Eastern District of California

SACRAMENTO, Calif. — U.S. District Judge John A. Mendez sentenced Donnie Joe Phillips, 65, of Concord, today to 25 years in prison for methamphetamine trafficking, U.S. Attorney McGregor W. Scott announced.

On February 7, 2018, after a five-day trial, a federal jury found Phillips and his co‑defendant Gordon Owen Miller, 60, of Clayton, guilty of conspiracy to distribute methamphetamine. Miller was found guilty of two counts of distribution and two counts of possession with intent to distribute methamphetamine. Phillips was found guilty of eight counts of distribution and two counts of possession with intent to distribute methamphetamine.

According to evidence produced at trial, between June 2014 and February 2015, Phillips and Miller supplied methamphetamine to co-defendant Phyliss Mosher, 51, of Vallejo, who supplied it to an undercover agent. The drug deals took place in Solano and Yolo Counties. On January 25, 2018, Mosher was sentenced to 15 years in prison after she pleaded guilty to the methamphetamine trafficking conspiracy on May 9, 2017. On May 15, 2018, Miller was sentenced to 20 years in prison.

This case was the product of an investigation by the Drug Enforcement Administration, the El Dorado County Sheriff’s Office, the El Dorado County District Attorney’s Office, the California Highway Patrol, the Vallejo Police Department, and the California Department of Corrections and Rehabilitation. Assistant U.S. Attorneys Jason Hitt and Jill Thomas prosecuted 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.

SACRAMENTO, Calif. — Michelle Louise Travis, 53, of Suisun City, was sentenced today by U.S. District Judge Kimberly J. Mueller to two years and three months in prison for conspiracy to commit wire fraud and aggravated identity theft, U.S. Attorney McGregor W. Scott announced.

According to court documents, in 2013, Travis and co-defendant Pamela Dawn Pierson used identity theft victims’ personal identifying information to file fraudulent tax returns in order to obtain income tax refunds to which they were not entitled. As part of their scheme, Travis and Pierson obtained and shared lists of personal identifying information, which included identity theft victims’ names and social security numbers. Travis and Pierson submitted a total of $66,022 in fraudulent claims to the Internal Revenue Service.

This case was the product of an investigation by the IRS Criminal Investigation, the Federal Bureau of Investigation, and the Fairfield Police Department. Assistant U.S. Attorney Brian A. Fogerty prosecuted the case.

On March 14, 2018, Judge Mueller sentenced Pierson to two years and three months in prison.

FRESNO, Calif. — On June 28, 2018, a federal grand jury returned an indictment against Mubarek Alnajar, 28; Yousef Nazem Alnajar, 24; Nazem Ahmed Alnajar, 46; and Bandar Gamal Saleh Alnaggar, 39, all of Bakersfield, charging them with conspiring to distribute synthetic narcotics, U.S. Attorney McGregor W. Scott announced.

According to court documents, from August 2016 through March 2018, the defendants conspired to distribute synthetic narcotics, including FUB-AMB, ADB-PINACA, AB‑FUBINACA, all Schedule I controlled substances. They distributed narcotics through several minimarts and smoke shops they owned and managed in Bakersfield.

This case is the product of an investigation by the Drug Enforcement Administration, California Highway Patrol, and Bakersfield Police Department. Assistant U.S. Attorney Grant B. Rabenn is prosecuting the case.

If convicted, the defendants face a maximum statutory penalty of 20 years in prison and a $1 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 defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.

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.

SACRAMENTO, Calif. — A federal grand jury returned two indictments this week charging Stockton residents Somnang Chea, 34, with being a felon in possession of ammunition and Phirum Phin, 30, with being a felon in possession of a firearm, U.S. Attorney McGregor W. Scott announced.

According to court documents, Stockton Police officers arrested Chea and Phin after they ran following an attempted a traffic stop.  Court documents allege that Chea possessed a fully automatic handgun with a laser sight and a high-capacity magazine with 22 rounds of ammunition, and that Phin possessed a stolen Glock handgun with a laser sight and high-capacity magazine.

Chea and Phin have previously been convicted of felonies and are prohibited from possessing firearms or ammunition.

This case is the product of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Stockton Police Department, and the San Joaquin County District Attorney’s Office. Assistant U.S. Attorney Cameron L. Desmond is prosecuting the case.

If convicted, Chea and Phin each face 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 defendants arepresumed 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 federal grand jury returned a one-count indictment this week against Dominic Raymond Orozco, 38, of Sacramento, charging him with being a felon in possession of a firearm, United States Attorney McGregor Scott announced.

According to court documents, on May 16, 2018, Orozco was found in possession of a Smith & Wesson 9 mm handgun. Orozco has at least one prior felony convictions, making it illegal for him to possess a firearm.

This case was the product of an investigation by the Federal Bureau of Investigation Safe Streets Task Force, the Sacramento County District Attorney’s Office, the Sacramento Police Department, and the Sacramento County Sheriff’s Department. Assistant United States Attorneys David W. Spencer and Justin L. Lee are prosecuting the case.

If convicted, Orozco 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 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 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. — George Hristovski, 59, of Elverta, was sentenced today by U.S. District Judge Garland E. Burrell Jr. to 10 years in prison for attempted enticement of a minor, U.S. Attorney McGregor W. Scott announced.

According to court documents, Hristovski posted an online advertisement seeking a mother who was willing to allow him to have sex with her daughter.  An undercover agent with the Placer County Sheriff’s Department responded to the advertisement and began to correspond with Hristovski, posing as a mother and eventually her 13-year-old daughter.  Hristovski was arrested on August 4, 2014, after making explicit demands for pornographic images of the 13-year-old girl that he believed he was communicating with, and for attempting to arrange a meeting with the girl for the purpose of having sex with her.

This case was the product of an investigation by the Federal Bureau of Investigation with assistance from the Placer County Sheriff’s Department. Assistant U.S. 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.

SACRAMENTO, Calif. — A federal grand jury returned an 18-count indictment today against Arlina Alexander-Zaplutus, 50, formerly of Elk Grove, charging her with making false statements in bankruptcy cases, and falsification of documents in bankruptcy, U.S. Attorney McGregor W. Scott announced.

According to court documents, Alexander-Zaplutus filed and caused the filing of bankruptcy petitions in the U.S. Bankruptcy Court for the Eastern District of California that contained materially false information, including purported debtors’ names, addresses, and Social Security numbers. Alexander-Zaplutus is alleged to have filed and caused the filing of the falsified petitions to invoke the automatic stay provisions of federal bankruptcy law with respect to her and her clients’ residential properties, which halted creditors’ collection and foreclosure actions. The indictment also alleges that Alexander-Zaplutus falsified bankruptcy petitions with the intent to obstruct the investigation and proper administration of bankruptcy cases.

This case is the product of an investigation by the Federal Bureau of Investigation. Assistant U.S. Attorneys Philip A. Ferrari and Matthew C. Thuesen are prosecuting the case.

Alexander-Zaplutus’ whereabouts are unknown. A warrant was issued for her arrest.

If convicted, Alexander-Zaplutus faces a maximum statutory penalty of five years in prison and a $250,000 fine for each false statement count and 20 years in prison and a $250,000 fine for each count of falsifying documents in bankruptcy. 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. — Attorney General Jeff Sessions and Department of Health and Human Services (HHS) Secretary Alex M. Azar III, announced today the largest ever health care fraud enforcement action by the Medicare Fraud Strike Force, involving 601 charged defendants across 58 federal districts, including 165 doctors, nurses, and other licensed medical professionals for their alleged participation in health care fraud schemes involving approximately $2 billion in false billings. Of those charged, over 162 defendants, including 76 doctors, were charged for their roles in prescribing and distributing opioids and other dangerous narcotics. Thirty state Medicaid Fraud Control Units also participated in today’s arrests. In addition, HHS has initiated suspension actions against 587 providers, including doctors, nurses and pharmacists.

As part of today’s enforcement actions, U.S. Attorney for the Eastern District of California, McGregor W. Scott, announced four individuals facing health care fraud charges in Fresno. 

Today’s enforcement actions were led and coordinated by the Criminal Division, Fraud Section’s Health Care Fraud Unit in conjunction with its Medicare Fraud Strike Force (MFSF) partners, a partnership between the Criminal Division, U.S. Attorney’s Offices, the FBI and HHS-OIG. In addition, the operation includes the participation of the DEA, DCIS, and State Medicaid Fraud Control Units.  

The charges announced today aggressively target schemes billing Medicare, Medicaid, and TRICARE (a health insurance program for members and veterans of the armed forces and their families) for medically unnecessary prescription drugs and compounded medications that often were never even purchased or distributed to beneficiaries. The charges also involve individuals contributing to the opioid epidemic, with a particular focus on medical professionals involved in the unlawful distribution of opioids and other prescription narcotics, a particular focus for the Department. According to the CDC, approximately 115 Americans die every day of an opioid-related overdose.

“Health care fraud is a betrayal of vulnerable patients, and often it is theft from the taxpayer,” said Attorney General Sessions. “In many cases, doctors, nurses, and pharmacists take advantage of people suffering from drug addiction in order to line their pockets. These are despicable crimes. That’s why this Department of Justice has taken historic new steps to go after fraudsters, including hiring more prosecutors and leveraging the power of data analytics. Today the Department of Justice is announcing the largest health care fraud enforcement action in American history. This is the most fraud, the most defendants, and the most doctors ever charged in a single operation—and we have evidence that our ongoing work has stopped or prevented billions of dollars’ worth of fraud. I want to thank our fabulous partners with the FBI, DEA, our Health Care Fraud task forces, HHS, the Defense Criminal Investigative Service, IRS Criminal Investigation, Medicare, and especially the more than 1,000 federal, state, local, and tribal law enforcement officers from across America who made this possible. By every measure we are more effective at finding and prosecuting medical fraud than ever.”

 “Every dollar recovered in this year’s operation represents not just a taxpayer’s hard-earned money—it’s a dollar that can go toward providing healthcare for Americans in need,” said HHS Secretary Azar. “This year’s Takedown Day is a significant accomplishment for the American people, and every public servant involved should be proud of their work.”

U.S. Attorney McGregor W. Scott said, “As today’s announcement highlights, we are working diligently with our law enforcement partners to hold accountable those who lie and cheat in an attempt to enrich themselves off of taxpayer dollars that are meant to help those in need. The U.S. Attorney’s Office for the Eastern District of California is committed to continuing these cooperative efforts and prosecuting health care fraud cases.”

