Central District of California

          LOS ANGELES – A Lakewood man pleaded guilty today to a federal criminal charge for threatening to bomb Small Business Administration (SBA) offices and then, the following year, threatening to assault SBA employees in response to his inability to obtain COVID-19 emergency business loans.

          Christopher Joseph Antoun, 30, pleaded guilty to one count of making threats by interstate communication. He has been in federal custody since his arrest in this case in November 2021.

          Antoun owns Federal Student Loan Consulting LLC, a company he runs out of his Lakewood residence, according to court documents. In early 2020, Antoun attempted to obtain a COVID-19 Emergency Injury Disaster Loan (EIDL). These loans provide accessible and borrower-friendly capital to small businesses impacted by the COVID-19 pandemic. Antoun attempted to receive approval for an EIDL loan or an advance from the SBA, but was unsuccessful in these efforts, court documents state.

          According to his plea agreement, on May 3, 2020, Antoun emailed the SBA and threatened to “start bombing every location” the SBA owned. On September 13, 2021, Antoun again sent an email threatening to injure SBA employees.

          Despite law enforcement contacting Antoun and warning him that further threats to the SBA would result in criminal prosecution, Antoun continued to threaten SBA employees by email.

          On November 12 and November 17, 2021, Antoun sent emails threatening to injure SBA employees. Specifically, on November 17, Antoun sent an email to several SBA employees threatening to injure them by “beating the skulls” of such employees with a baseball bat.

          Antoun admitted in his plea agreement that he intended to threaten SBA employees and he knew that such language would be perceived as a true threat.

          United States District Judge Fernando L. Aenlle-Rocha has scheduled a May 27 sentencing hearing, at which time Antoun will face a statutory maximum sentence of five years in federal prison.

          The United States Department of Homeland Security’s Federal Protective Service investigated this matter.

          Assistant United States Attorney Juan M. Rodríguez is prosecuting this case.

          LOS ANGELES – The former CEO of a Valencia-based financial services company was sentenced today to 33 months in federal prison for helping to run a Ponzi scheme that defrauded dozens of investors – including his own clients – out of over $2.3 million with false promises of earning up to 20% monthly returns on their money.

          Scott Allensworth, 68, of Santa Clarita, was sentenced by United States District Judge John A. Kronstadt, who also ordered him to pay $2,321,429 in restitution.

          In July 2021, Allensworth pleaded guilty to one count of wire fraud.

          Allensworth was the owner and CEO of Capital Growth Group Associates (CGGA), a company that provided financial services to clients, including tax advice and return preparation services, accounting services, retirement planning and investment advisory services.

          From November 2015 to March 2017, Allensworth schemed to defraud investors along with David Hunt Weddle, 66, who managed a private investment fund through JustInfo LLC, a company Weddle controlled and operated out of his Somerset, Kentucky home.

          Allensworth and Weddle solicited money – to be invested with CGGA and Weddle – from victim-investors, who included Allensworth’s clients. These clients trusted him based on their prior relationship with him, and recommended Allensworth to their friends and family members, who also became victims of the scheme.

          To lure victim-investors, Allensworth and Weddle promised them that their money would go into a brokerage account, and they would soon realize profits because Weddle employed a special trading strategy that would limit their losses and generate investment monthly returns of between 5% and 20%.

          Instead of investing the money as promised, Allensworth and Weddle used part of the funds to pay for their personal expenses, including – for Allensworth – credit card bills. In Ponzi style, they also used victim-investor money to repay and fund withdrawals requested by other victim-investors, falsely representing that the money comprising these withdrawals arose from their investment gains.

          Allensworth and Weddle failed to inform victim-investors that neither of them was registered or licensed as a commodity trading advisor and that the United States Securities and Exchange Commission had subpoenaed both of them in December 2016.

          Weddle also fabricated multiple false account statements which they sent to victim-investors that purported to show the investments were steadily increasing in value based on Weddle’s trading activity, when Allensworth and Weddle had misappropriated the funds.

          As a result of the fraudulent scheme, Allensworth and Weddle caused more than 50 victims to suffer total losses of approximately $2,320,000.

          Weddle pleaded guilty in March 2021 to one count of wire fraud. He is serving a 41-month prison sentence for that crime.

          The SEC brought civil charges against Allensworth, Weddle and JustInfo LLC in October 2017. That case settled the following year with the defendants agreeing to pay more than $300,000 in civil penalties.

          The FBI investigated this matter.

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

          LOS ANGELES – A federal grand jury today charged two Los Angeles County men in an eight-count indictment alleging they committed multiple armed robberies of 7-Eleven stores and another business in Los Angeles County during a six-week crime spree.

          Kyle Richard Williams, 25, of Inglewood and Colin Powell Lacey, 28, of the Hyde Park neighborhood of Los Angeles, are charged with one count of conspiracy to commit interference with commerce by robbery (Hobbs Act). Lacey is also charged with four counts of robbery while Williams is charged with two counts of robbery and one count of attempted robbery.

          The defendants, who are in federal custody, are expected to be arraigned on March 24 in United States District Court.

          According to the indictment, from mid-November to December 30, 2021, Williams and Lacey traveled together by car to businesses – usually 7-Eleven convenience stores – to commit armed robberies. Williams allegedly entered the stores, brandished a semi-automatic handgun at employees, and demanded money. Meanwhile, Lacey waited in the vehicle parked outside the stores. Williams and Lacey allegedly would then flee the area following the armed robbery.

          The businesses robbed during the spree included six 7-Eleven stores located in the Hollywood, East Hollywood and Mid-City neighborhoods of Los Angeles as well as in West Hollywood. One smoke shop in the Mid-City area also was robbed, according to the indictment. Williams allegedly attempted to rob a 7-Eleven store in El Segundo on December 30, 2021.

          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.

          Each charge of Hobbs Act robbery carries a statutory maximum penalty of 20 years in federal prison.

          The FBI, the Los Angeles Police Department’s Robbery-Homicide Division, and the Los Angeles County Sheriff's Department’s Major Crimes Bureau Metro Detail investigated this matter.

          Assistant United States Attorneys Jeffrey M. Chemerinsky and Jeremiah M. Levine of the Violent and Organized Crime Section are prosecuting this case.

          LOS ANGELES – A North Hollywood man has agreed to plead guilty to acting as an unlicensed gun broker by selling 16 rifles and handguns – many without serial numbers – as well as various firearms accessories over a seven-week period.

          In a plea agreement filed today in United States District Court, Arthur Muradyan, 32, of North Hollywood, agreed to plead guilty to engaging in the business of dealing in firearms without a license.

          Muradyan also agreed to plead guilty to distributing methamphetamine for selling nearly a pound of the drug to an undercover operative.

          Muradyan “willfully offered to, and did, sell firearms, firearms accessories, and ammunition, including: machineguns; semiautomatic firearms with large capacity magazines; firearms bearing no legitimate manufacturer’s mark or serial number (commonly referred to as “ghost guns”); and unregistered and unserialized short-barreled rifles,” he admitted in the plea agreement. Many of the guns had been trafficked from Las Vegas.

          The firearm sales were made to an informant working with the Bureau of Alcohol, Tobacco, Firearms and Explosives between August 11 and September 29, 2021.

          Muradyan sold 423.7 grams of methamphetamine to the informant on September 8, 2021, the same day he also sold a semi-automatic 9mm handgun and a machinegun conversion device commonly called a “Glock switch.”

          After the last gun sale on September 29, 2021 – in which Muradyan sold a short-barreled AR-15-type rifle with no serial number that also had a 3D printed machinegun conversion device attached to it, another AR-15-type rifle with an obliterated serial number, a semi-automatic 9mm handgun, and another 9mm pistol with no serial number – authorities search his residence and recovered 23 firearms, assorted magazines and ammunition of various calibers, and firearms component parts and accessories. Muradyan illegally possessed those seized firearms and ammunition because he previously had been convicted of felony burglary offenses in two cases.

          The court has not yet scheduled a date for Muradyan to formally enter his guilty pleas.

          Once he pleads guilty, Muradyan will face a mandatory minimum sentence of 10 years in federal prison for the narcotics distribution offense, as well as a maximum statutory penalty of five years for the firearms-related offense.

          This case is the result of an investigation by the Los Angeles Firearms Trafficking Strike Force, which is spearheaded by the ATF and the United States Attorney’s Office. The Los Angeles Police Department provided substantial assistance in the investigation.

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

          LOS ANGELES – The former chief executive of Aviron Pictures has agreed to plead guilty to federal fraud and money laundering charges, admitting that he applied for and received $1.7 million in loans under the Paycheck Protection Program (PPP) for Aviron entities when the entire operation was being shuttered as a result of his embezzlement.

          In a plea agreement filed today in United States District Court, William Sadleir, 67, of Beverly Hills, agreed to plead guilty to one count of bank fraud and one count of money laundering. Sadleir is scheduled to formally enter the guilty pleas on March 16.

          Sadleir filed bank loan applications that fraudulently sought more than $1.7 million dollars in forgivable PPP loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. According to court documents, Sadleir obtained the loans for three Aviron entities by falsely representing that the funds would be used to support payroll expenses for 33 employees at each company, when in fact the entities were no longer operational.

          Within days of the loans being funded on May 1, 2020, Sadleir transferred nearly $1 million to his personal checking account.

          Sadleir “expended a substantial amount of the fraudulent loan proceeds on utility bills, mortgage expenses, and his personal attorney, among other things,” he admitted in his plea agreement. Sadleir “did not use any of the fraudulent loan proceeds to pay employees of the Aviron companies.”

          Following the discovery of the fraudulent loan applications, federal agents seized $308,058 of fraudulent loan proceeds from an Aviron account, and Sadleir returned $1,122,090 to the bank that funded the loans. As a result of the fraudulent PPP loan scheme, the SBA suffered losses of $282,566. In his plea agreement, Sadleir agreed to pay full restitution.

          Once he pleads guilty to the two offenses, Sadleir will face a statutory maximum sentence of 50 years in federal prison. Prosecutors have agreed to recommend that whatever sentence is imposed should run concurrent with a sentence to be imposed in a pending case in the Southern District of New York. Sadleir is scheduled to be sentenced in the New York case on May 10 after he pleaded guilty in January to wire fraud for misappropriating more than $25 million that had been invested in Aviron.

          The Los Angeles case was investigated by the FBI, the SBA’s Office of Inspector General, and the Federal Deposit Insurance Corporation’s Office of Inspector General.

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

          In May 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 Justice Department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.

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

          LOS ANGELES – Authorities today arrested a physician and a marketer on federal charges stemming from a scheme that bilked Medicare out of more than $30 million for medically unnecessary hospice services provided to patients who were obtained through illegal kickbacks.

          Dr. Victor Contreras, 66, of Santa Paula, and Callie Jean Black, 63, of Lancaster, are scheduled to be arraigned this afternoon in United States District Court.

          A 14-count indictment unsealed today also names the former Pasadena resident who controlled the hospices, Juanita Antenor, 59, who remains at large and is believed to be in the Philippines.

          According to court documents, Antenor owned a Pasadena hospice company called Arcadia Hospice Provider, Inc., and she controlled a second, Saint Mariam Hospice, Inc., that billed Medicare and Medi-Cal for hospice services for patients who were not terminally ill. In some case, the companies submitted bills for services that were never provided.

          Contreras, who was on probation imposed by the California Medical Board while he was part of the scheme, provided fraudulent certifications for some of these patients, including patients he claimed to have examined, but never actually saw, according to the indictment.

          Antenor allegedly paid marketers, including Black, illegal kickbacks for the patients referred to Arcadia and Saint Mariam.

          From approximately September 2014 until April 2019, Arcadia submitted to Medicare nearly $23 million in claims for hospice services provided to beneficiaries and was paid approximately $18,853,757 for those claims, according to the indictment. Between February 2015 and April 2019, St. Mariam submitted to Medicare approximately $13,742,116 in claims for hospice services and was paid approximately $11,395,849 for those claims. Contreras is linked to about $5.1 million of the total claims paid by Medicare.

          Additionally, Arcadia and St. Mariam submitted more than $5.5 million in claims to Medi-Cal, which paid the companies a total of just over $1.35 million.

          Antenor and Contreras are charged in the indictment with health care fraud – six counts name Antenor, and Contreras is charged with five counts. Additionally, Antenor is charged with four counts of paying illegal kickbacks for health care referrals, and Black is charged with four counts of receiving illegal kickbacks.

          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 of the charges in the indictment, Contreras would face a statutory maximum sentence of 50 years in prison, while Black would face up to 40 years. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

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

          Assistant United States Attorney Kristen A. Williams of the Major Frauds Section is prosecuting this case.

          LOS ANGELES – Two Los Angeles County men today were sentenced to federal prison on conspiracy and hate crime charges for attacking five victims inside a family-owned Turkish restaurant in 2020 while shouting ethnic slurs, hurling chairs at the victims, and threatening to kill them.

          William Stepanyan, 23, of Glendale was sentenced to five years in federal prison, and Harutyun Harry Chalikyan, 24, of Tujunga was sentenced to 15 months in prison. Both defendants pleaded guilty in October 2021 to one count of conspiracy and one count of committing a hate crime.

          In September 2020, long-simmering tensions in Turkish and Armenian communities escalated worldwide – including in the United States – in response to a war breaking out between Armenia and its Turkish-backed neighboring country, Azerbaijan.

          According to court documents, the defendants, who identify as members of the Armenian American community, attacked the victims inside the restaurant on November 4, 2020, because of their anger about Turkey’s support of Azerbaijan in its conflict with Armenia. Earlier that day, Stepanyan sent a text message saying that he planned to go “hunting for [T]urks.”

          That evening, the defendants drove to the restaurant with a group of approximately nine individuals who planned to demonstrate outside the establishment because they considered it symbolic of Turkey. Upon arriving at the restaurant, Stepanyan and Chalikyan stormed inside, threw hard wooden chairs at the victims, smashed glassware, destroyed a plexiglass barrier, and overturned tables. One of the defendants asked the victims, “Are you Turkish?” and shouted, “We came to kill you!  We will kill you!”

          During the attack, three victims were injured, including one individual who lost feeling in their legs and collapsed multiple times due to the injury. Also, during the attack, Stepanyan ripped out the restaurant’s computer terminals and stole a victim’s iPhone.

          The attack caused at least $20,000 of damage to the restaurant and physically injured multiple victims.

          “These defendants were driven by hate, and their actions were deplorable,” said United States Attorney Tracy L. Wilkison. “The physical injuries and emotional trauma to the victims cannot be understated. We hope that the sentences handed down today will help vindicate those harms.”

          “The defendants violently attacked people inside a family-owned restaurant because of their perceived nationality,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “Such violence based on national origin has no place in our society. The Justice Department will continue to vigorously prosecute bias-motivated crimes in an effort to secure justice for the victims and the communities they are meant to target and intimidate.”

          “The victims in this case were brutally attacked by the defendants who trampled their civil rights and likely caused lasting psychological pain for nothing more than the perception of where they were born,” said Kristi Johnson, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “The FBI is committed to investigating civil rights violations and holding accountable individuals who commit violent acts motivated by hate.”

          The defendants were ordered to pay $21,200 in restitution.

          The FBI conducted the investigation in this matter and received substantial assistance from the Beverly Hills Police Department.

          Assistant United States Attorney Lindsey Greer Dotson of the Public Corruption and Civil Rights Section, and Trial Attorney Michael J. Songer of the Justice Department’s Civil Rights Division prosecuted this case.

          SANTA ANA, California – A Stockton man was sentenced today to 151 months in federal prison for transporting a teenage girl from Southern California to Nevada and Arizona so she could work as a prostitute for his financial benefit.

          Christian Alexander Augustus, 26, a.k.a. “Sir Ceeco” and “Ceeco,” was sentenced by United States District Judge James V. Selna.

          Augustus pleaded guilty in July 2021 to one count of transportation of a minor in interstate commerce to engage in prostitution and criminal sexual activity.

          From December 2018 to July 2019, Augustus directed the transportation of the victim from Los Angeles and Orange counties to locations – including Los Angeles, Las Vegas and Phoenix – in order for her to work as a prostitute to obtain money for him.

          Augustus forced the victim to work on the streets and advertised her services on the internet. He also admitted that he collected the money the victim obtained by committing commercial sex acts.

