Eastern District of California

SACRAMENTO, Calif. — United States Attorney Phillip A. Talbert announced today that Walgreen Co. (Walgreens) has paid $9.86 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.

Walgreens is one of the largest drugstore chains in the United States, operating approximately 630 stores in California. The company is headquartered in Deerfield, Illinois. 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. Walgreens may bill for drugs prescribed outside of the approved diagnoses, but it must submit a request to DHCS that includes a justification for the non‑approved use. Today’s settlement resolves allegations that Walgreens 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 two lawsuits filed against Walgreens under the qui tam, or whistleblower, provisions of the False Claims Act by a former Walgreens pharmacist and a former pharmacy technician. The Act allows private citizens with knowledge of fraud to bring civil actions on behalf of the government and to share in any recovery. The whistleblowers in this matter will collectively receive approximately $2.3 million of the recovery proceeds.

“This settlement illustrates our commitment to protect the integrity of California’s Medi‑Cal program,” said U.S. Attorney Talbert. “Regulations like those at issue here protect both critical funding and beneficiaries served. My office will continue working to ensure that pharmacies comply with these regulations.”

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 United States 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. — A federal jury today found an inmate at the Federal Correctional Institution at Herlong guilty of an assault on another inmate that resulted in serious bodily injury, U.S. Attorney Phillip A. Talbert announced.

According to court documents, on May 25, 2015, Willie James McNeal, 60, attacked another inmate at FCI Herlong, causing multiple fractures of the bones in his face. The victim required two surgeries, and experienced extreme pain, as well as disfigurement and impairment of his nasal and breathing functions. Two surveillance videos documented the assault. The videos showed that McNeal, after speaking briefly with the victim, punched him near his right eye. McNeal continued to punch the victim multiple times in the forehead before tossing the inmate onto the concrete floor.

This case is the product of an investigation by the Federal Bureau of Investigation and the Bureau of Prisons.

U.S. District Judge Garland E. Burrell Jr. is scheduled to sentence McNeal on July 14, 2017. McNeal faces a maximum statutory penalty of up to an additional 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. — U.S. District Judge Garland E Burrell Jr. sentenced Robert Patton McGee, 53, of Vallejo, today to seven years in prison for distributing child pornography, U.S. Attorney Phillip A. Talbert announced.

According to court documents, Facebook reported to the National Center for Missing and Exploited Children (NCMEC) that someone had uploaded suspected images of child pornography to a Facebook profile. The investigation of these profiles led law enforcement to execute a search warrant at McGee’s residence in June 2014. When interviewed by law enforcement officers, McGee admitted to sending and receiving child pornography through Facebook and email. Analysis of Facebook and email addresses used by McGee showed that between November 10, 2011, and May 9, 2014, McGee distributed thousands of images and videos containing child pornography.

This case was investigated by the Sacramento Internet Crimes Against Children (ICAC) Task Force, a federally and state-funded task force managed by the Sacramento Sheriff’s Department with agents from federal, state, and local agencies. The Sacramento ICAC investigates online child exploitation crimes, including child pornography, enticement, and sex trafficking. Assistant U.S. Attorney Jeremy J. Kelley prosecuted the case.

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

FRESNO, Calif. — Abudullah Almashwali, 31, a Yemeni national formerly residing in Brooklyn, New York, pleaded guilty today to distribution of heroin and cocaine, and conspiracy, 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, using the vendor names “Area51” and “DarkApollo,” were large-scale heroin and cocaine distributors on the dark web marketplace AlphaBay. Dark web marketplaces are operated on computer networks designed to conceal the true Internet Protocol (IP) address of the computers accessing the network. Dark web marketplaces 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.

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 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.

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.

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), the 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.

U.S. District Judge Dale A. Drozd is scheduled to sentence Almashwali on July 24, 2017, at 1:30 p.m. and Farooq on May 15, 2017. Almashwali and Farooq face 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.

SACRAMENTO, Calif. — A federal grand jury returned a single-count indictment today against Dilesh Sharma, of Sacramento, charging him with attempted online enticement of a minor for sexual purposes, U.S. Attorney Phillip A. Talbert announced.

This case is the product of an investigation by the Federal Bureau of Investigation and the FBI Child Exploitation Task Force. Assistant United States Attorneys Rosanne Rust and Jill M. Thomas are prosecuting the case.

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

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

SACRAMENTO, Calif. — In recent weeks, the U.S. Attorney’s Office, working with IRS Criminal Investigation and the Inspector General for Tax Administration, charged three cases of tax fraud, U.S. Attorney Phillip A. Talbert announced.

“Every person in this country is obligated to abide by our tax laws,” said U.S. Attorney Talbert. “It hurts everyone who follows those rules when people submit fraudulent returns and claim taxpayer money to which they aren’t entitled. This is doubly true when IRS employees use their knowledge of the system to cheat it and enrich themselves. It is vital that everyone meets their responsibilities to pay taxes and that they have confidence in the government agencies that enforce those rules. That is why my office is committed to prosecuting cases like those announced here today.”

