more than $300,000 while serving as the head of the Manzanita Tribal Police from 2012 to 2018. Vazquez pleaded guilty in U.S. District Court in San Diego to one count of theft concerning programs receiving federal funds. Vazquez sold fake badges to buyers who made substantial payments to become members of the Manzanita Tribal Police Department and have privileges available to law enforcement officers, such as carrying concealed weapons.

Vazquez is scheduled for sentencing on April 29, 2024.

The FBI in Los Angeles and San Diego investigated this matter with substantial assistance from the Culver City Police Department and the Los Angeles Police Department.

Assistant United States Attorney Frances S. Lewis of the Public Corruption and Civil Rights Section is prosecuting this case.

LOS ANGELES – A downtown Los Angeles man was sentenced today to 63 months in federal prison for fraudulently obtaining more than $150,000 – and attempted to obtain an additional $1.85 million – in COVID-relief loans for several companies he claimed to own and operate, and for illegally possessing firearms – including three AR-style rifles – and thousands of rounds of ammunition.

Sean Schoepflin, 44, a.k.a. “Sean Fitzgerald,” was sentenced by United States District Judge Fernando M. Olguin, who ordered Schoepflin immediately remanded into custody at today’s hearing.

At the conclusion of a three-day trial in late 2022, a jury found Schoepflin guilty of two counts of wire fraud and two counts of money laundering. At a separate two-day trial that concluded on August 16, a jury found Schoepflin guilty of one count of being a felon in possession of firearms and ammunition.

From April 2020 to October 2021, Schoepflin made numerous false statements to the United States Small Business Administration to secure more than $150,000 – and attempting to secure an additional $1.85 million – in Economic Injury Disaster Loans (EIDLs) for his business.

In applying for the EIDL loans, Schoepflin falsely stated that the business entity he created had several employees and more than half a million dollars in revenue, and that he would use the EIDLs for working capital for the business. Schoepflin also falsely stated on loan application that he had never been convicted of a felony.

In fact, his purported business, Capital Adventures Inc., had no employees and little to no revenue. Schoepflin used the EIDLs largely for personal expenses, and he had previously been convicted of multiple felonies.

For example, Schoepflin falsely stated in the loan application that Capital Adventures had revenues of $560,000 in a one-year period just before the pandemic. When an SBA employee sent an email to Schoepflin requesting Capital Adventures’ business tax return to show proof of the company’s existence as a business entity, Schoepflin sent an unsigned tax form that stated that Capital Adventures had gross sales or receipts of $625,112 in 2019.

In fact, Capital Adventures did not file the required IRS form for 2019 until July 2021, after it requested and was denied an increase for its EIDL. Furthermore, between February 2018 and April 2020, Capital Adventures’ bank accounts had total deposits of approximately $35,000.

“While the rest of the world was grappling with the effects of the worst pandemic in modern history…Sean Schoepflin saw this time as an opportunity to steal hundreds of thousands of dollars from American small businesses for his own gain,” prosecutors argued in a sentencing memorandum. “[Schoepflin]…utilized four fictitious companies over the span of a year to apply repeatedly for COVID-19 funds to which [he was] not entitled.”

In March 2022, federal law enforcement searched Schoepflin’s residence in connection with his COVID fraud scheme. While there, agents recovered nine firearms, including three AR-style assault rifles, and more than 4,000 rounds of ammunition belonging to Schoepflin.

Schoepflin is not permitted to possess firearms or ammunition because of his felony convictions dating back to the late 1990s in Florida state court, which include witness tampering, cocaine possession, and burglary.

Schoepflin’s wife, Erika Leon, 46, a.k.a. “Erika Fitzgerald,” also of downtown Los Angeles, has pleaded not guilty to two counts of wire fraud in the COVID fraud case. She is expected to go to trial early next year.

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

The FBI and the Treasury Inspector General for Tax Administration investigated this matter. The Small Business Administration’s Office of Inspector General and the Naval Criminal Investigative Service provided substantial assistance with the investigation.

Assistant United States Attorneys Solomon Kim and David C. Lachman of the Terrorism and Export Crimes Section are prosecuting 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 – Three Southland residents and a fourth defendant have been named in a seven-count indictment charging them with participating in a scheme to launder the proceeds of cryptocurrency investment scams and other fraudulent schemes involving millions of dollars in victim funds, the Justice Department announced today.

Two of the defendants – Lu Zhang, 36, of Alhambra, and Justin Walker, 31, of Cypress – were arrested Tuesday morning.

The other two defendants – Joseph Wong, 32, Rosemead, and Hailong Zhu, 40, Naperville, Illinois – are currently being sought by federal authorities.

The indictment charges all four defendants with conspiracy to commit money laundering, concealment money laundering, and international money laundering.

Zhang, Walker, Wong and Zhu allegedly conspired to open shell companies and bank accounts to launder victim proceeds of cryptocurrency investment scams – also known as “pig butchering” – and other fraudulent schemes. They allegedly transferred the funds involved in the fraud schemes to domestic and international financial institutions.

The overall fraud scheme in the related pig-butchering syndicate involved at least 284 transactions and resulted in more than $80 million in victim losses. More than $20 million in victim funds were directly deposited into bank accounts associated with the defendants.

