Eastern District of California

FRESNO, Calif. — Rafael Torres-Armenta (Torres), 30, a native and citizen of Mexico, was sentenced today to three years and one month in prison for conspiring to manufacture, distribute and possess with intent to distribute marijuana in connection with a large-scale cultivation operation that impacted a prehistoric site, U.S. Attorney Phillip A. Talbert announced.

 

Chief U.S. District Judge Lawrence J. O’Neill also ordered Torres to pay $5,233 in restitution to the U.S. Forest Service for the damage to public land and natural resources caused by their cultivation activities.

 

According to court documents, Torres conspired with Carlos Piedra-Murillo (Piedra), 30, of Michoacán, Mexico, Juan Carlos Lopez, 33, of Flagstaff, Arizona; and Javier Garcia-Castaneda (Garcia), 38, of Michoacán, Mexico, to cultivate marijuana in the Domeland Wilderness. The Domeland Wilderness is a federally designated wilderness area about 55 miles northeast of Bakersfield and is known for its many granite domes and unique geologic formations. Law enforcement officers seized over 8,000 marijuana plants, 17 pounds of processed marijuana, a .22‑caliber rifle, a pellet rifle, and hundreds of rounds of .22‑caliber ammunition.

In June 2017, Piedra was sentenced to two years and one month in prison, Lopez was sentenced to five years in prison, and Garcia was sentenced to three years and one month in prison.

The marijuana cultivation operation caused extensive environmental damage. It covered about 10 acres and was within the burned area of the 2000 Manter Fire. Some of the new vegetation and trees that sprouted after the fire had been cut and trimmed to make room for the marijuana plants. Water was diverted from a tributary stream of Trout Creek, a major tributary to the Kern River. Fertilizer and pesticides, including illegal carbofuran and zinc phosphide, highly toxic pesticides from Mexico, were found at the site. Large piles of trash were found near the campsite. The moving of soil to accommodate a basin around each marijuana plant caused extensive damage to a large prehistoric Tűbatulabal archaeological site. Holes were dug in the middle of the archaeological site and artifacts were found scattered on the surface among the marijuana plants.

This case was the product of an investigation by the U.S. Forest Service, the Bureau of Land Management, the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), and the California Department of Fish and Wildlife. Assistant U.S. Attorney Karen Escobar prosecuted the case.

FRESNO, Calif. — Timothy Ortiz, aka Michael Fitton, 46, of Waukegan, Illinois, pleaded guilty today for his role in a large-scale smokeable synthetic cannabinoids trafficking organization that shipped misbranded synthetic drugs interstate from a processing lab in Millbrae, California, U.S. Attorney Phillip A. Talbert announced.

 

Smokeable synthetic cannabinoids, commonly known as “spice” or “K2,” is falsely touted as legal alternatives to controlled substances. In some instances, they are far more lethal.

 

In pleading guilty, Ortiz acknowledged that from 2011 to 2013, he was involved in the importation of raw synthetic cannabis from China that was processed and distributed from warehouses in Pensacola, Florida and Millbrae and Stockton, California. Ortiz set up the Millbrae processing lab and served as its director of operations and production manager. The drugs were sold under various brand names such as “Bizarro,” “Orgazmo,” or “Headhunter.” To evade detection by federal law enforcement, Ortiz and his co-defendants deliberately misbranded and marketed their product as “potpourri” or “herbal incense” that they claimed was “not for human consumption,” even though they knew that it would be used as an intoxicant.

 

According to the plea agreement, Ortiz and his co-defendants shipped at least 24 tons of misbranded smokeable synthetic cannabinoids that contained the synthetic drugs AM-2201 and XLR11 to smoke shops and retail outlets throughout the United States. They generated in excess of $33 million in sales. At the time of the illicit enterprise, AM-2201 was a schedule I controlled substance and XLR11 was a controlled substance analogue that was placed under schedule I as a controlled substance in May, 2013. Ortiz has agreed to forfeit $137,110, which represents the proceeds that he derived during his participation in the illegal operation. Ortiz and his co‑defendants distributed the drugs to the Stuffed Pipe smoke shops in the Central Valley and to numerous retail establishments throughout the United States.

 

This case is the product of an Organized Crime Drug Enforcement Task Force (OCDETF) investigation by the Drug Enforcement Administration; the Internal Revenue Service, Criminal Investigation, and the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), with assistance from the Food and Drug Administration and the Fresno County Sheriff’s Office. The OCDETF program was established in 1982 to mount a comprehensive attack against organized drug traffickers. Today, the OCDETF program is the centerpiece of the U.S. Attorney General’s strategy to reduce the availability of drugs by disrupting and dismantling major drug trafficking organizations and money laundering organizations and related criminal enterprises. This OCDETF investigation was also part of a nationwide law enforcement effort coordinated by the DEA’s Special Operations Division. Assistant U.S. Attorney Karen A. Escobar is prosecuting the case.

 

Ortiz is scheduled for sentencing on October 30, 2017. He faces a maximum statutory penalty of three years in prison and a $250,000 fine, or twice the gross gain from the crime. 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.

 

Co-defendants Timothy New, 34, of Pensacola, Florida, pleaded guilty to the fraudulent shipment of misbranded drugs, and Natalie Middleton, 31, of Clovis, pleaded guilty to money laundering. In December 2016, New was sentenced to two and a half years in prison and Middleton was sentenced to four months in prison. Douglas Jason Way, aka Jason Way, 44, of Evanston, Illinois, is scheduled for a jury trial in February 2018. Way is charged with multiple controlled substance offenses and the misbranding charge, and if found guilty, faces a maximum penalty of 20 years in prison and a $10 million fine. The charges against him are only allegations; Way is presumed innocent until and unless proven guilty beyond a reasonable doubt.

FRESNO, Calif. — U.S. District Judge Anthony W. Ishii sentenced Iran Dennis “Denny” Foster, 46, of Fresno, today to 18 months in prison for conspiring to distribute and possessing with intent to distribute marijuana, U.S. Attorney Phillip A. Talbert announced.

Iran Foster is one of seven defendants named in a multicount indictment returned on April 9, 2015, charging them with a variety of drug trafficking offenses. One of the defendants was former Fresno deputy police chief Keith Foster. His nephew, Iran Foster, regularly traveled to Northern California to purchase marijuana for distribution. Iran Foster pleaded guilty to one count of conspiracy to distribute and possess with intent to distribute marijuana. According to the plea agreement, Iran Foster admitted that his primary source of income was derived from marijuana sales.

Keith Foster proceeded to trial, and on May 23, 2017, a jury found him guilty of conspiracy to distribute and possess with intent to distribute heroin and conspiracy to distribute and possess with intent to distribute marijuana. He is scheduled to be sentenced on November 13, 2017.

This case is the product of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Federal Bureau of Investigation. Assistant U.S. Attorneys Melanie L. Alsworth and Dawrence W. Rice Jr. are prosecuting the case.

Five co-defendants have pleaded guilty and have either been sentenced or are awaiting sentencing. Ricky Reynolds is scheduled to be sentenced on November 13, 2017. Randy Flowers, 51, was sentenced on July 10, 2017 to two years and nine months in prison. On October 11, 2016, Rafael Guzman, 43, of Fresno was sentenced to three years and four months in prison. Jennifer Donabedian, 38, of Fresno, pleaded guilty to concealing a felony and served 12 months’ probation. Sarah Ybarra, 39, of Fresno, pleaded guilty to conspiracy to distribute marijuana and served one year in prison.

FRESNO, Calif. — Mahendra Prasad, 55, of Fremont, was sentenced today by U.S. District Judge Lawrence J. O’Neill to 15 months in prison and ordered to pay $328,000 in restitution for his role in a mortgage fraud scheme, U.S. Attorney Phillip A. Talbert announced.

 

On May 22, 2017, Prasad pleaded guilty to one count of mail fraud affecting a financial institution. According to court documents, in 2006, Prasad caused loan application packages that contained false statements to be submitted to a mortgage lender in order to buy a property in Sacramento. The false statements included statements concerning Prasad’s employer, income, and purported intention to occupy the property as his primary residence. Following his fraudulent purchase, Prasad, with the assistance of others, rented the property as Section 8 housing and collected rents. Prasad did not reside in or occupy the property as his primary residence.

 

In 2013, Prasad applied to a bank to sell the property to another person at a loss to the bank. He falsely claimed to the bank that the “short” sale was an “arm’s length” transaction, and that neither he nor the buyer were related by commercial enterprise. Prasad’s conduct caused a loss to a financial institution of approximately $328,000.

 

This case was the product of an investigation by the Federal Bureau of Investigation, the Stanislaus County District Attorney’s Office, the Federal Housing Finance Agency Office of Inspector General, and the Federal Deposit Insurance Corporation Office of Inspector General, with assistance from the Office of the Special Inspector General for the Troubled Asset Relief Program. Assistant U.S. Attorneys Henry Z. Carbajal III and Christopher D. Baker are prosecuting the case.

 

Co-defendants Jyoteshna Karan, Praveen Singh, Sunita Singh and Nani Isaac are scheduled for a jury trial in U.S. District Court in Fresno, on Monday, December 11, 2017. The charges against the four remaining defendants are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.

FRESNO, Calif. — Ramsey Jeries Farraj, 41, of Bakersfield, was sentenced today to 18 months in prison for conspiring with his former business partner, Majed Bashir “Mike” Akroush, 49, also of Bakersfield, to structure $4,204,965 obtained from the sale of smokeable synthetic drugs, U.S. Attorney Phillip A. Talbert announced.

Smokable synthetic cannabinoids are commonly known as K-2 or spice. They are sometimes marketed as incense or potpourri but contain powerful hallucinogenic chemicals. Consumption of smokable synthetic cannabinoids can lead to illness or even death.

Farraj’s sentence follows his guilty plea in May. According to court documents, Farraj and Akroush obtained synthetic cannabinoids from Haitham Eid Habash, aka Eddie Habash, 54, of Hawthorne, and Zaid Elodat, 30, of Lawndale, and sold the drugs over the internet through their online businesses Blue Whale and World of Incense. They deposited over $4.2 million in proceeds in amounts under $10,000 into various bank accounts they maintained in order to avoid filing a currency transaction report, or CTR, that is required for amounts over $10,000.

In sentencing Farraj, U.S. District Judge Dale A. Drozd ordered the forfeiture of over $5 million seized from various bank accounts, seven properties, a 1962 Chevrolet Impala, one Rolex watch, and the domain names and websites utilized to conduct the illicit drug sales.

The case is part of a nationwide synthetic drug takedown in connection with Project Synergy Phase III that targeted the synthetic designer drug industry, including wholesalers, money launderers and other criminal facilitators. In connection with this case, federal law enforcement officers arrested and charged Farraj, along with Akroush, Habash, and Elodat, and executed 12 search warrants in Bakersfield and the Los Angeles area. Over 1,000 pounds of synthetic drugs, nearly a half a million dollars in cash and four firearms were seized.

Elodat previously pleaded guilty and is scheduled for sentencing later this year. The charges against Akroush and Habash are pending; they are scheduled to appear in federal court in Fresno for a status conference on September 25. If convicted, they 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. As to Akroush and Habash, the charges are only allegations; they are presumed innocent until and unless proven guilty beyond a reasonable doubt.

This case is the product of an investigation by the U.S. Drug Enforcement Administration, the Internal Revenue Service-Criminal Investigation, and the California Highway Patrol, with assistance from the Federal Bureau of Investigation, the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); the U.S. Postal Inspection Service, the California Department of Motor Vehicles, the Kern County Probation, the Kern County Sheriff’s Office, the Bakersfield Police Department, and the Los Angeles County Sheriff’s Office. Assistant U.S. Attorneys Karen A. Escobar, Grant B. Rabenn, and Jeffrey A. Spivak are prosecuting the case.

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

SACRAMENTO, Calif. — Earnest Marshall Badman, 31, of Marysville, pleaded guilty today to aggravated identity theft, U.S. Attorney Phillip A. Talbert announced.

 

According to court documents, in January 2016 and February 2016, Badman executed a scheme to defraud banks by using credit cards and checks and identification documents of others obtained from stolen mail and burglaries.

 

On February 9, 2016, Badman was arrested after a high speed chase in a stolen vehicle in Colusa County. The vehicle pursuit ended in the backyard of an Arbuckle home. Badman attempted to flee on foot but was arrested. At the time of his arrest, Badman possessed burglary tools, credit cards in the names of others, and stolen mail. He possessed the mail and identity information of over 40 victims and over 15 different access devices and credit cards for fraudulent use.

 

This case is the product of an investigation of the U.S. Postal Inspection Service with assistance from the Yuba County Sheriff's Office, California Highway Patrol, Butte County Sheriff’s Office, and the Yuba County Probation Department. Assistant U.S. Attorney Michelle Rodriguez is prosecuting the case.

