Central District of California

          SANTA ANA, California – The former president and CEO of the Anaheim Chamber of Commerce is expected to appear this afternoon in federal court after being charged with lying to a mortgage lender about his assets while seeking a loan for a $1.5 million home in the San Bernardino Mountains.

          Todd Ament, 57, of Orange, was charged in a 99-page criminal complaint filed Monday afternoon in United States District Court with making false statements to a financial institution while seeking funding in late 2020 to purchase a second home – a five-bedroom residence in Big Bear City.

          The affidavit in support of the criminal complaint outlines a plot in which Ament – with the assistance of a political consultant who was a partner at a national public relations firm – devised a scheme to launder proceeds intended for the Chamber through the PR firm into Ament’s bank account. This infusion of cash – which appears to have been a loan from the PR firm engineered by the political consultant – allegedly influenced the lender’s decision to fund the mortgage.

          The scheme led to a series of wire transfers from the PR firm that ultimately gave Ament $205,000 and made it appear he had enough cash on hand to secure the home loan, according to the affidavit. Ament allegedly used some of that money for the down payment, and some was used to make an out-of-escrow payment to the seller. The affidavit states that Ament made a $200,000 payment directly to the seller in an apparent effort to reduce the sale price of the house, thus reducing property taxes and lowering the commission to the seller’s real estate agent, the affidavit states.

          An investigation outlined in the affidavit revealed that Ament and the political consultant had a close relationship for several years, one that included leading a small group of Anaheim public officials, consultants and business leaders. That group –described by Ament and the political consultant as a “family” and a “cabal” – met regularly at “retreats” to allegedly exert influence over government operations in Anaheim, according to the affidavit.

          Ament and the political consultant also allegedly devised a scheme to divert proceeds intended for the Chamber through the PR firm and into Ament’s personal bank account. The affidavit alleges that Ament and the political consultant schemed to defraud a cannabis company that had retained the political consultant to lobby for favorable cannabis-related legislation in Anaheim. The cannabis company paid $225,000 to the Chamber with the understanding that it would have access to a task force that crafted such legislation, but at least $31,000 of that money was paid directly to Ament without those payments being disclosed to the client, the affidavit alleges.

          The charge of making false statements to a financial institution carries a statutory maximum sentence of 30 years in federal prison.

          A criminal complaint 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 and IRS Criminal Investigation are conducting the investigation in this matter.

          Assistant United States Attorneys Daniel H. Ahn, Daniel S. Lim and Melissa S. Rabbani of the Santa Ana Branch Office are prosecuting this case.

          SANTA ANA, California – A former physician assistant at a Fountain Valley medical clinic was sentenced today to 46 months in federal prison for conspiring to issue and sell prescriptions for oxycodone, a highly addictive opioid painkiller, without a medical purpose, to drug dealers, knowing the drugs would be sold on the street.

          Raif Wadie Iskander, 56, formerly of Ladera Ranch, but who now resides in Ennis, Montana, was sentenced by United States District Judge James V. Selna.

          Iskander pleaded guilty in November 2020 to one count of conspiracy to distribute oxycodone.

          From 2018 to April 2019, Iskander, who was a licensed physician assistant in California, wrote prescriptions for purported “patients” he had never met or examined. Iskander provided to drug dealers multiple paper prescriptions that he had signed, but with the patient names left blank, to be filled in by drug dealers later.

          In exchange for cash, Iskander wrote fraudulent oxycodone prescriptions for co-defendants Johnny Gilbert Alvarez, 42, a.k.a. “M.J.,” of Santa Ana, who sold the prescribed drugs on the street as well as to an undercover officer.

          Iskander knew that the oxycodone filled from the prescriptions would be sold to drug customers who were not using the oxycodone for legitimate medical purposes and whom he had never met or examined.

          Alvarez pleaded guilty in November 2021 to one count of distribution of methamphetamine and is scheduled to be sentenced on June 13.

          The Drug Enforcement Administration, the Costa Mesa Police Department, and the California Department of Health Care Services investigated this matter.

          Assistant United States Attorney Rosalind Wang of the Santa Ana Branch Office prosecuted this case.

          LOS ANGELES – A Diamond Bar man was arrested today on federal charges alleging that he disrupted a “Stop Asian Hate” rally in March 2021 by deliberately running a red light, blocking the path of demonstrators lawfully using a crosswalk and yelling racial epithets at them.

          Steve Lee Dominguez, 56, is charged in a federal grand jury indictment with two counts of bias-motivated interference with federal protected activities.

          Dominguez is expected to be arraigned this afternoon in United States District Court in downtown Los Angeles.

          According to the indictment that was unsealed today, on March 21, 2021, a “Stop Asian Hate” rally occurred in Diamond Bar. The rally was a protest against the increase in hate crimes and hate incidents against members of the Asian American Pacific Islander (AAPI) community both locally and nationally – including the murders of six Asian American women five days earlier in Atlanta.

          A group of rally participants assembled at the intersection of Diamond Bar Boulevard and Grand Avenue, carrying American flags and large signs in support of their cause. The demonstrators had gathered peacefully and lawfully crossed the streets using the marked pedestrian crosswalk when they had the right of way.

          During the rally, Dominguez was driving a black Honda four-door sedan and was stopped at a red light at the intersection. Dominguez allegedly yelled, “Go back to China!” and other racial slurs at the demonstrators. Dominguez then allegedly deliberately drove his car through the intersection’s crosswalk at the red light, made an illegal U-turn and cut off the route of several rally participants lawfully crossing the street.

          One of the victims was an Asian woman carrying a sign that read, “Stop Asian Hate.” Another victim was a minor Black female rally participant who carried a sign that read, “End the Violence Against Asians.” Another person who was cut off in the crosswalk was a 9-year-old child, and Dominguez’s car narrowly missed coming into contact with her and other victims, according to the indictment. No injuries were reported.

          Dominguez allegedly then pulled his car over some distance away from the intersection, got out of the car and continued to yell racial epithets and threats at the demonstrators. He then called the police, identified himself as “John Doe” and falsely reported to police that the rally participants were blocking the street and he had to run a red light “because they were about to trample my car,” the indictment alleges. He also allegedly requested that police “get some control out” at the intersection.

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

          If convicted of the two charges in the indictment, Dominguez would face a statutory maximum penalty of 20 years in federal prison.

          The FBI investigated this matter. The Los Angeles County Sheriff’s Department initially responded to the scene and assisted in this matter.

          Assistant United States Attorney Veronica Dragalin of the Public Corruption and Civil Rights Section is prosecuting this case.

          Any member of the public who has information related to this incident or other hate crimes is encouraged to call the FBI’s Los Angeles Field Office at (310) 477-6565 or report tips online at https://tips.fbi.gov.

          LOS ANGELES – A former San Bernardino County sheriff’s deputy has pleaded guilty to multiple felonies for deceiving victims into investing at least $5.6 million with him, then using their money on extravagant gambling, taking private jet airplane rides and buying luxury items for his girlfriends, the Justice Department announced today.

          Christopher Lloyd Burnell, 51, of Highland, pleaded guilty on Monday afternoon to 11 counts of wire fraud and two counts of filing a false tax return.

          According to court documents, Burnell falsely claimed to have accumulated tens of millions of dollars from lawsuits he purportedly won against the San Bernardino County Sheriff’s Department and Kaiser Permanente; from selling a patent for an air-cooled, bullet-resistant vest to Oakley Inc.; and through investments in small businesses and money-lending opportunities. The scheme began no later than November 2010 and continued until September 2017.

          After deceiving victims into believing he was a wealthy businessman, Burnell then induced victims to invest up to hundreds of thousands of dollars at a time with him by offering exclusive investment opportunities that promised rates of returns as high as 100% to be repaid in a few weeks, according to prosecutors’ trial memorandum. In some instances, Burnell asked the victim for an initial trial investment with him, during which he would fulfill his promised returns – and gain the victim’s trust – only to ask for a larger amount from them.

          But these investment opportunities did not exist. Rather, Burnell spent the money on maintaining a life of luxury. Burnell spent victims’ money on, among other things, gambling and luxury items, including losing more than $2 million in gambling at the San Manuel Casino in Highland, $500,000 in private jet trips, $70,000 on Louis Vuitton merchandise, and $175,000 on luxury cars and an apartment lease for his then-girlfriends, the trial memorandum states. Burnell continued this investment fraud scheme for years until he could not identify new victims to defraud and the money from his victims ran out.

          Burnell caused victim-investors to distribute at least $5,672,380 to him, according to court documents.

          As victims began to raise concerns to him about a lack of repayment and defaults, Burnell claimed that his money had been tied up in a trust fund and his remaining assets had been seized by federal authorities. He then cheated some of the victims out of additional funds by falsely claiming he needed loans to pay for his then-wife’s cancer treatment, a child custody dispute with his father-in-law, and other personal expenses.

          To alleviate victims’ concerns, Burnell showed many victims a fabricated Wells Fargo bank statement that said he had more than $150 million in his account that he would use to pay back victims once his funds were no longer tied up. In truth, Burnell had less than $6,500 in that account.

          Burnell did not report any of the money he received from victims in 2011 or 2012 on his personal income tax returns that he filed jointly with his then-wife. Instead, Burnell only reported income from gambling winnings in 2011 and 2012 – estimated to be more than $1 million – all of which was purportedly offset by gambling losses.

          United States District Judge Michael W. Fitzgerald has scheduled an August 15 sentencing hearing, at which time Burnell will face up to 20 years in federal prison for each wire fraud count and a statutory maximum sentence of three years in federal prison for each tax count.

          IRS Criminal Investigation and the United States Secret Service investigated this matter.

          Assistant United States Attorney Jerry C. Yang, Chief of the Riverside Branch Office, and Assistant United States Attorney Robert S. Trisotto, also of the Riverside Branch Office, are prosecuting this case.

          SANTA ANA, California – An Orange County man was sentenced today to 30 months in federal prison for fraudulently obtaining more than $1.5 million in Paycheck Protection Program (PPP) COVID-relief loans that he used for personal expenses and stock market trading.

          William Nicoloff Jr., 51, of Mission Viejo, was sentenced by United States District Judge James V. Selna, who also ordered him to pay $1,554,063 in restitution. At today’s hearing, Judge Selna said Nicoloff’s conduct was “extremely troubling” because it “pervert[ed] a public program designed to help small businesses during a time of severe economic hardship.”

          Nicoloff pleaded guilty in April 2021 to one count of bank fraud and one count of conducting an unlawful monetary transaction.

          From April 2020 to June 2020, Nicoloff obtained six PPP loans by defrauding two banks. To obtain the loans, he submitted to the banks false documents on behalf of four companies he owned and controlled – including Stonecreek Capital Partners and David Capital LLC – as well as himself and another individual. The fraudulent documents included falsified bank records, phony lease agreements, altered incorporation records, fake IRS records and bogus employee information.

          On the loan applications, Nicoloff falsely certified the number of employees and average monthly payrolls of the applicant companies and falsely claimed Nicoloff did not own other businesses.

          Nicoloff also falsely represented that the PPP funds would be used to pay employees and other permissible business expenses, when, in fact, he intended to use and later used the PPP loan proceeds to fund personal living expenses and securities trading activity entirely unrelated to the businesses for which the PPP loans were obtained.

          In total, Nicoloff fraudulently obtained $1,554,054 in PPP loans.

          Nicoloff transferred $405,880 in proceeds from the David Capital loan to a separate brokerage account and engaged in securities trading as well as using some of the loan to pay off personal expenses. Nicoloff has agreed to forfeit $1,709,151, which includes the $1,554,063 he obtained from the PPP loans as well as $155,097 in proceeds he gained because of securities trading from the illicit loans. These funds were previously recovered by the government from seizures of Nicoloff’s accounts.

          The Federal Reserve Board – Office of Inspector General; the U.S. Treasury Inspector General for Tax Administration; IRS Criminal Investigation; and the Small Business Administration – Office of Inspector General investigated this matter.

          Assistant United States Attorney Scott Paetty of the Major Frauds Section prosecuted 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, among other methods, 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 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 federal jury today convicted three defendants who participated in an $18.5 million scheme that submitted fraudulent claims to California’s Drug Medi-Cal program for alcohol and drug treatment services for high school and middle school students.

          With today’s guilty verdicts, a total of 19 people have been convicted of federal criminal charges stemming from fraudulent bills submitted by a Long Beach company – the non-profit Atlantic Recovery Services (ARS), later called Atlantic Health Services – that provided substance use disorder treatment services to students at local high schools and middle schools through Medi-Cal and its Drug Medi-Cal program.

          The three defendants convicted today of health care fraud charges are:

• Gregory Hearns, 66, of Compton, the billing supervisor for ARS who compiled the monthly billing and arranged for its submission to Medi-Cal (guilty of one count and acquitted on 10 others);
• LaLonnie Egans, 64, of Bellflower, a former manager at ARS (guilty of three counts);
• Tina Lynn St. Julian, 58, of Inglewood, a former counselor at ARS (guilty of four counts).

United States District Judge Philip S. Gutierrez is scheduled to sentence all three defendants on July 15, at which time each will face up to 10 years in prison for each count of conviction.

          According to court documents and the evidence presented at a 12-day trial, the participants in the ARS scheme defrauded the Drug Medi-Cal program by submitting bills for services to students who did not medically need alcohol or drug treatment. ARS also billed Drug Medi-Cal for group and individual counseling sessions that were not provided or did not meet the requirements for reimbursement as to size, length, or setting. To support the false billings, ARS employees falsified numerous documents.

          The former president and chief executive officer of ARS – Richard Mark Ciampa, 68, of Commerce – pleaded guilty last year and was sentenced in September to seven years in federal prison.

          In March 2009, Drug Medi-Cal ordered ARS to repay an overpayment, which caused a significant amount of financial pressure on Ciampa and ARS. Ciampa, in turn, passed along this financial pressure to his employees and threatened the employees that they would lose their jobs with ARS or have their hours reduced to part-time if they did not generate significant billings. In response to Ciampa’s threats, ARS employees generated false and fraudulent claims for submission to Drug Medi-Cal.

          Hearns also pressured ARS employees to increase billings. The pressure from ARS management prompted Egans and St. Julian to commit specific actions, including enrolling students in ARS’s substance abuse treatment program even if the students had used drugs or alcohol only one time or just occasionally, exaggerating documentation to falsely show that enrolled students had a medically diagnosed substance use disorder, falsifying documents to make it look like group and individual counseling sessions had taken place, collecting student signatures on sign-in sheets for group counseling sessions that the students did not attend or that were not conducted, and forging signatures on sign-in sheets and other documents that were used to support claims for reimbursement.

         During the four-year period that ended in March 2013, ARS submitted false and fraudulent claims of just over $18.5 million, and Drug Medi-Cal paid approximately $17,635,100 on those claims.

          The California Department of Justice, Division of Medi-Cal Fraud and Elder Abuse; the United States Department of Health and Human Services, Office of Inspector General; and the Internal Revenue Service - Criminal Investigation investigated this matter.

          Assistant United States Attorneys Cathy J. Ostiller and Karen E. Escalante of the Major Frauds Section, and Assistant United States Attorney Nisha Chandran of the General Crimes Section are prosecuting this case.

The United States is seeking the forfeiture of a more than 30,000-square-foot mega-mansion in the Holmby Hills neighborhood of Los Angeles, pursuant to a civil forfeiture complaint filed that alleges that the mansion was purchased with bribes paid by an Armenian businessman to the family of Gagik Khachatryan, a former high-ranking Armenian public official.

Gagik Khachatryan, 66, who was known as the “Super Minister,” because of his significant responsibilities, served as Chairman of the State Revenue Committee of the Republic of Armenia from 2008 to 2014 and as Minister of Finance for the Republic of Armenia from 2014 to 2016. In the complaint, which was filed Monday in U.S. District Court for the Central District of California, the United States alleges that businessman Sedrak Arustamyan paid Khachatryan and his family more than $20 million in bribes in exchange for favorable tax treatment of his businesses. The bribe payments allegedly were used to purchase the Holmby Hills property, which had been recently listed for sale for $63,500,000.

Gagik Khachatryan and his sons are charged in Armenia with receiving bribes in violation of the criminal code of the Republic of Armenia. Criminal charges are also pending in Armenia against Arustamyan for paying bribes.

This matter was investigated by the FBI's Eurasian Organized Crime Task Force (EOCTF) and the U.S. Marshals Service. The Republic of Armenia’s Prosecutor General’s Office and National Security Service provided critical assistance.  The EOCTF is composed of multiple law enforcement agencies including the FBI, IRS-Criminal Investigation, the U.S. Postal Inspection Service, the Glendale Police Department, the Los Angeles Police Department, and the Los Angeles County Sheriff's Department.

Trial Attorney D. Hunter Smith of the Kleptocracy Asset Recovery Initiative of the Criminal Division’s Money Laundering and Asset Recovery Section and Assistant U.S. Attorney Maxwell Coll for the Central District of California are litigating the forfeiture.

The Kleptocracy Asset Recovery Initiative is led by a team of dedicated prosecutors in the Criminal Division’s Money Laundering and Asset Recovery Section, in partnership with federal law enforcement agencies, and often with U.S. Attorneys’ Offices, to forfeit the proceeds of foreign official corruption and, where appropriate, to use those recovered assets to benefit the people harmed by these acts of corruption and abuse of office. In 2015, the FBI formed International Corruption Squads across the country to address national and international implications of foreign corruption. Individuals with information about possible proceeds of foreign corruption located in or laundered through the United States should contact federal law enforcement or send an email to kleptocracy@usdoj.gov or visit https://tips.fbi.gov/.

A civil complaint is merely an allegation, and the government has the burden of establishing the assets are subject to forfeiture by a preponderance of the evidence.

          LOS ANGELES – The United States is seeking the forfeiture of a more than 30,000-square-foot mega-mansion in the Holmby Hills neighborhood of Los Angeles, pursuant to a civil forfeiture complaint that alleges the mansion was purchased with bribes paid by an Armenian businessman to the family of Gagik Khachatryan, a former high-ranking Armenian public official.

          Khachatryan, 66, who was known as the “Super Minister” because of his significant responsibilities, served as chairman of the State Revenue Committee of the Republic of Armenia from 2008 to 2014 and as minister of finance for the Republic of Armenia from 2014 to 2016. In the complaint, which was filed Monday in federal court in Los Angeles, the United States alleges that businessman Sedrak Arustamyan paid Khachatryan and his family more than $20 million in bribes in exchange for favorable tax treatment of his businesses. The bribe payments allegedly were used to purchase the Holmby Hills property, which had been recently listed for sale for $63.5 million.

          Khachatryan and his sons are charged in Armenia with receiving bribes in violation of the criminal code of the Republic of Armenia. Criminal charges are also pending in Armenia against Arustamyan for paying bribes.