          “[Augustus’] egregious conduct victimized a minor by causing her to engage in sex with unknown customers purely for defendant’s financial benefit,” prosecutors wrote in a sentencing memorandum. “The seriousness of the offense is furthered by [Augustus’] used of violence in this case. [Augustus] was repeatedly violent with the minor victim in order to maintain the control needed to continue to have the minor victim work for his financial benefit.”

          The Orange County Human Trafficking Task Force, which is comprised of local law enforcement agencies, including Homeland Security Investigations and the United States Attorney’s Office for the Central District of California, investigated this matter.

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

          LOS ANGELES – A Santa Barbara man who allegedly stole approximately $12 million from victims who thought their investments would be used to purchase annuities today faces new charges of failing to pay over $3 million in federal income tax and concealing bank accounts in Monaco used to hide ill-gotten gains.

          A superseding indictment filed today in United States District Court charges Darrell Arnold Aviss, 64, with three counts of tax evasion, six counts of failing to report foreign bank and financial accounts, and one count of aggravated identity theft.

          Aviss was arrested last June and initially charged with five counts of wire fraud and six counts of money laundering for allegedly operating a Ponzi scheme that promised to invest victims’ money in annuities from Swiss insurance companies. The original 11 charges are included in today’s superseding indictment that alleges Aviss used none of the victim funds to purchase annuities.

          Aviss, who was jailed for about three months before a judge ordered him released in September on a $200,000 bond, is currently scheduled to go on trial July 26. He will be directed to appear for an arraignment on the superseding indictment in the coming weeks.

          Aviss allegedly operated the fraud scheme from at least 2012 through mid-2020, soliciting money from people who wanted to purchase annuities from insurance companies based in Switzerland. Even though he arranged for the victims to receive statements showing the value of the annuities were increasing, the indictment alleges Aviss did not use the victims’ money to purchase annuities. Victims, most of whom were over the age of 60, gave Aviss more than $12 million, with most of that money coming from just one victim, according to court documents. Some money was paid back to victims to keep the scheme running.

          Instead of purchasing annuities, Aviss allegedly used the victims’ money for his own purposes and to support his lavish lifestyle, which included luxury cars, expensive watches and trips to Monaco.

          The superseding indictment alleges that Aviss also defrauded the United States by failing to file tax returns for 2014, 2015 and 2016 and failing to pay any income taxes for those years. Aviss allegedly evaded paying more than $3 million in income taxes.

          Aviss also failed to file with the Department of the Treasury Reports of Foreign Bank and Financial Accounts for the years 2015 through 2020 relating to accounts he controlled in Monaco. The superseding indictment alleges that he transferred victims’ money to these offshore accounts, one of which was established with information from an identity theft victim.

          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 the charges in the superseding indictment, Aviss would face decades in federal prison. For example, each of the five counts of wire fraud carries a statutory maximum sentence of 20 years in federal prison.

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

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

          LOS ANGELES – A North Hollywood man has been sentenced to 84 months in federal prison for possessing five firearms and more than 300 rounds of live ammunition inside the Glendale Galleria mall during the holiday shopping season, the Justice Department announced today.

          Tigran Zmrukhtyan, 29, was sentenced Monday by United States District Judge Mark C. Scarsi after pleading guilty in July 2021 to one count of being felon in possession of firearms and ammunition.

          On December 18, 2020, Zmrukhtyan walked into the Macy’s department store in the Glendale Galleria with a duffel bag full of guns and ammunition. Zmrukhtyan attempted to steal clothes and was eventually detained by loss-prevention employees and Glendale Police Department officers.

          When he was detained, Zmrukhtyan had a .380-caliber handgun tucked into his waistband with one round in the chamber and six bullets in the magazine. Inside the duffel bag, officers found four additional firearms, some already loaded, as well as high-capacity magazines loaded with bullets.

          Before his arrest, Zmrukhtyan had been convicted of 19 felonies, including the 2016 burglary of a Burbank gun store during which he stole 10 firearms.

          “[Zmrukhtyan’s] conduct in this case was not an aberration,” prosecutors argued in a sentencing memorandum. “For more than a decade, [Zmrukhtyan] has engaged in a streak of criminal activity that has seemingly worsened with each conviction.”

          The FBI and the Glendale Police Department investigated this matter. 

          Assistant United States Attorney Maxwell K. Coll of the Asset Forfeiture Section prosecuted this case.

          LOS ANGELES – A Riverside County man was sentenced today to 108 months in federal prison for participating in an international fraud scheme in which he helped collect more than $550,000 in cash conned out of elderly victims by other co-conspirators pretending to be federal agents threatening the victims with arrest on bogus warrants.

          Anuj Mahendrabhai Patel, 32, a.k.a. “Mike” and “Indio,” of Lake Elsinore, was sentenced by United States District Judge Otis D. Wright II, who said, “I don’t understand how anyone could be so cruel and prey upon” elderly, vulnerable victims. Judge Wright also ordered Patel to pay $490,500 in restitution to his victims that investigators identified.

          From April 2019 to March 2020, Patel participated in the international conspiracy that deceived elderly victims out of their money. Other members of the conspiracy, some of whom are believed to be in India, telephoned victims and pretended to be government employees or law enforcement officers. Using several false pretenses – including phony badge numbers and using spoofed government telephone numbers – the co-conspirators convinced the victims, most of whom were elderly, that their identities or assets were in trouble.

          Some victims were told that their Social Security numbers had been linked to crimes and that there were warrants issued by courts authorizing the victims’ arrests. The co-conspirators further told the victims that to clear the warrants, they should withdraw their savings and send cash by mail to other members of the scheme.

          The victims were ordered to send the parcels through shipping companies that allowed parcel recipients to pick up parcel so long as the recipients had identification matching the names listed on the parcel as the addressees. The addresses the defendants gave primarily were at locations in Riverside County, but also in Los Angeles and San Diego counties.

          Patel used tracking numbers to monitor the victims’ parcels, and communicated with couriers – Elmer Miranda Barrios, 37, a.k.a. “Welbin Raul Mejia” and “Joe Rodriguez,” and William Margarito Barrios, 37, Elmer Barrios’s cousin, both of Lake Elsinore – who used fraudulent identification documents matching the names listed on the parcels as addresses. Patel also received or intended to receive 18 packages sent by victims.

          William Barrios pleaded guilty in January 2021 to one count of conspiracy to commit mail fraud and wire fraud, and he was sentenced to a time-served sentence of five months in federal prison. He was ordered released to immigration authorities for deportation. Elmer Barrios pleaded guilty in December 2021 to a conspiracy count, and he is scheduled to be sentenced on May 23.

          This matter was investigated by Homeland Security Investigations; the Social Security Administration; the United States Department of Treasury Inspector General for Tax Administration; the Murrieta Police Department; the San Bernardino County Sheriff’s Department; the Los Angeles County Sheriff’s Department; the Huntington Beach Police Department; the Fullerton Police Department; the Stanislaus County (California) Sheriff’s Department; the Seattle Police Department; the Brownsville (Texas) Police Department; the St. James Parish (Louisiana) Sheriff’s Office; the Cook County (Illinois) Sheriff’s Office; the Addison (Illinois) Police Department; the Columbus (Ohio) Division of Police; the Northwest Lancaster County (Pennsylvania) Regional Police Department; the Edison Township (New Jersey) Police Department; and the St. Petersburg (Florida) Police Department.

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

          The U.S. Attorney’s Office in Los Angeles is one of six offices participating in the Transnational Elder Fraud Strike Force, a joint law enforcement effort that brings together the resources and expertise of federal law enforcement and non-governmental organizations to combat international fraud schemes that disproportionately affect American seniors.

          LOS ANGELES – A former Transportation Security Administration (TSA) officer was arrested today on a federal criminal complaint alleging he smuggled what he believed was methamphetamine through Los Angeles International Airport in exchange for a total of $8,000 in cash. 

          Michael Williams, 39, of Hawthorne, is charged with one count of attempting to distribute methamphetamine. He 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, authorities in 2020 conducted undercover operations involving Williams, whom they suspected of helping smuggle narcotics past security checkpoints at LAX.  During the operations, Williams allegedly met with a drug source to exchange methamphetamine in the days prior leading up to his shift at LAX.

          As a TSA employee with unscreened access to LAX, Williams agreed to deliver the “methamphetamine” in a backpack to the drug source’s accomplice in the men’s restroom on the secure side of the airport terminal.

          After taking possession of what he believed was real narcotics, Williams allegedly transported an unscreened package containing the fake methamphetamine beyond the TSA screening area and delivered the package to another individual. This individual, whom Williams did not know was a federal agent, on both occasions exchanged $4,000 in cash in the stalls of the men’s restroom in the airport’s secure area.

          Williams was observed on LAX’s security cameras exiting the restroom while wearing his TSA uniform en route to begin his shift screening passengers and luggage.

          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.

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

          The FBI, DEA and the Los Angeles HIDTA investigated this matter.

          Assistant United States Attorneys Jeremiah M. Levine and Jeffrey M. Chemerinsky of the Violent and Organized Crime Section are prosecuting this case.

          LOS ANGELES – Two Los Angeles men were sentenced today to federal prison terms for collecting ransom payments for a criminal conspiracy in which multiple victims were kidnapped near the United States-Mexico border.

          Edgar Adrian Hernandez Lemus, 23, of the Central-Alameda neighborhood in Los Angeles, was sentenced to 78 months in federal prison by United States District Judge John F. Walter. At a separate hearing today, Judge Walter sentenced Junior Almendarez Martinez, 23, of Watts, to 24 months’ imprisonment.

          At the conclusion of a three-day jury trial in November 2021, Lemus was found guilty of one count of conspiracy and two counts of receiving money from a ransom demand for the release of a kidnapped person. Almendarez was found guilty of two counts of receiving money from a ransom demand for the release of a kidnapped person.

          The kidnapping incidents targeted victims who either were waiting or attempting to cross the border from Mexico into the United States. In each incident, the kidnappers offered to assist in smuggling the victims across the border from Mexico, but instead would hold them for ransom. The kidnappers insisted on ransom payments from the victim’s family members to release the victims.

          From March 29 to June 1, 2021, the kidnappers used specific sections at Walmart and other stores in Southern California to meet with the family members to collect the ransom payments. After the payments were made, however, the kidnappers demanded additional money rather than releasing the victims.

          Lemus and Almendarez traveled to these stores to pick up ransom payments from the family members of the kidnapped victims. During many of the ransom pickups, the family members of the kidnapped victims remained on the phone with members of the conspiracy who would direct them towards Lemus – who was often on the phone during the ransom pickups. At these stores, Lemus and Almendarez would enter and collect, or attempt to collect, ransom payments from kidnapped victims’ family members. The ransom payments picked up by defendants ranged from $12,000 to $30,000 in cash.

          After the ransom pickups, Lemus and Almendarez used Uber to transport the money, before eventually sending money to co-conspirators in Mexico via MoneyGram. The victims later were assaulted, drugged and released.

          In a sentencing memorandum, prosecutors argued that Lemus “was a key part of a brutal kidnapping for ransom scheme.

          “During this scheme, numerous victims were subjected to horrific abuse,” prosecutors wrote. “The horror of the kidnappings and ransom payment is a trauma that these victims will never forget.”

          A co-defendant and fellow ransom collector, Francisco Javier Hernandez Martinez, 21, of the Central-Alameda neighborhood in Los Angeles, pleaded guilty in September 2021 to one count of conspiracy and later was sentenced to 40 months in federal prison.

          The FBI investigated this matter. The South Gate Police Department and the Santa Barbara County Sheriff’s Office provided substantial assistance.

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

          LOS ANGELES – A South Los Angeles man pleaded today to a federal criminal charge for deliberately setting Hancock Park’s Pizzeria Mozza restaurant on fire during the civil disturbances that struck the city in May 2020.

          Mario Ernesto Alvarado, 44, pleaded guilty to one count of arson of a commercial building.

          According to his plea agreement, during the civil disturbances that occurred in Los Angeles on May 30, 2020, Alvarado walked into a commercial building on Melrose Avenue that housed Pizzeria Mozza and its related business, Mozza2Go. After entering the business, Alvarado sprayed and lit an ignitable liquid. The resulting fire caused more than $300,000 in damage to the business and was extinguished by firefighters.

          During the execution of federal search warrants at the time of Alvarado’s arrested in July 2020, law enforcement recovered the hat and t-shirt that Alvarado wore on the night of the arson, as well as a can of lighter fluid located in the back seat of the Ford Focus that he drove to and from the scene of the crime on the evening of May 30, 2020.

          United States District Judge R. Gary Klausner has scheduled a June 27 sentencing hearing, at which time Alvarado will face a mandatory minimum sentence of five years in federal prison and a statutory maximum sentence of 20 years in federal prison.

          This matter was investigated by the SAFE LA Task Force, which includes members of the FBI, the Los Angeles Police Department, the Los Angeles Fire Department, the Santa Monica Police Department, the Beverly Hills Police Department and the Long Beach Police Department.

          Assistant United States Attorneys Bruce K. Riordan and Joseph D. Axelrad of the Violent and Organized Crime Section are prosecuting this case.

          LOS ANGELES – A Koreatown man is scheduled to be arraigned this afternoon after being arrested Saturday on federal charges alleging he worked with a Hollywood woman who ran a drug-delivery operation that in one incident sold counterfeit oxycodone pills containing fentanyl that resulted in a fatal opioid overdose.

          Mucktarr Kather Sei, 36, whose stage name is Kather Sei, was charged in a federal grand jury indictment returned February 24. The indictment alleges that Sei delivered fentanyl-laced pills that led to the death of a Beverly Hills man in late 2020.

          The second defendant in this case who allegedly orchestrated the drug-delivery service – Mirela Todorova, also known as “Mimi,” 33, of Hollywood – is currently being held without bond after being charged last year for possession with intent to distribute cocaine and MDMA (commonly called ecstasy). Todorova – who holds United States, Bulgarian, and Canadian citizenship – also is scheduled to appear in court this afternoon for a status conference in her case.

          Todorova and Sei are charged with one count of conspiracy to distribute and possess with intent to distribute controlled substances resulting in death, and one count of distribution of fentanyl resulting in death. The four-count superseding indictment filed last week also charges Todorova with the two previously alleged drug counts stemming from the seizure of cocaine and MDMA at her residence in March 2021.

          According to the indictment, Todorova provided cellphones and narcotics – including counterfeit oxycodone pills that contained fentanyl – to Sei and other drivers to facilitate the delivery of drugs to customers across Los Angeles County and elsewhere. Todorova also delivered drugs herself and gave Sei keys to her Hollywood apartment so Sei could access drugs when Todorova visited Mexico, where she continued to manage her drug operation while tending to her pet jaguar, “Princess.”

          On November 15 and 16, 2020, after a 37-year-old man placed orders for oxycodone pills to Todorova’s phone number, Sei allegedly delivered pills laced with fentanyl that caused the man’s fatal overdose in his Beverly Hills home. As part of that transaction, Sei called the man from a phone that Todorova provided to facilitate drug sales, the indictment alleges.

          Before and after the fatal overdose, other drug customers raised concerns about the authenticity and safety of the oxycodone pills that Todorova and Sei allegedly distributed. Several weeks before the death of the drug customer in Beverly Hills, according to the indictment, another customer texted Todorova, “Yo mimi the oxys are dirty.”

          To facilitate drug payments, Todorova gave Sei and her other drug delivery drivers her electronic payment usernames such as “$clubmimi,” “@clubmimi,” “@mimiclub,” and 123mimi@gmail.com.

          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 charges of conspiracy to distribute drugs and drug distribution resulting in death carry a mandatory minimum sentence of 20 years in federal prison and a maximum sentence of life imprisonment.

          Assistant United States Attorneys Patrick Castañeda and Jason C. Pang of the International Narcotics, Money Laundering, and Racketeering Section are prosecuting this case.

          This case is the result of an investigation by the Los Angeles Police Department and the Drug Enforcement Administration’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.

          LOS ANGELES – An Orange County man who fled after authorities searched his residence on Wednesday is in federal custody today after he was arrested at the U.S.-Mexico border and charged with fraudulently obtaining more than $5 million in COVID-relief loans for three sham companies.

          Reddy Raghav Budamala, 35, of Irvine, was arrested at the border early Thursday morning by federal law enforcement and made his initial court appearance Thursday afternoon in the United States District Court in Los Angeles. At that hearing, a United States Magistrate Judge ordered Budamala held without bond because he posed a flight risk.