 

Badman is scheduled to be sentenced by U.S. District Judge Garland E. Burrell Jr. on November 3, 2017. Badman faces a minimum mandatory penalty of two years in prison. 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. — Luis Cortez-Garcia, 44, of Sacramento, was sentenced today to five and a half years in prison by U.S. District Judge Garland E. Burrell Jr. for unlawful manufacturing and sales of firearms, possession of a machine gun, and possession of a unregistered firearm, U.S. Attorney Phillip A. Talbert announced.

 

On December 9, 2016, Judge Burrell sentenced Luis Cortez-Garcia’s brother and co‑defendant Emiliano Cortez‑Garcia to six years in prison for unlawful manufacturing and dealing in firearms, possession of a machine gun, and possession of an unregistered firearm.

 

According to court records, Cortez-Garcia ran a firearm parts business called LCG AR‑15 Parts and Custom Accessories on Florin Road in Sacramento. Through this business, he sold AR-15-style firearms that were manufactured in the metal shop at the rear of the business. Cortez-Garcia did not have a license to manufacture or sell firearms and as an illegal alien and a felon, Cortez-Garcia was prohibited from possessing firearms.

 

During the investigation, undercover agents and at least one convicted felon purchased manufactured-to-order assault weapons from the defendants. These firearms did not have any manufacturer markings or serial numbers, making them untraceable should they be involved in criminal activity. During a search of the business on October 9, 2013, law enforcement officers seized 312 guns, including multiple fully automatic assault rifles, illegal short-barreled rifles, and silencers.

 

Most firearm parts are not subject to regulation by ATF and can be bought and sold without reporting the sales and without requiring a background check. According to court documents, the defendants and others involved in the scheme sold the parts necessary to assemble a firearm. The parts included a metal casting of an incomplete lower receiver called a “blank,” which is not considered a firearm by ATF. The blank is eventually converted into a lower receiver using a drill press or automated machine that creates the precise shape and space necessary for the lower receiver to accept the parts that will allow the firing of a projectile. These parts (e.g., the hammer, bolt or breechblock, and firing mechanism) are the internal mechanical parts that combine with a trigger, firing pin, and other parts to form a functioning firearm. Once the blank is milled into a completed lower receiver, it is considered a firearm by statute even if there is no barrel, handle, or trigger, and it is subject to federal regulation.

 

According to court records, once a customer purchased the firearm parts including a blank lower receiver, the customer was directed to Emiliano Cortez-Garcia who operated the metal shop at the business. Once Emiliano Cortez-Garcia had completed machining the lower receiver, he or Luis Cortez-Garcia would assemble the completed AR-15. Customers paid cash to receive a complete firearm that bore no serial number. No ATF paperwork or background checks were completed. During the course of the investigation, ATF conducted seven undercover purchases of AR-15 firearms.

 

This case was the product of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), and the California Department of Justice, Bureau of Firearms with assistance from the Sacramento Police Department, the Sacramento County Sheriff’s Department, and the California Highway Patrol. Assistant U.S. Attorney Justin Lee prosecuted the case.

FRESNO, Calif. — A federal grand jury returned a two-count indictment today against Fresno residents Alfonso Arreguin Alvarado, 20, and Victor Barragan Gonzalez, 33, charging them with cultivating marijuana and conspiring to cultivate marijuana, U.S. Attorney Phillip A. Talbert announced.

 

According to court documents, the clandestine marijuana grow in the Stanislaus National Forest was seen by the air in June 2017. When law enforcement officers entered the grow site on August 1, 2017, the defendants were found processing harvested marijuana. The officers eradicated over 3,000 marijuana plants in two connected plots.

 

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

 

If convicted, both defendants face a mandatory minimum penalty of 10 years in prison, with a maximum of up to 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. — A federal grand jury returned a three-count indictment today against Maurice Antoine Jefferson, 42, of American Canyon, charging him with possessing marijuana and cocaine for distribution within 1,000 feet of the Will C. Wood High School on Marshall Road in Vacaville and for possessing a firearm as a felon, U.S. Attorney Phillip A. Talbert announced.

According to court documents, Jefferson was the sole proprietor of Shredders Federation clothing store in Vacaville and allegedly used the business as a cover to distribute marijuana and cocaine to high school students and others and as a front for money laundering. When law enforcement officers executed a search warrant at the store in August 2016, they found 6.4 pounds of marijuana, 129 grams of cocaine, and other indicia of drug distribution. Jefferson was carrying a 9 mm pistol with him when Vacaville Police Officers arrived at the business. Jefferson has a felony conviction and is not allowed to possess any firearms.

This case is the product of an investigation by the Federal Bureau of Investigation’s Solano County Violent Crime Task Force, the Vacaville Police Department and the Napa Special Investigations Bureau with assistance from the Solano County District Attorney’s Office. Assistant U.S. Attorney Jason Hitt is prosecuting the case.

If convicted of possessing marijuana with intent to distribute near a school zone, Jefferson faces a maximum statutory penalty of 20 years in prison and a $1 million fine. If convicted of possessing cocaine with intent to distribute near a school zone, Jefferson faces a maximum statutory penalty of 60 years in prison and a $20 million fine. If convicted of possessing a firearm as a felon, he faces a maximum statutory penalty of 10 years in prison and a $250,000 fine. Any sentence would be determined at the discretion of the district court after considering any applicable statutory factors and the Federal Sentencing Guidelines. The charges are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.

SACRAMENTO, Calif. — A jury found Francisco Felix, 44, of Mountain House, guilty today of five felony counts for his role in leading a large, multi-defendant drug-trafficking conspiracy that moved significant quantities of methamphetamine from Mexico into California and throughout the United States, and that controlled at least three marijuana grows in the Central Valley of California, U.S. Attorney Phillip A. Talbert announced.

On February 13, 2014, Felix and 13 other defendants were charged with a number of drug-trafficking crimes. Today the jury found Felix guilty on all five counts submitted to the jury: one count of conspiracy to distribute methamphetamine; one count of conspiracy to manufacture, distribute, and to possess with intent to distribute marijuana; and three counts of using a telephone to facilitate a drug-trafficking crime. Felix is the only defendant to go to trial; 10 co-defendants pleaded guilty and three are fugitives.

 

This case arose from a year-long investigation that revealed a drug-trafficking organization with connections to the state of Sinaloa in Mexico. The organization was based in the Central Valley of California, and actively imported large amounts of methamphetamine into the United States. Evidence at trial established that Felix and his network were capable of importing 50 pounds of methamphetamine (with a wholesale value of approximately $200,000) into the United States every eight days.

 

In addition, the evidence at trial also established that the organization was cultivating substantial quantities of marijuana at many properties in both Stanislaus and San Joaquin counties.

 

Over nine months, investigators acquired over 80 pounds of methamphetamine, approximately 20 pounds of marijuana, and six firearms, including three assault rifles and a “Desert Eagle” .50-caliber handgun, from members of the organization. Finally, on the day of Felix’s arrest, investigators seized over 2,100 growing marijuana plants at properties under Felix’s control.

 

This case is the product of an investigation by the California Department of Justice’s Mountain and Valley Marijuana Investigation Team (MAVMIT), under the auspices of the Central Valley High Intensity Drug Trafficking Area (HIDTA) Program; U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); the Placer County District Attorney’s Office; the Placer County Special Investigations Unit (SIU); the Sheriff’s Departments from Placer, El Dorado and Sacramento Counties; the California Department of Fish and Wildlife; the California Department of Corrections and Rehabilitation; the California National Guard, Counterdrug Task Force; and the Yolo Narcotic Enforcement Team (YONET). In addition, at the conclusion of the investigation, hundreds of law enforcement officers from several states took part in a 28-location takedown.

 

Assistant U.S. Attorneys Justin Lee, Ross Naughton, and Michael Beckwith 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.

 

Felix is scheduled to be sentenced by U.S. District Judge William B. Shubb on December 4, 2017. Felix faces a maximum statutory penalty of life in prison, with a mandatory minimum sentence of 10 years in prison. 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. — David Ryan Burchard, 40, of Merced, pleaded guilty today to conspiracy to distribute and to possess with intent to distribute marijuana on dark web marketplaces, U.S. Attorney Phillip A. Talbert announced.

According to the criminal complaint, Burchard, using the moniker “Caliconnect,” was a major narcotics vendor on the Silk Road and other dark web marketplaces, including Agora, Abraxas, and AlphaBay. Dark-web marketplaces are operated on computer networks designed to conceal the true Internet Protocol (IP) address of the computers accessing the network. In addition, dark web marketplaces allow for payments to be made only in the form of digital currency, most commonly in bitcoin. While not inherently illegal, digital currency is used by dark web marketplaces because online transactions in digital currency can be completed without a third-party payment processor and are therefore perceived to be more anonymous and less vulnerable to law enforcement scrutiny.

According to the complaint, Burchard accepted orders for marijuana and cocaine on dark web marketplaces and then mailed the narcotics from post offices in Merced and Fresno County to his customers throughout the United States. Burchard was paid primarily in bitcoin. Burchard conducted sales in excess of $1.4 million on Silk Road before that dark web marketplace was closed. The complaint alleges that after federal law enforcement shut down the Silk Road website and arrested its founder in October 2013, Burchard transferred his narcotics business to Agora and then to AlphaBay, which are other dark web marketplaces.

This case is the product of an investigation by the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the Internal Revenue Service-Criminal Investigation, the U.S. Postal Inspection Service, and the Fresno Police Department. Assistant U.S. Attorney Grant Rabenn is 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.

Burchard is scheduled to be sentenced by U.S. District Judge Lawrence J. O’Neill on October 30, 2017. Burchard faces a maximum statutory penalty 20 years in prison and a $1 million fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

FRESNO, Calif. — Two former deputies with the Kern County Sheriff’s Office were sentenced today for conspiracy to distribute and possess with the intent to distribute marijuana, U.S. Attorney Phillip A. Talbert announced.

U.S. District Judge Lawrence J. O’Neill sentenced Logan August, 30, of Bakersfield, to three years’ probation, $16,200 forfeiture, 1,500 hours of community service. Derrick Penney, 34, of Star, Idaho, received a sentence of three years’ probation, $1,200 forfeiture, 250 hours of community service.

U.S. Attorney Talbert stated: “The defendants in this case caused a significant breach of the public’s trust when they committed these crimes. Not only did they betray the community they were sworn to serve, but also their fellow, hard-working officers who protect the Kern County community every day. My office is thankful for the hard work and cooperation of our law enforcement partners in bringing this conduct to light. We are committed to investigating and prosecuting anyone who abuses their law enforcement position for their own selfish gain."

“An officer’s badge is the ultimate symbol of integrity, pride, trust, and authority to protect and serve the public. Every day across America thousands of brave men and women in law enforcement uphold the meaning of that symbol by working tirelessly and placing themselves in harm’s way to serve their communities. The criminal behavior demonstrated by Logan August and Derrick Penney endangered the public and their colleagues. Both August and Penney will now face the legal consequences for their actions,” stated DEA Special Agent in Charge John J. Martin. “DEA will work with our law enforcement counterparts to hold accountable those who tarnish the badge and betray public trust.”

According to court documents, between June 2014 and October 2014, while working with the Kern County Sheriff’s Office (KCSO) as sworn peace officers, August and Penney abused their positions of trust and authority by conspiring with former Bakersfield Police Department detective Patrick Mara and an individual who previously worked as a confidential informant for August, and others, to steal marijuana from a KCSO storage unit and sell it for unlawful personal gain. The marijuana had previously been seized during investigations into marijuana grown on public and private lands. Once August and Penney obtained the marijuana from the storage unit, they had it processed (trimmed) into approximately eight pounds of usable marijuana. August then delivered it to his former confidential informant, who sold it and provided August with part of the proceeds from those sales. August then shared the proceeds with Penney and Mara. August and Penney received approximately $1,200 each from the sale of this marijuana.

Additionally, according to August’s plea agreement and other court documents, between March 2014 and December 2014, while a sworn peace officer assigned to the KCSO Major Vendor Narcotics Unit, August routinely participated in law enforcement marijuana eradication operations on public and private lands. During this time, August abused his position of trust and authority as a KCSO deputy by conspiring with a former confidential informant to take marijuana plants and processed marijuana from these law enforcement marijuana eradication operations and sell that marijuana for unlawful personal gain. On 10 separate occasions between March 2014 and December 2014, August wrongfully took marijuana from a law enforcement eradication operation for personal gain. August distributed to his former confidential informant the equivalent of 25 pounds of usable marijuana wrongfully taken from these law enforcement eradication operations. August received $15,000 from the sale of this marijuana.