According to court documents, the many defendants charged today allegedly participated in schemes to submit claims to Medicare, Medicaid and TRICARE for treatments that were medically unnecessary and often never provided. In many cases, patient recruiters, beneficiaries and other co-conspirators were allegedly paid cash kickbacks in return for supplying beneficiary information to providers, so that the providers could then submit fraudulent bills to Medicare for services that were medically unnecessary or never performed. Collectively, the doctors, nurses, licensed medical professionals, health care company owners and others charged are accused of submitting a total of over 2 billion in fraudulent billings. Because virtually every health care fraud scheme requires a corrupt medical professional to be involved in order for Medicare or Medicaid to pay the fraudulent claims, aggressively pursuing corrupt medical professionals not only has a deterrent effect on other medical professionals, but also ensures that their licenses can no longer be used to bilk the system.

The following cases in the Eastern District of California are part of today’s announcement:

Case no. 1:18-mj-100-sko

A criminal complaint filed in Fresno alleges that Hermine Hambartsumyan, 36, of Fresno, and Tem Phaphonh, 65, of Fresno, used the information of elderly Lao Medicare beneficiaries to submit false claims for durable medical equipment (DME) and physical therapy services. Phaphonh recruited the patients and gained their identification and insurance information. She then passed it to Hambartsumyan, who ran a series of DME businesses. The DME companies submitted claims to Medicare indicating that they had provided expensive orthotic braces to the beneficiaries. These claims were false because either the beneficiaries had received nothing or they had received inexpensive items for which Medicare does not reimburse. For example, one of the DME companies billed Medicare approximately $1,936 for orthotic braces including two knee braces and two ankle-foot braces for a Medicare beneficiary who had had his left leg amputated from the knee down and wore a prosthesis. The beneficiary had no knowledge of the DME company, never received the braces, and did not have a left foot or ankle on which to place an orthotic brace.

Hambartsumyan and Phaphonh also set up a health clinic in Porterville, California known as Villa Health Center LLC (VHC). Phaphonh recruited patients for this clinic for the purpose of submitting false claims, including false claims for physical therapy services. Beneficiaries received massages during their visits to VHC, and VHC billed Medicare for physical therapy services. The claims were false because Medicare requires such services be provided by trained physical or occupational therapists.

Case no. 1:18-mj-101-sko

A separate criminal complaint alleges that Gabriel Huerta, 38, of Fresno, and Natalie Corral, 38, of Fresno, were co-owners of a durable medical equipment business known as Central Valley Medical Supplies (CVMS) that falsely billed government health insurance programs for power wheelchair repairs. In many cases, CVMS did not perform the repairs, but even in the small amount of cases in which they were performed, the claims were false because the repairs were unnecessary and were not authorized by a physician, both of which are required by the programs. CVMS also billed for providing loaner wheelchairs to beneficiaries during the “repairs,” but no loaners were provided. From approximately January 2013 to June 2016, Medicare paid over $916,000 for false claims submitted under the direction of Huerta and Corral.

The Eastern District of California cases are the product of investigations by the Federal Bureau of Investigation, HHS OIG, and California Department of Health Care Services Investigation Branch. Assistant U.S. Attorney Michael G. Tierney is prosecuting the cases. A complaint, information, or indictment is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

SACRAMENTO, Calif. — A federal grand jury returned a three-count indictment today against Enrique Gomez-Perez, 30, of Mexico, charging him with manufacturing at least 100 marijuana plants, being an illegal alien in possession of a firearm, and depredation of public lands and resources, U.S. Attorney McGregor W. Scott announced.

According to court documents, law enforcement officers who were conducting aerial surveillance spotted an illegal marijuana grow in the area of Upper Backbone Creek in Shasta County, on land owned by the Bureau of Land Management. Law enforcement hiked into the area where they observed Gomez-Perez watering marijuana plants. They recovered a handgun, whose serial number was filed off and unidentifiable, from Gomez-Perez, and eradicated more than 800 plants from the area. At the site, water from a nearby stream had been diverted, many trees and other vegetation were cut to make room for the marijuana plants, and large piles of trash were stuffed under boulders and buried along the stream.

This case is the product of an investigation by the Bureau of Land Management, California Department of Fish and Wildlife, and California Department of Justice North State Marijuana Investigation Team. Assistant U.S. Attorneys David Spencer and Cameron Desmond are prosecuting the case.

If convicted, Gomez-Perez faces a mandatory minimum of five years in prison and a maximum statutory penalty of 40 years in prison and a $10 million fine for marijuana cultivation.  He faces a maximum statutory penalty of 10 years in prison and a $250,000 fine for each of the other two 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. — On Tuesday, after a four-day trial, a federal jury found Robert S. Turchin, 68, of Salinas, guilty of one count of conspiracy to commit bribery and identity fraud and three counts of identity fraud, U.S. Attorney McGregor W. Scott announced.

“This prosecution of a California state employee for bribery resulting in grave danger to public safety is very troubling,” U.S. Attorney Scott stated. ”It is alarming to think that unqualified persons were licensed to operate big rigs and buses on our public roadways. We will continue to do everything we can to root out public corruption at any level, and hold those in positions of trust accountable for their greed.”

According to evidence presented at trial, Turchin was an employee at the Salinas field office for the Department of Motor Vehicles, including between 2012 and 2015. Turchin was responsible for conducting tests for applicants for commercial licenses to operate 18-wheel tractor-trailers and commercial buses.

The trial evidence demonstrated that truck school owner Mangal Gill offered to get people commercial licenses without having to pass the written tests or even take the required behind-the-wheel tests. Gill worked with Turchin and another DMV employee, Emma Klem, to have them access the DMV database to fraudulently update the tests at Gill’s request.

During the investigation, confidential operatives were able to obtain three official commercial licenses in 2013 and 2014. Collectively, they paid Gill over $12,000 after Turchin and Klem accessed the DMV database to fraudulently enter passing scores for the operatives despite the fact that the operatives did not pass or otherwise take the required tests. The trial evidence also demonstrated that Gill and Turchin continued to be involved in this fraudulent conduct until March 28, 2015, days before agents executed search warrants and found in Turchin’s vehicle slips of paper containing the numbers of fraudulently updated driver license records as well as several envelopes full of cash totaling over $10,000. The trial evidence showed that Turchin and his co-conspirators falsified DMV database records for at least 40 individuals for the purpose of obtaining commercial licenses.

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

Co-defendants Gill and Klem previously pleaded guilty to counts of conspiracy to commit bribery and identity fraud and are awaiting sentencing.

Turchin is scheduled to be sentenced by U.S. District Judge Garland E. Burrell Jr. on September 21, 2018. Turchin faces a maximum statutory penalty of five years in prison for the conspiracy count and a maximum of 15 years in prison for the fraud involving identification documents counts, and up to a $250,000 fine per each count. 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. — Leslie Michelle Hays, 50, of Fresno, was sentenced today to three years and five months in prison for embezzling funds from her employer, U.S. Attorney McGregor W. Scott announced.

U.S. District Judge Dale A. Drozd ordered Hays to self-surrender on September 26, 2018, and to pay $1,632,093 in restitution.

According to court documents, Hays was the director of human resources from 2005 through 2014 at Borges USA, a food distribution company based in Spain with regional headquarters in Fresno. To embezzle funds from Borges USA, Hays misreported her salary, expenses, and vacation time to the company’s payroll processor, which then remitted the stolen funds to Hays’s bank account. In total, Hays stole more than $1.5 million in inflated salary payments and false expenses reimbursements from Borges USA.

This case was the product of an investigation by the Federal Bureau of Investigation and the Fresno Police Department. Assistant U.S. Attorney Grant B. Rabenn prosecuted the case.

SACRAMENTO, Calif. — Today, U.S. District Judge Garland E. Burrell Jr. sentenced Mary Sue Weaver, 65, currently of Scottsdale, Arizona and formerly of Lincoln, California, to four years and two months in prison and ordered to pay $15,387,945 in restitution for her participation in a $22 million fraud scheme, U.S. Attorney McGregor W. Scott announced.

On December 15, 2017, Weaver pleaded guilty to one count of wire fraud and one count of bank fraud. On June 1, 2018, co-defendant Abolghasseni “Abe” Alizadeh, 59, of Granite Bay, was sentenced to four years and eight months in prison and ordered to pay $15,879,945 in restitution to the victims of his crimes.

According to court documents, Weaver was employed at a local title company and assisted Alizadeh, a Sacramento-area commercial real estate developer, restauranteur and owner of Kobra Properties, in a scheme to fraudulently purchase land that he planned to develop.

According to court documents, Alizadeh would write checks for the down payment on a commercial property, but because he lacked funds to cover the checks, he would call Weaver and ask her to delay depositing the checks until after escrow closed. Once escrow closed, Weaver disbursed funds from the title company’s escrow trust account to Kobra Properties. Kobra Properties then used those funds to cover its down payment and other costs. In this way, it appeared as though Alizadeh was making a substantial down payment when in fact he was not. Alizadeh’s entire scheme, involving no fewer than six properties in the Sacramento area, resulted in a loss to various financial institutions of over $22 million.

This case was the product of an investigation by the Federal Bureau of Investigation, the IRS Criminal Investigation, and the Federal Deposit Insurance Corporation, Office of Inspector General. Assistant U.S. Attorneys Michael D. Anderson and Heiko P. Coppola are prosecuting the case.

SACRAMENTO, Calif. —Michael Paul Grisham Smith, 44, of Grass Valley, pleaded guilty today to unlawful dealing and manufacturing in firearms, U.S. Attorney McGregor W. Scott announced. 

According to court documents, Smith contacted a firearms vendor on the dark web seeking to sell AR-15-style “ghost” guns that have no serial number. The firearms vendor was in fact an undercover law enforcement agent working for the Homeland Security Investigations.  Between October 5, 2017, and February 15, 2018, Smith manufactured and sold eight AR‑15‑style firearms without serial numbers to the undercover agent in exchange for payment in bitcoin.

This case is the product of an investigation by the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI). Assistant U.S. Attorneys Quinn Hochhalter and Justin Lee are prosecuting the case.

Smith is scheduled to be sentenced by U.S. District Judge Garland E. Burrell Jr. on September 7, 2018. Smith faces a maximum statutory penalty of five 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. — Maurice Darnell Jones, Jr., 22, of Vacaville, was sentenced today by U.S. District Judge John A. Mendez to four years in prison for being a felon in possession of a firearm, U.S. Attorney McGregor W. Scott announced.

According to court documents, on August 27, 2017, the Vacaville Police Department received a call about an auto burglary in progress. The caller described a male suspect fleeing in a silver sedan. Moments later, police identified a car matching the description. When an officer tried to stop the car, the driver fled for several blocks, and then parked his car and began running from police. Police recovered various items in and around the car that showed ties to Jones, including paperwork in the trunk with Jones’s name on it, and a cellphone next to the car that was determined to be Jones’s phone. In addition, police located a .40-caliber handgun in the area where Jones had fled. Ammunition from the gun matched ammunition found with Jones’s belongings in an apartment unit nearby. Jones cannot lawfully possess firearms because he previously has been convicted of two felony offenses.

This case was the product of an investigation by the Vacaville Police Department and the Federal Bureau of Investigation’s Solano County Violent Crimes Task Force, with assistance from the Solano County District Attorney’s Office. 

