Central District of California

SANTA ANA, California – A former executive at an Orange County commercial real estate agency pleaded guilty today to embezzling more than $2.7 million from his employer by submitting fictitious invoices for companies controlled by his family and friends, whose services never were performed.

Varun Aggarwal, 41, of Irvine, pleaded guilty to one count of wire fraud.

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

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

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

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

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

United States District Judge Cormac J. Carney scheduled a January 22, 2024, sentencing hearing, at which time Aggarwal will face a statutory maximum sentence of 20 years in federal prison.

The FBI investigated this matter.

Assistant United States Attorney Brett A. Sagel of the Santa Ana Branch Office is prosecuting this case.

SANTA ANA, California – The former mayor of Anaheim has agreed to plead guilty to federal felony charges for obstructing an FBI public corruption investigation by destroying evidence and for making false statements to FBI agents, the Justice Department announced today.

In court documents filed today in United States District Court, Harish “Harry” Singh Sidhu, 66, of Anaheim, also admits cheating California tax authorities and making false statements to the Federal Aviation Administration in relation to his purchase of a helicopter.

Federal prosecutors today filed a criminal information charging Sidhu with one count of obstruction of justice, one count of wire fraud, and two counts of making false statements to the FBI and the FAA. In a plea agreement also filed today, Sidhu agreed to plead guilty to the four offenses.

According to his plea agreement, Sidhu – a longtime member of the Anaheim City Council who was elected mayor in 2018 – admitted that while the City of Anaheim was negotiating the sale of Angel Stadium to the Los Angeles Angels Major League Baseball club, he sought out and became a member of the city’s negotiating team for the stadium sale. While on the negotiating team, Sidhu provided confidential information belonging to the city to people working for the Angels, so that the Angels could buy Angel Stadium on favorable terms for the baseball club. After secretly providing the information he had received in his position as mayor, Sidhu later was recorded saying he expected a $1 million campaign contribution from the Angels after the baseball club purchased Angel Stadium, the plea agreement states.

“While serving as Anaheim’s mayor, Mr. Sidhu took a series of actions that compromised the city’s negotiating position by providing confidential information and secretly working to influence the city’s decision-making process – all of which had a detrimental effect on the city and its residents,” said First Assistant United States Attorney Joseph T. McNally. “Public confidence in the integrity of public officials is critical to our society. This office will continue to root out public officials who compromise their integrity.”

“Mr. Sidhu was elected by and pledged to work for the residents of Anaheim, but he violated that pledge and their trust on numerous occasions to look out for special interests,” said Donald Alway, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “Mr. Sidhu deceived his colleagues and weakened the city’s official strategy by divulging intellectual property, then lied to the government when his corruption was discovered. I’m proud of the hard work put in by agents and prosecutors which resulted in today’s plea agreement.”

“The public places a lot of trust and confidence in elected officials, which Mr. Sidhu violated,” said Special Agent in Charge Tyler Hatcher, IRS Criminal Investigation, Los Angeles Field Office. “Working with our law enforcement partners, we were able to prevent Mr. Sidhu from causing greater harm to the Anaheim community.”

Sidhu admitted that he knowingly destroyed evidence by deleting multiple email messages and documents with the intent to impede and obstruct the FBI’s investigation of public corruption related to the city’s attempted sale of Angel Stadium. In the plea agreement, Sidhu specifically admitted he deleted an email message he had sent on July 21, 2020, with an attachment drafted by lawyers for the city, which contained confidential negotiation information related to the potential sale of Angel Stadium, including a discussion of issues related to price.

Sidhu also admitted in his plea agreement that he deleted a September 2020 email message about secret mock Anaheim City Council meetings involving Sidhu, two other City Council members and representatives of the Angels – including the team president and a team lawyer. Those mock City Council meetings would precede the scheduled public City Council meeting about the city’s proposed sale of Angel Stadium. The deleted email message had an attachment titled “Angels Council Debate Prep,” which detailed the topics on which each participant of the mock City Council meetings should focus, and it added “[Angels] team available to help develop ‘zingers’, responses, and other points to improve performance.”

Sidhu also admitted he had provided a confidential appraisal range to the Angels in 2019, months before the appraisal was made public.

During the investigation, FBI agents secretly recorded multiple statements by Sidhu about the $1 million campaign contribution that he expected to receive after the City of Anaheim sold Angel Stadium to the Angels, the plea agreement states.

Sidhu also admitted that he lied about the Angel Stadium sale negotiations and related matters when FBI agents interviewed him on May 12, 2022. For example, during that interview, Sidhu falsely stated that he was expecting “nothing” from the Angels after the Angel Stadium sale, when in truth, he was expecting to receive a $1 million campaign contribution for his election after the sale. Sidhu also admitted to lying about using his personal email for city business. “Not only did [Sidhu] conduct City business using his personal email, but he also communicated with some City staff using that staff’s personal email, purposely avoiding using the staff member’s official City email address,” the plea agreement states.

In his plea agreement, Sidhu also admitted that in late 2020, he tried to defraud the State of California of approximately $16,000 in sales tax revenue by using an Arizona address to register a helicopter he had just purchased, even though he lived in Anaheim. Sidhu admitted that he fraudulently used a mailing address in Scottsdale, Arizona that actually belonged to an Anaheim businessperson.

Sidhu also admitted that he provided false information for the helicopter to the Federal Aviation Administration when he submitted an “Aircraft Registration Application” that he signed and certified as true, but which falsely claimed his permanent mailing address was in Arizona.

Sidhu is expected to make his initial appearance in United States District Court in Santa Ana later this month.

Once Sidhu enters his guilty pleas, he will face a statutory maximum sentence of 10 years in federal prison for the obstruction of justice count, up to 20 years in federal prison for the wire fraud count, and up to five years in federal prison for each false statements count.

The FBI and IRS Criminal Investigation are conducting the ongoing investigation in this matter. U.S. Customs and Border Protection, Air and Marine Operations – Riverside Air Unit, provided substantial assistance in the investigation of Sidhu’s helicopter tax fraud.

Assistant United States Attorneys Charles E. Pell and Melissa S. Rabbani of the Santa Ana Branch Office are prosecuting this case. 

RIVERSIDE, California – A Riverside County man has been charged in a federal grand jury indictment alleging he sold a 17-year-old boy fentanyl in May, which resulted in the boy’s fatal overdose the following day, the Justice Department announced today.

Kyler Thomas Overby, 22, of Temecula, was arrested on Friday and was arraigned that day on the nine-count indictment, which a grand jury returned on August 9. He pleaded not guilty to the charges and a bond of $750,000 was set.

Overby is charged with one count of distribution of fentanyl to a person under the age of 21 resulting in death, seven counts of possession with intent to distribute controlled substances, and one count of knowingly possessing firearms in furtherance of drug trafficking crimes.

According to the indictment, on May 4, Overby knowingly an intentionally distributed fentanyl to the victim – identified in court documents as “L.B.” The following day, L.B., who was 17 years old, died after ingesting the fentanyl.

Overby allegedly also possessed with the intent to distribute multiple controlled substances, including 201 grams of fentanyl, nearly one kilogram of cocaine, MDMA and alprazolam (also known by its brand name, Xanax).

On June 5, Overby allegedly possessed multiple firearms in furtherance of drug trafficking. Specifically, he is charged with possessing three firearms lacking serial numbers, commonly referred to as “ghost guns” – a 9mm pistol and two .40-caliber pistols.

An October 2 trial date has been scheduled in United States District Court in Riverside.

If convicted of all charges, Overby would face a mandatory minimum sentence of 25 years in federal prison and a statutory maximum sentence of life imprisonment.

The Drug Enforcement Administration and the Riverside County Sheriff's Department are investigating this matter.

Assistant United States Attorney Miles J. Robinson of the Riverside Branch Office is prosecuting this case.

SACRAMENTO, Calif. — Kenneth O’Neil, 49, of Lodi, was sentenced today to six years and 10 months in prison for conspiracy to distribute and to possess with intent to distribute heroin, U.S. Attorney Phillip A. Talbert announced.

According to court documents, between June 7, 2018, and June 28, 2018, O’Neil sold at least 563 grams of heroin to a co-conspirator, who then sold those drugs to an undercover agent.        

This case was the product of an investigation by the Drug Enforcement Administration with assistance from the Calaveras County Sheriff’s Office, Homeland Security Investigations, and the California Department of Corrections and Rehabilitation. Assistant U.S. Attorneys Cameron L. Desmond and David W. Spencer prosecuted 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 www.justice.gov/OCDETF.

LOS ANGELES – A convicted killer who admitted to illegally possessing a loaded firearm and threatening to shoot rival gang members at a public park in Ventura County despite the presence of children was sentenced today to 60 months in federal prison.

Jose Alcaraz Guerrero, 34, a.k.a. “Kruz,” of Ventura, was sentenced by United States District Judge Fernando L. Aenlle-Rocha.

Guerrero pleaded guilty on March 24 to two counts of being a felon in possession of a firearm and ammunition.

Guerrero admitted in court that he illegally possessed a firearm and ammunition at Moranda Park in Port Hueneme in May 2020 and that he illegally possessed another firearm during the following month.

Guerrero was prohibited from possessing firearms and ammunition because of his 2011 conviction in Ventura County Superior Court of voluntary manslaughter. Guerrero served nine years in California state prison for this conviction before being paroled in early 2020.

Guerrero’s reason for possessing a loaded firearm at a public park was “to shoot at rival gang members, notwithstanding the presence of innocent civilians who would be caught in the crossfire,” prosecutors argued in a sentencing memorandum. Some of the bystanders in the park included children.

Guerrero has been in federal custody since July 2022.

The FBI investigated this matter, with substantial assistance from the Ventura County Sheriff’s Office, the Port Hueneme Police Department, and the Oxnard Police Department.

Assistant United States Attorney Kathy Yu of the Violent and Organized Crime Section prosecuted this case.

LOS ANGELES – A New York City man has been sentenced to 70 months in federal prison for leading a conspiracy that laundered money stolen from victims of romance scams and business email compromise scams, causing a total loss of nearly $1 million, the Justice Department announced today.

Okechukwu Nwofor, 32, of Brooklyn, New York, was sentenced on Monday by United States District Judge Stephen V. Wilson, who also ordered him to pay $392,296 in restitution. During Monday’s sentencing hearing, Judge Wilson described Nwofor as being the “kingpin” of the scheme as well as the “personification of evil.”

Nwofor pleaded guilty on February 21 to one count of conspiracy to commit money laundering.

In his plea agreement, Nwofor admitted to leading a money laundering conspiracy from at least July 2018 to August 2019. Nwofor used a network of individuals who received fraudulent proceeds obtained from the victims of romance and business email compromise scams. Once the illicitly obtained funds were received, Nwofor and his co-conspirators quickly withdrawn or transferred into accounts they controlled.

To accomplish this scheme, Nwofor opened bank accounts in his name and the name of an Albany, New York-based company he founded, Juboy New Generation Inc. Using these bank accounts as well as others controlled by his co-conspirators, Nwofor regularly laundered money stolen by his co-conspirators via romance scams and business email compromise scams, which were sent to them from victims via interstate wires.

Nwofor typically charged his co-conspirators approximately 20% of the incoming funds, and then distributed a portion of the remaining funds to his accomplices and others.

The total losses in this scheme exceeded $930,000.

For example, in September 2018, a romance scam victim, who was a Pasadena resident, wired approximately $19,000 to a New York-based bank account controlled by one of Nwofor’s accomplices. Over the course of three days, this accomplice – at Nwofor’s direction – wired approximately $16,140 of the victim’s stolen money to a Nwofor-controlled bank account.

“[Nwofor] and his co-conspirators’ fraudulent conduct has left many of the victims in dire straits, including one victim’s inability to care for her disabled son, the foreclose of another’s home, and even one victim tragically taking her own life,” prosecutors argued in a sentencing memorandum.

Four other defendants in this case admitted their roles as money mules and pleaded guilty to conspiracy to commit money laundering. Three of them received probationary sentences and one awaits sentencing.

The FBI investigated this matter and previously has issued public service announcements urging the public to beware of romance scams and business email compromise scams.

Assistant United States Attorneys Ali Moghaddas of the Major Frauds Section and Andrew M. Roach of the Cyber and Intellectual Property Crimes Section prosecuted this case.

SANTA ANA, California – A convicted felon who allegedly posed as an experienced Wall Street stock trader has been charged with running a securities scam that caused victim investors to lose approximately $3.1 million, the Justice Department announced today.

Christopher Anthony Slaga, 50, a.k.a. “Keith Renko,” was charged with eight counts of wire fraud in an indictment filed on August 2. Slaga is currently a fugitive being sought by authorities.

According to the indictment, from at least March 2018 through this year, Slaga operated several companies, including JMC 4 Group LLC and Q4 Capital Group LLC, that purportedly trading businesses that implemented “different strategies for long-term and short-term gains” through “a bifurcated trading approach.” In addition to being the president and CEO of these companies, Slaga – using his “Keith Renko” alias – purportedly ran JMC 4 and Q4 Capital’s East Coast operations and trading desk before establishing a West Coast office and a trading desk in Newport Beach.

Using private placement memoranda (PPM) – securities disclosure forms issued by companies engaging in private securities offerings – as well as websites, emails and telephone calls, Slaga allegedly solicited individual investors to make capital commitments of at least $25,000 to his companies, falsely telling them that he was running a hedge fund for lay people.

Slaga promised victims he would use their money to invest in a broad range of securities by using a proprietary computer-based quantitative and statistical algorithm through brokerage accounts at JPMorgan and Goldman Sachs, the indictment alleges. His purported investment objective was to “maximize total return on capital by seeking capital appreciation,” according to the indictment.

In each of the PPMs, Slaga allegedly falsely claimed he personally made capital investments of at least $2 million into his companies, and that he was a “seasoned trader,” who previously worked at Merrill Lynch and who was a Dartmouth College graduate.

Slaga allegedly failed to disclose as required to investors that in 2003 he was convicted of wire fraud in the Southern District of Texas, was sentenced to four years in federal prison, and was ordered to pay $19,665,300 in restitution.

Slaga allegedly never invested the victim investors’ money in JMC 4 and Q4 Capital. Instead, he used it to repay other investors, pay commissions, and for his own personal expenses, such as rent, loan and credit card payments, personal stock trading, and private school payments, according to the indictment. He allegedly also produced bogus documentation purportedly from Deloitte, JPMorgan and Goldman Sachs to show investors false holdings and fabricated returns.

In total, Slaga caused 13 investors to lose approximately $3.1 million, 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.

If convicted of all charges, Slaga would face a statutory maximum sentence of 20 years in federal prison for each wire fraud count.

The United States Securities and Exchange Commission on Monday filed a lawsuit against Slaga in connection with the alleged scheme to defraud investors.

The FBI is investigating this matter.

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

SANTA ANA, California – An Orange County man was sentenced today to life in federal prison for the October 2019 murder of a man whose body was found floating in the Pacific Ocean with bullet and blunt force trauma wounds.

Hoang Xuan Le, 42, a.k.a. “Wayne,” and “Wangsta,” of Fountain Valley, was sentenced by United States District Judge David O. Carter.

At the conclusion of a 17-day trial in December 2021, a jury found Le guilty of first-degree murder within the special maritime and territorial jurisdiction of the United States, conspiracy to commit murder, and using a firearm in furtherance of a crime of violence. In February 2022, Le pleaded guilty to eight narcotics-related felonies, including distribution of cocaine and methamphetamine.

On the night of October 15, 2019, Le lured the victim onto a boat owned by Sheila Marie Ritze, 43, of San Juan Capistrano, at Dana Point Harbor, with the promise of a late-night fishing trip. The victim owed Le a debt.

Around midnight, Ritze drove her boat out into the Pacific Ocean with Le and the victim on board. Le shot the victim on the boat, the victim went overboard, and Ritze and Le left the victim to die in the ocean, where he drowned. Le and Ritze then returned to Dana Point Harbor.

The victim’s body was recovered from the Pacific Ocean several miles northwest of Oceanside on October 16, 2019. The San Diego County Medical Examiner’s Office determined that he was a homicide victim who drowned after being shot and suffering blunt force trauma.

“Le committed murder, and, as a result, [the victim’s] family will never see him again,” prosecutors wrote in a sentencing memorandum. “Le’s crime has left a grieving mother, grieving widow, grieving brothers, a grieving sister, and two fatherless small children.”

On April 17, Ritze was sentenced to almost 22 years in federal prison for her role in the murder. Ritze was convicted of one count of second-degree murder within the special maritime and territorial jurisdiction of the United States, and one count of making false statements to federal investigators.

The Coast Guard Investigative Service and the FBI investigated this matter.

Assistant United States Attorneys Greg Scally and Gregory W. Staples of the Santa Ana Branch Office prosecuted this case.

LOS ANGELES – Federal prosecutors today unsealed a grand jury indictment that accuses a United States Navy service member with receiving bribes in exchange for transmitting sensitive U.S. military information to an intelligence officer from the People’s Republic of China.

Petty Officer Wenheng Zhao, 26, also known as Thomas Zhao, of Monterey Park, was arrested Wednesday by special agents with the FBI and the Naval Criminal Investigative Service (NCIS). Zhao, who is charged in the indictment with conspiracy and receipt of a bribe by a public official, is scheduled to be arraigned this afternoon in United States District Court in downtown Los Angeles.

The indictment alleges that Zhao, who worked at Naval Base Ventura County in Port Hueneme and held a U.S. security clearance, received bribes from a Chinese intelligence officer in exchange for violating his official duties as a U.S. sailor by, among other actions, disclosing non-public, sensitive U.S. military information.

Beginning in August 2021 and continuing through at least May 2023, at the Chinese intelligence officer’s direction, Zhao violated his official duties to protect sensitive military information by surreptitiously recording, and then transmitting to the intelligence officer, U.S. military information, photographs and videos, according to the indictment.