According to court documents, pig butchering fraud schemes (a term derived from a foreign-language phrase used to describe these crimes) consist of scammers encountering victims on dating services or social media, or through unsolicited messages or calls, often masquerading as a wrong number. Scammers initiate relationships with victims and slowly gain their trust, eventually introducing the idea of making a business investment using cryptocurrency. Victims are then directed to other members of the scheme operating fraudulent cryptocurrency investment platforms and applications, where victims are persuaded to make financial investments. Once funds are sent to scammer-controlled accounts, the investment platform often falsely shows significant gains on the purported investment, and the victims are thus induced to make additional investments. Ultimately, the victims are unable to withdraw or recover their money, often resulting in significant losses for the victims.

After their arrests, Zhang and Walker appeared yesterday in United States District Court in Los Angeles, where they both entered not guilty pleas. Zhang was ordered detained, and Walker was ordered released on bond. A trial was scheduled for February 6, 2024.

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

Each of the charges for conspiracy to commit money laundering, concealment money laundering, and international money laundering carry a maximum statutory sentence of 20 years in federal prison.

This case was announced by United States Attorney Martin Estrada, Acting Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division, and Special Agent in Charge William Mancino of the U.S. Secret Service’s Criminal Investigative Division.

The U.S. Secret Service’s Global Investigative Operations Center is investigating the case. 

The case is being prosecuted by Assistant United States Attorneys Maxwell Coll of the Asset Forfeiture and Recovery Section and Nisha Chandran of the Cyber & Intellectual Property Crimes Section, and Justice Department Trial Attorney Stefanie Schwartz. AUSA Coll and Ms. Schwartz are part of the Justice Department’s Computer Crime and Intellectual Property Section’s (CCIPS) National Cryptocurrency Enforcement Team (NCET), which is jointly prosecuting the case with the United States Attorney’s Office.

If you or someone you know is a victim, report it to the www.IC3.gov. In the report, please reference “Pig Butchering PSA” and include as much information as possible in the complaint including names of investment platforms, cryptocurrency addresses and transaction hashes, bank account information, and names and contact information of suspected scammers. Maintain copies of all communications with scammers and records of financial transactions.

A seven-count indictment was unsealed yesterday in Los Angeles charging four individuals for their alleged roles in a scheme to launder the proceeds of cryptocurrency investment scams and other fraudulent schemes involving millions of dollars in victim funds.

Lu Zhang, 36, of Alhambra, California; Justin Walker, 31, of Cypress, California; Joseph Wong, 32, Rosemead, California; and Hailong Zhu, 40, Naperville, Illinois, are charged with conspiracy to commit money laundering, concealment money laundering, and international money laundering. Zhang and Walker were arrested and made their initial appearances in federal court yesterday.

According to court documents, Zhang, Walker, Wong, and Zhu allegedly conspired to open shell companies and bank accounts to launder victim proceeds of cryptocurrency investment scams, also known as “pig butchering,” and other fraudulent schemes. They transferred the funds to domestic and international financial institutions. The overall fraud scheme in the related pig-butchering syndicate involved at least 284 transactions and resulted in more than $80 million in victim losses. More than $20 million in victim funds were directly deposited into bank accounts associated with the defendants.

According to court documents, “pig butchering” fraud schemes (a term derived from a foreign-language phrase used to describe these crimes) consist of scammers encountering victims on dating services, social media, or through unsolicited messages or calls, often masquerading as a wrong number. Scammers initiate relationships with victims and slowly gain their trust, eventually introducing the idea of making a business investment using cryptocurrency. Victims are then directed to other members of the scheme operating fraudulent cryptocurrency investment platforms and applications, where victims are persuaded to make financial investments. Once funds are sent to scammer-controlled accounts, the investment platform often falsely shows significant gains on the purported investment, and the victims are thus induced to make additional investments. Ultimately, the victims are unable to withdraw or recover their money, often resulting in significant losses for the victims.

If convicted, Zhang and Walker face a maximum penalty of 20 years in prison.

Acting Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division, U.S. Attorney Martin Estrada for the Central District of California, and Special Agent in Charge William Mancino of the U.S. Secret Service’s Criminal Investigative Division made the announcement.

The U.S. Secret Service’s Global Investigative Operations Center is investigating the case.

The case is jointly prosecuted by the U.S. Attorney’s Office for the Central District of California and the Computer Crime and Intellectual Property Section’s (CCIPS) National Cryptocurrency Enforcement Team (NCET), which was established to combat the growing illicit use of cryptocurrencies and digital assets. CCIPS’ NCET conducts and supports investigations into individuals and entities that enable the use of digital assets to commit and facilitate a variety of crimes, with a particular focus on virtual currency exchanges, mixing and tumbling services, and infrastructure providers. The NCET also works to set strategic priorities regarding digital asset technologies, identify areas for increased investigative and prosecutorial focus, and lead the department’s efforts to collaborate with domestic and foreign government agencies as well as the private sector to aggressively investigate and prosecute crimes involving cryptocurrency and digital assets. 

CCIPS/NCET Trial Attorney and Assistant U.S. Attorney Maxwell Coll for the Central District of California, CCIPS/NCET Trial Attorney Stefanie Schwartz, and Assistant U.S. Attorney Nisha Chandran for the Central District of California are prosecuting the case.  