August and Penney have agreed to forfeit the proceeds of the marijuana trafficking.

This case was the product of an investigation by the Federal Bureau of Investigation, the Drug Enforcement Administration, and the Bakersfield Police Department. The Kern County Sheriff’s Office fully cooperated in this investigation. Assistant U.S. Attorneys Angela Scott and Brian Delaney are prosecuting the case.

SACRAMENTO, Calif. — Kamyar “Kami” Soltani, 47, of Sacramento, formerly of El Dorado Hills, was sentenced today by U.S. District Judge Garland E. Burrell Jr. to six months in prison, six months home confinement with electronic monitoring, and ordered to pay $150,446 in restitution for tax evasion, U.S. Attorney Phillip A. Talbert announced.

 

“All Americans have a duty to pay their fair share,” said Michael T. Batdorf, Special Agent in Charge, IRS Criminal Investigation. “Soltani took advantage of the system and obtained refunds to which he was not entitled while all along living a lavish lifestyle. In today’s economic environment, it’s more important than ever that the American people feel confident that everyone is playing by the rules and paying the taxes they owe.”

 

According to court documents, Soltani attempted to evade his tax obligations for tax years 2005, 2006, and 2007. Soltani worked in the used car sales industry. In each of the tax years in question, Soltani received taxable income between $229,000 and $296,000 and failed to file timely income tax returns for the tax years of 2005 and 2006. He ultimately filed tax returns for all three tax years in March 2008, but those returns only reported income of approximately $14,000 to $18,500 in each year. As a result of his conduct and tax filings, Soltani evaded $150,446 in federal income taxes, paid no taxes for those years, and in each year fraudulently claimed and received tax refunds of over $2,000 by falsely claiming that he was entitled to an Earned Income Tax Credit reserved for taxpayers with low and moderate income. Soltani admitted he acted willfully to evade taxes, in part, through his filing of false tax returns and by receiving his income in the form of cash and through indirect payments made to third parties.

 

This case was the product of an investigation by Internal Revenue Service, Criminal Investigation. Assistant U.S. Attorneys Nirav K. Desai and Christopher S. Hales prosecuted the case.

FRESNO, Calif. — A federal grand jury returned a three-count indictment today against Omar Felix-Corrales, 38, and Valeria Silvas Villarreal, 23, both of Mexico, charging them with conspiracy to distribute and possess with intent to distribute heroin, and Felix-Corrales alone with possession of a firearm in relation to a drug trafficking crime, U.S. Attorney Phillip A. Talbert announced.

According to court documents, On July 28, 2017, the defendants met with a law enforcement informant in a home improvement store parking lot in Bakersfield to sell the informant two kilograms of China-white heroin for $56,000. When the informant gave a pre‑arranged signal to nearby agents that drugs were present, agents rushed to the scene and arrested the defendants. At the time of his arrest, Felix-Corrales was found to have a loaded 9 mm Berretta pistol tucked into the waistband of his pants.

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

If convicted, the defendants face 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 defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.

FRESNO, Calif. — After a three-day trial, a federal jury found Colin Lovette Bosby, 50, of Bakersfield, guilty today of one count of receiving child pornography and two counts of possessing child pornography, U.S. Attorney Phillip A. Talbert announced. The trial was held before Chief U.S. District Judge Lawrence J. O'Neill.

 

According to evidence presented at trial, Bosby received child pornography through a peer-to-peer file-sharing program and possessed child pornography on thumb drives. Evidence at trial showed that the defendant sought out the child pornography by using search terms that are associated with the material.

 

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 Megan A. S. Richards and Vincenza Rabenn are prosecuting the case.

 

Bosby is scheduled to be sentenced by Chief Judge O'Neill on October 25, 2017. Bosby faces a maximum statutory penalty of 40 years in prison and a $250,000 fine for receipt and distribution of child pornography, and 20 years for each count of possession of child pornography. In addition, because Bosby has a prior sex offense, he faces mandatory minimum prison sentences of 15 years for receipt and 10 years for possession of child pornography. 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. — Donald Burton, 51, of Vallejo, pleaded guilty today for his part in a bribery scheme involving city contracts, U.S. Attorney Phillip A. Talbert announced.

According to court documents, Burton was previously employed in the Public Works Engineering Division of the City of Vallejo as the landscape manager. In that position, Burton regularly contracted with local landscape companies to provide services for Vallejo. The City of Vallejo received substantial federal funding, including over $500,000 in Community Development Block Grants from the U.S. Department of Housing and Urban Development.

In the Spring of 2017, Burton solicited a bribe from the owner of a company that provides maintenance services, requesting a 10 percent kickback in exchange for steering contracts to that company. The business owner complained to the Federal Bureau of Investigation and assisted in the investigation by meeting with Burton in an undercover capacity. During those meetings, Burton directed that additional days of work be added to contracted jobs so that Burton and the owner could divide up the profit. Burton stated that the excess amount in the contracts would generally add up to $5,000, and that Burton would take $2,000.

According to the plea agreement, the business owner provided the written contracts that inflated the number of days required to do a job from 10 days to 15, and Burton approved and signed the contracts. On June 7, 2017, the business owner met with Burton and gave him the $2,000 bribe payment. Burton was arrested after taking the payment.

This case is the product of an investigation by the Federal Bureau of Investigation. Assistant U.S. Attorney Jared C. Dolan is prosecuting the case.

Burton is scheduled to be sentenced by U.S. District Judge John A. Mendez on November 7, 2017. Burton 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.

BAKERSFIELD, Calif. — A two-count criminal complaint was filed against Matthew Paul Gumz, 39, of Barstow, charging him with taking a California condor in violation of both the Endangered Species Act and the Migratory Bird Treaty Act, U.S. Attorney Phillip A. Talbert announced. Gumz made his initial appearance Monday before U.S. Magistrate Judge Jennifer L. Thurston and pleaded not guilty to both charges.

According to court documents, the California Department of Fish and Wildlife received an anonymous tip about the death of a male juvenile California condor. A U.S. Fish and Wildlife Service biologist located the dead condor, designated as Condor 780, on federal land in Kern County. Condor 780 had a large distinctive green tag on its left wing with “80” printed on it in large white numbers. On September 30, 2016, Gumz was deer hunting in the Bean Canyon area, which is managed by the Bureau of Land Management. Gumz field dressed a deer and hung it in a tree, and left. When he returned to the area, Gumz saw condors and other birds near his deer and allegedly shot and killed Condor 780 with a rifle.

The California condor is protected by the Endangered Species Act and the Migratory Bird Treaty Act. Condor 780 came from an egg laid at the World Center Birds of Prey in Boise, Idaho and was fostered in the wild by condors in a monitored nest in Southern California. The nest was managed by the Hopper Mountain National Wildlife Refuge as part of the California Condor Recovery Program.

This case is the product of an investigation by the U.S. Fish and Wildlife Service, the Bureau of Land Management, and the California Department of Fish and Wildlife. Assistant U.S. Attorney Laurel J. Montoya is prosecuting the case.

If convicted, Gumz faces a maximum statutory penalty of up to one year in prison and a $100,000 fine for the Endangered Species Act violation and up to six months in prison and a $15,000 fine for the Migratory Bird Treaty Act violation. Additionally, the court can order restitution and order the forfeiture of the firearm used in the offense. 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. — Patrick Slavin, 55, formerly of Truckee, was arraigned today in federal court on a 21-count indictment charging him with mail and wire fraud for an investment scheme that he ran from 2008 through 2016, U.S. Attorney Phillip A. Talbert announced.

According to court documents, Slavin claimed to have developed a proprietary investment model that guaranteed returns of 12-18 percent that would be paid within one to two years of the investment. He persuaded some individuals to invest by representing that the money would be invested through a “social venture” fund or project that would earn returns by providing capital and services to nonprofit organizations. After the investments were made, Slavin assured investors that their money was earning profits. Based on these assurances, Slavin solicited additional investments or encouraged his investors to rollover their prior investments. In truth, Slavin used a large portion of the investors’ money to pay back other investors or for his own personal expenses and lost the rest in trading. Overall, investors lost at least $1.7 million.

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

If convicted, Slavin faces a maximum statutory penalty of 20 years in prison and a fine of $250,000 or twice the gross loss or gross gain from the fraud scheme. 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. — Three defendants were sentenced today for running a foreclosure rescue scam in Bakersfield, Visalia and Salinas, U.S. Attorney Phillip A. Talbert announced.

Chief U.S. District Judge Lawrence J. O’Neill sentenced Martin Calzada, 30, of Norwalk, to nine years in prison; Juan Curiel, 38, of Visalia, to three years and five months in prison; and Santiago Palacios-Hernandez, 48, of Salinas, to two years and seven months in prison. On March 10, 2017, Calzada was convicted by a jury of one count of conspiracy and eight counts of mail fraud affecting a financial institution. In December 2014, Curiel and Palacios-Hernandez pleaded guilty to conspiracy to commit mail fraud

According to evidence presented during Calzada’s four-day trial, the defendants conspired to defraud homeowners facing foreclosure. The three men operated Star Reliable Mortgage, which had offices in Bakersfield, Visalia, and Salinas, and targeted distressed homeowners with a fraudulent “loan elimination” scheme. Between approximately August 2010 and October 2011, Star Reliable charged clients an upfront fee for its services — ranging from $2,500 up to $4,500 — as well as monthly fees, for ostensibly helping the clients own their homes “free and clear.” Clients paid hundreds of thousands of dollars to Star Reliable and at least $300,000 was transferred from Star Reliable into Calzada’s bank accounts.

To advance the scheme, Calzada, Curiel, and Palacios-Hernandez filed fraudulent documents at county recorders’ offices on behalf of the homeowner-clients. The fraudulent documents purported to replace the legitimate property trustees with fictitious trusts, all in an effort to “cloud title” and halt or stall the foreclosure process. The defendants and other employees working at their direction told Star Reliable clients to stop paying their mortgages. They also falsely represented that Star Reliable clients had $1 million in a U.S. government account that could be used to pay off a homeowner’s mortgage.

As part of their sentences, the defendants were ordered to pay more than $1.1 million dollars in restitution to former Star Reliable clients and mortgage loan owners Fannie Mae and Freddie Mac, which suffered financial losses upon the foreclosure of several clients’ homes.

These cases were the product of an investigation by the Federal Bureau of Investigation and the Tulare County District Attorney’s Office. Assistant U.S. Attorneys Christopher D. Baker and Patrick J. Suter prosecuted the cases.

FRESNO, Calif. — Three defendants pleaded guilty today in three separate cases to being a felon in possession of a firearm, U.S. Attorney Phillip A. Talbert announced.

 

According to court documents, on March 19, 2016, Juan Gonzalez, 40, of Orosi, was driving a car and fled from officers who attempted to stop him for a traffic violation. He reached speeds of over 100 miles per hour before the officers cancelled the pursuit. During the chase, a deputy saw Gonzalez throw a dark object out of the window on Millerton Road near Lake View Estates. After the pursuit ended, the deputy returned to the location and found a Glock 27, .40‑caliber pistol. Gonzalez was stopped later that morning by Clovis police officers for failure to stop at a red light and arrested him for driving on a suspended license and possession of drug paraphernalia. He was also identified as the driver of the fleeing vehicle who tossed the gun. Gonzalez has prior felony convictions that prohibit him from possessing a firearm. (1:17‑cr‑031)

 

In the second case, court documents indicate that on May 4, 2016, Jerrett Newman, 27, of Fresno, possessed a Star Bonifacio Echeverria .22-caliber pistol he tossed while running from police. Newman has multiple prior felony convictions. (1:16‑cr‑086)

 

In the third case, court documents show that on May 2, 2017, the U.S. Marshals Service Fugitive Apprehension Team encountered Rodney Heather, 36, of Fresno, who was wanted for a probation violation. When deputies approached Heather, they saw him reaching for his waistband and removing a black object and tossing it on the driver’s side floorboard. Despite warnings to show his hands, Heather reached down and appeared to push something under the seat. The deputies arrested Heather and found a Glock Model F 22, .40-caliber handgun under the seat. Heather has multiple prior felony convictions. (1:17‑cr‑117)

 

These cases are the product of investigations by the Federal Bureau of Investigation, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the U.S. Marshals Service Fugitive Apprehension Task Force, the Fresno County Sheriff’s Office, and the Clovis Police Department. Assistant United States Attorney Kimberly A. Sanchez is prosecuting the cases.

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

 

Gonzalez and Newman are scheduled to be sentenced by U.S. District Judge Dale A. Drozd on October 16, 2017. Heather is scheduled to be sentenced by Chief U.S. District Judge Lawrence J. O’Neill on October 16, 2017. Each defendant 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.