In exchange for bribes, Zhao allegedly sent the Chinese intelligence officer non-public and controlled operational plans for a large-scale U.S. military exercise in the Indo-Pacific Region, which detailed the specific location and timing of Naval force movements, amphibious landings, maritime operations and logistics support.

The indictment further alleges that Zhao photographed electrical diagrams and blueprints for a radar system stationed on a U.S. military base in Okinawa, Japan.

Zhao also obtained and transmitted details about the Navy’s operational security at the Naval Base in Ventura County and on San Clemente Island, including photographs and videos, according to the indictment.

The intelligence officer allegedly directed Zhao to conceal their relationship and to destroy evidence of the unlawful and corrupt scheme.

In exchange for the sensitive information Zhao provided – information Zhao accessed as a result of his position within the U.S. Navy – the Chinese intelligence officer paid Zhao approximately $14,866, the indictment alleges.

“By sending this sensitive military information to an intelligence officer employed by a hostile foreign state, the defendant betrayed his sacred oath to protect our country and uphold the Constitution,” said United States Attorney Martin Estrada. “Unlike the vast majority of U.S. Navy personnel who serve the nation with honor, distinction and courage, Mr. Zhao chose to corruptly sell out his colleagues and his country.”

“By accepting cash bribes from a hostile nation whose leaders are intent on stealing American secrets, Zhao betrayed his military oath and sold out his country while he brazenly put Americans and our servicemen at risk, said Donald Alway, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “Zhao’s alleged actions are a reminder that American citizens with access to state secrets or intellectual property are being targeted by the Chinese government. The FBI will continue to seek out such behavior with our partners and hold offenders accountable.”

“NCIS is committed to protecting the Department of the Navy’s sensitive information to ensure the safety of the warfighter and our nation,” said Special Agent in Charge Brice Miller of the 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.”

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

If he were to be convicted of the two counts in the indictment, Zhao would face a statutory maximum sentence of 20 years in federal prison. 

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 are prosecuting this case. The Counterintelligence and Export Control Section at the Department of Justice is providing substantial assistance.

In two separate cases in the Southern and Central Districts of California, two U.S. Navy servicemembers were arrested for transmitting sensitive military information to the People’s Republic of China (PRC).

“These individuals stand accused of violating the commitments they made to protect the United States and betraying the public trust, to the benefit of the PRC government,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division. “The Department of Justice will continue to use every tool in our arsenal to counter threats from China and to deter those who aid them in breaking our laws and threatening our national security.”

“These arrests are a reminder of the relentless, aggressive efforts of the People’s Republic of China to undermine our democracy and threaten those who defend it,” said Assistant Director Suzanne Turner of the FBI’s Counterintelligence Division. “The PRC compromised enlisted personnel to secure sensitive military information that could seriously jeopardize U.S. national security. The FBI and our partners remain vigilant in our determination to combat espionage, and encourage past and present government officials to report any suspicious interactions with suspected foreign intelligence officers.”

United States v. Jinchao Wei, Southern District of California

A U.S. Navy sailor, Jinchao Wei, aka Patrick Wei, was arrested yesterday on espionage charges as he arrived for work at Naval Base San Diego, the homeport of the Pacific Fleet. He was indicted for conspiracy to send national defense information to an intelligence officer working for the People’s Republic of China.

The indictment, unsealed this morning, alleges that Wei, was an active-duty sailor on the amphibious assault ship the U.S.S. Essex stationed at Naval Base San Diego. In his role as a machinist’s mate, Wei held a U.S. security clearance and had access to sensitive national defense information about the ship’s weapons, propulsion and desalination systems. Amphibious assault ships like the Essex resemble small aircraft carriers and allow the U.S. military to project power and maintain presence by serving as the cornerstone of the U.S. Navy’s amphibious readiness and expeditionary strike capabilities.

According to the indictment, in February 2022, Wei began communicating with an intelligence officer from the PRC who requested that Wei provide information about the U.S.S. Essex and other Navy ships. Specifically, the Chinese intelligence officer tasked Wei with passing him photos, videos and documents concerning U.S. Navy ships and their systems. The two agreed to hide their communications by deleting records of their conversations and using encrypted methods of communication.

At the request of the intelligence officer, between March 2022 and the present, Wei sent photographs and videos of the Essex, disclosed the locations of various Navy ships and described defensive weapons of the Essex. In exchange for this information, the intelligence officer paid Wei thousands of dollars over the course of the conspiracy.

The indictment further alleges that in June 2022, Wei sent the intelligence officer approximately 30 technical and mechanical manuals. These manuals contained export control warnings and detailed the operations of multiple systems aboard the Essex and similar ships, including power, steering, aircraft and deck elevators, as well as damage and casualty controls. The intelligence officer confirmed with Wei that at least 10 of those manuals were useful to him. For passage of those materials, the indictment alleges that Wei was paid $5,000.

In June 2022, the intelligence officer requested that Wei provide information about the number and training of U.S. Marines during an upcoming international maritime warfare exercise. In response to this request, Wei sent multiple photographs of military equipment to the intelligence officer.

In August 2022, Wei sent an additional 26 technical and mechanical manuals related to the power structure and operation of the Essex and similar ships. The manuals contained warnings that this was technical data subject to export controls and that it was deemed “critical technology” by the U.S. Navy.

The indictment further alleges that in October 2022, Wei sent a technical manual to the intelligence officer describing the layout and location of certain departments, including berthing quarters and weapons systems. Specifically, Wei sent a weapons control systems manual for the Essex and similar ships. This manual contained export-controlled data that could not be exported without a license from the U.S. government. The indictment alleges that Wei knowingly violated the International Traffic in Arms Regulations by transmitting this manual to the Chinese intelligence officer without obtaining a required license. 

The intelligence officer continued to request information in 2023, including information about the overhaul and upgrades to the Essex. Specifically, he requested blueprints, especially those related to modifications to the flight deck. Wei provided information related to the repairs the Essex was undergoing, as well as other mechanical problems with similar vessels.

During the alleged conspiracy, the intelligence officer instructed Wei to gather U.S. military information that was not public and admonished him not to discuss their relationship and to destroy any evidence regarding the nature of their relationship and their activities.

“We have entrusted members of our military with tremendous responsibility and great faith,” said U.S. Attorney Randy Grossman for the Southern District of California. “Our nation’s safety and security are in their hands. When a soldier or sailor chooses cash over country, and hands over national defense information in an ultimate act of betrayal, the United States will aggressively investigate and prosecute.”

U.S. Attorney Grossman thanked the prosecution team and investigating agencies for their excellent work on this case.

The FBI and Naval Criminal Investigative Service (NCIS) investigated the case.

Assistant U.S. Attorneys John Parmley and Fred Sheppard for the Southern District of California and Trial Attorney Adam Barry of the National Security Division’s Counterintelligence and Export Control Section are prosecuting the case.

United States v. Wenheng Zhao, Central District of California

A U.S. Navy servicemember, Petty Officer Wenheng Zhao, aka Thomas Zhao, 26, of Monterey Park, California, was arrested following an indictment by a federal grand jury, charging him with receiving bribes in exchange for transmitting sensitive U.S. military information to an individual posing as a maritime economic researcher, but who was actually an intelligence officer from the PRC.

The indictment alleges that Zhao, who worked at Naval Base Ventura County in Port Hueneme and held a U.S. security clearance, received bribes from a Chinese intelligence officer in exchange for violating his official duties as a U.S. sailor by, among other actions, disclosing non-public sensitive U.S. military information.

Beginning in August 2021 and continuing through at least May 2023, at the Chinese intelligence officer’s direction, Zhao allegedly violated his official duties to protect sensitive military information by surreptitiously recording, and then transmitting to the intelligence officer, U.S. military information, photographs and videos. According to the indictment, the Chinese intelligence officer told Zhao that the intelligence officer was a maritime economic researcher seeking the information for investment decisions.

In exchange for bribes, Zhao allegedly sent the Chinese military officer non-public and controlled operational plans for a large-scale U.S. military exercise in the Indo-Pacific Region, which detailed the specific location and timing of Naval force movements, amphibious landings, maritime operations and logistics support.

The indictment further alleges that in exchange for bribes, Zhao also photographed electrical diagrams and blueprints for a radar system stationed on a U.S. military base in Okinawa, Japan.

The intelligence officer allegedly directed Zhao to conceal their relationship and to destroy evidence of the unlawful and corrupt scheme.

In exchange for the sensitive information Zhao provided – information Zhao accessed as a result of his position within the U.S. Navy – the Chinese intelligence officer paid Zhao approximately $14,866, the indictment alleges.

“By sending this sensitive military information to an intelligence officer employed by a hostile foreign state, the defendant betrayed his sacred oath to protect our country and uphold the Constitution,” said U.S. Attorney Martin Estrada for the Central District of California. “Unlike the vast majority of U.S. Navy personnel who serve the nation with honor, distinction and courage, Mr. Zhao chose to corruptly sell out his colleagues and his country.”

If convicted, Zhao faces a maximum penalty of 20 years in prison. 

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

Assistant U.S. Attorneys Annamartine Salick, Sarah Gerdes, Christine Ro and Kathrynne Seiden of the Terrorism and Export Crimes Section for the Central District of California are prosecuting this case. Trial Attorney Adam Barry of the National Security Division’s Counterintelligence and Export Control Section is providing substantial assistance.

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

Wei Indictment Zhao Indictment

LOS ANGELES – The former president and CEO of a Whittier medical clinic pleaded guilty today to submitting fraudulent billings to a Medi-Cal health care program that provides family planning services to low-income Californians without health insurance.

Vincenzo Rubino, 58, of Valencia, pleaded guilty to nine counts of health care fraud and two counts of aggravated identity theft in the middle of his federal criminal trial, in which the prosecution had nearly concluded its case. 

According to evidence presented at trial, 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, Santa Maria’s 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, but who in fact never received the examinations and other services. 

To submit many of these claims, Rubino used the names of two medical providers whom the patients did not see and who did not even work for Santa Maria’s at the time -- 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 stemming from referrals based on the same services that were never delivered.  

United States District Judge Otis D. Wright II scheduled a sentencing hearing for January 22, 2024, at which time Rubino will face up to 10 years in federal prison for each health care fraud count, and a mandatory sentence of two years in federal prison consecutive to the other sentences for each aggravated identity theft count.

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 and David H. Chao of the Major Frauds Section are prosecuting this case.

INDICTMENT

LOS ANGELES – The lead defendant in an indictment that charges three Southern California men linked to a white supremacy extremist group with planning and engaging in riots at political rallies across California has been extradited to the United States from Romania, the Justice Department announced today.

Robert Paul Rundo, 33, of Huntington Beach, allegedly a founding member of the Rise Above Movement (RAM), was transported by special agents with the FBI from Romania to Hollywood Burbank Airport, where he arrived Tuesday evening. Rundo is in federal custody and is expected to make his initial appearance and be arraigned this afternoon in United States District Court in Los Angeles.

Rundo, along with two other defendants, is charged with conspiracy to violate the Anti-Riot Act for his activities in connection with RAM, a white supremacist organization that represented itself “publicly…as a combat-ready, militant group of a new nationalist white supremacy and identity movement,” according to a federal grand jury indictment.

In addition to the conspiracy charge, Rundo also is charged with one count of rioting.

The other defendants charged in this case are:

• Robert Boman, 30, of Torrance; and
• Tyler Laube, 27, of Redondo Beach.

Boman and Laube are charged with conspiracy to violate the Anti-Riot Act. Boman also is charged with one count of rioting.

The trial date in this matter is scheduled for December 12.

According to the indictment, the defendants participated in the conspiracy in varying ways, including by engaging in recruitment of RAM members, coordinating and participating in hand-to-hand and other combat training, traveling to political rallies to attack protesters and other persons, and publishing photographs and videos of violent acts to recruit other members for future events.

The indictment alleges that various members of the conspiracy directly participated in attacks at political rallies in Huntington Beach on March 25, 2017; in Berkeley on April 15, 2017; and in San Bernardino on June 10, 2017. In the months following these events, the defendants allegedly trained for future events and celebrated their assaults, which included online posts with photos of RAM members assaulting people.

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.

In June 2019, a federal district court dismissed the indictment against Rundo and the other defendants, finding that the federal Anti-Riot Act violated the First Amendment. In March 2021, the United States Court of Appeals for the Ninth Circuit reversed the district court’s dismissal and the criminal charges were reinstated.   

Both the conspiracy and rioting charges carry statutory maximum sentences of five years in federal prison.

The FBI’s Joint Terrorism Task Force is investigating this case.

The Justice Department’s Office of International Affairs and the FBI’s Legal Attaché Office in Bucharest provided substantial assistance in securing the arrest and extradition of Rundo.

The Romanian National Police, Directorate of Combatting Organized Crime and Terrorism (DCCO), Fugitive Unit; the Romanian General Prosecutor's Office and Border Police; the U.S. Embassy Bucharest Regional Security Office and Consular Section/American Citizen Services, in coordination with Interpol Romania, provided substantial assistance in securing the arrest and extradition of Rundo. The Romanian Ministry of Justice, Directorate for International Law and Judicial Cooperation, Division of International Judicial Cooperation in Criminal Matters, also provided significant assistance.  

Assistant United States Attorneys Solomon Kim and Kathrynne N. Seiden, both of the Terrorism and Export Crimes Section, are prosecuting this case.

SANTA ANA, California – Two Orange County residents have been charged by a federal grand jury with fraudulently obtaining more than $2 million by stealing the identities of homeowners – primarily elderly Vietnamese Americans – and duping banks into “cashing out” mortgages on those properties, the Justice Department announced today.

Thao Thi Kim Nguyen, 47, of Garden Grove, and Nghiep Chinh Nguyen, 55, of Westminster, were arraigned Monday afternoon in United States District Court in Santa Ana.

Both defendants, who have been granted bond, are charged with one count of conspiracy to commit bank fraud and wire fraud. Thao Nguyen additionally is charged with seven counts of bank fraud and three counts of aggravated identity theft. Nghiep Nguyen is charged further with two counts of bank fraud and one count of aggravated identity theft.

At their arraignments, the defendants pleaded not guilty to the charges against them. A September 26 trial date was scheduled in this matter.

The schemers allegedly obtained a type of mortgage that allows homeowners to convert home equity into cash by borrowing against the value of the property.

According to an indictment returned on July 26, during a roughly four-month period in 2018, Thao Nguyen opened accounts in her name at two banks. The alleged purpose of these bank accounts was to collect the scheme’s ill-gotten gains.

Thao Nguyen then would visit the bank, accompanied Nghiep Nguyen and other co-schemers. Nghiep Nguyen and other co-schemers posed as the victim homeowners – whose identities they allegedly had stolen – and forged the victims’ signatures to fraudulently obtain cash-out mortgages on the victim-owned properties, which otherwise were unencumbered.

To pursue the fraud, Nghiep Nguyen allegedly used counterfeit California driver’s licenses and Social Security cards containing the victims’ names, and forged the victims’ signatures on documents, including bank and mortgage forms as well as grant deeds for the victims’ real estate properties. The victims’ names also were added to the Thao Nguyen-controlled bank accounts.

Thao Nguyen allegedly used her accounts to receive wire transfers totaling more than $2 million in fraudulently obtained cash-out mortgage proceeds. She allegedly would transfer the fraudulently obtained mortgage proceeds to other bank accounts she controlled and would make cash withdrawals totaling approximately $1 million. The remaining funds were distributed to the co-schemers.

In total, the defendants fraudulently obtained approximately $2,182,753 through the scheme, the indictment alleges.

For example, in July 2018, Thao Nguyen opened a bank account in her name. Later that month, Nghiep Nguyen and another co-schemer, accompanied by Thao Nguyen allegedly posed as two homeowners at the bank branch in Orange.

Two days later, Nghiep Nguyen allegedly forged the two victim homeowners’ signatures on a grant deed for properties in Garden Grove and Long Beach. Nghiep Nguyen and another co-schemer allegedly then used fake IDs in the victims’ names to add those names to Thao Nguyen’s bank account. While doing so Thao Nguyen told bank personnel that the victims were her parents, according to the indictment.

In August 2018, Thao Nguyen allegedly received a wire transfer of approximately $623,196 in fraudulent mortgage proceeds. She then transferred most of the ill-gotten funds to accounts she and another co-schemer controlled, 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.

If convicted of all charges, the defendants would face a statutory maximum sentence of 30 years in federal prison for each conspiracy and fraud charge, and a mandatory sentence of two years in federal prison for each aggravated identity theft charge.

The FBI, the Federal Deposit Insurance Corporation Office of Inspector General, and IRS Criminal Investigation are investigating this matter. The Long Beach Police Department, the California Attorney General’s Office, and investigators with the Alameda County District Attorney’s Office provided assistance.

Assistant United States Attorney Charles E. Pell of the Santa Ana Branch Office and Special Assistant United States Attorney Gregory B. Wagner are prosecuting this case.

LOS ANGELES – A Wilmington man was sentenced today to 180 months in federal prison for committing an armed robbery spree of businesses in the South Bay area of Los Angeles County, during which time he pointed a gun at a pregnant woman working at a gas station.

Stevo Mijanovic, 20, was sentenced by United States District Judge R. Gary Klausner, who also ordered him to pay $2,733 in restitution.

Mijanovic pleaded guilty on March 6 to two counts of Hobbs Act robbery and one count of brandishing a firearm in furtherance of a crime of violence.

From August 2021 to January 2022, Mijanovic robbed six businesses in the Wilmington area of Los Angeles, robbed two other businesses in San Pedro and Torrance, and attempted to rob another business in San Pedro. The victim businesses were restaurants, convenience stores and gas stations and their employees.

“[Mijanovic] committed six armed robberies, one attempted armed robbery, and two robberies in which he brandished what appeared to be a firearm,” prosecutors wrote in a sentencing memorandum. “He terrorized victim employees and bystanders at each location, using fear to obtain money from the victim businesses.”