          This matter was investigated by the FBI’s Eurasian Organized Crime Task Force (EOCTF) and the United States Marshals Service. The Republic of Armenia’s Prosecutor General’s Office and National Security Service provided critical assistance. The EOCTF is composed of multiple law enforcement agencies including the FBI, IRS Criminal Investigation, the U.S. Postal Inspection Service, the Glendale Police Department, the Los Angeles Police Department, and the Los Angeles County Sheriff’s Department.

          Assistant United States Attorney Maxwell Coll of the Asset Forfeiture Section and Justice Department Trial Attorney D. Hunter Smith of the Kleptocracy Asset Recovery Initiative of the Criminal Division’s Money Laundering and Asset Recovery Section (MLARS) are litigating the forfeiture.

          The Kleptocracy Asset Recovery Initiative is led by a team of dedicated prosecutors in MLARS, who work in partnership with federal law enforcement agencies, and often with U.S. Attorneys’ Offices, to forfeit the proceeds of foreign official corruption and, where appropriate, to use those recovered assets to benefit the people harmed by these acts of corruption and abuse of office. In 2015, the FBI formed International Corruption Squads across the country to address national and international implications of foreign corruption. Individuals with information about possible proceeds of foreign corruption located in or laundered through the United States should contact federal law enforcement or send an email to kleptocracy@usdoj.gov or visit https://tips.fbi.gov/.

          A civil complaint is merely an allegation, and the government has the burden of establishing the assets are subject to forfeiture by a preponderance of the evidence.

          LOS ANGELES – A Santa Clarita resident who invested in real estate and sold “coupon bonds” that promised regular interest payments on top of principal repayment has agreed to plead guilty to a federal criminal charge for defrauding investors out of more than $1.7 million, the Justice Department announced today.

          Matthew Skinner, 45, who in 2014 founded a company called Empire West Equity, Inc. and later established Simple Growth, LLC, was charged today with securities fraud in a one-count information filed in United States District Court.

          Federal prosecutors today also filed a plea agreement in which Skinner agreed to plead guilty to the offense and admitted he fraudulently sold securities.

          Skinner used social media platforms such as Facebook and YouTube to promote himself, falsely claiming to be an experienced and successful real estate investor with more than $200 million in deals under his belt, according to court documents.

          After Empire West experienced financial troubles – Skinner was unable to pay his staff and investors – he established Simple Growth in 2018 and falsely told investors who purchased Simple Growth coupon bonds “that their money would be used to purchase real estate that [Skinner] and Empire West would develop and resell at a profit,” according to the plea agreement.

          Skinner admitted that he did not intend to purchase, develop or resell real estate, and that he instead used investor funds to pay older investors, his employees and himself.

          Skinner “used investor funds from those entities and accounts to pay for personal trips, his mortgage, his utility bills, cosmetic surgery, and alimony payments to his ex-wife,” he acknowledged in the plea agreement.

          Simple Growth raised approximately $1,744,946 from more than 20 investors – none of whom received any of their money back.

          The securities fraud charge against Skinner carries a statutory maximum penalty of 20 years in federal prison.

          Skinner has agreed to surrender to federal authorities and make his initial court appearance on May 25.

          The FBI conducted the investigation into Skinner.

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

          LOS ANGELES – A former special agent with Homeland Security Investigations (HSI) was found guilty by a federal jury today of dozens of criminal charges for accepting cash payments and other benefits to help an organized crime-linked person, including taking official action designed to help two foreign nationals gain entry into the United States.

          Felix Cisneros Jr., 48, of Murrieta, was found guilty of 30 felonies: one count of conspiracy to commit bribery of a public official, one count of bribery, 26 counts of money laundering and two counts of subscribing to a false tax return. After today's verdict was read, Cisneros was ordered immediately remanded into federal custody.

          According to evidence presented at his five-day trial, over an 18-month period that started in September 2015, Cisneros accepted cash, checks, private jet travel, luxury hotel stays, meals and other items of value from a person identified in court documents as “Individual 1,” who was associated with a criminal organization. Cisneros received approximately $100,000 in checks and gifts from Individual 1 in 2015 and 2016.

          Cisneros accepted the cash and other bribes while employed as a special agent with HSI, which is an agency within the United States Department of Homeland Security. In exchange for the bribes, Cisneros performed a series of official acts at the behest of Individual 1, including:

• Accessing a DHS database for information about a German national identified as W.R., and telling Individual 1 he removed a “hit” on W.R., “thus indicating derogatory information had been removed”;
• Placing an alert in a law enforcement database for an address associated with an illegal marijuana grow operation so Cisneros could learn of law enforcement interest and warn Individual 1;
• Obtaining an official DHS letter signed by an HSI assistant special agent in charge to allow the parole of Individual 1’s brother-in-law into the United States from Mexico, and later providing updates about the brother-in-law’s asylum application; and
• Collecting information on an associate of Individual 1 whose home had been searched by law enforcement and later providing Individual 1 with information about the investigation.

          Cisneros also underreported his total income on his federal income tax returns by at least $20,000 for the year 2015 and at least $73,404 for the year 2016.

          United States District Judge R. Gary Klausner has scheduled an August 1 sentencing hearing. The conspiracy charge carries a statutory maximum sentence of five years in federal prison, the bribery count carries a sentence of up to 15 years, each money laundering charge carries a statutory maximum sentence of 20 years’ imprisonment, and each tax count carries a statutory maximum sentence of three years in federal prison.

          The FBI, IRS Criminal Investigation and the Department of Homeland Security’s Office of Inspector General investigated this matter.

          Assistant United States Attorney Ruth C. Pinkel of the Public Corruption and Civil Rights Section and Assistant United States Attorneys Michael J. Morse and Juan M. Rodriguez of the General Crimes Section are prosecuting this case.

          LOS ANGELES – A South Bay man pleaded guilty today to a federal criminal charge for participating with his sister in a $6 million real estate scam that involved listing homes without the owners’ consent and collecting money from multiple would-be buyers for each of the not-for-sale homes.

          Adolfo Schoneke, 44, of Torrance, pleaded guilty to one count of conspiracy to commit wire fraud.

          United States District Judge R. Gary Klausner has scheduled an August 8 sentencing hearing, at which time Schoneke will face a statutory maximum sentence of 20 years in federal prison.

          On April 4, Schoneke’s sister, Bianca Gonzalez, 39, a.k.a. Blanca Schoneke, pleaded guilty to the same criminal charge. Her sentencing hearing is scheduled for October 3.

          According to court papers, from November 2013 to December 2016, Schoneke and Gonzalez, along with co-conspirators, operated real estate and escrow companies based in Cerritos, La Palma and Long Beach under a variety of names, including MCR and West Coast Realty Services. Schoneke, Gonzalez and other co-conspirators found properties that they would list for sale – even though they did not intend to sell them to anyone.

          The properties were listed on real estate websites such as the Multiple Listing Service (MLS) and were marketed as below-market short sales opportunities. In some cases, the homes were marketed through open houses arranged by tricking homeowners into allowing their homes to be used.

          Multiple offers were accepted for each of the not-for-sale properties, but the co-conspirators hid this fact from the victims and instead led each victim to believe that his or her offer was the only one accepted. The co-conspirators strung victims along – sometimes for years – by telling them closings were being delayed because lenders needed to approve the purported short sales.

          At the co-conspirators’ direction, office workers opened bank accounts to hide the co-conspirators’ involvement in the fraud. Those accounts were used to receive down payments on the homes and other payments from victims who were convinced to transfer the full “purchase price” after receiving forged short sale approval letters. The co-conspirators directed the office workers to withdraw large amounts of cash from these accounts, which made the proceeds harder to trace.

          Investigators estimate that several hundred victims collectively lost more than $6 million during the scheme.

          A co-conspirator, Mario Gonzalez, 50, was charged in a related case and pleaded guilty in January 2019 to conspiracy to commit wire fraud. His sentencing is scheduled for October 3.

          The FBI and the Federal Deposit Insurance Corporation, Office of Inspector General investigated this matter. The investigation was initiated by numerous complaints to the Long Beach Police Department and the Los Angeles County Sheriff’s Department, both of which provided substantial assistance during the federal investigation.

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

          LOS ANGELES – A Philippines national who fatally stabbed a fellow crewmember on a container ship en route from Shanghai to Los Angeles pleaded guilty today to a federal criminal charge.

          Michael Dequito Monegro, 43, a resident of The Philippines, pleaded guilty to one count of committing an act of violence against a person onboard a ship that is likely to endanger the safe navigation of the ship.

          United States District Judge Dale S. Fischer has scheduled a September 12 sentencing hearing, at which time Monegro will face a statutory maximum sentence of life in federal prison.

          According to his plea agreement, in September 2020, Monegro was working as a seaman aboard the MSC Ravenna, a 153,000-gross-ton Liberian-flagged container ship. On September 20, 2020, the Ravenna was approximately 80 nautical miles from Southern California, nearing the end of its two-week voyage from Shanghai to the Port of Los Angeles.

          That morning, several crewmembers were in a dressing room on the ship’s upper deck, preparing for their shift and waiting for their direct supervisor to provide their work assignments for the day. Shortly after Monegro saw his direct supervisor in the hallway outside the locker room, Monegro began stabbing him with a knife while they were both in the hallway in full view of several crewmembers.

          The victim grappled with Monegro and the two fell to the floor. Monegro then got on top of the victim and continued stabbing him. Monegro then removed a second knife from the victim’s coveralls and stabbed him with both knives.

          Crewmembers attempted to intervene to stop Monegro, including throwing a trash can at him, but their actions were unsuccessful. Monegro admitted that he only stopped stabbing the victim when he became too tired to continue.

          The ship’s captain, chief mate and chief engineer all arrived on scene during the incident, and the captain convinced Monegro to get off the victim, who died on the ship from multiple stab wounds.

          Monegro was convinced by the captain to walk to a conference room. After continued discussions, Monegro placed the knives on the conference room table and was escorted to his cabin.

          After the incident, Monegro was confined to a cabin and crewmembers were assigned to guard the door, so they were unable to perform their normal duties on the ship. Other crewmembers were traumatized by witnessing Monegro stab and kill the victim.

          Federal agents arrested Monegro after the ship docked at the Port of Los Angeles on September 27, 2020. He has been in federal custody since his arrest.

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

          Assistant United States Attorney Jeffrey M. Chemerinsky of the Violent and Organized Crime Section; Assistant United States Attorney Mark A. Williams, Chief of the Environmental and Community Safety Crimes Section; and Assistant United States Attorney Matthew W. O’Brien, also of the Environmental and Community Safety Crimes Section, are prosecuting this case.

          LOS ANGELES – A real estate developer has agreed to plead guilty to a federal criminal charge for offering to buy a million-dollar home for a Los Angeles County public official in exchange for the official’s assistance securing a $45 million county lease for the developer, the Justice Department announced today.

          Arman Gabaee, 61, a.k.a. “Arman Gabay,” of Beverly Hills, has agreed to plead guilty to one count of bribery, a crime that carries a statutory maximum sentence of 10 years in federal prison.

          Gabaee is scheduled to enter his guilty plea on May 2 before United States District Judge George H. Wu, and also has agreed to pay a fine of at least $1,149,000 and any restitution ordered.

          According to his plea agreement, Gabaee was a co-founder and co-managing partner of the Charles Company, a Hollywood-based commercial and residential real estate development firm. The then-county official whom Gabaee bribed was Thomas M. Shepos, 72, of Palmdale, who worked in Los Angeles County’s Real Estate Division and was involved in awarding contracts to real estate developers and contractors.

          Beginning no later than 2011 and continuing until April 2017, Gabaee paid Shepos bribes and kickbacks of approximately $1,000 per month in exchange for county leases, preferential contract terms, non-public information and other benefits. From December 2016 when Shepos began cooperating to April 2017, Gabaee paid Shepos $6,000 in cash bribes during meetings Shepos secretly recorded at the direction of the FBI.

          Further, in 2017, Gabaee offered to buy Shepos a Northern California residence – then worth more than $1 million – in exchange for Shepos’ assistance securing a county lease in the Hawthorne Mall, which Gabaee owned and was redeveloping. Gabaee wanted the county to enter into a 10-year, $45 million lease for county departments to rent office space in the Hawthorne Mall.

          During other secretly recorded meetings with Shepos, Gabaee first offered to purchase him a home listed at $1,199,000 in Sonoma County. Upon learning that this property was already in escrow, Gabaee offered to buy Shepos a different house, listed at $1,095,000, and also located in Sonoma County. Gabaee placed two offers on this property, first for $1,035,000 and later for $1,065,000. Gabaee admitted in his plea agreement that he rescinded the second offer hours after he made it because FBI agents had approached and informed him that they were aware of his bribes to Shepos.

          Shepos pleaded guilty in November 2018 to one count of making false statements to federal investigators who were investigating his financial relationship with Gabaee and one count of subscribing to a false tax return related to payments he received from Gabaee. Shepos is scheduled to be sentenced on June 27.

          The FBI investigated this matter.

          Assistant United States Attorneys Ruth C. Pinkel, Lindsey Greer Dotson and Thomas F. Rybarczyk of the Public Corruption and Civil Rights Section are prosecuting this case.

          SANTA ANA, California – A federal grand jury today returned a four-count indictment that charges an Irvine man with attempting to provide material support to two foreign terrorist organizations – Hay’at Tahrir al-Sham (HTS) and Hamas.

          Jason Fong, 26, allegedly attempted in the spring of 2020 to provide to HTS tactical, combat and weapons training material – as well as information regarding the making of chemical weapons and improvised explosive devices.

          The indictment further alleges that in May 2020 Fong attempted to fundraise for Hamas. The indictment further alleges that at the time he committed these offenses, Fong knew that each organization had been designated a foreign terrorist organization by the United States government.

          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.

          Fong has been summonsed to appear for an arraignment in United States District Court on May 23. A trial in this matter was previously set for October 25.

          If he were to be convicted of the charges in the indictment, Fong would face a statutory maximum sentence of 20 years in prison for each of the four counts. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

          The FBI, the Naval Criminal Investigative Service, Homeland Security Investigations, the Irvine Police Department, and the New York Police Department are participating in the ongoing investigation.

          Assistant United States Attorneys Christine Ro and Mark Takla of the Terrorism and Export Crimes Section, and Trial Attorney John Cella from the Counterterrorism Section of the Justice Department’s National Security Division are prosecuting this case.

A 33-count federal grand jury indictment unsealed today charges 31 members and associates of the Orange County Mexican Mafia with racketeering offenses, two murders and six attempted murders, and related drug and gun charges.

“The Mexican Mafia allegedly preyed on vulnerable communities through fear, violence, and intimidation,” said Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division. “This indictment sends a clear message that the Criminal Division, and our federal, state, and local partners, remain committed to protecting all of our communities from violence and exploitation.”

The indictment includes charges of Racketeer Influenced and Corrupt Organizations (RICO) conspiracy, violent crimes in aid of racketeering (VICAR) murder and attempted murder, conspiracy to distribute and possess with intent to distribute and distributing and possessing with intent to distribute methamphetamine and heroin, using a firearm to cause a death, and other firearm charges.

“The violence, drug dealing, and other criminal acts being committed in our communities by gangsters associated with the Mexican Mafia is being met with the strongest possible response by law enforcement,” said U.S. Attorney Tracy L. Wilkison for the Central District of California. “We will continue to investigate, arrest and prosecute these individuals to the fullest extent of the law to restore a sense of safety to so many neighborhoods that have felt the impact of their destructive conduct.”

According to the allegations contained in the indictment:[1]

The OC Mexican Mafia, also known as La Eme, is a “gang of gangs” that controls and directs other Hispanic gangs operating in Southern California and within the California penal system. The OC Mexican Mafia members divided control of various areas in Southern California, with the member in control of a specific area controlling the criminal activities in that respective territory and receiving “taxes” paid by gangs to allow them to deal drugs in that area. In addition to this widespread “tax” collection, it is alleged that the OC Mexican Mafia directly engaged in drug distribution in and out of prisons and jails. The indictment also alleges that the OC Mexican Mafia maintained authority over other Hispanic street gangs through murder, attempted murder and violent assaults with weapons including firearms.

“Cases targeting criminal enterprises like the Mexican Mafia require close collaboration with our local and federal partners and employ a variety of sophisticated techniques to overcome their evasive tactics,” said the Assistant Director in Charge Kristi K. Johnson of the FBI’s Los Angeles Field Office. “The Mexican Mafia in Orange County controls the majority of local gangs and rules by threatening violence and exacting violence on their enemies or against their own members who don’t follow strict rules. This indictment is the latest in our continuing joint efforts to target gangs and drug networks that fuel the violence in our communities.” 

The indictment further alleges that in or around 2016, and continuing to at least in or around April 2022, defendants Johnny Martinez, Robert Aguirre and Dennis Ortiz were the OC Mexican Mafia members in charge of criminal activities in Orange County and within Orange County jail and prison facilities. Defendants Omar Mejia, Miguel Jose Alvarado, Luis Heriberto Vasquez, Michael Cooper and Abraham Guajardo held positions of shot-callers or mouthpieces for Martinez, Aguirre, and Ortiz. Defendant Robert Martinez held a position of authority within the Orange County Jail as defendant Johnny Martinez’s representative. Defendant Brenda Vanessa Campos Martinez served as a secretary for defendant Johnny Martinez, and defendant Danielle Canales served in a similar capacity for defendants Johnny Martinez and Cooper. The violent crimes alleged against the OC Mexican Mafia include:

• The Jan. 19, 2017, armed robbery and shooting death of R.R.;
• The Aug. 21, 2017, shooting death of R.V., who was shot seven times in the back of the head and body, and left dead on the street in Orange, California;
• The Aug. 5, 2017, attempted murder of defendant Munoz, who had fallen out of favor with The OC Mexican Mafia and was shot seven times;
• The Dec. 1, 2017, attempted murder of D.D., a representative of a Hispanic street gang, who was allegedly abusing his power and authority within the OC Mexican Mafia enterprise;
• The Dec. 12, 2017, attempted murder of E.O., an OC Mexican Mafia associate incarcerated at Calipatria State Prison, who was believed to have violated the OC Mexican Mafia’s code by warning individuals that they were targeted for violence by the OC Mexican Mafia, and who suffered multiple injuries, including puncture wounds to his shoulders, stomach, lower back, and upper back;
• The Dec. 25, 2017, attempted murder of R.M. for showing disrespect to defendant Martinez;
• The July 29, 2020, attempted murder of F.B., a member of an Orange County Hispanic street gang incarcerated at the Theo Lacy Facility, who was targeted because he purportedly claimed that he would speak to law enforcement about the Mexican Mafia, and whose throat was slit; and
• Two murder attempts on Jan. 5, 2018, and Dec. 31, 2019, of defendant Cooper, who had fallen out of favor with defendants Martinez and Aguirre, and who in one incident was stabbed multiple times in the head and back area, and in the second was cut in the throat and face.

