Eastern District of California

SACRAMENTO, Calif. — U.S. Attorney McGregor W. Scott announced today that Assistant U.S. Attorney Matthew D. Segal will serve as the District Election Officer (DEO) for the Eastern District of California in connection with the Justice Department’s nationwide Election Day Program for the November 6, 2018, general election. The DEO is responsible for overseeing the District’s handling of complaints of election fraud and voting rights abuses in consultation with Justice Department Headquarters in Washington.

Counties in the Eastern District are: Alpine, Amador, Butte, Calaveras, Colusa, El Dorado, Fresno, Glenn, Inyo, Kern, Kings, Lassen, Madera, Mariposa, Merced, Modoc, Mono, Nevada, Placer, Plumas, Sacramento, San Joaquin, Shasta, Sierra, Siskiyou, Solano, Stanislaus, Sutter, Tehama, Trinity, Tulare, Tuolumne, Yolo, and Yuba.

U.S. Attorney Scott said, “Every citizen must be able to vote without interference or discrimination and to have that vote counted. Ensuring free and fair elections depends in large part on the cooperation of the American electorate. It is imperative that those who have specific information about discrimination or election fraud make that information available immediately to our office, the FBI, or the Civil Rights Division of the Department of Justice. We will act promptly and aggressively to protect the integrity of the election process.”

The Department of Justice has an important role in deterring election fraud and discrimination at the polls, and combating these violations whenever and wherever they occur. The Department’s long-standing Election Day Program furthers these goals, and also seeks to ensure public confidence in the integrity of the election process by providing local points of contact within the Department for the public to report possible election fraud and voting rights violations while the polls are open on election day.

Federal law protects against such crimes as intimidating or bribing voters, buying and selling votes, impersonating voters, altering vote tallies, stuffing ballot boxes, and marking ballots for voters against their wishes or without their input. It also contains special protections for the rights of voters, and provides that they can vote free from acts that intimidate or harass them. For example, actions of persons designed to interrupt or intimidate voters at polling places by questioning or challenging them, or by photographing or videotaping them, under the pretext that these are actions to uncover illegal voting may violate federal voting rights law. Further, federal law protects the right of voters to mark their own ballot or to be assisted by a person of their choice (where voters need assistance because of disability or illiteracy).

The franchise is the cornerstone of American democracy. We all must ensure that those who are entitled to the franchise exercise it if they choose, and that those who seek to corrupt it are brought to justice. In order to respond to complaints of election fraud or voting rights abuses on November 6, 2018, and to ensure that such complaints are directed to the appropriate authorities, DEO Segal will be on duty in this district while the polls are open. He can be reached by the public at the following telephone numbers: (916) 554-2700 and (916) 554-2708, and by email at matthew.segal@usdoj.gov.

In addition, the FBI will have special agents available in each field office and resident agency throughout the country to receive allegations of election fraud and other election abuses on Election Day. The FBI can be reached by the public in the Eastern District of California at (916) 746-7000.

Complaints about possible violations of the federal voting rights laws can be made directly to the Civil Rights Division’s Voting Section in Washington, DC by phone at 1-800-253-3931 or (202) 307-2767, by fax at (202) 307-3961, by email to voting.section@usdoj.gov or by complaint form at http://www.justice.gov/crt/complaint/votintake/index.php.

FRESNO, Calif. — Maximiliano Farias-Martinez (Farias), 49, a Mexican national residing in Stevinson, pleaded guilty today to conspiring to cultivate marijuana, U.S. Attorney McGregor W. Scott announced.

According to court documents, Farias supervised Jose Manuel Sanchez-Zapien (Sanchez), 38, of Dos Palos, who delivered supplies to growers at a marijuana cultivation site in the Sequoia National Forest. The drop point has been used numerous times in the past to supply marijuana growers in the Slick Rock Creek drainage. Law enforcement officers found over 20,000 marijuana plants at the site.

The cultivation operation caused significant damage to public land. Approximately three acres were stripped of vegetation and the ground was terraced to accommodate the marijuana plants. Large amounts of ammonium nitrate and other fertilizers were found at the site. Insecticide containers were found scattered around the site and trash was scattered throughout the grow site. The cost to clean up the area is $8,665. Farias has agreed to make restitution to the Forest Service in that amount.

Farias is scheduled for sentencing on January 22, 2019, in federal court in Fresno by U.S. District Judge Dale A. Drozd. He faces a minimum statutory penalty of 10 years in prison and a maximum statutory penalty of life in prison, along with a $10 million fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

Earlier this year, Sanchez pleaded guilty to the drug conspiracy and was sentenced to 10 years in prison and ordered to pay restitution to the Forest Service.

This case is the product of an investigation by the U.S. Forest Service with assistance from Homeland Security Investigations, Office of Investigations of Social Security Administration, Drug Enforcement Administration, California Department of Fish and Wildlife, and Merced Area Gang and Narcotics Enforcement Team (MAGNET). Assistant U.S. Attorney Karen A. Escobar is prosecuting the case.

SACRAMENTO, Calif. — Jim A. Meron, 54, of Granite Bay, pleaded guilty today to wire fraud related to a government-procurement fraud scheme, U.S. Attorney McGregor W. Scott announced.

According to court documents, between May 2011 and July 2017, Meron used two office supply businesses he operated to defraud federal government agencies out of as much as $3.5 million, in thousands of transactions, by substituting and delivering cheaper, generic versions of expensive, name-brand products his customers ordered, and pocketing the price difference. As part of his plea, Meron agreed to forfeit more than $1.7 million in assets seized during the investigation of his crimes.

Meron’s companies, WOW Imaging Products LLC and Time Enterprises LLC, contracted to sell office supplies to federal agencies through two web-based government sales portals, GSA Advantage, operated by the General Services Administration, and DOD EMall, operated by the Department of Defense. After Meron received payments for the premium products his customers ordered, he obtained compatible products from his suppliers that cost him a fraction of what his customer paid for the brand-name products they ordered. Meron then substituted and delivered those cheaper products for the more expensive products his customers ordered, and retained the difference in cost. Over time, Meron extended his substitution scheme to nearly all orders for those name-brand products, and never intended to deliver what his customers ordered.

This case is the product of an investigation by the General Services Administration Office of Inspector General and the Defense Criminal Investigative Service. Assistant U.S. Attorneys André M. Espinosa and Kevin Khasigian are prosecuting the case.

Meron is scheduled to be sentenced by U.S. District Judge Kimberly J. Mueller on February 4, 2019. Meron faces a maximum statutory penalty of 20 years in prison and a $250,000 fine on each count of conviction. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

SACRAMENTO, Calif. — Vivian Wang, 55, of Alpharetta, Georgia, was sentenced today by U.S. District Judge Kimberly J. Mueller to two years in prison for wire fraud related to a nationwide casino and credit card fraud scheme and aggravated identity theft, U.S. Attorney McGregor W. Scott announced.

According to court documents, between August 2008 and August 2014, Wang participated in a scheme to defraud casinos and credit card companies across the country. The scheme involved using false identities in the names and Social Security numbers of migrant workers to apply for casino credit called “markers” and to open credit card accounts. A marker is a cash advance provided by a casino to a patron, and it is often secured by a check from the patron’s bank account.

Wang, working in concert with her co-defendant, Frank Luo, initially timely repaid several markers at different casinos and several credit cards in order to give the impression of creditworthiness to future casinos and credit card companies. Wang and Luo recruited “clients” to the scheme to induce the casinos and credit card companies to part with even more money under fraudulent pretenses.

Wang and her co-schemers coordinated their gambling activity in order to give the appearance of losing money (and thereby encouraging the casinos to issue future markers) when in fact one schemer would “lose” money while another would gain the same. In other instances, one schemer would surreptitiously deliver the issued gambling chips to another in order to give the appearance of having spent them. At the end of the scheme, Wang and her co-schemers did not repay the casino markers or the significant outstanding credit card balances accrued in a short amount of time once creditworthiness had been established. The combined fraud led to over $1.1 million in losses to casinos and credit card companies.

Wang used an Illinois state identity card in the name of a particular migrant worker to achieve various parts of the scheme, including presentation of that identification at a Placerville-area casino in August 2013 to obtain a $30,000 marker.

This case was the product of an investigation by the Federal Bureau of Investigation and the California Department of Justice’s Bureau of Gambling Control. Assistant United States Attorney Matthew M. Yelovich prosecuted the case.

Luo was sentenced to three years in prison.

SACRAMENTO, Calif. — Sergio Roman Barrientos, 64, of Poway, was sentenced today by U.S. District Judge Garland E. Burrell Jr. to 14 years in prison for conspiring to commit wire fraud affecting a financial institution and bank fraud, U.S. Attorney McGregor W. Scott announced.

According to court documents, from about September 2004 through February 2008, Barrientos and co-conspirators Zalathiel Aguila and Omar Anabo operated an entity named Capital Access LLC, in Vallejo. They preyed on homeowners nearing foreclosure, convinced them to sign away title in their homes, spent any equity those homeowners had saved, and used straw buyers to defraud federally insured financial institutions out of millions of dollars in home loans obtained under false pretenses. The equity stripped from the distressed homeowners’ properties was then used for operational expenses of the scheme and personal expenses of Barrientos and his coconspirators. Vulnerable homeowners across California lost their homes and savings as a result of the scheme, and lenders lost an estimated $10.47 million from the fraud.

This case is the product of an investigation by the Federal Bureau of Investigation and the U.S. Postal Inspection Service. Assistant U.S. Attorneys Matthew M. Yelovich and Todd A. Pickles are prosecuting the case.

Co-defendant Zalathiel Aguila pleaded guilty and is scheduled for sentencing on November 16, 2018. Aguila faces a maximum statutory penalty of 30 years in prison and a $1 million fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

SACRAMENTO, Calif. — Mangal Gill, 58, of San Ramon, was sentenced today by U.S. District Judge Garland E. Burrell, Jr. to 4 years and 3 months in prison for conspiracy to commit bribery and identity fraud, U.S. Attorney McGregor W. Scott announced.

According to court documents, Gill owned Central Truck Driving School, which had locations in Fremont, Lathrop, Fresno, and Salinas. Between April 2012 and April 2015, Gill conspired with employees of the California Department of Motor Vehicles (DMV) and others to fraudulently obtain commercial driver’s licenses (CDL) for Gill’s truck school students and others who did not take or pass the written or the behind-the-wheel driving examinations. Gill received money from those wishing to obtain a CDL and, in turn, paid bribes to the DMV employees, who would access the DMV’s database to alter records indicating that the individuals had passed tests when, in fact, they had not passed them or, in some instances, taken any examination at all. As a result, individuals were able to obtain driver’s licenses, including commercial licenses to operate tractor-trailer trucks and passenger buses, without having taken and passed the requisite written or behind-the-wheel driving tests.

In sentencing Gill, Judge Burrell referred to the criminal conduct as “egregious” and potentially endangering the safety of the public.