In December 2021, Mijanovic pointed a firearm at a victim, who was a pregnant gas station employee in Wilmington. The victim “complied out of fear as she told [Mijanovic] she was pregnant and allowed [him] to take approximately $180 from the cash register,” according to Mijanovic’s plea agreement.

Mijanovic admitted to netting between $80 and $1,000 per robbery. He obtained $2,733 during his crime spree.

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

Assistant United States Attorney Jennifer Chou prosecuted this case.

LOS ANGELES – A San Fernando Valley man associated with a racially motivated violent extremist group is expected to appear in federal court later today after being charged this morning in a criminal complaint with conspiring to distribute methamphetamine and being a felon in possession of ammunition.

Ryan Scott Bradford, 34, of Reseda, was arrested at his residence Thursday and is expected to make his initial appearance this afternoon at United States District Court in downtown Los Angeles.

As alleged in the complaint, between 2021 and January 2023, Bradford posted online messages and photographs documenting his use of a 3-D printer to manufacture firearms, as well as calling for the mass murder of Jews.

During a search of Bradford’s residence yesterday, agents and officers with the FBI, the DEA and the LAPD recovered 116 rounds of ammunition, which Bradford is prohibited from possessing due to a 2012 burglary conviction; firearms parts – including two 3D printed auto sears and five “switches,” both of which are used to convert semi-automatic firearms into fully-automatic firearms; two 3D printers, one of which had swastikas painted on it; various Nazi propaganda; and an apparent improvised explosive device (IED). Following the discovery of the apparent IED yesterday morning, law enforcement temporarily shut down streets in the vicinity of Bradford’s residence.

“As alleged, this convicted felon affiliated with a violent white supremacist group who espouses horrific acts of violence against Jews appears to be manufacturing firearms and possessing an improvised explosive device,” said United States Attorney Martin Estrada. “The potential danger to the community cannot be overstated. We will continue to investigate this matter to ensure that this defendant is held accountable for his crimes, and to keep our community safe from acts of violence motivated by racist and hateful ideology.”

“The defendant is a self-described anti-Semite associated with a white supremacist group which espouses the hatred of Jews and other minorities,” said Donald Alway, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “Hateful rhetoric that crosses the line into violence will get the attention of law enforcement and those who engage in such extremism will be held accountable should they act upon their violent rhetoric.”

“Dangerous individuals that conspire to distribute synthetic drugs, such as methamphetamine, are driving addiction and death in our communities,” said DEA Los Angeles Special Agent in Charge Bill Bodner. “The interagency collaboration with our local and federal partners was instrumental in preventing further violence and harm in our neighborhoods.”

“The LAPD values the ongoing partnership with the FBI and the U.S. Attorney in the pursuit of disrupting gun trafficking and the devastating impact these firearms have in our communities,” said Los Angeles Police Chief Michel R. Moore.

According to an affidavit filed with the complaint, Bradford used an Amazon account with the username “Peck Erwood” with a woodpecker avatar. The woodpecker is a logo used by the San Fernando Valley Peckerwoods, a racially motivated violent extremist group based in Los Angeles County. The Peckerwoods originated in the California state prison system and its members have engaged in racially motivated violence, drug and illegal firearms trafficking, and fraud, according to the affidavit.

As alleged in the complaint, Bradford – using online usernames referencing the Peckerwoods – used messaging applications such as Telegram to post racist remarks against Jewish people, including calling for mass murder and genocide of Jews.  Yesterday, law enforcement recovered from Bradford’s residence a calendar with a handwritten note stating: “New Year’s Resolution: Take over the world – save Aryan race *Bake every single Jew.*” Bradford also posted links and instruction manuals on Telegram concerning hand grenades, biological warfare, and the “Aryan Revolution,” and he offered to make firearms and firearm parts for others using 3-D printers, according to the complaint.

The affidavit further alleges that Bradford sent text messages in November 2022 to coordinate the distribution of methamphetamine and sent two photographs of methamphetamine to a buyer. The complaint alleges that he conspired with Kris Dean Drakakis, 42, another member of the Peckerwoods, who was indicted on June 30 on charges of possession with intent to distribute methamphetamine, heroin, and fentanyl; possession of a firearm in furtherance of drug trafficking crimes; and being a felon in possession of ammunition. Drakakis has pleaded not guilty to the charges and has an August 22 trial date scheduled. He is in federal custody.

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

If convicted of the charges in the complaint, Bradford would face a statutory maximum sentence of 20 years in federal prison for the drug conspiracy charge and up to 15 years in federal prison for the ammunition possession charge.

The FBI’s Joint Terrorism Task Force, the Drug Enforcement Administration, and the Los Angeles Police Department are investigating this matter.

Assistant United States Attorney Reema El-Amamy of the Terrorism and Export Crimes Section is prosecuting this case.

LOS ANGELES – A coalition of federal and local authorities this morning announced federal charges against 10 members and associates of a San Gabriel Valley gang who are named in a series of federal grand jury indictments that allege a wide range of criminal conduct. The crimes alleged include the fatal shooting of a woman who was gunned down when a gang member attempted to kill a person who was providing information to law enforcement.

Today’s takedown targeted the Quiet Village (QV) street gang and is the result of an investigation that started soon after June 14, 2022, when a member of that gang murdered two El Monte police officers – Sergeant Michael Paredes and Officer Joseph Santana.

The investigation was conducted by the FBI’s San Gabriel Valley Safe Streets Task Force and involved agents and officers assigned to the Task Force from the FBI, the El Monte Police Department, the Los Angeles County Sheriff’s Department, the Pomona Police Department and the California Department of Corrections and Rehabilitation’s Special Service Unit. The Bureau of Alcohol, Tobacco, Firearms and Explosives participated in the investigation.

“A highly violent gang responsible for the murders of two brave police officers and others has now felt the weight of a collective law enforcement response. The gang’s days of terrorizing the community stop with today’s federal arrests,” said United States Attorney Martin Estrada. “The indictments we announce today should assure the community that we are here to protect you, and we will use our full resources to fight violent crime and thereby ensure that everyone in Southern California, no matter where they live, has a safe place to live and raise their families.”

“The San Gabriel Valley Safe Streets Task Force works with multiple law enforcement departments throughout the valley to address violent crime, including the alleged crimes by the gang members and associates being charged in Operation Silent Cadence,” said Donald Alway, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “We expect this operation to deal a death blow to these criminal enterprises and their ability to maintain power in the neighborhoods they controlled, and to deliver a measure of justice to the families of the victims mercilessly targeted in the various crimes alleged.”

“Today, the El Monte Police Department, the FBI and all of our partner agencies told every American we will never stop in the pursuit of justice when the most heinous of crimes are committed that harm our communities,” said El Monte Police Chief Jake Fisher.

A total of 10 defendants are charged across four grand jury indictments and a criminal complaint. Today, two defendants were arrested; four were already in custody; and authorities are continuing to search for four fugitives. (Additional defendants were taken into custody today on local charges.)

The main indictment alleges violations of two federal racketeering statutes – a conspiracy to violate the Racketeer Influenced and Corrupt Organizations (RICO) Act, and violent crimes in aid of racketeering – as well as firearms and narcotics offense. The remaining three indictments allege narcotics trafficking and firearms charges.

The RICO count – which charges three defendants – outlines the history of QV; its close alliance with another street gang, Whittier Varrio Locos (WVL); and its association with the Mexican Mafia prison gang. The indictment alleges three main areas of criminal conduct: an attempted murder of a rival gang member, the targeting of an informant that resulted in the death of a bystander, and the gang’s operation of a “casita” that offered illegal gambling and narcotics.

According to the 46-page RICO indictment:

The lead defendant in the case – Chase Carrillo, aka “Sicko,” 34, a shot caller in QV – became involved in a verbal altercation with a rival gang member in El Monte on January 13, 2022. That altercation ended with Carrillo and WVL shot caller Ronny Rojas shooting the rival gangster, who was struck 8 to 10 times and severely wounded. A man identified in the indictment as J.P. was ordered to drive the getaway vehicle.

Authorities investigated the incident and local prosecutors filed charges against Carrillo and Ronny Rojas. In early March 2022, Rojas obtained a police report about the incident that named J.P. as a person who provided authorities information about the shooting. Rojas asked WVL member Maria Garcia, who was present at the shooting, to distribute the report. Rojas later said it should go “to all the homies,” which the indictment alleges was a message to fellow gang members that “J.P. should be murdered for cooperating with law enforcement.”

On March 5, 2022, only two days after the police report began circulating among gang members, Carrillo and Garcia – who were driving a car rented with a credit card Garcia had stolen – encountered J.P. in the City of Commerce. Carrillo got out of the rental car and fired at least two rounds into the vehicle J.P. was riding in with the intent to kill him. J.P. was not hit, but the driver of the vehicle – a woman identified in court documents as M.F. – was fatally wounded.

Soon after this killing, Garcia attempted to sell the 9mm ghost gun Carrillo used to kill M.F. One week after the slaying, Garcia told another gang associate, “yeah she was driving his car” and later said, “sometimes you gotta take matters into your own hands, you know?”

QV members and associates also operated casita – an illegal gambling business – behind a smoke shop in Whittier. After the murder of the El Monte Police officers, gang members “placed posters, stickers, and graffiti at QV’s illegal gambling business and elsewhere to celebrate the actions of [the murderer] and in order to advance their gang’s reputation for violence and intimidate others.”

In addition to illegal gambling, the casita was used to distribute methamphetamine. The indictment specifically alleges that QV member Richard Guzman, 40, engaged in five transactions involving methamphetamine in July and August of 2022. The complaint alleges that Vincent Gutierrez also sold methamphetamine at the casita. Additionally, the indictment alleges that a Kansas-based gang member, 43-year-old Raphael Solorzano, drove 7 pounds of methamphetamine from Kansas to Southern California with the intent to sell the narcotics.

One of the three narcotics-trafficking indictments alleges that Ronny Rojas, while he was incarcerated in the Los Angeles County Jail in relation to the attempted murder offense, conspired with a relative to distribute suboxone, an opioid marketed as a treatment for opioid addiction, but which is sometimes abused.

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

The defendants taken into custody today are expected to be arraigned this afternoon in United States District Court in downtown Los Angeles.

Each defendant faces a substantial prison sentence if they were to be convicted. For example, Carrillo, who is charged in the RICO count, a violent crime in aid of racketeering and using a firearm in a violent crime resulting in the death of M.F. would face a sentence of life without parole or a potential death sentence if he were convicted.

The FBI’s San Gabriel Valley Safe Streets Task Force, which includes the Drug Enforcement Administration, conducted this investigation. The Task Force received substantial assistance from the Whitter Police Department, the Bell Gardens Police Department, the Arcadia Police Department, the West Covina Police Department, the Covina Police Department, and the San Bernardino County Sheriff’s Department.

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

LOS ANGELES – The owner of an Orange County real estate finance business has pleaded guilty to fraudulently obtaining more than $5.2 million by making false promises to an investor that shares of his private company were about to be publicly traded on the Nasdaq stock exchange, the Justice Department announced today.

Jacques Poujade, 63, of Irvine, pleaded guilty late Monday afternoon to one count of securities fraud.

According to his plea agreement, Poujade is the owner and chief financial officer of Tri-Emerald Financial Group, a Lake Forest-based realty services company that operated as a residential mortgage lender. Tri-Emerald funded loans as a mortgage banker, with the intent to hold the funded loans for immediate resale to financial institutions that purchased the loans for investments. Neither Tri-Emerald nor its securities were ever registered with the United States Securities and Exchange Commission.

From February 2015 to May 2020, Poujade sold unregistered securities to a victim investor by telling the victim a series of lies, including about the timing and likelihood of Tri-Emerald’s initial public offering (IPO) and the resulting share price. The victim purchased shares in Tri-Emerald at $10 per share, after Poujade represented they were “securities” under federal law and would exceed the price of $100 per share once the company went public.

Poujade falsely promised the victim that Tri-Emerald was a pre-IPO opportunity that would provide high returns when the company soon went public on Nasdaq. In fact, Tri-Emerald had not completed the necessary steps to undertake an IPO, including filling out the required SEC paperwork or formally engaging the investment banks Poujade falsely told the victim he had engaged as underwriters.

Poujade admitted that he further lied to the victim by saying one investment bank “was super excited about moving forward” and estimated that Tri-Emerald would “be a billion dollar company in under 16 months,” according to the plea agreement.

He also said Tri-Emerald was using the victim’s investment to cover IPO costs when, in fact, Poujade used a substantial portion of the funds for general Tri-Emerald operating expenses and to make lulling payments and litigation settlement payments to previous Tri-Emerald investors. Poujade also used a portion of the funds for personal expenditures in lieu of taking a salary.

In total, Poujade fraudulently obtained approximately $5,255,600 from the victim.

In his plea agreement, Poujade further admitted to defrauding another victim and that victim’s investment group in July 2016 by convincing them to purchase 30-day promissory notes issued by LendPlus Holdings, another one of Poujade’s companies. These notes purportedly were to be used to increase Tri-Emerald’s warehouse line of credit, which would allow Tri-Emerald to fund a larger volume of mortgages.

At the end of the term of the 30-day promissory notes, instead of repaying victim investors, Poujade continuously rolled victim investors’ funds over into the next month. On numerous occasions, Poujade lulled the victims by falsely claiming their money was safe in a reserve account and LendPlus was using their funds to improve Tri-Emerald’s loan production and line of credit.

In reality, Poujade used a substantial portion of these funds to make lulling payments to previous Tri-Emerald investors, to pay Tri-Emerald’s operating expenses, and for his own personal use, including paying rent on his residence.

Poujade admitted to defrauding these investors out of approximately $915,000.

United States District Judge Mark C. Scarsi scheduled an October 30 sentencing hearing, at which time Poujade will face a statutory maximum sentence of 20 years in federal prison.

The FBI and the United States Department of Housing and Urban Development Office of Inspector General investigated this matter.

Special Assistant United States Attorney Ryan G. Adams of the Santa Ana Branch Office is prosecuting this case.

LOS ANGELES – An entertainment industry accountant pleaded guilty today to a felony charge for lying to federal law enforcement officials about his role in laundering illicit proceeds from an illegal gambling operation run by a former minor-league baseball player and which involved professional athletes.

William Eric Fulton, 59, of Agoura Hills, pleaded guilty to one count of making false statements.

According to his plea agreement, Fulton and his company provided bookkeeping, accounting, and tax preparation services for Wayne Joseph Nix, 46, of Newport Coast, a former minor-league baseball player who for nearly 20 years ran an illegal bookmaking business.

Beginning no later than 2011, Fulton was aware that Nix ran an illegal gambling business. Nonetheless, Fulton knowingly laundered Nix’s illegal gambling proceeds by continuing to provide financial services to Nix and providing access to the financial system. Specifically, Fulton continued to transfer money between accounts, issue checks and wires to Nix’s gambling clients who won large bets, and helped Nix obtain bank loans to facilitate the gambling business. Between 2010 and 2020, Fulton charged Nix approximately $336,645 in professional fees for his financial services.  

Fulton also admitted in his plea agreement that on three separate occasions from March 2011 to October 2019 he provided personal loans to Nix totaling $1.25 million, which allowed Nix to pay his gambling clients when Nix needed rapid access to funds, which Fulton agreed to provide at no cost to Nix.

In addition, Fulton placed personal bets with Nix via the Sand Island Sports website. On one day, Fulton placed 14 bets, including three bets he made on a professional match of one of his company’s clients. Fulton also referred at least one of his company’s clients to Nix for the purposes of illegal gambling.

During an October 2021 interview with federal law enforcement about the Nix gambling business, Fulton falsely denied all knowledge of Nix’s involvement in sports gambling, falsely claimed to have had no knowledge that Nix was a bookmaker until learning law enforcement had searched Nix’s home in February 2020, and repeatedly made the false assertion that he had never placed a bet with Nix.

United States District Judge Dolly M. Gee scheduled a November 29 sentencing hearing, at which time Fulton will face a statutory maximum sentence of five years in federal prison. Fulton has agreed to pay a fine of no less than $673,290.

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. His sentencing hearing is scheduled for March 6, 2024.

Nix’s longtime partner in the gambling operation – Edon Yoshida Kagasoff, 45, of Lake Forest – pleaded guilty in April 2022 to one count of conspiracy to operate an illegal gambling business. Kagasoff was sentenced on July 5 to six months of probation, was fined $1,000, and was ordered to forfeit $3,164,563 in ill-gotten gains.

Former Major League Baseball player Yasiel Puig Valdés, 32, who allegedly lied to federal law enforcement investigating Nix’s illegal gambling operation, is charged with obstruction of justice and making false statements. His trial is scheduled for January 16, 2024.

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

Homeland Security Investigations and IRS Criminal Investigation are conducting the ongoing investigation in this matter. The HSI agents are part of the El Camino Real Financial Crimes Task Force.

Assistant United States Attorneys Jeff Mitchell of the Major Frauds Section and Dan Boyle of the Environmental Crimes and Consumer Protection Section are prosecuting this case.

LOS ANGELES – A federal jury today found a La Verne woman guilty of federal criminal charges related to her role as a “secretary” to an imprisoned Mexican Mafia “shot caller” who controlled Latino gangs in Pomona, including facilitating an armed robbery and shooting, as well as distribution of narcotics and extortion. 

Kelly Deshannon, 42, was found guilty of one count of conspiracy to violate the Racketeer Influenced and Corrupt Organizations (RICO) Act, one count of committing a violent crime in support of racketeering activity (VICAR), and one count of using a firearm in furtherance of a violent crime.   

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

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

Lerma, who is this case’s lead defendant, was indicted in 2018 and has pleaded not guilty to RICO conspiracy and multiple other federal charges. His trial is scheduled for July 23, 2024. He is in federal custody.

United States District Judge George H. Wu scheduled an October 26 sentencing hearing, at which time Deshannon will face a statutory mandatory minimum sentence of seven years in federal prison and a statutory maximum sentence of 20 years in federal prison.