In addition to these alleged violent acts, law enforcement investigated the OC Mexican Mafia’s methamphetamine and heroin trafficking activities on the streets, as well as in the prisons and jails, and completed multiple undercover purchases of methamphetamine and heroin from OC Mexican Mafia associates who were selling narcotics on behalf of defendant Martinez and the OC Mexican Mafia.

Out of the 31 defendants charged in the indictment, 21 were already in custody, and nine were arrested last night and this morning. Those arrested today are expected to be arraigned this afternoon in U.S. District Court in Santa Ana, and those already in custody will make initial appearances once each defendant is in federal custody.

The RICO statute provides for a maximum penalty of 20 years’ imprisonment for acts performed as part of the criminal organization. The VICAR statute provides for a mandatory sentence of life imprisonment for murder, a maximum sentence of 20 years for assault with a dangerous weapon, a maximum sentence of 10 years for attempted murder, and a maximum sentence of three years for attempted assault with a dangerous weapon. The charge of possessing, using, carrying and discharging a firearm in furtherance of, during and in relation to a crime of violence carries a maximum sentence of life, with a mandatory sentence of at least five years and up to 10 years. The charge of causing death using a firearm carries a maximum sentence of life. Distribution and possession with intent to distribute methamphetamine and heroin carries a maximum sentence of life, and a minimum mandatory sentence of at least five years and up to 10 years. Felon in possession of a firearm or ammunition carries a maximum sentence of 10 years’ imprisonment. A federal district judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

The FBI; the DEA; the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF); IRS-Criminal Investigation; the Santa Ana Police Department; the Anaheim Police Department; the Fullerton Police Department; the Orange Police Department; the Placentia Police Department; the Orange County Sheriff’s Department; the Orange County Probation Department; the Orange County District Attorney’s Office and the California Department of Corrections and Rehabilitation (CDCR) are investigating the case.

Trial Attorneys Marianne Shelvey and Danbee Kim of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorneys Daniel Ahn, Gregory Scally, and Gregory Staples of the Central District of California are prosecuting the case.

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

[1] As the introductory phrase signifies, the entirety of the text of the indictment set forth herein, constitute only allegations, and every fact described should be treated as an allegation.

          SANTA ANA, California – A 33-count federal grand jury indictment unsealed today charges 31 members and associates of the Orange County Mexican Mafia with racketeering offenses, two murders and six attempted murders, and related drug and gun charges.

          The indictment includes charges of conspiring to violate the Racketeer Influenced and Corrupt Organizations (RICO) Act; committing violent crimes in aid of racketeering (VICAR), including murder and attempted murder; conspiring to traffic narcotics; distributing, and possessing with the intent to distribute, methamphetamine and heroin; using a firearm to cause a death; and other firearm charges.

          “The violence, drug-dealing and other criminal acts being committed in our communities by gangsters associated with the Mexican Mafia is being met with the strongest possible response by law enforcement,” said United States Attorney Tracy L. Wilkison. “We will continue to investigate, arrest and prosecute these individuals to the fullest extent of the law to restore a sense of safety to so many neighborhoods that have felt the impact of their destructive conduct.”

          “The Mexican Mafia allegedly preyed on vulnerable communities through fear, violence, and intimidation,” said Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division. “This indictment sends a clear message that the Criminal Division, and our federal, state, and local partners, remain committed to protecting all of our communities from violence and exploitation.”

          The indictment alleges that the Mexican Mafia, also known as La Eme, was comprised mostly of senior members of Latino street gangs who came together to control and profit from the activities of other Latino gangs operating in Southern California and within the California penal system. It is alleged that the Mexican Mafia members divided control of various areas in Southern California, with the member in control of a specific area controlling the criminal activities in that territory and receiving “taxes” paid by gangs to allow them to deal drugs in that area.

          In addition to this widespread “tax” collection, it is alleged that the OC Mexican Mafia directly engaged in drug distribution in and out of prisons and jails. The indictment also alleges that the OC Mexican Mafia maintained authority over Latino street gangs through murder, attempted murder, and violent assaults with weapons including firearms.

          “Cases targeting criminal enterprises like the Mexican Mafia require close collaboration with our local and federal partners and employ a variety of sophisticated techniques to overcome their evasive tactics,” said Kristi K. Johnson, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “The Mexican Mafia in Orange County controls the majority of local gangs and rules by threatening violence and exacting violence on their enemies or against their own members who don’t follow strict rules. This indictment is the latest in our continuing joint efforts to target gangs and drug networks that fuel the violence in our communities.”

          The indictment alleges that in or around 2016, and continuing to at least in or around April 2022, defendants Johnny Martinez, Robert Aguirre, and Dennis Ortiz were the OC Mexican Mafia members in charge of criminal activities in Orange County and within Orange County jail and prison facilities. Defendants Omar Mejia, Miguel Jose Alvarado, Luis Heriberto Vasquez, Michael Cooper, and Abraham Guajardo held positions of shot-callers or mouthpieces for Martinez, Aguirre, and Ortiz. Defendant Robert Martinez held a position of authority within the Orange County Jail as Johnny Martinez’s representative. Defendant Brenda Vanessa Campos Martinez served as a secretary for Johnny Martinez, and defendant Danielle Canales served in a similar capacity for Johnny Martinez and Cooper. The violent crimes alleged against the OC Mexican Mafia include:

• the Jan. 19, 2017, armed robbery and shooting death of R.R.;
• the Aug. 21, 2017, shooting death of R.V., who was shot seven times in the back of the head and body, and left dead on the street in Orange;
• the Aug. 5, 2017, attempted murder of defendant Munoz, who had fallen out of favor with the OC Mexican Mafia and was shot seven times;
• the Dec. 1, 2017, attempted murder of D.D., a representative of a Latino street gang, who was allegedly abusing his power and authority within the OC Mexican Mafia enterprise;
• the Dec. 12, 2017, attempted murder of E.O., an OC Mexican Mafia associate incarcerated at Calipatria State Prison, who was believed to have violated the OC Mexican Mafia’s code by warning individuals that they were targeted for violence by the OC Mexican Mafia, and who suffered multiple injuries, including puncture wounds to his torso;
• the Dec. 25, 2017, attempted murder of R.M. for showing disrespect to defendant Johnny Martinez;
• the July 29, 2020, attempted murder of F.B., a member of an Orange County Latino street gang incarcerated at the Theo Lacy Facility, who was targeted because he purportedly claimed that he would speak to law enforcement about the Mexican Mafia, and whose throat was slit; and
• two murder attempts on Jan. 5, 2018, and Dec. 31, 2019, of defendant Cooper, who had fallen out of favor with defendants Johnny Martinez and Aguirre, and who in one incident was stabbed multiple times in the head and back area, and in the second was cut in the throat and face.

          In addition to these alleged violent acts, law enforcement investigated the OC Mexican Mafia’s methamphetamine and heroin trafficking activities on the streets, as well as in the prisons and jails. Authorities conducted multiple undercover purchases of methamphetamine and heroin from OC Mexican Mafia associates who were selling narcotics on behalf of Johnny Martinez and the OC Mexican Mafia.

          “The Santa Ana Police Department is committed to working alongside local, state, and federal law enforcement partners to ensure that violent, career criminals are incarcerated and are brought to justice,” said Santa Ana Police Chief David Valentin. “Today’s operation was a result of years of dedicated investigation into some of the most dangerous gang members that plague our communities.”

          “Today’s arrests are the culmination of a multi-year investigation that IRS-CI is proud to be a part of”, said IRS Criminal Investigation Special Agent in Charge Ryan L. Korner. “The subjects of this investigation engaged is some of the most horrific acts imaginable, and we are glad to have done our part to help end their corrupt influence over our community.”

          Out of the 31 defendants charged in the indictment, 21 were already in custody, and nine were arrested last night and this morning. Those arrested today are expected to be arraigned this afternoon in United States District Court in Santa Ana, and those already in custody will make initial appearances once each defendant is in federal custody.

          The RICO statute provides for a maximum penalty of 20 years’ imprisonment for acts performed as part of the criminal organization. The VICAR statute provides for a mandatory sentence of life imprisonment for murder, a maximum sentence of 20 years for assault with a dangerous weapon, a maximum sentence of 10 years for attempted murder, and a maximum sentence of three years for attempted assault with a dangerous weapon. The charge of possessing, using, carrying, and discharging a firearm in furtherance of/during and in relation to a crime of violence carries a maximum sentence of life, with a mandatory sentence of at least five years and up to 10 years. The charge of causing death using a firearm carries a maximum sentence of life. Distribution and possession with intent to distribute methamphetamine and heroin carries a maximum sentence of life, and a mandatory minimum sentence of at least five years and up to 10 years. Felon in possession of a firearm or ammunition carries a maximum sentence of 10 years’ imprisonment. A federal district judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

          The FBI; the DEA; the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF); IRS-Criminal Investigation; the Santa Ana Police Department; the Anaheim Police Department; the Fullerton Police Department; the Orange Police Department; the Placentia Police Department; the Orange County Sheriff’s Department; the Orange County Probation Department; the Orange County District Attorney’s Office; and the California Department of Corrections and Rehabilitation are investigating the case.

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

          Assistant U.S. Attorneys Daniel Ahn, Gregory Scally and Gregory Staples of the Santa Ana Branch Office, and Justice Department Trial Attorneys Marianne Shelvey and Danbee Kim of the Criminal Division’s Organized Crime and Gang Section are prosecuting this case.

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

          LOS ANGELES – A federal grand jury today charged a San Fernando Valley man with selling a total of nearly 16 pounds of methamphetamine and 89 firearms, including dozens of “ghost guns,” or firearms that lack serial numbers.

          Julio Ernesto Lopez-Menendez, 26, a.k.a. “Iroe,” of Reseda, was charged in a 13-count indictment with four counts of distribution of methamphetamine, one count of engaging in the business of dealing in firearms without a license, four counts of possession of unregistered firearms, and four counts of possession of firearms not identified by serial numbers.

          Lopez-Menendez’s arraignment is scheduled for May 5 in United States District Court in downtown Los Angeles. He has been in federal custody since his April 14 arrest on a criminal complaint in this case.

          The indictment returned today details a series of alleged transactions involving Lopez-Menendez from January 6 to April 7, 2022. These transactions typically involved large numbers of firearms and, sometimes, pound quantities of methamphetamine. Some firearms sold were so-called “ghost guns,” named because of their lack of a serial number.

          Ghost guns are often assembled from parts purchased separately or in a kit. Because the separate parts do not bear serial numbers, the assembled ghost guns do not bear serial numbers, and they cannot be registered or traced.

          In one deal on January 20, Lopez-Menendez allegedly sold the buyer – who was an undercover operative – a dozen firearms, including 10 semi-automatic “ghost gun” pistols. In a February 10 transaction, Lopez-Menendez allegedly sold the buyer nearly one pound of methamphetamine and 14 firearms, including nine semi-automatic ghost gun pistols, for $15,000.

          During the final two drug deals alleged in the indictment, Lopez-Menendez sold the buyer approximately 4.2 kilograms (9.2 pounds) and 2.2 kilograms (4.8 pounds) of methamphetamine on March 8 and March 23, respectively.

          In total, Lopez-Menendez sold approximately 7.25 kilograms (15.98 pounds) of methamphetamine and 89 firearms – including 53 ghost guns, the indictment alleges.

          Lopez-Menendez does not have a federal firearms license and does not have any firearms registered to him in the National Firearms Registration and Transfer Record, the central registry for all items regulated under the National Firearms Act, according to court documents.

          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.

          If convicted, Lopez-Menendez would face a mandatory minimum sentence of 10 years in federal prison and a statutory maximum sentence of life imprisonment for the for each distribution of methamphetamine charge. He would face statutory maximum sentences of five years in federal prison for the unlicensed firearms business charge, 10 years in federal prison for each possession of an unregistered firearm count, and 10 years in federal prison for each count of possession of a firearm without a serial number.

          The FBI; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the Drug Enforcement Administration; and the Los Angeles Police Department investigated this matter.

          Assistant United States Attorney Jennifer Chou of the Violent and Organized Crimes Section is prosecuting this case.

          LOS ANGELES – The former general manager of the Los Angeles Department of Water and Power (LADWP) was sentenced today to 72 months in federal prison for accepting bribes from a lawyer in exchange for his official action to secure a three-year, $30 million no-bid LADWP contract for the lawyer’s company.

          David H. Wright, 62, of Riverside, was sentenced by United States District Judge Stanley Blumenfeld Jr., who described Wright’s conduct as “egregious” because Wright – while a public servant – executed an “elaborate and sophisticated criminal scheme” that was motivated by “pure greed.” Judge Blumenfeld also ordered Wright to pay a fine of $75,000.

          Wright, who is the first defendant to be sentenced in the LADWP corruption cases, pleaded guilty on January 25 to one count of bribery.

          Wright served as LADWP’s general manager from September 2016 until July 2019, when he resigned at the direction of the mayor of Los Angeles.

          “As the leader of the nation’s largest municipal utility, David Wright embarked on a campaign of corruption, including pushing through a no-bid $30 million contract for a company from which he had secretly accepted a lucrative job offer,” said United States Attorney Tracy L. Wilkison. “This ongoing criminal case has placed a spotlight on public corruption that harmed ratepayers while benefiting dishonest officials and unscrupulous lawyers.”

          “This case is especially significant given the corruption that was rooted in the highest level of city government,” said Kristi K. Johnson, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “This investigation highlighted the lack of oversight for a $30 million contract and the inexcusable silencing of whistleblowers, amounting to a gross misuse of Mr. Wright’s position and a violation of the public’s trust. The FBI encourages those with information about corruption to speak up and hold accountable public officials whose conduct erodes trust in government.”

          During 2016 and 2017, Wright developed a relationship with Paul O. Paradis, 58, of Scottsdale, Arizona, a lawyer appointed by the Los Angeles City Attorney’s Office to represent LADWP in a lawsuit in which the department blamed the vendor of its billing system for the misbilling of hundreds of thousands of ratepayers. Paradis and his New York-based law firm also held a $6 million LADWP contract to provide project management services in connection with the department’s remediation of the faulty billing system.

          By early 2017, Wright and Paradis agreed that – in exchange for Wright’s support of a “no-bid” $30 million contract for Paradis’s downtown Los Angeles-based company Aventador Utility Services LLC — Paradis would give Wright a $1 million-per-year job as Aventador’s CEO and a luxury company car once Wright retired from LADWP.

          In exchange, Wright lobbied members of the LADWP board of directors to vote in favor of the contract for Aventador, whose company name was taken from a model of Lamborghini sports car. At the time it approved the $30 million no-bid contract in June 2017, the LADWP board was not informed of Wright’s illegal agreement with Paradis to take a lucrative job as Aventador’s CEO upon retiring from LADWP.

          After the awarding of the contract, through early 2019, Wright continued to collaborate with Paradis to build and market Aventador and to seek additional lucrative business opportunities for it — and thus for Wright and Paradis — both inside and outside LADWP. Despite being a public official, Wright used his position as LADWP’s general manager to advertise Aventador's services at industry events and in meetings and discussions with other industry officials and executives.

          By March 2019, Paradis had been forced to resign from his role as special counsel to the City Attorney’s Office. Around this time, the LADWP board voted to terminate Aventador’s contract, but it agreed to retain the company’s services if Paradis sold his stake in the company and disavowed any interest in the company, which Paradis purported to do. In late March 2019, after Paradis sold the company to an employee, Aventador officially changed its name to Ardent Cyber Solutions LLC.

          In late March 2019, after Paradis had begun covertly cooperating with the FBI, Wright met with Paradis at Wright’s home and directed Paradis to destroy their incriminating text messages and emails from Wright’s cell phone and Apple iCloud account and to take back an Aventador laptop and wipe it clean. Wright told Paradis that he had already gone through his office at LADWP and destroyed all incriminating physical evidence.

          In April 2019, Wright used his position to urge the LADWP board to support a new cybersecurity contract to Ardent for more than $10 million. Wright again did not inform the board of another secret arrangement with Paradis, which by then included their agreement that Wright would receive a “substantial sign-on bonus” of $600,000 or $1.2 million, as well as an increase in his ownership of their company, in addition to a previously agreed-to $1 million annual salary and luxury car.

          Paradis pleaded guilty on January 28 to a federal bribery charge for accepting an illicit kickback of nearly $2.2 million for getting another attorney to purportedly represent his ratepayer client in a collusive lawsuit against LADWP related to the billing debacle. Paradis is cooperating with the ongoing investigation into the collusive litigation and corruption at LADWP. Paradis is scheduled to be sentenced on July 19.

          David F. Alexander, 54, of Arcadia, LADWP’s former chief information security officer and its former chief cyber risk officer, pleaded guilty on February 8 to one felony count of making false statements to federal investigators probing corruption in the department. Alexander’s sentencing hearing is scheduled for June 7.

          Thomas H. Peters, 56, of Pacific Palisades, the former chief of the Civil Litigation Branch of the Los Angeles City Attorney’s Office, pleaded guilty on April 5 to one count of aiding and abetting extortion. Peters threatened to fire a plaintiffs’ attorney from a lucrative special counsel job with the city unless the attorney paid a substantial extortion demand from a former employee who was threatening to expose the city’s collusive litigation over its faulty water-and-power billing system. Peters, who is also cooperating with the ongoing investigation, is scheduled to be sentenced on August 2.

          The FBI is investigating this matter. 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.

          Assistant United States Attorneys Melissa Mills, Jamari Buxton, and Susan Har of the Public Corruption and Civil Rights Section prosecuted this case.

• Pursuant to a motion by the government, the case against defendant Victor Belonogoff described in the news release below was dismissed by the court on January 31, 2023. 

• Pursuant to a motion by the government, the case against defendant Aryeh Kluger described in the news release below was dismissed by the court on June 28, 2024.

LOS ANGELES – A federal grand jury today indicted the former CEO of a Los Angeles-based digital media company on charges that allege he created a series of companies that defrauded his employer out of at least $3 million by submitting bills for services never provided or at inflated prices.

Victor Belonogoff, 46, who is believed to reside in San Mateo, California, is charged in the indictment with bilking Render Media, Inc., a Beverly Grove-based company he co-founded and ran until late 2018. Belonogoff is charged in the indictment with conspiracy to commit wire fraud and nine substantive counts of wire fraud.

Belonogoff, through his attorney, has agreed to surrender to federal authorities on April 26.