This case is the product of a series of ongoing investigations by the Federal Bureau of Investigation; Homeland Security Investigations (HSI); and the California DMV, Office of Internal Affairs. Assistant U.S. Attorneys Todd A. Pickles and Rosanne Rust are prosecuting the case.

Co-defendant Andrew Kimura, a DMV employee, previously pleaded guilty to conspiracy to commit bribery and identity fraud and was sentenced to three years and 10 months in prison. Co-defendant Robert Turchin, a DMV employee, was convicted after a jury trial and is scheduled to be sentenced on November 9, 2018.  Co-defendant Pavittar Dosangh Singh pleaded guilty and is also scheduled for sentencing on November 9, 2018. Emma Klem, another DMV employee, and Kulwinder Dosanjh Singh, a broker, also previously pleaded guilty to conspiracy to commit bribery and identity fraud as part of the same investigation in United States v. Klem, 2:15-cr-00139 GEB, and United States v. Kulwinder Dosanjh, 2:15-cr-00146 GEB, respectively. They are scheduled for sentencing on November 16, 2018.

They face a maximum statutory penalty of 5 to 10 years in prison and a $250,000 fine. The actual sentences, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

FRESNO, Calif. — After a three–day trial, a federal jury found Rolando Felix-Carrazco, 45, of Tulare County, guilty of one count of being a Deported Alien Found in the United States, United States Attorney McGregor W. Scott announced.

According to evidence presented at trial, Felix-Carrazco was born in Mexico and entered the United States illegally. He was removed in February 2015 and again in July 2015. Felix-Carrazco returned to the United States without permission to reenter and was encountered by Tulare County Sheriff’s deputies in March 2018. 

This case was the product of an investigation by Homeland Security Investigations. Assistant United States Attorneys Laura D. Withers and Kathleen A. Servatius are prosecuting the case.

Felix-Carrazco is scheduled to be sentenced by U.S. District Judge Drozd on February 4, 2019. Felix-Carrazco faces a maximum statutory penalty of 20 years in prison and a $250,000 fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

SACRAMENTO, Calif. — The U.S. District Court for the Eastern District of California entered orders in two cases during the last two weeks declaring California statutes unconstitutional because they discriminated against the United States in violation of the United States Constitution.  The cases are United States v. California, No. 2:18-cv-721, and United States v. Kernen Construction, 2:17-cv-1424. 

In United States v. California, decided yesterday, the court struck down California Senate Bill 50 (“SB 50”), enacted in October 2017 for the express purpose of “discourag[ing]” conveyances of federal land.  The statute provided that any conveyance of a property interest in federal land would be void unless the State Lands Commission was given a right of first refusal over government proposals to sell federal land.  After the United States filed suit last spring, California amended the statute, narrowing its application to federal lands managed by the National Forest Service, the federal Bureau of Reclamation, the federal Bureau of Land Management, the U.S. Fish and Wildlife Service, or the National Park Service; and federal lands containing national monuments, national marine sanctuaries, national conservation lands, or lands in the National Register of Historic Places.  Nonetheless, the court ruled that the statute both regulated the United States and discriminated against persons with whom the United States deals, in violation of the Supremacy Clause of the United States Constitution.

The order explains that SB 50 directly regulates the United States and “trespasses on the federal government’s ability to convey land to whomever it wants” by requiring it to offer a right of first refusal.  In addition, the court found the statute discriminates against purchasers and grantees of federal lands, because only they must present a certificate of compliance from the Lands Commission in order to record conveyance documents, and only they are subject to monetary penalties if they fail to do so.    In addition to declaring the statute unconstitutional, the court permanently enjoined California and the Lands Commission from enforcing it.

Attorney General Jeff Sessions issued a statement following the district court’s ruling declaring SB 50 unconstitutional.  He stated, “The court’s ruling is a firm rejection of California’s assertion that, by legislation, it could dictate how and when the federal government sells federal land. This was a stunning assertion of constitutional power by California, and it was properly and promptly dismissed by the district judge.  It is unfortunate that, in the interim, California forced both the Justice Department and the court to spend valuable time and resources to dispose of its baseless position.”  

In United States v. Kernen Construction, the court entered an order on October 16, 2018, ruling that California Health & Safety Code § 13009.2 is unconstitutional because it unconstitutionally discriminated against the United States in violation of the Supremacy Clause.  Section 13009.2 was specifically intended to reduce damages the United States may recover for wildfires caused by the neglect of other parties.  The statute imposed four different limitations on compensation for the United States but did not impose any of those limitations on recoveries by private landowners.  The court found that Section 13009.2 “systemically undervalues damage to National Forest Land,” and explained that when private parties are excluded in this way from the burdens imposed by a state statue, there is no political check against abuse of the statue’s regulatory authority, and the federal government’s operations may be unfairly burdened.  The court found no “sensible distinction” to justify disparate treatment of the United States as a landowner seeking damages caused by wildfires.

“Since the founding of the Republic, it has been fundamental to our constitutional system that a state may not discriminate against the United States or those with whom it deals,” said U.S. Attorney McGregor W. Scott for the Eastern District of California.  “We have vigorously defended this principle in these cases, and we will continue to do so as necessary.”

In United States v. California, the United States is represented by Acting Assistant Attorney General Jeffrey H. Wood of the Justice Department’s Environment and Natural Resources Division, with lead counsel Deputy Assistant Attorney General Eric Grant, Justin Heminger, Stacy Stoller and Peter McVeigh, and Civil Chief David Shelledy and Assistant U.S. Attorney Joseph Frueh of the U.S. Attorney’s Office for the Eastern District of California.  In United States v. Kernen Construction, the United States is represented by Civil Chief Shelledy and Assistant U.S. Attorneys Colleen Kennedy and Benjamin Wolinsky.

FRESNO, Calif. — William Lee, 41, of Fresno, was sentenced today by Chief U.S. District Judge Lawrence J. O’Neill to 10 years in prison for conspiracy to commit murder in aid of racketeering, U.S. Attorney McGregor W. Scott announced. 

According to court documents, Lee conspired with other members of the Dog Pound Gangsters (DPG) enterprise to kill a rival gang member for the purpose of gaining or maintaining status within the DPG organization. DPG is a criminal street gang based in southwest Fresno.  DPG engaged in criminal activities, including conspiracy to commit murder in aid of racketeering, prostitution, drug trafficking, and access device fraud. After DPG member and co-defendant Kenneth Wharry was shot by rival gang members, Lee and others conspired to conduct a retaliatory shooting against rival gang members. The conspiracy culminated in an April l7, 2018, shooting at Fink White Park in Fresno, where a DPG member opened fire in the park.

This case is the product of an investigation by the California Department of Justice, California Highway Patrol Special Operations Unit; Fresno Police Department; the Federal Bureau of Investigation; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the Internal Revenue Service Criminal Investigation; the Multi-Agency Gang Enforcement Consortium (MAGEC); the Fresno County District Attorney’s Office; and California Department of Corrections and Rehabilitation. Assistant U.S. Attorneys Kimberly A. Sanchez, Jeffrey A. Spivak, and Christopher D. Baker prosecuted the case.

This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. Attorney General Jeff Sessions reinvigorated PSN as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally based strategies to reduce violent crime.

FRESNO, Calif. — Douglas Jason Way, aka Jason Way, 45, of Evanston, Illinois, was sentenced Monday to 11 years in prison following his conviction by a jury on five felony drug charges and two fraudulent misbranded drug charges, announced U. S. Attorney McGregor W. Scott; Special Agent in Charge Christopher Nielsen, Drug Enforcement Administration, San Francisco Field Division; and Special Agent in Charge Tara Sullivan, IRS Criminal Investigation, Oakland Field Office.

The convictions concerned the manufacture and distribution of 24 tons of synthetic cannabinoids or designer drugs, commonly known at the street level as “spice,” “K2,” “herbal incense,” or “potpourri.”

Way was convicted following a four-week jury trial in federal court in Fresno in June and July 2018. Following his release from prison, Way will serve a three-year term of supervised release. As a further part of the sentence, U.S. District Judge Dale A. Drozd ordered a money judgment of $589,199.48 against Way. In addition to this money judgment, the U.S. Attorney’s Office previously forfeited more than $6.5 million of drug proceeds: $6,488,000 in cash and $191,000 in other assets, including a 2013 Ford F350 pickup truck and a 2014 Airstream travel trailer. 
 

“Way led an illegal business manufacturing and distributing large quantities of harmful, mislabeled synthetic cannabinoids nationwide for profit,” said United States Attorney Scott.  “The sentence imposed today reflects the seriousness of that crime and the danger these drugs pose to our communities. I am grateful to the dedicated efforts of our federal law enforcement partners, who conducted an intensive two-year investigation that led to Way’s prosecution and conviction, as well as the disgorgement of his illegally-gotten gains. We will continue to investigate and prosecute drug traffickers who masquerade as legitimate businessmen.”

 “Synthetic cannabinoids are dangerous designer drugs that destroy lives. Today, Way is being held accountable for producing this poison and distributing it in communities throughout the country,” stated DEA Special Agent in Charge Chris Nielsen. “The success of this extensive investigation can be attributed to strong law enforcement partnerships and good police work.”

The trial evidence established that Way was the Executive Leader of ZenBio, LLC, a company that manufactured and distributed misbranded synthetic cannabinoids throughout the country, including to Stuffed Pipe smoke shops and other retail establishments in the Central Valley. The processing labs were located in Millbrae and Stockton, California, where raw synthetic drugs from China would be diluted with acetone and mixed in cement mixers with flavoring and smokeable dried plant material. The finished product would be packaged in opaque metallic bags and sold as “potpourri” or “incense” under various brand names, including Bizarro, Headhunter, Neutronium, Sonic Zero, and Orgazmo. Documents found at the processing labs and in their computers showed that Way understood that XLR11, also known as 5-F-UR-144, one of the synthetic substances used in ZenBio products, were controlled substance analogues, that is, designer drugs that were substantially similar in chemical composition and pharmacological effect to a schedule I controlled substance. Way took significant steps to evade detection by law enforcement. After law enforcement seizures of raw chemicals and finished synthetic cannabinoid products, he would reship the substances using a different carrier. He would not disclose the ingredients or potential adverse effects of the products. In fact, he would send lab reports with purchased goods that indicated what substances were not contained in the shipment.  When confronted by DEA and IRS agents, he insisted that he was selling incense and that the drugs in China were added for a “smoldering” effect.  

 During the brief lifespan of ZenBio, Way made $589,199.48 in three months, and the company earned over $32 million. ZenBio employed about 200 employees who manufactured, shipped, and sold their products. The evidence at trial also showed that Way negotiated for the purchase of large quantities of XLR11 from China to manufacture the finished smokeable product.

At Way’s sentencing, Dr. Jordan Trecki, a DEA pharmacologist, testified that XLR11 can cause severe toxic effects, including acute kidney damage, organ and respiratory failure, rapid heartbeat, hypothermia, and death. The drug first made its appearance in the United States in 2011 and was scheduled by the DEA as a Schedule I controlled substance in May 2013. 