At the conclusion of a 10-day trial in March 2023, a federal jury found Deshannon not guilty of attempted carjacking and deadlocked on four other counts. At the request of federal prosecutors, Judge Wu on June 28 dismissed one VICAR count against Deshannon.

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

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

LOS ANGELES – A NASA-Jet Propulsion Laboratory (JPL) employee has agreed to plead guilty to defrauding a government-sponsored loan program designed to help people and businesses survive the COVID-19 pandemic’s economic impact and has admitted that he used part of the proceeds to fund illegal marijuana cultivation, the Justice Department announced today.

Armen Hovanesian, 32, of Glendale, a cost-control and budget-planning resource analyst for the JPL, a federally funded research and development center operated by the California Institute of Technology for NASA, agreed to plead guilty to a single-count information charging him with wire fraud. Both the information and a plea agreement were filed Thursday in United States District Court. Hovanesian is expected to make his initial court appearance on August 11. 

According to the plea agreement, from June 2020 to October 2020, Hovanesian submitted three loan applications in the names of business entities under his control to the Economic Injury Disaster Loan Program (EIDL), a program administered by the Small Business Administration (SBA) that provided low-interest financing to small businesses, renters, and homeowners in regions affected by declared disasters, including businesses impacted by the COVID-19 pandemic. 

Hovanesian admitted to making false and fraudulent statements in the loan applications concerning the gross revenues each of the businesses had generated in the preceding year as well as false and fraudulent statements concerning his intended use of loan proceeds. 

Hovanesian certified to the SBA under penalty of perjury that he would “use all the proceeds” of the loans for which he applied and caused others to apply for “solely as working capital to alleviate economic injury caused by disaster” consistent with the terms and limitations of the EIDL program. But Hovanesian instead applied those proceeds toward his own prohibited personal benefit to repay a personal real-estate debt and fund his illegal marijuana cultivation. Hovanesian fraudulently caused the SBA to transfer via interstate wire EIDL proceeds totaling $151,900.

After Hovanesian pleads guilty, he will face a statutory maximum sentence of 20 years in federal prison.

The SBA Office of Inspector General and NASA Office of Inspector General are investigating this matter. The United States Secret Service also provided substantial assistance. 

Assistant United States Attorney Adam P. Schleifer of the Major Frauds Section is prosecuting this case.

On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.

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 (NCDF) Hotline at (866) 720-5721 or via the NCDF Web Complaint Form at https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

Two California men now named in a four-count federal grand jury indictment were arraigned earlier today on charges alleging they conducted a firebombing attack on a Planned Parenthood clinic in Orange County in March 2022.

The two defendants arraigned today are Chance Brannon, 23, of San Juan Capistrano, an active-duty Marine stationed at Camp Pendleton, and Tibet Ergul, 21, of Irvine.

A third defendant now charged in this case – Xavier Batten, 21, of Brooksville, Florida – was arrested Friday by special agents with the FBI. Batten made his initial appearance on Friday in the Middle District of Florida. He was ordered held without bond pending trial.

The indictment, returned on July 14 and unsealed Friday, charges all three defendants with one count of conspiracy and one count of malicious destruction of property by fire and explosion. Additionally, Brannon and Ergul both are charged with one count of possession of an unregistered destructive device and one misdemeanor count of intentional damage to a reproductive health services facility, which is a violation of the Freedom of Access to Clinic Entrances (FACE) Act.

According to the indictment, in February and March of 2022, the defendants plotted to throw a Molotov cocktail at the Planned Parenthood clinic in Costa Mesa. Brannon and Ergul allegedly chose the target property, obtained the materials necessary to construct a Molotov cocktail, assembled the destructive device, then, during the early morning hours of March 13, 2022, threw the ignited Molotov cocktail at the clinic. The device struck the clinic entrance.

Batten allegedly advised and directed Brannon regarding how to build the Molotov cocktail.

As a result of the fire, the Planned Parenthood Costa Mesa health care clinic was forced to close the following morning and cancel approximately 30 appointments.

Security videos described in court documents show that two men wearing hooded sweatshirts and face masks approached the Planned Parenthood facility at approximately 1 a.m. the day of the attack, ignited a device, and threw the flaming device at the front door of the building. According to court documents, “The device landed against a southern wall next to the glass door and erupted into a fire, which spread up the wall and across the ceiling above the glass door.”

The Costa Mesa Police Department and Fire Department responded to the scene and extinguished the fire. An analysis of evidence collected at the scene showed that the glass container and other materials contained gasoline.

The conspiracy and malicious destruction counts each carry a mandatory minimum of five years in prison and a statutory maximum penalty of 20 years in federal prison. The count of possession of an unregistered destructive device is punishable by up to 10 years. The intentional damage to a reproductive health facility charge carries a statutory maximum penalty of one year in federal prison.

Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division, U.S. Attorney Martin Estrada for the Central District of California, Assistant Director Robert R. Wells of the FBI Counterterrorism Division and Assistant Director in Charge Donald Alway of the FBI Los Angeles Field Office made the announcement.

The FBI and the Naval Criminal Investigative Service are conducting the ongoing investigation in this matter. The Costa Mesa Police Department provided substantial assistance.

Assistant U.S. Attorney Kathrynne N. Seiden for the Central District of California is prosecuting this case, with valuable assistance provided by the Justice Department’s National Security Division.

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

SANTA ANA, California – Two defendants now named in a four-count federal grand jury indictment are scheduled to be arraigned this morning on charges alleging they conducted a firebombing attack on a Planned Parenthood clinic in Orange County in March 2022.

The two defendants set for arraignment today are Chance Brannon, 23, of San Juan Capistrano, an active duty Marine stationed at Camp Pendleton, and Tibet Ergul, 21, of Irvine.

A third defendant now charged in this case – Xavier Batten, 21, of Brooksville, Florida – was arrested Friday by special agents with the FBI. Batten made his initial appearance on Friday in United States District Court in the Middle District of Florida. He was ordered held without bond pending trial.

The indictment returned on July 14 and unsealed Friday charges all three defendants with one count of conspiracy and one count of malicious destruction of property by fire and explosion. Additionally, Brannon and Ergul both are charged with one count of possession of an unregistered destructive device and one misdemeanor count of intentional damage to a reproductive health services facility, which is a violation of the Freedom of Access to Clinic Entrances Act.

“The violent and reckless attack on a Planned Parenthood clinic alleged in the indictment is intolerable,” said United States Attorney Martin Estrada. “This indictment shows that federal law enforcement will work diligently to uncover and hold accountable those who plan and carry out violent extremist acts against others.”

“Those who deliberately put lives at risk and damage property by launching improvised explosive devices into public facilities will be sought and will be held accountable, as this case makes clear,” said Donald Alway, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “Anyone with information about the planning of violent attacks on public facilities – or the targeting of individuals – should immediately contact law enforcement in order to potentially prevent an act of violence that could prove deadly.”

According to the indictment, in February and March of 2022, the defendants plotted to throw a Molotov cocktail at the Planned Parenthood clinic in Costa Mesa. Brannon and Ergul allegedly chose the target property, obtained the materials necessary to construct a Molotov cocktail, assembled the destructive device, then, during the early morning hours of March 13, 2022, threw the ignited Molotov cocktail at the clinic. The device struck the clinic entrance.

Batten allegedly advised and directed Brannon regarding how to build the Molotov cocktail.

As a result of the fire, the Planned Parenthood Costa Mesa healthcare clinic was forced to close the following morning and cancel approximately 30 appointments.

Security videos described in court documents show that two men wearing hooded sweatshirts and face masks approached the Planned Parenthood facility at approximately 1 a.m. the day of the attack, ignited a device, and threw the flaming device at the front door of the building. “The device landed against a southern wall next to the glass door and erupted into a fire, which spread up the wall and across the ceiling above the glass door,” according to court documents.

The Costa Mesa Police Department and Fire Department responded to the scene and extinguished the fire. An analysis of evidence collected at the scene showed that the glass container and other materials contained gasoline.

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

The conspiracy and malicious destruction counts each carry a mandatory minimum sentence of five years in federal prison and a statutory maximum sentence of 20 years in federal prison. The count of possession of an unregistered destructive device is punishable by up to 10 years in federal prison. The intentional damage to a reproductive health facility charge carries a statutory maximum sentence of one year in federal prison.

The FBI and the Naval Criminal Investigative Service are conducting the ongoing investigation in this matter. The Costa Mesa Police Department provided substantial assistance.

Assistant United States Attorney Kathrynne N. Seiden of the Terrorism and Export Crimes Section is prosecuting this case.

LOS ANGELES – A real estate developer was sentenced today to 72 months in federal prison for paying a $500,000 cash bribe to then-Los Angeles City Councilman José Huizar and his special assistant in exchange for their help in resolving a labor organization’s appeal of the developer’s downtown Los Angeles development project.

Dae Yong Lee, a.k.a. “David Lee,” 58, of Bel Air, was sentenced by United States District Judge John F. Walter, who also ordered him to pay a $750,000 fine, the maximum permitted by law.

At today’s sentencing hearing, Judge Walter highlighted why significant sentences are important for deterrence in white collar crimes, saying such defendants “don’t think they will get caught, don’t think they will get charged, and don’t think they will face significant terms of imprisonment.”  Judge Walter further said that Lee “readily accepted and exploited” Huizar’s corrupt offer and showed a “lack of remorse and arrogance” in recorded telephone conversations when discussing his crimes. Lee’s “only regret is that he got caught,” the judge said.

Judge Walter also sentenced 940 Hill LLC, a Lee-controlled, Los Angeles-based company, to five years of probation and ordered it to pay the statutory maximum fine of $1.5 million, as well as the cost of prosecuting the case, along with requiring it to enact variance compliance measures to prevent future criminal activity.

At the conclusion of a nine-day trial in June 2022, a federal jury found each Lee and 940 Hill LLC guilty of one count of honest services wire fraud, one count of bribery, and one count of falsification of records in federal investigations.

Lee, a commercial real estate developer, was the majority owner and managing member of 940 Hill LLC and was planning to build a mixed-use development located at 940 South Hill Street in downtown Los Angeles, which was in Huizar’s council district. The development was to include 14,000 square feet of commercial space and more than 200 residential units.

In August 2016, after a labor organization filed an appeal that prevented the 940 Hill project from progressing through the city’s approval process, Lee called Justin Jangwoo Kim, a Huizar fundraiser, to request Huizar’s help in resolving the appeal. At the time, Huizar chaired the city’s Planning and Land Use Management (PLUM) Committee, a body that oversaw many of the city’s most significant commercial and residential projects.

In September 2016, George Esparza, then Huizar’s special assistant, informed Kim that Huizar would not help the 940 Hill project for free and would require a financial benefit. In 2017, after several months of bribe negotiations, Lee agreed to provide $500,000 in cash to Huizar and Esparza. Lee then made three payments of cash through Kim over a series of months, including in a paper bag, which Esparza then transferred to a liquor box to show to Huizar.

Two years after paying the bribe, 940 Hill LLC was served with a federal grand jury subpoena from the U.S. Attorney’s Office for records relating to Huizar, and, in response, Lee and 940 Hill LLC obstructed justice by making false entries in the company’s accounting records and then submitting false state and federal tax returns, which categorized the $500,000 bribe as a legitimate business expenditure for resolving the labor organization appeal.

“Despite enjoying a life of privilege and abundance, Lee wanted more,” prosecutors argued in a sentencing memorandum. “But instead of earning it, he wanted a guaranteed shortcut to circumvent the city process and silence community opponents threatening to thwart his attempts to expand his substantial real estate empire.”

Kim pleaded guilty in June 2020 to a federal bribery offense. Esparza pleaded guilty in July 2020 to one count of racketeering conspiracy. Both men, who are cooperating with the investigation, testified against Lee at trial and are scheduled to be sentenced in October.

Huizar pleaded guilty on January 20 to one count of conspiracy to violate the Racketeer Influenced and Corrupt Organizations (RICO) Act and one count of tax evasion. His sentencing hearing is scheduled for December 15. Huizar has agreed to seek a sentence of no less than nine years in prison, and prosecutors have agreed to recommend a sentence of no more than 13 years in prison.

In May, Judge Walter sentenced real estate development company Shen Zhen New World I LLC to five years of probation and the statutory maximum financial penalty of $4 million for its conduct in Huizar’s pay-to-play scheme, including providing more than $1 million in benefits to Huizar – among them, luxury trips to Las Vegas and a sham loan to settle a sexual harassment lawsuit filed against Huizar – in exchange for approval to build a 77-story skyscraper.

Former Los Angeles Deputy Mayor Raymond Chan is scheduled for a re-trial on March 12, 2024, on federal charges alleging he conspired to violate the Racketeer Influenced and Corrupt Organizations (RICO) Act, and that he agreed to accept, while he was deputy mayor, more than $100,000 for official acts to benefit a project by a Chinese real estate developer. Chan also is charged with lying to federal investigators in this public corruption case.  

The FBI investigated this matter.

Assistant United States Attorney Mack E. Jenkins, Chief of the Criminal Division, and Assistant United States Attorney Cassie D. Palmer of the Public Corruption and Civil Rights Section prosecuted these defendants.

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 – A federal grand jury today indicted a Texas man who allegedly kidnapped a 13-year-old girl at gunpoint in Texas, drove her to California, and sexually assaulted her multiple times before his arrest in Long Beach last week.

Steven Robert Sablan, 61, of Cleburne, Texas, is charged with one count of kidnapping and one count of transportation of a minor with intent to engage in criminal sexual activity. His arraignment is scheduled for July 31 in United States District Court in downtown Los Angeles.

According to the indictment and an affidavit previously filed with a criminal complaint in this matter, on July 6 in San Antonio, the victim was walking down a street when Sablan, driving a gray Nissan Sentra, approached her. Sablan allegedly raised a black handgun to his side and told the victim to get in the car, saying “If you don’t get in the car with me, I am going to hurt you.” Fearing for her life, the victim obeyed Sablan, court documents allege.

Sablan allegedly began driving with the victim in the car and asked her how old she was. The victim replied she was 13 years old, and – after later mentioning she had a friend in Australia – Sablan allegedly told the victim he could take her to a cruise ship to visit this friend, but she had to do something for him first. He then repeatedly sexually assaulted the victim, according to court documents.

Over the next two days, Sablan allegedly drove the victim from Texas to California and sexually assaulted her at least two more times.

On the morning of July 9, Sablan parked the car in a lot in Long Beach and took their clothes to a laundromat for washing. While Sablan was in the laundromat, the victim stayed in the car and wrote “Help me!” on a piece of paper to try and get someone’s attention.

A witness telephoned law enforcement, who upon arrival saw Sablan standing outside the vehicle and saw the victim – who mouthed the word “Help” – inside the car, court documents state. During a search of the vehicle, officers retrieved a black BB gun, a “Help me” sign, and a pair of handcuffs. Law enforcement determined the victim was a reported runaway missing person from San Antonio.

If convicted of both charges in the indictment, Sablan would face a statutory maximum sentence of life in federal prison.

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 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 former Los Angeles County Sheriff’s Department deputy has agreed to plead guilty to a felony charge of conspiring to violate the civil rights of a 23-year-old man at a Compton skatepark by falsely imprisoning him and to then obstruct justice to cover up the illegal detention, the Justice Department announced today.

Christopher Blair Hernandez, 37, who was a sheriff’s deputy formerly assigned to LASD’s Compton Station, agreed to plead guilty to one count of conspiracy, according to a plea agreement filed today in United States District Court. 

Hernandez is expected to formally plead guilty to the felony charge in the coming weeks.

According to his plea agreement, on the afternoon of April 13, 2020, Hernandez and this then-partner, former LASD deputy Miguel Angel Vega, were in uniform and on patrol in an LASD sports utility vehicle in the area near Wilson Park in Compton as part of their official duties at LASD. While on patrol, Hernandez and Vega saw two young Black males, one of whom Hernandez believed was on probation, outside a skateboard park enclosed by a tall fence within Wilson Park. Vega parked the SUV on the grass near the skatepark, after which Hernandez and Vega got out of the SUV and approached the individuals, whom they ordered to lift their shirts.

At this point, the victim – who is identified in court documents as “J.A.” – from inside the enclosed skatepark, began yelling at Hernandez and Vega to leave the Black males alone. J.A. did not threaten Vega or Hernandez or any of the other approximately 10 to 15 people inside the skatepark, who likewise did not pose any danger to Vega or Hernandez. Vega and J.A. then got into an argument during which Vega challenged J.A. to a fight, according to the plea agreement.

Vega then grabbed and pulled J.A. through an opening in the skatepark fence and confined J.A. in the back of the SUV as Hernandez looked on, the plea agreement states. During this incident, although Hernandez and Vega had ample time to do so, J.A. was not handcuffed, his seatbelt was not secured, he never was told he was under arrest, nor was he informed of his rights at any time. According to the plea agreement, Hernandez knew that Hernandez and Vega did not have any lawful basis to detain J.A., particularly after Vega had challenged J.A. to a fight.

After leaving the park, Vega, who was still driving the SUV with Hernandez in the front passenger seat and J.A. confined in the backseat, again challenged J.A. to a fight and taunted J.A. that the deputies were going to “set up” J.A., or words to that effect, and drop J.A. in gang territory, the plea agreement states. Hernandez added that Hernandez would beat up J.A. if they fought, according to the plea agreement. In addition, Vega made statements to J.A. suggesting to Hernandez that the two deputies were going to fabricate and falsely allege that J.A. exhibited symptoms of being under the influence of a stimulant as a pretext to justify their false imprisonment of J.A. Even though he did not believe that J.A. was under the influence of a stimulant, Hernandez did not take any steps to release J.A., challenge Vega’s actions, or alert a supervisor about what had occurred and was occurring.