If you or someone you know is a victim, report it to the IC3.gov. In the report, please reference “Pig Butchering PSA” and include as much information as possible in the complaint including names of investment platforms, cryptocurrency addresses and transaction hashes, bank account information, and names and contact information of suspected scammers. Maintain copies of all communications with scammers and records of financial transactions.

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

LOS ANGELES – A Ventura County man is now in federal custody after being named in a criminal complaint that specifically charges him with using a gun to rob a food truck in Oxnard and alleges that he committed four other armed robberies.

Oscar Silva, 30, of Oxnard, was transferred to federal custody Tuesday after he was arrested on local charges on December 7. The federal case charges Silva with Hobbs Act robbery, a crime that carries a statutory maximum sentence of 20 years in federal prison.

Silva made his initial appearance Tuesday afternoon in United States District Court, where he was ordered detained and was directed to appear for an arraignment on January 22.

According to an affidavit filed last week with the federal complaint, Silva committed a series of five armed robberies between November 6 and November 23 in Oxnard and Ventura. Silva allegedly robbed two street food vendors, a smoke shop, and a convenience store in Oxnard. Silva also allegedly robbed a female pedestrian near Mission Park in downtown Ventura, taking her purse and credits cards. Silva later used credit and debit cards stolen from the female pedestrian’s purse to purchase items worth several hundred dollars, the complaint alleges. Silva allegedly brandished a firearm and threatened his victims during each of the robberies.

A criminal complaint contained allegations.  All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

The investigation into Silva is being conducted by the Ventura County Violent Crime Task Force, which includes the FBI, the Oxnard Police Department, the Ventura County Sheriff’s Office, and the Ventura Police Department.

Assistant United States Attorney Lyndsi C. Allsop of the Violent and Organized Crime Section is prosecuting this case.

LOS ANGELES – A federal grand jury has returned an indictment charging a San Pedro man in a “stock scalping” scheme in which he used his “TeamBillionaire” email list and his social-media accounts to deceive investors into buying penny stocks he recommended, while simultaneously selling off those same stocks for a profit.

Michael M. Beck, 48, was charged in an indictment returned Tuesday afternoon with three counts of securities fraud and three counts of wire fraud, each of which carries a statutory maximum penalty of 20 years in federal prison.

The indictment alleges that Beck purchased blocks of penny stocks and then promoted those stocks to his many followers on the social-media platform then-known as Twitter. Prior to promoting the stocks to the followers of the @BigMoneyMike6 handle on Twitter, Beck encouraged subscribers of his TeamBillionaire email group to buy the stock, thereby increasing the trading volume of the stock and making the stock look more attractive to potential investors. At the same time, Beck was secretly selling – or causing his associates to sell – shares of the very stock he was promoting into the artificially inflated market for a profit, often while falsely telling his Twitter followers that he was still buying shares.

Investigators believe that Beck’s fraudulent scheme resulted in profits of at least $500,000.

The United States Securities and Exchange Commission previously filed a civil complaint alleging that Beck committed violations of federal securities law.

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

Beck is scheduled to make his initial court appearance on the indictment on January 9.

IRS Criminal Investigation is investigating the case.

Assistant United States Attorneys Carolyn S. Small and Jenna Williams of the Corporate and Securities Fraud Strike Force are prosecuting this case.

Created in October, the Corporate and Securities Fraud Strike Force is focusing on complex corporate crimes, abuses by company insiders and offenses that impact the nation’s financial system.

A superseding indictment was unsealed yesterday charging an Australian national and a California man with operating a cryptocurrency Ponzi scheme that defrauded victims of more than $25 million.

According to court documents, David Gilbert Saffron, 51, of Australia, and Vincent Anthony Mazzotta Jr., 52, of Los Angeles, allegedly conspired to operate a fraudulent scheme to induce victims to invest in various trading programs that falsely promised to employ an artificial intelligence automated trading bot to trade victims’ investments in cryptocurrency markets and earn high-yield profits. Saffron and Mazzotta promoted the investment programs under various names including Circle Society, Bitcoin Wealth Management, Omicron Trust, Mind Capital, and Cloud9Capital. Rather than investing victims’ funds in cryptocurrency, Saffron and Mazzotta allegedly misappropriated victims’ funds to pay for personal expenses including private chartered jet flights, luxury hotel accommodations, private mansion rentals, a personal chef, and private security guards.

To execute the scheme, Saffron and Mazzotta allegedly created a fictious entity called the Federal Crypto Reserve. The indictment alleges that, after inducing victims to invest in one of the cryptocurrency investment programs, Saffron and Mazzotta fraudulently solicited victims to pay the Federal Crypto Reserve to investigate and recover the victims’ losses. To conceal his identity, Saffron often allegedly solicited victims under various aliases, including David Gilbert and Dave Gabe, and under various online personas, including the Blue Wizard and Bitcoin Yoda.

Saffron and Mazzotta also allegedly conspired to obstruct official proceedings by concealing assets, concealing or destroying evidence, and falsifying records. The defendants also allegedly conspired to conceal the source and location of victims’ cryptocurrency investments through various means, including using methods known as “blockchain hopping” and through services known as “mixers” or “tumblers” that are designed to prevent cryptocurrency tracing.