FRESNO, Calif. — Abudullah Almashwali, 31, a Yemeni national formerly residing in Brooklyn, New York, was sentenced today to six and a half years in prison for conspiracy to distribute and distribution of heroin and cocaine, U.S. Attorney Phillip A. Talbert announced.

According to court documents, Almashwali and co-defendant Chaudhry Ahmad Farooq, 24, a Pakistani national residing in Brooklyn, New York, were large-scale heroin and cocaine distributors on the dark web marketplace AlphaBay. Almashwali and Farooq used the vendor names “Area51” and “DarkApollo.”

According to the criminal complaint, Almashwali and Farooq accepted orders for heroin and cocaine on AlphaBay, and then mailed the narcotics from post offices in New York to customers throughout the United States. They received payment in Bitcoin. In May 2016, law enforcement officers made two undercover purchases of heroin from “Area51,” which were delivered to a post office box in the Eastern District of California. Postal records revealed that Almashwali purchased the postage for the two heroin parcels mailed to law enforcement, and that Farooq was involved in other mailings. Law enforcement agents were also able to determine that the encrypted email address used by “Area51” and “DarkApollo” was associated with actual Twitter, Instagram, and Facebook accounts used by Farooq.

Dark web marketplaces are operated on computer networks designed to conceal the true Internet Protocol (IP) addresses of the computers accessing the network. They allow for payments to be made only in the form of digital currency, most commonly Bitcoin. While not inherently illegal, digital currency is used by dark web marketplaces because online transactions in digital currency can be completed without a third-party payment processor and are therefore perceived to be more anonymous and less vulnerable to law enforcement scrutiny.

Last week, the Justice Department announced that AlphaBay, the largest criminal marketplace on the internet, was shut down and that its creator and administrator was arrested following an indictment (1:17-cr-144-LJO), filed in Fresno on June 1. The indictment charged racketeering and various narcotics, identity theft, and money laundering offenses. Law enforcement authorities in the United States worked with numerous foreign partners to freeze and preserve millions of dollars’ worth of cryptocurrencies that were proceeds of the AlphaBay organization’s illegal activities. A related civil forfeiture complaint has also been filed against numerous high value assets, including luxury vehicles, and real estate located throughout the world, including in Thailand, Cyprus, Lichtenstein, and Antigua & Barbuda.

 

U.S. Attorney Talbert stated: “The sentencing in this case is timely, as it closely follows our seizure and shut down of the AlphaBay criminal marketplace. That case resulted in an indictment filed in our district, but involved significant coordination and assistance from our partners in the Criminal Division’s Computer Crime and Intellectual Property Section, as well as the FBI and DEA. Although other markets are likely to open or continue to operate after AlphaBay’s demise, we have shown our ability to prosecute those who commit crimes using the dark web and to shut down the criminal enterprises that attempt to hide there. Today’s sentence highlights that people committing crimes on the dark web will be brought to justice.”

“Those who conduct criminal activity on the dark web under the guise of anonymity are mistaken, and this sentence serves as a reminder,” stated DEA Special Agent in Charge John J. Martin. “Recently, the DEA Fresno Resident Office worked tirelessly with our law enforcement counterparts to shut down the largest criminal marketplace on the internet, and we have no intention of stopping there. We will continue to investigate those who traffic drugs on the dark web or any place else.”

On January 17, 2017, Farooq pleaded guilty to conspiring to traffic heroin. According to the plea agreement, Farooq admitted to selling 636.5 grams of heroin on the dark web marketplace Alpha Bay in exchange for $145,807 in Bitcoin. He is scheduled to be sentenced on January 22, 2018. He faces a maximum statutory penalty of 20 years in prison and a $1 million fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

This case is a product of an investigation by the Drug Enforcement Administration, with assistance provided by the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), IRS Criminal Investigation, and the U.S. Postal Inspection Service. Assistant U.S. Attorneys Grant B. Rabenn and Ross Pearson are prosecuting the case.

This case is 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.

FRESNO, Calif. — Jeffrey G. Vincent, 68, of Madera, was sentenced today by Chief U.S. District Judge Lawrence J. O’Neill to four years and three months in prison for tax evasion, U.S. Attorney Phillip A. Talbert announced.

 

On April 7, 2017, a federal jury convicted Vincent on five counts of evading the assessment and payment of individual income taxes. According to evidence presented during the four-day trial, in 1991, Vincent began operating a Fresno-based engineering company called Veco Technologies, organized as Stafford Group Limited Partnership, for which Vincent was general partner. Vincent had not filed an individual income tax return since 1989, despite earning significant income from Stafford Group, including close to $500,000 between 2007 and 2010. Two federal tax liens were filed on Vincent’s assets in 1993 and 2000 when he failed to pay assessments made for earlier years’ tax delinquencies. Vincent signed tax returns for Stafford Group in which he falsely represented that he does not have a social security number. Vincent also funneled his income through various trusts and other entities.

 

“Mr. Vincent formed entities and trusts and funneled his income in a manner that enabled him to evade paying taxes,” said Michael T. Batdorf, Special Agent in Charge, IRS Criminal Investigation. “All taxpayers are required to follow the law and the law requires accurate reporting and timely payment of any tax due and owing. Today’s sentencing should send a clear message that those involved in these types of schemes will be held accountable for their crimes.”

 

This case was the product of an investigation by the IRS Criminal Investigation. Assistant U.S. Attorneys Christopher D. Baker and Kirk E. Sherriff prosecuted the case.

FRESNO, Calif. — A federal grand jury returned a two-count indictment today against Oscar Ivan Salazar-Avalos (Salazar), 27, a native and citizen of Mexico, and Jose Manuel Sotelo-Mendoza, aka Jose Manuel Mendoza-Sotelo (Sotelo), 25, of Modesto, charging them with conspiring to distribute and possess with intent to distribute and possessing with intent to distribute methamphetamine, U.S. Attorney Phillip A. Talbert announced.

According to court documents, Salazar and Sotelo delivered 15 pounds of methamphetamine to an undercover officer in Delano, California after Salazar negotiated for the delivery of the drug for $3,400 per pound.

This case is the product of an investigation by the High Intensity Drug Area Fresno Methamphetamine Task Force, consisting the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the California Highway Patrol, the California Department of Justice’s Bureau of Investigation, the Fresno Police Department, and the Fresno County Sheriff’s Office. Assistant U.S. Attorney Karen A. Escobar is prosecuting the case.

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

FRESNO, Calif. — On June 22, 2017, Jose Manuel Sanchez-Zapien (Sanchez), 37, a native and citizen of Michoacán, Mexico, residing in Dos Palos, was charged in an indictment with conspiring to manufacture marijuana and damaging public lands and natural resources. Today, a federal grand jury additionally charged him with manufacturing marijuana, and added co-defendant Maximiliano Farias-Martinez (Farias), 48, of Stevinson. Farias is charged with conspiring to manufacture marijuana, manufacturing marijuana, and damaging public lands and natural resources, U.S. Attorney Phillip A. Talbert announced.

 

According to court documents, Sanchez was found in April and June of this year at a drop point delivering supplies to growers at a marijuana cultivation site in the Slick Rock Creek drainage in the Sequoia National Forest. The drop point has been used numerous times in the past as a supply drop point for marijuana growers to access grow sites in the Slick Rock Creek drainage. Law enforcement officers found over 20,952 marijuana plants at the Alder Creek site supplied by Sanchez. Follow-up investigation revealed that Farias supervised Sanchez and others associated with the grow site.

 

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

 

If convicted of the drug offenses, Farias and Sanchez face 10 years to life in prison, and up to a $10 million fine for each count. If convicted of the environmental crime, Farias and Sanchez face a maximum statutory penalty of 10 years in prison and a fine of up to $250,000 and restitution to the U.S. Forest Service. 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. — The Justice Department today announced the seizure of the largest criminal marketplace on the internet, AlphaBay, which operated for over two years on the dark web and was used to sell deadly illegal drugs, stolen and fraudulent identification documents and access devices, counterfeit goods, malware and other computer hacking tools, firearms, and toxic chemicals throughout the world. The international operation to seize AlphaBay’s infrastructure was led by the United States and involved cooperation and efforts by law enforcement authorities in Thailand, the Netherlands, Lithuania, Canada, the United Kingdom, and France, as well as the European law enforcement agency Europol.

 

On July 5, Alexandre Cazes aka Alpha02 and Admin, age 25, a Canadian citizen residing in Thailand, was arrested by Thai authorities on behalf of the United States for his role as the creator and administrator of AlphaBay. On July 12, Cazes apparently took his own life while in custody in Thailand. Cazes was charged in an indictment (1:17-cr-144-LJO), filed in the Eastern District of California on June 1, with one count of conspiracy to engage in racketeering, one count of conspiracy to distribute narcotics, six counts of distribution of narcotics, one count of conspiracy to commit identity theft, four counts of unlawful transfer of false identification documents, one count of conspiracy to commit access device fraud, one count of trafficking in device making equipment, and one count of money laundering conspiracy. Law enforcement authorities in the United States worked with numerous foreign partners to freeze and preserve millions of dollars’ worth of cryptocurrencies that were the subject of forfeiture counts in the indictment, and that represent the proceeds of the AlphaBay organization’s illegal activities.

 

On July 19, the U.S. Attorney’s Office for the Eastern District of California filed a civil forfeiture complaint against Alexandre Cazes and his wife’s assets located throughout the world, including in Thailand, Cyprus, Lichtenstein, and Antigua & Barbuda. Cazes and his wife amassed numerous high value assets, including luxury vehicles, residences and a hotel in Thailand. Cazes also possessed millions of dollars in cryptocurrency, which has been seized by the FBI and the Drug Enforcement Administration (DEA).

According to publicly available information on AlphaBay prior to its takedown, one AlphaBay staff member claimed that it serviced over 200,000 users and 40,000 vendors. Around the time of takedown, there were over 250,000 listings for illegal drugs and toxic chemicals on AlphaBay, and over 100,000 listings for stolen and fraudulent identification documents and access devices, counterfeit goods, malware and other computer hacking tools, firearms, and fraudulent services. Comparatively, the Silk Road dark web marketplace, which was seized by law enforcement in November 2013, had reportedly approximately 14,000 listings for illicit goods and services at the time of seizure and was the largest dark web marketplace at the time.

 

“This is likely one of the most important criminal investigations of the year – taking down the largest dark net marketplace in history,” said Attorney General Jeff Sessions. “Make no mistake, the forces of law and justice face a new challenge from the criminals and transnational criminal organizations who think they can commit their crimes with impunity using the dark net. The dark net is not a place to hide. The Department will continue to find, arrest, prosecute, convict, and incarcerate criminals, drug traffickers and their enablers wherever they are. We will use every tool we have to stop criminals from exploiting vulnerable people and sending so many Americans to an early grave. I believe that because of this operation, the American people are safer – safer from the threat of identity fraud and malware, and safer from deadly drugs.”

 

“Transnational organized crime poses a serious threat to our national and economic security,” said Acting Director Andrew McCabe of the FBI. “Whether they operate in broad daylight or on the dark net, we will never stop working to find and stop these criminal syndicates. We want to thank our international partners and those at the Department of Justice, the DEA and the IRS-CI for their hard work in demonstrating what we can do when we stand together.”

 

“The so-called anonymity of the dark web is illusory,” said Acting Administrator Chuck Rosenberg of the DEA. “We will find and prosecute drug traffickers who set up shop there, and this case is a great example of our commitment to doing exactly that. More to come.”

 

“The seizure and shut-down of the AlphaBay criminal marketplace and the indictment and arrest of its founder should send a clear message,” said Eastern District of California U.S. Attorney Phillip A. Talbert. “If you choose to become involved in administering a site like AlphaBay on the dark web, or decide to use it to engage in criminal transactions, you will have federal law enforcement and United States Attorney offices from every District and State across the nation pursuing you. We are thankful for the invaluable assistance we received from our partners in the Criminal Division’s Computer Crime and Intellectual Property Section, and I particularly want to recognize the incredible skill and dedication displayed by the FBI and the DEA in turning the lights on in the dark web and shutting down the world’s largest black market.”

 

“AlphaBay was the world’s largest underground marketplace of the dark net, providing an avenue for criminals to conduct business anonymously and without repercussions,” said Chief Don Fort of IRS-CI. “Working with our law enforcement partners—both domestically and abroad—IRS-CI used its unique financial and cyber expertise to help shine a bright light on the accounts and customers of this shadowy black marketplace, and we intend to continue pursuing these kinds of criminals no matter where they hide.”