While Vega and Hernandez continued driving with J.A. still confined in the back of the SUV, Vega began pursuing a group of young males on bicycles, one of whom appeared to grab his waistband and began riding away down an alley. Hernandez got out of the SUV to attempt to capture the bicyclist on foot, and Vega drove the SUV down the alley, where Vega crashed into a wall and another vehicle, causing J.A. to hit his face and head and sustain a cut above his right eye that later required stiches, court documents state. Following the collision, Vega removed J.A. from the patrol vehicle and told him to leave, informing Hernandez, who responded on foot to the alley shortly thereafter, that he had done so. After J.A. was released by Vega following the collision, J.A. walked out of the alley and tried to get help from strangers at a nearby house.

After the traffic collision, Vega reported over LASD radio that a person purportedly with a gun, whom Vega described as wearing clothes similar to J.A.’s clothing that day, had fled through an alley, which prompted numerous LASD personnel to respond to the scene to set up a containment zone. Even though Vega also reported the traffic collision over LASD radio, neither Vega during the radio calls, nor Vega or Hernandez during a subsequent conversation with their supervising sergeant at the scene, initially disclosed that they had detained J.A. at the skatepark or that J.A. had been in the SUV during the collision in the alley, Hernandez admitted in the plea agreement.

It was only after Vega learned that J.A. had been independently detained on a neighboring street by another LASD deputy as the purported gun suspect that Vega informed other deputies and his supervising sergeant that J.A. had been in the SUV during the crash. While J.A. was at a hospital later in the day to receive treatment for the injuries he sustained from the collision, Hernandez spoke with another deputy who had escorted J.A. to the hospital. Consistent with the plan suggested and articulated by Vega earlier in the day, Hernandez directed the deputy at the hospital to issue J.A. a citation for being under the influence of methamphetamine, even though Hernandez knew this to be false, according to the plea agreement. The deputy followed Hernandez’s direction and issued the citation.

Hernandez and Vega authored two incident reports regarding the day’s events. Hernandez and Vega intentionally included false, misleading, and ambiguous information in the reports to justify and legitimize, and ultimately cover up, their unlawful conduct, Hernandez admitted in the plea agreement. The first report falsely stated that J.A. appeared to be under the influence of a stimulant; that J.A. had threatened to harm people in the skatepark, as well as Vega and Hernandez; that a crowd of people were moving toward the LASD patrol vehicle as the defendants drove away after unlawfully detaining J.A; and that, following the crash in the alley, Vega checked J.A. for injuries and J.A. was placed in another patrol vehicle of an assisting LASD unit until paramedics arrived. The second report likewise falsely stated that Vega transferred J.A. to another patrol vehicle after the collision, which both Hernandez and Vega knew to be false, according to the plea agreement.

Vega has pleaded not guilty to a five-count indictment charging him with conspiracy, deprivation of rights under color of law, witness tampering, and two counts of falsification of records. His trial is scheduled for October 24.

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 FBI is conducting the investigation into 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 are prosecuting this case.

LOS ANGELES – The owner of a now-shuttered health care business management services company and three other people were arrested today on a nine-count federal grand jury indictment alleging they defrauded lenders and investors out of millions of dollars via false claims that the owner’s struggling business was booming.

Tammy Le, 48, of San Clemente, the former owner and CEO of CareAccess MSO Inc., a Cerritos-based company that purported to help primary care physician groups manage their business affairs, was arrested without incident this morning.

Also arrested today were:

• Macy Zia, 50, of Fullerton, a former senior accounting manager at CareAccess;
• Galen Clark, 31, of Simi Valley, a former CareAccess information technology manager; and
• Chris Ruiz, 52, of Pasadena, the owner of Auxilium Health Network, an Arcadia-based independent physician association (IPA).

All four defendants are charged with one count of conspiracy to commit wire fraud. Le, Zia and Ruiz are charged with six counts of wire fraud. Clark, who allegedly joined the conspiracy in November 2020, is charged with three counts of wire fraud. Le also is charged with one count of aggravated identity theft and one count of money laundering.

Le and Zia are expected to make their initial appearances this afternoon in United States District Court in Santa Ana. Clark and Ruiz are scheduled to make their initial court appearances this afternoon in federal court in downtown Los Angeles.

According to an indictment returned on Tuesday, from January 2020 to July 2021, the defendants conspired to fraudulently obtain money from their victims by falsely representing the scope of CareAccess’ business and its anticipated revenue – one victim company was duped into loaning money to CareAccess while the other victim company was deceived into acquiring Le’s company. Neither victim knew the weak state of CareAccess, the indictment alleges.

Le allegedly caused CareAccess to contract with a New Jersey-based finance company that would make loans to CareAccess in exchange for rights to collect against her company’s accounts receivable, including fees due from Auxilium and other IPAs.

The defendants allegedly induced the lender by making false statements regarding the business performance of CareAccess, including by sending fake copies of invoices the company purportedly issued to IPAs. The bogus invoices were accompanied by spreadsheets containing the number of patients purportedly enrolled with the IPAs. The fraudulent invoices and spreadsheets inflated the amount of fees due to CareAccess and the amount of money the lender would loan to it.

To impede the lender’s ability to detect the fraud, Le allegedly arranged for Ruiz to be the point of contact at Auxilium and, when contacted by the lender’s representatives, he verified the false information contained in the fraudulent invoices and spreadsheets.

Le, Zia and Ruiz allegedly caused this lender to wire approximately $6.1 million in loans into a Le-controlled bank account.

Also, starting in November 2020, the defendants, now including Clark, allegedly solicited a Utah-based health care investment company to invest in and eventually acquire CareAccess. The defendants allegedly provided this investor fraudulent reports that inflated its business performance and the size of its customer base.

Through these misrepresentations the defendants allegedly caused the investor to provide approximately $12.7 million for the acquisition of CareAccess, of which Le allegedly directed $2.2 million to be deposited in her bank account. A substantial portion of the latter amount was to be used by the defendants for their personal benefit.

Within months of the acquisition, CareAccess filed for bankruptcy protection.

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 is investigating this matter.

Assistant United States Attorneys Valerie L. Makarewicz and David H. Chao of the Major Frauds Section are prosecuting this case.

LOS ANGELES – A federal jury today found a Long Beach man guilty of building and planting a package bomb that detonated inside an Aliso Viejo day spa in May 2018, killing his ex-girlfriend, causing serious injuries to two spa clients, and damaging a commercial office building.

Stephen William Beal, 64, was found guilty of four felony counts: 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.

United States District Judge Josephine L. Staton scheduled a November 17 sentencing hearing, at which time Beal will face a statutory maximum sentence of life imprisonment, and a mandatory minimum sentence of 30 years in federal prison.

“Using his expertise in explosives, Mr. Beal cowardly murdered his former girlfriend, permanently injured two other victims who were her customers, and risked the safety of many others in the area, including a day-care center across the street” said United States Attorney Martin Estrada. “Thanks to the thorough investigation by the FBI, Orange County Sheriff’s Department, Orange County Fire Department, and other law enforcement partners, I am pleased the jury saw through Mr. Beal’s efforts to avoid responsibility for his deplorable actions.”           

“Hard work and a commitment to finding the truth about this despicable act paid off today,” said Donald Alway, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “We are gratified that the jury’s verdict led to justice for Ildiko Krajnyak and Beal’s two surviving victims, who will endure the horror and pain of that awful day for the rest of their lives. This day is for them, their families and for the Aliso Viejo community.”

“I am thankful for the painstaking work of our investigators, hazardous devices team, and our federal partners working together to provide justice for Ms. Krajnyak’s family,” said Orange County Sheriff Don Barnes. “While a verdict will not lessen the pain of their loss, nor take away the suffering of the two additional victims inside the spa when the bomb exploded, we hope they know that we never stopped investigating this shocking act of violence. Rest assured, the community is safer with today’s decision.”

According to the evidence presented at a three-week trial, a 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 massive explosion. The surviving victim pulled her mother from the rubble and together they escaped the burning building through a blown-out wall.

The evidence at trial showed that Beal became obsessed with Krajnyak after she attempted to distance herself from him following an 18-month romantic relationship. Krajnyak’s family and associates testified that Beal was controlling and possessive, and some said they feared for her safety.

During a search of Beal’s residence the day 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 came from the same chemicals 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 particular size and shape of the box the surviving victim testified Krajnyak opened at the moment the bomb exploded.

Beal kept tabs on Krajnyak before the bombing, checking her online schedule and social media accounts, according to evidence presented to the jury. 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. 

In a separate case, Beal is scheduled to go on trial on November 14 on federal fraud charges alleging he failed to report in a bankruptcy proceeding $350,000 he received from his late wife’s estate. Beal also allegedly schemed to fraudulently obtain insurance benefits and Social Security payments.

The FBI’s Joint Terrorism Task Force, which includes special agents with the FBI and deputies with the Orange County Sheriff’s Department, investigated 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 Attorney Annamartine Salick, Chief of the National Security Division, along with Assistant United States Attorneys Mark Takla, Solomon Kim and Sarah Gerdes, all of the Terrorism and Export Crimes Section, are prosecuting this case.

LOS ANGELES – A Downtown Los Angeles man pleaded guilty today to three felony charges, including that he defrauded victims, one of them a social media influencer, by engaging in “SIM swapping” to hijack their Instagram accounts to unlawfully obtain money.

Amir Hossein Golshan, 24, pleaded guilty to one count of unauthorized access to a protected computer to obtain information, one count of wire fraud, and one count of accessing a computer to defraud and obtain value.

Golshan has been in federal custody since last month after he was found to have violated the terms of his pretrial release.

According to his plea agreement, from at least April 2019 to February 2023, Golshan knowingly executed multiple online schemes to defraud hundreds of victims through various online scams and unauthorized intrusions into victims’ digital accounts, including social media account takeovers, Zelle payment fraud, and impersonating Apple support. In total, Golshan’s entire scheme caused approximately $740,000 in losses to hundreds of victims over several years. 

            SIM swapping and social media account takeovers

“SIM swapping” is the process of fraudulently inducing a carrier to reassign a cell phone number from the legitimate subscriber’s SIM card to a SIM card controlled by another without the legitimate subscriber’s authorization. This allows the fraudster to take control of the victim’s various accounts through two-step authentication text messages sent to a victim’s cell phone.

Golshan’s SIM swapping and social media account takeovers targeted both the account owners and their online friends, duping them into sending him money.

For example, in December 2021, a Los Angeles-based model and influencer with more than 100,000 followers on social media, received a direct message on Instagram from her friend’s account, stating, “Can you do me a favor? What’s your number?” The victim provided her phone number to the person whom she believed was her friend, but who really was Golshan.

Golshan then logged into the victim’s Instagram account without authorization, impersonated the victim to her friends, and requested the victim’s friends send him money through Zelle, PayPal, and other online payment platforms. Several of the victim’s friends sent Golshan money, totaling thousands of dollars, believing they were sending money to the victim.

During the time that Golshan locked the victim out of her accounts, he sent her messages demanding $2,000 for the return of her accounts and threatening to delete her accounts if she did not pay him.

Golshan further admitted to SIM swapping two additional victims in January 2022. For one of these victims, Golshan fraudulently caused the victim’s cell phone number to be SIM swapped to a new cell phone that he controlled. Golshan then reset the passwords to the victim’s social media accounts which allowed him to gain access to the victim’s accounts. He then accessed the victim’s social media accounts – which had her personal photos and videos saved on them. Golshan contacted the victim and demanded that she pay him $5,000 or else he would post her personal videos online.

            Zelle merchant fraud

Golshan also fraudulently advertised fake and non-existent Instagram services to individual victims for several hundred dollars each. In August 2019, for example, Golshan falsely represented on Instagram that he could provide a verified Instagram badge for one victim’s teenage daughter in exchange for $300. Golshan knew this statement was false and that only Instagram could provide such a badge. Nevertheless, Golshan induced the victim to send an electronic payment of $300 to him, which he deposited in his bank account.

During Golshan’s SIM swapping and Zelle fraud schemes, Golshan fraudulently received approximately $82,000 in payments from approximately 500 victims, usually in increments of $300 to $500 per victim.

            Apple Support fraud and NFT/cryptocurrency theft

Golshan also started to impersonate Apple Support personnel to gain unauthorized access to several victims’ Apple iCloud accounts to steal NFTs, cryptocurrency, and other valuable digital property. Through this conduct, Golshan defrauded five victims of amounts between $2,000 and $389,000 each.

For example, in August 2022, Golshan called a victim from Apple Support’s official telephone number and pretended to be an Apple Support employee. Golshan told the victim that Apple Support wanted to give the victim an advanced security protocol to protect the victim’s iCloud account. Golshan then caused a two-step authentication code to be sent to the victim’s phone.

Through these misrepresentations, Golshan fraudulently induced the victim to tell him this six-digit security code, which allowed Golshan to gain access to the victim’s iCloud account. Golshan then changed the email address on the victim’s iCloud account to an email address that he controlled. Golshan then stole valuable digital property from the victim, including an NFT valued at approximately $319,000 and approximately $70,000 worth of cryptocurrency. Later that same day, defendant sold the stolen NFT for $130,000 in cryptocurrency on a NFT marketplace.

United States District Judge Otis D. Wright II scheduled a November 27 sentencing hearing, at which time Golshan will face a statutory maximum sentence of 20 years in federal prison for the wire fraud count, and up to five years in federal prison for each of the computer access counts.

The FBI investigated this matter.

Assistant United States Attorney Andrew M. Roach of the Cyber and Intellectual Property Crimes Section is prosecuting this case.

LOS ANGELES – A federal jury today convicted a Los Angeles man of participating in a scheme that illegally sold 27 guns, including a “Glock switch” that converts a semiautomatic firearm to a machinegun.

Following a five-day trial, William Nirion Peña, 40, who resides in the Koreatown neighborhood, was found guilty of conspiracy to engage in the business of dealing in firearms without a license. The evidence presented at trial showed that Peña provided approximately 10 of the firearms and a substantial amount of ammunition that were sold by a co-conspirator to an undercover agent. The firearms included two silencers without serial numbers and the Glock switch.

A second defendant in this case – Ellourth Eladio Simon 32, of the Mid-City neighborhood of Los Angeles – pleaded guilty on May 25 to one count of engaging in the business of dealing firearms without a license and one count of possessing a machine gun. Simon specifically admitted engaging in eight illegal gun transactions, several of which involved multiple firearms, including a November 10, 2021, sale for $8,400 in which Simon sold an ATF undercover agent four handguns and a “ghost gun” AR-type rifle.

From at least September 2021 until late February 2022, Peña provided Simon with information about the prices and nature of numerous firearms – frequently sending photographs of firearms that Simon could sell to Simon’s gun customers.

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

Peña is scheduled to be sentenced by United States District Judge George H. Wu on September 18, at which time Peña will face a statutory maximum sentence of five years in federal prison.

Simon is scheduled to be sentenced on August 10. As a result of his guilty pleas, Simon faces a statutory maximum sentence of 15 years in federal prison.

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

Assistant United States Attorney Jennifer Chou of the Violent and Organized Crime Section, along with other members of that section, are prosecuting this case.

LOS ANGELES – Three members of a Los Angeles street gang have pleaded guilty to violating the federal racketeering statute for their roles in the robbery and fatal shooting last year of Los Angeles Police Officer Fernando Arroyos, the Justice Department announced today.

The following defendants – all members of the South Los Angeles-based Florencia 13 (F13) street gang – each pleaded guilty late Thursday to one count of conspiracy to violate the Racketeer Influenced and Corrupt Organizations (RICO) Act:

• Luis Alfredo de la Rosa Rios, 29, a.k.a. “Lil J” and “Lil Malo”;
• Ernesto Cisneros, 24, a.k.a. “Gonzo” and “Spooky”; and
• Jesse Contreras, 35, a.k.a. “Skinny Jack” and “Flaco.”

According to three plea agreements filed Thursday afternoon, on the night of January 10, 2022, the defendants were driving in Rios’ truck around F13’s “territory” in the Florence-Firestone area of South Los Angeles, looking for people to rob. The three defendants decided to rob Officer Arroyos because he was wearing gold chains around his neck. Arroyos was accompanied by his girlfriend, another victim who is identified in court documents as “A.M.” Contreras handed Rios a loaded gun. Cisneros already possessed a loaded gun. Rios and Cisneros, both armed, then exited Rios’ truck.

Cisneros approached the off-duty officer, patted him down, and then took his chains and wallet, which contained Arroyos’ LAPD identification card. Rios approached A.M., patted her down and stole her property.

After robbing Arroyos, Rios and Cisneros opened fire. Arroyos was struck by a single bullet, which killed him.

Rios and Contreras further admitted in their plea agreements to committing armed robberies against two victims outside a bar in the Florence-Firestone area earlier the same day.

“This case starkly illustrates the devastating impact of gangs on our community,” said United States Attorney Martin Estrada. “A young man who had achieved great success and returned to serve his community as a Los Angeles Police officer was murdered while shopping for a home in the city he took an oath to protect. These senseless tragedies are repeated too often. Our work in this case sends a message that we will aggressively prosecute violence against our community.”

“The defendants admitted to their role in the callous and cowardly murder of an off-duty police officer,” said Donald Alway, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “These defendants now face spending the better part of their lives in prison and will no longer be in a position to prey on innocent victims.”

“The murder of LAPD Officer Fernando Arroyos was a senseless murder,” said Los Angeles County Sheriff Robert G. Luna. “The Los Angeles County Sheriff’s Department is thankful for the interagency collaboration with the LAPD, and other local and federal agencies. LASD’s Homicide Bureau is appreciative of the Federal Bureau of Investigation and the United States Department of Justice for their efforts in bringing some semblance of justice to Officer Arroyos’ loved ones.”

The three gang members pleaded guilty Thursday before United States District Judge Percy Anderson, who scheduled sentencing hearings on September 25 for Rios and Contreras, and an October 16 sentencing hearing for Cisneros. As a result of their guilty pleas, each defendant faces a statutory maximum sentence of life in federal prison. Prosecutors have agreed to seek terms of between 35 and 50 years in prison for Rios and Cisneros, and a prison term of 35 years for Contreras.