This case was the product of an Organized Crime Drug Enforcement Task Force (OCDETF) investigation by the DEA, IRS Criminal Investigations, and Homeland Security Investigations (HSI), with assistance from the Food and Drug Administration (FDA), and the Fresno County Sheriff’s Office. Numerous other law enforcement agencies assisted in follow-up investigation, including the St. Cloud, Minnesota Police Department; Mars Hill, North Carolina Police Department; Montgomery County, North Carolina Sheriff’s Office; Buncombe County, North Carolina, Sheriff’s Office; and Willis, Texas Police Department.

The OCDETF Program was established in 1982 to mount a comprehensive attack against organized drug traffickers. Today, the OCDETF Program is the centerpiece of the United States Attorney General’s drug strategy to reduce the availability of drugs by disrupting and dismantling major drug trafficking organizations and money laundering organizations and related criminal enterprises. This OCDETF investigation was also part of a nationwide law enforcement effort coordinated by the DEA’s Special Operations Division.  Assistant United States Attorneys Karen A. Escobar and Vincenza Rabenn prosecuted the case.

SACRAMENTO, Calif. —Derek Hillgert, 29, of Carmichael, and Jeffrey Wilhite, 31, of Linden, pleaded guilty today to committing access device fraud, aggravated identity theft, and possession of stolen mail, U.S. Attorney McGregor W. Scott announced.

According to court documents, Hillgert and Wilhite worked together to steal United States Mail and conduct transactions with stolen identities. On the day of their arrests, they possessed over 200 pieces of stolen mail addressed to over 100 victims. With Wilhite’s assistance, Hillgert used a stolen identity to purchase a van at a dealership in Modesto. Hillgert presented a fraudulent driver’s license in the other person’s name but with Hillgert’s photograph, and he obtained a loan in the other person’s name for over $39,000. Wilhite opened a Target debit card account using a second stolen identity, and the defendants made more than $3,000 in purchases with it.

This case is the product of an investigation by the U.S. Postal Inspection Service with assistance from the Tracy Police Department. Assistant U.S. Attorney Miriam R. Hinman is prosecuting the case.

Hillgert and Wilhite are scheduled to be sentenced by Senior U.S. District Judge William B. Shubb on January 14, 2019. Both defendants face a maximum statutory penalty of five years in prison and a $250,000 fine for possession of stolen mail. Each count of access device fraud carries a maximum statutory penalty of 10 years in prison and a $250,000 fine. For the aggravated identity theft, each defendant faces a mandatory consecutive term of two years in prison. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

SACRAMENTO, Calif. —Ahmad Nassar, 31, of Sacramento, pleaded guilty today to aggravated identity theft, access device fraud, and being a felon in possession of a firearm, United States Attorney McGregor W. Scott announced. 

According to court documents, from August 2015 through June 2017, Nassar was engaged in identity theft, unauthorized bank account takeovers, and obtaining and using unauthorized and counterfeit access devices in the form of credit cards, debit cards, account numbers, and other financial account information. On May 10, 2017, the execution of search warrants at two properties in Sacramento associated with Nassar led to the seizure of a loaded .22 caliber handgun from underneath a pillow in a bedroom of one of the properties in which Nassar himself was found. In addition, agents seized numerous boxes containing credit cards; debit cards; mail (some with “forwarding” address labels); and federal and state government-issued identification cards, which bore the names of people other than Nassar; and at least 55 electronic devices, including computers, cellular phones, thumb and storage media drives, and other electronic devices, including a “CelleBrite” device commonly used by law enforcement to conduct forensic examinations of cellular phones. Nassar stipulated to using intricate techniques to obtain victims’ personal identifying and financial information, including online account takeovers, that continued even after search warrants were executed on his properties. Nassar’s conduct caused at least $558,276.38 in actual loss.

This case was the product of an investigation by the Federal Bureau of Investigation and Sacramento County Department of Human Assistance. Assistant United States Attorney Matthew M. Yelovich is prosecuting the case.

Nassar remains out of custody pending sentencing, which is scheduled before United States District Judge Kimberly J. Mueller on February 25, 2019. Nassar faces a maximum statutory penalty of 10 years in prison and a $250,000 fine for the access device fraud and firearm possession offenses, and an additional two-year mandatory sentence for aggravated identity theft, to be served consecutively to any other sentence received. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

FRESNO, Calif. — Alan Fernando Gomez-Paniagua, 26, a citizen of Mexico residing in Delano, California, pleaded guilty today to conspiring to cultivate, distribute, and possess with intent to distribute marijuana, U.S. Attorney McGregor W. Scott announced.

According to court documents, Gomez-Paniagua fled from law enforcement officers investigating a large marijuana cultivation site in the McFarland Creek area in the Sequoia National Forest. He was ultimately stopped in a vehicle as he attempted to escape from the area. At the grow site, officers found and eradicated 15,852 marijuana plants, over 1,000 marijuana seedlings, and a loaded short-barreled shotgun with a pistol grip.

The marijuana cultivation operation had a devastating impact on the environment. Numerous oak trees had been cut down and the hillside was terraced to make room for the marijuana plants. Pesticide containers, trash, and thousands of feet of irrigation line were strewn throughout the site. In pleading guilty, Gomez-Paniagua agreed to make restitution to the U.S. Forest Service in the amount of $3,826 to cover the cost of cleaning up the grow site.

Gomez-Paniagua is scheduled for sentencing in federal court in Fresno on January 22, 2019. He faces a mandatory minimum prison term of 10 years and a maximum term of life, along with a $10 million fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

This case is the product of an investigation by the U.S. Forest Service, Bureau of Alcohol, Tobacco, Firearms and Explosives, Homeland Security Investigations (HSI), Southern Tri-County Central Valley California High Intensity Drug Trafficking Area (HIDTA) Task Force, California Department of Fish and Wildlife, Kern County Sheriff’s Office, and California Multi-jurisdictional Methamphetamine Enforcement Team (CalMMET), a task force administered by the Kern County Sheriff’s Office. Assistant U.S. Attorney Karen A. Escobar is prosecuting the case.

FRESNO, Calif. — Ladaireus Jones, 25, of Bakersfield, was sentenced by United States District Dale A. Drozd today to more than four and a half years in prison and three years of supervised release for being a felon in possession of a firearm, U.S. Attorney McGregor W. Scott announced.

According to court documents, Jones, a documented member of a Bakersfield criminal street gang known as the West Side Crips, possessed a loaded, stolen .38 caliber revolver on October 25, 2017. The complaint filed in this case alleged that telephone calls intercepted pursuant to a court-authorized federal wiretap indicated that Jones and another individual possessed weapons located in a backpack at the scene of a car accident. Officers responded to the scene and seized two firearms from the backpack, including the .38 caliber revolver. Jones later pleaded guilty to possessing that weapon.

According to the indictment and Jones’s subsequent plea agreement, at the time he possessed the revolver, Jones had been convicted of two felonies in Kern County, a 2009 conviction for Assault with Force Likely to Produce Great Bodily Injury, and a 2012 conviction for being felon in possession of a firearm. Consequently, he had been prohibited from possessing firearms or ammunition.

This case is the product of an investigation of the West Side Crips by the Federal Bureau of Investigation, the California Department of Justice, the Bakersfield Police Department and the Drug Enforcement Administration. Assistant United States Attorneys Angela Scott and Vincenza Rabenn are prosecuting the case.

SACRAMENTO, Calif. — A federal grand jury returned a three-count indictment today against Agustin Rodriguez-Sandoval, 44, and Gustavo Barraza-Barboza, 33, both Mexican nationals, charging them with conspiracy to grow marijuana, growing marijuana, and damaging public lands, U.S. Attorney McGregor W. Scott announced.

According to court records, the two men were arrested on October 12, 2018, following a raid on a marijuana-cultivation site on public land near Likely, California, in the Modoc National Forest, in Modoc County. Agents eradicated over 3,300 growing marijuana plants at the site and seized another recently harvested 800 marijuana plants.

This case is the product of an investigation by the U.S. Forest Service, the Modoc County Sheriff’s Office, and the California Department of Fish and Wildlife. 

If convicted of either of the marijuana charges, both defendants face a mandatory minimum penalty of 10 years in prison, and a maximum penalty of life in prison and a $10 million fine. If convicted of damaging public lands, the defendants face a maximum penalty of 10 years in prison and a $250,000 fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. These charges are only allegations; the defendants are presumed innocent until proven guilty beyond a reasonable doubt.

SACRAMENTO, Calif. — As part of its strategy to reduce violent crime, the U.S. Attorney’s Office for the Eastern District of California announced the following indictments involving illegal firearms offenses.

Thomas Christopher Hilton, 51, of Vacaville, was charged in a one-count indictment today with being a felon in possession of a firearm. Hilton cannot lawfully possess firearms because he has previously been convicted of a felony offense. This case is the product of an investigation by the Vacaville Police Department with special assistance from the FBI’s Solano County Violent Crimes Task Force and the Solano County District Attorney’s Office. 

Asan Durana Hayes, 25, of Antioch, was charged with one count of being a felon in possession of a firearm. According to court documents, on August 16, 2018, during a traffic stop, discovered a Glock 9 mm pistol in Hayes’s possession. Hayes cannot lawfully possess firearms or ammunition because he has previously been convicted of a felony offense. This case is the product of an investigation by the Vallejo Police Department, with special assistance from the FBI’s Solano County Violent Crimes Task Force and the Solano County District Attorney’s Office. 

Ricardo Madrigal, 38, of Stockton, was charged with being a felon in possession of a firearm and possessing an unregistered short-barreled rifle. According to court documents, officers executed a search warrant at Madrigal’s home on September 6, 2018, and found 15 firearms, including a short-barreled AR-style rifle with a folding stock, pistol grip, and no serial number. The short-barreled rifle had not been registered as required under federal law. Madrigal has prior felony convictions, making it illegal for him to possess a firearm. This case is the product of an investigation by ATF and the Lodi Police Department. Assistant U.S. Attorney David Spencer is prosecuting the case.

If convicted Hayes and Hilton face a maximum statutory penalty of 10 years in prison and a $250,000 fine. If convicted, Madrigal faces a maximum statutory penalty of 10 years in prison and a $250,000 fine for being a felon in possession, and 10 years in prison and a $10,000 fine for possessing an unregistered short-barreled rifle. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.

These cases were brought as part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. Attorney General Jeff Sessions reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally based strategies to reduce violent crime.

SACRAMENTO, Calif. — Jason Solomon, 43, of Stockton, pleaded guilty today to distribution of child pornography, U.S. Attorney McGregor W. Scott announced. 

According to court documents, in July 2016, Solomon used social media to send images of minors engaged in sexually explicit conduct to a then-15-year-old girl. In January 2018, Solomon also possessed additional images of child pornography, some of which depict the sexual molestation of infants.

This case is the product of an investigation by the Federal Bureau of Investigation. Assistant U.S. Attorney Brian A. Fogerty is prosecuting the case.