          A criminal complaint filed Thursday charges Budamala with one count of wire fraud.

          According to an affidavit filed with the complaint, Budamala in 2019 formed or acquired three shell companies with no operations – Hayventure LLC, Pioneer LLC, and XC International LLC. Following the outbreak of the COVID-19 pandemic, and the enactment of federal programs designed to address the economic fallout from the pandemic, Budamala allegedly submitted to the Small Business Administration (SBA) seven applications for pandemic-relief loans under the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL).

          As part of the applications filed from April 2020 through March 2021, Budamala falsely represented to the banks administering the COVID-relief business loan programs that his companies employed dozens of individuals and earned millions of dollars in revenue, and that he needed the money for payroll and business expenses, the affidavit alleges.

          The listed addresses for the companies were bogus, nonexistent or residential. The states where Budamala’s companies purportedly operated have no records of those companies paying wages to any employees, and bank records for the companies reflect no significant business income or operating expenses. During a February 2021 interview with a State Department official in an unsuccessful attempt to obtain a United States passport, Budamala said he wanted the passport so he could get a job, according to the affidavit.

          The SBA and the banks funded six of the loans and disbursed $5,151,497, the affidavit states. Budamala allegedly applied to have several of the loans forgiven and falsely represented that he had used the SBA money entirely for payroll.

          Once the loans were funded, Budamala used the money to pay for personal expenses, including the purchase of a $1.2 million investment property in Los Angeles, the purchase of a $597,585 property in Malibu, a $970,000 investment in an EB-5 Immigrant Investor Visa Program and a nearly $3 million deposit into Budamala’s personal TD Ameritrade account, according to the affidavit.

          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.

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

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

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

          In May 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 (NCDF) 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 former Redondo Beach resident today is being held without bond on federal child sexual exploitation charges after prosecutors described in court how he targeted girls on the internet and enticed them to engage in masochistic abuse for his sexual gratification.

          Matthew Christian Locher, 31, was ordered detained Tuesday afternoon during an arraignment in United States District Court. During that arraignment, Locher pleaded not guilty to an eight-count indictment that charges him with sexual exploitation and attempted sexual exploitation of a child for the purpose of producing a sexually explicit visual depiction, enticement and attempted enticement of a minor to engage in criminal sexual activity, and receipt of child pornography.

          According to court documents and statements made in court, Locher targeted girls suffering from mental health issues, including depression, suicidal thoughts, and anorexia. During internet conversations, Locher allegedly groomed his victims to engage in self-mutilation and, eventually, to become his “slave” or “pet.” 

          As alleged in the indictment, Locher enticed two of the minor victims to send Locher images of themselves committing acts of self-harm, which included cutting their breasts. With one of the victims identified in the indictment, Locher allegedly used racial epithets to devalue the victim and entice her to self-mutilate. 

          Locher allegedly enticed a third victim, who was 12, to run away from her home in Ohio and travel to California to engage in illegal sexual activity with Locher. This victim began a trip to California after setting a fire in her family’s home – an unsuccessful attempt to kill her parents in a plot Locher encouraged, prosecutors said in court Tuesday.

          Locher – who used various screen names, including “The Hat,” “MattheHat,” “HeyThere,” and “Shark” – was arrested on January 10 in Indianapolis. Locher relocated to Indiana last summer soon after federal authorities executed a search warrant at his residence. Following his arrest, federal authorities transported Locher to California, and he made his first court appearance here Tuesday.

          According to a search warrant in this case that was unsealed after his arrest last month, Locher “enticed, encouraged, and instructed the victims to produce child pornography and child sexual abuse material in the form of sexually explicit images and video recordings of themselves to send to Locher over the internet, including through the use of Discord,” a voice and text chat platform.

          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, Locher would face up to life in federal prison, and a mandatory minimum sentence of 10 years’ imprisonment, for each of four counts of enticement and attempted enticement of a minor to engage in criminal sexual activity. The three counts of sexual exploitation and attempted sexual exploitation of a child in the indictment each carry a maximum statutory penalty of 30 years in federal prison and a mandatory minimum sentence of 15 years’ imprisonment. The remaining charge of receipt of child pornography carries a potential penalty of 20 years in prison and a mandatory minimum sentence of five years in prison.

          At the arraignment on Tuesday, Locher was ordered to stand trial on April 19.

          The FBI is investigating this matter.

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

          LOS ANGELES – A Hawthorne man was sentenced today to life without parole in federal prison for engaging in a child exploitation enterprise, as well as creating child sexual abuse material (CSAM) of 20 young victims, some of whom were infants.

          Arlan Wesley Harrell, 27, was sentenced today by United States District Judge André Birotte Jr.

          Harrell pleaded guilty on July 7, 2021, 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.

          According to court documents, in 2016, Harrell joined on an online bulletin board dedicated to the sexual exploitation of children under the age of five. He used that bulletin board to distribute and advertise CSAM depicting three children.

          Harrell, along with co-defendants John Brinson Jr., and Moises Martinez, was an active member of this website, which was accessed via Tor, a computer network specifically designed to facilitate anonymous communication over the internet. Harrell also secured the custody of a minor and traveled with him to Brinson’s house in Fresno to create CSAM of that minor and two other children together.

          In total, Harrell created CSAM depicting himself engaging in sexual acts with or otherwise sexually exploiting 20 children, including nine children four years of age or younger. Harrell was arrested in May 2017 and has remained in custody since that time.

          Co-defendant Martinez, 31, of San Jose, pleaded guilty to engaging in a child exploitation enterprise and production of child pornography in 2019, and he was sentenced in September 2021 to 55 years in prison, to be followed by lifetime supervised release.

          Co-defendant Brinson, 28, of Fresno, pleaded guilty to engaging in a child exploitation enterprise and production of child pornography in July 2021, and he is scheduled to be sentenced on April 22.

          A fourth co-defendant, Keith Lawniczak, 57, of Fresno, pleaded guilty to conspiracy to commit sex trafficking of a child in late 2019, and he was sentenced in August 2020 to 12 years in prison, to be followed by lifetime supervised release.

          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 Attorney Devon Myers of the Cyber and Intellectual Property Crimes Section, along with Justice Department Trial Attorneys Lauren S. Kupersmith and Kyle P. Reynolds of CEOS, are prosecuting the case. 

          This case was brought as part of Project Safe Childhood, a nationwide Justice Department initiative to combat the epidemic of child sexual exploitation and abuse.  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.

          SANTA ANA, California – An Orange County man – whose company used high-pressure sales tactics to raise more than $9.5 million with bogus claims that the outfit’s solar panels utilized nanotechnology to generate electricity three times more efficiently than traditional solar panels – was sentenced today to 78 months in federal prison.

          Michael James Sweaney, 58, of Irvine, the founder, owner and chief financial officer of Nanotech Engineering Inc., was sentenced by United States District Judge Josephine L. Staton. Judge Staton also ordered Sweaney to pay $9,771,052 in restitution.

          Sweaney pleaded guilty in April 2021 to one count of mail fraud.

          Nanotech, which had facilities in Irvine and Loveland, Colorado, used a team of salespeople to cold-call potential investors and pitch them with bogus claims the company had developed a compact “Nanopanel” with patent-pending nanotechnology that was one-third the cost of similar devices and would soon dominate the solar panel market. But the “Nanopanel” did not exist.

          From September 2017 to December 2019, Nanotech and its salesforce not only lied to investors, it also failed to disclose pertinent facts, which included identifying the CFO as “Michael Hatton” to conceal that Sweaney had previously been convicted in Nevada state court of securities fraud.

          “While the proceeds of [Sweaney’s] past crime were several orders of magnitude smaller than those in his current offense, this prior conviction does reveal a disturbing trend of an individual who graduated from a small-time con to a major investment scam,” prosecutors wrote in a sentencing memorandum.

          Using the alias “Michael Hatton,” Sweaney personally solicited a potential investor with lies, including that Nanotech did not pay commissions to sales personnel and that the company’s manufacturing equipment was worth $100 million. That potential investor was an undercover FBI agent.

          During the scheme, Sweaney instructed his nephew – who was in charge of Nanotech’s Colorado facility – to create a prop to make it appear that there were functioning Nanopanels, to make a video with a hired actor showing the product outperforming a traditional solar panel, and to make it appear the Loveland facility was manufacturing Nanopanels, the court documents state.

          In a 2018 email to his nephew, Sweaney wrote, “We need to spend ALOT OF CASH, we need IMMEDIATELY equipment in the warehouse, without it JAIL, and that’s no joke, no equipment and using investment funds EQUALS JAIL, however spending money on equipment WILL SET US FREE.”

          Investor funds – which purportedly would be spent on company overhead and the manufacturing of Nanopanels – were used to fund his lavish lifestyle, which included a 46-foot yacht, two Maserati GranTurismo automobiles, a gold Cartier watch and cosmetic surgery. Sweaney has agreed to forfeit the yacht, the cars, the watch and approximately $1.5 million in cash, bank accounts and checks previous seized by investigators.

          Sweaney’s nephew – David Wayne Sweaney, 42, of Fort Collins, Colorado, who was listed on documents as Nanotech’s chief executive officer – pleaded guilty in September 2020 to one count of mail fraud. He is scheduled to be sentenced on March 11 by Judge Staton, at which time he will face a statutory maximum sentence of 20 years in prison.

          David Sweaney assisted in the scheme orchestrated by his uncle in a number of ways, including depositing victims’ checks into Nanotech bank accounts in Colorado, purchasing and installing $300,000 in used solar panel manufacturing equipment, arranging for at least two potential victim-investors to tour Nanotech’s Colorado facility, and creating a video showing a prop Nanopanel outperforming a standard solar panel – an illusion he created by powering the purported Nanopanel with a hidden battery pack.

          The FBI investigated this matter.

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

          The United States Securities and Exchange Commission has filed a civil action against Nanotech and the Sweaneys, and the agency has obtained partial judgments against both David Sweaney and Michael Sweaney.

A California man was sentenced today to life in prison for engaging in a child exploitation enterprise, creating child sexual abuse material (CSAM) of 20 victims whose ages ranged from infancy to nine-years old, obtaining custody of a minor for purposes of producing CSAM, and possessing CSAM.

Arlan Wesley Harrell, 27, of Hawthorne, pleaded guilty on July 7, 2021, 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.

According to court documents, from 2016 and 2017, Harrell distributed and advertised CSAM depicting three children on an online bulletin board dedicated to the sexual exploitation of children under the age of five. Harrell, along with co-defendants John Brinson Jr., 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.  Harrell also secured the custody of a minor and traveled with him to Brinson’s house to create CSAM of that minor and two other children together. In total, Harrell created CSAM depicting himself engaging in sexual acts with or otherwise sexually exploiting 20 children, including nine children four years of age or younger.

Co-defendant Martinez pleaded guilty to engaging in a child exploitation enterprise and production of child pornography on Sept. 13, 2019, and was sentenced on Sept. 17, 2021 to 55 years in prison followed by lifetime supervised release.  Co-defendant Brinson Jr., pleaded guilty to engaging in a child exploitation enterprise and production of child pornography on July 23, 2021, and is scheduled to be sentenced on April 22. A fourth co-defendant, Keith Lawniczak, pleaded guilty to conspiracy to commit sex trafficking of a child on Dec. 19, 2019, and was sentenced on Aug. 13, 2020 to 12 years in prison followed by lifetime supervised release.

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.

Trial Attorneys Lauren S. Kupersmith and Kyle P. Reynolds of CEOS and Assistant U.S. Attorneys Devon Myers and Kim Meyer of the Central District of California are prosecuting 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.

          LOS ANGELES – A disbarred personal-injury lawyer was sentenced today to 144 months in federal prison for stealing settlement money from multiple clients, including a multimillion-dollar settlement that should have been paid to a car accident victim, and for cheating on his federal income taxes.

          Philip James Layfield, a.k.a. “Philip Samuel Pesin,” 48, formerly of Coto de Caza, was sentenced by United States District Judge Michael W. Fitzgerald, who said in court that Layfield’s actions were “appalling” and his criminal conduct was “sheer evil.”

          Judge Fitzgerald found the total loss in this case to be approximately $5,552,756. The exact amount of restitution that Layfield will be ordered to pay to his victims will be determined at a hearing scheduled for May 12.

          At the conclusion of a 13-day trial in August 2021, a federal jury found Layfield guilty of 19 counts of wire fraud, one count of mail fraud, one count of tax evasion, one count of failure to collect and pay over payroll taxes, and one misdemeanor charge of failure to file a tax return.

          Layfield owned and operated law firms, including Layfield & Barrett (L&B), which, at various times, maintained offices in Los Angeles; Irvine; El Segundo; Park City, Utah; and Scottsdale, Arizona.

          After he had misappropriated millions of dollars from clients’ settlements, Layfield relocated to Costa Rica. Just before getting on a flight to Costa Rica, Layfield borrowed $700,000 from a business lender by providing misleading information and failing to disclose material information. He then used substantial portions of the loan proceeds for personal expenses, including buying a horse and shipping horses to Costa Rica.

          In one case, Layfield entered into an agreement to represent an individual who was struck by an automobile in Orange County and suffered significant injuries. After negotiating a $3.9 million settlement related to the accident, Layfield misappropriated the money owed to the victim – approximately $2 million – for personal and unrelated business uses, including to pay clients whose settlement proceeds Layfield had earlier misappropriated. Long after Layfield misappropriated the victim’s settlement proceeds, Layfield attempted to placate the victim by paying her $25,000 from other clients’ settlement proceeds.

          Layfield also failed to file a federal income tax return for the tax year 2016, despite receiving more than $3 million, including embezzled client settlement money. Layfield also caused his law firm to not pay approximately $120,000 in payroll taxes to the United States government for the second quarter of 2017.

          “The evidence, including [Layfield’s] own testimony, showed that [Layfield] repeatedly stole money from his trust account that he should have paid to his clients who had suffered horrible personal injuries,” prosecutors argued in a sentencing memorandum. “They had hired [Layfield] to bring them closure and some sense of relief. Their faith in the legal system shaken, [Layfield] compounded his clients’ stress and anxiety by forcing them to hire other counsel to try to recover money from [Layfield], only to find little or nothing.”

          The State Bar of California disbarred Layfield in October 2018. Layfield also was a certified public accountant, but his CPA license expired in July 2019, according to the California Board of Accountancy.

          Homeland Security Investigations, IRS Criminal Investigation and the FBI investigated this matter.

          Assistant United States Attorneys Mark Aveis and Carolyn S. Small of the Major Frauds Section and Ian V. Yanniello of the International Narcotics, Money Laundering and Racketeering Section prosecuted this case.

          LOS ANGELES – A Santa Barbara County man was sentenced today to 46 months in federal prison for crashing a stolen Jeep near Vandenberg Air Force Base while under the influence of drugs, killing one motorist and severely injuring another.

          Michael James Culligan, 30, of Lompoc, was sentenced by United States District Judge André Birotte Jr. after pleading guilty in September to one count of involuntary manslaughter.

          On June 16, 2020, at approximately 12:30 p.m., Culligan drove a stolen 2019 Jeep Wrangler on Vandenberg Air Force Base property. After veering onto the right shoulder, Culligan’s car swerved into the oncoming lane of traffic and collided head-on with a blue Lexus sedan, killing its driver and seriously injuring its passenger. Following the traffic collision, Culligan climbed out of the Jeep Wrangler’s sunroof and fled the scene. Law enforcement later found him hiding in a drainpipe.

          Culligan was under the influence of illegal narcotics at the time of the accident, according to court documents. During his post-arrest interview, Culligan admitted using drugs before operating the vehicle, crashing the Jeep into another car and fleeing the scene of the accident.

          Culligan has been in federal custody since June 2020.

          “The severity and tragedy of [Culligan’s] conduct cannot be overstated,” prosecutors wrote in a sentencing memorandum. “His disregard for the safety of the community was staggering. Driving a stolen car while drunk and high is the very epitome of recklessness and, sadly, [Culligan’s] conduct had consequences.”

          The United States Air Force Office of Special Investigations investigated this matter. The California Highway Patrol and Santa Barbara County Sheriff’s Office provided substantial assistance.

          Assistant United States Attorney Joseph D. Axelrad of the Violent and Organized Crime Section prosecuted this case.