Haylee Marie Grisham, 20, an F13 associate who was Rios’ girlfriend, pleaded guilty on April 5 to one count of violent crime in aid of racketeering for participating in the fatal robbery of Arroyos. Her sentencing hearing is scheduled for September 11, at which time she will face a statutory maximum sentence of life imprisonment.

The Los Angeles County Sheriff’s Department and the FBI investigated this matter.

Assistant United States Attorneys Joanna M. Curtis, Chief of the General Crimes Section; Christopher C. Kendall of the International Narcotics, Money Laundering, and Racketeering Section; and Kathy Yu of the Violent and Organized Crime Section are prosecuting this case.

LOS ANGELES – An Orange County orthopedic surgeon was sentenced today to 33 months in federal prison for accepting more than $315,000 in bribes and kickbacks for performing spinal surgeries at a now-defunct Long Beach hospital whose owner later was imprisoned for committing a massive workers’ compensation insurance fraud.

David Hobart Payne, 66, of Irvine, was sentenced by United States District Judge Josephine L. Staton, who also ordered him to a pay a fine of $20,000, and to forfeit $316,597 in ill-gotten gains.

At the conclusion of a six-day trial, a federal jury on March 3 found Payne guilty of one count of conspiracy, two counts of honest services wire fraud, and one count of use of an interstate facility in aid of bribery.

Michael Drobot – the owner of the Long Beach-based Pacific Hospital – conspired with doctors, chiropractors, and marketers to pay kickbacks and bribes in return for the referral of patients to Pacific Hospital for spinal surgeries and other medical services. These services and surgeries were paid for primarily through the California workers’ compensation system. During its final five years, the scheme resulted in the submission of more than $500 million in medical bills for spinal surgeries involving kickbacks.

Payne received bribes from Drobot of up to $15,000 for each spinal surgery that he performed at Pacific Hospital. The top bribe payment was for lumbar spinal surgeries Payne performed on patients at Pacific Hospital with implants from one of Drobot’s companies. Drobot and Payne covered up the bribes by disguising them as payments for marketing services and fees based on a sham contract.

In total, Payne received more than $315,000 in illegal payments.

In April 2013, law enforcement searched Pacific Hospital, which was sold later that year, bringing the kickback scheme to an end.

To date, 24 defendants, among them multiple physicians, have been convicted for participating in the kickback scheme. In 2018, Drobot was sentenced to 63 months in federal prison.

“Bribe schemes like [Payne’s] cause an insidious harm that lingers for years, leaving victim-patients wondering whether their surgeries were necessary or whether the unethical doctors and hospital executives who treated them as commodities also agreed to implant substandard medical hardware in their bodies,” prosecutors wrote in a sentencing memorandum.

The FBI, IRS Criminal Investigation, United States Postal Service Office of Inspector General, and the California Department of Insurance investigated this matter.

First Assistant United States Attorney Joseph T. McNally, Assistant United States Attorneys Billy Joe McLain of the Public Corruption and Civil Rights Section, and Hava Mirell of the Violent and Organized Crime Section prosecuted this case.

LOS ANGELES – An Orange County man was sentenced today to 24 months in federal prison for stalking a professional online gamer during a long-running harassment campaign.

Evan Baltierra, 30, of Trabuco Canyon, was sentenced by United States District Judge Fernando M. Olguin, who also ordered him to pay $2,544 in restitution.

Baltierra pleaded guilty in July 2022 to one count of stalking. He has been in federal custody since his arrest in September 2022 for violating the terms of his pretrial release by continuing to harass the victim.

Baltierra met the victim, a prominent professional gamer, at a gaming convention in Anaheim in November 2019. After this meeting, Baltierra asked to meet the victim in her hometown in Canada, which made her feel uncomfortable. After the victim blocked Baltierra on various social media accounts, Baltierra created hundreds of social media accounts to send the victim threatening messages. One message sent to the victim via Twitter in January 2021 read in part, “[t]imes ticking…waiting for the right opportunity.”

In October 2020, Baltierra hired an unknown third party to create multiple images of the victim that placed her face onto pornographic images. From November 2020 to March 2022, Baltierra posted the photoshopped images to multiple pornographic websites and internet forums. He also sent the images to the victim’s friends and family. Baltierra also posted links to the images on various social media websites and told others online to search for the victim’s name to see naked pictures of her.

The victim obtained a temporary restraining order against Baltierra in January 2021. After the protective order was served on him, Baltierra began posting the victim’s personal information – including her real name and city of residence, which were listed on the protective order – to social media websites and during her live video game streams. Baltierra also posted the victim’s Twitter handle to pornographic websites along with the photoshopped nude images he had created.

During the victim’s live streams of video games, Baltierra used multiple accounts to continually post harassing messages. Baltierra’s spamming of the victim forced her to stop streaming in February 2021.

In June 2021, two months after Baltierra and the victim reached a settlement in which he agreed to not contact her or her associates in exchange for the victim dissolving the temporary restraining order, Baltierra called the victim’s local police department. In that phone call, Baltierra requested the police conduct a welfare check of the victim by lying to the police that the victim had made online threats to commit suicide. Baltierra also attempted to obtain the victim’s home address during that phone call. The police responded to the victim’s home in response to Baltierra’s call.

From January 2022 to March 2022, Baltierra sent threatening messages to the victim via various social media accounts, including one messages that read, “get a casket ready.” In March 2022, Baltierra wrote a letter to the parents of the victim’s boyfriend, which stated, in part, that the situation was going to end badly for her.

Baltierra continued to harass the victim after the FBI searched his residence, after he was criminally charged in this case, and after he pleaded guilty to a felony offense and was free on bond pending sentencing.

“Baltierra continued to post fake nude photographs of [the victim] and appeared to attempt to contact her online, leading to his arrest in September of 2022,” prosecutors wrote in a sentencing memorandum.

The FBI investigated this matter.

Assistant United States Attorney Jake D. Nare of the Santa Ana Branch Office prosecuted this case.

SANTA ANA, California – An Orange County man pleaded guilty today to federal criminal charges for unsafely operating a drone aircraft on several occasions, including once flying it near a United States Coast Guard helicopter in mid-flight off the coast of Laguna Beach.

Alexander Milinovic, 62, of Laguna Beach, pleaded guilty to three misdemeanor counts of unsafe operation of an unmanned aircraft.

According to his plea agreement, Milinovic unsafely operated a drone on three occasions from June 2022 to March 2023.

On June 19, 2022, Milinovic launched his drone at a father and son who were flying an open-cockpit gyrocopter on Father’s Day. Milinovic flew the unmanned aircraft to within 10 to 20 feet of the gyrocopter, which was off the coast of Crescent Bay Beach in Laguna Beach, which caused the son, who was operating the gyrocopter, to make an emergency course correction to avoid striking the drone and crashing into the Pacific Ocean.

On July 26, 2022, Milinovic launched a drone at and flew it next to a Discovery Channel “Shark Week” blimp flying at an altitude between 500 and 1,000 feet over the Pacific Ocean in the Laguna Beach area. The blimp’s pilot estimated the drone to be in line with hitting the blimp and causing him to navigate a life-threatening emergency crash landing.

On March 19, 2023, four members of a Coast Guard flight crew were flying a rescue helicopter about 200 to 300 feet above sea level in Laguna Beach. Milinovic launched a drone and flew it directly at the Coast Guard helicopter, coming to within 200 feet of it. The crew maneuvered the helicopter away from the drone, fearing it would hit their tail rotor and cause the helicopter to crash into the Pacific Ocean.

Law enforcement was notified in November 2022 of videos posted on the TikTok social media application that showed Milinovic’s drone flying dangerously close to aircraft.

United States District Judge Fred W. Slaughter scheduled a November 28 sentencing hearing, at which time Milinovic will face a statutory maximum sentence of one year in federal prison for each count.

The FBI and the Orange County Sheriff’s Department investigated this matter as part of the Joint Terrorism Task Force with assistance from the Federal Aviation Administration and the United States Coast Guard.

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

LOS ANGELES – A federal grand jury today returned an indictment against a West Los Angeles man who allegedly ran a decade-long telemarketing scam primarily targeting elderly victims that fraudulently obtained more than $4.5 million via false promises to help victims sell or rent their timeshare properties.

Michael Alexai Dragunov, 44, whose aliases include “Michael Anthony Farole,” “Michael LeFleur,” “Victor Romano,” and “James Logan,” is charged in the 10-count indictment along with Christopher Michael Lang, 42, of Hays, Kansas, whose aliases include “Scott Graham,” “Don Lewis,” and “Jack Morgan.”

Both defendants are charged with one count of conspiracy to commit wire fraud and nine counts of wire fraud in connection with telemarketing and email marketing targeting the elderly.

Dragunov was arrested on a federal criminal complaint in this matter on June 28 and was ordered jailed without bond. His arraignment is scheduled for July 18 in United States District Court in downtown Los Angeles. Lang was arrested in Kansas on June 28 and is expected to be arraigned in Los Angeles in the coming weeks.

According to the indictment, from August 2013 to June 2023, Dragunov and Lang purported to represent companies that provided advertising and other services to current or former timeshare owners. The companies included Premier Marketing LLC, CML Marketing Specialists Inc., Condo Rental Associates LLC, and Paramount Media LLC.

Dragunov and Lang allegedly contacted victims, many of whom were elderly, and, to conceal the fraudulent scheme and their true identities, the defendants also used Skype messaging service phone numbers and used aliases instead of their true names.

Victims allegedly were induced to enter into agreements with the defendants’ telemarketing companies – agreements that were formalized in documents that were faxed or sent electronically – by falsely representing that the telemarketing companies would assist the victims with selling or renting their timeshare properties for a “one time” advertising fee.

Despite the recurring fees that each victim paid, often reaching the hundreds of thousands over several years, no victim received the timeshare-related services or proceeds promised, the indictment alleges.

To dupe victims into sending them more money, Dragunov and Lang allegedly told their victims a series of lies, including that the fees being requested would be refunded or reimbursed to the victims upon completion of the sale or rental of the victims’ timeshare, that the victims still owed taxes on the timeshare properties, and if the victims tried to dispute their payments to the telemarketing companies, the victims would automatically lose their disputes and lose all funds paid and any proceeds from a sale or rental of their timeshares.

To create the false impression that the telemarketing companies were legitimate, Dragunov and Lang pretended to be the companies’ customers and engaged in hundreds of phony small transactions with the companies’ payment processing accounts, according to the indictment.

Dragunov and Lang also allegedly concealed material facts from the victims, including the fact that their money was being used to personally enrich themselves.

If convicted of all charges, Dragunov and Lang would face a statutory maximum sentence of 30 years in federal prison for each count.

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 IRS Criminal Investigation are investigating this matter. The Los Angeles County Sheriff’s Department; the Henry County (Ohio) Sheriff’s Department; Hays (Kansas) Police Department; and United States Marshals Service provided substantial assistance.

Assistant United States Attorney Julia Hu of the Major Frauds Section is prosecuting this case.

If you or someone you know is age 60 or older and has been a victim of financial fraud, help is available at the National Elder Fraud Hotline: 1-833-FRAUD-11 (1-833-372-8311). This Department of Justice hotline, managed by the Office for Victims of Crime, is staffed by experienced professionals who provide personalized support to callers by assessing the needs of the victim and identifying relevant next steps. Case managers will identify appropriate reporting agencies, provide information to callers to assist them in reporting, connect callers directly with appropriate agencies, and provide resources and referrals, on a case-by-case basis. Reporting is the first step. Reporting can help authorities identify those who commit fraud and reporting certain financial losses due to fraud as soon as possible can increase the likelihood of recovering losses. The hotline is staffed seven days a week from 3 a.m. to 8 p.m. Pacific Time. English, Spanish, and other languages are available.

Information about the Department of Justice’s Elder Fraud Initiative is available at www.justice.gov/elderjustice.

LOS ANGELES – A West Los Angeles man was sentenced today to 79 months in federal prison for fraudulently obtaining approximately $9 million in COVID-19 business loans, some of which he used on gambling excursions to Las Vegas and transferred to his stock trading accounts.

Andrew Marnell, 43, was sentenced by United States District Judge R. Gary Klausner, who scheduled a restitution hearing for August 28.

Marnell pleaded guilty in September 2021 to one count of bank fraud and one count of money laundering.

From March 2020 to July 2020, Marnell schemed to defraud lenders and the Small Business Administration (SBA) by submitting fraudulent loan applications under the Paycheck Protection Program (PPP), which Congress designed to aid businesses feeling the economic impact of the COVID-19 pandemic, and another SBA loan program called the Economic Injury Disaster Loan Program (EIDL).

Marnell’s bogus loan applications contained numerous false and misleading statements about his shell companies’ business operations and payroll expenses. Marnell, often using aliases, submitted fake and altered documents to obtain the small business loans, including bogus federal tax filings and employee payroll records.

In total, Marnell submitted applications for PPP loans in amounts exceeding $10 million and lenders funded nearly $9 million in loans to his fake companies. In addition, Marnell requested EIDL loans from the SBA in the amount of $320,000, and of that amount, $170,000 was funded.

Once Marnell obtained the illicitly obtained loans, he used the money for gambling, including at a Las Vegas casino and in stock market trades, and for purchasing luxury goods. As part of his plea agreement with federal prosecutors, Marnell agreed to forfeit his ill-gotten gains, including Rolex watches, multiple laptop computers and tablets, a Range Rover automobile, a Ducati motorcycle, and hundreds of thousands of dollars in cash. The government also seized more than $1.5 million from various Marnell-controlled accounts, including those used to trade in the stock market.

“As soon as the federal government declared a national emergency and took action to respond to the COVID-19 pandemic, [Marnell] started scheming to steal relief funds intended to save small businesses from going bankrupt and millions of individuals from losing their jobs,” prosecutors argued in a sentencing memorandum. “[Marnell] was one of the first people arrested in this district for pandemic-related fraud, and thus he was one of the first out of the proverbial gate to start defrauding programs designed to provide emergency assistance and relief to those impacted by the pandemic, including owners of small businesses.”

The Federal Housing Finance Agency Office of Inspector General; the FBI; the Federal Deposit Insurance Corporation Office of Inspector General; IRS Criminal Investigation; the Treasury Inspector General for Tax Administration; and the Small Business Administration Office of Inspector General investigated this matter. The California Department of Justice Bureau of Gambling Control provided assistance in the investigation.

Assistant United States Attorney Kerry L. Quinn of the Major Frauds Section prosecuted this case.

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

LOS ANGELES – A woman serving a life sentence in state prison for murder was sentenced today in federal court to 84 months in federal prison for leading a ring that fraudulently obtained more than $1.5 million in California unemployment insurance (UI) benefits – mostly pandemic-related relief – by using other people’s identities, some of which belonged to her fellow California prison inmates.

Natalie Le Demola, 38, who was incarcerated at the California Institution for Women in Corona at the time of the offense, was sentenced by United States District Judge John F. Walter, who also ordered her to pay $933,181 in restitution. Demola is serving a life sentence after being convicted in 2005 of the first-degree murder of her mother.

Judge Walter ordered Demola to serve her federal prison sentence consecutive to her state prison sentence. She will be eligible for parole from state prison in July 2026.

Demola pleaded guilty on March 7 to one count of conspiracy to commit bank fraud and wire fraud, three counts of bank fraud, and one count of aggravated identity theft.

From June 2020 until April 2021, Demola and other co-conspirators acquired the personal identifiable information (PII), such as the names, dates of birth, and Social Security numbers, of individuals – including identity theft victims – who were not eligible for UI benefits, including pandemic benefits, because they were employed, retired, or incarcerated.

Members of the conspiracy then used the information to make fraudulent online applications for UI benefits from the California Employment Development Department (EDD). Once the applications were approved, members of the conspiracy received EDD-funded debit cards that allowed them to withdraw money from ATMs across Southern California.

The total loss incurred by this conspiracy was $1,546,933. 

“[Demola] led and organized a scheme in which she and her coconspirators pocketed hundreds of thousands of dollars allocated for residents of California who were unemployed on account of the COVID19 pandemic,” prosecutors argued in a sentencing memorandum. “[Demola] made a cost-benefit analysis and decided that the money and influence, including among fellow inmates, that she stood to gain was worth the additional penalties she faced if she were caught.”

Prosecutors secured a total of 13 guilty pleas in this case.

The investigation into this scheme was conducted by the Los Angeles El Camino Real Financial Crimes Task Force, a multi-agency task force led by Homeland Security Investigations that includes federal and state investigators who are focused on financial crimes in Southern California. The California Employment Development Department, the California Department of Corrections and Rehabilitation, the United States Department of Labor Office of Inspector General, the Inglewood Police Department, and the United States Marshals Service participated in this investigation.

Assistant United States Attorneys Nisha Chandran of the Cyber and Intellectual Property Crimes Section and David C. Lachman of the Terrorism and Export Crimes Section prosecuted this case.

LOS ANGELES – Southern California Edison (SCE); Utility Tree Service LLC (UTS); and Frontier Communications Holdings LLC have paid the United States $22 million to resolve claims on behalf of the U.S. Forest Service to recoup costs and damages associated with a 2016 wildfire in the Los Padres National Forest, the Justice Department announced today.

The Rey Fire ignited on August 18, 2016, when a tree fell onto powerlines and communication lines owned, respectively, by SCE and Frontier. In 2019, the United States filed a lawsuit on behalf of the Forest Service against SCE and Frontier — as well as UTS, which was SCE’s vegetation management contractor — to recover costs for the extensive damages that the Rey Fire caused.

The United States alleged that the impact of the tree on Frontier’s and SCE’s lines caused a malfunction of SCE’s power equipment farther down the power lines and caused an energized power line to fall to the ground. The energized power line ignited adjacent dry vegetation. The Rey Fire burned more than 32,000 acres, including 19,000 acres of National Forest System lands in Santa Barbara County.

“This settlement will compensate the public for the expense of fighting the Rey Fire and restoring these federal lands that are enjoyed by all Americans,” First Assistant United States Attorney Joseph T. McNally said. “The U.S. Attorney’s Office will continue to aggressively pursue recovery against those who cause damages to our precious national resources.”