Solomon is scheduled to be sentenced by U.S. District Judge Troy L. Nunley on January 17, 2019. Solomon faces a mandatory minimum sentence of five years in prison, and a maximum statutory penalty of 20 years in prison and a $250,000 fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute those who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. Click on the “resources” tab for information about internet safety education.

SACRAMENTO, Calif. — A federal grand jury returned a three-count indictment today against A Vern Saeteurn, 30, of Sacramento, charging him with possessing methamphetamine with the intent to distribute it, doing so in a location where children were present, and possession of stolen firearms, U.S. Attorney McGregor W. Scott announced.

According to court documents, law enforcement agents searched Saeteurn’s home on September 6, 2018. They found about 12 kilograms of methamphetamine, a garage lab for adulterating and packaging methamphetamine, and several guns — two of which had been stolen from law enforcement agencies. Four children were also present in the home.

This case is the product of an investigation by the Federal Bureau of Investigation, Homeland Security Investigations, the Sacramento Sheriff’s Office, the Sacramento Police Department, the California Highway Patrol, and the California Department of Corrections & Rehabilitation. Assistant U.S. Attorney Amanda Beck is prosecuting the case.

If convicted, Saeteurn faces a maximum statutory penalty of life in prison and a $10 million fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. Attorney General Jeff Sessions reinvigorated PSN as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally based strategies to reduce violent crime.

FRESNO, Calif. — A federal grand jury returned a one-count indictment today against Jimmy Euresti, 41, of Fresno, charging him with being a felon in possession of a firearm, United States Attorney McGregor W. Scott announced.

According to court documents, during a traffic stop in Fresno, officers found a stolen Glock semi-automatic handgun under a child’s booster seat on the rear passenger seat of the vehicle that Euresti was driving.  A records check revealed that Euresti had previously been convicted of a felony offense, which makes him ineligible to possess a firearm.

This case was the product of an investigation by the Fresno Police Department and the Bureau of Alcohol, Tobacco, Firearms, and Explosives. Assistant United States Attorney Laurel J. Montoya is prosecuting the case.

If convicted, Euresti faces a maximum statutory penalty of 10 years in prison and a $250,000 fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

FRESNO, Calif. — A federal grand jury returned a one-count indictment today against Frankie Thomas Goulding, 39, of Carmichael, charging him with escaping from custody, U.S. Attorney McGregor W. Scott announced.

According to court documents, Goulding was sentenced to federal prison for distributing methamphetamine in 2014. In March 2017, Goulding was transferred to a residential re-entry facility in Fresno as part of his sentence. On June 27, 2017, officials found he had left the facility.

This case is the product of an investigation by the U.S. Marshals Service. Assistant U.S. Attorney Laurel J. Montoya is prosecuting the case.

If convicted, Goulding faces a maximum statutory penalty of five years in prison and a $250,000 fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

SACRAMENTO, Calif. — Attorney General Jeff Sessions recognized 244 department employees for their distinguished public service today at the 66th Annual Attorney General’s Awards Ceremony. Thirty-six other individuals outside of the department were also honored for their work. This annual ceremony recognizes employees and other individuals who have demonstrated exceptional achievements, leadership, and service to the Department of Justice and the American people. This year’s award includes an award for exceptional heroism to U.S. Marshal Senior Inspector Basilio S. Perez Jr. for his courageous actions to protect and aid victims of the October 1, 2017, mass shooting in Las Vegas, Nevada.

“Service in the Department of Justice is more than a normal job; it is a calling to the highest standards of professionalism,” Attorney General Jeff Sessions said. “That is true for all of the 115,000 Department of Justice employees. But it is especially true for these award winners. And so I want to thank them and their families for their exemplary service to this Department and to the American people. They have made this Department proud.”

U.S. Attorney McGregor W. Scott said: “It was an honor to be part of the ceremony recognizing the team that took down AlphaBay in 2017. This multi-agency team worked tirelessly to disrupt a marketplace that was selling dangerous and illegal goods. We are delighted that the U.S. Department of Justice is recognizing three of our attorneys for their outstanding contributions to the Department and its mission.”

This year’s program honors individuals across the department and our federal, state, local, and tribal partners for their self-less efforts, protecting our national security and our civil rights, addressing rising violent crime in our communities, going after gangs and those trafficking in dangerous narcotics and human beings. The awards also honor the work of civil and environmental litigation, which enforces the rule of law and upholds our Constitution. They also recognize employees whose ideas and efforts save taxpayer dollars and help our government operate more effectively and efficiently, among other contributions to public safety and good governance.

In addition to AlphaBay team members in Washington D.C. and around the world, the Attorney General recognized 10 team members from the Eastern District of California for their work on the AlphaBay case. The multi-agency takedown of AlphaBay, the world’s largest darknet marketplace, was a landmark victory in the Department’s fight against cybercrime. The meticulously planned international operation involved law enforcement partners in Asia, Europe, and North America. AlphaBay had over 200,000 active listings for illegal goods, including fentanyl and heroin, stolen identity documents, computer hacking tools, and illegal firearms. During the takedown, the team was able to seize record amounts of digital currencies, including Bitcoin, Monero, and Zcash, and permanently disable the infrastructure of the site while coordinating with its international partners to simultaneously shutdown Hansa, the second‑largest darknet marketplace. The team also tracked down and seized millions of dollars in assets held by the site’s administrator. The case serves as a model for complex international cybercrime investigations and demonstrates the value in inter-agency and international coordination.

After the takedown, online drug markets were in disarray with just a few disorganized markets struggling to reclaim AlphaBay’s business. The previously thriving Bitcoin exchanges became a fraction of what they once were. The operation was a massive success and a model for future dark-market operations.

The Attorney General presented awards to the following AlphaBay team members from the Eastern District of California: Assistant U.S. Attorneys Paul Hemesath, Grant Rabenn, and Kevin Khasigian; Sacramento FBI Special Agents Nicholas Phirippidis and Heriberto Cadena; Fresno DEA Special Agent John Rabaut; Fresno IRS Criminal Investigation Special Agent Kulbir Mand; Fresno DEA Special Agent Jay Dial; and two Sacramento FBI Computer Scientists.

FRESNO, Calif. — A four-count indictment was unsealed Tuesday charging Ivan Isho, 41, of Phoenix, Arizona, with wire fraud, impersonation of a federal officer, and cyberstalking, U.S. Attorney McGregor W. Scott announced.

According to court documents, between September 2016 and April 2017, Isho claimed to be a special agent with the FBI to a couple living in Ceres. He claimed that as an FBI agent he could help the couple acquire visas for three family members living overseas. Although they paid him over $6,700 to facilitate the visa process, no visas have issued, and Isho has returned none of the money.

The indictment alleges that between April 2016 and April 2018, Isho harassed and intimidated another victim using the telephone, internet, and internet-based social media platforms in a manner likely to cause substantial emotional distress to this victim.

This case is the product of an investigation by the Federal Bureau of Investigation. Assistant U.S. Attorney Laura D. Withers is prosecuting the case.

If convicted, Isho faces a maximum statutory penalty of 20 years in prison and a $250,000 fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

SACRAMENTO, Calif. — Martin Gasca-Rojas, 49, of Mexico, was sentenced to 12 years and seven months in prison, for distributing methamphetamine, U.S. Attorney McGregor W. Scott announced.

According to court documents, between October 2016 and May 2017, Gasca-Rojas distributed nearly 4 pounds of methamphetamine on three occasions. In October 2016, Gasca‑Rojas sold 1 pound of methamphetamine for $3,300. In November 2016, he arranged a sale of 2 pounds of methamphetamine for $6,500, and had two other individuals deliver the methamphetamine. Finally, in May 2017, he sold 1 pound of methamphetamine for $3,600.

This case was the product of an investigation by the Drug Enforcement Administration and Homeland Security Investigations (HSI). Assistant U.S. Attorney Audrey B. Hemesath prosecuted the case.

FRESNO, Calif. — A federal grand jury returned a four-count indictment on October 18, 2018, against Vance Franklin Myers, 31, of Ahwannee, charging him with three counts of unauthorized excavation and removal of archeological resources, and one count of possession of stolen government property, U.S. Attorney McGregor W. Scott announced.

According to court documents, on July 26, 2015, while fighting a wild fire, fire fighters discovered an excavated site in the Willow Creek area of Box Canyon in the Sierra National Forest. Human remains and artifacts were located among large piles of sifted dirt, hand tools and a large screen sifting box.

According to the criminal complaint filed in this case, archeologists determined that the artifacts indicated long‑term use of the site between 500 A.D. and 1900. The site is believed to have been inhabited by members of the Mono Indian tribe. In August 2015, the archeological site was stabilized, rehabilitated, and the artifacts repatriated after consultation with the involved tribe.

The investigation revealed incidents of illegal excavation and looting in the same archeological site in September 2015 and again in August 2016, requiring a second site rehabilitation and reburial of the artifacts in October 2016. As the investigation progressed, Myers was identified as being involved in the excavation through photographs and statements.

According to the indictment, Myers was found to be in possession of archeological items such as stone tools, arrowheads, and beads, among other things.

“We are extremely proud of the Forest Service’s role in helping to reduce the theft and destruction of Native American remains and artifacts from national forest lands here in California,” said Randy Moore, Regional Forester for the USDA Forest Service Pacific Southwest Region. “Special Agent Michael Grate and the Sierra National Forest are to be commended for their excellent work in bringing this case to justice.”

Myers was arraigned on the indictment October 19, 2018, and entered pleas of not guilty. His next hearing is scheduled for January 28, 2019.

This case is the product of an investigation by the U.S. Forest Service. Assistant U.S. Attorney Laurel J. Montoya is prosecuting the case.

If convicted, Myers faces a maximum statutory penalty of two years in prison and a $100,000 fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

FRESNO, Calif. — Chief U.S. District Judge Lawrence J. O’Neill sentenced Stefan Ramirez, 34, of Fresno, today to 12 years and seven months in prison for receipt and distribution of child pornography, U.S. Attorney McGregor W. Scott announced.

The prison sentence imposed will be followed by five years of supervised release, during which Ramirez will be required to register as a sex offender, and his access to minors, computers, and the internet will be restricted.

“Consumers and distributors of child pornography often try to rationalize their actions as passive behavior,” said Special Agent in Charge Sean Ragan of the FBI Sacramento Field Office. “It is most certainly not passive. Children are physically abused during the production of child pornography. Not only do consumers of child pornography seek gratification from vicariously participating in that abhorrent activity, but they also often make those images available to others through file sharing. The FBI and our partner agencies work to ensure consumers and distributors of child pornography understand their behavior is utterly contrary to the values of American society and will be met with rigorous investigation and lengthy prison sentences.”

According to a plea agreement and sentencing documents, Ramirez admitted that he used a file-sharing program to obtain and make available thousands of images of children being sexually abused. Some of the depictions were of infants and toddlers, and some included sadistic conduct and violence. Judge O’Neill  awarded restitution to seven victims whose images Ramirez obtained for damages that they established that Ramirez caused.