 

“This ranks as one of the most successful coordinated takedowns against cybercrime in recent years,” said Europol Executive Director Rob Wainwright. “Concerted action by law enforcement authorities in the United States and Europe, with the support of Europol, has delivered a massive blow to the underground criminal economy and sends a clear message that the dark web is not a safe area for criminals. I pay tribute to the excellent work of the United States and European authorities for the imaginative and resourceful way they combined their efforts in this case.”

 

AlphaBay operated as a hidden service on the “Tor” network, and utilized cryptocurrencies including Bitcoin, Monero and Ethereum in order to hide the locations of its underlying servers and the identities of its administrators, moderators, and users. Based on law enforcement’s investigation of AlphaBay, authorities believe the site was also used to launder hundreds of millions of dollars deriving from illegal transactions on the website.

 

An investigation conducted by FBI Atlanta and the U.S. Attorney’s Office in the Northern District of Georgia identified an AlphaBay staffer living in the United States. That investigation is ongoing.

 

The investigation into AlphaBay revealed that numerous vendors sold fentanyl and heroin, and there have been multiple overdose deaths across the country attributed to purchases on the site.

 

According to a complaint affidavit filed in the District of South Carolina against Theodore Vitality Khleborod and Ana Milena Barrero, an investigation into an overdose death on February 16, 2017, in Portland, Oregon, involving U-47700, a synthetic opioid, revealed that the drugs were purchased on AlphaBay from Khelborod and Barrero. According to another complaint affidavit filed in the Middle District of Florida against Jeremy Achey, an investigation into a fentanyl overdose death in Orange County, Florida, on February 27, 2017, revealed that the lethal substance was purchased on AlphaBay from Achey.

 

Charges contained in an indictment and/or complaint are merely allegations, and the defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

 

This operation to seize the AlphaBay site coincides with efforts by Dutch law enforcement to investigate and take down the Hansa Market, another prominent dark web market. Like AlphaBay, Hansa Market was used to facilitate the sale of illegal drugs, toxic chemicals, malware, counterfeit identification documents, and illegal services. The administrators of Hansa Market, along with its thousands of vendors and users, also attempted to mask their identities to avoid prosecution through the use of Tor and digital currency. Further information on the operation against the Hansa Market can be obtained from Dutch authorities.

 

The operation to seize AlphaBay’s servers was announced by Attorney General Jeff Sessions; Deputy Attorney General Rod Rosenstein; Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division; U.S. Attorney Phillip A. Talbert for the Eastern District of California; Acting Director Andrew G. McCabe of the FBI; Acting Administrator Chuck Rosenberg of the DEA and Europol Executive Director Robert Mark Wainwright.

 

The case is being investigated by the FBI including FBI Sacramento Field Office and DEA, with substantial assistance from the IRS-CI. U.S. Immigration and Customs Enforcement’s Homeland Security Investigations also assisted in the investigation. The case against Cazes was prosecuted by Assistant U.S. Attorneys Paul A. Hemesath and Grant B. Rabenn of the U.S. Attorney’s Office for the Eastern District of California, and Trial Attorneys Louisa K. Marion and C. Alden Pelker of the Criminal Division’s Computer Crime and Intellectual Property Section. Assistant U.S. Attorney Kevin C. Khasigian of the Eastern District of California handled the asset forfeiture. Substantial assistance was provided by the Department of Justice’s Office of International Affairs and Special Operations Division. Additionally, the following foreign law enforcement agencies provided substantial assistance in the operation to seize AlphaBay’s infrastructure: Royal Thai Police, Dutch National Police, Lithuanian Criminal Police Bureau (LCPB), Royal Canadian Mounted Police, United Kingdom’s National Crime Agency, Europol, and French National Police.

The Justice Department today announced the seizure of the largest criminal marketplace on the Internet, AlphaBay, which operated for over two years on the dark web and was used to sell deadly illegal drugs, stolen and fraudulent identification documents and access devices, counterfeit goods, malware and other computer hacking tools, firearms, and toxic chemicals throughout the world.  The international operation to seize AlphaBay’s infrastructure was led by the United States and involved cooperation and efforts by law enforcement authorities in Thailand, the Netherlands, Lithuania, Canada, the United Kingdom, and France, as well as the European law enforcement agency Europol.

On July 5, Alexandre Cazes aka Alpha02 and Admin, 25, a Canadian citizen residing in Thailand, was arrested by Thai authorities on behalf of the United States for his role as the creator and administrator of AlphaBay.  On July 12, Cazes apparently took his own life while in custody in Thailand.  Cazes was charged in an indictment (1:17-CR-00144-LJO), filed in the Eastern District of California on June 1, with one count of conspiracy to engage in racketeering, one count of conspiracy to distribute narcotics, six counts of distribution of narcotics, one count of conspiracy to commit identity theft, four counts of unlawful transfer of false identification documents, one count of conspiracy to commit access device fraud, one count of trafficking in device making equipment, and one count of money laundering conspiracy.  Law enforcement authorities in the United States worked with numerous foreign partners to freeze and preserve millions of dollars’ worth of cryptocurrencies that were the subject of forfeiture counts in the indictment, and that represent the proceeds of the AlphaBay organization’s illegal activities. 

On July 19, the U.S. Attorney’s Office for the Eastern District of California filed a civil forfeiture complaint against Alexandre Cazes and his wife's assets located throughout the world, including in Thailand, Cyprus, Lichtenstein, and Antigua & Barbuda. Cazes and his wife amassed numerous high value assets, including luxury vehicles, residences and a hotel in Thailand. Cazes also possessed millions of dollars in cryptocurrency, which has been seized by the FBI and the Drug Enforcement Administration (DEA).

According to publicly available information on AlphaBay prior to its takedown, one AlphaBay staff member claimed that it serviced over 200,000 users and 40,000 vendors.  Around the time of takedown, there were over 250,000 listings for illegal drugs and toxic chemicals on AlphaBay, and over 100,000 listings for stolen and fraudulent identification documents and access devices, counterfeit goods, malware and other computer hacking tools, firearms and fraudulent services. Comparatively, the Silk Road dark web marketplace, which was seized by law enforcement in November 2013, had reportedly approximately 14,000 listings for illicit goods and services at the time of seizure and was the largest dark web marketplace at the time.

“This is likely one of the most important criminal investigations of the year – taking down the largest dark net marketplace in history,” said Attorney General Jeff Sessions. “Make no mistake, the forces of law and justice face a new challenge from the criminals and transnational criminal organizations who think they can commit their crimes with impunity using the dark net.  The dark net is not a place to hide. The Department will continue to find, arrest, prosecute, convict, and incarcerate criminals, drug traffickers and their enablers wherever they are. We will use every tool we have to stop criminals from exploiting vulnerable people and sending so many Americans to an early grave. I believe that because of this operation, the American people are safer – safer from the threat of identity fraud and malware, and safer from deadly drugs.”

“Transnational organized crime poses a serious threat to our national and economic security,” said Acting Director Andrew McCabe of the FBI. “Whether they operate in broad daylight or on the dark net, we will never stop working to find and stop these criminal syndicates.  We want to thank our international partners and those at the Department of Justice, the DEA and the IRS-CI for their hard work in demonstrating what we can do when we stand together.”

“The so-called anonymity of the dark web is illusory,” said Acting Administrator Chuck Rosenberg of the DEA. “We will find and prosecute drug traffickers who set up shop there, and this case is a great example of our commitment to doing exactly that. More to come.”

“AlphaBay was the world’s largest underground marketplace of the dark net, providing an avenue for criminals to conduct business anonymously and without repercussions,” said Chief Don Fort of IRS-CI. “Working with our law enforcement partners – both domestically and abroad – IRS-CI used its unique financial and cyber expertise to help shine a bright light on the accounts and customers of this shadowy black marketplace, and we intend to continue pursuing these kinds of criminals no matter where they hide.”

“This ranks as one of the most successful coordinated takedowns against cybercrime in recent years,” said Executive Director Rob Wainwright of Europol. “Concerted action by law enforcement authorities in the United States and Europe, with the support of Europol, has delivered a massive blow to the underground criminal economy and sends a clear message that the dark web is not a safe area for criminals. I pay tribute to the excellent work of the United States and European authorities for the imaginative and resourceful way they combined their efforts in this case.”

AlphaBay operated as a hidden service on the “Tor” network, and utilized cryptocurrencies including Bitcoin, Monero and Ethereum in order to hide the locations of its underlying servers and the identities of its administrators, moderators, and users. Based on law enforcement’s investigation of AlphaBay, authorities believe the site was also used to launder hundreds of millions of dollars deriving from illegal transactions on the website. 

An investigation conducted by FBI Atlanta and the U.S. Attorney’s Office in the Northern District of Georgia identified an AlphaBay staffer living in the United States. That investigation is ongoing.

The investigation into AlphaBay revealed that numerous vendors sold fentanyl and heroin, and there have been multiple overdose deaths across the country attributed to purchases on the site.   

According to a complaint affidavit filed in the District of South Carolina against Theodore Vitality Khleborod and Ana Milena Barrero, an investigation into an overdose death on February 16, in Portland, Oregon, involving U-47700, a synthetic opioid, revealed that the drugs were purchased on AlphaBay from Khelborod and Barrero. According to another complaint affidavit filed in the Middle District of Florida against Jeremy Achey, an investigation into a fentanyl overdose death in Orange County, Florida, on February 27, revealed that the lethal substance was purchased on AlphaBay from Achey.

Charges contained in an indictment and/or complaint are merely allegations, and the defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

This operation to seize the AlphaBay site coincides with efforts by Dutch law enforcement to investigate and take down the Hansa Market, another prominent dark web market. Like AlphaBay, Hansa Market was used to facilitate the sale of illegal drugs, toxic chemicals, malware, counterfeit identification documents, and illegal services. The administrators of Hansa Market, along with its thousands of vendors and users, also attempted to mask their identities to avoid prosecution through the use of Tor and digital currency. Further information on the operation against the Hansa Market can be obtained from Dutch authorities.

The operation to seize AlphaBay’s servers was announced by Attorney General Jeff Sessions; Deputy Attorney General Rod Rosenstein; Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division; U.S. Attorney Phillip A. Talbert for the Eastern District of California; Acting Director Andrew G. McCabe of the FBI, Acting Administrator Chuck Rosenberg of the DEA and Europol Executive Director Robert Mark Wainwright.

The case is being investigated by the FBI including FBI Sacramento Field Office and DEA, with substantial assistance from the IRS-CI. U.S. Immigration and Customs Enforcement’s Homeland Security Investigations also assisted in the investigation. The case against Cazes was prosecuted by Assistant U.S. Attorneys Paul A. Hemesath and Grant B. Rabenn of the U.S. Attorney’s Office for the Eastern District of California, and Trial Attorneys Louisa K. Marion and C. Alden Pelker of the Criminal Division’s Computer Crime and Intellectual Property Section. Substantial assistance was provided by the Department of Justice’s Office of International Affairs and Special Operations Division.  Additionally, the following foreign law enforcement agencies provided substantial assistance in the operation to seize AlphaBay’s infrastructure: Royal Thai Police, Dutch National Police, Lithuanian Criminal Police Bureau (LCPB), Royal Canadian Mounted Police, United Kingdom’s National Crime Agency, Europol, and French National Police. 

SACRAMENTO, Calif. — Patricia Ramona Vasquez, 37, of Stockton, was sentenced today to three years in prison and ordered to pay $30,971 in restitution by U.S. District Judge Morrison C. England Jr. for bank fraud, aggravated identity theft, and mail fraud, U.S. Attorney Phillip A. Talbert announced.

San Francisco Division Inspector in Charge Rafael Nunez of the U.S. Postal Inspection Service stated, “Postal Inspectors work closely with the U.S. Attorney’s Office and our partners in law enforcement to arrest and prosecute those individuals responsible for mail fraud and identity theft crimes committed against the public.”

According to court documents, between February 3, 2016, and July 7, 2016, Vasquez targeted a woman with the same last name and obtained her mail to obtain documents and information to steal her identity. Vasquez created an email address for her new identity. On April 4, 2016, Vasquez entered a DMV branch in Sacramento and claimed her California driver’s license was lost or stolen. In doing so, Vasquez obtained a genuine driver’s license with her own picture and the identity theft victim’s personal identifying information. On April 15, 2016, Vasquez used the false identity to purchase a Nissan Altima from an auto dealership in Stockton. At the victim’s and creditors’ expense, Vasquez obtained a car loan from Well Fargo Bank for $16,703. On May 20, 2016, Vasquez opened accounts at Golden 1 Credit Union in Stockton using her phony California driver’s license number, the victim’s SSN, date of birth, true residence address, and signature. After opening the credit union accounts, Vasquez deposited stolen and altered checks to obtain cash.