SCE, UTS, and Frontier agreed to pay the settlement without admitting wrongdoing or fault.

This case was handled by Assistant United States Attorneys Matthew Barragan and Margaret Chen of the Complex and Defensive Litigation Section.

SANTA ANA, California – The owner of a Newport Beach-based artificial turf company pleaded guilty today to a federal criminal charge for failing to report nearly $9 million in income his business earned and for attempting to evade the payment of more than $946,000 in federal income taxes.

Craig Steven Voyton, 56, of San Pedro, pleaded guilty to one count of tax evasion.

Voyton owns and operates Smart Grass LLC, which installs artificial turf for residential and commercial customers in Orange and Los Angeles counties.

According to his plea agreement, from 2016 to 2020, Smart Grass generated more than $1.5 million in gross income per year from its business operations, and – not wanting to pay taxes that income – Voyton attempted to conceal that income from the IRS.

To do so, Voyton emailed customers federal tax forms listing false identification information, so if and when the customers reported to the IRS the payments they had made to him and his company, those payments would not tie for tax purposes directly to Voyton or Smart Grass.

On three occasions in 2020, Voyton emailed to customers in Los Angeles and Beverly Hills an IRS Form W-9 with false information and a signature in a fictitious identity. Voyton admitted in his plea agreement to sending similar fraudulent IRS Forms W-9 during the tax years 2016, 2017, 2018 and 2019. Voyton further admitted to providing a false IRS Form W-9 to a school in Irvine in August 2016.

While attempting to evade the payment of taxes during this time, Voyton made more than $63,000 in transfers to the Coinbase cryptocurrency exchange from a Smart Grass bank account. Voyton also used more than $500,000 in company funds to make real estate purchases in Nevada and Mexico.

In total, Voyton failed to report approximately $8,926,333 in income, which prevented the IRS from assessing the total sum of approximately $946,479 in federal income taxes for the tax years 2016 through 2020.

Voyton has agreed that before sentencing, he will pay the IRS all the back taxes he owes, plus interest, as well as paying an additional 75% fraud penalty.

United States District Judge John W. Holcomb scheduled a September 8 sentencing hearing, at which time Voyton will face a statutory maximum sentence of five years in federal prison.

IRS Criminal Investigation investigated this matter.

Assistant United States Attorney Charles E. Pell of the Santa Ana Branch Office is prosecuting this case.

LOS ANGELES – A San Bernardino County woman was sentenced today to 63 months in federal prison for her involvement in an investment fraud scheme that caused more than $2.6 million in losses to more than two dozen victims.

Sharief Deona McDowell, 58, of Loma Linda, was sentenced by United States District Judge André Birotte Jr., who also ordered her to pay $2,446,093 in restitution.

McDowell pleaded guilty in December 2022 to one count of wire fraud.

From October 2018 to March 2022, McDowell defrauded at least 28 investors by falsely representing that she would invest their money in commodity futures and options contracts. As part of the scheme, McDowell started a purported investment company called Presidential Investments Inc. LLC. McDowell operated and controlled this company and directed others to open bank accounts in the name of Presidential Investments.

In fact, McDowell did not trade with the investors’ money and instead misappropriated the funds for her personal use. McDowell also provided investors with fabricated trade confirmations and account statements to falsely indicate that their investments were generating returns.

For example, from October 2020 to January 2021, McDowell caused one victim to wire $250,000 from the victim’s bank account to a McDowell-controlled account after McDowell led the victim to believe she would invest the victim’s money through Presidential Investments.

In addition, McDowell used money provided by new investors to repay earlier investors – a tactic often used to conceal and prolong Ponzi and other investment fraud schemes.

In total, McDowell admitted in her plea agreement to causing losses to victims of approximately $2,678,768. The victims included people inside the United States as well as in Canada and Poland.

McDowell committed this fraud in violation of a prior judicial order as the result of a 2011 lawsuit filed against her and 20/20 Trading Company, a precious metals trading business that employed her as a saleswoman, by the Commodities Futures Trading Commission.

“From the very formation of her company, Presidential Investments, [McDowell] intended to use it to commit fraud, after having been prohibited by a court order from doing precisely that,” prosecutors argued in a sentencing memorandum. “Aware of the injunction, [McDowell] took steps to conceal her conduct by registering the business and opening bank accounts in the names of other people.”

The FBI investigated this matter.

Assistant United States Attorney Cory L. Burleson of the Riverside Branch Office and Trial Attorney Lauren Archer of the Justice Department Criminal Division’s Fraud Section prosecuted this case

RIVERSIDE, California – A San Gabriel Valley man was found guilty by a jury today of federal criminal charges, including conspiring with his employee to hire a hitman to kill two men – one who opposed him in litigation and the other who represented one of his companies in bankruptcy.

Arthur Raffy Aslanian, 54, of La Cañada Flintridge, was found guilty of one count of conspiracy and use of interstate commerce facilities in the commission of murder-for-hire and one count of use of interstate commerce facilities in the commission of murder-for-hire. The federal jury also found Aslanian guilty of one count of conspiracy to commit arson, one count of attempted arson, and one count of arson of a building used in interstate commerce.

According to evidence presented at a five-day trial, Aslanian conspired with Sesar Rivera, 41, of North Hollywood, Aslanian’s employee, to hire a hitman to murder two people – identified in court documents as “M.Y.” and “S.E.”

M.Y. was a lawyer who represented Aslanian in a bankruptcy proceeding in which Aslanian had prevailed but then refused to pay over $261,000 in legal fees and expenses to M.Y.’s law firm. In April 2022, M.Y. sent a demand letter to Aslanian requesting to mediate the dispute and stating he was prepared to sue Aslanian if the mediation failed.

S.E. was a litigant who defeated Aslanian in court after Aslanian tried to take possession of the Brentwood home in which S.E.’s parents lived.

In April 2022, Rivera – Aslanian’s employee at the time – met with an individual, who according to trial testimony was a gang member and convicted felon. Rivera told the individual that a real estate businessman named “Arthur” wanted to pay him to kill M.Y. and S.E.

In July 2022, Rivera again met with the individual and said “Arthur” wanted the killing done as soon as possible. Rivera showed the individual information about M.Y. The individual secretly recorded a portion of this July 2022 in-person meeting on his phone and provided a copy of the recording to law enforcement.

Rivera also promised the individual that Aslanian would pay $20,000 for the murder once Rivera had photographic proof the murder had been committed.

On August 10, 2022, Rivera again met with the individual and told him to focus on murdering S.E. before killing M.Y. On August 19, 2022, Rivera used the Facebook Messenger application to send the individual a multimedia message with a screenshot of victim S.E.’s Facebook profile, including S.E.’s picture and business name, to assist the individual in locating and murdering S.E.

Law enforcement contacted and warned M.Y. and S.E. of the murder plots.

On September 7, 2022, law enforcement detained and questioned Rivera, who later agreed to cooperate with them.

Aslanian was arrested shortly after a September 15, 2022 meeting in which Rivera showed him a staged murder photograph of S.E.

In a separate incident, Aslanian, through Rivera, paid an individual a few hundred dollars for successfully setting fire to a vacant unit at a rental property in North Hollywood own by Aslanian so the remaining tenants would be forced to leave the property.

United States District Judge Jesus G. Bernal scheduled an October 2 sentencing hearing, at which time Aslanian will face a statutory maximum sentence of 10 years in federal prison for each murder-for-hire-related count and up to 20 years in federal prison for each arson-related count, and a mandatory minimum of five years in federal prison for each arson count.

Rivera pleaded guilty on March 27 to one count of conspiracy and one count of use of interstate commerce facilities in the commission of murder-for-hire. He faces up to 10 years in federal prison for each count at his September 25 sentencing hearing.

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

Assistant United States Attorneys Kevin J. Butler of the Violent and Organized Crime Section, Kevin B. Reidy of the Major Frauds Section, and Eli A. Alcaraz of the Riverside Branch Office are prosecuting this case.

LOS ANGELES – A former Malibu resident who defrauded several individuals out of more than $3 million with bogus claims he had access to stock shares of Alibaba prior to its initial public offering has pleaded guilty to two counts of wire fraud, the Justice Department announced today.

Frank Harold Rosenthal, 48, who currently resides in New York City, pleaded guilty Friday before United States District Judge Fernando L. Aenlle-Rocha.

Rosenthal admitted making false claims of having inside connections at Goldman Sachs that would provide him with special access to purchase discounted shares of Alibaba, a Chinese e-commerce company, before its initial public offering.

Rosenthal carried out his scheme through a middleman, David Kunkle, by making fraudulent representations and pressuring Kunkle to solicit funds from his relatives and acquaintances for the purportedly lucrative investment opportunity.

To lend legitimacy to his fraudulent scheme, Rosenthal negotiated and drafted loan agreements and promissory notes with the victims that promised the victims significant returns on their loans and investments.

After obtaining their money, Rosenthal lulled his victims by, among ways, falsely stating that Alibaba shares had been purchased and sold. Rosenthal paid his earlier victims with money from later victims’ funds.

Instead of using victims’ funds to purchase shares of Alibaba, Rosenthal used the money to support his lavish lifestyle, which included the $16,000 monthly rent of a Malibu home.

Judge Aenlle-Rocha has scheduled a sentencing hearing on October 13, at which time Rosenthal will face a statutory maximum sentence of 40 years in federal prison, as well as restitution.

IRS Criminal Investigation investigated this matter.

Trial Attorney Sara Henderson of U.S. Department of Justice’s Tax Division and Assistant United States Attorneys Steven M. Arkow and Mark Aveis of the Major Frauds Section are prosecuting this case.

LOS ANGELES – Two San Fernando Valley brothers have been found guilty by a jury of nearly a dozen felonies for fraudulently obtaining hundreds of thousands of dollars in federal income tax refunds, some of which they then laundered through bank accounts held in the United Kingdom, the Justice Department announced today.

Victor A. Ohiri, 55, and Stephen O. Danielson-Ohiri, 54, both of Woodland Hills, were found guilty late Wednesday of one count of conspiracy and 10 counts of theft of government property.

According to evidence presented at their two-day trial, from March 2014 to March 2015, Victor and Stephen Ohiri, together with others in the United Kingdom, conspired to use the Ohiris’ U.S.-based bank accounts to fraudulently obtain hundreds of thousands of dollars of federal income tax refunds.

The co-conspirators filed nearly 20 fraudulent federal income tax returns with the IRS in the names of victim-taxpayers whose identities they had stolen. The co-conspirators used fake documents, such as bogus Forms W-2, to file the fraudulent returns, which requested large tax refunds, often between $8,000 and $10,000. 

Based on the fraudulent returns, the IRS issued tax refunds, which were electronically transmitted not to the victim-taxpayers whose identities had been stolen, but instead to bank accounts controlled by Victor and Stephen Ohiri. The Ohiris then wired the majority of those refund proceeds to co-conspirators in the United Kingdom, and they withdrew the rest in cash for themselves.

During the conspiracy, approximately $340,000 in federal income tax refunds was deposited into accounts controlled by the Ohiris.

During the investigation, IRS investigators seized approximately $181,000 from two of Stephen Ohiri’s bank accounts – money that came from just one of the fraudulently obtained tax refunds.

United States District Judge Stephen V. Wilson has scheduled an October 2 sentencing hearing, at which time Victor Ohiri and Stephen Ohiri will face statutory maximum sentences, respectively, of 115 years and 60 years in federal prison.

IRS Criminal Investigation and Homeland Security Investigations investigated this matter.

Assistant United States Attorney Morgan J. Cohen of the Major Frauds Section is prosecuting this case.

LOS ANGELES – Following a lengthy investigation that determined the County of Los Angeles discriminated against persons with disabilities at vote centers during recent elections, the United States Attorney’s Office today filed a lawsuit alleging the county has failed to comply with the Americans with Disabilities Act of 1990 (ADA).

The investigation into the county’s voting program found that the county, acting through its registrar-recorder, excluded qualified individuals with mobility disabilities and those with vision disabilities from participating in the county’s voting programs. The complaint filed in United States District Court seeks a court order directing the county to comply with the ADA, promptly develop a plan to completely remedy the alleged violations, and not further discriminate against individuals with disabilities.

“Voting is a fundamental right, and we will do everything we can to ensure that it is not limited or denied to anyone in our community,” said United States Attorney Martin Estrada. “Through this lawsuit, we demand that Los Angeles County afford individuals with disabilities an opportunity to participate in the county’s voting program that is equal to that provided to nondisabled individuals.”

“Voting is the bedrock of our democracy, and all voters, including those with disabilities, should have an equal opportunity to participate in the voting process. This lawsuit should send a strong message to officials across the country regarding the Justice Department’s firm commitment to ensuring polling place accessibility,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division.

The lawsuit was brought under Title II of the ADA, which prohibits public entities from discriminating against qualified individuals with disabilities. The federal investigation has focused on physical accessibility for persons with mobility disabilities and persons with vision disabilities at county vote centers during the 2020 primary election, the 2020 general election and the 2022 general election. The United States Attorney’s Office also reviewed other aspects of the county’s voting programs, including curbside voting and ballot drop boxes.

On May 16, the United States issued a Letter of Findings that advised the county of its findings about inaccessible vote centers during the March 2020, November 2020, and November 2022 elections; inaccessible ballot drop boxes from the November 2020 and 2022 elections; and the inaccessible curbside voting system. The United States advised the county that its use of physically inaccessible vote centers and its curbside voting system violated Title II of the ADA.

The lawsuit filed today in Los Angeles alleges that the county is responsible for selecting and providing accessible facilities to be used as polling places or vote centers for federal, state and local elections.

During elections in June 2016, March 2020 and November 2020, the United States Attorney’s Office surveyed well over 250 polling places and vote centers, finding that only a small percentage of them complied with the ADA, according to the complaint.

During the November 2022 general election, the United States surveyed 52 Los Angeles County vote centers to determine if they were compliant with the ADA and applicable standards for accessibility. “Each of the surveyed vote centers had non-compliant elements or features, including, for example, a lack of van accessible parking; wide gaps, abrupt level changes, and excessive cross slopes on designated accessible routes; ramps with steep running slopes and without the required handrails; entrances and/or exits that were obstructed or too narrow, lacked level landings, or had high thresholds; interior routes that had protruding objects; and voting areas with narrow routes,” the complaint alleges.

The lawsuit identifies specific vote centers in Pasadena, North Hollywood, Downey and Watts that are still in use, even though the federal government first alerted the county about accessibility deficiencies at the first three facilities in September 2016 and the Watts location in July 2020.

Other accessibility problems were identified with ballot drop boxes used during the November 2020 and November 2022 general elections.

The lawsuit discusses difficulties experienced during the August 2019 special election by a voter who uses a wheelchair. This voter “reported feeling dismayed and frustrated by her treatment at the polling place and that she felt as if she had lost her freedom to vote privately and independently like everyone else,” the lawsuit states.

The lawsuit is part of the Justice Department’s ADA Voting Initiative, which seeks to increase accessibility for voters with disabilities across the country. A hallmark of the ADA Voting Initiative is its collaboration with jurisdictions to increase accessibility at vote centers or polling places. Through this initiative, the Department of Justice’s Civil Rights Division and U.S. Attorney’s Offices across the country have surveyed more than 2,700 polling places and increased polling place accessibility in more than 50 jurisdictions, including Kenton County, Kentucky; Travis County, Texas; and Lycoming County, Pennsylvania.  

Assistant United States Attorney Katherine M. Hikida of the Civil Division’s Civil Rights Section is handling this case.

Information about the Civil Rights Section in the Civil Division of the United States Attorney’s Office is available on our website. Members of the public may report possible civil rights violations to our office via email to USACAC.CV-CivilRights@usdoj.gov.

LOS ANGELES – A county organized health system (COHS) that arranges services for Medi-Cal enrollees in Santa Barbara and San Luis Obispo counties and three Central Coast health care providers have agreed to pay a total of $68 million to resolve allegations that they violated the False Claims Act and the California False Claims Act by submitting or causing the submission of false claims to Medi-Cal related to Medicaid Adult Expansion under the Patient Protection and Affordable Care Act (ACA).

The four entities that entered into settlement agreements with the United States and the State of California are the Santa Barbara San Luis Obispo Regional Health Authority, doing business as CenCal Health, a COHS that contracts to arrange for the provision of health care services under Medi-Cal, which is California’s Medicaid program; Cottage Health System, a not-for-profit hospital network operating in Santa Barbara County; Sansum Clinic, a non-profit outpatient clinic operating in Santa Barbara County; and Community Health Centers of the Central Coast (CHC), a non-profit community health center operating in Santa Barbara and San Luis Obispo counties.

The settlement agreements were executed earlier this month, and late Wednesday a federal judge unsealed the “whistleblower” case naming the entities.

Pursuant to the ACA, beginning in January 2014, Medi-Cal was expanded to cover the previously uninsured “Adult Expansion” population – adults between the ages of 19 and 64 without dependent children with annual incomes up to 133% of the federal poverty level. The federal government fully funded the expansion coverage for the first three years of the program. Under contracts with California’s Department of Health Care Services (DHCS), if CenCal did not spend at least 85% of the funds it received for the Adult Expansion population on “allowed medical expenses,” CenCal was required to pay back to the state the difference between 85% and what it actually spent. California, in turn, was required to return that amount to the federal government.

The four settlements resolve allegations that CenCal, Cottage, Sansum, and CHC knowingly submitted or caused the submission of false claims to Medi-Cal for “Enhanced Services” that were purportedly provided to Adult Expansion Medi-Cal members: by Cottage between January 1, 2014 and June 30, 2016; by Sansum and CHC between January 1, 2015 and June 30, 2016; and by certain other healthcare providers between January 1, 2014 and June 30, 2016.

The United States and California alleged that the payments were not “allowed medical expenses” permissible under the contract between DHCS and CenCal; were pre-determined amounts that did not reflect the fair market value of any Enhanced Services provided; and/or the Enhanced Services were duplicative of services already required to be rendered. The United States and California further alleged that the payments were unlawful gifts of public funds in violation of the California Constitution.