Belonogoff, who held several positions at Render, including chief executive officer, secretly formed six digital media and advertising companies that he used to defraud Render, according to the indictment. Belonogoff allegedly caused Render to pay his fraudulent digital media companies for products and services that were never provided or were sold to Render at inflated prices. Belonogoff is accused of diverting Render’s incoming revenue to his fraudulent digital media companies, using Render’s lines of credit to support them, and using the sham companies to misappropriate Render’s brand and content.

The indictment specifically alleges that Belonogoff caused Render to pay one of his companies for video content that was never provided. Belonogoff also allegedly caused two of the fraudulent companies to sell Render internet traffic at inflated prices and to re-code internet traffic sold to Render to make it falsely appear as though his companies generated that traffic. Belonogoff also caused one of his companies to post Render’s content while keeping 90% of the revenue generated by that content, according to the indictment.

To conceal his fraud, Belonogoff allegedly deleted emails from his Render account and later provided false testimony at a deposition in a lawsuit brought against him by Render.

The indictment alleges that Belonogoff caused Render to pay his fraudulent digital media companies more than $3 million, much of which went to his personal accounts and was used for his personal benefit.

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.

If he is convicted of the wire fraud charges in the indictment, Belonogoff would face a statutory maximum sentence of 20 years in federal prison for each of the 10 counts.

Federal prosecutors previously charged one of Belonogoff’s co-conspirators with conspiracy to commit wire fraud. Aryeh Kluger, 34, of San Antonio, who was a vice president at Render, pleaded guilty to the charge in October 2020, admitting that he and Belonogoff “exploit[ed] Render’s business model by employing a sophisticated embezzlement scheme involving third-party companies they controlled.” United States District Judge Stephen V. Wilson is scheduled to sentence Kluger on October 24.

The FBI and IRS Criminal Investigation are conducting the investigation in this matter.

Assistant United States Attorney Gregory Bernstein of the Major Frauds Section is prosecuting this case.

          LOS ANGELES – A Fresno man was sentenced today to life in federal prison for engaging in a child exploitation enterprise and creating child sexual abuse material (CSAM) of four young children, including children he abused with his co-defendants who were previously sentenced to lengthy prison terms.

          John Richard Brinson Jr., 28, was sentenced this afternoon by United States District Judge André Birotte Jr. In imposing the life sentence, Judge Birotte said Brinson’s conduct was “evil – I don’t know how else to say it.”

          Brinson pleaded guilty in July 2021 to one count of engaging in a child exploitation enterprise and four counts of production of child pornography, each representing a different victim.

          According to court documents, in 2016 and 2017, Brinson distributed and advertised CSAM on a website dedicated to the sexual abuse of children ages from birth to 5 years old. Brinson – along with co-defendants Arlan Harrell, of Hawthorne, and Moises Martinez, of San Jose – was an active member of this website, which was hosted on Tor, a computer network on the dark web that is specifically designed to facilitate anonymous communication over the internet. Brinson used the website to view CSAM, to advertise and distribute CSAM – including CSAM he produced – and to encourage other members to post more CSAM. Additionally, Brinson used this website to meet like-minded offenders, including Harrell and Martinez, and commit additional offenses against children with them in-person.

          “The life sentence imposed in this case is warranted by the defendant’s callous and violent abuse of children, some of whom were filmed while screaming in pain,” said United States Attorney Tracy L. Wilkison. “The child exploitation enterprise impacted more than 20 victims – children who were sexually assaulted, sometimes repeatedly, solely for the pleasure of this defendant and his cohorts. The Justice Department will continue its effort to protect the most vulnerable among us by aggressively prosecuting the most dangerous predators.”

          “Those who engage in child exploitation enterprises and create child sexual abuse material will be tracked down and held accountable for their heinous conduct,” said Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division. “Preying on children with no regard to the grievous harm abusers cause to their victims and their families will not be tolerated. I commend the prosecution team and our law enforcement partners who worked tirelessly to ensure that these defendants would be held accountable for their crimes and justice sought for the victims.”

          “The depravity of this enterprise was reflected in today’s sentencing,” said acting Special Agent in Charge Eddy Wang of Homeland Security Investigations Los Angeles. “Homeland Security Investigations prioritizes crimes of victimization and will leave no stone unturned to rescue every victim possible and bring every perpetrator to justice. I am very proud of the Homeland Security Investigations special agents from Boston, Fresno, and right here in Los Angeles that worked tirelessly with our partners at the Department of Justice, the U.S. Attorney’s Office, and the Los Angeles Internet Crimes Against Children Task Force to protect our most innocent and remove these predators from our communities.”

          According to court documents, Brinson created child sexual abuse material of children between approximately three to nine years of age. On at least two occasions, Brinson and Harrell met at Brinson’s home to create CSAM depicting their sexual abuse of two of the minors together. On one of those occasions, Harrell secured the custody of another minor and traveled with the minor to Brinson’s house to create CSAM depicting both Harrell and Brinson engaging in the sexual abuse of that minor. On another occasion, Brinson and Martinez arranged to meet at Brinson’s house to create CSAM depicting their sexual abuse of two minors together, one brought by Brinson and one by Martinez.

          In total, Brinson, Martinez and Harrell pleaded guilty to creating CSAM depicting themselves engaging in sexual acts with or otherwise sexually exploiting more than 20 children under the age of nine, including 10 children four years of age or younger.

          The CSAM that Brinson created by himself and with his co-defendants took place in the house he shared with co-defendant Keith Lawniczak. According to court documents, Lawniczak admitted that he offered Brinson a room in his house to live in free of charge and benefitted from Brinson’s abuse of one of the minors because he had an opportunity to view the sexual acts between Brinson and the minor.

          Co-defendant Martinez pleaded guilty to engaging in a child exploitation enterprise and production of child pornography and was sentenced to 55 years in prison, followed by lifetime supervised release. Lawniczak pleaded guilty to conspiracy to commit sex trafficking of a child and was sentenced to 12 years in prison and lifetime supervised release. Harrell pleaded guilty to engaging in a child exploitation enterprise, obtaining custody of a minor for purposes of producing child pornography, production of child pornography and possession of child pornography, and he was sentenced to life in prison in February.

          Homeland Security Investigations’ Los Angeles office, along with HSI’s Fresno and Boston offices, investigated the case. The High Technology Investigative Unit of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) provided significant assistance.

          Assistant United States Attorneys Devon Myers of the Cyber and Intellectual Property Crimes Section and Kim Meyer of the Violent and Organized Crime Section prosecuted this case in conjunction with Justice Department Trial Attorneys Lauren S. Kupersmith and Kyle P. Reynolds of CEOS

A California man was sentenced today to life in prison for engaging in a child exploitation enterprise and creating child sexual abuse material (CSAM) of four young children, including children he abused with his co-defendants who were previously sentenced.

John Richard Brinson Jr., 28, of Fresno, pleaded guilty on July 23, 2021, to engaging in a child exploitation enterprise and four counts of production of child pornography, each representing a different victim. According to court documents and information stated during court proceedings, in 2016 and 2017, Brinson distributed and advertised CSAM on a website dedicated to the sexual abuse of children ages zero to five years old.  Brinson, along with co-defendants Arlan Harrell and Moises Martinez, was an active member of this website, which was hosted on Tor, a computer network on the dark web that is specifically designed to facilitate anonymous communication over the internet. Brinson used the website to view CSAM, to advertise and distribute CSAM, including CSAM he produced, and to encourage other members to post more CSAM. Additionally, Brinson used this website to meet like-minded offenders, including Harrell and Martinez, and commit additional offenses against children with them in-person.

“Those who engage in child exploitation enterprises and create child sexual abuse material will be tracked down and held accountable for their heinous conduct,” said Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division. “Preying on children with no regard to the grievous harm abusers cause to their victims and their families will not be tolerated.  I commend the prosecution team and our law enforcement partners who worked tirelessly to ensure that these defendants would be held accountable for their crimes and justice sought for the victims.” 

“The sentence imposed in this case is warranted by the defendant’s callous and violent abuse of children, some of whom were filmed while screaming in pain,” said U.S. Attorney Tracy L. Wilkison for the Central District of California. “The child exploitation enterprise impacted more than 20 victims – children who were sexually assaulted, sometimes repeatedly, solely for the pleasure of this defendant and his cohorts. The Justice Department will continue its effort to protect the most vulnerable among us by aggressively prosecuting the most dangerous predators.”

“The depravity of this enterprise was reflected in today’s sentencing,” said acting Special Agent in Charge Eddy Wang of Homeland Security Investigations (HSI) Los Angeles. “Homeland Security Investigations prioritizes crimes of victimization and will leave no stone unturned to rescue every victim possible and bring every perpetrator to justice. I am very proud of the Homeland Security Investigations special agents from Boston, Fresno and right here in Los Angeles that worked tirelessly with our partners at the Department of Justice, the U.S. Attorney’s Office and the Los Angeles Internet Crimes Against Children Task Force to protect our most innocent and remove these predators from our communities.”   

According to court documents and information stated during court proceedings, Brinson created child sexual abuse material of children with ages ranging from approximately three to nine years old. On at least two separate occasions, Brinson and Harrell met at Brinson’s home to create CSAM depicting their sexual abuse of two of the minors together. On one of those occasions, Harrell secured the custody of another minor and traveled with the minor to Brinson’s house to create CSAM depicting both Harrell and Brinson engaging in the sexual abuse of that minor. On another occasion, Brinson and Martinez arranged to meet at Brinson’s house to create CSAM depicting their sexual abuse of two minors together, one brought by Brinson and one by Martinez. In total, Brinson, Martinez and Harrell pleaded guilty to creating CSAM depicting themselves engaging in sexual acts with or otherwise sexually exploiting more than 20 children under the age of nine, including 10 children four years of age or younger. The CSAM that Brinson created by himself and with his co-defendants took place in the house he shared with co-defendant Keith Lawniczak. According to court documents and information stated during court proceedings, Lawniczak admitted that he offered Brinson a room in his house to live in free of charge and benefitted from Brinson’s abuse of one of the minors because he had an opportunity to view the sexual acts between Brinson and the minor. 

Co-defendant Martinez pleaded guilty to engaging in a child exploitation enterprise and production of child pornography and was sentenced to 55 years in prison, followed by lifetime supervised release. Lawniczak pleaded guilty to conspiracy to commit sex trafficking of a child and was sentenced to 12 years in prison and lifetime supervised release. Harrell pleaded guilty to engaging in a child exploitation enterprise, obtaining custody of a minor for purposes of producing child pornography, production of child pornography, and possession of child pornography and was sentenced to life in prison.

Homeland Security Investigations’ (HSI) Los Angeles office, along with HSI’s Fresno and Boston offices, investigated the case. The High Technology Investigative Unit of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) provided significant assistance.

Trial Attorneys Lauren S. Kupersmith and Kyle P. Reynolds of the Criminal Division’s CEOS and Assistant U.S. Attorneys Devon Myers and Kim Meyer for  the Central District of California prosecuted the case. 

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

          SANTA ANA, California – Federal authorities today announced seven criminal cases against drug dealers who sold fentanyl-laced narcotics that caused fatal overdoses in Orange County, including one case in which three people died in Newport Beach.

          The sweep has resulted in the arrest of six defendants pursuant to federal grand jury indictments or criminal complaints. One charged defendant is a fugitive currently being sought by authorities.

          All seven defendants are charged with distribution of fentanyl resulting in death. If convicted of this offense, each defendant would face a mandatory minimum sentence of 20 years in federal prison and a potential sentence of life without parole.

          “The opioid crisis has resulted in the widespread distribution of fentanyl and a horrific trail of misery resulting from the untimely death of tens of thousands of Americans each year,” said United States Attorney Tracy L. Wilkison. “These cases highlight two important lessons, with the first being that many street drugs are contaminated with an extremely powerful opioid that often leads to death. The second is that narcotics dealers face severe consequences in federal court when the distribution of their products results in a fatal overdose.”

          “Often when we discuss the rampant rise of drug-caused deaths there’s a focus on numbers, but today’s announcement is an important reminder that these numbers are more than that – these are our children, loved ones and friends,” said DEA Los Angeles Special Agent in Charge Bill Bodner. “Fentanyl does not discriminate and it’s affecting every community, ethnicity and generation throughout our country. As we tackle the fentanyl crisis locally, we are intent on bringing justice to victims and their families, while putting drug dealers on notice that even selling one pill can have harsh federal penalties.”

          The cases announced today are the result of investigations by the DEA’s Overdose Justice Task Force, which was created to address opioid-related deaths in the greater Los Angeles area, most of which are caused by the synthetic opioid fentanyl. Under the Overdose Justice program for the DEA’s Los Angeles Field Division, DEA agents collaborate with local law enforcement to analyze evidence to determine if there are circumstances that might lead to a federal criminal prosecution, and, if so, proactively target the drug trafficker. Since the start of the Overdose Justice program in 2018, the DEA has worked with an ever-expanding list of local police agencies to obtain approximately three dozen federal indictments that specifically charge death resulting from narcotics trafficking.

          The victims in these cases are of diverse backgrounds, with two of the deceased victims being minors and one a community college student. In most of the cases, the victims did not know they were ingesting fentanyl, which can be deadly in tiny amounts. Some of the alleged drug traffickers knew or had reason to believe their products contained fentanyl, even though they claimed to be selling other narcotics.

          All of the case were filed in United States District Court in Santa Ana and will be prosecuted by the United States Attorney’s Office:

• William Edward Dick Jr., 51, of Costa Mesa was arrested Thursday for allegedly selling fentanyl-laced cocaine that killed three individuals in a Balboa Island house on the night of October 24, 2021. A criminal complaint filed on Wednesday alleges that two couples had gathered in Newport Beach, enjoyed a dinner together, and one of them decided to purchase cocaine for the group. They eventually contacted Dick, who agreed to sell them $200 worth of cocaine, which he delivered to the house where the couples were staying. After snorting the purported cocaine, all four suffered overdoses, and three of the individuals were pronounced dead at house the next morning. Dick, who is currently charged with one count of distribution of fentanyl resulting in death, is scheduled to make his first court appearance this afternoon in United States District Court in Santa Ana. The DEA and the Newport Beach Police Department are investigating this matter, which is being prosecuted by Assistant United States Attorney Bradley Marrett.

• Omar Alejandro Reynoso, 30, of Costa Mesa, was arrested on Monday after a grand jury indicted him last week on two counts of distribution of fentanyl resulting in death. Reynoso allegedly provided counterfeit Xanax pills containing fentanyl to a man and a woman who died in his hotel room in incidents three weeks apart in November 2019. At his arraignment on Tuesday, Reynoso pleaded not guilty and was ordered to stand trial on June 14. A United States magistrate judge ordered Reynoso detained without bond while the case is pending. The DEA and the Costa Mesa Police Department are investigating this matter, which is being prosecuted by Assistant United States Attorney Jake Nare.

• Tyler David Wilkinson, 23, of Santa Ana, was named Wednesday in a four-count federal grand jury indictment that alleges he sold counterfeit oxycodone pills to a 17-year-old victim who died in Lake Forest of a fentanyl overdose. The victim purchased the pills in June 2021 after responding to an advertisement Wilkinson posted on Snapchat, the investigation revealed. Six months before the transaction that led to the teen’s death, Wilkinson allegedly possessed distribution quantities of several types of narcotics, including nearly 1,400 counterfeit oxycodone pills laced with fentanyl. Wilkinson allegedly continued to sell fentanyl-laced pills, even after law enforcement executed a search warrant at his residence. Wilkinson is currently being sought by authorities. The DEA and the Orange County Sheriff’s Department are investigating this case, which is being prosecuted by Assistant United States Attorney Jake Nare.

• Anthony Bernard Fender, 31, of Tustin, was arrested Monday pursuant to a grand jury indictment filed last week that alleges he sold fentanyl powder that resulted in the death of a 40-year-old man. The indictment further alleges that Fender committed the federal offense after being convicted of a drug trafficking crime in Orange County Superior Court in 2013, which, if proven, would subject Fender to a mandatory life sentence. The DEA and the Orange County Sheriff’s Department investigated this matter, which is being prosecuted by Assistant United States Attorney Bradley Marrett.

• Carter Joseph Klein, 25, of Newport Beach, was arrested on April 14 after being named in a one-count indictment that accused him of distributing fentanyl that led to the overdose death of an 18-year-old Orange Coast College student. Klein allegedly sold fentanyl-laced counterfeit oxycodone pills to the victim in February 2021. Klein was arraigned on the indictment on April 15, when he entered a not guilty plea and was ordered to stand trial on June 7. The DEA and Costa Mesa Police Department are investigating this matter, which is being prosecuted by Assistant United States Attorney Rosalind Wang.

• Isai Hernandez Higinio, a.k.a. “Joker,” 23, of Santa Ana, was arrested April 1 pursuant to a grand jury indictment filed last month that alleges he distributed fentanyl in counterfeit Percocet pills to an 18-year-old Tustin resident who died after ingesting the drug. Hernandez was arraigned on April 4, at which time he pleaded not guilty and was ordered held without bond. A trial in this case is scheduled for May 31. The DEA and Orange County Sheriff’s Department are investigating this matter, which is being prosecuted by Assistant United States Attorney Melissa Rabbani.

• Matthew Benjamin Hurley, 24, of Virginia, was arrested January 3 on charges alleging that he distributed fentanyl at a motel in Costa Mesa that resulted in a fatal overdose. Hurley, who has been ordered detained without bond, is scheduled to go on trial on September 27. The DEA and the Huntington Beach Police Department are investigating this case, which is being prosecuted by Assistant United States Attorney Gina J. Kong.

          Indictments and criminal complaints contain allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

          SANTA ANA, California – A former Orange County chiropractor was sentenced today to 70 months in federal prison for stealing from health insurers by fraudulently causing the submission of $2.2 million in billings for chiropractic services never provided, medical diagnoses never given, office visits that never occurred, and medical devices that were falsely prescribed.

          Susan H. Poon, 57, of Dana Point, was sentenced by United States District Judge David O. Carter, who ordered her to pay $1,379,622 in restitution to her victims.

          At the conclusion of a five-day trial in June 2021, a federal jury found Poon guilty of five counts of health care fraud, three counts of making false statements relating to health care matters, and one count of aggravated identity theft.

          From January 2015 to April 2018, Poon, whose office was in Rancho Santa Margarita, schemed to defraud health insurance companies by submitting false reimbursement claims for services that were never performed.

          Poon also submitted fraudulent prescriptions containing medical diagnoses of individuals that she had never met, including toddlers and children, which led a medical device manufacturer to submit false claims for reimbursement to one health insurer.