          LOS ANGELES – Two South Los Angeles men were each sentenced today to 144 months in federal prison for committing an armed robbery last year on the crowded patio of a Beverly Hills restaurant in which one customer had a gun held to his head while the robbers removed his $500,000 wristwatch, and a second restaurant patron was shot and wounded.

          Malik Lamont Powell, 21, and Khai McGhee, 18, a.k.a. “Cameron Smith,” were sentenced by United States District Judge John F. Walter, who called the crime “outrageous and unacceptable.”

          “These types of robberies, which are becoming more and more prevalent in our community, have to stop,” Judge Walter said.

          Each defendant pleaded guilty in September 2021 to three felony counts: conspiracy to interfere with commerce by robbery, interference with commerce by robbery, and using and discharging a firearm during a crime of violence.

          A third defendant who participated in the robbery – Marquise Anthony Gardon, 41, also of South Los Angeles – pleaded guilty in September 2021 to two felonies: interference with commerce by robbery, and using and discharging a firearm during a crime of violence. Gardon is scheduled to be sentenced on February 28 by Judge Walter.

          The three defendants – each of whom is a documented member of the Rollin’ 30s Crips street gang – drove to Beverly Hills on the afternoon of March 4 to commit an armed robbery. After scouting Beverly Hills for potential victims, the defendants decided to target a man wearing a Richard Mille wristwatch who was seated in the outdoor dining section of the Il Pastaio restaurant.

          During the robbery, the victim was held at gunpoint. A struggle for the gun ensued, and at least two rounds were discharged from the firearm, one of which struck another restaurant patron in the leg. The gun was left at the scene, but the robbers fled with the watch, which was worth approximately $500,000.

          “[Powell] and his co-conspirators’ decision to hold a loaded firearm to [a victim’s] head is especially troubling,” prosecutors argued in a sentencing memorandum. “This type of robbery where firearms are brandished, and discharged, leaves severe, lasting trauma that victims carry with them their entire lives.”

          The FBI and the Beverly Hills Police Department investigated this matter.

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

          LOS ANGELES – A Los Angeles man was sentenced today to 240 months in federal prison for operating a Ponzi scheme that raised at least $650 million with bogus claims that investor money would be used to acquire licensing rights to films that HBO and Netflix purportedly had agreed to distribute abroad.

          Zachary Joseph Horwitz, 35, of the Beverlywood neighborhood of Los Angeles, was sentenced by United States District Judge Mark C. Scarsi, who also ordered Horwitz to pay $230,361,884 in restitution to his victims. Horwitz pleaded guilty in October 2021 to one count of securities fraud.

          “Defendant Zachary Horwitz portrayed himself as a Hollywood success story,” prosecutors argued in a sentencing memorandum. “He branded himself as an industry player, who, through his company…leveraged his relationships with online streaming platforms like HBO and Netflix to sell them foreign film distribution rights at a steady premium…But, as his victims came to learn, [Horwitz] was not a successful businessman or Hollywood insider. He just played one in real life.”

          For more than five years, Horwitz raised millions of dollars from investors, many of whom were personal friends, based on false claims that their money would be used to acquire film distribution rights, which then would be profitably licensed to online platforms such as Netflix and HBO.

          But the whole business was a lie. In reality, Horwitz’s company neither acquired film rights nor entered into any distribution agreements with HBO or Netflix. The purported copies of film licensing agreements and distribution agreements were fake.

          Instead of using the funds to acquire films and arrange distribution deals, Horwitz operated 1inMM Capital as a Ponzi scheme, using victims’ money to repay earlier investors and to fund his own lavish lifestyle, including the purchase of his $6 million Beverlywood residence, luxury cars, and travel by private jet, according to the government’s sentencing memorandum.

          Horwitz defrauded five major groups of private investors, but he knew these entities derived funds from individual investors. Throughout the scheme, Horwitz raised at least $650 million from more than 250 individuals who invested directly or indirectly in 1inMM Capital. By late 2019, 1inMM Capital began defaulting on all of its outstanding promissory notes. To date, Horwitz, through 1inMM Capital, remains in default to investors on a total outstanding principal of approximately $230 million and his scheme has caused substantial financial hardship to dozens of investors.

          Horwitz’s scheme began in 2014 and lasted until the FBI arrested him in April 2021. During that time, Horwitz, through his company, 1inMM Capital, entered into hundreds of six- and 12-month promissory notes with investors. The funds supplied under each note were supposed to provide money for 1inMM Capital to acquire the rights to a specific film, and each note was supposed to be repaid using the profits from licensing those film rights to Netflix or HBO. The promissory notes guaranteed repayment on a specified maturity date, as well as the amount to be paid at maturity, which included investment returns ranging from 25 percent to 45 percent.

          To give investors a sense of security, Horwitz furnished them with purported film license agreements between 1inMM Capital and sales agents for production companies, as well as purported distribution agreements with Netflix and HBO.

          Investors started to complain after 1inMM Capital began defaulting on notes in 2019. In response, Horwitz falsely reassured investors that any missed payments on promissory notes were caused by the streaming platforms, and that payment on the notes would resume. To support these false excuses, Horwitz sent the investors fabricated emails and text messages using the identities of actual employees of HBO and Netflix.

          The FBI investigated this matter. The United States Securities and Exchange Commission provided substantial assistance.

          Assistant United States Attorneys Alexander B. Schwab and David H. Chao of the Major Frauds Section prosecuted this case.

          LOS ANGELES – A retired Marine Corps captain who traveled to Cambodia in 2005 for the purpose of engaging in illicit sexual conduct with minors was sentenced today to 210 years in federal prison.

          Michael Joseph Pepe, 68, a former Oxnard resident who has been in federal custody since 2007, was sentenced by United States District Judge Dale S. Fischer, who described Pepe’s actions as “monstrous” and “horrific.”

          “What he did to those pre-teen girls…was torture,” Judge Fischer said, noting that there was “no justification for a sentence that would ever allow [Pepe] to be released from prison.”

          Judge Fischer has scheduled a restitution hearing in this case for February 28.

          During a seven-day trial in August 2021, jurors heard testimony from eight victims who were as young as 9 years old when they were sexually abused. Each of the victims testified that Pepe sexually abused them, and several explained that Pepe drugged, bound, beat and raped them.

          Prosecutors also presented evidence corroborating the victims’ testimony, including homemade child pornography.

          Pepe initially was arrested in Cambodia 2006. After being brought to the United States and charged in early 2007, he subsequently was tried, convicted and sentenced to prison. The United States Court of Appeals for the Ninth Circuit overturned the conviction in 2018, and prosecutors retried the defendant on new charges.

          Homeland Security Investigations and the Cambodian National Police investigated this matter.

          First Assistant United States Attorney Stephanie S. Christensen, Assistant United States Attorney Damaris Diaz of the Violent and Organized Crime Section, and Assistant United States Attorney Lynda Lao of the General Crimes Section prosecuted this case.

          LOS ANGELES – A federal grand jury today returned a five-count indictment that charges a San Gabriel Valley man who allegedly fired BB guns at the Planned Parenthood facility in Pasadena with violating the federal Freedom of Access to Clinic Entrances (FACE) Act.

          Richard Royden Chamberlin, 53, who currently resides in Altadena, but also maintains a residence in Ontario, was charged with two counts of forcible interference with the obtaining and provision of reproductive health services. A third charge alleges attempted forcible interference with the obtaining and provision of reproductive health services. No one was injured in any of the shootings, and the FACE Act violations alleged in the indictment are misdemeanor offenses.

          The indictment alleges that Chamberlin fired BB guns at the Planned Parenthood facility on multiple occasions in 2020 and 2021. Count one of the indictment specifically alleges an attack on March 30, 2021, in which a patient’s support companion was nearly hit as she waited on the front porch of the women’s health clinic.

          The indictment also charges Chamberlin with being a convicted felon in possession of a firearm and ammunition for carrying a loaded handgun during the final drive-by attack on the Planned Parenthood facility on May 7, 2021. Following that alleged BB gun shooting, the Pasadena Police Department located Chamberlin in his vehicle near the Planned Parenthood facility, and they discovered vehicle multiple BB guns, as well as a.22-caliber handgun loaded with 10 bullets, according to court documents. Chamberlin, who was previously convicted of a narcotics-related felony in Arizona, is prohibited from possessing firearms and ammunition.

          Following his arrest on May 7, the Pasadena City Attorney’s Office filed firearms-related charges against Chamberlin. Federal authorities began to investigate the matter and last month filed a criminal complaint against Chamberlin alleging the felon-in-possession offense.

          The FBI arrested Chamberlin on January 28. In conjunction with his arrest, FBI special agents executed search warrants at Chamberlin’s two residences. At the Ontario residence, investigators recovered thousands or rounds of ammunition. The indictment also charges Chamberlin with being a felon in possession of ammunition.

          The two felon-in-possession charges alleged in the indictment each carry a statutory maximum sentence of 10 years in federal prison. Each of the three FACE Act charges carry up to one year in 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.

          Chamberlin, who was freed on bond following his arrest on January 28, has been ordered to appear for an arraignment in United States District Court in Los Angeles on February 17.

          The FBI’s Civil Rights Squad and the Pasadena Police Department investigated this matter.

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

          SANTA ANA, California – A customs broker was arrested today on a federal grand jury indictment charging him with evading the payment of $1.5 million in taxes and engaging in a $3.4 million wire fraud scheme that overcharged a Japanese variety store client on customs duties.

          Frank Seung Noah, 59, of Corona, self-surrendered to law enforcement and is expected to be arraigned this afternoon in United States District Court in Santa Ana. He is charged with one count of tax evasion and three counts of wire fraud.

          According to the indictment, Noah owned and operated Comis International Inc., a logistics and supply-chain company based out of Cerritos, which offered customs import brokerage services on behalf of businesses. From 2007 to 2019, Comis was a customs import broker for Daiso, a Japan-based variety and value store with stores in the United States, including Southern California.

          From March 2016 until February 2019, Noah – acting through Comis – paid customs import duty fees to U.S. Customs and Border Protection on Daiso’s behalf. Noah then allegedly submitted invoices to Daiso that fraudulently inflated the customs import duty fees that Noah had paid to CBP. As a result of Noah’s scheme, Daiso paid the inflated invoices, causing Noah to fraudulently obtain a total of at least approximately $3,379,774, the indictment alleges.

          For example, on September 15, 2017, Daiso wired $192,486 to a Noah-controlled bank account, of which approximately $74,840 was a result of inflated invoices, according to the indictment.

          Noah also allegedly willfully attempted to evade the payment of approximately $1,562,684 in federal taxes which the IRS assessed against him for the calendar years 2008, 2009 and 2010. He allegedly did so by making small payments to the IRS, all while making much larger payments on mortgages for properties he controlled – even though they were bought in his girlfriend’s name – including his Corona residence purchased in 2016 and a vacation property in Rancho Mirage that was purchased the following year.

          Noah allegedly used funds transferred to his girlfriend’s bank account to pay the mortgage on the Corona property and to a country club. In September 2017, after Noah received approximately $147,148 from the sale of a property he owned in Carson, he wrote a $120,000 check to his girlfriend. He also allegedly made false statements to the IRS during this time by underreporting his income.

          From 2014 to 2017, Noah allegedly cashed more than $7 million in checks instead of depositing the funds into his personal or business bank accounts to conceal his control over such funds.

          Including penalties and interest, as of February 2022, Noah owes approximately $2,012,618 to the IRS, according to the indictment.

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

          If convicted of all charges, Noah would face a statutory maximum sentence of five years in federal prison for the tax evasion count and 20 years in prison for each wire fraud count.

          IRS Criminal Investigation, Homeland Security Investigations, and U.S. Customs and Border Protection investigated this matter.

          Assistant United States Attorneys Daniel Ahn and Daniel Lim of the Santa Ana Branch Office are prosecuting this case.

          LOS ANGELES – An active-duty Marine stationed at Camp Pendleton was arrested Tuesday on charges that he cyberstalked multiple young women with ties to his former hometown of Torrance in a “sextortion” campaign.

          Johao Miguel Chavarri, 25, of Oceanside, is expected to make his initial appearance this afternoon in United States District Court in downtown Los Angeles.

          According to the criminal complaint unsealed following his arrest, from 2019 through 2021, Chavarri, using the online alias “Michael Frito,” created and used numerous online accounts to repeatedly stalk, harass, and threaten women who would not give in to his demands that, among other things, they send him nude, sexually explicit or otherwise compromising photos and videos of themselves. This type of conduct is commonly referred to as sextortion. According to the complaint, in some cases, his cyberstalking, threats and sextortion demands continued for over a year.

          Chavarri’s harassing and extortionate threats and demands of the victims generally followed a pattern outlined in complaint affidavit. In some instances, he allegedly demanded that the victims provide him with sexual photos or videos of themselves, or photos or videos of their feet. In other instances, he demanded that they respond to him and communicate online with him.

          According to the complaint, in multiple instances, Chavarri threatened that, if his victims refused to comply with his demands, he would publish sexually explicit photos and videos of the victims online or on well-known pornography websites. He also allegedly threatened to distribute the photos or videos to the victims’ boyfriends, friends, families or employers, whom he would often identify by name.

          According to the complaint, one message sent by Chavarri to multiple victims via Instagram stated that he would spend his “whole life ruining” their lives. Chavarri allegedly also created fake social media accounts mimicking some of the victims’ names and sent harassing messages to some of the victims’ friends and family members.

          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.

          Chavarri is charged with stalking. If convicted, he faces a statutory maximum sentence of five years in federal prison.

          The FBI is investigating the case, with assistance from the Naval Criminal Investigative Service.

          Anyone who believes they are a victim in this case or is aware of a victim in this case is urged to contact the FBI’s Los Angeles Field Office, which can be reached 24 hours a day at (310) 477-6565.

          Assistant U.S. Attorney Lauren Restrepo of the Cyber and Intellectual Property Crimes Section and Justice Department Senior Trial Attorney Mona Sedky of the Criminal Division’s Computer Crime and Intellectual Property Section are prosecuting the case.

A California man was arrested yesterday and will make his initial appearance in federal court today to face charges that he cyberstalked multiple young women in California in a “sextortion” campaign.  

Johao Miguel Chavarri, 25, aka Michael Frito, of Oceanside and Torrance, was arrested yesterday in Oceanside, where he is stationed as an active-duty member of the U.S. Marine Corps. According to the criminal complaint, from 2019 through 2021, Chavarri, using the online persona “Michael Frito,” created and used numerous online accounts to repeatedly stalk, harass, and threaten women who would not give in to his demands that, among other things, they send him nude, sexually explicit, or otherwise compromising photos and videos of themselves. This type of conduct is commonly referred to as sextortion. According to the complaint, in some cases, his cyberstalking, threats, and sextortion demands continued for over a year.

As alleged, Chavarri’s harassing and extortionate threats and demands of the victims generally followed a pattern. In some instances, he allegedly demanded that the victims provide him with sexual photos or videos of themselves or photos or videos of their feet. In other instances, he demanded that they respond to him and communicate online with him. According to the complaint, in multiple instances, he threatened that, if his victims refused to comply with his demands, he would publish sexual photos and videos of the victims online or on well-known pornography websites and/or distribute the sexual photos or videos to the victims’ boyfriends, friends, families or employers, whom he would often identify by name. As alleged, Chavarri also created fake social media accounts mimicking some of the victims’ names and sent harassing messages to some of the victims’ friends and family members. One message sent by Chavarri to multiple victims via Instagram stated that he would spend his “whole life ruining” their lives.

Chavarri is charged with cyberstalking. If convicted, he faces up to five years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

The FBI’s Los Angeles Field Office is investigating the case, with assistance from the Naval Criminal Investigative Service.

Anyone who believes they are a victim in this case or is aware of a victim in this case is urged to contact the FBI's Los Angeles Field Office, which can be reached 24 hours a day at (310) 477- 6565.

Assistant U.S. Attorney Lauren Restrepo for the Central District of California and Senior Trial Attorney Mona Sedky of the Criminal Division’s Computer Crime and Intellectual Property Section are prosecuting the case.

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

          LOS ANGELES – A San Fernando Valley woman pleaded guilty today to federal criminal charges for conspiring to defraud health insurance companies by causing millions of dollars in fraudulent claims to be submitted to provide patients with “free” cosmetic procedures, including Botox injections.