This case was the result of an investigation by the Federal Bureau of Investigation. Assistant U.S. Attorney David Gappa prosecuted the case.

This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute those who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. Click on the “resources” tab for information about internet safety education.

FRESNO, Calif. — Jarrod M. Langford, 27, of Orlando, Florida, was sentenced today by U.S. District Judge Dale A. Drozd to three years and six months in prison for conspiracy to commit credit card fraud and aggravated identity theft, U.S. Attorney McGregor W. Scott announced.

According to court documents, Langford, while serving with the United States Navy in Lemoore, California, conspired with others to fraudulently acquire and use credit card account numbers to purchase and resell over the internet voucher codes redeemable for consumer items such as wristwatches, jewelry, computer software applications, and electronic devices. Langford used various methods to fraudulently acquire other peoples’ credit card information, including purchasing the information on the internet.  In September 2012, Langford fraudulently possessed more than 2,500 records of credit card account numbers and the associated account holders’ personal identifying information, such as names, addresses, telephone numbers, and email addresses.

To hide his actual location and conceal his involvement in these fraudulent activities, Langford installed an application on his computers that established a virtual private network (VPN) that allowed him to conduct anonymous encrypted internet sessions and gave the appearance that he was located outside of California. In his plea agreement, Langford admitted to fraudulently purchasing approximately $340,000 of consumer products and unauthorized voucher codes redeemable for such items.

This case was the product of an investigation by the Federal Bureau of Investigation. Assistant U.S. Attorney Christopher D. Baker prosecuted the case.

SACRAMENTO, Calif. — Zendell Despenza, 34, was sentenced by U.S. District Judge Kimberly J. Mueller to 10 months in prison, followed by five years of supervised release, for failing to register as a sex offender, U.S. Attorney McGregor W. Scott announced.

According to court documents, in June 2014, Despenza moved from Nevada to Sacramento and knowingly failed to register as a sex offender as was required by the Sex Offender Registration and Notification Act (SORNA) based on his conviction for attempted sexual assault in the state of Nevada. Despenza lived and worked in the Eastern District of California for approximately two years, and on two separate occasions during that two-year period submitted a sex offender registration form in Nevada that falsely indicated he was unemployed and residing at addresses in Las Vegas.

This case was the product of an investigation by the U.S. Marshals Service and the Sacramento County Sheriff’s Sex Assault Felony Enforcement (SAFE) Team. The SAFE Team is a multi-agency task force operating in Northern California that monitors sex offenders and conducts investigations regarding sex offender registration violations. Assistant U.S. Attorney Shelley D. Weger is prosecuting the case.

BAKERSFIELD, Calif. — Noel Carter, 46, of Bakersfield, pleaded guilty today to conspiring with Bakersfield police officers Damacio Diaz and Patrick Mara to distribute methamphetamine and marijuana that Diaz and Mara seized in the course of their duties as police officers, U.S. Attorney McGregor W. Scott announced.

According to court documents, from April 2012 to August 2015, Carter conspired with Diaz and Mara, who deliberately failed to submit the seized drugs into the BPD evidence room and instead provided the stolen narcotics to Carter so that Carter could sell those narcotics for profit.

In May 2016, Diaz pleaded guilty to possessing with the intent to distribute methamphetamine, as well as receiving bribes and making a false income tax return. In June 2016, Mara pleaded guilty to conspiring to distribute, and to possess with the intent to distribute, methamphetamine. Both were removed from active duty with the Bakersfield Police Department and are currently serving federal prison sentences.

As part of the plea agreement, five counts of the indictment will be dismissed, but Carter will pay restitution to the victim of the embezzlement charged in those counts, Pacific Workplaces. According to the factual basis in the plea agreement, starting in September 2016 and up until his termination in September 2017, Carter was a contract manager for the Pacific Workplaces, a virtual office and short-term office rental business, and was responsible for the overall operation of the office. Carter admitted to embezzling money from the company and depositing the money into his personal account. During this one-year period, Carter fraudulently negotiated and embezzled the funds from at least 87 checks, totaling $70,251.

According to the plea agreement, Carter admitted that he failed to report the proceeds of his illegal activity from 2012 through 2017. He agrees that he will file amended returns for those years, correctly reporting $480,000 of previously unreported income.

This case is the product of an investigation by the Federal Bureau of Investigation, the Drug Enforcement Administration, the Internal Revenue Service Criminal Investigation, and the Bakersfield Police Department. Assistant U.S. Attorneys Brian K. Delaney and Angela Scott are prosecuting the case.

Carter is scheduled to be sentenced by U.S. District Judge Dale A. Drozd on January 16, 2019. Carter faces a maximum statutory penalty of life in prison and a $10 million fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

FRESNO, Calif. — A federal grand jury returned a 14-count indictment today against Pedro Gavino, 23, and his father, Pedro Gavino-Robles, 58, both of Orosi, charging them with four felony counts of animal cruelty violations relating to cockfighting, U.S. Attorney McGregor W. Scott announced.

In addition, Gavino was charged with dealing firearms without a license and nine counts of possessing and transferring firearms in violation of the National Firearm Act. According to court documents, from February 2017 to October 4, 2018, Gavino sold homemade AR-15 style assault rifles that did not have any serial numbers or manufacture markings. Gavino was not a licensed firearms dealer. During one of his firearms transactions, Gavino sold gamecocks and knives or gaffs for the purpose of cockfighting. Gavino and his father, Pedro Gavino-Robles, allegedly bought, trained, and sold hundreds of gamecocks from their ranch and attended cockfights in Tulare County. During the execution of a federal search warrant at their ranch, agents found at least 150 gamecocks and 278 knives used in cockfighting.

Cockfighting violates federal law and is outlawed in all 50 states. In cockfighting, roosters, bred for fighting and often provided with stimulants to make them more aggressive, are placed in a pit and goaded to fight. With knives attached to their legs, the birds kick one another to the death, all for the entertainment and profit of spectators, exhibitors, and sponsors.

This case is the product of an investigation by the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the U.S. Department of Agriculture, with assistance from the Dinuba Police Department and the Multi-Agency Gang Enforcement Consortium (MAGEC), consisting of officers from the California Highway Patrol, the Fresno County Sheriff’s Office, and Fresno Police Department. Assistant U.S. Attorney Karen A. Escobar is prosecuting the case.

Gavino is scheduled to be arraigned in the federal court in Fresno on October 19, 2018. An arrest warrant has issued for Gavino-Robles. If convicted, Gavino faces a maximum statutory penalty of 10 years in prison and a $250,000 fine for each of the nine counts of possessing and transferring unregistered firearms. He also faces a maximum statutory penalty of five years in prison and a $250,000 fine for dealing firearms without a license. Both defendants face a maximum statutory penalty of five years in prison and a $250,000 fine for each of the four counts relating to selling gamecocks and knives used in cockfights. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.

SACRAMENTO, Calif. — Frank Her, 39, of Sacramento, was sentenced today by U.S. District Judge Troy L. Nunley to six years and six months in prison for conspiracy to commit access device fraud, possession of device-making equipment, and possession of stolen mail, U.S. Attorney McGregor W. Scott announced.

According to court documents, Her was the leader of an organization numbering up to 50 people who created fraudulent credit cards, stole others’ mail, and compromised victims’ identities. Her specifically conspired with others to traffic in and use unauthorized Target REDcard account numbers to obtain things of value in excess of $1,000 in a one-year period. Her’s conduct involved at least 500 unauthorized and counterfeit cards, affected hundreds of victims, and led to an estimated actual loss of over $200,000 to those victims.

Her operated a credit card and access device “lab” out of his garage in Sacramento, which included possessing and operating voluminous device-making equipment used to create fake credit, debit, gift, and other banking cards, falsifying government identification documents, and washing checks. In particular, Her would create fraudulent Target REDcards in his garage, give them to co-conspirators, and direct them to use those REDcards to buy merchandise and other items at Target stores in the Sacramento area. Her learned an algorithm revealing how to create working Target REDcard account numbers and encoded those account numbers onto blank cards without authorization from Target or the account holders. To avoid detection, Her often sent co‑conspirators to Target alone or, if he went himself, wore disguising clothing and accessories. Her also personally stole mail and directed others to do so.    

This case is the product of an investigation by the U.S. Postal Inspection Service. Assistant U.S. Attorneys Matthew M. Yelovich and André M. Espinosa are prosecuting the case.

Five of Her’s six co-defendants have already been sentenced, with the final co-defendant, Amy Her, scheduled to be sentenced on October 25, 2018.

FRESNO, Calif. —Leticia Bedolla, 39, of Porterville, pleaded guilty today to aiding and assisting in the preparation and presentation of a false and fraudulent tax return, United States Attorney McGregor W. Scott announced. 

According to court documents, Bedolla operated a tax preparation service called Leticia Tax Service, located in Porterville, California. Bedolla prepared and electronically filed tax returns with the Internal Revenue Service (IRS) on behalf of her customers. In finalizing the customers' federal income tax returns for electronic filing, Bedolla would sometimes fabricate amounts of deductions and deductible expenses without informing her customers she was doing so. In other instances, Bedolla would ask a general question about a customer's personal expenses and then mischaracterize the information on the customer's federal income tax return to improperly claim a deduction or tax credit. As a result of Bedolla's preparation and submission to the IRS of false and fraudulent federal income tax returns, Bedolla caused her customers to claim tax deductions and credits to which the customers were not entitled. This resulted in the IRS paying out excessive refunds to Bedolla's customers or not collecting additional tax that would have been due and owing from Bedolla's customers. Bedolla's conduct resulted in a tax loss to the IRS of approximately $105,747.

This case was the product of an investigation by the Internal Revenue Service, Criminal Investigations Division. Assistant United States Attorney Henry Z. Carbajal III is prosecuting the case.

Bedolla is scheduled to be sentenced by Judge Dale A. Drozd on February 4, 2019. Bedolla faces a maximum statutory penalty of three years in prison and a $250,000 fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

FRESNO, Calif. — Nicholas Carroll Watkins, 30, of Valley Springs, was sentenced today by Chief U.S. District Judge Lawrence J. O’Neill to 25 years in prison, followed by 10 years of supervised release for receiving material involving the sexual exploitation of minors, U.S. Attorney McGregor W. Scott announced.  Watkins will also be required to register as a sex offender.

According to a criminal complaint and sentencing documents, Watkins used Kik Messenger and SayHi, which are messaging applications based outside the United States, to engage in sexually explicit communications with other adults as well as numerous minor females. Watkins discussed his sexual interest in children and often solicited and received sexually explicit images directly from minors.

This case was the result of an investigation by the Miami, Florida and Stockton, California offices of the Federal Bureau of Investigation. Assistant U.S. Attorney David Gappa prosecuted the case.

This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute those who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc.  Click on the “resources” tab for information about internet safety education.