          The patients that Poon claimed to have met with and treated were dependents – such as the spouses and children – of Costco Wholesale Corp. and United Parcel Service Inc. employees. Poon unlawfully took and used the dependent’s personal identifying information (PII) in her reimbursement requests and prescriptions. Poon obtained the PII by attending health fairs at various UPS warehouses and Costco locations and soliciting such information from employees.

          “[Poon’s] scheme consisted of interdependent moving parts,” prosecutors wrote in a sentencing memorandum. “She lied about visits with, diagnoses of, and treatments given to actual people and their children. She sent fraudulent Durable Medical Equipment (DME) prescriptions – predicated on visits with these patients that never happened – to a DME manufacturer. And she fabricated medical documentation containing the personal identifying information of these ‘ghost’ patients to mislead an auditor.”

          In total, Poon billed and caused to be billed approximately $2.2 million through her scheme.

          Poon’s chiropractic license was revoked in July 2019, according to the California Department of Consumer Affairs.

          The following agencies investigated this matter: Amtrak – Office of the Inspector General, California Department of Insurance, U.S. Department of Labor – Employee Benefits Security Administration, U.S. Department of Labor Office of the Inspector General, the FBI, and Office of Personnel Management – Office of the Inspector General.

          Assistant United States Attorneys Daniel S. Lim and Daniel H. Ahn of the Santa Ana Branch Office prosecuted this case.

          SANTA ANA, California – A San Juan Capistrano woman was found guilty by a federal jury today of criminal charges in connection with the October 2019 murder of a man whose body was found floating in the Pacific Ocean with bullet and blunt force trauma wounds.

          Sheila Marie Ritze, 42, was found guilty of two felonies: one count of second-degree murder within in the special maritime and territorial jurisdiction of the United States, and one count of making false statements to federal investigators.

          At her sentencing hearing, which is expected in the coming months, Ritze will face a statutory maximum sentence of life in federal prison.

          According to evidence presented at her 12-day trial, Ritze went out on her boat with Hoang Xuan Le, 40, a.k.a. “Wayne,” and “Wangsta,” of Fountain Valley, where they murdered the victim, who owed Le a debt. On October 15, 2019, in connection with a late-night lobster-fishing trip, Ritze and Le took the victim to Ritze’s boat, which was docked at Dana Point Harbor.

          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 who had suffered blunt force trauma.

          During a December 2019 interview with federal investigators, Ritze told a series of lies, including when she falsely said she had never met the victim prior to the fatal October 15, 2019, boat trip. Ritze and the victim had been in Las Vegas together 11 days prior to the murder.

          At the conclusion of a 17-day trial in December 2021, a federal 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.

          Le faces a mandatory sentence of life in federal prison at his June 27 sentencing hearing.

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

          Assistant United States Attorneys Gregory S. Scally and Gregory W. Staples of the Santa Ana Branch Office are prosecuting this case.

          LOS ANGELES – A Santa Clarita man was sentenced today to 41 months in federal prison for attempting to steal millions of dollars in Paycheck Protection Program (PPP) COVID-relief loans for his companies by submitting fraudulent applications that included fake tax documents and information for non-existent employees.

          Raymond Magana, 41, was sentenced by United States District Judge Stanley Blumenfeld Jr., who ordered him to pay $360,415 in restitution. At today’s hearing, Judge Blumenfeld called Magana’s crime “a despicable offense” and noted that Magana exploited a “national emergency” in order to “line his own pockets.”

          Magana pleaded guilty in January 2021 to one count of fraud in connection with major disaster or emergency benefits.

          In May and June 2020, Magana submitted to banks PPP loan applications that contained false statements about the number of employees and the amount of payroll expenses. Specifically, on June 3, 2020, Magana submitted a PPP loan application to Customer’s Bank for $940,416 for The Building Circle LLC, a company registered in his name.

          In that application, Magana falsely claimed the company’s average monthly payroll was $376,167 for 40 workers. Magana admitted to submitting fraudulent tax documents that reported $4,402,000 in annual wages paid to 40 employees in 2019 and $852,000 paid in employee wages during the first quarter of 2020.

          IRS and California Employment Development Department records showed that the company never reported paying any employees, and the underwriting packet also did not include a list of employees or associates for the company, according to an affidavit filed with a criminal complaint in this case.

          Investigators later determined that the Pico Rivera address given as The Building Circle’s headquarters was a 980-square-foot, single-family home that appeared to be a residence, not a business. Ultimately, the loan application was approved and $940,416 was funded to Magana’s company on June 4, 2020, the affidavit states.

          Magana also applied for and received a PPP loan of $360,415 for Forward Builders LLC, another company, using fake tax documents and false employee information, and falsely claiming $1.73 million in employee wages.

          When a bank manager contacted Magana after one of the business accounts receiving PPP funds had been frozen because of suspicious activity, he told the bank “We have all the documents, we got approved,” and he refused to agree to return the improperly obtained PPP funds, the affidavit states. The bank nonetheless kept the $940,416 in Magana's bank account frozen, and he could not access it.

          The actual loss from the two loans that were approved and disbursed was $360,415. Prior to today’s sentencing hearing, Magana deposited with the court $360,415 as his restitution payment.

          Magana’s business partner, Steven R. Goldstein, 37, of Northridge, is serving a one-year federal prison sentence for committing fraud in connection with major disaster or emergency benefits. Goldstein pleaded guilty in December 2020 to a federal fraud charge and admitted in his plea agreement that he fraudulently obtained $655,000 in PPP loans for his companies by submitting false tax documents and fake employee information.

          IRS Criminal Investigation and the Small Business Administration’s Office of Inspector General investigated this case.

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

          LOS ANGELES – A federal jury today found a long-time senior leader of the South Los Angeles-based East Coast Crips (ECC) street gang guilty of federal criminal charges for conspiring to commit racketeering through various criminal acts including murder, extorting local businesses and the distribution of narcotics.

          Paul Gary Wallace, 56, a.k.a. “Little Doc” and “Uncle Bill,” of South Los Angeles, was found guilty of one count of conspiracy to violate the Racketeer Influenced and Corrupt Organizations (RICO) Act and one count of using a firearm in furtherance of a violent crime.

          United States District Judge André Birotte Jr. scheduled a July 29 sentencing hearing, at which time Wallace will face a statutory maximum sentence of life in federal prison.

          According to evidence presented at his 11-day trial, Wallace was a member of the ECC for more than 30 years and rose to become the leader and most influential member of the gang’s “6-Pacc” set, a series of cliques of the gang responsible for control over territory in South Los Angeles.

          Wallace maintained his control over the gang through violence and intimidation. Wallace murdered and conspired to commit murder to enhance the gang’s violent reputation, to enhance his status within the gang, to retaliate against rivals, and to enforce discipline within the gang.

          As a gang leader, Wallace’s other criminal conduct included selling drugs in ECC territory, extorting local businesses, presiding over robberies, and engaging in other acts of violence, including intimidation, assaults and shootings against the gang’s rivals.

          The jury specifically found that on November 13, 2014, Wallace participated in the murder of a rival gang member. The murder weapon, an AK-47-style assault rifle, was later found in Wallace’s van. The jury did not find that Wallace committed the February 2003 murder of a rival.

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

          Assistant United States Attorneys Joseph D. Axelrad and Jeffrey M. Chemerinsky of the Violent and Organized Crime Section are prosecuting this case.

          LOS ANGELES – A Sylmar man pleaded guilty this afternoon to two federal drug trafficking offenses, one of which stemmed from a 2020 transaction in which he sold bogus oxycodone pills laced with fentanyl that caused a U.S. Marine stationed at Camp Pendleton to suffer a fatal overdose.

          Gustavo Jaciel Solis, 25, of Sylmar, pleaded guilty in United States District Court to participating in a drug trafficking conspiracy and distributing fentanyl resulting in death.

          United States District Judge Dolly M. Gee is scheduled to sentence Solis on August 17, at which time he will face a mandatory minimum sentence of 20 years in federal prison for the fentanyl charge, and potential life sentences for each of the narcotics offenses.

          Solis was charged in 2020, along with an active-duty United States Marine stationed at Camp Pendleton and two other alleged co-conspirators, with being part of a ring that distributed narcotics to civilians and members of the United States Marine Corps.

          In a plea agreement filed Tuesday, Solis admitted that he “would advertise his controlled substances for sale through his Snapchat account username, ‘huf_75,’ and display name, ‘Gusto928.’ [Solis] would provide various controlled substances, including LSD, MDMA, cocaine, and purported oxycodone pills containing fentanyl, to customers directly, through couriers, or through the United States mail.”

          On May 22, 2020, after obtaining approximately 1,000 counterfeit oxycodone pills containing fentanyl from a co-defendant, Solis admitted using his Snapchat account to advertise the pills by posting a picture of several pills with the caption, “Who f*** with M30s? Tapp in.”

          Solis subsequently sold approximately 10 of the counterfeit oxycodone pills, and a 20-year-old U.S. Marine identified in court papers as “L.M.” died after consuming some of the fentanyl-laced pills.

          Solis also admitted in his plea agreement orchestrating other narcotics transactions, some of which were conducted with an undercover agent with the Naval Criminal Investigative Service. The transactions with the undercover agent involved several types of narcotics, including counterfeit oxycodone containing fentanyl, cocaine and LSD.

          Solis was arrested on July 29, 2020, at which time investigators seized narcotics and several firearms – including a 9mm “ghost gun” – from his residence.

          A superseding indictment filed in September 2020 named Solis and four other defendants, who are:

• Jordan Nicholas McCormick, 27, of Palmdale, the lead defendant and the conspiracy’s alleged supplier who provided LSD, ecstasy, cocaine and oxycodone pills laced with fentanyl to co-conspirators;
• Anthony Ruben Whisenant, 22, a lance corporal in the United States Marine Corps, who allegedly aided and abetted the distribution of the fentanyl-laced pills purchased from Solis that resulted in L.M.’s fatal overdose;
• Jessica Sarah Perez, 25, of Pacoima, who distributed narcotics including fentanyl and cocaine to the conspiracy’s civilian customers; and
• Ryan Douglas White, 24, a lance corporal in the United States Marine Corps, who is charged with being an accessory after the fact for allegedly attempting to hinder law enforcement’s apprehension of Whisenant and Solis.

          Perez pleaded guilty to conspiring to distribute narcotics on January 26, and Judge Gee is scheduled to sentence her on May 11. The remaining three defendants are scheduled to go on trial on June 21.

          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.

          This matter was investigated by the Naval Criminal Investigative Service, the Drug Enforcement Administration, the FBI, the United States Postal Inspection Service, and the Ventura County Sheriff’s Office.

          This case is being prosecuted by Assistant United States Attorneys Patrick Castañeda and Gregg E. Marmaro of the International Narcotics, Money Laundering, and Racketeering Section.

          LOS ANGELES – A Riverside County man who purported to own a pothole-repair company was found guilty by a federal jury today of fraud charges for using hundreds of thousands of dollars from the Paycheck Protection Program (PPP) for personal expenses such as luxury cars after he obtained a PPP loan for more than $7 million on behalf of his business.

          Oumar Sissoko, 59, of Temecula, was found guilty of four counts of wire fraud.

          According to evidence presented at his three-day trial, Sissoko obtained a $7.25 million loan for his downtown Los Angeles-based company, Road Doctor California LLC, after submitting a PPP loan application in April 2020.

          In the loan application, Sissoko claimed that Road Doctor was in the process of hiring 450 full-time employees and would have average monthly payroll expenses of $2.9 million. When he applied for the loan, Sissoko acknowledged the funds would be used to retain workers and maintain payroll, or make mortgage interest payments, lease payments and utility payments.

          In the days after the PPP loan was funded on May 1, 2020, Sissoko misappropriated hundreds of thousands of dollars of the loan proceeds to use for impermissible purposes, including purchasing a Mercedes-Benz for $113,000, paying off a loan on a BMW, and buying an Apple computer for more than $5,000.

          The illegal uses of the loan also included a non-refundable down payment of approximately $100,000 to purchase a company located in New Hampshire and the attempted transmission of approximately $150,000 to accounts in the African nation of Mauritania associated with a mineral-exploration company for which Sissoko purported to serve as CEO.

          United States District Judge John F. Walter has scheduled a July 18 sentencing hearing, at which time Sissoko will face a statutory maximum sentence of 20 years in federal prison for each of the four wire fraud counts.

          Last month, a federal jury deadlocked on the charges against Sissoko and a mistrial was declared. The second trial resulted in today’s verdict.

          The FBI, the Small Business Administration Office of Inspector General and the Federal Deposit Insurance Corporation’s Office of Inspector General investigated this matter.

          Assistant United States Attorney Carolyn S. Small of the Major Frauds Section and DOJ Trial Attorney Jason Covert of the Criminal Division’s Fraud Section are prosecuting this case. Assistant United States Attorney Jonathan S. Galatzan, Chief of the Asset Forfeiture Section, is providing substantial assistance, including with the seizure and forfeiture of two luxury automobiles purchased with PPP loan funds.

          The Coronavirus Aid, Relief, and Economic Security (CARES) Act is a federal law enacted in March 2020 and is designed to provide emergency financial assistance to the millions of Americans who are suffering the economic effects caused by the COVID-19 pandemic. One source of relief provided by the CARES Act was the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses, through the PPP. In April 2020, Congress authorized more than $300 billion in additional PPP funding.

          Anyone with general information about allegations of attempted fraud involving COVID-19 can report it by calling the Justice Department’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 – Edward Buck, a businessman and long-time figure of West Hollywood politics, was sentenced today to 360 months in federal prison for providing fatal doses of methamphetamine to two men who died at his apartment after he injected them with the drug.

            Buck, 67, was sentenced by United States District Judge Christina A. Snyder. A restitution hearing in this case is scheduled for May 16.

            At the conclusion of a nine-day trial in July 2021, a federal jury found Buck guilty of two counts of distribution of methamphetamine resulting in death, four counts of distribution of methamphetamine, one count of maintaining a drug-involved premises, and two counts of enticement to travel in interstate commerce for prostitution.

            Beginning no later than 2011 and continuing through September 2019, Buck engaged in a pattern of “party and play,” in which he solicited men – some of whom were homeless or struggling with drug addiction – to consume narcotics that he provided and perform sexual activities at his apartment, a ritual that prosecutors argued was “more than a fetish – it was a lethal and unchecked pattern of reckless disregard for human life.”

            In these party-and-play sessions, Buck distributed drugs, including methamphetamine, GHB (the “date rape” drug), and clonazepam. In some instances, Buck injected victims with drugs intravenously in a practice known as “slamming.”

            He exploited the wealth and power balance between himself and his victims by offering them money to use drugs.

            Buck solicited his victims in various ways, including using social media platforms, dating and escort websites, or via referrals from his prior victims, to whom he offered finder’s fees.

            Once the men were at his apartment, Buck prepared syringes containing methamphetamine, sometimes personally injecting the victims with or without their consent. Buck also injected victims with more narcotics than they agreed to take, and sometimes he injected victims while they were unconscious. At trial, victims described how Buck put sedatives in their drinks or in the injections, causing them to lose consciousness or control over their bodies. While they were unconscious, Buck sexually assaulted his victims.

            On two occasions, Buck’s party-and-play fetish turned lethal. Buck killed Gemmel Moore with a lethal dose of methamphetamine on July 27, 2017, and then he killed Timothy Dean with a lethal dose of methamphetamine on January 7, 2019.

            These deaths failed to deter him from continuing to distribute methamphetamine, and Buck continued distributing the drug to additional victims, including a man who overdosed twice in Buck’s apartment but survived after receiving immediate medical treatment.

            Buck also enticed individuals to travel to California from other states for the purpose of engaging in prostitution through party-and-play sessions. Buck purchased a plane ticket for Moore, who had moved to Texas, so Moore could travel to Los Angeles in July 2017 to party and play at Buck’s apartment. In September 2018, Buck similarly purchased a plane ticket for another victim to fly from Iowa to Los Angeles.

            Buck has been in federal custody in this case since his arrest in September 2019.

            “This defendant preyed upon vulnerable victims – men who were drug-dependent and often without homes – to feed an obsession that led to death and misery,” said United States Attorney Tracy L. Wilkison. “Mr. Buck continues to pose a clear danger to society, as evidenced by him continuing to lure men to his apartment, even after he killed two men with lethal methamphetamine injections. The sentence imposed today will protect other potential victims and hopefully will bring some solace to the families of two men who needlessly died in Mr. Buck’s apartment.”

            “We fight every day, with every drug-related case, to bring justice to the victims and their families,” said DEA Los Angeles Field Division Special Agent in Charge Bill Bodner. “Individuals who knowingly distribute lethal drugs and use them to prey on vulnerable victims will be relentlessly pursued and held accountable. Today’s sentencing illustrates the tireless efforts by investigators and prosecutors to hold predators responsible for their actions.”

            “Ed Buck preyed on young black males who were vulnerable, isolated and were often fighting addiction,” said Kristi K. Johnson, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “The evidence showed that Buck, in addition to causing the death of two men, also degraded his victims with racial slurs and exploited their circumstances, including homelessness and addiction, to indulge his sexual proclivities. This sentence will effectively remove a predator and hopefully deliver a degree of justice to the families of the victims.”

            “As the Sheriff of Los Angeles County, I stand with the victims of crime,” said Los Angeles County Sheriff Alex Villanueva. “This has been a long and very thorough investigation which began with our Los Angeles County Sheriff’s Department Homicide Bureau. Investigators worked tirelessly to put together a fileable case which was ultimately presented to the United States Attorney’s Office. Collectively, Homicide Bureau, with the support of the Organized Crime Drug Enforcement Task Force, and in partnership with the Drug Enforcement Administration and the FBI, the investigation continued. I am especially thankful to the prosecuting Assistant United States Attorneys for their commitment to seek justice for the victims and their families.”

            The Drug Enforcement Administration’s Los Angeles Field Division, the FBI and the Los Angeles County Sheriff’s Department investigated this matter.

            Assistant United States Attorneys Chelsea Norell of the Violent and Organized Crime Section and Lindsay Bailey of the International Narcotics, Money Laundering, and Racketeering Section prosecuted this case.

          LOS ANGELES – A former train engineer at the Port of Los Angeles was sentenced today to 36 months in federal prison for intentionally running a locomotive at full speed off the end of railroad tracks near a United States Navy hospital ship that was deployed to provide medical relief during the early months of the COVID-19 pandemic.

          Eduardo Moreno, 46, of San Pedro, was sentenced by United States District Judge Philip S. Gutierrez, who also ordered him to pay $755,880 in restitution.

          Moreno pleaded guilty in December 2021 to one count of committing a terrorist attack and other violence against railroad carriers and mass transportation systems.