          Roshanak Khadem, 54, a.k.a. “Roxanne Khadem” and “Roxy Khadem,” of Sherman Oaks, pleaded guilty to one count of conspiracy to commit health care fraud and one count of subscribing to a false income tax return.

          According to her plea agreement, Khadem owned and operated facilities that provided aesthetic services to clients, including R&R Med Spa in Valley Village and Nu-Me Aesthetic and Anti-Aging Center in Woodland Hills.

          From January 2012 to April 2016, Khadem caused patients to visit her clinics to receive cosmetic procedures, including Botox injections, facials and laser hair removal. Khadem knew these procedures were not covered by the patients’ health insurers. Khadem also knew that her employees informed some patients that, if they turned over their health insurance information to the Khadem-owned clinics, the patients could receive free or discounted cosmetic procedures pursuant to a “credit” they would earn.

          Health insurance information from these patients was provided to the insurance biller for the clinics, knowing and intending that the information would be used to submit false and fraudulent claims to the health insurers for medical procedures that Khadem knew were either not actually provided to the patients or were not medically necessary.

          Then, based on the amount that the health insurers paid on those false and fraudulent claims, Khadem and others would calculate an amount, which the co-conspirators referred to as a "credit," that the patients could use to receive free or discounted cosmetic procedures from the clinics. Those patients would then come into the clinics to receive the free or discounted cosmetic procedures.

          The proceeds from the health care fraud conspiracy were deposited into bank accounts that were held in the names of doctors who were affiliated with the clinics and who signed off on and caused to be submitted the false and fraudulent claims under their names.

          Khadem took possession of the proceeds from the doctors’ accounts in two ways. First, because Khadem had signatory authority on the bank accounts, she was able to obtain the funds by writing checks on the accounts. Second, she would withdraw funds from the bank accounts using pre-signed checks that she obtained from the doctors.

          From January 2012 to April 2016, Khadem and her co-conspirators submitted claims, which included false and fraudulent claims for which those companies paid out at least $1,361,200.

          Prosecutors estimate the amounts paid based on false and fraudulent claims submitted as part of the health care fraud conspiracy in which Khadem participated could be as much as $7,991,406.

          The scheme involving the two clinics defrauded the International Longshore and Warehouse Union, Pacific Maritime Association Benefit Plan, which is the health benefit plan that covers longshore workers in Southern California and their dependents. Another victim was the Federal Employees Health Benefits Program, which provides health insurance for federal employees.

          Khadem failed to report this income on her income tax returns for 2013, 2014 and 2015. Khadem’s underreporting of her income for these three years caused a total tax loss of $453,451.

          United States District Judge Stephen V. Wilson has scheduled a June 27 sentencing hearing, at which time Khadem will face a statutory maximum sentence of 13 years in federal prison.

          The remaining four defendants in this case each have pleaded guilty. Lucine Ilangezyan, 42, of North Hills, pleaded guilty to one count of conspiracy to commit health fraud, and was sentenced to 18 months in federal prison. Gary Jizmejian, 48, of Santa Clarita, a former senior investigator at the Anthem Special Investigations Unit, the anti-fraud unit within Anthem that is responsible for investigating health care fraud committed against the insurance company, pleaded guilty to using his cell phone to send text messages to co-defendants as part of a this commercial bribery scheme– was also sentenced to 18 months in federal prison.

          Dr. Roberto Mariano, 63, of Rancho Cucamonga, a physician who helped operate the clinics, and Marina Sarkisyan, 52, of Panorama City, who was the office manager at the clinics, await sentencing.

          The United States Department of Labor, Office of Inspector General; the United States Department of Labor, Employee Benefits Security Administration; Internal Revenue Service-Criminal Investigations, and the Office of Personnel Management, Office of Inspector General investigated this matter. The United States Marshals Service provided assistance relating to the asset forfeiture investigation.

          Assistant United States Attorneys Valerie L. Makarewicz of the Major Frauds Section and Morgan J. Cohen of the General Crimes Section are prosecuting this case.

          LOS ANGELES – A West Los Angeles pharmacist was sentenced today to 30 months in federal prison for orchestrating a scheme that fraudulently obtained millions of dollars for compounded drugs in a scheme that paid illegal kickbacks for patient referrals and fraudulently paid patients’ copayments.

          Navid Vahedi, 42, of Brentwood, was sentenced by United States District Judge Christina A. Snyder. Vahedi and his West Los Angeles-based company, Fusion Rx Compounding Pharmacy, pleaded guilty in February 2021 to one count of conspiracy to commit health care fraud and payment of illegal remunerations.

          On January 18, Judge Snyder sentenced Fusion Rx Compounding Pharmacy to five years of probation. She has ordered Vahedi and his company to jointly pay $4,400,525 in restitution.

          Fusion Rx was a provider of compounded drugs, which are tailor-made products doctors may prescribe when FDA-approved alternatives do not meet the health needs of patients. Vahedi, a licensed pharmacist, and Fusion Rx routed millions of dollars in kickback payments through the businesses of two marketers to steer prescriptions for compounded drugs to Fusion Rx.

          As part of the scheme, Vahedi and the two marketers provided physicians with preprinted prescription script pads that offered “check-the-box” options on the form to maximize the amount of insurance reimbursement for the compounded drugs. From May 2014 to at least February 2016, Fusion Rx received approximately $14 million in reimbursements on its claims for compounded drug prescriptions.

          As part of its contracts with various insurance networks, Fusion Rx was obligated to collect copayments from patients. Because the copayments might discourage patients from requesting expensive and potentially unnecessary compounded drug prescriptions, Fusion Rx did not collect copayments with any regularity and, in other instances, it provided gift cards to patients to offset the amount of the copayments, according to court documents.

          After an audit raised concerns that Fusion Rx’s failure to collect copayments would be discovered, Vahedi directed Fusion Rx funds to be used to purchase American Express gift cards, which were then used to make copayments for certain prescriptions without the patients’ knowledge. Fusion Rx then submitted claims on these prescriptions to various insurance providers, falsely representing that patients had paid the required copayments.

          “As a pharmacist offering compounded medications, [Vahedi] had a real opportunity to use his skills to help patients in need, individuals whose unique health challenges made it impossible for them to depend on the FDA-approved medications others rely on,” prosecutors wrote in a sentencing memorandum. “Instead, defendant converted his pharmacy into an assembly line for his own enrichment.”

          The two marketers involved in the scheme – Joshua Pearson, 42, of St. George, Utah, and Joseph Kieffer, 41, of West Los Angeles – previously pleaded guilty in this case. Judge Snyder sentenced Kieffer to six months in federal prison and ordered him to pay $1.25 million in restitution. Pearson was sentenced to three years of probation.

          The Defense Criminal Investigative Service, the FBI, the Amtrak Office of Inspector General, the Office of Personnel Management’s Office of Inspector General, and the Office of Inspector General for the United States Department of Health and Human Services investigated this matter.

          Assistant United States Attorneys Alexander B. Schwab of the Major Frauds Section and Jonathan S. Galatzan of the Asset Forfeiture Section prosecuted this case.

          LOS ANGELES – A nun who was the principal of a Catholic elementary school in Torrance was sentenced today to 12 months and one day in federal prison for stealing more than $835,000 in school funds to pay for personal expenses, including gambling trips.

          Mary Margaret Kreuper, 80, of the Arlington Heights neighborhood in Los Angeles, was sentenced by United States District Judge Otis D. Wright II, who also ordered her to pay $825,338 in restitution.

          Kreuper pleaded guilty in July 2021 to one count of wire fraud and one count of money laundering.

          For a period of 10 years ending in September 2018, Kreuper embezzled money from St. James Catholic School. As principal – a position she held for 28 years – Kreuper was responsible for the money the school received to pay for tuition and fees, as well as for charitable donations. Kreuper controlled accounts at a credit union, including a savings account for the school and one established to pay the living expenses of the nuns employed by the school.

          Kreuper, who as a nun had taken a vow of poverty, diverted school funds into the St. James Convent Account and the St. James Savings Account and then used the diverted funds “to pay for expenses that the order would not have approved, much less paid for, including large gambling expenses incurred at casinos and certain credit card charges,” according to court documents.

          Kreuper falsified monthly and annual reports to the school administration to cover up her fraudulent conduct and “lulled St. James School and the Administration into believing that the school’s finances were being properly accounted for and its financial assets properly safeguarded, which, in turn, allowed defendant Kreuper to maintain her access and control of the school’s finances and accounts and, thus, continue operating the fraudulent scheme,” according to court documents. Kreuper also directed St. James School employees to alter and destroy financial records during a school audit.

          The total losses Kreuper caused to St. James Catholic School were $835,339.

          “On an annualized basis (approximately $83,000 per year), [Kreuper] stole the equivalent of the tuition of 14 different students per year,” prosecutors argued in a sentencing memorandum. “These funds were intended to further the students’ education, not fund [Kreuper’s] lifestyle. In their letters [to the court], several students and parents commented on how the school was lacking in resources…Another parent discussed [in a letter to the court] how [Kreuper] said there was no money for an awning at school and no money for field trips.”

          The Torrance Police Department, the FBI and IRS Criminal Investigation conducted the investigation in this matter.

          Assistant United States Attorney Poonam G. Kumar of the Major Frauds Section prosecuted this case.

          RIVERSIDE, California – A San Bernardino County man who paid a teenager he met on the internet to have sex with him on two occasions was sentenced today to 136 months in federal prison.

          Jason Dee Taylor, 42, of Fontana, was sentenced by United States District Judge Jesus G. Bernal. Judge Bernal also ordered Taylor to pay $3,508 in restitution to the victim.

          At the conclusion of a four-day trial in November 2021, a federal jury found Taylor guilty of one count of sex trafficking of a minor and one count of enticement of a minor to engage in criminal sexual activity.

          According to the evidence presented at trial, Taylor contacted the victim on a public website. They exchanged messages through that website’s messenger feature and then switched to communicating via Instagram messenger.

          Although she initially represented that she was 19 years old, the victim told Taylor almost immediately that she was 16, even though she was 15 years old at the time. In response, Taylor wrote her, “I’ll be honest. I like your age, it’s kinda hot.”

          Twice in April 2020, Taylor drove to Santa Barbara County, picked up the victim, took her to a hotel, and paid her a total of $600 for sex.

          That same month, the victim’s family friend, whose phone she used to communicate with Taylor, found the messages between Taylor and the victim. When a member of the victim’s family sent Taylor a message informing him that they were going to report him to law enforcement, Taylor deleted his Instagram account, but not before the family friend had taken screenshots of the incriminating communications.

          “The minor victim was not a fully developed young woman with whom [Taylor] had sex in the heat of the moment, only to find out she was underage,” prosecutors argued in a sentencing memorandum. “Rather, this was a case where [Taylor] looked for, found, and exploited a teenager who was willing to sell her body for money because that is what he wanted.”

          The FBI investigated this matter, with the assistance of the Guadalupe Police Department, the Santa Maria Police Department, and the Fontana Police Department.

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

          RIVERSIDE, California – A former California Employment Development Department (EDD) employee was sentenced today to 63 months in federal prison for causing nearly 200 fraudulent COVID-related unemployment relief claims to be filed in other people’s names, resulting in nearly $4.3 million in ill-gotten gains.

          Gabriela Llerenas, a.k.a. “Maria G. Sandoval,” 44, of Perris, was sentenced by United States District Judge John W. Holcomb, who also ordered her to pay $4,298,093 in restitution.

          Llerenas took advantage of the expanded eligibility for unemployment insurance (UI) benefits made possible by the Coronavirus Aid, Relief, and Economic Security (CARES) Act passed by Congress and signed into law in March 2020. The CARES Act provided additional UI benefits to qualified individuals and helped provide UI benefits during the COVID-19 pandemic to people who did not otherwise qualify, including business owners, self-employed workers, independent contractors, and those with a limited work history.

          From April to October 2020, Llerenas filed and caused the filing with EDD of fraudulent unemployment insurance benefits that falsely asserted the named claimants were self-employed independent contractors – often identifying them as cake decorators or event attendants – who were negatively affected by the COVID-19 pandemic. Llerenas obtained some of the names, Social Security numbers and other identifying information she used to submit the fraudulent claims through her prior work as a tax preparer.

          Llerenas also falsely stated on some of the applications that the claimants were residents of California entitled to unemployment insurance benefits administered by EDD when in fact they lived elsewhere. On some applications, she inflated the amounts of income she reported for the claimant to maximize the benefit amount. She also filed a dozen or more fraudulent EDD claims in a day.

          As a result of the fraudulent unemployment benefits applications that Llerenas filed and caused to be filed, EDD authorized Bank of America to mail debit cards in the names of the claimants to addresses she provided, including her residence, her husband’s business location, her mother’s apartment and the addresses of friends and other family members.

          Llerenas charged the named claimants a fee for filling the applications, which was often paid out of the fraudulently obtained benefits. In at least one case, she told the named claimant that she was still employed at EDD and could control the distribution of the unemployment insurance benefits, and then demanded an additional payment for “releasing” the benefits.

          In total, 197 debit cards were fraudulently issued because of this scheme. Judge Holcomb found that the resulting losses to EDD and the United States Treasury that Llerenas caused totaled $4,298,093.

          As part of the investigation, $621,124 in cash was seized from Llerenas and has been forfeited.

          Llerenas previously worked at EDD as a disability insurance program representative. She resigned in March 2002 after admitting to fraudulently authorizing and paying disability benefits administered by EDD. She was sentenced to 37 months in federal prison in connection with that scheme.

          The Department of Labor-Office of Inspector General, EDD-Investigations Division, Homeland Security Investigations, United States Postal Inspection Service, FBI and Social Security Administration-Office of Inspector General investigated this matter.

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

          In May 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.

          SANTA ANA, California – A former Rancho Mirage resident pleaded guilty this morning to federal charges related to a scheme that fraudulently billed insurance companies tens of millions of dollars for cosmetic surgeries by falsely claiming the procedures were “medically necessary.”

          Linda Morrow, 69, who has been in federal custody since July 2019, pleaded guilty to one count of conspiracy to commit health care fraud, admitting that she helped her husband run the fraudulent billing scheme out of The Morrow Institute (TMI) in Rancho Mirage.

          Morrow also pleaded guilty to one count of contempt of court for fleeing the United States in 2017 after a federal grand jury indicted her for the health care fraud scheme. Along with her husband, Morrow fled to Israel, which deported her in 2019 after U.S. authorities tracked her down and Israeli authorities determined she had entered that nation on a fraudulent Mexican passport.

          Morrow pleaded guilty to the two felony offenses before United States District Judge Josephine L. Staton, who scheduled a sentencing hearing for July 1. At that time, Morrow will face a statutory maximum sentence of 20 years in federal prison.

          Morrow’s husband, 77-year-old Dr. David M. Morrow, was extradited by Israel two years ago and is currently serving a 20-year prison sentence. David Morrow pleaded guilty in 2016 and was free on bond awaiting sentencing when the couple fled. Judge Staton imposed the 20-year sentence while the Morrows were living as fugitives, finding that the intended loss from the scheme was more than $44 million.

          Linda Morrow, who was the “executive director” of TMI in Rancho Mirage, admitted in court today that she participated in a scheme to defraud health insurance companies by submitting bills for procedures performed at the Morrow Medical Surgery Center that were billed as “medically necessary” – but in fact were cosmetic procedures such as “tummy tucks,” “nose jobs,” breast augmentations and vaginal rejuvenations. Morrow admitted that the scheme attempted to bilk insurance companies out of between $25 million and $65 million.

          The victim insurance companies included Aetna, Anthem Blue Cross, Blue Shield of California and Cigna Health Insurance. The scheme also defrauded Staples, Inc. and a self-insured group of public entities that included school districts. To pursue payment for some of the fraudulent surgeries when they were not paid, TMI filed claims of $10,931,237 against the Desert Sands Unified School District; $4,199,862 against the Palm Springs Unified School District; $1,341,519 against the City of Palm Springs; and $256,782 against the California Highway Patrol, according to court documents.

          In April 2011, shortly after the FBI and California Department of Insurance executed a search warrant in the investigation, Morrow went to a former employee’s house to confront her on whether she had cooperated with law enforcement, according to the plea agreement.