Saffron and Mazzotta are charged with conspiracy to commit wire fraud, wire fraud, conspiracy to obstruct justice, conspiracy to commit money laundering, and money laundering. Saffron is also alleged to have committed felonies while on pre-trial release. If convicted, they each face a maximum penalty of 20 years in prison for each count of conspiracy to commit wire fraud and money laundering, 20 years in prison for each wire fraud count, 10 years for each money laundering count, and five years for conspiracy to obstruct justice. Saffron also faces up to 10 years in prison consecutive to any other sentence for committing felonies while on pre-trial release.

Acting Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division, U.S. Attorney Martin Estrada for the Central District of California, and Special Agent in Charge Tyler Hatcher of the IRS Criminal Investigation (IRS:CI) Los Angeles Field Office made the announcement.

IRS:CI is investigating the case.

Trial Attorneys Theodore Kneller and Siji Moore of the Criminal Division’s Fraud Section and Assistant U.S. Attorney James Hughes for the Central District of California are prosecuting the case.

The Commodity Futures Trading Commission previously charged Saffron by complaint. 

If you believe you are a victim in this case, please contact the Fraud Section’s Victim Witness Unit toll-free at (888) 549-3945 or by email at victimassistance.fraud@usdoj.gov. To learn more about victims’ rights, please visit www.justice.gov/criminal/criminal-vns/victim-rights-derechos-de-las-v-ctimas.

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

LOS ANGELES – FBI agents this morning arrested a West Los Angeles man who is one of two defendants charged in a federal grand jury indictment alleging a scheme that laundered at least $2 million in proceeds obtained from victims of grandparent scams who were defrauded with bogus claims that their relatives were in distress and urgently needed funds.

James Wesley Jackson III, aka “Imperial,” 42, pleaded not guilty this afternoon to one count of conspiracy to commit money laundering and one count of conspiracy to commit bank fraud.

The two-count indictment unsealed this afternoon also charges Christopher Fagon (who had several aliases, mostly variations of “Christopher Broker”), 45, who at the time of the alleged scheme lived in the Beverly Grove neighborhood of Los Angeles, and who is now believed to reside in or near Toronto, Canada.

The indictment outlines how perpetrators of grandparent scams convince victims to send money – purportedly to help relatives, often their grandchildren, who are typically described as being in legal trouble – “to bank accounts, business entities, and physical addresses specified by the scammers, using interstate wires and cashier’s checks…, for the supposed purpose of assisting the relatives in distress.” The victims’ money often is initially handled by “money mules,” who allow their addresses or bank accounts to be used or agree to receive or negotiate cashier’s checks.

Fagon allegedly was a manager of money mules, including Jackson, who also recruited his own money mules. The indictment further alleges that Fagon created business entities and opened bank accounts using information stolen from identity theft victims.

Once money was in the accounts associated with the money mules or identity theft victims, Fagon and Jackson allegedly engaged in transactions designed to conceal the true nature of the funds, which had been obtained via wire fraud.

The indictment specifically alleges that the scheme laundered funds obtained from victims of grandparent scams who reside in California and as far away as Pennsylvania.

The bank fraud scheme alleged in the indictment involves fraudulently obtained funds that were held in suspense in an account that had been set up in the name of an identity theft victim. Fagon, Jackson and a co-conspirator allegedly worked together to contact the bank and impersonate the identity theft victim to secure the issuance of a check for nearly $83,000 that was remaining in the account.

At his arraignment this afternoon, Jackson was ordered released on bond, and a trial was scheduled for February 6, 2024.

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

The charge of conspiracy to commit money laundering carries a statutory maximum penalty of 20 years in federal prison, and the charge of conspiracy to commit bank fraud carries a sentence of up to 30 years.

The FBI is conducting the investigation in this case. The Toronto Police Service in Canada provided assistance in the investigation.

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

This case is the product of an investigation by the Vulnerable Communities Task Force, which is focused on investigating and prosecuting individuals and entities that prey on communities that typically are less likely to report crimes to law enforcement and historically have had less legal recourse to address the offenders targeting them. These groups may include immigrants and migrant workers defrauded in immigration schemes, indigent individuals reliant on public benefits, the elderly, and those who have been reluctant to seek assistance from government authorities.

SANTA ANA, California – A San Pedro man has been sentenced to 177 months in federal prison for – while on parole from a life sentence in state prison for armed robbery – robbing an armored truck in Harbor City last year in which the truck’s driver was shot and suffered serious injuries, the Justice Department announced today.

Gregory James, 48, was sentenced Monday afternoon by United States District Judge David O. Carter.

James pleaded guilty on June 12 to one count of Hobbs Act robbery and one count of discharge of a firearm in relation to a crime of violence. He has been in federal custody since October 2022.

On October 17, 2022, James and co-defendant Lamond Akins, 31, of Compton, robbed a Loomis armored truck after the truck driver had finished servicing an ATM at a Bank of America branch in Harbor City. James and Akins waited for the driver to finish his ATM work, and then – both brandishing firearms – approached the driver and robbed him.

During the robbery, the victim was shot and wounded. James and Akins stole a bag filled with approximately $145,000 in cash that belonged to the Loomis company – which operates in 40 states and three nations – before driving away from the scene.

The victim truck driver experienced significant bodily injury because of the shooting and required surgery.