This case was brought as a 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 of Justice’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. — Two Bakersfield women were arrested today for federal offenses related to possession of stolen U.S. mail and aggravated identity theft, U.S. Attorney McGregor W. Scott announced. A federal grand jury in Fresno returned the indictments on June 7, 2018.

According to the first indictment, Kammi Sargent, 48, was charged with bank fraud, possession of stolen U.S. mail and aggravated identity theft.  Court documents indicate that Sargent obtained stolen identity documents, including driver’s licenses of women who had similar appearances to her. With the stolen identification documents, Sargent opened bank accounts under the victims’ names. She obtained checks stolen from the mail and washed off the name of the payee, substituting the name of the stolen identity onto the check. Sargent then deposited the stolen and altered checks into the fraudulently obtained bank accounts, and used a credit or debit card tied to the accounts to withdraw funds.

According to the second indictment, Erin Peterson, 40, is charged with possession of stolen U.S. mail, unlawfully possessing 15 or more unauthorized access devices (credit or debit cards), possession with intent to distribute 50 grams and more of methamphetamine, and aggravated identity theft.

According to court documents, from July to December 2017, Peterson was using credit and debit cards stolen from the mail to make purchases at various retail establishments in Bakersfield. Purchase records, including photographic captures of Peterson conducting fraudulent purchases, were obtained from the retail stores.

On December 28, 2017, a federal search warrant at Peterson’s residence found 428 pieces of stolen mail, 31 stolen credit and debit cards, over a hundred personal and business checks, and a counterfeit arrow key used to access community mailboxes. Also located in the residence was approximately 149 grams of crystal methamphetamine, $1,400 in cash, narcotics packaging material, and a digital scale.

These cases are the product of investigations by the U.S. Postal Inspection Service and the Bakersfield Police Department with assistance from the Kern County Sheriff’s Office. Assistant US. Attorney Brian R. Delaney is prosecuting both cases.

If convicted, Sargent faces a maximum statutory penalty of 30 years in prison and a $1 million fine. If convicted, Peterson faces a maximum statutory penalty of life in prison and a $5 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 defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.

SACRAMENTO, Calif. — Oganes Emirzyan, 54, of North Hollywood, pleaded guilty today to a scheme to traffic in and possess stolen credit card numbers and the account holders’ information, U.S. Attorney McGregor W. Scott announced.

According to the plea agreement, Emirzyan pleaded guilty to conspiring to traffic in at least one unauthorized access device and to possess at least 15 access devices.

According to court documents, on April 28, 2016, Emirzyan conspired with co-defendant Mkrtych “Mike” Robertovic Sargsyan to obtain and sell stolen credit card information. Emirzyan obtained an electronic storage device containing 199 stolen credit card numbers and corresponding account holder information. He then met with a buyer at his home in North Hollywood. During that meeting, Emirzyan sold the stolen credit card information to the buyer for $8,700.

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.

Charges are pending against Sargsyan. The charges against him are allegations; he is presumed innocent until and unless proven guilty beyond a reasonable doubt.

Emirzyan is scheduled to be sentenced by U.S. District Judg William B. Shubb on November 5, 2018. Emirzyan faces a maximum statutory penalty of five 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. — Robert Farrace, 54, of Modesto, was sentenced today to two years in prison for a fraudulent short-sale scheme, U.S. Attorney McGregor W. Scott announced.

On November 14, 2017, a jury found Farrace guilty of three counts of wire fraud in connection with the scheme. According to court documents, Farrace, an attorney specializing in real estate law and the former president of the Stanislaus County Bar Association, owned two properties in Modesto with substantial mortgage loans. By early 2010, Farrace was in default and received foreclosure notices for the two properties. In order to keep the properties and avoid foreclosure, Farrace formed an entity called “Dignitas LLC” to purchase the properties.

According to evidence presented at trial, Farrace controlled Dignitas, but listed a friend’s name on the paperwork as a nominal manager because he knew the bank would not sell the property to a related party. Farrace then submitted short sale offers to the bank that serviced the loans on both properties, listing Dignitas and the nominee manager as the purchaser. Farrace misrepresented his relationship to Dignitas to induce the bank to approve the short sale. Because the servicing bank did not know of the true relationship, it went forward and completed one of the short sales. The short sale on the second property was stopped after law enforcement informed the bank of Farrace’s scheme.

This case was the product of an investigation by the Federal Housing Finance Agency–Office of Inspector General, the Federal Bureau of Investigation, and the Stanislaus County District Attorney’s Office. Assistant U.S. Attorneys Michael G. Tierney and Shelley D. Weger prosecuted the case.

BAKERSFIELD, Calif. — On Thursday, a superseding indictment was brought against Noel Carter, 45, of Bakersfield, adding charges of bank fraud and making a false statement on a loan application, U.S. Attorney McGregor W. Scott announced.

On September 14, 2017, Carter was charged in an indictment for conspiring with Bakersfield Police Department 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.

The superseding indictment re-alleges that 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 Carter could sell those narcotics for profit. The indictment also alleges that Mara took marijuana and provided it to Carter to process so it was suitable for sale. Finally, the indictment alleges that Carter conspired with Mara to unlawfully manufacture, process, and sell marijuana for profit.

Earlier court records indicate that 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.

The superseding indictment adds five additional charges of bank fraud against Carter, alleging that in 2016 and 2017 Carter was a manager of a virtual office and short-term office rental business known as Pacific Workplaces located in the Bank of America Building, 5th Floor, 1430 Truxtun Avenue in Bakersfield. As a contract manager for the Pacific Workplaces office, Carter was responsible for the overall operation of the office, which included the rental of space, sale of services, and the invoicing and collection of payments from clients who used the services and facilities of Pacific Workplaces. Carter was required to deposit payments of Pacific Workplaces’ customers into company checking accounts. Carter is charged with knowingly and fraudulently negotiating Pacific Workplaces customers’ checks and depositing those checks into his personal bank account at Chase Bank, for his own personal gain.

The superseding indictment also adds one additional count of making false statement on a loan application with a federally insured financial institution. The count alleges that on November 3, 2017, Carter knowingly made false statements in a loan application for the purchase of a new Mercedes-Benz automobile. Carter claimed that he earned a gross monthly income of $20,000 from Pacific Workplaces, and provided false pay stubs in support of this statement, when in fact, his actual monthly income from Pacific Workplaces was approximately $4,000.

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

If convicted, Carter 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.

SACRAMENTO, Calif. — Robert Thomas Honeycutt, 30, of Sacramento, was sentenced today by U.S. District Judge Garland E. Burrell Jr. to two years and six months in prison for possessing cocaine with intent to distribute, U.S. Attorney McGregor W. Scott announced. Honeycutt was ordered to surrender to federal custody on August 3, 2018.

According to court documents, on May 2, 2017, officers in Nevada County pulled over a suspicious vehicle driving with expired registration tags. Officers determined that the vehicle was registered to Honeycutt and identified him as the passenger. They also determined that Honeycutt was on searchable probation.

During a search of Honeycutt’s vehicle, officers found approximately 28 grams of cocaine under the driver’s seat and items consistent with narcotics distribution including a digital scale and 300 small baggies. During a search of Honeycutt’s person, officers found approximately 245 grams of cocaine concealed in his pants. During a later search of Honeycutt’s residence, officers found additional cocaine, digital scales, and small baggies.

On March 16, 2018, Honeycutt pleaded guilty to one count of possession with intent to distribute cocaine.

This case was the product of an investigation by the Drug Enforcement Administration, the Nevada County Sheriff’s Office, the Nevada City Police Department, and the Grass Valley Police Department. Special Assistant U.S. Attorney Robert J. Artuz and Assistant U.S. Attorney Justin Lee prosecuted the case.

SACRAMENTO, Calif. — Kevin Joseph Martin, 43, of Sacramento, pleaded guilty today to one count of attempting to entice a child to engage in illegal sexual activity, U.S. Attorney McGregor W. Scott announced.

According to court documents, between March 9, 2017, and April 22, 2017, Martin communicated with an undercover agent who was posing as person with a sexual interest in children. During the chats using a messaging application and text messages, Martin discussed with the undercover agent various ways to sexually assault the 11-year-old daughter that the undercover agent claimed to have. Eventually, the undercover agent agreed to meet Martin in a parking lot where Martin believed he would have the opportunity to perform sex acts on the girl. Martin was arrested by law enforcement when he arrived at the agreed upon location.

This case is the product of an investigation by the Federal Bureau of Investigation, the FBI Child Exploitation Task Force, and the Sacramento Valley Hi-Tech Crimes Task Force. Assistant U.S. Attorney Shelley D. Weger is prosecuting the case.

Martin is scheduled to be sentenced by U.S. District Judge Troy L. Nunley on August 30, 2018. Martin faces a mandatory minimum of 10 years in prison and 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.

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. — Brandon Anderson-Lacy, 30, of Fairfield, was sentenced today by U.S. District Judge John A. Mendez to three years and five months in prison for a tax refund fraud conspiracy, U.S. Attorney McGregor W. Scott announced.

“Today’s sentencing shows the seriousness of identity theft with the filing of false tax returns to the IRS,” said Cindy S. Chen, Acting Special Agent in Charge, IRS Criminal Investigation. “IRS-CI continues to investigate these types of tax crimes and purse the criminals who steal other people’s identity and file false tax returns to enrich themselves and undermine the U.S. tax system. We will continue to work with our law enforcement partners in combating these tax crimes.”

According to court documents, from February 2011 through March 2012, Anderson-Lacy and others participated in a conspiracy to submit false tax returns to the IRS by obtaining personal identifying information of others, and then submitting returns seeking refunds to which the people listed on the returns were not entitled. The false tax returns included fake Forms W-2 listing false employers, false income amounts, and false federal income tax withholdings, all of which was used to help generate a claimed refund. Many of the tax returns also included false information related to dependents and education expenses that were used to further increase the refunds requested. Anderson-Lacy and his co-conspirators requested that the refunds issue in a variety of ways, including by prepaid debit cards, direct deposit into bank accounts, and by treasury check. More than $319,000 in refunds were claimed in connection with the conspiracy.

This case was the product of an investigation by IRS Criminal Investigation with assistance from the Vacaville Police Department. Assistant U.S. Attorneys Christopher S. Hales and Miriam R. Hinman are prosecuting the case.

SACRAMENTO, Calif. — Mark Corum, 62, of Sacramento, pleaded guilty today to four counts of production of child pornography and one count of distribution of child pornography, U.S. Attorney McGregor W. Scott announced.