FRESNO, Calif. — On Monday, Vonshay Robinson, 31, pleaded guilty to conspiracy to traffic firearms, U.S. Attorney McGregor W. Scott announced.

According to court documents, between November 2015 and October 2016, Robinson illegally purchased and sold firearms to others, including a .22 caliber gun he sold to an undercover agent on March 25, 2016, for $1,000.

Another defendant in a related case, Jesus Roberto Velazquez Juarez, 25, also pleaded guilty on Monday to money laundering. According to court documents, Velazquez Juarez sold firearms and methamphetamine to others, including a 9mm automatic blank pistol modified to fire live ammunition and approximately 3 grams of methamphetamine to the same customer in October 2016.

Robinson and Velazquez Juarez were arrested on November 3, 2016, along with 18 other defendants following a year-long multi-agency investigation that targeted criminal street gangs in Fresno.  Other defendants also have pleaded guilty to various firearms and drug offenses, including:

Devone Johnson, 32, and Anthony Thomas, 26, pleaded guilty on August 13, 2018, to unlawfully possessing a firearms.  They are scheduled to be sentenced on October 29, 2018.

Garry Sampson, 40, pleaded guilty on August 1, 2018, to unlawfully possessing a firearm. He is scheduled to be sentenced on October 22, 2018.

Raymond Jones, 61, pleaded guilty on August 6, 2018, to conspiracy to distribute and possess with intent to distribute cocaine base. He is scheduled to be sentenced on November 5, 2018.

Danny Valenzuela, 51, pleaded guilty on July 30, 2018, to conspiracy to distribute and possess with intent to distribute cocaine base. He is scheduled to be sentenced on November 5, 2018.

Stephen Hill, 28, pleaded guilty on September 25, 2017, to conspiracy to distribute and possess with intent to distribute cocaine. On December 18, 2017, Hill was sentenced to two years and eight months in prison.

Rashad Halford, 31, pleaded guilty on September 25, 2017, to conspiracy to distribute and possess with intent to distribute cocaine. On March 12, 2018, Halford was sentenced to two years and two months in prison.

These cases are the product of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Federal Bureau of Investigation, the California Department of Justice’s Bureau of Investigation Special Operations Unit, the Multi-Agency Gang Enforcement Consortium (MAGEC), the Fresno Police Department, the California Department of Corrections and Rehabilitation, the Fresno County District Attorney’s Office, and the California Highway Patrol Special Operations Unit (SOU). The Fresno County Sheriff’s Office, the Clovis Police Department, Fresno County Probation, and the California Highway Patrol assisted in the investigation. Assistant U.S. Attorneys Kimberly A. Sanchez and Christopher D. Baker are prosecuting the cases.

Robinson and Velazquez Juarez are scheduled to be sentenced by U.S. District Judge Dale A. Drozd on January 7, 2019, and January 22, 2019, respectively. Robinson faces a maximum statutory penalty of 5 years in prison and a $250,000 fine. Velazquez Juarez faces a maximum statutory penalty of 20 years in prison and a $500,000 fine. The actual sentences, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

The Organized Crime Drug Enforcement Task Force (OCDETF) was involved in the investigation of many of these cases. The OCDETF program was established in 1982 to conduct comprehensive, multilevel attacks on major drug trafficking and money laundering organizations. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking and money laundering organizations and those primarily responsible for the nation’s drug supply.

These cases are part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. Attorney General Jeff Sessions reinvigorated PSN as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally based strategies to reduce violent crime.

FRESNO, Calif. — As part the U.S. Attorney’s Office for the Eastern District of California’s strategy to reduce violent crime, U.S. Attorney McGregor W. Scott announced the following cases involving illegal firearms offenses.

Richard Reyes, a 37-year-old resident of Fresno, was sentenced today by United States Chief District Judge Lawrence J. O’Neill to nine years and two months in prison for being a felon in possession of a firearm. According to court documents, on March 21, 2017, Reyes crashed his vehicle into another car and fled the scene of the accident. Police found him a few houses away.  In Reyes’s car, police found a short-barreled rifle and a sawed-off shotgun, along with ammunition. This case was the product of an investigation by the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Fresno Police Department.  Assistant United States Attorney Ross Pearson prosecuted the case.

Delwyn Gladney, a 49-year-old resident of Fresno, was sentenced today by United States Chief District Judge Lawrence J. O’Neill to seven years in prison for being a felon in possession of a firearm. According to court documents, Gladney was riding his bicycle without a front light on February 26, 2017.  Police officers attempted to stop him, but he rode away. They followed him to a nearby parking lot, where they saw him place a gun behind a parked car. This case was the product of an investigation by the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Fresno Police Department.  Assistant United States Attorney Ross Pearson prosecuted the case.

Miguel Saldate, a 42-year-old resident of Modesto, pleaded guilty today to being a felon in possession of a firearm. According to court documents, police officers came to search Saldate’s house and observed him drop a firearm near a shed.  Saldate is scheduled to be sentenced by United States Chief District Judge Lawrence J. O’Neill on January 14, 2019. This case is the product of an investigation by the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Stanislaus County Sheriff’s Department. Assistant United States Attorney Ross Pearson is prosecuting the case.

Daniel Sandoval-Arce, a 42-year-old resident of Turlock, pleaded guilty today to being an illegal alien in possession of a firearm. According to court documents, police officers searched a house in Turlock, where they found Sandoval-Arce in possession of firearms and a military-grade 60-millimeter mortar round. Sandoval-Arce is scheduled to be sentenced by United States District Judge Dale A. Drozd on January 7, 2019. This case is the product of an investigation by Homeland Security Investigations and the Turlock Police Department. Assistant United States Attorney Ross Pearson is prosecuting the case.

Salvador Tarango, 35, of Bakersfield, pleaded guilty today to possession of an unregistered firearm.  According to court documents, on March 7, 2018, Bakersfield Police Officers responded to a call reporting shots fired in the early morning hours.  Officers found shell casings in the defendant’s driveway.  During a search, officers found an unregistered weapon made from a rifle with a barrel of less than 16 inches in length.  A partially-loaded, high capacity magazine was found in close proximity to the weapon.  Tarango is scheduled to be sentenced by U.S. District Judge Lawrence J. O’Neill on January 22, 2019. This case is the product of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Bakersfield Police Department.  Assistant U.S. Attorney Melanie L. Alsworth is prosecuting the case.

Orasio Fierro, 27, of Winton, was sentenced last week by United States Chief District Judge Lawrence J. O’Neill to four years and eleven months in prison for being a felon in possession of a firearm. According to court documents, on multiple occasions between January 2017 and May 2017, Fierro sold firearms to an alleged gang member, including two AR-15-type rifles. Fierro pleaded guilty to the offense in June 2018. This case was the product of an investigation by the Federal Bureau of Investigations, the Bureau of Alcohol, Tobacco, Firearms, and Explosives, and the California Department of Justice Special Operations Unit. Assistant United States Attorneys Ross Pearson and Kimberly A. Sanchez prosecuted the case.

Bryan Mancia, 31, of Fresno, was sentenced on October 10, 2018, by U.S. District Judge Dale A. Drozd to 2 years in prison for being a felon in possession of a firearm.  In June 2018, Mancia  pleaded guilty to the charge. According to court documents, Mancia had a firearm in his pocket during an encounter with police.  This case was the product of an investigation by the Fresno Sheriff’s Office and Homeland Security Investigations.  Assistant U.S. Attorney Kimberly A. Sanchez prosecuted the case.

The Organized Crime Drug Enforcement Task Force (OCDETF) was involved in the investigation of many of these cases. The OCDETF program was established in 1982 to conduct comprehensive, multilevel attacks on major drug trafficking and money laundering organizations. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking and money laundering organizations and those primarily responsible for the nation’s drug supply.

These cases are part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. Attorney General Jeff Sessions reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally based strategies to reduce violent crime.

SACRAMENTO, Calif. — Tion Makeise Foster, 23, of Point Arena, was sentenced today by United States District Judge Kimberly J. Mueller to twelve and one-half years in prison followed by ten years of supervised release for sex trafficking a minor, United States Attorney McGregor W. Scott announced.

According to court documents, in August 2016, Foster and his co-defendant, Monica Morales, recruited a 16-year-old girl to engage in commercial sex acts for their financial benefit.  The defendants contacted the minor using a social media website on the internet called MocoSpace.  After making initial contact, Foster and Morales drove to Yuba County, where they picked up the victim and then transported her around Northern California, where they had her engage in sex acts for their financial benefit for approximately one week.  During that time, Foster and Morales posted photos of the victim in various online prostitution advertisements.

After Foster and Morales returned the victim to Yuba County, they contacted her again using the internet in December 2016, and discussed plans to traffic her again.  While en route to pick up the victim, Foster was arrested in Citrus Heights following a local undercover operation.  In that separate state case, Foster used the internet to recruit a person he believed to be a seventeen-year old girl for sex trafficking activity, but who was in fact an undercover officer.

Codefendant Monica Morales was previously sentenced to over 10 years in prison in this case.

This case was the product of an investigation by the Federal Bureau of Investigation with assistance from the Yuba County Sheriff’s Office. Assistant United States Attorney Michele Beckwith prosecuted the case.

This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute those who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. Click on the “resources” tab for information about internet safety education.

FRESNO, Calif. — Deandre Stanfield, 38, of Fresno, was sentenced last week by Chief U.S. District Judge Lawrence J. O’Neill to 10 years in prison for conspiracy to commit murder in aid of racketeering, U.S. Attorney McGregor W. Scott announced.  

According to court documents, Stanfield was an influential member of the Dog Pound Gang (“DPG”). In that role, he and other influential members guided and directed the actions of younger, less-experienced gang members. They also set rules, including directives not to talk to the police, to “back up” fellow gang members when they needed help with rival gang members or otherwise, and to assist other DPG members with sex trafficking and credit card fraud. In addition to these crimes, the  DPG enterprise engaged in drug trafficking, conspiracy to commit murder, and other offenses affecting interstate commerce. 

In pleading guilty to the conspiracy, Stanfield admitted that he agreed with other DPG members to kill rival gang members. While incarcerated in Kern North State Prison for assault with a firearm, Stanfield spoke with several DPG members about getting guns and planning retaliation for the shooting of fellow DPG gang members. The conversations happened in March 2016 after codefendant Kenneth Wharry was shot at by individuals DPG believed to be rival gang members, and during a time when DPG was pursuing retaliation.

This case is the product of an investigation by the California Department of Justice, California Highway Patrol Special Operations Unit; Fresno Police Department; the Federal Bureau of Investigation; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the Internal Revenue Service Criminal Investigations; the Multi-Agency Gang Enforcement Consortium (MAGEC); the Fresno County District Attorney’s Office; and California Department of Corrections and Rehabilitation. Assistant U.S. Attorneys Kimberly A. Sanchez, Jeffrey A. Spivak, and Christopher D. Baker prosecuted the case.

This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. Attorney General Jeff Sessions reinvigorated PSN as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally based strategies to reduce violent crime.