Akins also pleaded guilty on June 12 to one count of Hobbs Act robbery and one count of discharge of a firearm in relation to a crime of violence. On October 27, Judge Carter sentenced Akins to 177 months in federal prison.

The Los Angeles County Sheriff’s Department and the FBI investigated this matter. The Gardena Police Department provided substantial assistance.

Assistant United States Attorney Jeremiah M. Levine of the Violent and Organized Crime Section prosecuted this case.

LOS ANGELES – A superseding indictment was unsealed yesterday charging an Australian national and a Hollywood Hills man with operating a cryptocurrency Ponzi scheme that defrauded victims of more than $25 million.

According to court documents, David Gilbert Saffron, 51, of Australia, and Vincent Anthony Mazzotta Jr., 52, of the Hollywood Hills area of Los Angeles, allegedly conspired to operate a fraudulent scheme to induce victims to invest in various trading programs that falsely promised to employ an artificial intelligence automated trading bot to trade victims’ investments in cryptocurrency markets and earn high-yield profits. Saffron and Mazzotta promoted the investment programs under various names including Circle Society, Bitcoin Wealth Management, Omicron Trust, Mind Capital, and Cloud9Capital. Rather than investing victims’ funds in cryptocurrency, Saffron and Mazzotta allegedly misappropriated victims’ funds to pay for personal expenses including private chartered jet flights, luxury hotel accommodations, private mansion rentals, a personal chef, and private security guards.

To execute the scheme, Saffron and Mazzotta allegedly created a fictious entity called the Federal Crypto Reserve. The indictment alleges that, after inducing victims to invest in one of the cryptocurrency investment programs, Saffron and Mazzotta fraudulently solicited victims to pay the Federal Crypto Reserve to investigate and recover the victims’ losses. To conceal his identity, Saffron often allegedly solicited victims under various aliases, including David Gilbert and Dave Gabe, and under various online personas, including the Blue Wizard and Bitcoin Yoda.

Saffron and Mazzotta also allegedly conspired to obstruct official proceedings by concealing assets, concealing or destroying evidence, and falsifying records. The defendants also allegedly conspired to conceal the source and location of victims’ cryptocurrency investments through various means, including using methods known as “blockchain hopping” and through services known as “mixers” or “tumblers” that are designed to prevent cryptocurrency tracing.

Saffron and Mazzotta are charged with conspiracy to commit wire fraud, wire fraud, conspiracy to obstruct justice, conspiracy to commit money laundering, and money laundering. Saffron is also alleged to have committed felonies while on pre-trial release. If convicted, they each face a maximum penalty of 20 years in prison for each count of conspiracy to commit wire fraud and money laundering, 20 years in prison for each wire fraud count, 10 years for each money laundering count, and five years for conspiracy to obstruct justice. Saffron also faces up to 10 years in prison consecutive to any other sentence for committing felonies while on pre-trial release.

United States Attorney Martin Estrada for the Central District of California, Acting Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division, and Special Agent in Charge Tyler Hatcher of the IRS Criminal Investigation (IRS:CI) Los Angeles Field Office made the announcement.

IRS Criminal Investigation is investigating the case.

Assistant United States Attorney James Hughes of the Major Frauds Section, and Justice Department Trial Attorneys Theodore Kneller and Siji Moore of the Criminal Division’s Fraud Section and are prosecuting the case.

The Commodity Futures Trading Commission previously charged Saffron by complaint.

If you believe you are a victim in this case, please contact the Fraud Section’s Victim Witness Unit toll-free at (888) 549-3945 or by email at victimassistance.fraud@usdoj.gov. To learn more about victims’ rights, please visit www.justice.gov/criminal/criminal-vns/victim-rights-derechos-de-las-v-ctimas.

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

LOS ANGELES – The former president and CEO of a Los Angeles-based anti-poverty nonprofit agency was sentenced today to six months in federal prison for embezzling money from the nonprofit for his personal benefit, failing to report these funds on his tax returns, and intentionally misapplying more than $600,000 in grant money to pay for unauthorized expenses.

Howard Dixon Slingerland, 54, of Studio City, was sentenced by United States District Judge Dolly M. Gee, who also ordered him to serve six months of home confinement, pay a fine of $10,000, pay $750,470 in restitution and to perform 200 hours of community service.

Slingerland pleaded guilty on March 8 to one count of conversion and intentional misapplication of funds from an organization receiving federal money and one count of subscribing to a false federal income tax return.

From 1996 until he was fired in September 2019, Slingerland led the Youth Policy Institute Inc. (YPI), a Hollywood-based nonprofit agency that worked to eradicate poverty, eventually becoming president and CEO. YPI operated in some of the highest needs neighborhoods in Los Angeles, running programs aimed at supporting youth education, development, safety, job training, and health and wellness. As the head of YPI, Slingerland had check-signing authority over YPI’s bank accounts and was the personal guarantor of YPI’s credit card.

From January 2015 to February 2019, Slingerland caused at least $71,533 of YPI funds to be spent on unauthorized expenditures, including Slingerland’s personal property tax bill that exceeded $14,000; a Slingerland family dinner at an upscale New York City restaurant costing more than $6,000; private tutoring for a family member costing nearly $11,000; and a home computer and software valued at nearly $2,000.