          On March 31, 2020, Moreno drove a train at high speed, did not slow down near the end of the railroad track, and intentionally derailed the train off the tracks near the United States Naval Ship Mercy – a hospital ship then docked in the Port of Los Angeles.

          No one was injured in the incident, and the Mercy was not harmed or damaged. The incident resulted in the train leaking a substantial amount – approximately 2,000 gallons – of diesel fuel, which required clean up by fire and other hazardous materials personnel. Clean-up crews recovered approximately 400 gallons of fuel from the fuel tank and the ground adjacent to the derailment, according to court documents.

          Moreno caused $755,880 in damage because of the derailment.

          In his first interview with the Los Angeles Port Police, Moreno acknowledged that he “did it,” saying that he was suspicious of the Mercy and believed it had an alternate purpose related to COVID-19 or a government takeover, according to an affidavit filed with a criminal complaint in this case. Moreno stated that he acted alone and had not pre-planned the attempted attack. While admitting to intentionally derailing and crashing the train, he said he knew it would bring media attention and “people could see for themselves,” referring to the Mercy, according to the affidavit.

          In a second interview with FBI agents, Moreno stated that “he did it out of the desire to ‘wake people up,’” the affidavit states. “Moreno stated that he thought that the Mercy was suspicious and did not believe ‘the ship is what they say it’s for.’”

          “[Moreno’s] offense was extraordinarily serious, and he used his unique access as a licensed train conductor to derail a multi-ton train toward a government hospital ship whose purpose was to treat vulnerable patients in the midst of a global pandemic,” prosecutors wrote in a sentencing memorandum.

          The FBI’s Joint Terrorism Task Force and the Port of Los Angeles Police investigated this matter.

          Assistant United States Attorneys Reema M. El-Amamy and Christine M. Ro of the Terrorism and Export Crimes Section, along with Trial Attorney Taryn Meeks of the Justice Department’s National Security Section’s Counterterrorism Section prosecuted this case.

          LOS ANGELES – Six Southern California companies today were ordered to pay $1.83 billion in restitution for participating in a conspiracy to defraud the United States through a scheme in which huge amounts of aluminum – disguised as “pallets” to avoid $1.8 billion in customs duties – were exported to the United States and were “sold” to fraudulently inflate a China-based company’s revenues and deceive investors worldwide.

          United States District Judge R. Gary Klausner sentenced two aluminum businesses and four warehousing companies – all of which were related to one another – to five years of probation, which is the maximum penalty permitted by law, and ordered them to pay $1.83 billion in restitution. The defendants are:

• Perfectus Aluminium Inc., an Ontario-based business;
• Perfectus Aluminium Acquisitions LLC, a subsidiary of Perfectus Aluminium formed in 2014 to oversee several companies that received aluminum pallets shipped to the United States after duties were imposed on Chinese aluminum in 2011;
• Scuderia Development LLC, which owns a warehouse in Riverside;
• 1001 Doubleday LLC, which owns a warehouse in Ontario;
• Von Karman – Main Street LLC, which owns a warehouse in Irvine; and
• 10681 Production Avenue LLC, which owns a warehouse in Fontana.

          At the conclusion of a nine-day trial in August 2021, a federal jury found all six corporate entities guilty of one count of conspiracy, nine counts of wire fraud and seven counts of passing false and fraudulent papers through a customhouse. The Perfectus Aluminium defendants also were found guilty of seven counts of international promotional money laundering.

          “The Perfectus and Warehouse defendants were integral participants in this conspiracy,” prosecutors wrote in a sentencing memorandum. “Indeed, they existed only to perpetrate it.”

          The corporate defendants sentenced today – along with indicted defendants China Zhongwang Holdings Ltd., Asia’s largest manufacturer of aluminum extrusions; Zhongtian Liu, the company’s former president and chairman; and several other individuals – lied to U.S. Customs and Border Protection to avoid paying the United States $1.8 billion in anti-dumping and countervailing duties (AD/CVD) that were imposed in 2011 on certain types of extruded aluminum imported into the United States from China.

          The aluminum sold to United States-based companies controlled by Liu was simply aluminum extrusions that were spot-welded together to make them appear to be functional pallets. In fact, there were no customers for the 2.2 million pallets imported by the Liu-controlled companies between 2011 and 2014, and no pallets were ever sold.

          The vast majority of the pallets were imported through the ports of Los Angeles and Long Beach and then stockpiled at four large warehouses in Southern California, all of which were purchased at Liu’s direction.

          Liu and his co-defendants orchestrated the bogus sales of aluminum to Liu-controlled companies in Southern California to falsely inflate China Zhongwang’s value. Liu was the majority owner of China Zhongwang, which has been listed on the Stock Exchange of Hong Kong since a 2009 initial public offering that raised $1.26 billion.

          After the AD/CVD duties were put in place in 2011, China Zhongwang’s annual reports falsely claimed that there was a robust demand for the aluminum pallets in the United States. Although the annual reports asserted that the aluminum pallets were being sold to independent third parties – and the defendants used these reported “sales” to inflate China Zhongwang’s reported sales volume and purported volume of exports to the United States – in fact the aluminum was being stockpiled by Liu-controlled entities in more than 2 million square feet of warehouse space owned by the warehouse defendants in Southern California, as well as at Liu’s New Jersey facility.

          Since there was no actual demand for the pallets, Liu and China Zhongwang arranged for aluminum melting facilities to be built and acquired, which were to be used to reconfigure the aluminum imported as pallets into a form with commercial value.

          The defendants facilitated their schemes by laundering hundreds of millions of dollars through shell companies to the U.S.-based aluminum companies controlled by Liu. The funds were then transferred to China Zhongwang and the other shell companies as payments for the aluminum.

          On March 24, Judge Klausner ordered the forfeiture to the United States the seized aluminum, currently estimated to be worth approximately $70 million.

          The remaining four defendants charged in a 2019 federal grand jury indictment in this case have yet to appear in court in the United States to face the criminal charges in this matter:

• Zhongtian Liu, 58, a billionaire Chinese citizen who is a former Tustin resident, and who is the former president and former chairman of the board of China Zhongwang Holdings Ltd.;
• China Zhongwang Holdings Ltd., a publicly traded aluminum company based in Liaoyang City that at the time of the indictment was the largest aluminum extrusion manufacturer in Asia and the second largest in the world, and which has accrued approximately $3.6 million in contempt sanctions for its failure to appear in this case;
• Zhaohua Chen, 62, a Chinese national who allegedly was a close friend of Liu and a key player in the scheme; and
• Xiang Chun Shao, a.k.a. “Johnson Shao,”60, most recently of Irvine, who allegedly managed a collection of Southern California businesses that pretended to be independent third parties importing the Chinese aluminum, including the Perfectus defendants.

          In 2017, the United States Attorney’s Office filed civil forfeiture actions against the four Southern California warehouses used by Perfectus to store the pallets. In 2018, the government filed a fifth civil forfeiture complaint against “approximately 279,808 Aluminum Structures in the Shape of Pallets,” about half of which were seized in early 2017 at the Ports of Los Angeles and Long Beach, and the other half were seized from three other warehouses Perfectus was using to store the pallets.

          Those civil asset forfeiture cases have been stayed pending the completion of the criminal prosecution.

          Homeland Security Investigations and IRS Criminal Investigation investigated this matter.

          Assistant United States Attorneys Roger A. Hsieh and Gregory D. Bernstein of the Major Frauds Section prosecuted this case. Assistant United States Attorney Jonathan S. Galatzan, Chief of the Asset Forfeiture Section, is handling the asset forfeiture-related portion of this case.

          RIVERSIDE, California – A San Bernardino County man was arrested today on a federal grand jury indictment that alleges he sold fentanyl to a woman last year who soon afterward suffered a fatal overdose from the powerful synthetic opioid.

          John Biagianti, 31, of Upland, was arrested this morning at his residence by federal and local law enforcement.

          He is charged with one count of distribution of fentanyl resulting in death – a crime that carries a mandatory minimum sentence of 20 years in federal prison and a statutory maximum sentence of life imprisonment.

          Biagianti is scheduled to be arraigned this afternoon in United States District Court in Riverside.

          According to an indictment filed on April 6, Biagianti on August 8, 2021 knowingly and intentionally distributed fentanyl to a victim, who ingested the drug and died the following day.

          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 Riverside County Sheriff’s Department’s Overdose Death Investigations and Narcotics Unit and the Drug Enforcement Administration’s Los Angeles Division investigated this matter.

          Special Assistant United States Attorney Stephen T. Merrill of the Riverside Branch Office is prosecuting this case.

          LOS ANGELES – A West Hills man was sentenced today to 18 months in federal prison for starting a fire that caused substantial damage to a Santa Monica restaurant during the civil disturbances that erupted during the spring of 2020.

          Micah Tillmon, 20, was sentenced by United States District Judge Michael W. Fitzgerald. A restitution hearing will be scheduled for a later date.

          Tillmon pleaded guilty in September 2021 to one count of possession of an unregistered destructive device.

          On May 31, 2020, Tillmon entered Sake House by Hikari, a Japanese restaurant located in downtown Santa Monica, without authorization and while the business was closed because of the civil unrest occurring in the city at that time. While inside the restaurant, Tillmon possessed and used an incendiary device to ignite a fire that rapidly grew, enveloped the entire restaurant space and spread to other areas of the building adjacent to the restaurant.

          According to court documents, security video from the restaurant shows Tillmon removing “a red tube-shaped object from his jacket, which he placed behind the reception desk area of the restaurant before walking away. Within seconds of that action, smoke and fire appeared from the area.”

          The Santa Monica Fire Department (SMFD) responded to the fire and extinguished the flames using several fire trucks and numerous personnel. Due to safety concerns that accompanied the city’s civil unrest, SMFD prematurely abandoned the scene. As a result, SMFD needed to return to the scene several times throughout the night to extinguish additional flare-ups. The restaurant has since permanently closed.

          Tillmon was identified by detectives with the Santa Monica Police Department, who reviewed numerous security videos and social media posts. Tillmon was also linked to the fire when investigators uncovered a video showing his white Ford Explorer parking next to the Sake House four minutes before the fire started and then reversing across the street soon after the fire started, according to court documents.

          Tillmon possessed an incendiary device that had not been registered with the National Firearms Registration and Transfer Record, the central federal registry for all items regulated under the National Firearms Act.

          “[Tillmon’s] actions on May 31, 2020, were only possible because of a complete breakdown in social order,” prosecutors wrote in a sentencing memorandum. “Riots like the ones that convulsed this district in the summer of 2020 are a stark reminder of the thin line that separates state control and anarchy.”

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

          Assistant United States Attorney Shawn T. Andrews of the Violent and Organized Crime Section prosecuted this case.

          LOS ANGELES – A former contractor at a food supply company has agreed to plead guilty to a felony bid-rigging charge, admitting that he conspired with a person at another food company to determine which supplier would obtain low-bid contracts from the United States Bureau of Prisons (BOP), the Justice Department announced today.

          Edgar Porras, 49, of Moreno Valley, was charged in a criminal information filed today with one count of bid rigging. In a plea agreement also filed today, Porras agreed to plead guilty to the offense.

          During the scheme that ran from 2013 through August 2018, Porras conspired “to suppress and restrain competition by rigging bids to obtain selected food contracts offered by the BOP,” according to court documents. To further the scheme, Porras, who was a contractor to a food company identified as “Company A,” agreed with co-conspirators not to compete to obtain the BOP contracts, and collectively they decided which conspirator would submit the lowest – and presumably winning – bid for a contract.

          Porras admitted in his plea agreement that he rigged the bidding process for approximately 111 BOP food contracts cumulatively worth approximately $1.9 million.

          Porras agreed to plead guilty to violating a provision of the Sherman Antitrust Act, which carries a statutory maximum penalty of 10 years in federal prison and a maximum fine of $1 million. The fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime if either of those amounts is greater than the statutory maximum fine.

          Porras will be directed to appear in United States District Court in Los Angeles at a later date.

          The United States Department of Justice, Office of Inspector General conducted the investigation in this matter as part of the Procurement Collusion Strike Force (PCSF).

          Assistant United States Attorneys Jeff Mitchell of the Major Frauds Section and Jason Pang of International Narcotics, Money Laundering, and Racketeering Section are prosecuting this case. The United States Attorney’s Office is a participating member of the PCSF.

          In November 2019, the Department of Justice created the PCSF, a joint law enforcement effort to combat antitrust crimes and related fraudulent schemes that impact government procurement, grant and program funding at the federal, state and local levels.

          In the fall of 2020, the Strike Force expanded its footprint with the launch of PCSF: Global, which is designed to deter, detect, investigate, and prosecute collusive schemes that target government spending outside of the United States.

          To contact the PCSF, or to report information on market allocation, price fixing, bid rigging or other anticompetitive conduct, go to https://www.justice.gov/procurement-collusion-strike-force.

          LOS ANGELES – A Compton man is expected to appear in federal court today after being arrested Monday on federal criminal charges alleging he targeted and robbed more than 20 gay men he met on the Grindr dating application.

          Derrick Patterson, 22, was arrested on Monday by special agents with the FBI. Patterson, who is charged in a criminal complaint with one count of Hobbs Act robbery, is expected to make his initial appearance this afternoon in United States District Court.

          According to an affidavit filed with the criminal complaint on March 30, from November 2019 to March 2022, Patterson targeted his victims by using Grindr, a social networking program for gay, bisexual, transgender and queer people. Patterson allegedly met his victims at their homes or in hotel rooms, purportedly for sexual encounters, then robbed them. During the robberies, Patterson allegedly pulled weapons – varyingly, knives or a taser gun – on his victims, then demanded money and their cell phones, before fleeing the scene with the victims’ wallets. On other occasions, Patterson physically assaulted his victims. He then allegedly later withdrew money from victims’ bank accounts or used their credit cards for his own personal expenses.

          For example, in September 2020, Patterson allegedly met one victim at a hotel on Century Boulevard in Los Angeles and, while engaging in consensual sexual activity, took the victim’s phone. He then attempted to access Apple Pay by asking the victim for the password. When the victim refused and demanded his phone back, Patterson pulled out a taser, threatened the victim, and continued to demand the victim’s Apple Pay password, according to the affidavit. When the victim fled, Patterson allegedly activated the taser. When the victim returned to the room, Patterson was gone, but the victim’s wallet was missing and his belongings had been rummaged through.

          A search warrant for Patterson’s phone number placed him near this location at the time of the robbery – as well as at a different Century Boulevard hotel where a similar robbery was reported two hours earlier.

          During another robbery in October 2020, Patterson allegedly stabbed a victim in the chest. The victim survived and later positively identified Patterson during a photographic line-up as his attacker. The final robbery occurred on March 26 at a hotel in Beverly Hills, the affidavit alleges.

          A complaint contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proved guilty beyond a reasonable doubt.

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

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

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

          Anyone who believes they may have been a victim or targeted by the defendant is urged to contact the FBI’s Los Angeles Field Office 24 hours a day at (310) 477-6565.

          LOS ANGELES – A former UCLA decathlete who also competed with the Philippines national team was arrested this morning on a federal criminal complaint alleging that he fraudulently raised more than $37 million from investors who were told their funds would be used to finance companies marketing cannabis vape pens.

          David Joseph Bunevacz, 53, of Calabasas, was taken into custody this morning pursuant to a complaint filed on March 30 that charges him with one count of wire fraud. Bunevacz is expected to make his initial appearance this afternoon in United States District Court in Los Angeles.

          According to an affidavit filed with the complaint, Bunevacz solicited investments in various businesses – “CB Holding Group Corp.” and “CaesarBrutus LLC,” among others – which he claimed were involved in the sale of vape pens containing cannabis products such as CBD oil and THC. Bunevacz falsely told at least one investor he had a long-standing relationship with a Chinese manufacturer of disposable vape pens and he obtained “raw pesticide-free oil” that was sent to a “lab that infuses the flavors into the oil with our proprietary custom process that renders the vape flavoring smooth and discrete,” the complaint alleges. Bunevacz allegedly also provided investors with forged documents – such as bank statements, invoices and purchase orders – to support his claims of the businesses’ success and the need for investor funds.

          Instead of using the funds to finance business operations, Bunevacz “misappropriated the vast majority of the funds to pay for his own opulent lifestyle, including a luxurious house in Calabasas, Las Vegas trips, jewelry, designer handbags, a lavish birthday party for his daughter, and horses,” according to the affidavit. Bunevacz allegedly spent $8,143,500 at casinos, paid $218,700 to an event planner in connection with a birthday party for his daughter, and bought a horse for $330,000. Some investor funds were allegedly used to repay earlier investors in a manner consistent with a Ponzi scheme.

          To create the false appearance that his companies were engaged in legitimate business activities, Bunevacz registered various shell companies, including several with names similar or identical to those of legitimate cannabis businesses. To conceal his control of these shell companies and the bank accounts associated with them, Bunevacz listed other individuals, including his stepdaughter, as the corporate officers of the shell companies.

          According to the affidavit, Bunevacz and his family maintain a public profile. Bunevacz’s blog touts his success as a former decathlete who competed for the Philippines, and his wife and daughter appeared in a reality television show. Despite Bunevacz’s promotion of his background, Bunevacz took efforts to conceal negative information from investors, such as his 2017 felony conviction for the unlawful sale of securities, according to the affidavit. After one investor uncovered a civil lawsuit against Bunevacz, Bunevacz allegedly emailed a counterfeit version of the settlement agreement to falsely make it appear that he had been paid $325,000 as part of a settlement. In reality, it was Bunevacz who had agreed to pay $325,000 to settle the claim.

          Investigators believe that Bunevacz caused his victims to suffer losses of at least $28.4 million, and possibly as much as $35 million. The investigation in this matter is ongoing.

          A criminal complaint contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty in court.

          If convicted of the wire fraud charge alleged in the complaint, Bunevacz would face a statutory maximum sentence of 20 years in federal prison.

          The FBI, the Los Angeles Sheriff’s Department and IRS Criminal Investigation are investigating this matter. The U.S. Securities and Exchange Commission provided substantial assistance.

          Assistant United States Attorney Alexander B. Schwab of the Major Frauds Section is prosecuting this case.

          LOS ANGELES – A lawyer who formerly had a legal practice in Ontario was sentenced today to 120 months in federal prison for receiving sexually explicit images and videos from a minor over Snapchat.

          Sagi Schwartzberg, 39, of Fontana, who used the aliases “Jason D,” “drunkesq_064” and “xocdrunkx” on social media platforms, was sentenced by United States District Judge André Birotte Jr., who also ordered him to pay a $10,000 fine and ordered him to serve a 20-year period of supervised release upon the completion of his prison term.

          Schwartzberg, whose California law license was suspended on January 24, pleaded guilty in August 2021 to one count of receipt of child pornography.