FRESNO, Calif. —Hazel Turner, 44, of Tehachapi, pleaded guilty today to aggravated identity theft, United States Attorney McGregor W. Scott announced. 

According to court documents, between February 2014 and March 2014, Turner used the means of identification of another person to falsify and electronically submit federal tax returns for the purpose of fraudulently obtaining money belonging to the United States.

This case was the product of an investigation by the Internal Revenue Service Criminal Investigations and the Kern County Sheriff’s Office. Assistant United States Attorney Melanie L. Alsworth is prosecuting the case.

Turner is scheduled to be sentenced by Judge Lawrence J. O'Neill on January 7, 2019. Turner faces a statutory penalty of 2 years in prison, a $250,000 fine, and up to 3 years of supervised release. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

SACRAMENTO, Calif. — United States Attorney McGregor Scott announced today that Alpha Research & Technology, Inc. (“ART”), an El Dorado Hills company that provides command and control systems to the U.S. Air Force, has agreed to pay the United States $1 million to resolve allegations that it violated the False Claims Act by knowingly submitting inflated contract pricing to the government. 

Between 2006 and 2011, ART submitted subcontract proposals to prime contractors including The Raytheon Company and The Boeing Company that were to be included in firm-fixed-price proposals made by those prime contractors to the Department of Defense.  In submitting its proposals, ART knowingly included millions of dollars in personal expenses of its owners Donne and DeAnn Smith, which ART knew were unallowable in government contracting. Those expenses included payments for the design and construction of the Smiths’ luxury personal residence in Amador County, luxury cars, a personal caretaker, and a weekend at the Hotel del Coronado in San Diego. 

The False Claims Act allows the government to recover damages and penalties for the presentation of false claims for payment to the United States. By improperly basing its government subcontract proposals on unallowable costs, ART caused the United States to pay improperly inflated prices.

“It is a priority of this office to safeguard public coffers against fraud and abuse that affect the integrity of federal contracting programs,” said U.S. Attorney Scott. “We will continue to work closely with our federal law enforcement partners to address the unnecessary expenditure of taxpayer funds, and results like this one help accomplish that objective.”

Chris Hendrickson, Special Agent in Charge of the Department of Defense, Defense Criminal Investigative Service (DCIS), Western Field Office, said, “Padding government contracts with personal expenses is an act of greed that diverts taxpayer dollars away from the critical support of our soldiers, sailors, airmen, and Marines.  DCIS is committed to working with partner agencies to root out fraud in Department of Defense contracting.”

“Cost mischarging schemes such as this cheat the Air Force and ultimately the American taxpayer,” said Air Force Office of Special Investigations Special Agent in Charge Cornelius King. “I appreciate the dedicated efforts of the Defense Criminal Investigative Service, The Defense Contract Audit Agency, and the U.S. Attorney's office who helped hold this Air Force contractor accountable.”

The settlement is the product of a joint investigation by DCIS, the Defense Contract Audit Agency, and the Air Force Office of Special Investigations. Assistant U.S. Attorney Colleen M. Kennedy handled the case for the United States. The claims settled by this agreement are allegations only and there has been no determination of liability.

FRESNO, Calif. — Danny Luna, 32, of Carson was sentenced on October 10, 2018 by U.S. District Judge Dale A. Drozd to over 13 years in prison for distributing methamphetamine, U.S. Attorney McGregor W. Scott announced. In July 2018, Luna pleaded guilty to the charge.

According to court documents, Luna delivered methamphetamine to an undercover officer twice between October and December 2016:  two pounds on the first occasion and 20 pounds on the second occasion.

This case was the product of an investigation by Fresno Police Department, Major Narcotics Unit, and the Drug Enforcement Administration. Assistant U.S. Attorney Kimberly A. Sanchez prosecuted the case.

SACRAMENTO, Calif. — Danny Lee Rhines, 34, of Vallejo, CA was sentenced on Thursday by United States District Judge Morrison C. England, Jr. to six years in prison for being a prohibited person in possession of a firearm, United States Attorney McGregor W. Scott announced. 

According to court documents, in March 2018, officers of the Fairfield Police Department observed Rhines driving a Nissan Altima in Vallejo and tried to pull him over.  Rhines, who was the sole occupant of the car, ran a red light and attempted to flee police.  Officers were able to apprehend him after Rhines ran the car into a fence and it came to a stop. While officers were securing the car after Rhines' arrest, they found a Ruger .22-caliber pistol in the driver’s side door pocket. Rhines cannot lawfully possess a firearm because he has a prior felony conviction. Rhines pleaded guilty to the charge on July 5, 2018.

This case was the product of an investigation by the FBI Solano County Violent Crimes Task Force and the Fairfield Police Department. Assistant United States Attorneys Owen Roth and James Conolly prosecuted the case.

This case was brought as part of Project Safe Neighborhoods (PSN), an initiative that brings together federal, state and local law enforcement to combat gun and gang crime. At the core of PSN is increased federal prosecution to incapacitate chronic violent offenders as well as to communicate a credible deterrent threat to potential gun offenders.

SACRAMENTO, Calif. — BMO Harris Bank, N.A. (“BMO Harris”) will pay $10 million to resolve allegations that M&I Marshall & Ilsley Bank (“M&I Bank”), which BMO Harris acquired in 2011, violated the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA) by engaging in fraud related to the multi-billion-dollar Ponzi scheme perpetrated by Minnesota businessman Thomas J. Petters, United States Attorney McGregor W. Scott announced. 

Petters was convicted by a federal jury in December 2009 of orchestrating a massive Ponzi scheme.  Aided and abetted by multiple co-conspirators, he obtained billions of dollars and property by inducing investors to lend money to his company, Petters Company, Inc. (“PCI”), purportedly to purchase electronics to be sold to big-box retailers, such as Costco and Sam’s Club.  Instead, Petters and his co-conspirators diverted the funds to other purposes, such as making lulling payments to investors, paying off those who assisted in the fraud scheme, and financing Petters’s extravagant lifestyle.  For his conduct, Petters was sentenced to 50 years in prison.

The United States alleges that M&I Bank participated in a related fraudulent scheme by entering, at Petters’s request, “deposit account control agreements” that promised certain of Petters’s investors that M&I Bank would monitor PCI’s depository account held at M&I Bank on their behalf and protect the proceeds of their investments with Petters.  The bank representatives who signed the agreements, however, knew that the agreements in fact provided the investors with no protection and would not be performed.  The United States alleges that M&I Bank’s fraudulent conduct facilitated the continuation of Petters’s scheme and resulted in millions of dollars in losses to the Petters investors who signed the fraudulent agreements.

“People who commit white collar crimes often use the banking system to facilitate those crimes,” U.S. Attorney Scott said.  “This significant civil penalty underscores the Department of Justice’s continued commitment to use all of the tools at our disposal to hold accountable financial institutions that participate in wrongful activity.”

This investigation was initiated by a whistleblower declaration submitted to the Eastern District of California and the whistleblower will receive a share of this settlement, as provided for in the Financial Institutions Anti-Fraud Enforcement Act.  Assistant U.S. Attorneys Colleen M. Kennedy and Kelli L. Taylor represented the United States in this matter.

The claims settled by this agreement are allegations only, and there has been no determination of liability.  The settled claims relate exclusively to conduct by M&I Bank prior to its acquisition by BMO Harris in 2011.

SACRAMENTO, Calif. — A federal grand jury returned an eleven-count indictment today against Eddy Steven Sandoval Lopez, 22, and Deshari Saivohn Frederick, 21, both of Sacramento, charging them with distributing controlled substances, conspiracy, and use of a firearm in furtherance of drug trafficking, United States Attorney McGregor W. Scott announced. 

According to court documents, Sandoval Lopez and Frederick sold cocaine and marijuana to customers throughout the country under the vendor names "CokeWave," "SafeDealsDirect," and "HerbanFarmer" on Dream Market, a dark-web marketplace. Agents conducted numerous undercover purchases of cocaine and marijuana from these vendor accounts. Physical surveillance and postal records revealed that Sandoval Lopez and Frederick were responsible for packaging and mailing these parcels. Agents searched the defendants' residences on October 2, 2018, and found bulk marijuana, packaged cocaine, and a stolen Ruger handgun. 

This case was the product of an investigation by the Northern California Illicit Digital Economy ("NCIDE") Task Force, consisting of agents from Homeland Security Investigations, the Federal Bureau of Investigation, the United States Postal Inspection Service, and the Drug Enforcement Administration. The NCIDE Task Force is a joint, federal task force focused on targeting all forms of dark-web and cryptocurrency criminal activity in the Eastern District of California. The Sacramento County Sheriff’s Department also assisted in this investigation. Assistant United States Attorneys Grant B. Rabenn and Paul A. Hemesath are prosecuting the case.

This case was brought in conjunction with the Joint Criminal Opioid Darknet Enforcement (J-CODE) Team. Established within the FBI’s Hi-Tech Organized Crime Unit, J-CODE is a U.S. Government initiative announced in January 2018, aimed at targeting drug trafficking, especially fentanyl and other opioids, on the Darknet. Building on the work initiated with the takedowns of Silk Road and AlphaBay, the FBI’s J-CODE team brings together agents, analysts, and professional staff with expertise in drugs, gangs, health care fraud, and more, and our federal, state, and local law enforcement partners from across the U.S. Government, to focus on disrupting the sale of drugs via the Darknet and dismantling criminal enterprises that facilitate this trafficking.

This case was part of an Organized Crime Drug Enforcement Task Force (OCDETF). The OCDETF program was established in 1982 to conduct comprehensive, multi-level attacks on major drug trafficking and money laundering organizations. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking and money laundering organizations and those primarily responsible for the nation's drug supply.

If convicted, the defendants face a maximum statutory penalty of 20 years in prison and a $1,000,000 fine for drug distribution. Frederick also faces a five-year consecutive sentence and a $250,000 fine for possessing a firearm in furtherance of drug trafficking. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.

SACRAMENTO, Calif. — A federal grand jury returned a three-count indictment today against Atanasio Jose Marcos Avila, 30, of Stockton, charging him with possessing methamphetamine for distribution, possessing a firearm as a felon, and possessing a firearm in furtherance of a drug-trafficking crime, United States Attorney McGregor W. Scott announced. 

According to court documents, on September 22, 2018, Stockton Police responded to a call about a disturbance. When they arrived on the scene, they encountered Avila and found that his backpack contained two firearms, a box with 42 rounds of ammunition, methamphetamine, marijuana, and a digital scale. Avila cannot lawfully possess firearms or ammunition because he has a prior felony conviction. 

This case is the product of an investigation by the Stockton Police Department, with special assistance from the FBI’s Stockton Safe Streets Task Force. 