Slingerland also caused federal grant money YPI had received under the Workforce Innovation and Opportunity Act, administered by the United States Department of Labor, to be used for unauthorized purposes. The grant was awarded to support a YPI education and training program designed to prepare young adults in Los Angeles for jobs in growing industries such as construction, customer service, food preparation and service. Instead, in July 2019, Slingerland caused approximately $401,561 of these funds to be used for the unauthorized payment of YPI payroll. That same month, he caused another approximately $201,466 of the federal grant money to be illegally used to pay off YPI’s credit card bill, including for expenses Slingerland had incurred.

Slingerland underreported on his individual federal income tax returns more than $100,000 in income each year for the tax years 2015 through 2018. Slingerland did not report the money he obtained from YPI through the embezzlement or the value of benefits he received from YPI, including retirement plan contributions and a housing allowance and a vehicle allowance. Slingerland admitted to owing the United States Treasury a total of approximately $147,398 in unpaid taxes – not including penalties and interest – for these years.

“Entrusted with the management of a large non-profit organization on which many community members had come to depend, [Slingerland] ignored the rules and used the organization’s money to pay for his own personal expenses, some of which were extravagant, even profligate,” prosecutors argued in a sentencing memorandum.  In November 2019, two months after Slingerland was fired, YPI declared bankruptcy.

IRS Criminal Investigation; the FBI; the United States Department of Labor Office of Inspector General; the United States Department of Education Office of Inspector General; the United States Department of Justice Office of Inspector General; and the Los Angeles Unified School District investigated this matter. The Office of the United States Trustee provided substantial assistance.

Assistant United States Attorney Ranee A. Katzenstein of the Major Frauds Section prosecuted this case.

LOS ANGELES – An Inglewood man, who last year was granted compassionate release after serving 26 years in federal prison for armed robberies of armed couriers, was indicted today for allegedly robbing a Brinks courier at gunpoint in a bank parking lot in Westchester in August.

Markham David Bond, 60, is charged in a three-count federal grand jury indictment with interference with commerce by robbery (Hobbs Act), using a firearm during a crime of violence, and being a felon in possession of a firearm and ammunition.

Bond’s arraignment is scheduled for December 18 in United States District Court in downtown Los Angeles.

According to the indictment returned today and other court documents, on the morning of August 18, 2023, Bond stole approximately $145,000 in cash from a Brinks armored carrier outside a bank branch in the Westchester neighborhood of Los Angeles. The armored vehicle was parked in the bank parking lot as one of its employees got out of the vehicle with a blue duffle bag on a rolling cart and which contained the cash. Bond allegedly approached the driver, pointed a handgun at him and said, “I got you, bro” and “Don’t try nothing.”

Fearing for his life, the Brinks employee dropped the duffle bag. Bond allegedly then ordered the victim to get down on the ground. After the victim complied with this order, Bond grabbed the blue Brinks duffle bag then fled the area, according to court documents.

Police put out a crime alert after obtaining stills of the getaway car from surveillance footage. On August 27, patrol officers located the car – a Chevrolet Tahoe with distinctive rims and damage to a rear window. Police seized from the car, among other items, a blue Brinks duffle bag and a black baseball cap with the same Raiders NFL logo as seen on surveillance footage of the robber.

Bond was arrested on November 22 and police seized at his residence a .40-caliber pistol containing 10 rounds of ammunition, a maroon-colored long-sleeve shirt similar in appearance to one used in the August 18 robbery, and crumpled cash totaling $9,005 that was located inside multiple plastic bags hidden inside of a mini-refrigerator.

Bond has multiple felony convictions dating from 1985 and 1995 for Hobbs Act robbery, armed bank robbery, and use of a firearm in furtherance of a crime of violence, among other crimes. As a convicted felon, Bond is not permitted to possess firearms or ammunition.

In January 1995, Bond was sentenced to 562 months (46 years and 10 months) in prison after being convicted of bank robbery and firearms offenses, but in January 2022 he was granted a compassionate release. He was on supervised release for his 1995 conviction when he allegedly robbed the Brinks employee at gunpoint on August 18.

A federal magistrate judge on November 28 ordered Bond jailed without bond.

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, Bond will face a statutory maximum sentence of life in federal prison.

The Los Angeles Police Department’s Robbery Homicide Division and the FBI investigated this case.

Assistant United States Attorney Haoxiaohan H. Cai of the General Crimes Section is prosecuting this case.

LOS ANGELES – A Sherman Oaks man who ran the San Fernando Valley-based Vineland Boys street gang was sentenced today to 192 months in federal prison for committing federal racketeering and narcotics crimes.

Mario Alberto Miranda, 32, a.k.a. “Ultimo,” “Last,” and “Shot Caller,” was sentenced by United States District Judge Michael W. Fitzgerald.

Miranda – the lead defendant in a federal grand jury indictment targeting 31 Vineland Boys members and associates – pleaded guilty on June 26 to one count of conspiracy to violate the Racketeer Influenced and Corrupt Organizations (RICO) Act and one count of conspiracy to distribute methamphetamine. He has been in federal custody since February 2019.