According to court documents, Corum engaged in Skype conversations with various Skype users in the Philippines in which he instructed the other parties to perform sexual acts on children while he watched on live webcam. Corum sent the persons in the Philippines payments of between $25 and $35 via money transmittal services in exchange for them performing the sexual acts he requested on children and transmitting the images to him via webcam. Transcripts of the Skype chats filed with the court reflect that, at Corum’s direction, children between the ages of infancy and 10 years old were sexually abused. The Skype chats also contain statements by Corum alluding to prior trips to the Philippines and sex acts with children there. He stated that he had visited the Philippines “many times” and had “many good memories.” He also indicated that if he visited the Philippines again, he wanted to have sex with one of the children he had directed to be abused, a six-year-old girl. In addition, on June 23, 2016, Corum used the internet to transmit images of prepubescent children engaged in sexually explicit conduct to another person.

This case was investigated by the Sacramento Internet Crimes Against Children (ICAC) Task Force, a federally and state-funded task force managed by the Sacramento Sheriff’s Department with agents from federal, state, and local agencies. The Sacramento ICAC investigates online child exploitation crimes, including child pornography, enticement, and sex trafficking. Assistant U.S. Attorneys Katherine T. Lydon and Jill Thomas are prosecuting the case.

Corum is scheduled to be sentenced by U.S. District Judge Kimberly J. Mueller on October 29, 2018. Corum faces a maximum statutory penalty of 20 years in prison on the distribution of child pornography count and a maximum statutory penalty of 30 years in prison on each of the four production of child pornography counts, as well as a maximum statutory fine of $250,000 on each count. 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.

FRESNO, Calif. — Suzy Vang Lo, 41, formerly of Merced, was sentenced today by U.S. District Judge Lawrence J. O’Neill to 21 months in prison for conspiring to defraud the United States by unlawfully purchasing Supplemental Nutrition Assistance Program (SNAP) benefits from recipients in exchange for cash, U.S. Attorney McGregor W. Scott announced.

Suzy Vang Lo and her husband, Michael Chu Lo, pleaded guilty to the scheme in March 2018. According to court documents, Suzy Vang Lo was the manager of LV Market in Winton. Her husband performed many employee functions at the store even though he was not officially employed at the store. Suzy Vang Lo conspired with her husband to give SNAP recipients cash in exchange for swiping their benefit cards. When the defendants exchanged SNAP benefits for cash, it caused the U.S. Department of Agriculture (USDA) to wire sums of money into an account that Suzy Vang Lo controlled.

Special Agent-in-Charge Lori Chan, United States Department of Agriculture (USDA), Office of Inspector General (OIG), Western Region, stated: “The USDA OIG has the responsibility for protecting the integrity of the Supplemental Nutrition Assistance Program. Protecting the integrity of SNAP is a major investigative priority for OIG. OIG conducts investigations in each region of the United States to deter and uncover criminal activity that undermines important USDA nutrition programs. Vendors who engage in SNAP fraud exploit the program’s needy beneficiaries and misuse the substantial funding that taxpayers provide. The OIG at USDA works to ensure SNAP funds are used for their intended purpose, feeding families, not for the enrichment of criminal enterprises.”

The USDA, through its Food and Nutrition Service, administers SNAP, a food assistance program designed to help low-income individuals and families purchase food. In California, the Food and Nutrition Service authorizes retail food stores to accept SNAP benefits for eligible food items from authorized recipients via the Electronic Benefit Transfer (EBT) system. Through EBT, the funds provided by SNAP and other state benefits programs are loaded onto the benefit recipients’ EBT debit cards. When a recipient wishes to use SNAP benefits to purchase eligible food items at a participating store, the store or customer swipes the recipient’s EBT card, and the recipient enters a Personal Identification Number (PIN). The SNAP dollar amount is immediately deducted from the customer’s SNAP account and is credited dollar-for-dollar to the retailer’s bank account.

When a retailer is authorized to participate in SNAP, it is informed that it may accept SNAP benefits only in exchange for eligible food items, and it must acknowledge in writing that trading cash for SNAP benefits is illegal.

In this case, for approximately three and a half years, the defendants swiped SNAP beneficiaries’ EBT cards and give them cash in the approximate amount of 69 cents per dollar of SNAP benefits. Michael Chu Lo kept notes at the cash registers to warn customers to remain silent during the transactions to avoid detection, and he attempted to hide large transactions by swiping EBT cards multiple times.

This case is the product of an investigation by the U.S. Department of Agriculture Office of Inspector General. Assistant U.S. Attorneys Megan A. S. Richards and Jeffrey A. Spivak are prosecuting the case.

Co-defendant Michael Lo is scheduled to be sentenced on July 25, 2018.

SACRAMENTO, Calif. — Raeef Ohan Ohan, 59, of Stockton, pleaded guilty today to engaging in monetary transactions in criminally derived property related to a series of cargo thefts, U.S. Attorney McGregor W. Scott announced.

According to court documents, from 2012 to 2014, Ohan received and possessed thousands of dollars’ worth of stolen goods that had been stolen from truck trailers or warehouses. Ohan then sold the stolen goods to legitimate wholesalers and retail entities through his company called “V&P Trading.” Ohan failed to accurately report to the Internal Revenue Service and the California Franchise Tax Board (FTB) the income he received from this criminal activity, as well as income received by other means. As part of his plea agreement, Ohan agreed to pay restitution to the victims of the cargo thefts, as well as to the IRS and FTB.

According to the plea agreement, on October 1, 2014, a cargo trailer containing personal hygiene products was stolen from a warehouse in Stockton, and the theft was reported to the Stockton Police Department. A pallet within the stolen cargo contained a GPS tracking device, which led officers to Ohan’s leased warehouse space. Officers found the 52 pallets of stolen cargo. A federal search warrant executed at a later date revealed that Ohan had 60 pallets of stolen goods from several separate thefts. They included pet food valued at $26,000, protein powder valued at $200,000, and concrete valued at $66,700.

This case is the product of an investigation by the TRaCE (Tax Recovery and Criminal Enforcement) Task Force. The TRaCE Task Force joins existing state and federal resources to collaboratively combat illegal business activities that rob California of public funds and its citizens of public services. The TRaCE Task Force is composed of investigators and special agents from multiple agencies working together to investigate, prosecute and recover revenue lost to the underground economy. These agencies include the Federal Bureau of Investigation; U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); IRS Criminal Investigation; California Department of Justice - Bureau of Investigation, Office of the Attorney General; California Department of Tax and Fee Administration; California Franchise Tax Board; California Employment Development Department; and California Department of Motor Vehicles. Assistant U.S. Attorney Amy Schuller Hitchcock is prosecuting the case.

Ohan is scheduled to be sentenced by U.S. District Judge Morrison C. England Jr. on October 18, 2018. Ohan faces a maximum statutory penalty of 10 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. — On May 17, 2018, a federal grand jury returned an indictment against Danny Lee Rhines, 34, of Vallejo, charging him with being a felon in possession of a firearm, U.S. Attorney McGregor W. Scott announced. The indictment was unsealed on June 1, and Rhines was arraigned before U.S. Magistrate Judge Edmund F. Brennan on June 4.

According to court documents, in March 2018, officers observed Rhines driving a Nissan Altima and tried to pull him over. Rhines, who was the driver and sole occupant, ran a red light and attempted to flee the police, but eventually came to a stop and was apprehended. Officers found a Ruger .22-caliber pistol in the Altima. Rhines has previously been convicted of a felony and is prohibited by federal law from possessing firearms.

This case is the product of an investigation by the FBI Solano County Violent Crimes Task Force and the Fairfield Police Department. Assistant U.S. Attorney Owen Roth is prosecuting the case.

If convicted, Rhines 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.

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. — On Monday, after a seven-day trial, a federal jury found Saber A. Shehadeh, 75, of Sacramento, guilty of three counts of mail fraud related to an arson fraud scheme, U.S. Attorney McGregor W. Scott announced. Shehadeh was remanded into custody following the verdict.

According to evidence presented at trial, Saber Shehadeh made a series of false statements to State Farm Insurance Company to get insurance money after two fires destroyed buildings he owned at the corner of 10th and E Streets in Sacramento’s Alkali Flat neighborhood. The fires occurred on December 27, 2009, and August 15, 2010, and ultimately destroyed a historical building where Saber Shehadeh ran a business called Tru Value Market. Prior to the fires, the financial condition of Shehadeh’s Tru Value Market had declined. He experienced suspension from USDA’s food stamp program, bounced mortgage checks, and frequent overdrafts on his business bank account, and his alcohol license was placed in jeopardy due to a conviction for food stamp fraud and receiving stolen property.

After the second fire, Saber Shehadeh became a silent partner in a supposed construction company that was then used to submit inflated invoices for post-fire cleanup to State Farm. During State Farm’s investigation of the insurance claims, Saber Shehadeh made a series of false statements about the status of his market prior to the fires, and submitted fraudulent documents and made false statements about the debris removal performed after the second fire. Saber Shehadeh received over $1.4 million in insurance proceeds after the fires, enabling him to pay off his mortgage and still have several hundred thousand dollars left over to invest in new businesses and to share with family members, including his co-defendant Jamal Shehadeh.

This case is the product of an investigation by the Federal Bureau of Investigation and IRS Criminal Investigation, with assistance from the Bureau of Alcohol, Tobacco, Firearms, and Explosives; the Sacramento Fire Department; the Sacramento Metropolitan Fire Department; and the Sacramento Sheriff’s Department. Assistant U.S. Attorneys Michael D. Anderson and Christopher S. Hales prosecuted the case.

On February 10, 2018, Jamal Shehadeh pleaded guilty to two counts of arson to commit a felony and was sentenced to 30 years in prison. According to his plea agreement, Jamal Shehadeh set or caused to be set the first fire at Saber Shehadeh’s 10th and E Street property. On April 17, 2018, another co-defendant, Brian Stone, was convicted of 13 counts of mail and wire fraud after a separate jury trial and is currently scheduled to be sentenced on July 12, 2018.

Saber Shehadeh is scheduled to be sentenced on September 6, 2018, by U.S. District Judge Morrison C. England Jr. Shehadeh faces a maximum statutory penalty of 20 years in prison and a $250,000 fine for 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.

FRESNO, Calif. — Rojelio Martin, 36, of Tulare, was sentenced today by Chief U.S. District Judge Lawrence J. O’Neill to two years and 11 months in prison for making false statements to his federal probation officer while on supervised release after serving a prison sentence for a previous offense, U.S. Attorney McGregor W. Scott announced.

According to court documents, Martin was sentenced in 2013 to 33 months in prison and ordered to pay $44,860 in restitution for a scheme that had defrauded 75 taxpayers out of their tax refunds. Martin was released from prison in 2016, and beginning in April 2017, he failed to make the court-ordered restitution payments. He claimed that health-related absences from work prevented him from paying restitution, and on December 13, 2017, Martin gave his supervising U.S. Probation Officer a fraudulent and forged letter from his doctor and a fraudulent statement of earnings to support that claim.