If convicted of possessing methamphetamine for distribution, Avila faces a maximum statutory penalty of 20 years in prison and a $1,000,000 fine. If convicted of possessing a firearm as a felon, Avila faces a maximum statutory penalty of 10 years in prison and a $250,000 fine. If convicted of possessing a firearm in furtherance of a drug-trafficking crime, Avila faces a mandatory minimum penalty of 5 years in prison, and a maximum statutory penalty of life imprisonment and a $250,000 fine. Any sentence would be determined at the discretion of the district court after considering any applicable statutory factors and the Federal Sentencing Guidelines. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. Attorney General Jeff Sessions reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally based strategies to reduce violent crime.

FRESNO, Calif. — Rafael Delatorre, 33, of Fresno, pleaded guilty on Wednesday to using a cellphone to facilitate a drug trafficking crime, U.S. Attorney McGregor W. Scott announced. 

According to court documents, on April 15, 2016, Delatorre used a cellphone to communicate with a local drug dealer and an out-of-town drug courier to coordinate the transfer of more than 30 pounds of methamphetamine.

This case is the product of an investigation by the Drug Enforcement Administration, the Fresno Police Department, and the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant U.S. Attorneys Melanie L. Alsworth and Kimberly Sanchez are prosecuting the case.

Delatorre is scheduled to be sentenced by Judge Dale A. Drozd on January 22, 2019. Delatorre faces a maximum statutory penalty of 4 years in prison and a $250,000 fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

SACRAMENTO, Calif. — Jason E. Mininger, 50, of Folsom, CA, was sentenced today by United States District Judge Troy L. Nunley to 46 months in prison and ordered to pay $917,714 in restitution to the victims of the fraud, United States Attorney McGregor W. Scott announced.

According to court documents, Mininger was an investment broker and advisor in Folsom. Beginning in January 2014, and continuing until May 2017, Mininger misrepresented to his clients that he needed to use their previously invested funds as part of a new series of investments to be made or managed by Mininger. In truth, Mininger, after depositing the clients’ funds into his own bank account, used the investors’ money on his personal expenses. Mininger caused at least $917,714 in losses to his clients. Mininger also created false investment account statements and used a sham corporation to conceal his embezzlement of his clients’ funds.

This case was the product of an investigation by the Federal Bureau of Investigation and the Internal Revenue Services-Criminal Investigations. Assistant United States Attorney Todd A. Pickles prosecuted the case.

FRESNO, Calif. — John Baker Rose, 77, of St. Paul, Minnesota, was sentenced today by United States District Judge Dale A. Drozd to 10 years in prison, followed by a ten-year term of supervised release, for using the internet to induce a minor in Fresno, Calfiornia to engage in illegal sexual activity, United States Attorney McGregor W. Scott announced. The court also ordered that Rose pay the minor victim $25,000 in restitution.

According to court documents, from approximately September 2015 through November 2015, Rose met a 14-year-old minor female from Fresno online and groomed her through buying her a computer, jewelry, and clothing. Rose traveled to Fresno on two occasions to engage in sexual intercourse with her.  

This case was the product of an extensive investigation by the Fresno Office of Homeland Security Investigations (HSI), St. Paul, Minnesota and Fresno Police Departments. Assistant United States Attorney Brian W. Enos prosecuted the case.

This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute those who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. Click on the “resources” tab for information about Internet safety education.

FRESNO, Calif. — A two-count indictment returned by a federal grand jury was unsealed today, charging six defendants with one count of conspiracy to commit robbery affecting interstate commerce and one count of robbery affecting interstate commerce.  The indictment charges the following defendants with both conspiracy and robbery in connection with the robbery of a Calaveras County marijuana distributor: Talia Khio, 42, of Chicago, Illinois; Dontia Arrington, 38, of Skokie, Illinois; Roddy Aundre Johnson, Jr., 30, of San Diego, California; Mark Noble, 32, of Willamette, Illinois; Jimmy Khio, 41, of Morton Grove, Illinois; and Carlos Merkhai, 42, of Phoenix, Arizona. 

U.S. Attorney McGregor W. Scott stated, “This indictment demonstrates our offfice’s commitment to working with and supporting our local law enforcement partners. We are proud to have answered the call when Calaveras County District Attorney Barbara Yook reached out to us for assistance in prosecuting this case involving individuals who crossed state lines to commit violent crimes in our district. It is through partnerships like these that we can work together to keep our communities safe.”

"This case serves as an excellent example of the FBI's commitment to working with federal, state, and local partners to aggressively investigate and disrupt violent criminals that threaten the safety and security of our communities," said Special Agent in Charge Sean Ragan of the Federal Bureau of Investigation Sacramento Field Office. "Through our Safe Streets Task Force, the FBI relies on these partnerships to target those who target our neighborhoods with violent crimes such as those charged today. I would like to thank all of our partners for their collaboration and tireless work on this investigation."

According to court documents, on June 24, 2018, the six defendants conducted an armed robbery of a Calaveras County marijuana distributor. The defendants allegedly bound and blindfolded several victims and tortured one victim with a stun gun. One victim was beaten with a baseball bat, which caused multiple injuries. The defendants allegedly took over 100 pounds of processed marijuana and $30,000 in cash. After a high speed chase, officers arrested Talia Khio, Dontia Arrington, Roddy Aundre Johnson, Jr., and Mark Noble. Jimmy Khio and Carlos Merkhai were apprehended months later. 

This case was the product of an investigation by the Federal Bureau of Investigation, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Calaveras County Sheriff’s Office, California Highway Patrol, and the Skokie Police Department, with special assistance from the Calaveras County District Attorney’s Office.  Assistant United States Attorneys Jeffrey A. Spivak and Ross Pearson are prosecuting the case.

If convicted, the defendants each face a maximum statutory penalty of 20 years in prison and a $250,000 fine on each count. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.

This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. Attorney General Jeff Sessions reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally based strategies to reduce violent crime.

FRESNO, Calif. — Javier Beltran, 34, of Strathmore, pleaded guilty today to two counts of use of a firearm during a crime of violence, U.S. Attorney McGregor W. Scott announced.

According to court documents, Beltran was a member of a conspiracy to commit a series of armed robberies of gas stations, convenience stores, and liquor stores from May 19, 2016, until July 26, 2017. The indictment alleges that Beltran and his conspirators committed at least seven armed robberies in Tulare and Kern Counties between May 2016 and January 2017. The next month, Beltran and his associates travelled to Nebraska, where they committed two more robberies. They then returned to California, where they committed three more armed robberies.

In his guilty plea, Beltran admitted that he used a firearm to rob two liquor stores. First, Beltran admitted that on January 18, 2017, he and other conspirators robbed Joe’s Westside in Porterville, California. Prior to the robbery, Beltran and other conspirators stole a 2006 Chevrolet Trailblazer by pushing a hole in the driver’s side lock, cracking the steering shaft, and starting the vehicle without a key.  They drove the vehicle to Joe’s Westside in Porterville, California, where they entered the store wearing masks and carrying guns.

Inside the store, Beltran and other co-conspirators ordered the store clerk to the ground at gunpoint, forced the clerk to open the cash register, and stole over $8,000. Beltran and his associates fled in the stolen Chevrolet Trailblazer, which they left approximately half a mile away with the engine still running.

Second, Beltran admitted that on July 22, 2017, he and other co-conspirators robbed Woodville Liquor in Woodville, California. Prior to the robbery, Beltran and his associates stole a 2006 Chevrolet Silverado by cracking the steering shaft and starting the vehicle without a key. They drove the vehicle to Woodville Liquor in Woodville, California. Beltran entered the store along with two other suspects, each carrying a firearm. They ordered the customers in the store to the ground at gunpoint and used zip ties to tie up one of the store employees. They then stole approximately $2,000 in cash, $4,000 in checks, bottles of whiskey, and cartons of cigarettes before fleeing in the stolen vehicle, which they left a short distance from Woodville Liquor.

This case was the product of an investigation by the Federal Bureau of Investigation, Tulare County Sheriff’s Office, Porterville Police Department, Lindsay Police Department, Bakersfield Police Department, Fremont (Nebraska) Police Department, and Dodge County (Nebraska) Sheriff’s Office. Assistant United States Attorneys Ross Pearson and Kathleen Servatius are prosecuting the case.

Beltran is scheduled to be sentenced by Judge Lawrence J. O’Neill on Monday, January 14, 2019, at 8:30 a.m. Beltran faces a mandatory minimum statutory penalty of 32 years in prison for the two firearms offenses to which he pleaded guilty, a maximum statutory penalty of life in prison, and a $250,000 fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

An additional defendant, Ulises Medina, is also charged in this case.  His next court appearance is set for January 7, 2019.  The charges are only allegations; Medina is presumed innocent until and unless proven guilty beyond a reasonable doubt.

This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. Attorney General Jeff Sessions reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally based strategies to reduce violent crime.

SACRAMENTO, Calif. — A 10-count indictment was unsealed today charging Daniel Zhu, 38, of Sacramento, with conspiracy to commit international money laundering, substantive counts of international money laundering, and conspiracy to manufacture and manufacturing of marijuana, U.S. Attorney McGregor W. Scott announced.

This is the second indictment stemming from Operation Lights Out—an operation that has already resulted in federal forfeiture actions against over 100 homes in the Sacramento area earlier this year.

According to court documents, Zhu conspired with others to grow marijuana, and Zhu grew marijuana plants at three locations in Sacramento and Amador Counties. Moreover, Zhu is charged in two separate money laundering conspiracies that entailed international wires from China being used to purchase real estate in California that was subsequently turned into a marijuana cultivation site. Zhu is also charged with substantive money laundering counts for several wires from China to the United States to convert residences in Elk Grove and Fiddletown into indoor marijuana grow sites.

This case is the product of an investigation by Federal Bureau of Investigation, Drug Enforcement Administration, Homeland Security Investigations (HSI), and IRS Criminal Investigation. Assistant U.S. Attorneys Roger Yang, Matthew M. Yelovich, and Kevin C. Khasigian are prosecuting the case.

This case was part of an Organized Crime Drug Enforcement Task Force (OCDETF). The OCDETF program was established in 1982 to conduct comprehensive, multilevel attacks on major drug trafficking and money laundering organizations. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking and money laundering organizations and those primarily responsible for the nation’s drug supply.

If convicted, Zhu faces a maximum statutory penalty of 40 years in prison and a $5 million fine for each of the marijuana-related counts and a maximum penalty of 20 years in prison and $500,000 fine, or twice the value of the monetary instrument or funds involved, whichever is greater, for each of the money laundering-related counts. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

SACRAMENTO, Calif. — A federal grand jury returned an eight-count indictment today against Jack Ray Snyder, 61, of Truckee, charging him with tax evasion and filing false tax returns, U.S. Attorney McGregor W. Scott announced.
According to court documents, between 2012 and 2014, Jack Ray Snyder filed false tax returns that failed to report significant income, deducted non-deductible personal expenses, and overreported his property taxes.
This case is the product of an investigation by the Internal Revenue Service Criminal Investigation. Assistant U.S. Attorney Roger Yang is prosecuting the case.
If convicted, Snyder faces a maximum statutory penalty of five years in prison and a $100,000 fine for each count. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.