From at least September 2008 to November 2019, Miranda conspired with other Vineland Boys members and associates to engage in drug trafficking and to maintain the gang’s territorial control in the San Fernando Valley. Miranda acted as a drug supplier and sold narcotics within the gang’s territory, operated drug and firearms stash locations and extorted drug dealers within areas under the gang’s control.

As the gang’s shot caller, Miranda also ordered Vineland Boys members and associates to attack and assault rival gang members and individuals suspected of cooperating with law enforcement, according to court documents.

Miranda sold methamphetamine to buyers at a Pacoima residence as well as at a North Hollywood clothing store that he ran. Miranda also sold a total of approximately 1.2 kilograms of methamphetamine to one buyer over eight transactions and, in June 2016, ordered a co-conspirator to obtain one pound of methamphetamine for another buyer.

He also maintained and operated illegal marijuana grow houses in Pacoima and Palmdale. At the Pacoima residence, Miranda and an accomplice maintained at least 125 marijuana plants weighing a total of approximately 315 pounds.

In November 2014, Miranda collected up to $300 from a Vineland Boys member as a “tax” on the proceeds of the member’s heroin sales. Miranda also was part of a scheme to collect payments from the gang’s members to be paid to incarcerated Vineland Boys members and leaders.

Miranda also attended and helped organize Vineland Boys gang meetings, including a March 2016 meeting at a Panorama City restaurant and a January 2017 meeting at a residence in Sun Valley, where he gave orders to Vineland Boys gang members to commit acts of violence against rival gang members and individuals suspected of cooperating with police.

Federal prosecutors secured 30 guilty pleas in this case, including 19 convictions that have resulted in prison sentences of at least 10 years. One of them, Vineland Boys gang member Jesus Gonzalez Jr., 30, “Lil Chito,” “Gunner” and “Chuy,” of Sun Valley, is serving a 31-year federal prison sentence for committing multiple felonies, including the attempted murders of three rival gangsters. One defendant died after being indicted.

The FBI, the Bureau of Alcohol, Tobacco, Firearms, and Explosives, IRS Criminal Investigation and the Los Angeles Police Department investigated this matter. This effort 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.

Assistant United States Attorneys Jennifer Chou and Sara Vargas of the Violent and Organized Crime Section prosecuted this case.

LOS ANGELES – A former Los Angeles County Sheriff’s Department (LASD) deputy was sentenced today to 24 months in federal prison for depriving a 23-year-old man of his civil rights in the spring of 2020 by falsely imprisoning him and then lying and cover up his illegal actions.

Miguel Angel Vega, 33, of Corona, was sentenced by United States District Judge Percy Anderson, who also fined Vega $5,000.

At today’s hearing, Judge Anderson said Vega’s conduct had “embarrassed” the Sheriff’s Department and “every man and woman that puts on a badge every day and puts their lives at risk” and that today’s sentence sends “a clear message that there are serious consequences for law enforcement officers who abuse their power and violate their sworn oath to uphold the law.”

Vega pleaded guilty on September 6 to one count of deprivation of rights under color of law.

“When law enforcement officers abuse their power, they tear at our social fabric by undermining public trust in the equal application of the law,” said United States Attorney Martin Estrada. “By violating his sacred oath to uphold the law, Vega also betrayed his fellow deputies, the vast majority of whom sacrifice every day to keep our community safe.”

“The defendant swore an oath to protect the public he served, but instead chose to violate the civil rights of an innocent young man,” said Donald Alway, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “Today’s sentencing exemplifies the FBI’s commitment to protecting those who are illegally accused under the color of law, while restoring trust in the overwhelming majority of police professionals who devote themselves to serving their communities with integrity.”

“When the Sheriff’s Department became aware of allegations of misconduct against Miguel Vega, criminal and administrative investigations were initiated,” said Los Angeles County Sheriff Robert Luna. “The Department assisted federal agencies during the criminal investigation, contributing to their indictment. The Sheriff’s Department is committed to holding employees accountable for their actions and expects them to exhibit the highest moral and ethical standards when serving our communities.”

On the afternoon of April 13, 2020, Vega and his then-partner, Christopher Blair Hernandez, 38, were in uniform and on patrol in an LASD SUV near Wilson Park in Compton as part of their official duties at LASD.

Vega and Hernandez saw two young Black males outside a skateboard park enclosed by a tall wrought-iron fence within Wilson Park. Vega and Hernandez got out of the vehicle, approached the individuals, and ordered them to lift their shirts to search for firearms, which the individuals did not possess.

At this point, the victim – identified in court documents as “J.A.” – began yelling at Vega and Hernandez to leave the young Black males alone, and Vega began yelling back at the victim, challenging him to a fight. Soon afterward, to teach J.A. a lesson, Vega and Hernandez illegally detained him in their patrol vehicle without telling him that he was under arrest, handcuffing J.A., informing him of his rights, or securing his seatbelt in the LASD SUV. After driving away from the park, Vega continued to taunt and threaten J.A., including threatening to drop him off in gang territory where J.A. would be beaten. J.A. was never given a valid reason for his detention, and in fact there was no legitimate basis for the false imprisonment.