As a result of the settlements, CenCal will pay $49.5 million, Cottage will pay $9 million, Sansum will pay $4.5 million, and CHC will pay $3.15 million to the United States. In addition, California will receive payments totaling $1.85 million.

“These historic settlements demonstrate our steadfast efforts to eradicate fraud involving Medicaid Adult Expansion,” said United States Attorney Martin Estrada. “Health care systems and providers are on notice that the False Claims Act provides us with a powerful tool to ensure that taxpayer-funded health care programs are used for patient care, and not for furtive financial gain.”

“Medicaid expansion funds must be used for their intended purpose of providing health care services to low-income individuals,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “When health care systems and providers knowingly misuse Medicaid funds, they will be held accountable.”

“Federal health care programs are an important resource for millions of Americans to receive medical care,” said Timothy B. DeFrancesca, Special Agent in Charge at the Department of Health and Human Services, Office of Inspector General (HHS-OIG). “HHS-OIG will continue to ensure that federal health care funds are used as intended and protected from fraud, waste, and abuse.”

“Medi-Cal is a lifeline that provides access to free or affordable healthcare services for millions of Californians and their families,” said California Attorney General Rob Bonta. “When any healthcare provider or agency defrauds the program, they break the public’s trust and put their own bottom line before the patients who count on them for honest, quality care and services. I am grateful to the Justice Department for its extensive efforts throughout the course of this investigation. The California Department of Justice and our law enforcement partners will continue to hold accountable those who defraud the Medi-Cal program, and protect those it serves.”

The civil settlements include the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act by Julio Bordas, CenCal’s former medical director. Under the act, a private party can file an action on behalf of the United States and receive a portion of any recovery. Dr. Bordas will receive approximately $12.56 million as his share of the federal recovery.

The United States previously settled similar allegations against Dignity Health (which operates Arroyo Grande Community Hospital, French Hospital Medical Center in San Luis Obispo, and Marian Regional Medical Center in Santa Maria) and Twin Cities Community Hospital and Sierra Vista Regional Medical Center, two subsidiaries of Tenet Healthcare Corporation, relating to payments they received from CenCal under the Adult Expansion program.

The partial resolution obtained in this matter was the result of a coordinated effort between the United States Attorney’s Office; the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section; and the California Department of Justice, with assistance from HHS-OIG and DHCS. This case is being handled by Assistant United States Attorney Jack D. Ross of the Civil Fraud Section, and Trial Attorneys Mary Beth Hickox-Howard and Tiffany L. Ho of the Commercial Litigation Branch.

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

The claims resolved by the settlements are allegations only and there has been no determination of liability.

LOS ANGELES – A South Bay woman was found guilty today of nearly two dozen felonies for billing Medicare more than $24 million by submitting fraudulent claims for medically unnecessary durable medical equipment – mostly power wheelchairs (PWC) – and PWC repairs, many of which were never performed.

Tamara Yvonne Motley, 54, a.k.a. “Tamara Ogembe,” of Redondo Beach, was found guilty by a federal jury of 20 counts of health care fraud, two counts of aggravated identity theft, and one count of conspiracy to commit money laundering.

Following the reading of the guilty verdicts, United States District Judge Stanley Blumenfeld Jr. remanded Motley into custody.

According to evidence presented at her five­-day trial, from July 2006 to August 2014, Motley was the de facto owner of the Hawthorne-based Action Medical Equipment and Supplies. From January 2013 to November 2016, Motley was the de facto owner of the Ventura-based Kaja Medical Equipment & Supply. Both companies were enrolled with Medicare in the names of Motley’s out-of-state relatives.

Motley orchestrated a scheme in which she paid marketers for patient referrals and then directed them to take patients to corrupt physicians, who prescribed medically unnecessary durable medical equipment, such as PWCs, that Motley’s companies used to submit fraudulent bills to Medicare.

In January 2011, when Medicare changed the reimbursement rules for PWCs to make the upfront payments less lucrative to suppliers, Action switched to billing Medicare for PWC repairs, and continued that scheme at Kaja once Action was shut down. These repairs were not medically necessary because the patients did not need the PWCs to begin with, were not needed to make the PWCs serviceable in any event, and often simply were not performed. These repairs were expensive – often billed for $3000-$4000 – and accounted for nearly half of Action’s billings and almost all of Kaja’s.

Over an eight-year period, Action billed Medicare more than $18.2 million for DME – most for PWCs, but also for PWC accessories, knee braces and back braces – and the repair or replacement of PWCs. Medicare paid Action nearly $10.3 million.

Between July 2013 and November 2016, Kaja billed Medicare $6.3 million, primarily for PWC repairs. Medicare paid Kaja approximately $2.8 million for those claims.

Judge Blumenfeld scheduled an October 3 sentencing hearing, at which time Motley will face up to 10 years in federal prison for each health care fraud count, up to 20 years in federal prison for the money laundering conspiracy count, and a mandatory sentence of two years in federal prison consecutive to the other sentences for the aggravated identity theft counts.

Two other defendants have been convicted in this case:

• Cynthia Karina Marquez, 47, of Paramount, who worked as an office manager at both Action and Kaja, pleaded guilty in December 2019 to two counts of making false statements affecting a health care program. She received a time-served sentence, was placed on supervised release for three years, and was ordered to pay $9,886,646 in restitution.
• Juan Roberto Murillo, 46, of Montebello, who worked at both medical supply companies as a repair technician, pleaded guilty in November 2019 to one count of conspiracy to commit money laundering. He was sentenced to three years’ probation and was ordered to pay $2,504,119 in restitution.

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

Assistant United States Attorneys Kristen A. Williams and David H. Chao of the Major Frauds Section are prosecuting this case.

LOS ANGELES – A South Bay woman was sentenced today to 24 months in federal prison for throwing a Molotov cocktail inside a bank in Torrance after having a dispute with the branch manager.

Teranee Millet, 35, of Gardena, was sentenced by United States District Judge Stanley Blumenfeld Jr.

Millet pleaded guilty on March 21 to unlawful possession of a firearm and destructive device.

On September 20, 2021, Millet entered a Bank of America branch in Torrance. She spoke to the bank manager and demanded to be helped by another teller because she believed she had been waiting in line for too long.

When the bank manager informed her that no other tellers were available and she would have to continue waiting, Millet used profane language and then yelled, “I’m going to blow this bitch up!” In response, the bank manager called 911 and informed law enforcement of Millet’s comments.

A few minutes later, Millet returned to the bank branch and threw a Molotov cocktail into the bank, causing a fire in the middle of the bank. A bank customer successfully extinguished the fire. On her way out of the bank’s parking lot and before law enforcement arrived, she threatened another customer and threw a glass bottle at the customer’s truck, causing minor damage to the vehicle. Police responded within a few minutes, secured the scene and recovered the item that Millet threw on the floor.

Law enforcement used bank surveillance photos to help identify Millet.

Millet was arrested in Georgia in December 2021, after she led law enforcement on a chase in a stolen U-Haul van that ended with the van crashing, according to court documents. Inside the van, law enforcement recovered a gym bag containing four packs of glass bottles with tissue paper inserted inside the bottles, a can of lighter fluid and a five-gallon can of gasoline, according to court documents. Millet sustained injuries in the crash and later received medical treatment. She has been in custody since that time.

The FBI, the Torrance Police Department, and the Torrance Fire Department investigated this matter.

Assistant United States Attorney Kellye Ng of the Violent and Organized Crime Section prosecuted this case.

LOS ANGELES – A San Bernardino County woman was sentenced today to 30 months in federal prison for fraudulently obtaining more than $500,000 in pandemic-related unemployment insurance (UI) benefits by using the names of inmates locked up the California state prison system.

Cynthia Ann Hernandez, 33, a.k.a. “Cynthia Roberts,” of Victorville, was sentenced by United States District Judge Mark C. Scarsi, who also ordered her to pay $515,138 in restitution.

Hernandez pleaded guilty on January 23 to one count of mail fraud and one count of access device fraud.

During the summer of 2020, Hernandez filed with the California Employment Development Department (EDD) fraudulent applications for UI benefits in the names of persons incarcerated in the California state prison system and who were ineligible to receive jobless benefits. EDD manages California’s unemployment insurance benefit program.

Hernandez falsely stated on the UI benefits applications that the named claimants were individuals whose employment had been negatively affected by the COVID-19 pandemic and were eligible for pandemic unemployment assistance under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Congress passed the CARES Act in March 2020, in part, to help individuals whose employment and finances were adversely affected by the pandemic.

The applications also falsely stated that the named claimants were eligible for the UI benefits and that they resided and worked in Los Angeles and Orange counties. EDD then authorized Bank of America to issue debit cards in the claimants’ names that were mailed to Hernandez’s mailing address.

In total, Hernandez caused at least 29 fraudulent applications to be filed with EDD.

“[Hernandez] orchestrated a sophisticated scheme that deprived the state of over [$500,000] meant to provide relief for vulnerable taxpayers who were unable to work due to the COVID-19 pandemic,” prosecutors wrote in a sentencing memorandum. “She did so by applying for UI benefits for people who were plainly ineligible and did so for her own financial gain.”

This matter was investigated by the United States Department of Labor, Office of Inspector General; the California Employment Development Department, Investigation Division; Homeland Security Investigations; the California Department of Corrections and Rehabilitation; the United States Department of Homeland Security, Office of Inspector General; the United States Postal Inspection Service; and United States Customs and Border Protection’s Special Response Team.

Assistant United States Attorney Haoxiaohan Cai of the General Crimes Section prosecuted this case.

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

LOS ANGELES – An Inland Empire tax preparer was sentenced today to 72 months in federal prison for knowingly filing thousands of tax returns that falsely claimed deductions, such as fake medical expenses and bogus mortgage interest, and which caused more than $3 million in losses to the IRS.

Andrew Zepeda Hansack, 40, of Riverside, was sentenced by United States District Judge Stephen V. Wilson, who said Hansack’s crimes were “one of the most serious offenses I’ve encountered while on the bench.”

In addition to the six-year prison term, Judge Wilson ordered Hansack to pay a $50,000 fine and $3,369,886 in restitution.

Hansack pleaded guilty on February 27 to two counts of aiding and assisting in the preparation of a false tax return. Judge Wilson imposed the statutory maximum sentence for each of the two counts.

Starting in January 2015, Hansack prepared personal income tax returns at AJ Loyal Income Tax Service, a Riverside-based company. Hansack filed tax returns for some of his clients that included false itemized deductions. Specifically, Hansack filed tax returns for these clients that indicated they had paid mortgage interest for their homes, when in truth, as Hansack knew, his clients did not own a home. Hansack also claimed false medical expenses, sales tax, and gifts by cash or check on some tax returns he prepared that he knew to be false.

For the tax years 2015 through 2019, Hansack filed approximately 2,533 tax returns with false deductions on behalf of his clients, according to court documents. Because of Hansack’s criminal activity, the IRS was prevented from assessing and collecting the correct amount of taxes owed by the clients. Judge Wilson found that the IRS suffered losses of approximately $3.37 million.

For example, in February 2020, Hansack aided and assisted the preparation of a federal income tax return for a South Gate resident. This tax return falsely claimed $30,488 in itemized deductions, including deductions for mortgage interest. The false and fraudulent deductions caused the South Gate taxpayer to claim a refund from the IRS in the amount of $7,318 to which the taxpayer was not entitled.

IRS Criminal Investigation investigated this matter.

Assistant United States Attorney Jeff Mitchell of the Major Frauds Section prosecuted this case.

LOS ANGELES – A skilled nursing facility in Riverside and its management company have agreed to pay the United States and California a total of $3.825 million to resolve allegations related to kickbacks allegedly given to physicians to induce patient referrals, United States Attorney Martin Estrada announced today.

Alta Vista Healthcare & Wellness Centre, LLC and its management company, Rockport Healthcare Services, settled a “whistleblower” case that alleged they submitted and caused the submission of false claims to Medicare and Medicaid by paying kickbacks to physicians. The $3.85 million settlement amount was negotiated based on Alta Vista’s and Rockport’s lack of ability to pay.

The lawsuit in this matter was unsealed on June 16.

The Anti‑Kickback Statute prohibits offering or paying remuneration to induce the referral of items or services covered by Medicare, Medicaid and other federally funded programs. It is intended to ensure that medical decision-making is not compromised by improper financial incentives and is instead based on the best interests of the patient.

From 2009 through 2019, Alta Vista, under the direction and control of Rockport, gave certain physicians extravagant gifts, including expensive dinners for the physicians and their spouses, golf trips, limousine rides, massages, e-reader tablets and gift cards worth up to $1,000. Separately, Alta Vista paid these physicians monthly stipends of $2,500 to $4,000, purportedly for their services as medical directors. At least one purpose of these gifts and payments was to induce these physicians to refer patients to Alta Vista.

“The administrators and beneficiaries of the Medicare and Medicaid programs expect that providers will make decisions based on sound medical judgment, not their personal self-interest,” said United States Attorney Martin Estrada. “As this case demonstrates, our office will take decisive action to address allegations that medical providers are paying or receiving improper financial benefits that could impact care provided to patients.”

“Kickbacks can impair the independence of physician decision-making and waste taxpayer dollars,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “The department is committed to preventing illegal financial relationships that undermine the integrity of our public healthcare programs.”

“Decisions that affect patient health should be made solely on the basis of a patient’s best interest,” said California Attorney General Rob Bonta. “When a healthcare company cheats and offers kickbacks to gain an unfair advantage, it jeopardizes the health and wellbeing of those who rely on its services. These illegal schemes also make public services and programs costlier, and ultimately waste valuable taxpayer dollars. Today, I thank the U.S. Department of Justice for teaming up with the California Department of Justice on this case. This settlement demonstrates our commitment to protecting the integrity of Medi-Cal, and the taxpayer dollars that support the program."

“Kickbacks impose hidden costs on the health care system, compromise medical decision making, and taint the doctor-patient relationship,” said Special Agent in Charge Timothy B. DeFrancesca of the U.S. Department of Health and Human Services Office of the Inspector General (HHS-OIG). “Working tirelessly with our law enforcement partners, HHS-OIG will continue to prevent the waste of valuable taxpayer dollars and protect the integrity of federal health care programs.”

The defendants’ conduct allegedly resulted in false claims to Medicare and California’s Medicaid programs, the latter of which is jointly funded by the federal government and California. Under the settlement, they will pay $3,228,300 to the United States and $596,700 to California.

The settlement announced today stems from a whistleblower complaint filed in 2015 by former Alta Vista accounting employee Neyirys Orozco pursuant to the qui tam provisions of the False Claims Act, which permit private persons to bring a lawsuit on behalf of the government and to share in the proceeds of the suit. Orozco will receive $581,094 as her share of the federal government’s recovery in this case.

In addition to resolving their False Claims Act liability, Alta Vista and Rockport have entered into a five-year Corporate Integrity Agreement with HHS-OIG which requires, among other compliance obligations, an Independent Review Organization’s review of Alta Vista’s and Rockport’s physician relationships.

The United States’ settlement in this matter illustrates the government’s emphasis on combating healthcare fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement, can be reported to HHS-OIG, at 800‑HHS‑TIPS (800-447-8477).

This matter was handled by Assistant United States Attorney Ross Cuff of the Civil Fraud Section; the Commercial Litigation Branch, Fraud Section, of the Justice Department’s Civil Division; and the California Department of Justice. HHS-OIG provided investigative support.

The case is captioned United States of America ex rel. Neyiris Orozco v. Shlomo Rechnitz, et al., CV15-6177.

The claims resolved by this settlement are allegations only and there has been no determination of liability.

LOS ANGELES – A former member of the United States military was sentenced today to 27 months in federal prison for conspiring to unlawfully export to Russia defense articles – including thermal imaging riflescopes and night vision goggles – without a license in violation of the Arms Export Control Act.

Igor Panchernikov, 41, a former Corona resident who once served in the United States Air Force Reserves, was sentenced by United States District Judge André Birotte Jr.

Panchernikov pleaded guilty on March 24 to one count of conspiracy to violate the Arms Export Control Act. He has been in federal custody since July 2022 after Israel extradited him to the United States.

From December 2016 to May 2018, Panchernikov conspired with other individuals to knowingly export from the United States to Russia defense articles without obtaining from the State Department a valid license or other approval for such exports.

Panchernikov’s accomplices purchased defense articles – including thermal riflescopes, weapons sights, monoculars and night vision googles – from various online sellers located in the United States and directed the sellers to mail those items to Panchernikov’s residence in Corona.

At his Corona residence, Panchernikov received at least 19 defense articles that his co-conspirators purchased from online sellers. After receiving these items, Panchernikov inspected the items to ensure that they were undamaged and operational. Pursuant to his co-conspirators’ instructions, Panchernikov then mailed two of the items to accomplices in Russia and mailed 17 defense articles to Elena Shifrin, 61, of Mundelein, Illinois, who then mailed these items to Russia.

To conceal his unlawful activities, when Panchernikov exported the two defense articles to Russia, he listed fictitious sender names on the packages containing the items. He also falsely identified the items in the packages as non-export-controlled items, such as clothing. Finally, he concealed the defense articles in other items, including a drill press.

Shifrin pleaded guilty in February 2022 to one count of conspiracy to violate the Arms Export Control Act. Her sentencing hearing is expected in the coming months.

Vladimir Pridacha, 58, of Volo, Illinois, has pleaded not guilty to criminal charges in this case and has an August 29 trial date scheduled.

Two other defendants charged in this case – Boris Polosin, of Russia, and Vladimir Gohman, of Israel – are fugitives.

An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

The FBI’s Los Angeles and Chicago field offices investigated this matter, with substantial assistance from the United States Postal Inspection Service and Homeland Security Investigations.

Assistant United States Attorneys David T. Ryan, Chief of the Terrorism and Export Crimes Section, and Wilson Park of the General Crimes Section are prosecuting this case.