          From 2019 to January 2021, Schwartzberg used Snapchat to communicate with a minor victim. Between May 2020 and December 2020, Schwartzberg received several sexually explicit images and videos of the victim over Snapchat.

          In November 2020, law enforcement received a tip from Kik, another instant messaging application, that one of its users had shared suspected child pornography with another Kik user or group of users from October 2020 to November 2020.

          The tip indicated that a person later identified as Schwartzberg had uploaded suspected child pornography to Kik from two locations – later determined to be his residence and his law office.

          Law enforcement also discovered that in February 2020 Kik had also submitted a tip that one of its users had shared suspected child pornography with another user or group of users in February 2020. One of the IP addresses associated with the child pornography was assigned to Schwartzberg’s Fontana residence and another IP address was assigned to his previous work address in Rancho Cucamonga.

          During a search on February 17, Fontana Police officers seized Schwartzberg’s mobile phone, which had a hidden vault containing file folders, labeled with girls’ names, one of which contained sexually explicit images and videos of a girl who was at the time 14 and 15 years old when the images were created.

          During a subsequent interview with police officers that is outlined in the affidavit, the girl said she had been solicited by Schwartzberg to send sexually explicit images via Snapchat starting 2019 and that she had received electronic gift cards in exchange.

          In addition to this victim, law enforcement located four additional individuals in California, Minnesota and Iowa, who provided information that Schwartzberg paid for sexually explicit photos and videos of them via Snapchat and Kik. These victims were minors at the time Schwartzberg contacted them.

          “Trading child pornography and soliciting sexually explicit photos . . . [and] videos from minors, is shameful and shocking behavior from an adult man, much less an adult man from [Schwartzberg’s] background: an attorney, a father, a husband, an educated man of profession who appears to enjoy professional and financial success as well as a wide circle of personal friends and colleagues,” prosecutors wrote in a sentencing memorandum.

          The FBI investigated this matter in conjunction with Fontana Police Department, as part of Inland Regional Child Exploitation and Human Trafficking Task Force. The Task Force also includes the Upland Police Department, the Rialto Police Department, the San Bernardino County Sheriff's Department, the Riverside County District Attorney’s Office, the Riverside County Sheriff’s Department and the Riverside Police Department.

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

          LOS ANGELES – A Los Angeles paralegal has agreed to plead guilty to participating in a conspiracy to violate U.S. immigration laws by preparing and filing fraudulent documents that sought legal permanent residency and citizenship for members of a Philippines-based church who allegedly worked as fundraisers for a bogus charity operated by the church, the Justice Department announced today.

          In a plea agreement filed today in United States District Court, Maria De Leon, 73, a resident of the Koreatown neighborhood of Los Angeles and the owner of Liberty Legal Document Services, agreed to plead guilty to participating in a scheme with administrators of the church, which is known as the Kingdom of Jesus Christ, The Name Above Every Name (KOJC).

          In addition to pleading guilty, De Leon agreed to cooperate in the government’s case.

          De Leon admitted in the plea agreement to participating for about eight years in the conspiracy to commit marriage fraud and visa fraud with the leaders of the KOJC.

          “At the time [De Leon] completed the immigration paperwork for certain KOJC members, [she] knew that the immigration paperwork was based upon false representations of the bona fides of the underlying marriages” made by church officials, according to the plea agreement.

          De Leon admitted to submitting fraudulent “Petitions for Alien Relative” and related paperwork on behalf of KOJC members knowing or believing that the marriages were arranged for purposes of securing favorable immigration status for a spouse.

          De Leon is one of nine defendants who were charged in November 2021 in a 42-count superseding indictment that alleges a labor trafficking scheme that used fraudulently obtained visas to bring KOJC members to the United States, where they were forced to solicit donations for a bogus charity – the Glendale-based Children’s Joy Foundation (CJF). The indictment alleges that the donations were used to finance church operations and the lavish lifestyles of its leaders.

          Members who proved successful at soliciting for the KOJC were forced to enter into sham marriages or obtain fraudulent student visas to acquire legal status in the United States so they could continue soliciting donations, the indictment alleges. Many of the workers were moved around the United States to solicit donations as CJF “volunteers,” who were also called Full Time Miracle Workers, according to the indictment, which alleges these “workers fundraised for KOJC nearly every day, year-round, working very long hours, and often sleeping in cars overnight.”

          The superseding indictment also alleges a sex trafficking scheme that implicates KOJC’s leader, Apollo Carreon Quiboloy, who was referred to as “The Appointed Son of God.”

          De Leon is one of six defendants previously arrested in this case. The remaining five defendants who have appeared in federal court in Los Angeles are currently scheduled to be tried on March 21, 2023.

          Three of the defendants, including Quiboloy, are fugitives believed to be in the Philippines.

          The court is expected to soon schedule a hearing for De Leon to formally enter her guilty plea to the conspiracy count. Once she pleads guilty, De Leon will face a statutory maximum sentence of five years in federal prison.

          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.

          As part of the investigation, the FBI is encouraging potential victims or anyone with information about KOJC activities to contact investigators. Those with information are asked to call the FBI’s Los Angeles Field Office at (310) 477-6565. Individuals may also contact the FBI through its website at https://www.fbi.gov/tips.

          The investigation into KOJC activities is being led by the FBI, which is receiving substantial assistance from Homeland Security Investigations, U.S. Citizenship and Immigration Service’s Fraud Detection and National Security Unit, the U.S. Department of State’s Diplomatic Security Service, and IRS Criminal Investigation.

          Assistant United States Attorneys Daniel H. Ahn, Jake D. Nare and Benjamin D. Lichtman of the Santa Ana Branch Office, along with Special Assistant United States Attorney Angela C. Makabali of the General Crimes Section, are prosecuting this case. Assistant United States Attorney Katharine Schonbachler of the Asset Forfeiture Section is also working on the matter.

          SANTA ANA, California – A federal jury has found an Orange County real estate investor who successfully flipped foreclosed homes guilty of three federal criminal tax charges, the Justice Department announced today.

          John W. Rampello, 71, of Santa Ana, was found guilty on Wednesday afternoon of two counts of subscribing to a false individual income tax return and one count of aiding and assisting in the preparation of a false individual income tax return.

          United States District Judge David O. Carter has scheduled a June 27 sentencing hearing, at which time Rampello will face a statutory maximum sentence of nine years in federal prison.

          According to evidence presented at his seven-day trial, Rampello, along with his business partners, was an established and successful property flipper of foreclosed homes in Orange County since the mid-1990s. During the tax years 2014 through 2016, Rampello and his partners flipped approximately 170 homes and defendant’s portion of the profits was approximately $2.1 million.

          Rampello and his business partners kept detailed records of their property flip activities, including the profits Rampello made on each property. But Rampello concealed this information from his income tax return preparers and did not tell them that he was involved in the property flipping business.

          As a result of his omission of his property flipping income from his 2014, 2015, and 2016 individual income tax returns, Rampello underreported his federal income taxes by hundreds of thousands of dollars.

          IRS Criminal Investigation investigated this matter.

          Assistant United States Attorney James C. Hughes of the Major Frauds Section and Assistant United States Attorney Brett A. Sagel of the Santa Ana Branch Office are prosecuting this case.

          This case was the result of a whistleblower. If you have information on tax law violations, please provide it to IRS at https://www.irs.gov/compliance/whistleblower-office.

          LOS ANGELES – Federal authorities today announced a series of cases stemming from an illegal gambling operation that involved current and former professional athletes, some of whom assisted with the business and others who placed large bets on games.

          In documents unsealed Wednesday in United States District Court, the principals of the operation agreed to plead guilty to conspiracy charges and admitted they took in millions of dollars in bets, many of which were facilitated by a Costa Rica-based gambling website. One of the leaders of the scheme also admitted that he failed to report to the IRS nearly $1.5 million in income he received from the gambling scheme over two years.

          The owner of the online gambling business and website pleaded guilty earlier this month and admitted the business was illegal under California law because it involved at least five people, operated for at least six years, and often had gross revenue of well over $2,000 on a single day.

          Four new cases and related plea agreements were unsealed this week against:

• Wayne Nix, 45, of Newport Coast, a former minor league baseball player, who was charged with one count of conspiring to operate an illegal sports gambling business, and one count of filing a false tax return;
• Edon Kagasoff, 44, of Lake Forest, Nix’s longtime partner in the operation, who was charged with one count of conspiring to operate an illegal sports gambling business;
• Howard Miller, 63, of Gardena, who was charged with one count of aiding and abetting the operation of an illegal sports gambling business by assisting in the collection and payout of gambling proceeds related to the Costa Rica-based website; and
• Celebrity Financial LLC, dba Sherman Oaks Check Cashing, which was charged with failing to maintain an effective money laundering program related to it cashing at least $18 million in checks from the illegal sport gambling business at its San Fernando Valley check cashing store.

Representatives of Celebrity Financial appeared in court on March 28. Nix made his first court appearance Wednesday afternoon, and he is scheduled to formally enter his guilty plea on April 11. Miller has agreed to appear in court this afternoon, and Kagasoff has agreed to appear in court on Friday.

          The Justice Department also announced that earlier this month the court unsealed cases against two other defendants:

• Kenneth Arsenian, 52, of Newport Beach, who pleaded guilty on January 26 to four charges: operating an illegal sports gambling business, filing a false tax return, money laundering, and accepting a financial instrument for unlawful internet gambling; and
• Joseph Castelao, 56, of Rancho Palos Verdes, the owner of the gambling website – Sand Island Sports – who pleaded guilty on March 15 to operating an illegal gambling business.

          According to the court documents made public this week, Nix began operating a bookmaking business about 20 years ago. Through his contacts in the sports world, Nix developed a client list that included current and former professional athletes, and he employed three former Major League Baseball players to assist with the business.

          Kagasoff joined Nix in the gambling operation around 2014, and they used an online infrastructure and calling center operated by Sand Island Sports to create accounts for bettors, according to court documents, which note that Nix and his associates paid winning bets and retained nearly all of the money collected from bettors.

          Nix’s plea agreement outlines specific incidents related to the betting scheme, including receiving payments for gambling losses from a professional football player, a Major League Baseball coach and a baseball analyst. The plea agreement also discusses a bettor who wagered $1 million a year with Nix’s operation, a $5 million bet on the 2019 Super Bowl, and a sports broadcaster who told Nix he was going to refinance his home to pay off gambling debts.

          In relation to the tax count against him, Nix admitted receiving $1,466,947 in income that he failed to report on his 2017 and 2018 federal income tax returns. In his plea agreement, Nix agreed to pay all back taxes due for those years – a total of $1,248,429, which includes the back taxes, penalties and interest. Nix also agreed to forfeit to the government nearly $1.3 million seized in February 2020 from two bank accounts and two brokerage accounts he controlled.

          When Arsenian pleaded guilty in January, he admitted failing to report to the IRS more than $2.8 million in income for the years 2015 through 2018. Arsenian has agreed to pay $1.1 million in back taxes, plus additional penalties and interest. Arsenian also agreed to forfeit $341,459 in United States currency seized from his residence in February 2020.

          In its plea agreement, Sherman Oaks Check Cashing admitted that it encouraged customers to bring large business checks – far in excess of the $10,000 that normally triggers a Currency Transaction Report (CTR) to federal authorities – and employees of the company told customers that it would not file CTRs. As a result, many of its customers brought checks that were proceeds of unlawful activity, including two customers of the gambling operation who cashed at least $18.35 million in checks. Sherman Oaks Check Cashing admitted that it made at least $500,000 in profits by engaging in this activity. In its plea agreement, the company agreed to pay a $500,000 fine, which is the maximum penalty under the law.

          Homeland Security Investigations (HSI) 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 Asset Forfeiture Section are prosecuting these cases.

          SANTA ANA, California – An Orange County man was sentenced today to 188 months in federal prison for selling nearly four pounds of methamphetamine while he was on supervised release following a 2009 terrorism conviction.

          Ahmed Binyamin Alasiri, 45, a.k.a. Kevin Lamar James, of Garden Grove, was sentenced by United States District Judge Cormac J. Carney. Judge Carney also sentenced Alasiri to 24 months in federal prison for violating the terms of his supervised release, a sentence that will run concurrently to Alasiri’s 188-month term.

          Alasiri pleaded guilty in October 2021 to one count of distribution of methamphetamine.

          About one year after being released from prison and while serving a term of federal supervised release, Alasiri sold methamphetamine to a buyer on three occasions.

          “[Alasiri] was industrious and obtained legitimate full-time employment, yet he did not hesitate to traffic in drugs to earn income,” prosecutors argued in a sentencing memorandum. “He valued his personal short-term goals over respect for the law, the societal and individual damage caused by narcotics, and the risk of arrest for drug trafficking.”

          On July 24, 2020, Alasiri sold the buyer 430 grams of pure methamphetamine in exchange for $3,700. On August 6, 2020, Alasiri exchanged 435 grams of pure methamphetamine to the buyer for $3,700. On August 20, 2020, Alasiri distributed 877 grams of pure methamphetamine to the buyer in exchange for $7,400.

          The total weight of the methamphetamine was approximately 1.7 kilograms (3.8 pounds).

          Alasiri admitted in his plea agreement that he – not the buyer – first raised the topic of selling drugs, and that he had “family members who were drug traffickers and that he himself sold drugs to customers.”

          Alasiri is on supervised release after completing a 16-year federal prison sentence for conspiring to levy war against the United States through terrorism. Alasiri’s co-conspirators committed numerous armed robberies of gas stations to raise money for attacks Alasari planned on U.S. military operations and Israeli and Jewish facilities in Southern California. Alasiri completed his prison sentence in September 2019.

          This case was investigated by the FBI’s Joint Terrorism Task Force (JTTF) in Orange County, with assistance from the following JTTF agencies and other partners: the Los Angeles Police Department, the Los Angeles County Sheriff’s Department, the United States Probation Office, the Federal Bureau of Prisons, the California Department of Corrections and Rehabilitation, the Garden Grove Police Department, the Drug Enforcement Administration, the Orange County Sheriff’s Department, the California Highway Patrol, the United States Department of Defense, and the Orange County Intelligence Assessment Center.

          Assistant United States Attorney Dennise D. Willett of the Terrorism and Export Crimes Section prosecuted this case.

          LOS ANGELES – A Palm Springs man with a long criminal record and who previously claimed to have led a Coachella Valley street gang was sentenced today to 260 months in federal prison after admitting he sold distribution quantities of methamphetamine on five occasions.

          Efrain Chavez, 37, whose street moniker is “Chino,” was sentenced by United States District Judge Dale S. Fischer. Chavez pleaded guilty in November to five counts of distributing methamphetamine.

          When he pleaded guilty, Chavez admitted selling a total of 2.88 kilograms (about 6.3 pounds) of methamphetamine during five transactions in 2019. The sales took place in parking lots in Cathedral City, Palm Springs, and Colton.

          When he was arrested in this case in November 2019, Chavez was in possession of another 2.2 kilograms (nearly 5 pounds) of methamphetamine.

          Chavez has a criminal history that goes back 19 years and includes five prior felony convictions, prosecutors said in a sentencing memorandum that noted at one time Chavez was the “self-proclaimed leader of the Barrio San Rafael street gang.”

          Chavez conducted the methamphetamine sales while on probation for being a convicted felon in possession of a firearm.

          “Earlier sentences have not deterred [Chavez] from becoming a career offender, including multiple two-year sentences and a five-year sentence,” according to the sentencing memo. “Even being on supervision did not stop defendant from committing five felonies here.”

          Once he completes the prison sentenced, Chavez will be on supervised release for an additional 10 years.

          Homeland Security Investigations led the investigation into Chavez under the umbrella of the Riverside County Gang Impact Team, which also includes representatives of the Palm Springs Police Department.

          Assistant United States Attorney Eli A. Alcaraz of the Riverside Branch Office prosecuted this matter.

          LOS ANGELES – A South Bay woman was charged today in a federal grand jury indictment alleging she threw a Molotov cocktail inside a bank in Torrance after having a dispute with the branch manager.

          Teranee Millet, 34, of Gardena, is charged with one count of attempted arson and one count of unlawful possession of a destructive device. A federal grand jury returned the indictment today. Millet’s arraignment is expected to occur in the coming weeks at United States District Court.

          According to an affidavit previously filed in this case, 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 allegedly 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, court papers state.

          A few minutes later, Millet returned to the bank branch and threw a Molotov cocktail into the bank, lighting a fire in the middle of the bank. A bank customer attempted to put it out. Law enforcement officers responded within a few minutes, secured the scene and recovered the item that Millet allegedly threw on the floor of the bank to start the fire. On her way out of the bank’s parking lot and before law enforcement arrived, she allegedly threatened another customer and threw a glass bottle at the customer’s truck.

          Law enforcement used bank surveillance photos to help identify Millet.

          Millet was arrested in Fulton County, Georgia on December 2, 2021, after she allegedly led law enforcement on a chase in a stolen U-Haul van that ended with the van crashing. Law enforcement recovered from the van, among other items, 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.

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

          If convicted, Millet would face a mandatory minimum sentence of five years in federal prison and a statutory maximum sentence of 20 years’ imprisonment for the attempted arson charge. The possession of a destructive device charge carries a statutory maximum penalty of 10 years in federal prison.

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

          Assistant United States Attorney Maria Elena Stiteler of the International Narcotics, Money Laundering, and Racketeering Section is prosecuting this case.

          LOS ANGELES – A Ventura County man was charged today in a superseding indictment that alleges he illegally imported into the United States more than 1,700 reptiles – including 60 reptiles found hidden in his clothes last month at the United States-Mexico border.

          Jose Manuel Perez, a.k.a. “Julio Rodriguez,” 30, of Oxnard, is charged with one count of conspiracy, nine counts of smuggling goods into the United States and two counts of wildlife trafficking. He is expected to be arraigned on March 28 in United States District Court in Los Angeles.

          His sister, Stephany Perez, 25, also of Oxnard, is also charged in the indictment with conspiracy and will be directed to appear for an arraignment in the coming weeks.

          The superseding indictment returned today adds allegations to an indictment originally filed on February 24. The new allegations include 14 overt acts in the conspiracy charge, including some accusing Jose Perez of crossing into the U.S. from Mexico by car at the San Ysidro Port of Entry on February 25 with approximately 60 reptiles – including dozens of lizards and four snakes – concealed inside his jacket pockets, pants pockets, groin area, and pant legs. After initially denying to customs officials that he had anything to declare, Perez later told them that “the animals were his pets,” the indictment alleges.

          According to the indictment, from January 2016 to February 2022, the Perez siblings and their co-conspirators used social media to buy and to negotiate the terms of the sale and delivery of wildlife in the United States. The defendants allegedly advertised for sale on social media the animals smuggled from Mexico into the United States, posting photos and video that depicted the animals being collected from the wild.