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

FRESNO, Calif. — Fernando Alanis, 55, of Rio Grande City, Texas, was sentenced today by U.S. District Judge Lawrence J. O’Neill to three years and three months in prison for two counts of mail fraud related to an unemployment insurance fraud scheme, U.S. Attorney McGregor W. Scott announced.

According to court documents, Alanis and others participated in a scheme to defraud the California Employment Development Department (EDD) of unemployment insurance benefits. Alanis was a supervisor with a local farm labor contractor that provided contract labor for growers and packers and organized them into crews managed by “crew bosses.” Alanis would hire and supervise crew bosses and facilitate the hiring of other laborers.

According to court documents, Alanis provided the personal identifying information of individuals, including his relatives and other acquaintances, to workers, some of whom were undocumented, so they could obtain employment with the farm labor contractor under the assumed identities. They then worked as seasonal farm laborers and earned wages. When the workers were laid off at the end of the season, with Alanis’ knowledge and assistance, false and fraudulent unemployment insurance claims were filed in the names of the assumed identities. This caused EDD to send unemployment insurance checks and benefit debit cards to the addresses of the owners of the assumed identities, who were not entitled to the benefits. The individuals lending their identities would either share some of the benefits with Alanis, or would pay Alanis in advance of the unemployment insurance claims being made. Alanis’ direct and indirect conduct resulted in a loss to EDD of approximately $456,548.

“As a supervisor for a large Central Valley farm labor contractor, Fernando Alanis devised a scheme to defraud the U.S. Department of Labor’s unemployment insurance program for his own personal benefit. We will continue to work with our law enforcement partners to combat fraud against programs of the Department designed to assist unemployed workers,” stated Abel Salinas, Special Agent-in-Charge, Los Angeles Region, U.S. Department of Labor Office of Inspector General.

This case was the product of an investigation by the Department of Labor, Office of Inspector General, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), and the California Employment Development Department Investigations Division. Assistant United States Attorneys Henry Z. Carbajal III and Vincenza Rabenn prosecuted the case.

FRESNO, Calif. — Everitt Aaron Jameson, 26, of Modesto, pleaded guilty today to attempting to provide material support to the Islamic State of Iraq and al-Sham (ISIS), a designated foreign terrorist organization.

Assistant Attorney General for National Security John C. Demers and U.S. Attorney McGregor W. Scott made the announcement.

According to the plea agreement, between September 2017 and December 20, 2017, Jameson voiced support for ISIS knowing that the organization was engaging in terrorist activity and terrorism. Among other things, he had several online interactions with a confidential source, and during those interactions, he stated that he was committed wholeheartedly to “the cause.” Jameson also expressed support online for the October 31, 2017, terrorist attack in New York City, as well as other terrorist attacks. In subsequent communications with an undercover agent, Jameson stated that he was ready to do whatever they needed done here and noted that his time in the military had trained him for combat and war. According to court documents, Jameson joined the Marine Corps and received basic training, including earning a sharpshooter rifle qualification, but was ultimately discharged for failing to disclose his asthma history.

Later, Jameson met with another undercover agent whom he believed to be associated with, and working for, the senior leadership of ISIS and offered to carry out violent acts and provide financial support for the terrorist organization.

According to the plea agreement, on December 16, 2017, Jameson discussed what he could offer to the cause. Among other things, Jameson stated that he was well versed in the Anarchist Cookbook, and explained his desire to use explosives in an attack. He also noted that he could get PVC pipe, nails and powder for explosive devices, and asked for remote timing devices from that person, Jameson identified Pier 39 as a target location of an attack, noting that it was crowded and explosives could be used to funnel people into an area so that he could inflict casualties by shooting people trying to escape. Jameson also offered to provide money to the cause.

This case is the product of an investigation by the Federal Bureau of Investigation. Assistant U.S. Attorneys Dawrence W. Rice Jr. and Christopher D. Baker are prosecuting the case with Trial Attorney Brenda Sue Thornton of the National Security Division’s Counterterrorism Section.

Jameson is scheduled to be sentenced by U.S. District Judge Lawrence J. O’Neill on September 4, 2018. Pursuant to the plea agreement, Jameson faces a 15-year prison term, followed by a lifetime of supervised release. Under the agreement, the court may accept or reject the parties’ agreement about the appropriate sentence.

FRESNO, Calif. — Jarrod M. Langford, 26, of Orlando, Florida, pleaded guilty today before U.S. District Judge Lawrence J. O’Neill to 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 that were 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 over 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 his fraudulent activities, Langford installed an application on his computers that would establish a virtual private network (VPN) in order to conduct anonymous encrypted internet sessions and give 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 is the product of an investigation by the Federal Bureau of Investigation. Assistant U.S. Attorney Christopher D. Baker is prosecuting the case.

Langford is scheduled to be sentenced by U.S. District Judge Dale A. Drozd on September 9, 2018. Langford faces a maximum statutory penalty of five years in prison for the conspiracy charge, an additional two years in prison for the aggravated identity theft charge, 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.

Everitt Aaron Jameson, 26, of Modesto, pleaded guilty today to attempting to provide material support to the Islamic State of Iraq and al-Sham (ISIS), a designated foreign terrorist organization.

Assistant Attorney General for National Security John C. Demers and U.S. Attorney McGregor W. Scott for the Eastern District of California made the announcement.

According to the plea agreement filed, beginning in or around September 2017 until around Dec. 20, 2017, Jameson voiced support for ISIS, knowing that the organization was engaging in terrorist activity and terrorism.  Among other things, he had several online interactions with a confidential source, and during those interactions, he stated that he was committed wholeheartedly to “the cause.”  Jameson also expressed support on-line for the Oct. 31, 2017, terrorist attack in New York City, as well as other terrorist attacks.  In subsequent communications with an undercover agent, Jameson stated that he was ready to do whatever they need done here and noted that his time in the military had trained him for combat and things of war.  According to court documents, Jameson joined the Marine Corps and received basic training, including earning a sharpshooter rifle qualification, but was ultimately discharged for failing to disclose his asthma history.

Later, he met with another undercover agent whom he believed to be associated with, and working for, the senior leadership of ISIS and offered to carry out violent acts and provide financial support for the terrorist organization. Specifically, on Dec. 16, 2017, Jameson discussed what he could offer to the cause.  Among other things, Jameson stated that he was well versed in the Anarchist Cookbook, and explained his desire to use explosives in an attack.  He also noted that he could get PVC pipe, nails and powder for explosive devices, and asked for remote timing devices from that person.  Jameson identified Pier 39 as a target location of an attack, noting that it was crowded and explosives could be used to funnel people into an area so that he could inflict casualties by shooting people trying to escape.  Jameson also offered to provide money to the cause.

Jameson is scheduled to be sentenced by U.S. District Judge Lawrence J. O’Neill on Sept. 4.  If the Court accepts the plea agreement, the parties have agreed that the defendant should be sentenced to 15 years in prison and a life term of supervised release.

This case was investigated by the FBI.  Assistant U.S. Attorneys Dawrence W. Rice Jr. and Christopher D. Baker of the Eastern District of California, and Trial Attorney Brenda Sue Thornton of the National Security Division’s Counterterrorism Section are in charge of the prosecution.

SACRAMENTO, Calif. — U.S. District Judge Garland E. Burrell Jr. sentenced Abolghasseni “Abe” Alizadeh, 59, of Granite Bay, today to four years and eight months in prison, U.S. Attorney McGregor W. Scott announced. Alizadeh was also ordered to pay $15,879,945 in restitution to the victims of his crimes.

On January 12, 2018, Alizadeh pleaded guilty to wire fraud, bank fraud and making false statements to a federally insured financial institution.

According to court documents, Alizadeh, a Sacramento-area commercial real estate developer, restauranteur and owner of Kobra Properties, came up with a scheme to fraudulently purchase land that he planned to develop. Banks usually loan up to 60 to 65 percent of the loan to-value ratio (LTV) on undeveloped commercial property. (LTV ratio is the comparison between the amount of the loan and the value of the property.) To circumvent the banks and fraudulently get a higher level of financing, Alizadeh submitted altered purchase contracts to the banks that greatly inflated the purported purchase price. The banks, which competed for Alizadeh’s business, were unaware that the purchase prices were inflated and sometimes loaned well in excess of the loan-to-value ratio. By concealing the true purchase price from the banks, Alizadeh received substantial amounts of cash, sometimes millions of dollars, at the close of escrow and avoided making the full down payment or, in some instances, any down payment.

Alizadeh was assisted in this scheme by co-defendant Mary Sue Weaver, 64, currently of Scottsdale, Arizona and formerly of Lincoln, California, who was employed at a local title company. According to the plea agreement, Alizadeh would write checks for the down payment, but because he lacked funds to cover the checks, he would call Weaver and ask her to delay depositing the checks until after escrow closed. Once escrow closed, Weaver disbursed funds from the title company’s escrow trust account to Kobra Properties. Kobra Properties then used those funds to cover its down payment and other costs. In this way, it appeared as though Alizadeh was making a substantial down payment when in fact he was not.

On April 29, 2005, Alizadeh submitted a fraudulent purchase contract to Central Pacific Bank, which induced the bank to lend him nearly $4 million for the purchase of 10.3 acres of property. This loan represented over 96 percent loan-to-value ratio. Similarly, on October 21, 2005, Alizadeh received over $22 million in funding and loans to purchase the Turtle Island property, when in actuality, the original purchase price was $10 million. In March 2006, Alizadeh also falsely claimed to Bank of Sacramento that he was paying $36 per square foot for a piece of property where he intended to build a TGI Friday’s restaurant. In reality, Alizadeh was paying only $21 per square foot. This resulted in a $650,000 inflation of the true purchase price. Alizadeh’s entire scheme, involving no fewer than six properties in the Sacramento area, resulted in a loss to various financial institutions of over $22 million.

“The defendant used his reputation as a local business leader to perpetrate a complex fraud scheme to enrich himself at the expense of others,” stated U.S. Attorney Scott. “The U.S. Attorney’s Office will continue to work diligently with its law enforcement partners to expose schemes like this and bring criminals like the defendant to justice.”

“The scope of the fraud is staggering,” said Michael T. Batdorf, Special Agent in Charge, IRS Criminal Investigation. “As a well-known real-estate developer, title companies and banks competed for Mr. Alizadeh’s business. He submitted altered purchase contracts that greatly inflated the purchase price. This scheme cost financial institutions over $22 million. While this sentence cannot reverse the damage caused by Alizadeh and his co-defendant, it highlights the ongoing commitment of IRS-CI to hold accountable those involved  in these types of crimes.”

“Today’s sentencing holds defendant Alizadeh accountable for causing more than $22 million in losses to the financial institutions, by corruptly inflating the value of property to obtain millions of dollars in fraudulent bank loans,” stated FDIC Inspector General Jay N. Lerner. “This case is a powerful example of law enforcement cooperation to combat fraud and bring such swindlers to justice.”