          To defraud the insurance companies into believing that the patients had undergone medically necessary procedures, the Morrows convinced patients to sign “testimonial” letters or declarations that had false statements, according to court documents. In her plea agreement, Morrow admitted that she coached employee patients to draft falsified testimonial letters and declarations.

          Morrow also admitted in court today that she fled the United States to avoid prosecution and failed to appear in court as ordered. In addition to helping move $4 million from domestic bank accounts to accounts in Israel, Morrow used a fraudulent Mexican passport to enter Israel and a fraudulent Guatemalan passport while living there. Morrow also admitted that while she was living as a fugitive, she applied for Israeli citizenship using a fraudulent identity.

          The FBI, IRS Criminal Investigation and the California Department of Insurance conducted the investigation into the Morrows and TMI. The FBI’s Legal Attachés in Jerusalem, Mexico City, and Guatemala; the Israeli National Police; the United States Marshals Service; the United States Border Patrol’s Northern Border Coordination Center; and the Department of Justice’s Office of International Affairs provided considerable assistance in tracking down and capturing the Morrows.

          Assistant United States Attorney Charles E. Pell of the Santa Ana Branch Office is prosecuting this case. Assistant United States Attorney Robert Lester of the Financial Litigation Section of the Civil Division is enforcing restitution orders in this matter.

          LOS ANGELES – A former deportation officer with the Department of Homeland Security was sentenced today to 15 months in federal prison for “structuring” charges for making cash withdrawals and deposits totaling nearly $200,000, which were designed to circumvent federal reporting requirements and to conceal assets from his then-wife and the state court during divorce proceedings.

          Vardan Keshishyan, 50, of Glendale, was sentenced by United States District Judge Philip S. Gutierrez.

          At the conclusion of a three-day trial in September 2021, a federal jury found Keshishyan guilty of two counts of structuring of currency transactions to evade reporting requirements.

          Shortly after his then-wife filed for divorce in November 2014, Keshishyan began structuring nearly $100,000 out of his bank accounts to deceive the court into believing he only had $1,000 in assets that could be distributed during the divorce.

          In January 2015, Keshishyan deposited approximately $96,000 from the sale of the home he shared with his then-wife into a bank account he solely owned and controlled. He then withdrew $99,400 from his bank accounts by making 11 cash withdrawals of approximately $9,000 – each withdrawal just shy of the bank’s mandatory reporting requirements for cash transactions above $10,000.

          During one attempted withdrawal, a bank manager warned Keshishyan that it was a crime to break up a cash transaction greater than $10,000 into smaller amounts to evade the bank’s reporting requirements mandated by federal law. After the manager informed Keshishyan that the bank planned to file a report to comply with federal law, he cancelled the transaction. He then continued his pattern of structured transactions elsewhere to avoid the filing of any report required under federal law.

          Once he had drained his bank accounts, according to evidence at trial, Keshishyan lied under oath to the court at a June 2015 hearing in his divorce case, falsely telling the court he had lost $95,000 of the family home sale proceeds, in part, through a bad investment. Upon learning that Keshishyan had withdrawn the funds in cash progressively over time, the court warned him that his pattern of cash withdrawals was “not permitted.”

          Despite these admonishments from the court and the bank manager’s warning about the illegality of structuring, Keshishyan continued to structure to sneak the money back into his accounts. Once he and his then-wife settled on the terms of the divorce, he started structuring $99,000 back into his bank accounts. In 2016 and 2017, he visited multiple banks, sometimes just minutes apart, to make 11 cash deposits of $9,000 each.

          To conceal his pattern of cash transactions just shy of the $10,000 reporting requirement, he traveled to 11 bank branches throughout Los Angeles County to make the cash transactions and tried to further conceal his conduct using multiple accounts at multiple banks.

          “Despite [Keshishyan’s] oath to upload the law, he willfully and repeatedly chose to break it…and then tried to cover [up his crimes] through perjury and deceit,” prosecutors wrote in a sentencing memorandum. “[Keshishyan] violated the law after not one, but two, warnings that what he was doing was illegal. One of those warnings even came from a state court judge, and yet, even that admonishment was not enough to deter [Keshishyan].”

          The United States Department of Homeland Security Office of Inspector General investigated this matter.

          Assistant United States Attorneys Lindsey Greer Dotson and Thomas F. Rybarczyk of the Public Corruption and Civil Rights Section prosecuted this case.

          LOS ANGELES – Three Southern California men were charged today in a federal grand jury indictment for allegedly robbing six cell phone stores in Los Angeles and Ventura counties during store hours on the same day, using hammers to smash display cases to steal iPhones and other merchandise.

          The indictment charges each of the following defendants with one count of conspiracy and six counts of interference with commerce by robbery (Hobbs Act):

• Tony Tyron Lee Stewart, 21, of Highland;
• Rayford Newsome, 23, of Compton; and
• Jerome Gregory Belser, 20, of San Bernardino.

          The defendants are in federal custody and their arraignments are scheduled for February 10 in United States District Court in downtown Los Angeles.

          According to the indictment, on January 15, 2022, Newsome drove Stewart and Belser in a blue Kia Optima vehicle to rob T-Mobile stores in Long Beach, Carson, Inglewood, Encino and Camarillo, and an AT&T Wireless store in Woodland Hills. Stewart and Belser allegedly entered the stores during store hours to commit the robberies while Newsome remained in the car.

          Once inside the stores, Stewart and Belser – in the presence of store employees and customers – allegedly used hammers to smash display cases and phone displays to steal telephones and other electronics. After stealing the merchandise, Newsome drove Stewart and Belser away from the robbery locations, the indictment alleges.

          Law enforcement received reports of similar robberies that same day at cell phone stores. During the evening of the robberies, GPS location data for Stewart’s and Newsome’s phones and the blue Kia Optima showed that the two phones and the car were in the vicinity of the robberies around the time they occurred, according to an affidavit filed with a criminal complaint in this case.

          That same evening, law enforcement used the tracker on the blue Kia Optima to track down the car in North Hollywood. After a short pursuit, the defendants were found in the blue Kia Optima, the affidavit states. Inside the car, officers recovered the devices reported stolen during the Encino robbery as well as hammers that had the same distinctive handle coloring as those used during that robbery.

          The total loss from the six charged robberies was $33,795, according to the indictment.

          Law enforcement has linked Stewart, Newsome, and Belser to more than 50 cell phone store robberies throughout Southern California, according to the affidavit filed with the criminal complaint.

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

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

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

          Assistant United States Attorneys Kevin Reidy and Kevin Butler of the Violent and Organized Crime Section are prosecuting this case.

          LOS ANGELES – A Los Angeles man was sentenced today to 48 months in federal prison for leading a conspiracy that fraudulently obtained American Express credit cards and then used the cards to purchase more than a half million dollars in goods at luxury stores.

          Trace Jevon Jones, 33, a.k.a. “Million Dollar,” a transient living in downtown Los Angeles when he was arrested in 2019, was sentenced by United States District Judge André Birotte Jr., who also ordered him to pay $521,128 in restitution to American Express.

          Jones pleaded guilty in September 2020 to one count of conspiracy to commit bank fraud and one count of aggravated identity theft.

          From at least November 2016 to July 2018, Jones masterminded a scheme to fraudulently obtain and use American Express credit cards for unauthorized purchases at high-end retail stores. To carry out his scheme, Jones enlisted co-conspirators, and obtained the credit card information and other personal identifying information of true American Express account holders.

          Jones and his co-conspirators then used this information to convince American Express to send out replacement credit cards in the victims’ names. Jones and his co-conspirators then used the fraudulently obtained credit cards to make purchases at luxury stores such as Barneys, Goyard and Gucci in Los Angeles, Beverly Hills and Costa Mesa. There, Jones and other conspirators used victims’ stolen information to obtain luxury bags, shoes, jewelry, and other goods.

          “This was not a one-time event or an isolated lapse of judgment,” prosecutors argued in a sentencing memorandum. “[Jones] participated in this scheme at least as early as November 2016, and then coordinated numerous purchases with five coconspirators between May and July 2018, many of whom he recruited. Further, while the ultimate victim here was American Express (because it reimbursed the individual victims), stealing and misusing victims’ PII and account information is a serious nationwide problem that can have lasting impact on individual victims.”

          Four other defendants have been sentenced in this case. Terry Ellis Jr., 40, of Chino, and Davion Raymone Ellis, 32, of Eastvale, are serving federal prison sentences of two years and three years, respectively, after pleading guilty to conspiracy and aggravated identity theft charges in this case. Cherelle Daire Beal, 31, of Eastvale, and Miranda Clare Hensley, 31, of Las Vegas, were given credit for time served and were ordered to serve three years of supervised release. An additional defendant, Jonathan Randall Ross, 33, of Canoga Park, is scheduled to be sentenced in the coming weeks.

          The United States Secret Service and United States Postal Inspection Service investigated this matter.

          Assistant United States Attorneys Maria Elena Stiteler and Matthew J. Rosenbaum of the International Narcotics, Money Laundering and Racketeering Section, Assistant United States Attorney Jeremiah Levine of the Violent and Organized Crime Section, and Special Assistant United States Attorney Ryan G. Adams of the Santa Ana Branch Office prosecuted this case.

          SAN DIEGO – The CEO of several Southern California-based medical imaging companies was sentenced today to 60 months in federal prison for running a scheme that submitted more than $250 million in fraudulent claims through the California Workers’ Compensation System for medical services procured through bribes and kickbacks to physicians and others.

          Sam Sarkis Solakyan, 40, of Glendale, was sentenced by United States District Judge Cynthia A. Bashant. Judge Bashant also ordered him to pay $27,937,175 in restitution to the victim insurers. She also banned him from working in the health care and workers compensation industries for his three-year term of supervised release once he completes his prison sentence.

          During an eight-day trial that concluded on July 2, a jury found Solakyan guilty of one count of conspiracy to commit honest services mail fraud and health care fraud, and 11 counts of honest services mail fraud.

          “[Solakyan] paid some $9 million in kickbacks in order to generate over $250 million in fraudulent medical billings, the vast majority of which were for MRIs [magnetic resource images] that were…totally medically unnecessary,” prosecutors wrote in a sentencing memorandum. “[Solakyan] devised, and through his kickbacks fueled, a cross-referral scheme that incentivized [co-conspirators] to herd patients to physicians who overprescribed ancillary services in exchange for cash and other economic benefits.”

          Solakyan was the CEO of several medical-imaging companies, including the Glendale-based Vital Imaging Inc., and San Diego MRI Institute. Solakyan operated diagnostic imaging facilities throughout California, including the Bay Area, Los Angeles and Orange counties, and San Diego.

          From no later than mid-2013 to November 2016, Solakyan conspired with physicians and others to perpetrate a scheme in which physicians were paid bribes and kickbacks in exchange for the referral of workers’ compensation patients. The compensation offered to the corrupt doctors consisted of either cash or referrals of new patients in what is known as a “cross-referral” scheme.

          The conspirators obscured the true nature of their financial relationships to conceal the bribes and kickbacks, including by entering into various sham agreements such as contracts for “marketing,” “administrative services,” and “scheduling,” when in fact the money Solakyan paid amounted to volume-based, per- magnetic resonance imaging (MRI) scan bribes and kickbacks to induce physicians to refer and continue referring patients to Solakyan’s companies.

          Solakyan’s recruiters required physicians to refer a minimum number of patients to receive “cross-referrals,” and those referrals stopped if the physicians failed to meet the minimum quota. Solakyan paid more than $8.6 million in kickbacks disguised largely as sham “scheduling” fees in exchange for MRI referrals, payments which were concealed from patients and health insurers.

          In total, Solakyan submitted and caused to be submitted more than $250 million in claims for medical services procured through the payment of bribes and kickbacks.

          The FBI and the California Department of Insurance, Fraud Division, investigated this matter.

          Assistant United States Attorneys Adam P. Schleifer of the Major Frauds Section and Faraz R. Mohammadi of the Santa Ana Branch Office prosecuted this case.

          LOS ANGELES – An Altadena man who allegedly fired BB guns at the Planned Parenthood facility in Pasadena on multiple occasions was arrested today on federal charges of being a convicted felon in possession of a firearm for carrying a loaded handgun during one of the attacks on the women’s reproductive health clinic.

          Richard Royden Chamberlin, 53, who currently resides in Altadena, but also maintains a residence in Ontario, was arrested this morning by FBI special agents. The arrest was made pursuant to a one-count criminal complaint filed on January 21 that charges Chamberlin with the illegal possession of a .22-caliber handgun.

          Chamberlin is expected to make his initial appearance this afternoon in United States District Court in downtown Los Angeles.

          According to the affidavit in support of the complaint, on multiple occasions in 2020 and 2021, Planned Parenthood Pasadena and San Gabriel Valley reported to the police that it had been fired upon by the occupant of a moving vehicle. Video surveillance from several of these attacks showed a Chevrolet Malibu registered to Chamberlin driving by with its window down when the shots were fired. Planned Parenthood suspected Chamberlin was using a BB gun because of multiple pellets lodged in the facility near the front door.

          “During one of these shootings on March 30, 2021, a patient’s support companion was nearly hit as she waited on the front porch” of the Planned Parenthood facility, the affidavit states. “In addition to incurring the costs of repairs and added security, Planned Parenthood has had to cancel patient appointments and the staff has been emotionally traumatized not knowing when the next shooting will occur.”

          After another reported BB gun shooting on May 7, 2021, the Pasadena Police Department located Chamberlin in his Malibu near the Planned Parenthood facility. Investigators found in Chamberlin’s vehicle multiple BB guns, as well as a Phoenix Arms .22-caliber handgun loaded with 10 bullets in a backpack on the front passenger seat. Chamberlin, who was previously convicted of a felony in Arizona, is prohibited from possessing firearms.

          A criminal complaint 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 being a felon in possession of a firearm, Chamberlin would face a statutory maximum sentence of 10 years in federal prison.

          The investigation into the attacks on the Planned Parenthood facility is continuing.

          This matter was investigated by the FBI’s Civil Rights Squad and the Pasadena Police Department.

          This case is being prosecuted by Assistant United States Attorney Frances S. Lewis of the Public Corruption and Civil Rights Section.

          LOS ANGELES – A Mexican national was sentenced today to 18 months in federal prison for attempting to breach the cockpit of a commercial airliner taxiing at Los Angeles International Airport, assaulting a flight attendant who tried to stop him, then opening the exit door and jumping out of the aircraft.

          Luis Armando Victoria Dominguez, 34, of La Paz, Mexico, was sentenced by United States District Judge Dolly M. Gee, who also ordered him to pay $20,132 in restitution.

          Dominguez pleaded guilty in October 2021 to one count of interference with flight crew members and flight attendant.

          On June 25, 2021, Dominguez was a passenger on United Airlines flight 5365, operated by SkyWest Airlines, that was scheduled to fly from Los Angeles to Salt Lake City. Soon after the plane pushed back from the gate, Dominguez “sprinted” to the front of the aircraft past a seated flight attendant and “began banging on the cockpit door and manipulating the locked doorknob,” according to an FBI affidavit that was filed with a criminal complaint in this case.

          When he failed to gain entry to the cockpit, Dominguez pushed past the flight attendant and went to the emergency exit on the right side of the plane, where he managed to partially open the door, causing the emergency slide to partially deploy, the affidavit states. While a nearby passenger attempted to restrain him, Dominguez managed to get away and jump from the aircraft, missing the emergency slide.

          “Once…Dominguez landed on the tarmac, he began crawling away from the aircraft. His right leg appeared broken,” the affidavit states.

          “[Dominguez] assaulted a flight attendant and endangered the lives of countless others when he attempted to breach the cockpit of the plane and then partially deployed a slide while the plane was taxiing, causing the pilot to immediately shut off the engine to avoid having the slide sucked into the engine,” prosecutors wrote in a sentencing memorandum. “[Dominguez’s] unruly conduct damaged the plane, taking it out of commission for four days.”

          The FBI investigated this matter and received substantial assistance from the Los Angeles Airport Police Department.

          Assistant United States Attorney Lyndsi C. Allsop of the General Crimes Section prosecuted this case.

          LOS ANGELES – A federal grand jury indictment alleging a scheme to smuggle weapons and ammunition to one of the world’s most violent and dangerous transnational criminal organizations has led to the arrest of four defendants, the Justice Department announced today.