          The animals – which included Yucatan box turtles, Mexican box turtles, baby crocodiles and Mexican beaded lizards – allegedly were imported into the United States from Mexico and Hong Kong without obtaining permits required by an international treaty known as the Convention on the International Trade of Endangered Species of Wild Fauna and Flora (CITES).

          For the animals allegedly smuggled from Mexico, co-conspirators would retrieve the wildlife from Cuidad Juarez International Airport in Mexico and eventually ship the animals by car to El Paso, Texas. Jose Perez paid his co-conspirators a “crossing fee” for each border crossing – the amount of which depended on the number of animals transported, the size of the package, and the risk of being detected by the authorities.

          On other occasions, Jose Perez and a co-conspirator traveled to Mexico to purchase additional live animals that had been taken from the wild so that the animals could be smuggled into the United States, according to the indictment.

          Once the animals had been shipped to the United States, they allegedly were transported to Perez’s then-residence in Missouri. But after he moved to California, the wildlife was shipped to his residence in Ventura County.

          Stephany Perez allegedly assisted in the illegal wildlife smuggling business, particularly during two extended periods when her brother was incarcerated in the United States.

          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.

          If convicted of all charges, the defendants would face a statutory maximum sentence of five years in federal prison for the conspiracy charge. Jose Perez would face a statutory maximum sentence of 20 years in prison for each smuggling count and five years in prison for each wildlife trafficking count. Jose Perez has been in federal custody since his arrest on February 25.

          United States Fish and Wildlife Service investigated this matter. The United States Attorney’s Office for the Southern District of California, U.S. Customs and Border Protection, and Homeland Security Investigations provided substantial assistance.

          Assistant United States Attorneys Matthew W. O’Brien and Brian R. Faerstein of the Environmental and Community Safety Crimes Section and Trial Attorney Gary Donner of the Environmental Crimes Section of the Justice Department’s Criminal Division are prosecuting this case.

          LOS ANGELES – A former manager at a U.S.-based automobile manufacturing company was taken into custody this morning after being indicted this week on a federal bribery charge alleging he solicited a $5 million bribe from a South Korean company with promises of delivering a large contract for various car parts.

          Hyoung Nam So, 46, of Irvine, who was also known as Brian So, surrendered this morning to federal authorities after a federal grand jury on Wednesday charged him in a bribery conspiracy. So is expected to be arraigned on the one-count indictment this afternoon in United States District Court in downtown Los Angeles.

          The indictment alleges that the foreign parts supplier paid So a total of $3.45 million in cash. Homeland Security Investigations seized $3.19 million believed to be proceeds from the bribery scheme from a private vault in Los Altos, California in 2017, and HSI subsequently returned the money to South Korean authorities.

          As a manager and team leader at the Michigan-based car manufacturer – referred to as “Company A” in the indictment – So oversaw the supply of parts used to build interiors for Company A automobiles in North America. In October 2015, the indictment alleges, So promised a contract to the owner of the South Korean parts company – “Company B” – in exchange for $5 million, which So demanded in cash.

          The following month, the owner of Company B arranged to have $1 million in cash transferred to the United States through money brokers, which an accomplice then drove from Los Angeles to Michigan, according to the indictment. The owner of Company B allegedly flew to the United States in late November 2015 and personally delivered the cash to So in a meeting at a hotel in Troy, Michigan.

          By the time the $1 million payment was made, So had learned that Company B was not the lowest bidder on the contract, and he arranged for information to be provided to Company B so it could revise its bid on the contract, according to the indictment. On December 8, 2015, So recommended to Company A executives that the contract be awarded to Company B, and the contract was awarded to Company B on the same day.

          “So refrained from notifying Company B of the contract award, and continued to withhold the information until [Company B’s owner] paid the remaining portion of the bribe,” the indictment states. On December 20, 2015, the owner of Company B allegedly paid So another portion of the bribe at a restaurant in Detroit – $2.45 million that also had been driven from Los Angeles to Michigan. The following day, So arranged for Company B to be told it had won the contract.

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

          The indictment charges So with one count of conspiracy to commit federal funds bribery, a charge related to the fact that Company A received money through federal assistance programs. This offense carries a maximum statutory penalty of five years in federal prison.

          The owner of Company B was prosecuted for offenses related to the bribery scheme in South Korea.

          The investigation into the bribery scheme was conducted by HSI’s Los Angeles El Camino Real Financial Crimes Task Force, a multi-agency task force comprised of federal and state investigators who are focused on financial crimes in Southern California. The Justice Department’s Office of International Affairs provided substantial assistance during the investigation.

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

          LOS ANGELES – U.S. Representative Jeff Fortenberry, who represents Nebraska’s 1st Congressional District, was found guilty by a federal jury this evening of concealing information and making false statements to federal authorities who were investigating illegal contributions made by a foreign national to the congressman’s 2016 re-election campaign.

          Fortenberry, 61, of Lincoln, Nebraska, who has served in Congress since 2005, was found guilty of one count of scheming to falsify and conceal material facts and two counts of making false statements to federal investigators.

          United States District Judge Stanley Blumenfeld Jr. scheduled a June 28 sentencing hearing. Each of the three felony charges carry a statutory maximum penalty of five years in federal prison.

          “After learning of illegal contributions to his campaign, the congressman repeatedly chose to conceal the violations of federal law to protect his job, his reputation and his close associates,” said United States Attorney Tracy L. Wilkison. “The lies in this case threatened the integrity of the American electoral system and were designed to prevent investigators from learning the true source of campaign funds.”

          “Today’s conviction highlights the FBI’s commitment to holding elected officials accountable,” said Kristi Johnson, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “The verdict emphasizes the importance of being truthful to law enforcement and demonstrates the government’s dedication to keeping the nation’s interests free from foreign influence through illegal campaign contributions.”

          “Jeff Fortenberry lied to federal agents in order to cover up illegal contributions to his re-election campaign,” said IRS Criminal Investigation Special Agent in Charge Ryan L. Korner. “The guilty verdict today shows that no one is above the law, and IRS-CI and our law enforcement partners will continue to hold our public servants accountable.”

          According to evidence presented during a seven-day trial, Fortenberry lied to and misled authorities during two interviews conducted by federal authorities who were looking into illegal contributions to Fortenberry’s re-election campaign made by a foreign billionaire in early 2016. Gilbert Chagoury, a foreign national prohibited by federal law from contributing to any U.S. elections, donated $30,000 of his money through “straw donors” who attended a Fortenberry campaign fundraiser held in Los Angeles.

          It is illegal for foreign nationals to make contributions to a federal campaign. It also is illegal for the true source of campaign contributions to be disguised by funneling the money through third-party conduits.

          Chagoury entered into a deferred prosecution agreement with the United States Attorney’s Office in 2019 in which he admitted providing approximately $180,000 that was used to make illegal contributions to four different political candidates in U.S. elections. Chagoury paid a $1.8 million fine.

           The co-host of the Fortenberry 2016 fundraiser, who is referred to in court papers as “Individual H,” began cooperating with federal authorities in September 2016 and informed special agents with the FBI and IRS Criminal Investigation about the illegal contributions. In response, investigators began looking into whether the Fortenberry campaign received illegal conduit contributions, whether Fortenberry knew about illegal contributions – both foreign contributions and conduit contributions – at the 2016 fundraiser, whether Fortenberry knew about illegal foreign contributions from Chagoury, and whether Fortenberry had any communications with Chagoury in relation to the illegal contributions made at the 2016 fundraiser.

          In the spring of 2018, Fortenberry contacted Individual H about hosting another fundraiser. In a June 2018 call, Individual H told the congressman on multiple occasions that a close associate of Chagoury and political ally of Fortenberry – Toufic Joseph Baaklini, who also entered into a deferred prosecution agreement with prosecutors – had provided him with $30,000 cash to route to Fortenberry’s campaign at the 2016 fundraiser. Individual H told Fortenberry that the money – which was distributed to other individuals at the fundraiser so the donations could be made under their names and avoid individual donor limits – “probably did come from Gilbert Chagoury.”

          Despite learning of the illegal campaign contributions, Fortenberry did not file an amended report with the Federal Elections Commission.

          Instead, after learning this information, Fortenberry made false and misleading statements during a March 23, 2019, interview with investigators who specifically told him it was a crime to lie to the federal government. Fortenberry falsely told investigators that he was not aware of Baaklini ever being involved in illegal campaign contributions, that the individuals who made contributions at the 2016 fundraiser were all publicly disclosed, and that he was not aware of any contributions to his campaign from a foreign national.

          At a second interview on July 18, 2019, with federal investigators and prosecutors, Fortenberry made additional false statements, including denying he was aware of any illicit donations made during the 2016 fundraiser, denying that Individual H had told him Baaklini had provided the $30,000 cash at the 2016 fundraiser, and stating that he would have been “horrified” to learn about the illegal conduit contributions.

          During this second interview, Fortenberry also misleadingly stated he ended the June 2018 call with Individual H after that person made a “concerning comment,” when in fact Fortenberry continued to ask Individual H to host another fundraiser for his campaign, according to court documents.

          The FBI and IRS Criminal Investigation investigated this matter.

          Assistant United States Attorney Mack E. Jenkins, Chief of the Public Corruption and Civil Rights Section, and Assistant United States Attorneys Susan S. Har and J. Jamari Buxton, also of the Public Corruption and Civil Rights Section, are prosecuting this case.

          LOS ANGELES – A Canadian national was found guilty by a jury today of federal criminal charges for leading a drug-trafficking organization that intended to export hundreds of pounds of cocaine and heroin from Southern California into Canada and imported MDMA (Ecstasy) into the United States using big-rig trucks and fully encrypted telephones to achieve their aims.

          Vincent Yen Tek Chiu, 43, a.k.a. “El Chino,” “Tiger,” “TigerOfMexico,” “TigerOfSweden,” of Vancouver, Canada, was found guilty of five felonies: one count conspiracy to distribute controlled substances, one count of conspiracy to export controlled substances, one count of distribution of cocaine, one count of distribution of heroin, and one count of distribution of MDMA.

          According to evidence presented at his seven-day trial, Chiu and other members of the drug trafficking organization obtained multi-kilogram quantities of cocaine, and less frequently, heroin from Los Angeles and passed the drugs to couriers who intended to transport them to Canada for further distribution. Big-rig trucks were used to try and export some of the cocaine into Canada.

          Chiu arranged the purchase of bulk quantities of cocaine in the United States for importation into Canada for resale in exchange for cash or bulk quantities of MDMA. Chiu also arranged for the transportation of MDMA from Canada into the United States in exchange for cocaine. Chiu and his co-conspirators used modified cellular devices with military-grade end-to-end encryption to talk to each other about the drug buys and transportation of narcotics.

          At trial, prosecutors presented evidence regarding four drug loads Chiu purchased, totaling approximately 90 kilograms (198.4 pounds) of cocaine and 8 kilograms (17.6 pounds) of heroin – with an estimated wholesale value of $4.5 million – that he intended to export to Canada.

          Federal agents intercepted several of the drug deliveries in 2018 and 2019. Law enforcement seized more than $800,000 in Canadian currency during this investigation.

          United States District Judge John A. Kronstadt has scheduled an August 4 sentencing hearing, at which time Chiu will face a mandatory minimum sentence of 10 years in federal prison and a statutory maximum sentence of life imprisonment. Chiu has been in federal custody since his arrest in July 2019.

          The FBI, Homeland Security Investigations, and the Royal Canadian Mounted Police investigated this matter. Critical support was provided by the U.S. Drug Enforcement Administration, the California Highway Patrol, and the West Covina Police Department. This investigation is part of the Justice Department's Organized Crime Drug Enforcement Task Force (OCDETF).

          Assistant United States Attorneys Brittney M. Harris and MiRi Song of the International Narcotics, Money Laundering, and Racketeering Section are prosecuting this case.

          LOS ANGELES – A third-party seller on Amazon.com Inc. has admitted gaming the online retailer’s payment system in a scheme that defrauded the company out of more than $1.3 million, the Justice Department announced today.

          Ting Hong Yeung, 41, of Hacienda Heights, was charged with wire fraud in an information filed today in United States District Court. In a plea agreement also filed today, Yeung agreed to plead guilty to the felony offense, which carries a statutory maximum penalty of 20 years in federal prison.

          As described in the court documents, Amazon allows third-party sellers to use its online retail platform to advertise items, make sales and communicate with customers. Ordinarily, when an Amazon customer purchases an item listed by a third-party seller, Amazon credits the third-party seller’s internal Amazon account for the amount of that purchase. About every two weeks, Amazon disburses into the seller’s bank account the proceeds of those sales for which the seller has provided proof that the items purchased have been shipped – namely, the shipment tracking numbers.

          Yeung operated as an Amazon third-party vendor using business names including “Speedy Checkout,” “Special SaleS” and “California Red Trading Inc.” After enough time passed to allow his businesses to appear to be reputable vendors, Yeung would list expensive merchandise, such as furniture and home décor, at cut-rate prices to drive a spike in sales. However, instead of shipping purchased items to the customers, Yeung provided Amazon with bogus tracking numbers. When customers complained about not receiving their purchases, Yeung delayed customer refund requests long enough to ensure that Amazon would disburse funds into his businesses’ bank accounts. As a result, Yeung collected payment for items that were never shipped and relied on Amazon to issue refunds to his disgruntled customers under its “A-to-z Guarantee.”

          In some instances, instead of sending customers the products they ordered, Yeung shipped them cheap crystal ornaments, which served the dual purpose of generating tracking numbers that induced Amazon to disburse customer funds and forestalling customer complaints and demands for refunds. Yeung also used Amazon’s Buyer-Seller Messaging Service to convince customers that their orders were on their way when, in fact, they were not.

          On occasion, Yeung provided goods to his customers that he obtained through his own fraudulent purchases from Amazon, which he made using credit cards in the names of other people and fictitious identities. After the goods were delivered to his customers, Yeung requested refunds for the goods from Amazon. Yeung often falsely claimed that he was entitled to a refund because the product was “Different from what was ordered,” and then returned lower-value items rather than the merchandise he had originally ordered. As a result, Yeung received both the refund and the proceeds of the original sale to his own customer.

          In his plea agreement, Yeung admitted causing Amazon to suffer approximately $1,302,954 in losses. Yeung has agreed to pay restitution, some of which will be paid with gold and silver bars that investigators seized during a search of his residence last month.

          Yeung is expected to make his initial appearance in this case in United States District Court on April 12.

          The FBI investigated this matter and received cooperation from Amazon.

          Assistant United States Attorney Alexander B. Schwab of the Major Frauds Section is prosecuting the case.

          LOS ANGELES – A former Long Beach Police officer pleaded guilty today to a federal criminal charge for distributing child pornography, including when he was on duty as a law enforcement officer.

          Anthony Brown, 57, of Lakewood, pleaded guilty to one count of distribution of child pornography.

          According to his plea agreement, Brown used his smart phone to log into MeWe, an internet-based messaging application, including when he was on duty as a Long Beach Police officer. While logged in, Brown knowingly distributed and possessed child pornography.

          Brown admitted in his plea agreement to distributing sexually explicit images of girls in November 2019, March 2020 and April 2020.

          From October 2019 through May 2020, Brown also knowingly possessed a sexually explicit image of a girl who appeared to be 11 or 12 years old.

          Brown was a Long Beach Police officer for 27 years. He left the force last year after his arrest on state charges of possession and distribution of child pornography. The Los Angeles County District Attorney’s Office dismissed those charges in light of the federal case.

          United States District Judge André Birotte Jr. has scheduled a July 25 sentencing hearing, at which time Brown will face a mandatory minimum sentence of five years in federal prison and a statutory maximum sentence of 20 years in federal prison.

          Homeland Security Investigations and the Long Beach Police Department investigated this matter.

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

          LOS ANGELES – Two downtown Los Angeles residents were arrested today on a federal criminal complaint alleging they fraudulently obtained more than $300,000 – and attempted to obtain an additional $1 million – in COVID-relief loans for several companies they claimed to own and operate.

          Sean Schoepflin, 42, a.k.a. “Sean Fitzgerald,” and Erika Leon, 44, a.k.a. “Erika Fitzgerald,” are each charged with one count of wire fraud, according to a complaint that was unsealed today. They are expected to make their initial appearances this afternoon in United States District Court.

          According to an affidavit filed with the complaint, from April 2020 to October 2021, Schoepflin and Leon made numerous false statements to the United States Small Business Administration to secure more than $300,000 – and attempt to secure an additional $1 million – in Economic Injury Disaster Loans (EIDLs) for their businesses.

          Schoepflin and Leon allegedly falsely stated that the business entities they created had several employees and several hundred thousand dollars in revenues, and that they would use the EIDLs for working capital for those businesses. Schoepflin also allegedly falsely stated on loan applications that he had never been convicted of a felony.

          In fact, their purported businesses – Capital Adventures Inc., Lady Capital Inc., Digital Army Ltd., and Lady Pictures LLP – had no employees and little to no revenue, they used the EIDLs largely for personal expenses, and Schoepflin had previously been convicted of multiple felonies.

          For example, Schoepflin falsely stated in one loan application that Capital Adventures had revenues of $560,000 in the 12-month period from February 1, 2019 to January 31, 2020, the affidavit alleges. In June 2020, when an SBA employee sent an email to Schoepflin requesting Capital Adventures’ business tax return to show proof of the company’s existence as a business entity, Schoepflin allegedly sent an unsigned tax form that stated that Capital Adventures had gross sales or receipts of $625,112 in 2019.

          In fact, Capital Adventures did not file an IRS Form 1120 for 2019 until July 2021, after it requested and was denied an increase for its EIDL, according to the affidavit. Furthermore, between February 2018 and April 2020, Capital Adventures’ bank accounts had total deposits of approximately $35,000.

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

          A complaint 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 and the Treasury Inspector General for Tax Administration investigated this matter. The Small Business Administration Office of Inspector General provided substantial assistance with the investigation.

          Assistant United States Attorneys David Ryan and Solomon Kim of the Terrorism and Export Crimes Section are prosecuting this case.

          The Coronavirus Aid, Relief, and Economic Security (CARES) Act was designed to provide emergency financial assistance to millions of Americans who are suffering the economic effects resulting from the COVID-19 pandemic. One source of relief provided by the CARES Act is the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses through the PPP. In April, Congress authorized more than $300 billion in additional PPP funding.

          The EIDL program is designed to provide economic relief to small businesses that are currently experiencing a temporary loss of revenue. EIDL proceeds can be used to cover a wide array of working capital and normal operating expenses, such as continuation of health care benefits, rent, utilities, and fixed-debt payments.

          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.