This case is the product of an investigation by the Federal Bureau of Investigation, the IRS Criminal Investigation, and the Federal Deposit Insurance Corporation, Office of Inspector General. Assistant U.S. Attorneys Michael D. Anderson and Heiko P. Coppola are prosecuting the case.

On December 15, 2017, Weaver pleaded guilty to one count of wire fraud and one count of bank fraud and is scheduled for sentencing on June 22, 2018. She faces a maximum statutory penalty of 30 years in prison on each count 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. — A federal grand jury returned a one-count indictment today against Derek Carl Toledo, 30, of Shiprock, New Mexico. The indictment charges him with being a felon in possession of a firearm, U.S. Attorney McGregor W. Scott announced.

According to court documents, on March 8, 2018, law enforcement officers responded to reports that there was at least one car stopped on the shoulder of Interstate 5 near the exit for Sweetbrier Avenue in Shasta County. One of the people near the stopped car was Toledo, who has a prior felony conviction for arson and is prohibited from possessing a firearm. After investigating the scene, officers found a DPMS A-15 .223-caliber rifle, all components for a Bushmaster BA50 .50-caliber rifle, and three loaded 30-round magazines in Toledo's car.

U.S. Attorney Scott stated, “The Department of Justice has made it a priority for federal prosecutors to work in partnership with local law enforcement to reduce violence in our communities. The prosecution of firearms offenses is one way that we can make our neighborhoods safer. The U.S. Attorney’s Office is committed to working with our partners throughout the Eastern District of California to accomplish this goal.”

Shasta County District Attorney Stephanie A. Bridgett stated: “My office is committed to working with the U.S. Attorney’s Office to identify local offenders suitable for federal prosecution in order to help reduce violent crime in our community. We share the U.S. Attorney’s goal to protect the citizens of Shasta County.”

This case is the product of investigation by the Federal Bureau of Investigation, the United States Forest Service, the California Highway Patrol, and the Shasta County District Attorney’s Office. Assistant U.S. Attorney Amanda Beck is prosecuting the case.

If convicted, Toledo 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.

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. — Elias Muhammad, 21, of Fresno, was arraigned today for a two-count indictment charging him with being a felon in possession of a firearm, U.S. Attorney McGregor W. Scott announced. A federal grand jury returned the indictment against him on May 24, 2018.

According to court documents, Muhammad posted pictures of himself holding a firearm that was stamped “Detroit PD.” Investigators later recovered the firearm at a residence in Fresno where Muhammad had been staying. As a previously convicted felon, Muhammad is prohibited from possessing a firearm.

This case is the product of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Federal Bureau of Investigation, and the Fresno Police Department. Assistant U.S. Attorney Laurel J. Montoya is prosecuting the case.

If convicted, Muhammad 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.

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. — On May 24, 2018, a federal grand jury indicted Scott Stephen Howard, 33, of Yuba City, charging him with receipt of child pornography, U.S. Attorney McGregor W. Scott announced.

According to court documents, Howard knowingly received visual depictions of minors engaged in explicit conduct between November 2014 and April 2016.

This case is the product of an investigation by the Federal Bureau of Investigation. Assistant U.S. Attorneys Amy Schuller Hitchcock and Matthew G. Morris are prosecuting the case.

If convicted, Howard faces a minimum statutory penalty of five years in prison and 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.

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. — Today, federal, state, and local leaders joined with experts to highlight the devastating damage that illegal, public-land marijuana grows do to our national forests, the wildlife who inhabit them, and the streams and waterways that flow through them.

Making the announcement today were U.S. Attorney McGregor W. Scott; U.S. Department of Agriculture’s Forest Service Director of Law Enforcement and Investigations Tracy Perry; California Attorney General Xavier Becerra; U.S.D.A. Pacific Southwest Regional Forester Randy Moore; Integral Ecology Research Center Director Dr. Mourad Gabriel; California National Guard Major General David Baldwin; Fresno County Sheriff Margaret Mims; Siskiyou County Sheriff Jon Lopey; and the Director of High Intensity Drug Trafficking Areas (HIDTA) program Bill Ruzzamenti.

Every year, acres of marijuana are illegally planted throughout the nation’s pristine public lands; the damage is widespread and long-lasting. While law enforcement have worked for years to eradicate these illegal marijuana grows, new data has emerged to show how they cause far-reaching harm to the environment and threaten public safety.

“Growing marijuana on federal public lands is, and has always been, illegal, and the destruction it wreaks on the environment must be stopped,” said U.S. Attorney Scott. “Our national parks and forests are priceless treasures held in trust for the public to enjoy for generations to come. But these assets are being destroyed by criminal organizations that cultivate millions of marijuana plants on these lands each year for profit. The growing scientific evidence showing the depth and scale of this destruction to the forests, wildlife and waterways is a wake‑up call that we must heed. My office is committed to raising awareness about this issue and joining with our partners to put an end to this profound problem.”

U.S. Department of Agriculture’s Forest Service Director of Law Enforcement and Investigations Tracy Perry stated, “The illegal cultivation of marijuana on National Forest System lands poses a significant risk to the public, to Forest Service employees, and to the environment. The Forest Service is committed to working in partnership with our federal, state and local cooperators to ensure that our National Forests are a safe place to visit and that our precious natural resources are protected for present and future generations.”

“The illegal growth of cannabis is undeniably a major threat to public safety. It is also killing our wildlife, polluting our waters, and destroying our public lands,” said Attorney General Xavier Becerra. “At the California Department of Justice, we work hard with our federal and local law enforcement partners to combat illegal marijuana planting under our Campaign Against Marijuana Planting (CAMP) program. We will enforce California’s cannabis laws to protect our people and those who play by the rules in this emerging industry and we will hold accountable those who don’t.”

Dr. Gabriel of the Integral Ecology Research Center said: “California now has contaminated water, soil, plants and wildlife due to the clandestine actions of those cultivating marijuana on our public lands. We are at a precipice where we can either ignore the prologue of the past when public resources were illegally exploited for monetary gain or proactively conserve these national public lands for future generations to use and enjoy.”

Those who plant and tend the illegal grows use toxic fertilizers, pesticides, and rodenticides that find their way into the soil and streams, and consequently infect, poison, and kill plants and wildlife. Research shows that these poisons are carried away from the grow sites and are ingested by threatened species as well as species that are hunted and consumed by humans for food. One of the deadliest pesticides, carbofuran, which is banned on all crops grown for human consumption, has been increasingly used at these sites with experts finding signs of it at 78 percent of all known grow sites. According to Dr. Gabriel, of the Integral Ecology Research Center, who presented today, 70 percent of northern spotted owls, a federally listed species, tested positive for pesticides. The poisons also find their way into water supplies for towns and cities downstream.

Those responsible for the illegal cultivation also leave behind piles of garbage and waste, including PVC pipes, irrigation lines, gardening tools and human waste, which add to the blight on these previously undisturbed habitats. In addition to the poison and waste, the cultivators divert water to the marijuana plants, drying up streams and reservoirs used for plants, animals and humans. According to Dr. Gabriel, by even a conservative estimate, a single marijuana plant uses about six gallons of water per day. The 1.1 million illegal marijuana plants removed in California in 2016 would have used approximately 1.3 billion gallons of water, which is as much as the consumption of up to three months in the municipality of San Francisco.

According to HIDTA Director Bill Ruzzamenti: “Many public land trespass marijuana cultivation sites and complexes are operated by drug trafficking organizations that are ultimately controlled by Mexican drug cartels. Every year, agents arrest scores of Mexican nationals illegally growing marijuana. While relatively few suspects talk to police, some do, and some claim to be affiliated with Mexican drug cartels, usually naming the Sinaloa Cartel. In 2017, an investigation of a public land marijuana grow site complex in Siskiyou County yielded indications of involvement by the Cartel Jalisco Nueva Generación (CJNG or Jalisco New Generation).”

By bringing together subject matter experts, federal, state, and local law enforcement can reclaim illegal marijuana grow sites, and protect the environment and the public. These efforts will be supported by Congress’s recent appropriate of money to the Forest Service to use in combating this problem.

SACRAMENTO, Calif. — An eight-count indictment was unsealed on Tuesday following the arrest of Loretta Darlene Stewart-Cabrera, 52, of Sacramento, for her role in a scheme to defraud beneficiaries of a trust she administered as a professional fiduciary, U.S. Attorney McGregor W. Scott announced.

On April 26, 2018, a federal grand jury returned an 8-count indictment, charging Stewart‑Cabrera with mail fraud, wire fraud, and money laundering.

According to court documents, Stewart-Cabrera was a professional fiduciary who served as the trustee of a trust. The trust owned a Sacramento property. After the trust grantor died in December 2012, Stewart-Cabrera executed a scheme to obtain and spend the trust assets. Stewart-Cabrera did this by selling the trust’s property, distributing to the trust beneficiaries only approximately $30,000 of the more than $300,000 she received from the sale of the property, and spending the remaining money without the permission or knowledge of the trust beneficiaries. At the time, Stewart-Cabrera was in financial distress. She used a portion of the trust funds to gamble and dine in Las Vegas casinos, pay family members, and purchase merchandise.

This case is the product of an investigation by the Federal Bureau of Investigation and Internal Revenue Service, Criminal Investigation. Assistant U.S. Attorney Brian A. Fogerty is prosecuting the case.

If convicted of the mail fraud and wire fraud counts, Stewart-Cabrera faces a maximum statutory penalty of 20 years in prison and a $250,000 fine. If convicted of the money laundering counts, Stewart-Cabrera faces a maximum statutory penalty of 10 years in prison, and a fine of $250,000 or twice the value of the property involved in the money laundering transactions. 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. — Seth Adam Depiano, 37, formerly of Clovis, was sentenced on Tuesday by U.S. District Judge Dale A. Drozd to 12 years and seven months in prison following his guilty pleas to mail fraud, wire fraud and money laundering charges, U.S. Attorney McGregor W. Scott announced.

According to court documents, Depiano operated a Ponzi scheme that lured real estate investors to give money to Depiano and the businesses he controlled, including The Rental Group, US Funding and Home Services LLC, and Draymond Homes. Depiano fraudulently promised investors that he would use their money to purchase residential properties and either manage the properties for rental income or arrange for them to be renovated and resold. In many cases, Depiano promoted the properties to investors with documents that falsely represented high occupancy rates. Depiano oftentimes had no authority to purchase or sell the properties and misled investors with fraudulent documents misrepresenting the properties’ ownership. Some of the properties Depiano marketed to investors did not even exist.

Depiano frequently used the investors’ money to pay his personal expenses, fund his gambling activities, and finance the settlement of the investors’ civil lawsuits against him. He also paid investors purported rental income that, in fact, was money other investors gave to Depiano for investment purposes.

Depiano admitted to defrauding investors of approximately $24 million and was ordered by the court to pay restitution to investors of more than $19.6 million. Depiano also was ordered to forfeit more than $700,000 seized from several bank accounts and cash, and a baseball card collection valued at more than $31,000.