          The arrests on January 19 are the result of Operation Semper Infidelis, a Los Angeles Strike Force investigation that targeted a domestic weapons trafficking organization that provided firearms and ammunition to the Cártel Jalisco Nueva Generación (CJNG), one of the largest and most violent drug cartels in Mexico. In conjunction with the arrests, authorities unsealed a 23-count indictment that charges six defendants with conspiring to violate federal export laws by illegally bringing the weapons and ammunition to CJNG operatives in Mexico.

          The indictment alleges that a Whittier man led the gun trafficking organization that used narcotics proceeds to purchase assault rifles, hundreds of thousands of rounds of assault rifle ammunition, and numerous machine gun parts and accessories – some of which were smuggled into Mexico, mostly since the beginning of the COVID-19 pandemic.

          “This case alleges a scheme to provide military-grade firepower to a major drug trafficking organization that commits unspeakable acts of violence in Mexico to further its goal of flooding the United States with dangerous and deadly narcotics,” said United States Attorney Tracy L. Wilkison. “We will continue our efforts to dismantle drug cartels by targeting their leadership and well as their soldiers, intercepting their narcotics and ill-gotten financial gains, and prosecuting those who provide the resources that allow the cartels to engage in acts of violence.”

          “The defendants in this case smuggled sophisticated weaponry out of the United States to one of the most violent cartels in Mexico whose members target not only rival gangs, but innocent Mexican citizens and Mexican law enforcement,” said Kristi K Johnson, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “Interdictions by our task force, coupled with this indictment, have dealt a blow to firearms trafficking groups on which this cartel relies to facilitate their violent operations.”

          The indictment charges all six defendants in a conspiracy to violate export administration regulations that “restrict the export of items that could make a significant contribution to the military potential of other nations or that could be detrimental to the foreign policy or national security of the United States.” The indictment further charges five of the defendants with various attempted smuggling counts. The leader of the organization and his son are charged in a money laundering conspiracy, and two of the defendants are charged with being felons in possession of ammunition.

          The six defendants named in the indictment are:

• Marco Antonio Santillan Valencia, 51, of Whittier, the alleged leader of the organization that obtained and supplied weapons, firearms parts and ammunition to the CJNG;
• Anthony Marmolejo Aguilar, 30, of Whittier, who is currently in state custody on separate charges in North Carolina;
• Marco Santillan Jr., 29, of Pahrump, Nevada, who is the son of the alleged leader of the ring and who was arrested in Oregon;
• Michael Diaz, 33, of Moreno Valley;
• Luis De Arcos, 51, of Midway City; and
• Rafael Magallon Castillo, 34, of Oceano, who is a fugitive believed to be in Mexico.

          At their arraignments on January 19 in United States District Court in Los Angeles, Santillan, De Arcos and Diaz entered not guilty pleas and were ordered to stand trial in March. Santillan Jr. was ordered to appear for an arraignment in Los Angeles on February 2.

          The indictment alleges that members of the Santillan gun trafficking organization obtained firearms in Oregon and Nevada, consolidated shipments in or near Pahrump and Whittier, and smuggled the prohibited items to Mexico. The organization further obtained ammunition from various states – sometimes anonymously ordering pallets of bullets – to be delivered to a stash location in Nevada.

          The conspiracy, which the indictment states began no later than March 2020 and operated for about one year, also obtained thousands of rounds of .50-caliber armor piercing incendiary rounds in Arizona, consolidating them in Nevada before attempting to smuggle them into Mexico.

          That indictment states that on May 26, 2020, in a Facebook message, “Santillan Jr. informed another individual that members of ‘Mencho’s cartel’ – referring to the CJNG – ‘are buying everything’ – referring to firearms and firearms parts.” Later that day, according to the indictment, Santillan Jr. sent a video of himself via Facebook holding a fanned stack of $100 bills and saying the “sale of firearms to the CJNG was profitable.”

          During the Semper Infidelis investigation, authorities seized six assault rifles, over 250,000 rounds of assault rifle ammunition, over $300,000 worth of weapons parts and kits to assemble several “mini-guns” – six-barrel rotary machine guns capable of firing up to 6,000 rounds per minute.

          Marmolejo, Santillan Jr. and Diaz allegedly made large purchases of .50-caliber armor piercing incendiary ammunition and .223-caliber ammunition that was to be transported to Mexico. Days later, on July 31, 2020, in operations in Pahrump and San Bernardino County, law enforcement seized firearms parts and ammunition, including well over 100,000 rounds of .223-caliber and approximately 10,000 rounds of .50-caliber armor piercing incendiary ammunition.

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

          The charge of conspiracy to violate export administration regulations carries a statutory maximum sentence of 20 years in federal prison, while the attempted smuggling counts each carry a maximum penalty of 10 years in prison.

          Since the January 19 takedown, authorities continued efforts to arrest Magallon, but they are now seeking the public’s assistance in bringing him to justice. Anyone with information about Magallon’s whereabouts is asked to contact the FBI’s Los Angeles Field Office at (310) 477-6565.

          The Los Angeles Strike Force is led by the FBI, the Drug Enforcement Administration and the United States Attorney’s Office. Homeland Security Investigations, IRS Criminal Investigation, the Los Angeles Police Department and the United States Marshals Service are members of the Strike Force. The Bureau of Alcohol, Tobacco, Firearms and Explosives and the South Gate Police Department provided substantial assistance during this investigation.

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

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

          LOS ANGELES – A South Korean national was sentenced today to 24 months in federal prison for attempting to illegally export to Asia live Dudleya succulent plants worth at least $150,000 that he and his co-schemers had pulled out of the ground at remote state parks in Northern California.

          Byungsu Kim, 46, was sentenced by United States District Judge George H. Wu, who also ordered him to pay $3,985 in restitution to the State of California for expenses related to replanting the stolen plants after his arrest. Kim pleaded guilty in September 2021 to one count of attempting to export plants taken in violation of state law.

          On October 11, 2018, Kim and co-defendants Youngin Back, 47, and Bong Jun Kim, 46, traveled by car from Los Angeles International Airport to Crescent City, California. From October 14 to October 16, Kim and the co-defendants harvested numerous Dudleya plants from DeMartin State Beach in Klamath, California, and from Del Norte Coast Redwoods State Park.

          Kim knew the taking of the Dudleya plants was unlawful. He had conducted internet searches on his smartphone for “poaching succulents” and “dudleya” and had read a press release regarding the arrest and convictions of three other Dudleya poachers.

          On October 22, 2018, Kim and the co-defendants traveled from Northern California to a nursery in Vista and unloaded the Dudleya plants that they had poached during the previous week. The following day, the men traveled to Russian Gulch State Park in Mendocino County, where, wearing backpacks and using hand-held radios to communicate, they pulled additional Dudleya plants out of the ground before returning once again to the Vista nursery.

          Prior to the plants’ shipment, Kim scheduled an inspection with a county agriculture official at the Vista nursery and falsely told her the government-issued certificate necessary for the plants’ exportation should list 1,397 Dudleya plants (259 pounds/117.5 kilograms) for export to South Korea and that the “place of origin” of the plants was San Diego County.

          The defendants then transported the plants to a commercial exporter in Compton, to whom Kim intended to present the fraudulently obtained certificate so the Dudleya plants could be smuggled to South Korea. When the defendants left, local law enforcement executed a search warrant at the cargo shipping company and found 3,715 Dudleya plants in boxes that were labeled “Rush” and “Live Plants.” These were the plants the defendants had pulled out of the ground from public lands in Northern California.

          At the time that Kim and the co-defendants engaged in the illegal conduct, they did not have a scientific permit nor a federal permit that would allow them to harvest Dudleya plants. Kim also admitted to being the scheme’s organizer.

          Although California law enforcement officials had confiscated Kim’s passport following his arrest on state charges relating to his October 2018 conduct, Kim fraudulently obtained a new South Korean passport in January 2019 by falsely claiming to the South Korean Consulate in Los Angeles that he had lost his passport.

          In May 2019, soon after Kim learned of the federal criminal charges pending against him in this case, he and Back fled to Mexico on foot through the Tijuana-San Ysidro border crossing. Using his fraudulently obtained passport, Kim then flew with Back from Mexico to China, and then flew from China to South Korea.

          Kim was arrested in South Africa in October 2019 for charges related to a similar scheme in which he illegally collected plants from protected areas in that nation to export to South Korea. Kim pleaded guilty to the criminal charges in South Africa and was extradited to the United States in October 2020 after spending a year in custody there. He has remained in federal custody since October 2020.

          “[Kim’s] willful criminal conduct in October 2019 was not an isolated event: he had carried out the same scheme repeatedly in California,” prosecutors wrote in a sentencing memorandum. “[Kim] had traveled to the United States more than 50 times since 2009. Customs records show that he was travelling for succulent-related purposes and often with tens of thousands of dollars in cash (sometimes declared, sometime not) and fake phytosanitary certificates.”

          Bong Jun Kim pleaded guilty in July 2019 to one count of attempting to export plants taken in violation of state law. He served four months in federal custody and was released in October 2019 after Judge Wu imposed a sentence of time served.

          Back remains a fugitive.

          The California Department of Fish and Wildlife, the United States Fish and Wildlife Service, Homeland Security Investigations, U.S. Customs and Border Protection, San Diego County’s Department of Agriculture, Weights and Measures, the U.S. Department of Agriculture, and the California State Parks investigated this matter. The Justice Department’s Office of International Affairs provided significant assistance in securing the defendant’s extradition from South Africa.

          Assistant United States Attorneys Matthew W. O’Brien and Dennis Mitchell of the Environmental and Community Safety Crimes Section prosecuted this case.

          LOS ANGELES – A Baldwin Hills man pleaded guilty today to a federal criminal charge for conning victims nationwide into giving him their high-end and exotic vehicles with bogus promises he would find other people to take over their car leases.

          Geoffrey Eldridge Hull, 41, pleaded guilty to one count of wire fraud.

          According to his plea agreement, from April 2016 to November 2019, Hull marketed himself and his companies as being able to find people to take over leases for high-end and exotic car – such as Bentleys, Ferraris and Maseratis – from individuals no longer wishing to continue those leases. Despite assuring victims that his venture was successful, Hull and his companies did not find people to take over these leases.

          Hull agreed to cover monthly lease payments and promised leaseholders that he would quickly find credit-qualified buyers to legally assume the lease through the original finance company. Hull used a longtime friend and business associate to vouch for the quality of the program.

          In fact, Hull offered the luxury cars for rent and passed little of the rent money to the original leaseholders, who were still responsible for lease payments. Furthermore, Hull made few, if any, timely car lease payments.

          Hull ignored victims’ requests for the return of their vehicles, prompting some to make stolen car reports to law enforcement agencies. When some victims’ cars were returned after law enforcement seizures, repossession and other means, the cars were often damaged, had incurred toll and parking violations, or had been driven over the allotted mileage.

          When victims posted negative reviews online about Hull and his company, Hull would change his company name and resume the scheme. The company names Hull used to operate his scheme included Exotic Lease Transfer, Luxe Lease Transfer, Shift Lease, Veer Lease, Torque Transfer, Haven Transfer, Early Lease, and Open Lease Transfer. Hull, who has three prior convictions for grand theft auto, also used a series of aliases as part of the scheme, including “Geoff Eldredge,” “Geoff Eldridge,” “Jefrii Eldridge,” “Geoffrey Hulle,” “Jeff Bluthenthal,” and “Jeff H.”

          In total, Hull defrauded at least 128 individuals and caused an actual loss of at least $1,560,321.

          United States District Judge Fernando M. Olguin has scheduled a May 26 sentencing hearing, at which time Hull will face a statutory maximum sentence of 20 years in federal prison.

          Homeland Security Investigations investigated this matter.

          Assistant United States Attorney Carolyn S. Small of the Major Frauds Section is prosecuting this case.

          SANTA ANA, California – A former professional skateboarder was sentenced today to 97 months in federal prison for selling nearly two pounds of methamphetamine and laundering Bitcoin for the dark-web operations of other drug traffickers.

          Evan Jaime Hernandez, 35, of Long Beach, was sentenced by United States District Judge David O. Carter.

          Hernandez pleaded guilty in June 2021 to one count of distribution of methamphetamine and one count of laundering of monetary instruments.

          According to court documents, from at least March 2018 to March 2019, Hernandez distributed narcotics, conspiring with drug dealers to distribute the controlled substances over one of the world’s largest dark-net marketplaces.

          Hernandez not only supplied drugs that were sold over the dark-net by drug dealers such as William Glarner IV, 36, of Irvine, but he also distributed drugs on his own. Glarner pleaded guilty in June 2019 to one count of possession with intent to distribute methamphetamine and is serving a 10-year prison sentence for that offense.

          In March 2018, Hernandez sold approximately 895 grams (1.97 pounds) of methamphetamine for $5,000 to an individual whom he thought was a money launderer, but who was working with federal law enforcement at the time.

          Hernandez also was responsible for laundering Bitcoin for dark-net drug trafficking operations. Hernandez utilized the services of an individual – the same one working with law enforcement – to exchange Bitcoin into cash. Hernandez conducted four Bitcoin-to-cash transactions with the individual, including the exchange of approximately 7.95 Bitcoin for $50,000 in September 2018. By using cryptocurrency and an unlicensed exchanger to liquidate the proceeds, Hernandez intended to conceal the source and ownership of the drug proceeds.

          In total, Hernandez conducted four Bitcoin-to-cash exchanges that totaled approximately $171,300.

          In March 2019, law enforcement conducted a search warrant of a location controlled by one of Hernandez’s drug dealing associates, where agents found 10 vacuum-sealed bags in United States Postal Service and Federal Express envelopes, as well as four separate vacuum-sealed bags and one gallon-size freezer bag. During this search, agents recovered approximately 6.7 kilograms (14.8 pounds) of methamphetamine that Hernandez distributed and which would have been used to fill orders placed on the dark-net.

          “[Hernandez] was involved in a highly sophisticated drug trafficking operation, where he personally took on various roles to ensure its success: obtaining multiple types of narcotics, selling them directly to customers, and laundering money on the backend in a sophisticated manner,” prosecutors wrote in a sentencing memorandum.

          Hernandez has been ordered to forfeit to the government a 2010 Mercedes-Benz, approximately $35,000 in cash, and various watches, necklaces, rings and other jewelry.

          Homeland Security Investigations investigated this matter. The Costa Mesa Police Department, the La Habra Police Department, the Brea Police Department and the Cypress Police Department assisted with the investigation.

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

          LOS ANGELES – Federal prosecutors this evening filed a criminal complaint charging three members and an associate of a Los Angeles street gang with violating a federal racketeering statute for their roles in the robbery and fatal shooting earlier this week of Los Angeles Police Officer Fernando Arroyos.

          The criminal complaint alleges that two of the defendants confronted Arroyos and his girlfriend on the night of January 10, stole items from them, and then shot Arroyos, who died soon after suffering a single gunshot wound.

          The complaint charges the four defendants with violent crime in aid of racketeering (VICAR), whereby the defendants, as consideration for the receipt of anything of value of the Florencia 13 (F13) gang, and to increase and maintain position within F13, murdered Arroyos. F13 is a large, multi-generational street gang that previously has been the subject of federal prosecutions, including two large racketeering cases.

          The defendants in this case were taken into custody on Wednesday by investigators with the Los Angeles County Sheriff’s Department. Those defendants are expected to be transferred to federal custody Friday morning and to make their initial court appearances Friday afternoon in United States District Court.

          The defendants charged today are:

• Luis Alfredo De La Rosa Rios, 29, an F13 member also known as “Lil J”;
• Ernesto Cisneros, 22, an F13 member also known as “Gonzo”;
• Jesse Contreras, 34, an F13 member who claimed a moniker of “Skinny Jack,” but who also may be known as “Flaco”; and
• Haylee Marie Grisham, 18, who is Rios’ girlfriend.

          The VICAR charge carries a potential death penalty – and minimum sentence of life in federal prison without the possibility of parole – because Officer Arroyos allegedly was murdered during the robbery.

          According to the affidavit in support of the criminal complaint, Arroyos – who is identified in the affidavit as “F.A.” – and his girlfriend were looking at a home potentially to purchase on East 87th Street in Los Angeles when a black pickup truck arrived. Rios and Cisneros confronted the victims, pointing guns and removing property from both, including chains from Arroyos’ neck.

          “At some point after Cisneros removed victim F.A.’s chains, victim F.A. and the two suspects exchanged gunfire,” the affidavit states. “Victim F.A. ran toward an alley where he collapsed and the two suspects fled.”