This case was the product of an investigation by the United States Postal Inspection Service, with the assistance of the Stockton Police Department. Assistant United States Attorney Michelle Rodriguez prosecuted the case.

SACRAMENTO, Calif. — In a unanimous opinion, the U.S. Court of Appeals for the Ninth Circuit today affirmed the denial of relief from judgment for Sierra Pacific Industries and the other defendants held responsible for the Moonlight Fire in a settlement they entered with the United States five years ago.[1]

U.S. Attorney Phillip A. Talbert said, “We are gratified but not surprised by today’s decision, which helps make an important point this fire season. When negligent logging operations cause massive forest fires, this Office will respond with exactly the kind of tenacious, professional advocacy shown by Assistant U.S. Attorneys David Shelledy, Kelli Taylor and the rest of the team. Consistent with the best traditions of the U.S. Department of Justice, our office will continue to hold the careless to account.”

The fire started on Labor Day 2007 and burned over 46,000 acres of the Plumas and Lassen National Forests before it could be extinguished. In a complaint filed in 2010, the United States alleged that the fire started and escaped due to the neglect by Sierra Pacific and one of its contractors in operating bulldozers on a remote logging site on a “red flag” warning day. The contractor’s employees abandoned the job site to get a soda and cellphone soon after completing work, without inspecting the area to ensure they had not started a fire, as required by company policy and state law. The same contractor started two other fires the same summer working on other projects for Sierra Pacific. Sierra Pacific knew the contractor had started one of those fires yet took no action to ensure fire safety.

After litigation commenced, the contractor formally admitted that the fire started in its work area where no one but its employees was seen all day. Sierra Pacific, however, engaged in extensive litigation in an effort to avoid responsibility.

In 2012, the district court in Sacramento ruled that Sierra Pacific could present at trial some of its claims that the government engaged in fraud in attributing blame for the fire. However, in July 2012, Sierra Pacific and the other defendants averted trial by entering a settlement.

In exchange for dismissal of the United States’ complaint, the defendants agreed to pay a total of $55 million in cash. Sierra Pacific’s share of the settlement was $47 million and a conveyance of 22,500 acres of undeveloped land for incorporation into the National Forest System.

With a total value of at least $122.5 million, the settlement is the largest ever received by the United States for damages caused by a forest fire. All of the settlement payments are now complete. Land transfers totaling more than 12,000 acres have been completed with the remainder ongoing.

In the settlement agreement, Sierra Pacific and the other defendants specifically agreed to release all claims—known or unknown. Nonetheless, in October 2014, they filed a motion for relief from judgment, seeking to back out of the settlement based on allegations of fraud. Almost all accusations in the motion repeated the baseless claims made by Sierra Pacific in litigation before the settlement.

In April 2015, U.S. District Judge William B. Shubb issued a detailed 63-page order denying the motion and emphatically rejecting every allegation by Sierra Pacific’s counsel that there was fraud on the court.[2] After an exhaustive review of the law and the record, Judge Shubb concluded that the defendants “failed to identify even a single instance of fraud on the court, certainly none on the part of any attorney for the government. They repeatedly argue that fraud on the court can be found by considering the totality of the allegations. . . . Stripped of all its bluster, defendants’ motion is wholly devoid of any substance.” This is the order affirmed today by the court of appeals.

In a unanimous, 34-page opinion the Ninth Circuit ruled that “[a]fter voluntarily settling this case and asking the district court to enter judgment based on that settlement,” the defendants’ allegations of newly discovered fraud failed to meet the high showing required for relief from judgment. The court ruled that all accusations of fraud discovered before the settlement were legally insufficient — whether those accusations were true or not — because Sierra Pacific and the other defendants “voluntarily settled instead of going to trial.” The settlement agreement also precluded all accusations that the defendants claimed to have discovered after settlement, the court explained, because under the express terms of the settlement agreement, the defendants “bound themselves not to seek future relief, even for fraud on the court.” And finally, the court ruled that even if the settlement terms did not bar relief, “we conclude [those accusations] do not constitute fraud on the court.”

The court specifically rejected Sierra Pacific’s claim that an Assistant U.S. Attorney encouraged perjury by telling a federal investigator the government’s lawyers considered Sierra Pacific’s core scandal claim (that a white flag at the fire investigation scene marked the initial, “concealed” point of origin) to be “a non-issue.” The court explained that this comment was “merely an opinion about the relative importance of an element of the case; . . . not an instruction to commit perjury.”

Despite Sierra Pacific’s inflammatory accusations against the Assistant U.S. Attorneys representing the government in this case, not one of the number of federal judges to have issued rulings before and after settlement have sustained any of those accusations.

 

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[1] The case is United States v. Sierra Pacific Industries, et al., Ninth Circuit No. 15-15799.

[2] United States v. Sierra Pacific Industries, et al., No. 2:09-02445 (E.D. Cal. April 17, 2015).

SACRAMENTO, Calif. — CVS Pharmacy Inc. has paid $5 million to resolve federal Controlled Substances Act (CSA) allegations that its pharmacies in the Eastern District of California failed to keep and maintain accurate records of Schedule II, III, IV, and V controlled substances, U.S. Attorney Phillip A. Talbert and Drug Enforcement Administration Special Agent in Charge John J. Martin announced today.

Drugs, substances, and certain chemicals used to make drugs are classified into five distinct categories or schedules depending upon the drug’s acceptable medical use and the drug’s abuse or dependency potential.

In addition to the settlement payment, CVS has agreed to an administrative compliance plan with the DEA. The payment and plan resolve the United States’ allegations that during the period from April 30, 2011, through April 30, 2013, CVS pharmacies failed to provide effective controls and procedures to guard against diversion when CVS failed to: record the amount received and the date received of Schedule II drugs on DEA-222 Forms; maintain DEA-222 Forms and keep them separate from other records; record the date of acquisition of controlled substances in Schedules II through V; maintain invoices for drugs in Schedules III through V and keep the records separate from non-controlled substance records; and conduct a biennial inventory on one specific day.

“The Department of Justice is committed to fighting prescription drug abuse, including the alarming rise of prescription opioid abuse that is plaguing the country,” U.S. Attorney Talbert stated. “National retailers that distribute massive amounts of controlled substances have a responsibility to comply with recordkeeping regulations because these regulations are specifically designed to prevent dangerous drugs from being diverted into the community and abused.”

“The nation is in the midst of an opioid crisis and all entities that distribute controlled substances must hold the frontline. Regulatory compliance and accurate recordkeeping are key in a pharmacy’s ability to prevent prescription drug diversion,” stated DEA Special Agent in Charge Martin.

Under the settlement reached July 5, 2017, CVS acknowledges that its DEA-registered pharmacies were and are required to comply with the CSA, and that nine CVS pharmacies in the Eastern District of California failed to fulfill these recordkeeping obligations in a manner fully consistent with CVS’s responsibilities under the CSA. The settlement and compliance plan cover the 168 CVS pharmacies that operated in the Eastern District of California from April 30, 2011, through April 30, 2013.

The allegations resolved by this settlement were uncovered during a DEA investigation that began in 2012 after CVS self-reported thefts and losses of hydrocodone, a Schedule III drug at the time, at five of its Sacramento-area pharmacies. Under the CSA, DEA-registered pharmacies are obligated to report any thefts or significant losses of controlled substances to DEA.

To address the issues uncovered by this investigation, CVS made improvements to its pharmacies in the Eastern District of California by, among other things, instituting annual CSA compliance training of its pharmacy staff, increasing loss prevention oversight, and excluding controlled substances prescriptions from the volume metric that can impact pharmacy staff compensation.

Assistant U.S. Attorneys M. Anderson Berry and Kurt Didier handled the case with assistance from diversion investigators at DEA’s Sacramento field office.

FRESNO, Calif. — Antonio Soria-Arellano (Soria), 44, a citizen of Mexico, was sentenced today to two years in prison for being an alien in possession of a firearm, U.S. Attorney Phillip A. Talbert announced.

According to court documents, on February 23, 2017, Soria, an alien, was in possession of a Remington 870 Express, 12-gauge shotgun. According to the criminal complaint, law enforcement officers found Soria at an indoor marijuana cultivation operation in a residence in Madera County. Soria was the sole occupant of the residence and was in possession of the loaded shotgun and ammunition. On April 17, 2017, Soria pleaded guilty to being an alien in possession of a firearm.

This case was the product of an investigation by the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the Madera County Sheriff’s Office, and the Merced County District Attorney’s Office. Assistant U.S. Attorney Karen A. Escobar prosecuted the case.

FRESNO, Calif. — U.S. District Judge Anthony W. Ishii sentenced Randy Flowers, 51, of Fresno, to two years and nine months in prison for being a felon in possession of firearms, U.S. Attorney Phillip A. Talbert announced.

Flowers is one of seven defendants, including former Fresno deputy police chief Keith Foster, charged in a multi-count indictment returned on April 9, 2015. Flowers entered a guilty plea on April 4, 2017, to Count 10 of the indictment, charging him with being a felon in possession of a firearm. Five of Flowers’ co-defendants entered guilty pleas and have either been sentenced or are awaiting sentencing, Keith Foster proceeded to trial, and on May 23, 2017, a jury found him guilty of conspiracy to distribute and possess with intent to distribute heroin and conspiracy to distribute and possess with intent to distribute marijuana. He is scheduled to be sentenced on October 10, 2017.

According to court documents, Flowers was arrested on March 26, 2015, after a brief meeting at his home with Keith Foster. Flowers was found to be in possession of a .357-caliber Smith & Wesson revolver, a .45-caliber pistol, and a Remington .30-06 caliber rifle. Having previously been convicted of two felonies, Flowers was prohibited from possessing firearms.

This case is the product of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Federal Bureau of Investigation. Assistant U.S. Attorneys Melanie L. Alsworth and Dawrence W. Rice Jr. are prosecuting the case.

Five co-defendants have pleaded guilty to various offenses related to the drug trafficking conspiracy. Denny Foster is scheduled to be sentenced on August 14, 2017. Ricky Reynolds is scheduled to be sentenced on September 11, 2017. On October 11, 2016, Rafael Guzman, 43, of Fresno was sentenced to three years and four months in prison. Jennifer Donabedian, 37, of Fresno, pleaded guilty to concealing a felony and served 12 months’ probation. Sarah Ybarra, 39, of Fresno, pleaded guilty to conspiracy to distribute marijuana and served one year in prison.

FRESNO, Calif. — Darrell Lemont Morris, 46, formerly of Stockton, and currently a resident of Houston, Texas, pleaded guilty today to conspiracy to submit false claims, U.S. Attorney Phillip A. Talbert announced.

According to court documents, between January 2010 and March 2011, Morris conspired with co-defendant Vivian Marie Williams, of Stockton, to defraud the United States by filing false and fraudulent tax returns. Williams prepared tax returns out of her home in Stockton for legitimate clients, but most of the tax returns she prepared were in the names of victims of identity theft. These individuals did not know Williams, did not authorize her to file a tax return on their behalf, and did not receive the refund. Morris allowed Williams to use his bank accounts to deposit the tax refunds and then shared in the proceeds with her. During the scheme, Morris admitted he submitted false claims to the IRS for at least $25,945.

This case is the product of an investigation by the Internal Revenue Service, Criminal Investigation. Assistant U.S. Attorney Mark J. McKeon is prosecuting the case.

Co-defendant Williams was sentenced on October 17, 2016, to four months and 25 days in custody and ordered to pay restitution to the Internal Revenue Service.

Morris is scheduled to be sentenced by U.S. District Judge Dale A. Drozd on January 8, 2018. Morris 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. — Wal-Mart Stores Inc. has paid $1.65 million to resolve allegations that it violated the federal False Claims Act when it knowingly submitted claims for reimbursement to California’s Medi‑Cal program that were not supported by applicable diagnosis and documentation requirements, U.S. Attorney Phillip A. Talbert announced today.

“These Medi-Cal regulations are essential to protect both patients and limited heath care funding,” said U.S. Attorney Talbert. “My office will continue to hold pharmacies accountable when they fail to comply with regulations like these.”

Walmart, headquartered in Bentonville, Arkansas, operates over 290 retail stores in California; approximately 283 of these locations have pharmacies. The Medi-Cal program is administered by the California Department of Health Care Services (DHCS) and relies on both federal and state funding to provide health care to millions of Californians, including those with low incomes and disabilities.

Medi-Cal utilizes a formulary list, commonly known as “Code 1” drugs, which designates certain restrictions for each listed drug, including restrictions pertaining to diagnoses. Medi-Cal will reimburse certain Code 1 drugs only for approved diagnoses, taking into account criteria such as the drug’s safety, efficacy, misuse potential, and cost. Pharmacies serve the critical gatekeeping function of confirming and certifying that these Code 1 drugs are dispensed for the approved diagnoses. Walmart may bill for drugs prescribed outside of the approved diagnoses only if it submits a request to DHCS that includes a justification for the non‑approved use. Today’s settlement resolves allegations that Walmart failed to confirm and document the requisite diagnoses, and in some instances dispensed drugs for non-approved diagnoses, then knowingly billed Medi-Cal for these prescriptions.