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. — Boone B. Khoonsrivong, 41, of Stockton, was sentenced today by U.S. District Judge Troy L. Nunley to five years and five months in prison for conspiracy to commit credit card fraud and aggravated identity theft in connection with a scheme aimed at Target REDcard account holders across the United States involving hundreds of fraudulent transactions and at least 1,000 victims, United States Attorney McGregor W. Scott announced. Khoonsrivong was also sentenced to a concurrent term of three years for destruction of letter boxes in in Wallace, California, charged in a separate indictment.

According to the indictment charging the credit-card fraud conspiracy, between March 2014 and September 2015, Khoonsrivong and eight co-conspirators stole personal information from victims through various methods. The conspirators then used that information to create unauthorized access devices or otherwise used unauthorized access devices to obtain things of value in excess of $1,000. Part of the scheme involved using unauthorized access devices in the form of Target REDcard account numbers to buy large amounts of electronics, pre-paid gift cards, and other goods at Target locations throughout the Sacramento area, northern California, and elsewhere. The indictment further alleged that Khoonsrivong possessed and used device-making equipment with the intent to defraud. 

In all, the indictment alleges that more than 300 counterfeit and unauthorized access devices were possessed, used, produced, or trafficked by members of the conspiracy, and over 1,000 victims have been identified to date as having had their identities compromised as a result of the conspiracy. All of Khoonsrivong’s eight co-defendants have pled guilty, six of the co-defendants have already been sentenced, and two await sentencing. 

This case is the product of an investigation by the United States Postal Inspection Service and the Stockton Police Department. Assistant United States Attorneys André M. Espinosa and Rosanne L. Rust are prosecuting the case.

SACRAMENTO, Calif. — A federal grand jury returned a one-count indictment today against Tamaran Edward Bontemps, 20, of Granite Bay, charging him with possessing a firearm as a felon, U.S. Attorney McGregor W. Scott announced.

According to court documents, on April 18, 2018, law enforcement officers stopped a group of four men in Vallejo after officers noticed a gun-shaped object in one of the men’s clothing. The officers found a 9 mm handgun in the first man’s sweater. During the encounter, one of the officers also saw an object inside Bontemps’ sweatshirt that the officer believed was a gun. Officers searched Bontemps and located a .40 caliber pistol holstered inside Bontemps’ sweatshirt. Bontemps 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 Federal Bureau of Investigation’s Solano County Violent Crimes Task Force and the Vallejo Police Department. 

If convicted, Bontemps 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.

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. —Steel A. Davis, 45, of Chico, was sentenced today by United States District Judge Troy L. Nunley to 33 months in prison for a scheme to obtain bonuses for referring individuals to enlist in the California National Guard, U.S. Attorney McGregor W. Scott announced.

On January 29, 2018, after an eight-day trial, a federal jury found Davis guilty of eight counts of wire fraud.

“Those who receive funds from the government have a duty to follow the law,” said Frank Robey, the director of the U.S. Army Criminal Investigation Command’s Major Procurement Fraud Unit. “This verdict should put those attempting to defraud the U.S. government on notice that there will be consequences for their actions. Our organization and our law enforcement partners will continue to pursue those who erode the rule of law in order to exploit others for their own greed.”

“During his time as a California Army National Guard Recruiter, Steel Davis betrayed public trust by conspiring with others to illegally obtain thousands of dollars in bonus money and kickbacks” said Special Agent in Charge Sean Ragan of the FBI Sacramento field office. “The FBI is committed to working with its investigative partners to identify and vigorously pursue those who engage in public corruption and government fraud.”

According to court documents and evidence presented at trial, the United States Army contracted with a company called Document and Packaging Broker Inc. (DOCUPAK) to administer the Guard Recruiting Assistance Program (G-RAP). Under G-RAP, members of the California National Guard served as Recruiting Assistants. If a Recruiting Assistant referred a potential Guard member to a recruiting office and that person ultimately enlisted, the Recruiting Assistant was eligible to receive a $1,000 payment when a person enlisted and a second $1,000 payment when the recruit left for boot camp.

Davis was a recruiter with the California National Guard and was ineligible to participate in the G-RAP program. However, realizing the potential to make money through G-RAP, Davis gave recruits’ information to his co‑conspirators who had signed up to be Recruiting Assistants. The RAs would then file false claims with DOCUPAK that they had referred the recruits to join the Guard when, in fact, the recruits had joined on their own initiative. When the compensation was received, Davis split the proceeds of the fraud with the Recruiting Assistants.

This trial was the fourth and final trial derived from a multi-agency investigation by the Army Criminal Investigative Command Major Procurement Fraud Unit, the Defense Criminal Investigative Service, and the Federal Bureau of Investigation that began in 2012.  In total, 10 former soldiers across the Fresno and Sacramento divisions of the Eastern District of California were convicted of criminal charges for abusing the GRAP program. Separate from the criminal cases, other soldiers agreed to repay bonuses as part of civil settlements with the United States. 

This case was the product of an investigation by the Army Criminal Investigation Command Major Procurement Fraud Unit, the Defense Criminal Investigative Service, and the Federal Bureau of Investigation. Assistant United States Attorneys Matthew G. Morris and Katherine T. Lydon prosecuted the Sacramento cases, and Assistant United States Attorney Michael G. Tierney and Trial Attorneys Alexis J. Loeb and Jacklin Chou Lem prosecuted the Fresno cases. Assistant United States Attorney Vincente Tennerelli represented the United States in civil recovery efforts.

Other National Guard members and recruiters have been charged in similar schemes in the Eastern District of California.

• 1:14-cr-109-LJO — Jimmy D. Maldonado, 37, and Mayra L. Maldonado, 31, both of Fresno, were convicted on January 29, 2018, after a jury found them guilty of three counts of wire fraud. On May 21, 2018, Jimmy Maldonado was sentenced to six months in prison, and Mayra Maldonado was sentenced to five years of probation.
• 2:14-cr-153 TLN — Brian Kaps, 44, of Chico, pleaded guilty on November 21, 2014, to one count of wire fraud. He is scheduled to be sentenced on May 31, 2018.
• 2:14-cr-152 TLN — Sarah Nattress, 30, of Paradise, pleaded guilty on October 23, 2014, to one count of wire fraud. She is scheduled to be sentenced on May 31, 2018.
• 2:18-cr-012 TLN — Jason M. Hair, of Paradise, pleaded guilty on January 18, 2018, to one count of wire fraud and one count of making false statements. He is scheduled to be sentenced on July 12, 2018.
• 1:14-cr-107 DAD — Leonardo Pesta, 49, of Mountain View, pleaded guilty on July 27, 2015, to one count of wire fraud and was sentenced to two years of probation.
• 1:14-cr-108-LJO — Nicholas Huerta, 36, of Fresno, pleaded guilty on September 14, 2015, to one count of wire fraud and was sentenced to four years of probation.
• 2:14-cr-151 JAM — Richard C. Sihner, 55, of Elk Grove, was convicted on January 22, 2016, of 18 counts of wire fraud and one count of making false statements following a seven-day jury trial and was sentenced to 30 months in prison.
• 1:14-cr-106 DAD — Joaquin Cuenca, 40, of San Diego, was convicted on February 1, 2016, of three counts of wire fraud and one count of making false statements following a seven-day jury trial. He was sentenced to six months in prison.

A former U.S. Air Force staff sergeant pleaded guilty today to seeking and receiving a bribe from an Afghan contractor while serving in Afghanistan.  The sergeant worked at the Humanitarian Aid Yard (HA Yard) at Bagram Airfield in Afghanistan and was involved in the issuance of contracts to replenish supplies at the HA Yard under the Commander’s Emergency Response Program (CERP).  The sergeant is the eighth defendant to plead guilty in the investigation of this matter. 

Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, U.S. Attorney McGregor W. Scott of the Eastern District of California, Special Agent in Charge Matthew J. DeSarno of the FBI’s Washington Field Office’s Criminal Division, Special Inspector General for Afghanistan Reconstruction (SIGAR) John F. Sopko, Special Agent in Charge Robert Craig of the Defense Criminal Investigative Service’s (DCIS) Mid-Atlantic Field Office, Director Frank Robey of the U.S. Army Criminal Investigation Command’s (CID) Major Procurement Fraud Unit (MPFU) and Colonel Kirk B. Stabler, Commander of the Air Force Office of Special Investigations (OSI) made the announcement.

David A. Turcios, 41, currently of San Jose, California, was charged in an indictment filed in July 2017 in the Eastern District of California with two counts of seeking and receiving bribes.  The indictment charges him with seeking and receiving $8,500 in bribes from two Afghan contractors who sought contracts for companies with which they were associated.  Turcios pleaded guilty to count two of the indictment before U.S. District Court Judge John A. Mendez of the Eastern District of California, in Sacramento.  Turcios is scheduled to be sentenced by Judge Mendez on Aug. 28.

Turcios admitted at the time of the guilty plea that, from November 2010 until November 2011, he worked as a U.S. Air Force staff sergeant at the HA Yard.  He was the yard supervisor responsible for replenishing supplies such as rice, beans and clothing at the HA Yard and overseeing the loading of trucks that took the supplies off the base.  During Turcios’s tenure, approximately nine contracts in which Turcios was involved were awarded to Afghan vendors with a value of over $2 million.

Turcios admitted that as part of his duties at the HA Yard, Turcios worked closely with, among others, an Afghan vendor (the Vendor) who sought to obtain contracts to replenish supplies in the HA Yard for companies with which he was associated.  In September 2011, Turcios agreed to allow the Vendor to provide the names of the three companies to be selected on each of the replenishment contracts he oversaw, effectively allowing the Vendor to select the company awarded the respective contract.  Because Turcios was nearing the end of his deployment in Afghanistan, he only had time to prepare approximately two contracts with the Vendor and, in October 2011, two contracts in which Turcios was involved were awarded to companies owned by individuals associated with the Vendor.

In late October or early November 2011, just prior to Turcios’s re-deployment to the United States, the Vendor offered Turcios $3,500 in return for Turcios’s actions on behalf of the Vendor as to HA Yard replenishment contracts, Turcios admitted.  Turcios thereafter sent several emails urging U.S. Army officials to approve payments to the Vendor in connection with the Vendor’s HA Yard contracts and obtained from the U.S. Army a voucher authorizing payment to the Vendor.  In February 2013, the Vendor wire transferred to Turcios’ wife’s bank account $500 of the $3,500 promised.

This matter was investigated by the FBI, SIGAR, DCIS, Army CID-MPFU and Air Force OSI.  Trial Attorney Daniel Butler of the Criminal Division’s Fraud Section is prosecuting the case, with assistance from Assistant U.S. Attorney Matthew Yelovich of the Eastern District of California.