While still unlawfully confined and unsecured in the back of the patrol vehicle, J.A. sustained a cut above his eye during a subsequent police car chase when Vega crashed his LASD SUV into a wall in an alley while chasing a young male on a bicycle whom Vega believed may have possessed a firearm. After the crash, Vega told J.A. to flee despite J.A. suffering a head injury and sustaining a cut above his eye that required stitches. Vega initially lied to a supervising sergeant that no one else had been in the patrol vehicle at the time of the collision. Then, after J.A. was independently re-detained by other deputies responding to the scene, Vega lied and told the sergeant that he and Hernandez originally detained J.A. for being under the influence of a controlled substance.

As further part of the coverup, Vega and Hernandez had another deputy issue J.A. a citation for being under the influence of methamphetamine, even though Vega and Hernandez knew that this accusation was false. Vega and Hernandez later filed false incident reports to cover up their illegal conduct, repeating the same and other lies about the events of the day, including that J.A. appeared to be under the influence of a stimulant and threatened people at the park and that Vega had transferred J.A. to another patrol vehicle after the collision instead of directing J.A. to flee the scene.

Hernandez pleaded guilty on July 24 to one count of conspiracy pursuant to a cooperation plea agreement. His sentencing hearing is scheduled for January 8, 2024, at which time he will face a statutory maximum sentence of five years in federal prison.

The FBI investigated this matter. The LASD’s Internal Criminal Investigations Bureau and Internal Affairs Bureau provided substantial assistance.

Assistant United States Attorneys J. Jamari Buxton and Brian R. Faerstein of the Public Corruption and Civil Rights Section prosecuted this case.

LOS ANGELES – An Orange County man was sentenced today to 18 months in federal prison for conspiring to procure and illegally ship high-end computer servers from the United States to Iran, in violation of the International Emergency Powers Act (IEEPA) and U.S. sanctions against Iran.

Johnny Paul Tourino, 69, of Dana Point, was sentenced by United States District Judge Josephine L. Staton, who also fined him $20,000. Tourino has agreed to forfeit approximately $2 million in seized funds.

On March 3, Tourino pleaded guilty to one count of conspiracy to violate IEEPA, which controls and restricts the export of certain goods from the United States to foreign nations, as well as U.S. sanctions against Iran.

According to court records, Tourino owned and operated Spectra Equipment Inc., a Laguna Niguel-based computer support and services company. Between September 2015 and March 2017, Tourino negotiated the sale of five business-class computer servers valued at $2.1 million and attempted to have them sent to Iran for use by two Iranian financial institutions, Bank Mellat and Bank Keshavarzi.  

In February 2017, when the manufacturer of the servers asked Tourino to identify the end-user, he falsely stated that the servers were being sold to a bank in Africa and “NOT going to Iran.” Later that month, Tourino, through his lawyer, falsely represented to the manufacturer that the servers were going to Slovenia.

Roughly one week later, Tourino sent three checks to the manufacturer as partial payment for the servers. After learning that the Department of Treasury had blocked funds from Iran that were to be used to pay for the servers, Tourino deleted his emails and contacted the Department of Treasury and again falsely stated that the servers were not going to Iran and were destined for Slovenia.

According to court documents, in August 2015, Tourino previously brokered the sale of four business-class computer servers that were ultimately sent to Bank Mellat in Iran. Regarding these servers, Judge Staton noted “the government cannot get back the 2015 servers.” These servers offered high-level encryption allowing the users to shield information from law enforcement detection.

“Mr. Tourino knowingly violated U.S. law and sanctions by attempting to sell millions of dollars’ worth of computer equipment to Iran and doing business with sanctioned Iranian banks that have been the lifeblood of Iran’s international acts of terror and nuclear weapons program,” said United States Attorney Martin Estrada. “Today’s sentence exemplifies the unshakeable will of this Office to vigorously investigate and bring to justice persons who would undermine our national security by giving aid and comfort to hostile foreign state actors.”

“Defendant Tourino conspired to illegally export restricted equipment to a foreign adversary and took steps to conceal his activities to avoid law enforcement scrutiny,” said Donald Alway, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “Tourino’s activity violated U.S. economic and trade sanctions and, in the process, potentially aided an oppressive terrorist regime and put America’s long-term security interests at risk.”

“We will fully and aggressively enforce restrictions on U.S. exports to parties in Iran,” said Los Angeles Field Office Special Agent in Charge Gregory Dunlap of the U.S. Department of Commerce, Office of Export Enforcement (OEE). “OEE will continue to leverage its unique authorities to pursue violators wherever they are, and will collaborate with our law enforcement partners to achieve this goal.”

“Tourino attempted to profit from a far-reaching, extensive scheme to evade U.S. sanctions on Iran. Tourino repeatedly lied to illegally obtain and supply dual-use items to a foreign nation,” said Special Agent in Charge Tyler Hatcher of the Los Angeles Field Office of IRS Criminal Investigation. “This sentence is the result of a successful joint investigative effort with our law enforcement partners and the U.S. Attorney’s Office for the Central District of California. IRS Criminal Investigation is fully committed to protecting national security by disrupting efforts by our adversaries to violate U.S. export controls.”

The FBI, the Commerce Department’s Office of Export Enforcement, and IRS Criminal Investigation investigated this matter.

Assistant United States Attorneys Mark Takla of the Terrorism and Export Crimes Section and Bradley Marrett of the Santa Ana Branch Office prosecuted this case. The Counterintelligence and Export Control Section of the Justice Department’s National Security Division provided substantial assistance.