The allegations resolved by this settlement were first raised in a lawsuit filed against Walmart under the qui tam, or whistleblower, provisions of the False Claims Act by a pharmacist who has worked at Walmart locations in the greater Sacramento area. The False Claims Act allows private citizens with knowledge of fraud to bring civil actions on behalf of the government and to share in any recovery. The whistleblower in this matter will receive approximately $264,000 of the recovery proceeds.

This settlement is the result of a joint effort by the United States Attorney’s Office for the Eastern District of California and California’s Bureau of Medicaid Fraud and Elder Abuse. Assistant U.S. Attorney Catherine J. Swann handled the matter for the United States, with assistance from the Department of Health and Human Services, Office of Inspector General, and the Federal Bureau of Investigation. The claims settled by this agreement are allegations only, and there has been no determination of liability.

SACRAMENTO, Calif. — U.S. District Judge Garland E. Burrell Jr. sentenced Harjit Kaur Johal, 50, and Jasvir Kaur, 47, each to two years in prison for making false declarations before a grand jury, U.S. Attorney Phillip A. Talbert announced.

According to evidence presented at trial in March 2017, the defendants participated in a series of unemployment and disability fraud schemes in Yuba City. The organizers of the schemes were members of the Khan family and included Mohammad Nawaz Khan, Mohammad Adnan Khan, Mohammad Shahbaz Khan, and Mohammad Riaz Khan. The organizers set up a series of farm labor contracting businesses that purported to provide labor to harvest crops in Sutter and Yuba Counties. The organizers then sold fraudulent paystubs to other people, including the defendants, and reported false wages to the Employment Development Department. The purchasers of the paystubs would subsequently file for unemployment or disability benefits with the EDD based upon the fictitious wages. Because the amount of the benefits that the EDD pays is based upon the claimant’s prior earnings, the participants would pay the Khans to report high wages to the EDD.

In 2014, the defendants were subpoenaed to testify before a federal grand jury investigating the fraud scheme. During their testimony, when questioned about their wages, the defendants falsely stated under oath that they picked peaches for Ray Khan and that they did not commit fraud. Both defendants claimed they had picked peaches for Ray Khan for at least eight hours a day, six days a week, during the summer months of June through September. Both defendants also claimed that they worked on other tasks in the orchards for hours every day after picking peaches.

Testimony from individuals with knowledge of Ray Khan’s real employees established that he did not employ the defendants. Further, evidence presented at trial showed the defendants had reported chronic back and knee problems in prior disability claims with the EDD and were not capable of doing the physically intensive work required by peach picking. Finally, evidence at trial established that the defendants purchased paystubs from Ray Khan so that he would report falsely inflated wages to the EDD, which the defendants could then use to claim the maximum possible amount of unemployment benefits. Both defendants had participated in previous fraud schemes with other Khan family members and had already claimed benefits in excess of $30,000 each.

This case is part of a series of cases involving the Khan family’s fraud schemes. Over the course of these related conspiracies, the Khans reported wages for over 400 separate individuals that resulted in more than 2,000 fraudulent claims for unemployment and disability benefits. The fraud schemes defrauded the California Employment Development Department of more than $14 million. To date, 26 individuals have been convicted of various offenses related to the schemes.

This case was the product of an investigation by the U.S. Department of Labor, Office of Inspector General; the Federal Bureau of Investigation; and the Employment Development Department-Criminal Investigations. Assistant U.S. Attorneys Jared C. Dolan and Jeremy J. Kelley prosecuted the case.

FRESNO, Calif. — Seth Adam Depiano, 36, of Clovis, was arrested yesterday in Las Vegas and is charged in a criminal complaint with mail fraud, wire fraud and money laundering, U.S. Attorney Phillip A. Talbert announced.

According to court documents, Depiano operated a Ponzi scheme that lured real estate investors into giving to him and the businesses he controlled — including The Rental Group, U.S. Funding and Home Services LLC, and Draymond Homes — more than $20 million. 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.

According to court documents, in many cases, Depiano promoted the properties to investors with documents that falsely represented high occupancy rates. He 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 paid investors purported rental income that, in fact, was money other investors had given him for investment purposes.

This case is the product of an investigation by the Federal Bureau of Investigation with assistance from the U.S. Attorney’s Office for the District of Nevada. Assistant U.S. Attorney Christopher D. Baker is prosecuting the case.

If convicted, Depiano faces a maximum statutory penalty of 20 years in prison for the mail fraud and wire fraud charges, 10 years in prison for money laundering, and a $250,000 fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

SACRAMENTO, Calif. — Channin Renee Dickens, 30, of Sacramento, pleaded guilty today to possessing stolen mail, U.S. Attorney Phillip A. Talbert announced.

According to court documents, between September 15, 2016, and February 20, 2017, Dickens possessed mail that had been stolen from an authorized U.S. Mail receptacle. Dickens, along with Ashley Nicole Leyba, 27, of Sacramento, and others, carried out a scheme to defraud banks by using identity information and financial documents obtained from stolen U.S. Mail to apply for lines of credit and open accounts in the names of others. Dickens would use the cards to purchase merchandise and services.

On February 13, 2017, Leyba was arrested, and in April 7, 2017, pleaded guilty to bank fraud, aggravated identity theft, and possession of stolen mail. In Leyba’s plea agreement, she admits that while in custody, she instructed Dickens to destroy stolen identification and financial information that she had in her residence. However, some of the stolen mail was recovered in Dickens’ car before she could destroy it.

This case is the product of an investigation of the U.S. Postal Inspection Service, with assistance from the California Highway Patrol, the Sacramento County Sheriff’s Office, the Sacramento County Probation Office, and the Citrus Heights Police Department.

Dickens is scheduled to be sentenced by U.S. District Judge Garland E. Burrell Jr. on September 15, 2017. Dickens faces up to five years in prison. Leyba is scheduled to be sentenced by Judge Burrell on July 28, 2017. Leyba faces up to 30 years in prison for bank fraud, a mandatory sentence of two years in prison for aggravated identity theft, and five years in prison for possession of stolen U.S. Mail.

SACRAMENTO, Calif. — Alexander Antonio Rojas, 58, of Sacramento, was sentenced today by U.S. District Judge Garland E. Burrell Jr. to 20 years in prison for distribution of child pornography, U.S. Attorney Phillip A. Talbert announced.

U.S. Attorney Talbert stated: “Today’s sentence is necessary to protect the public from further crimes by this defendant. He used his relative wealth and privilege in this country to exploit impoverished people overseas. It is our goal to ensure that this defendant never harms another child.”

“This case sends a clear message to those who seek, consume, and distribute child pornography,” said Acting Special Agent in Charge Voviette Morgan of the FBI Sacramento field office. “This investigation reminds those who are considering committing similar crimes that the FBI continues to collaborate with our international and task force partners to ensure the exploitation of vulnerable children is investigated and prosecuted to the full extent of the law.”

According to court documents, between August 5, 2013, and April 5, 2014, Rojas offered to pay money to individuals living in the Philippines and other Southeast Asian countries to produce photographs and videos of minor children engaged in sexually explicit conduct. In some instances, Rojas sought images of children as young as nine years old.

This case was the product of an investigation by the Federal Bureau of Investigation with assistance from 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. Attorney Matthew G. Morris prosecuted the case.

Rojas has been in custody since his arrest on June 13, 2014.

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

SACRAMENTO, Calif. — A federal grand jury returned a three-count indictment today against Ahmad Nassar, 30, of Sacramento, charging him with access device fraud, possessing stolen mail, and being a felon in possession of a firearm, U.S. Attorney Phillip A. Talbert announced.

According to court documents, on May 10, 2017, Nassar possessed numerous unauthorized or counterfeit credit and debit cards, a loaded firearm not registered to him, and stolen U.S. mail. Nassar allegedly conducted unauthorized transactions using credit and debit card accounts opened in others’ names.

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

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

FRESNO, Calif. — A federal grand jury in Fresno indicted eight defendants today for their participation in a methamphetamine and heroin distribution conspiracy. U.S. Attorney Phillip A. Talbert and Special Agent in Charge John J. Martin of the Drug Enforcement Administration’s San Francisco Division made the announcement. The indictment charges Jose Luis Zambrano, 33; Juan Carlos Lopez, 28; Ruben Mojarro, 42; Adalberto Jacobo, 36; all of Bakersfield; Joel Melendez, aka Leonel Rodriguez, 33; Edgar Omar Rodriguez Parra, aka Jesus Burgos Luna, 36; and Alex Castro Portillo, 29, all Mexican nationals; and Manuel Teodoro Aros, 42, of Santa Maria; with conspiracy to distribute and possess with intent to distribute methamphetamine and heroin. Zambrano, Jacobo, Portillo, Parra, and Aros were also charged with other drug trafficking offenses, and Zambrano and Lopez were charged with firearm offenses. According to court documents, Zambrano was the head of a drug trafficking organization that from March 1, 2016, through June 16, 2017, imported and distributed large amounts of methamphetamine and heroin to the Bakersfield area and other locations. In order to intimidate others, protect their narcotics and cash, and enforce drug debts, some members of the organization carried firearms and wore protective body armor. On June 23, 2017, arrest and search warrants targeting the organization were executed and resulted in the seizure of narcotics. Zambrano, Lopez, Mojarro, Aros, and Jacobo, were arrested and remain in custody. Joel Melendez, Edgar Omar Rodriguez Parra, and Alex Castro Portillo are fugitives. This case is the product of an investigation by the Drug Enforcement Administration, the California Highway Patrol, and the Bakersfield Police Department with assistance from Kern County Probation Department, Bureau of Alcohol, Tobacco, Firearms, and Explosives, and the Internal Revenue Service, Criminal Investigation. Assistant U.S. Attorney Brian K. Delaney is prosecuting the case. If convicted, all defendants face 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 defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.

Fugitive Joel Melendez, aka Leonel Rodriguez fugitive Alex Castro Portillo, 29 fugitive Edgar Omar Rodriguez Parra, aka Jesus Burgos Luna

 

FRESNO, Calif. — Chief U.S. District Judge Lawrence J. O’Neill sentenced two men today for conspiring to manufacture, distribute and possess with intent to distribute marijuana in connection with a large-scale cultivation operation that impacted a prehistoric site, U.S. Attorney Phillip A. Talbert announced.

Juan Carlos Lopez, 32, of Flagstaff, Arizona was sentenced to five years in prison, and Javier Garcia-Castaneda (Garcia), 38, of Michoacán, Mexico, was sentenced to three years and one month in prison. Lopez was ordered to pay $5,930 in restitution, and Garcia was ordered to pay $5,233 in restitution to the U.S. Forest Service for the damage to public land and natural resources caused by their cultivation activities.

The sentences were imposed following their guilty pleas in April. According to court documents, the men conspired with each other and Rafael Torres-Armenta (Torres), 30; and Carlos Piedra-Murillo (Piedra), 30, both of Michoacán, Mexico, to cultivate marijuana in the Domeland Wilderness. The Domeland Wilderness is a federally designated wilderness area about 55 miles northeast of Bakersfield and is known for its many granite domes and unique geologic formations. Law enforcement officers seized over 8,000 marijuana plants, 17 pounds of processed marijuana, a .22‑caliber rifle, a pellet rifle, and hundreds of rounds of .22‑caliber ammunition.

Piedra previously pleaded guilty to the conspiracy and was sentenced earlier this month to serve two years and one month in prison. Torres previously pleaded guilty and will be sentenced on July 10, 2017.

The marijuana cultivation operation caused extensive environmental damage. It covered about 10 acres and was within the burned area of the 2000 Manter Fire. Some of the new vegetation and trees that sprouted after the fire had been cut and trimmed to make room for the marijuana plants. Water was diverted from a tributary stream of Trout Creek, a major tributary to the Kern River. Fertilizer and pesticides, including illegal carbofuran and zinc phosphide, highly toxic pesticides from Mexico, were found at the site. Large piles of trash were found near the campsite. The moving of soil to accommodate a basin around each marijuana plant caused extensive damage to a large prehistoric Tűbatulabal archaeological site. Holes were dug in the middle of the archaeological site and artifacts were found scattered on the surface among the marijuana plants.

This case is the product of an investigation by the U.S. Forest Service, Bureau of Land Management, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), and California Department of Fish and Wildlife. Assistant United States Attorney Karen Escobar prosecuted the case.