          Investigators have obtained surveillance video showing the black pickup arriving at a residence near the shooting, where Contreras is seen exiting the vehicle and helping an apparently injured Cisneros out of the truck, the affidavit states. All four defendants were in the vehicle and allegedly were at the scene of the robbery and shooting.

          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 Los Angeles County Sheriff’s Department, with assistance from the FBI, is conducting the investigation in this matter.

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

          LOS ANGELES – A federal grand jury indictment returned this week charges two Chinese nationals with operating an illegal money transfer business that moved funds from the China to the United States, in some cases using proceeds of romance scams to provide money to their U.S.-based customers.

          A four-count superseding indictment filed Wednesday charges two people currently being sought by the FBI. The new indictment, which supersedes an indictment filed in 2018, charges both defendants with conspiracy to operate an unlicensed money transmitting business and witness tampering offenses.

          The defendants in this case are Dianwei Wang, 31, and Zhili “Ethan” Song, 36, both of whom previously resided in West Covina. Wang and Song are fugitives.

          Wang and Song allegedly operated an “informal value transfer system” (IVTS), which the indictment describes as “a network of people who would receive funds from a customer in one location for the purpose of making roughly equivalent funds available (minus a fee) to the customer in another location, often in a different country.” An IVTS can be known by various names, including “fei ch’ien” in China and “hawala” in the Middle East.

          As part of the scheme alleged in the indictment, Wang and Song told their IVTS customers to deposit money into Chinese bank accounts they controlled or had access to with a promise that the money – minus their fee – would be deposited into accounts their customers designated in the United States.

          Over the course of about eight months in 2017, Wang and Song transferred or attempted to transfer approximately $2 million from China to the United States for their IVTS customers, the indictment states.

          “To fulfill their agreements to provide U.S. dollar-denominated funds to the IVTS customers in the United States, defendants Wang and Song would use funds they obtained from third parties, including romance scam victims,” according to the indictment.

          Wang allegedly directed people associated with the online scammers to send him checks or wire him funds derived from romance scam victims, most of whom were older adults. In some cases, Wang allegedly directed the people associated with scammers to have victims send checks directly to him.

          Over a six-month period in 2017, in 22 transactions detailed in the indictment, Wang and Song caused romance scam victims to send nearly $1.1 million to them or to their IVTS customers.

          Wang and Song also allegedly lied to the FBI in late 2017 when they were asked about wire transfers to a Chinese national residing in Southern California. Both defendants are charged with conspiracy to obstruct justice for telling the third Chinese national to falsely tell the FBI that she was buying a house with Wang as a way of explaining the wire transfers and supporting their own false statements to FBI agents. Counts three and four in the indictment separately charge Wang and Song with witness tampering.

          More than $450,000 in funds seized from accounts associated with the third Chinese national are the subject of a pending civil asset forfeiture proceeding. 

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

          The charge of conspiracy to operate an unlicensed money transmitting business carries a statutory maximum sentence of five years in federal prison. The obstruction of justice and witness tampering charges each carry a maximum penalty of 20 years in federal prison.

          The FBI previously seized approximately $1.9 million from accounts controlled by Wang, Song and other Chinese nationals. No claims were made on approximately $376,000 seized from Wang’s accounts, and that money has been forfeited to the United States. The United States intends to seek forfeiture of the remaining funds.

          The FBI is investigating this matter.

          Anyone with information concerning the whereabout of Wang or Song should call their local FBI office, or the nearest U.S. embassy or consulate. In Los Angeles, the FBI can be reached at (310) 477-6565.

          Romance scams occur when a criminal adopts a fake online identity to gain a victim’s affection and trust. The scammer then uses the illusion of a romantic or close relationship to manipulate and/or steal from the victim. Some romance scam victims become witting or unwitting participants in other scams, by agreeing to receive money into their accounts and transfer the money to third parties as directed by their scammer contact. Never send money to, or receive and transfer money for, anyone who has only communicated with you online or by phone. If you or someone close to you may be caught in a romance scam, stop sending money and report the activity to the Internet Crime Complaint Center (www.ic3.gov) or the FBI.

          Assistant United States Attorney Monica E. Tait of the Major Frauds Section is prosecuting the criminal case, and Assistant United States Attorney Katharine Schonbachler of the Asset Forfeiture Section is handling the forfeiture matters.

 

INFORMATION

 

PLEA AGREEMENT

          LOS ANGELES – A former senior official at the Los Angeles City Attorney’s Office has agreed to plead guilty to a federal charge for threatening 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, the Justice Department announced today.

          Thomas H. Peters, 55, of Pacific Palisades, agreed to plead guilty to a one-count information charging him with aiding and abetting extortion, a crime that carries a statutory maximum sentence of 20 years in federal prison.

          The information and plea agreement were filed today in United States District Court. Peters is expected to make his initial court appearance on February 7.  

          This is the fourth plea agreement federal prosecutors have filed in relation to the ongoing investigation concerning corruption and collusion involving the Los Angeles Department of Water and Power (LADWP) and the Los Angeles City Attorney’s Office. Peters is cooperating with the investigation.

          Peters served as the chief of the Civil Litigation Branch of the Los Angeles City Attorney’s Office from February 2014 to March 2019. By December 2014, the city and LADWP were facing multiple class-action lawsuits over the flawed rollout of a new billing system during the previous year.

          Also in December 2014, the City Attorney’s Office hired Paul O. Paradis, 58, a New York-based lawyer, and Paul R. Kiesel, a Beverly Hills plaintiffs’ attorney, as special counsel to represent the city in an anticipated lawsuit against PricewaterhouseCoopers (PwC), the vendor the city blamed for the billing system debacle in which thousands of ratepayers were massively overcharged, while others were significantly undercharged, resulting in financial losses to the city and LADWP.

          The city’s lawsuit, filed in March 2015, alleged that PwC caused hundreds of millions of dollars in damages due to the faulty billing system. The city agreed to pay Paradis and Kiesel 19.9 percent of any recovery in the litigation, meaning the two lawyers stood to gain tens of millions of dollars in attorneys’ fees from the case.

          Around this time, Paradis simultaneously was representing Antwon Jones, an LADWP ratepayer suing the city and the department for billing overcharges he incurred from the billing system debacle. By January 2015, members of the City Attorney’s Office were aware that Paradis was simultaneously representing both the city and Jones.

          In April 2015, an Ohio attorney whom Paradis had enlisted to purportedly represent Jones filed a Paradis-drafted lawsuit against the city and LADWP. Paradis secretly agreed to accept – and eventually did accept – an illegal kickback of nearly $2.2 million for steering the lawsuit to the Ohio attorney. Paradis has agreed to plead guilty to a bribery charge for this offense.

          By the spring of 2015, Peters was informed by a senior City Attorney’s Office official that Jones v. City was a friendly lawsuit intended as a vehicle for the city to settle globally and on its desired terms all claims related to the LADWP billing debacle, that Paradis had referred the case to the Ohio attorney for that purpose, and that the senior City Attorney official had directed and authorized this strategy before the complaint was filed.

          Despite objections in an internal email in August 2015 from the city’s class action counsel that a proposed $13 million attorney fee award was unjustifiably high because, in part, the Ohio attorney had done “little demonstrative work to advance the interests of the class,” the city agreed to the fee proposal.

          In July 2017, a Los Angeles Superior Court judge issued a final approval of the $67 million settlement agreed to by the parties in Jones v. City, including approximately $19 million in plaintiffs’ attorney fees.

          According to the plea agreement filed today, on November 16, 2017, Peters learned from Paradis that a former long-time employee of Kiesel’s – identified in court documents as “Person A” – had stolen or improperly retained from Kiesel’s law firm certain documents that would show the city’s undisclosed collusion with the Ohio attorney in the Jones v. City lawsuit. Person A had threatened to reveal the documents if Kiesel did not pay her to return them.

          Peters, who knew Person A from when they worked together at Kiesel’s law firm, understood that she had demanded payment of more than $1 million. Person A also threatened to appear at the next hearing in the City v. PwC case – scheduled for December 4, 2017 – in which the court was set to hear arguments on PwC’s motion to compel the city to produce the Jones v. PwC draft complaint. Peters knew that this document would lead PwC to discover the undisclosed collusive origins of the Jones v. City case, which would be damaging both to the city’s litigation position and to the reputation of the City Attorney’s Office.

          On November 17, 2017, Peters met with Kiesel, Paradis and Paradis’ law partner to discuss Person A’s threats. Kiesel complained that Person A’s threats and demands constituted extortion and expressed reluctance to pay her. During this meeting, Peters ordered Kiesel to pay Person A’s monetary demands – if necessary – or potentially be fired as the city’s special counsel in the PwC litigation. Peters did not have the direct authority to fire Kiesel.

          By the time of the November 17, 2017 meeting, Kiesel and his law firm had invested thousands of hours of uncompensated labor into City v. PwC. Additionally, Kiesel had borne more than $30,000 in non-labor costs on behalf of the city for the PwC litigation.

          On December 1, 2017, Peters met with other senior members of the City Attorney’s Office and updated them on the status of Person A’s threats. The update included the fact that Kiesel had unsuccessfully attempted to negotiate with Person A at LADWP headquarters, and the fact that Person A had threatened to appear at the City v. PwC hearing the following Monday and reveal the documents showing the city’s collusion. Among other things, Peters conveyed that Kiesel had described Person A’s threats as “extortion.” Peters was directed to take care of the situation, and he agreed to do so.

          After the December 1, 2017 meeting, Peters sent a text message to Paradis advising that senior leadership at the City Attorney’s Office was “not firing anyone at this point” – meaning that a decision to seek termination of the special counsel contract had not been made at the meeting – but warning that others were concerned about “the prospect of a sideshow” if Person A made good on her threat to appear in court the following Monday and reveal the documents showing the city’s collusion.

          On December 4, 2017, Peters, Kiesel, Paradis and Paradis’ law partner, along with a friend of Kiesel’s who knew Person A, attended the hearing in City v. PwC. Person A appeared at the December 4 hearing and attempted to give documents to a court employee, who advised Person A that the court would not accept documents from a non-party. Person A approached the lead counsel for PwC with the documents, stating that she had information that could help PwC’s case. PwC’s counsel exchanged business cards with Person A and asked her to call him.

          Kiesel’s friend – acting at Kiesel’s direction – then approached Person A and asked to reinitiate negotiations of her monetary demands to Kiesel.

          After the hearing, Peters, Kiesel, Paradis and Paradis’ law partner met in Peters’ office, where Peters reiterated that Kiesel needed to pay Person A’s monetary demands to obtain the return of the documents, or he would be fired, which would mean significant financial losses to Kiesel and his law firm.

          On the evening of December 4, 2017, Person A, Kiesel and Kiesel’s friend met at a restaurant and further discussed Person A’s demands. At the dinner, Kiesel agreed to pay $800,000 to Person A to prevent her from releasing the documents.

          At approximately 9:15 p.m. on December 4, 2017, via text message, Kiesel informed Peters of the terms of the agreement reached with Person A, including that Kiesel would pay Person A $800,000 and that Person A would return the documents to Kiesel. Peters replied to Kiesel later that night, stating, “Good job,” and directing Kiesel to ensure that there was a strong confidentiality agreement with Person A regarding the $800,000 payment and the documents.

          In May 2019, after Peters had resigned from the City Attorney’s Office, he received an inquiry from that office asking what he recalled about the 2017 payment to Person A. Understanding that the City Attorney’s Office was probing whether Peters would, if asked by someone outside the city, reveal the extortion or the underlying collusion, Peters falsely replied that the matter had only involved an employment dispute.

          According to his plea agreement, Peters conveyed that he would continue to conceal the extortion and collusion by intentionally omitting from his reply that the “settlement” had involved Kiesel paying Person A $800,000 in extortion money to conceal the city’s collusion, that Peters had directed Kiesel to satisfy Person A’s monetary demands or be fired as special counsel, and that Peters had discussed the situation with and received direction from senior members of the City Attorney’s Office.

          In addition to Peters and Paradis, prosecutors have secured plea agreements from David H. Wright, 62, of Riverside, LADWP’s former general manager, and David F. Alexander, 54, of Arcadia, a former senior cyber official at LADWP, stemming from corruption at the department.

          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 are prosecuting this case.

          LOS ANGELES – A Montebello man who provided a lethal dose of fentanyl to a victim was sentenced today to 400 months in federal prison.

          Edwin Oliva, 30, was sentenced by United States District Judge André Birotte Jr.

          Oliva pleaded guilty in September 2021 to one count of distribution of fentanyl resulting in death and one count of possession with intent to distribute heroin. He has been in federal custody since March 2019.

          During the early hours of February 28, 2019, Oliva gave the victim a line of drugs to snort and did not tell her the substance was fentanyl – a powerful synthetic opioid. Believing the substance to be cocaine, the victim ingested the drug, which resulted in a fatal overdose.

          Oliva did not call 911 or otherwise seek medical care for the victim until nearly six hours after texting a friend that the victim was not breathing.

          In the nearly six hours between when Oliva learned that the victim was not breathing and when he ultimately called 911, he cleaned his apartment, removing the fentanyl and other evidence of drug trafficking. He placed these items in the trunk of his significant other’s car and then drove away from the apartment in attempt to hide it from law enforcement.

          Later that day, Montebello Police officers executed a search warrant on the car and discovered 1.9 kilograms (4.2 pounds) of heroin, 21 grams of fentanyl, 1.4 kilograms (3.2 pounds) of marijuana, 0.4 grams of methamphetamine, drug paraphernalia, a loaded .45-caliber semiautomatic pistol, a blue flip phone he used to conduct drug transactions, and a notebook he used as a pay/owe ledger.

          While in custody in March 2019, Oliva directed his significant other to destroy evidence in the case, and he also directed her to tell law enforcement that the blue flip phone was a play phone for their children.

          The Drug Enforcement Administration and the Montebello Police Department investigated this matter.

          Assistant United States Attorneys Maria Jhai and Kathrynne Seiden of the General Crimes Section prosecuted this case.

          LOS ANGELES – A Huntington Park man was sentenced this morning to 252 months in federal prison for committing 21 armed robberies and attempted armed robberies of Trader Joe’s grocery stores throughout Southern California during a three-month crime spree.

          Gregory Johnson, 44, was sentenced by United States District Judge Virginia A. Phillips for the robberies in which Johnson used a semi-automatic handgun to terrorize store employees and customers.

          Johnson pleaded guilty in May 2021 to one count of interference with commerce by robbery (Hobbs Act) and one count of brandishing a firearm in furtherance of a crime of violence. Johnson admitted he committed armed robberies of Trader Joe’s grocery stories between August 28 and December 4, 2020 in Eagle Rock, Sherman Oaks, Chatsworth, Glendale, Pasadena, Monrovia, San Dimas, Culver City, Manhattan Beach, Rancho Palos Verdes, Cerritos, Brea, Santa Ana, Agoura Hills, Tustin and Irvine. He also attempted to rob Trader Joe’s stores in Simi Valley and Corona. After Johnson robbed the stores in Rancho Palos Verdes and Brea, he returned weeks later to rob them again.

          On December 4, 2020, Johnson and his son, Gregory Eric Johnson, 20, of South Los Angeles, were arrested after a witness gave law enforcement a description of the Johnsons’ getaway car and its license plate, according to court documents. After stopping the vehicle, law enforcement recovered Johnson’s gun and other items from the vehicle. 

          “The violent, terroristic nature of [Johnson’s] criminal conduct cannot be overstated,” prosecutors wrote in a sentencing memorandum. “[Johnson] repeatedly brandished and used a firearm to control and instill fear in innocent civilians. These crimes terrorized the businesses’ employees and customers. These crimes have a lasting impact of emotional trauma on the victims.”

          Prosecutors further noted defendant’s “serious and violent criminal history,” including a prior armed robbery conviction in 2000 for robbing a Trader Joe’s store that resulted in a 12-year sentence. Johnson was on probation in several other cases when he committed Trader Joe’s armed robbery spree.

          Gregory Eric Johnson was sentenced in December 2021 to two years in federal prison for his role in his father’s crime spree. He pleaded guilty in March 2021 to a two-count information charging him with interference with commerce by robbery for robbing Trader Joe’s stores in Chatsworth and Chino Hills in December 2020. 

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

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