FRESNO, Calif. — A federal grand jury returned an eight-count indictment against Aurora Cuara, 38, of Lemoore, last Thursday, charging her with theft from an Indian tribal organization, U.S. Attorney McGregor W. Scott announced.

According to court documents, Cuara was the director of the Santa Rosa Rancheria Department of Education in Lemoore, which belongs to the Tachi Yokut tribe. The Rancheria operated a higher education program through its Department of Education that allowed Tachi Yokut tribal members to apply to have their higher education tuition and other costs of school attendance, such as child care and books, paid by Santa Rosa Rancheria.

According to the indictment, while overseeing the reimbursement program, Cuara submitted false documentation in order to receive reimbursement for tuition, childcare, mileage and other costs of attending college between 2012 and 2016, even though she was not a student. To support her reimbursement requests, Cuara submitted falsified documents, including fabricated schedules, grade reports, and receipts.

This case is the product of an investigation by the Federal Bureau of Investigation. Assistant U.S. Attorney Megan Richards is prosecuting the case.

If convicted, Cuara 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.

FRESNO, Calif. —Sylvia Ochoa, 35, of Selma, was sentenced Monday by U.S. District Judge Dale A. Drozd to 18 months in prison for embezzlement from a financial institution, U.S. Attorney McGregor W. Scott announced.

According to court documents, Ochoa was the branch manager at the Bank of America’s Fresno branch at 4445 E. Tulare Street. On multiple occasions between March 2013 and October 2013, Ochoa prevented other bank employees from counting the cash in the vault located in the branch. She would then enter the vault after the branch was closed and remove cash to spend on personal expenses. Ochoa also made fraudulent counter credits and transfers into accounts over which she had control, including two accounts she opened in the name of her boyfriend. The money was then spent on personal expenses and items, including a truck, casino gambling, and expensive handbags. Ochoa embezzled at least $165,850 from Bank of America during this time.

This case was the product of an investigation by the Federal Bureau of Investigation and the Fresno Police Department. Assistant U.S. Attorney Michael G. Tierney prosecuted the case.

SACRAMENTO, Calif. — U.S. District Judge John A. Mendez sentenced Gordon Owen Miller, 60, of Clayton, to 20 years in prison for methamphetamine trafficking, U.S. Attorney McGregor W. Scott announced.

On February 7, 2018, after a five-day trial, a federal jury found Miller and his co‑defendant Donnie Joe Phillips, 65, of Concord, guilty of conspiracy to distribute methamphetamine. Miller was found guilty of two counts of distribution and two counts of possession with intent to distribute methamphetamine. Phillips was also found guilty of eight counts of distribution and two counts of possession with intent to distribute methamphetamine.

According to trial evidence, between June 2014 and February 2015, Phillips and Miller supplied methamphetamine to co-defendant Phyliss Mosher, 51, of Vallejo, who supplied it to an undercover agent. The drug deals took place in Solano and Yolo Counties. On January 25, 2018, Mosher was sentenced to 15 years in prison after she pleaded guilty to the methamphetamine trafficking conspiracy on May 9, 2017. Phillips is scheduled to be sentenced before Judge Mendez on June 19, 2018.

This case is the product of an investigation by the Drug Enforcement Administration, the El Dorado County Sheriff’s Office, the El Dorado County District Attorney’s Office, the California Highway Patrol, the Vallejo Police Department, and the California Department of Corrections and Rehabilitation. Assistant U.S. Attorneys Jason Hitt and Jill Thomas 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.

SACRAMENTO, Calif. — Today, just as trial was set to begin, Martin Gasca-Rojas, 49, of Mexico, pleaded guilty to three counts of 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 is the product of an investigation by the Drug Enforcement Administration and the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI). Assistant U.S. Attorneys Audrey B. Hemesath and Owen Roth are prosecuting the case.

Gasca-Rojas is scheduled to be sentenced by U.S. District Judge John A. Mendez on August 21, 2018. Gasca-Rojas 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. — U.S. District Judge Dale A. Drozd sentenced Brandi Marshall, 41, of Fresno to four years and three months in prison, and Daniel Barrios Jr., 37, of Fresno to two years and seven months in prison for conspiracy to commit wire fraud and bank fraud and conspiracy to launder money in connection with their embezzlement of money from a Fresno business, U.S. Attorney McGregor W. Scott announced.

According to court documents, Marshall was employed as the company’s bookkeeper between October 2014 and March 2016 and was responsible for, among other things, receiving and depositing checks from customers to pay their invoices. During that time, she and Barrios misappropriated more than 100 checks and fraudulently deposited them into Barrios’ personal bank account. Marshall and Barrios used money derived from the fraudulently deposited checks for personal purchases, including more than $35,000 to purchase and accessorize a 2016 Ford Mustang GT, and more than $25,000 to purchase a 2012 Dodge Challenger. Marshall created fictitious entries in the company’s computer accounting application to attempt to conceal the embezzlement. Together, Marshall and Barrios embezzled more than $1 million and were ordered by the court to pay restitution.

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

FRESNO, Calif. — A federal grand jury returned a six-count indictment today against Juan Pina, 22, of Bakersfield, charging him with conspiracy to distribute and possess with intent to distribute heroin, methamphetamine, and cocaine and other related charges, U.S. Attorney McGregor W. Scott announced.

According to court documents, on November 16, 2017, Pina allegedly paid to ship nearly 300 grams of cocaine through a Bakersfield parcel service to Sioux Falls, South Dakota. On November 30, 2017, Pina shipped a package containing three pounds of methamphetamine to Indianapolis, Indiana. On December 1, 2017, it is alleged that Pina shipped a package containing approximately 1 kilogram of cocaine to Virginia Beach, Virginia. Records obtained from the parcel service indicated that Pina, using the same alias each time, made similar shipments on at least 45 additional occasions.

On May 3, 2018, search warrants were executed for Pina’s residence and vehicle, and additional drugs were recovered at each location.

This case is the product of an investigation by the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and the Bakersfield Police Department. Assistant U.S. Attorney Brian K. Delaney is prosecuting the case.

If convicted, Pina 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.

SACRAMENTO, Calif. — Attorney General Sessions and McGregor W. Scott, the U.S. Attorney for the Eastern District of California, recognized the service and sacrifice of federal, state, local, and tribal police officers on the occasion of National Police Week, and commented on the FBI’s 2017 Law Enforcement Officers Killed and Assaulted report.

According to statistics collected by the FBI, 93 law enforcement officers were killed in line-of-duty incidents in 2017 — a 21 percent decrease from 2016 when 118 law enforcement officers were killed in line-of-duty incidents.

Additionally, in 2017 there were 46 law enforcement officers killed in line-of-duty incidents as a result of felonious acts — this is a 30 percent decrease from 2016, when 66 law enforcement officers were killed in line-of-duty incidents as a result of felonious acts.

 “One officer death is too many,” Attorney General Sessions said. “While we are inexpressibly grateful to have had a decrease in the number of officers killed in the line-of-duty last year, the number is still far too high. At the Department of Justice, we honor the memories of the fallen, and we pray for their families. We are also following President Trump’s Executive Orders to back the women and men in blue, to enhance law enforcement safety, and to reduce violent crime in America. Those priorities will help keep every American safe, including those who risk their lives for us. As always, we have their backs and they have our thanks.”

“This week is a somber reminder of the dangers our law enforcement officers face on our behalf,” U.S. Attorney Scott said. “These officers strive to keep our communities safe and they put their lives on the line in the service of others. We are humbled by the sacrifices they make and we take this opportunity to express our deepest gratitude for their service.”

In October 1962, Congress passed and President Kennedy signed a joint resolution declaring May 15th as National Peace Officers Memorial Day to honor law enforcement officers killed or disabled in the line of duty. The resolution also created National Police Week as an annual tribute to law enforcement service and sacrifice.

During Police Week, which is observed from Sunday, May 13 to Saturday, May 19, 2018, our nation celebrates the contributions of police officers from around the country, recognizing their hard work, dedication, loyalty and commitment in keeping our communities safe.

In the last several days, U.S. Attorney Scott and others from the U.S. Attorney’s Office helped to commemorate the selfless service of law enforcement officers by attending the California Highway Patrol Peace Officer Memorial at the CHP Academy, the California Peace Officer Memorial Ceremony at the California Peace Officers Memorial, the Sacramento Peace Officer Memorial, and the Sacramento County District Attorney’s Annual Public Safety and Community Appreciation Luncheon.

Today, we take time to remember the courage by which peace officers live their lives, and we remember the tragic loss of those from our community who died in the line of duty:

CHP Officer Lucas Forrest Chellew, who died in February 2017;

Stanislaus County Deputy Sheriff Jason Allen Garner who died in May 2017; and,

Sacramento County Deputy Sheriff Robert Allan French who died in August 2017.

The names of all 93 fallen officers nationwide will be formally dedicated on the National Law Enforcement Officers Memorial in Washington, DC, during the 30th Annual Candlelight Vigil on the evening of May 13, 2018. So that people across the country can experience this unique and powerful ceremony, the vigil will be livestreamed beginning at 5:00 p.m. PDT on May 13th. To register for this free online event, visit www.LawMemorial.org/webcast.

The Candlelight Vigil is one of many commemorative events taking place in the nation’s capital during National Police Week 2018.

For more information about other National Police Week events, please visit www.policeweek.org.

To access the FBI’s 2017 Law Enforcement Officers Killed and Assaulted report, please visit www.fbi.gov.

FRESNO, Calif. — Mark Merrill Reynolds, 62, of Fresno, pleaded guilty today to  unlawfully converting to his own use client funds held by his company, Ben-E-Lect, U.S. Attorney McGregor W. Scott announced.

According to court documents, Reynolds was the president and sole shareholder of Ben‑E-Lect and Ben-E-Lect of Visalia. These companies operated in Fresno and Tulare Counties. Ben-E-Lect’s clients were small to medium sized businesses that purchased high‑deductible, fully insured group medical plans from independent insurance carriers, and then self‑insured beneficiaries for amounts up to the amount of the high deductible.  Ben-E-Lect processed the claims using funds that its clients paid into an account known as the Ben-E-Lect Employer Elect account. Ben-E-Lect was required to hold these funds in a fiduciary capacity and to withdraw clients’ funds only for specific purposes, none of which included Ben-E-Lect’s own operational expenses or Reynold’s personal gain.

According to the plea agreement, Reynolds converted funds from the Employer Elect account to his own use by withdrawing funds from the account and then using these funds for business operational expenses of Ben-E-Lect, and to pay his own personal expenses. 

This case is the product of an investigation by the Federal Bureau of Investigation and the California Department of Insurance. Assistant U.S. Attorneys Mark J. McKeon and Henry Z. Carbajal III are prosecuting the case.  Reynolds is scheduled to be sentenced by U.S. District Judge Lawrence J. O’Neill on August 20, 2018, at 10:45 a.m. 

Reynolds faces a maximum statutory penalty of 5 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.