FRESNO, Calif. — Carlos Gerardo Blanco, 27, and Henry Polin Morales III, 21, both of Bakersfield, pleaded guilty today to conspiracy to distribute methamphetamine, U.S. Attorney Phillip A. Talbert announced.

According to court documents, between November 2014 and December 2015, Blanco conspired with Morales and others to distribute methamphetamine to various drug dealers and users in Kern County and Las Cruces, New Mexico. Blanco and Morales admit they distributed between 1.5 kilograms and 4.5 kilograms of methamphetamine.

According to the plea agreement, on May 6, 2015, Blanco purchased approximately five pounds of crystal methamphetamine in the Los Angeles metropolitan area that he intended to distribute for profit with the help of Morales and other co-conspirators. Agents seized the crystal methamphetamine from Blanco, Morales, and another convicted co-conspirator, Justin Rivera, 22, of Bakersfield, as they attempted to transport the narcotics on a commercial bus bound for Las Cruces, New Mexico.

This case is the product of an investigation by the Drug Enforcement Administration and task force officers from Kern County Probation. Assistant U.S. Attorney Brian K. Delaney is prosecuting the case.

Salvador Morales was earlier convicted in this matter and was sentenced on September 26, 2016, to six years and three months in prison. Jose Alejandro Jacobo, 25, of Bakersfield, was convicted in this matter and sentenced on March 13, 2017, to seven years and eight months in prison. Two other defendants have pleaded guilty to this conspiracy and are awaiting sentencing — Justin Rivera and Carlos Blanco’s wife Josefina Blanco, 25, a Mexican national.

Blanco and Morales are scheduled to be sentenced by U.S. District Judge Lawrence J. O’Neill on October 16, 2017. Blanco faces a maximum statutory penalty of life in prison and a $10 million fine. Morales faces a maximum statutory penalty of 40 years in prison and a $5 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. — Matthew Faron Blair, 33, of Modesto, was sentenced today to eight years and nine months in prison for forcibly assaulting a federal government contract security guard assigned to protect the Social Security Administration office in downtown Fresno, U.S. Attorney Phillip A. Talbert announced.

According to court documents, on October 14, 2014, Blair went to the Social Security Administration office in Fresno to attempt to collect Supplemental Security Income (SSI) benefits. When advised that his benefits had stopped but could be renewed by completing additional paperwork, Blair became agitated and a security guard was called to escort him out of the office. As he was being escorted out of the office, Blair physically assaulted the guard. As a result of the assault, the guard suffered injury to the head and mouth, which required medical treatment.

In sentencing the defendant, Chief U.S. District Judge Lawrence J. O’Neill considered Blair’s lengthy criminal history.

This case was the product of an investigation by Federal Protective Services of the U.S. Department of Homeland Security. The Social Security Administration, Office of the Inspector General, California Department of Corrections and Rehabilitation, Division of Adult Parole Operations, and Stockton Police Department assisted in the investigation. Assistant United States Attorney Karen A. Escobar is prosecuting the case.

FRESNO, Calif. — Daniel Rios, 33, of Kern County, pleaded guilty today to conspiracy to distribute methamphetamine, U.S. Attorney Phillip A. Talbert announced.

According to court documents, between March 1, 2016, and June 29, 2016, Rios conspired with others in Earlimart to distribute methamphetamine. On June 14, 2016, he distributed approximately 14.7 kilograms of methamphetamine to a co-conspirator. When law enforcement agents arrested Rios and other co-conspirators, they seized approximately 14.7 kilograms of methamphetamine, three firearms, multiple magazines and ammunition, and over $16,000 in cash.

This case was the product of an investigation by the Drug Enforcement Administration, the Kern County Sheriff’s Office, the Tulare County Sheriff’s Office, the Southern Tri-County Task Force of the Central Valley High Intensity Drug Trafficking Area (HIDTA), the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the California Department of Motor Vehicles Investigations, the Kern County Probation Department, and the California Highway Patrol. Assistant United States Attorney Brian K. Delaney is prosecuting the case.

Rios is scheduled to be sentenced by U.S. District Judge Lawrence J. O'Neill on December 18, 2017. Rios faces a maximum statutory penalty of life in prison and a $5 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. — Angelica Moreno Velasquez, 32, of Fresno, was sentenced today by Chief U.S. District Judge Lawrence J. O’Neill to 15 months in prison for conspiracy to produce, transfer, possess, and sell false identification documents, U.S. Attorney Phillip A. Talbert announced. Moreno Velasquez was remanded into custody today after the sentence was imposed.

According to court documents, between June 2015 and June 2016, Moreno Velasquez conspired with others to sell fraudulent identification documents, including social security cards and alien registration receipt cards, to customers who placed orders and paid as much as $150 for a set of the fraudulent documents.

This case was the product of an investigation by the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and the California Department of Motor Vehicles, Investigations Division. Assistant U.S. Attorney Christopher D. Baker is prosecuting the case.

On June 16, 2016, Moreno Velasquez and five co-defendants were arrested for the scheme. In December 2016, Francisco Javier Hidalgo-Flores was sentenced to 15 months in prison; Veronica Rosales-Capitaine was sentenced to 14 months in prison; and Lizet Amairani Ramirez-Zazueta was sentenced to time served.

Charges are pending against the remaining co‑defendants and trial is scheduled to commence on December 5, 2017. The charges are only allegations; they are presumed innocent until and unless proven guilty beyond a reasonable doubt.

FRESNO, Calif. — Crystal Ferguson, 37, of Bakersfield, pleaded guilty today to conspiracy to distribute and possess with the intent to distribute cocaine base, U.S. Attorney Phillip A. Talbert announced.

According to court documents, between June 1, 2016, and November 1, 2016, Ferguson distributed approximately 79.8 grams of cocaine base and approximately 28.6 grams of cocaine.

This case is the product of an investigation by the FBI Violent Crime Task Force, which includes the Bakersfield Police Department. Assistant U.S. Attorney Brian K. Delaney is prosecuting the case.

Ferguson is scheduled to be sentenced by U.S. District Judge Lawrence J. O'Neill on October 16, 2017. Ferguson faces a maximum statutory penalty of 40 years in prison and a $5 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. — Kye Aaron Dunbar, 30, of Bakersfield, was sentenced today by U.S. District Judge Dale A. Drozd to three years and 10 months in prison and ordered to pay $287,945 in restitution for conspiring to defraud Bakersfield Pipe and Supply Inc. (BPS), U.S. Attorney Phillip A. Talbert announced.

According to court documents, between March 17, 2014, and October 22, 2014, Kye Dunbar, his wife Lynnsi Dunbar, and Daniel Harte conspired to defraud BPS, which is headquartered in Bakersfield, by creating false invoices for payment. Lynnsi Dunbar was an employee of BPS who, with the help of Kye Dunbar and Daniel Harte, created a fictitious trucking company in the name of Harte Trucking. Harte Trucking existed in name only and was created by the defendants for the sole purpose of submitting fraudulent invoices to BPS for payment for services never performed. As a result of this conspiracy, the defendants were able to defraud BPS out of $287,000.

This case is the product of an investigation by the Federal Bureau of Investigation. Assistant United States Attorney Brian K. Delaney is prosecuting the case.

Lynnsi Dunbar pleaded guilty and is scheduled to be sentenced on January 8, 2018. Harte is scheduled to go to trial on November 7, 2017. The charges against Harte are only allegations; he is presumed innocent until and unless proven guilty beyond a reasonable doubt.

FRESNO, Calif. — Martin Patino Jr, 25, of Bakersfield, was sentenced today by U.S. District Judge Lawrence J. O’Neill to five years and 11 months in prison for two counts of being a felon in possession of a firearm, U.S. Attorney Phillip A. Talbert announced.

Patino pleaded guilty on January 30, 2017. According to court documents, on December 22, 2015, while law enforcement officers were preparing to execute a search warrant at Patino’s residence, they observed Patino exit the residence and walk over to an older model truck that had its front engine compartment hood open. Later, officers searched the truck and found a Black Rock Island Armory, .45‑caliber M1911 A1 handgun with an extended magazine under a sheet in the engine compartment. They also found an additional .45‑caliber handgun magazine at the property. Patino admitted that he was a previously convicted felon and that the firearm and ammunition were his.

On February 12, 2016, law enforcement agents executed a federal search warrant at Patino’s residence and found a Ruger LCP .380 handgun, which was later determined to be stolen, inside a safe in the bedroom. They also found in the safe a 50-round box of Winchester 32 auto 71 grain ammunition and a Ruger brand magazine containing four rounds of ammunition.

According to the plea agreement, Patino admitted that he used or possessed these firearms in connection with the commission of a conspiracy to distribute methamphetamine.

This case was the product of an investigation by the FBI Violent Crime Task Force, which includes the Bakersfield Police Department. Assistant U.S. Attorney Brian K. Delaney prosecuted the case.

SACRAMENTO, Calif. — U.S. District Judge Garland E. Burrell Jr. sentenced Michael Anthony Holmes, 25, of Fairfield, today to 15 years and eight months in prison for sex trafficking a minor, U.S. Attorney Phillip A. Talbert announced.

According to court documents, from July 16, 2014, until September 4, 2015, Holmes recruited a 15-year-old runaway girl to engage in commercial sex acts with men for his financial benefit. Holmes transported her to multiple locations and collected the money that she earned. In July 2014, police officers found the girl and returned her to her mother. Nonetheless, Holmes continued to pressure the victim work for him, even while he was incarcerated on other charges. He wrote to her from jail and threatened that “there would be consequences” if she did not continue to make money for him.

This case was the product of an investigation by the FBI Solano County Violent Crime Task Force composed of the Federal Bureau of Investigation, the California Highway Patrol, the Solano County Sheriff's Office, the Fairfield Police Department and the Vallejo Police 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. — Shellby Leeanna Moore, 30, of Sacramento, was sentenced today by U.S. District Judge Morrison C. England Jr. to four years and two months in prison for aggravated identity theft and possession of methamphetamine, U.S. Attorney Phillip A. Talbert announced.

According to court documents, while Moore was in custody with charges pending for identity theft, she obtained and used methamphetamine. On March 16, 2017, Moore pleaded guilty to stealing identities of Sacramento County residents and possessing methamphetamine.

According to court documents, Moore and co-defendant Trevor Lichnock-Gembe, 29, of Sacramento, obtained stolen mail and used the personal information of victims to open checking and savings accounts and to obtain debit cards. After opening the accounts, the defendants used them to deposit stolen, counterfeit, and altered checks. Surveillance cameras at various locations showed the defendants opening accounts and making phony deposits at banks, making purchases with the fraudulent debit cards, and breaking into mail boxes at apartment complexes.

On April 20, 2016, law enforcement agents conducted a probation search where Moore lived with Lichnock-Gembe. Inside the residence, officers seized stolen property, stolen credit and debit cards, stolen identifications, passports, and stolen U.S. mail.

On April 6, 2017, Judge England sentenced co-defendant Lichnock-Gembe to four years and 10 months in prison for bank fraud, aggravated identity theft, and unlawful possession of identification documents. The attempted loss exceeded $126,879, and both defendants were ordered to pay restitution for the actual loss of $71,960. The defendants stole mail from over 700 different victims in the greater Sacramento Metropolitan area.

This case was the product of an investigation by the United States Postal Inspection Service with assistance from the Sacramento County Sheriff’s Office. Assistant U.S. Attorney Michelle Rodriguez prosecuted the cases.

FRESNO, Calif. — A federal grand jury returned a two-count indictment today against Jose Manuel Sanchez-Zapien (Sanchez), 37, a native and citizen of Michoacán, Mexico, residing in Dos Palos, charging him with conspiring to manufacture marijuana and damaging public lands and natural resources, U.S. Attorney Phillip A. Talbert announced.

According to court documents, Sanchez was found in April and June of this year at a drop point delivering supplies to growers at a marijuana cultivation site in the Slick Rock Creek drainage in the Sequoia National Forest. The drop point has been used numerous times in the past as a supply drop point for marijuana growers to access grow sites in the Slick Rock Creek drainage.

This case is the product of an investigation by the U.S. Forest Service with assistance from the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the California Department of Fish and Wildlife and the Social Security Administration, Office of the Inspector General. Assistant U.S. Attorney Karen A. Escobar is prosecuting the case.

If convicted of the drug conspiracy, Sanchez faces a minimum statutory penalty of 10 years in prison and a maximum statutory penalty of life in prison, along with a $10 million fine. If convicted of the environmental crime, Sanchez faces a maximum statutory penalty of 10 years in prison and a fine of up to $250,000. Sanchez is also liable for restitution to the U.S. Forest Service for damages stemming from the marijuana cultivation activities. 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.