“We want everyone who files a tax return to take advantage of the deductions and credits to which they are entitled by law,” said Michael T. Batdorf, Special Agent in Charge, IRS Criminal Investigation. “However, no one is entitled to defraud the United States and the American taxpayers. The charges filed against these defendants should send a clear message that those involved in these types of schemes will be held accountable. IRS Criminal Investigation is the only law enforcement agency charged with enforcing the American tax laws. We are proud to have such a committed partnership with the U.S. Attorney’s Office to uphold our mission.”

Cases involving IRS employees are investigated jointly by the Inspector General for Tax Administration (TIGTA) and IRS Criminal Investigation. Rod Ammari, Special Agent-in-Charge of TIGTA’s San Francisco Field Division stated: “It is very important that the American taxpayers have confidence in the IRS and its functions. When IRS employees use their insider knowledge to file fraudulent tax returns, we are committed to prosecuting these individuals to the fullest extent of the law. IRS employees committing tax fraud cannot be tolerated.”

1:17-cr-090 LJO — On April 6, 2017, Marcela Heredia, 43, of Fresno, was charged with seven counts of wire fraud, aggravated identity theft, and making a false tax return. According to the indictment, Heredia worked as a tax examiner for the IRS in Fresno. Between January 9, 2009, and February 4, 2014, Heredia also worked overnight shifts at the Transitional Living Center (TLC) in Fresno. The TLC was a residential home for young adults, many of whom were former foster children who had reached the age of majority. TLC offered life skills and career training for its residents. While working there, Heredia offered to help the residents prepare their tax returns, and residents turned over their personal information to her. Instead of completing the returns as agreed, Heredia would tell the individuals that they did not make enough money to file a tax return. She then filed tax returns on their behalf without their knowledge and directed the IRS to electronically transfer the refund to her personal account. Heredia did not notify the taxpayer of the refund and did not distribute any of the refund to them. In the tax returns she submitted, she claimed more than $20,000 in tax refunds. In addition to this scheme, Heredia also filed a false tax return for herself for the 2011 tax year. She claimed a dependent for that year that she said was her disabled niece, when in fact the person she listed was not her dependent, was not her niece, and was not disabled.

This case is the product of an investigation by the U.S. Department of the Treasury Inspector General for Tax Administration and IRS Criminal Investigation. Assistant U.S. Attorney Megan A.S. Richards is prosecuting this case.

1:17-cr-083 DAD — Pamela Pringle, 57, of Fresno, was indicted on April 6, 2017, charged with four counts of making an opportunity for a person to defraud the United States and three counts of filing a false tax return. According to the indictment, Pringle worked for the IRS as a lead contact representative responsible for responding to taxpayers’ inquiries and making adjustments to taxpayers’ accounts. Between January 2011 and April 2011, Pringle increased individuals’ tax refunds on four separate tax returns by claiming deductions for expenses that the taxpayer had not incurred. In addition, Pringle claimed unauthorized and excessive business expenses related to her photography activity, in spite of being informed by the IRS that her photography work was a hobby and not a business. As a result of her fraudulent filings, Pringle claimed and received tax deductions and credits to which she was not entitled.

This case is the product of an investigation by the U.S. Department of the Treasury Inspector General for Tax Administration and IRS Criminal Investigation. Assistant U.S. Attorney Vincenza Rabenn is prosecuting the case.

1:17-cr-081 DAD — On March 30, 2017, a grand jury returned an indictment charging Leticia Bedolla, of Porterville, with 16 counts of aiding and assisting in the preparation of a false tax return. According to court documents, Bedolla operated Leticia Tax Service in Porterville. Between April 2008 and April 18, 2011, Bedolla prepared and filed many tax returns with the IRS, knowing that the returns contained false statements. Bedolla would fabricate amounts of deductions, expenses and tax credits without informing her customers. Bedolla submitted the returns to the IRS, causing her customers to claim tax deductions and credits to which they were not entitled and the IRS to either pay out excessive refunds or to not collect the tax due and owing. Her conduct resulted in a tax loss to the IRS of $100,000.

This case is the product of an investigation by the IRS Criminal Investigation. Assistant U.S. Attorney Henry Z. Carbajal III is prosecuting the case.

If convicted, Heredia faces a maximum statutory penalty of 20 years in prison and a $250,000 fine for wire fraud, a mandatory minimum of two years in prison to be served consecutive to any other sentence for aggravated identity theft, and three years in prison and a $250,000 fine for making a false tax return. If convicted, Pringle faces a maximum statutory penalty of three years in prison and a $250,000 fine for filing a fraudulent tax return and five years in prison and a $250,000 fine for making an opportunity for a person to defraud the United States. If convicted, Bedolla faces a maximum statutory penalty of five years in prison and a $250,000 fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.

FRESNO, Calif. — Bonnie Lynn Recinos, 56, of Mesa, Arizona, was sentenced Monday by United States District Judge Dale A. Drozd to four years and seven months in prison and was ordered to pay over $1.5 million in restitution for conspiracy to commit mail and wire fraud in connection with an investment fraud scheme, U.S. Attorney Phillip A. Talbert announced.

According to court documents, between April 2006 and August 2009, Recinos, who was doing business as Farr and Associates and Farr Financial Group, conspired with others to defraud investors of money. In most instances, Recinos offered individuals an opportunity to purportedly invest in a real estate project. Recinos told investors that the company was an investment group for business and real estate in Arizona, that their investment was secured by Farr assets, and that they would typically earn 3 –5 percent interest per month. As a result of Recinos’ false representations, investors gave money to invest in the purported real estate projects. However, instead of investing the money, Recinos used it for her own business and personal expenses.

As part of the conspiracy, Recinos would periodically have statements sent to the investors showing the purported progress of their investments and the interest earned to date. Recinos would also use investors’ money to pay interest amounts owed to other investors. Both the statements and the periodic payments lulled the investors into believing that their investments were legitimate, brought in new investors, and helped to avoid detection by law enforcement. Investors lost more than $1.5 million as a result of the fraud scheme.

This case was the product of an investigation by the Federal Bureau of Investigation. Assistant U.S. Attorney Henry Z. Carbajal III and Megan A. S. Richards prosecuted the case.

SACRAMENTO, Calif. — A federal grand jury returned a 25-count indictment on April 6, 2017, charging six defendants in connection with their various roles in defrauding an energy generation company of over $2.2 million, United States Attorney Phillip A. Talbert announced. The indictment was unsealed today, and all six defendants were arraigned today on the indictment.

The defendants have been charged as follows:

• Timothy Chapin, 38, formerly of Lathrop, is charged with three counts of conspiracy to commit mail or wire fraud, five counts of mail fraud, 14 counts of wire fraud, and three counts of conspiracy to commit money laundering.

• Manuel Agueros, 37, formerly of Lathrop, and Dodge City, Kansas, is charged with two counts of conspiracy to commit mail or wire fraud, three counts of mail fraud, 11 counts of wire fraud, and two counts of conspiracy to commit money laundering.

• Jeffrey Reilley, 53, of Ripon, is charged with one count of conspiracy to commit mail and wire fraud and six counts of wire fraud.

• Paul Fournier, 34, of Scottsdale, Arizona, is charged with one count of conspiracy to commit mail and wire fraud, three counts of mail fraud, eight counts of wire fraud, and one count of conspiracy to commit money laundering.

• Jorge Eguiluz, 46, of Stockton, is charged with one count of conspiracy to commit wire fraud, three counts of wire fraud, and one count of conspiracy to commit money laundering.

• Robert Lautenslager, 38, of Castro Valley, is charged with one count of conspiracy to commit mail and wire fraud, two counts of mail fraud, three counts of wire fraud, and one count of conspiracy to commit money laundering.

According to the indictment, Chapin, Reilley, and Agueros all worked for a Florida-based energy generation company that operated wind farms in the Solano County town of Birds Landing in California. Chapin, a senior business technician, and supervisors Reilley and Agueros executed a scheme that caused the generation of purchase orders for parts and services not actually needed at the wind farms. Those purchase orders were sent to three Arizona-based shell companies that had been set up by Fournier; the shell companies had no facilities and provided no actual products or services. The shell companies then submitted fraudulent invoices to the energy generation company for undelivered products and unperformed services, and were paid on those invoices in an amount just under $2 million. Also according to the indictment, Chapin, Agueros, and Eguiluz engaged in a similar scheme using a company called “J. Eguiluz Labor Service LLC” as the shell company to submit fraudulent invoices and be paid on those invoices. Further still, Chapin and Lautenslager engaged in a similar scheme using a shell company set up by Lautenslager to submit fraudulent invoices and be paid on those invoices.

This case is the product of an investigation by the Federal Bureau of Investigation and the Internal Revenue Service Criminal Investigation. Assistant United States Attorney Nirav Desai is prosecuting the case.

If convicted, each defendant faces a maximum statutory penalty of 20 years in prison and a $250,000 fine. The money laundering charges are subject to fines of up to $500,000 or twice the value of the property involved in the money laundering transactions. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.

SACRAMENTO, Calif. — Alexander Jordan Miller, 21, of Elk Grove, was arrested on Friday, charged with production of child pornography and possession of child pornography, U.S. Attorney Phillip A. Talbert announced. Miller is scheduled to be arraigned today before U.S. Magistrate Judge Edmund F. Brennan.

A six-count indictment, unsealed after his arrest, was returned by a federal grand jury on April 6, 2017. According to court documents, between March 2015 and September 2015, Miller obtained nude images of children between the ages of 11 and 15 years old, then threatened to distribute those images if the victims did not produce and provide him with sexually explicit videos. In addition, Miller also possessed other images of child pornography.

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

If convicted, each count of child pornography production carries a minimum statutory penalty of 15 years in prison and a maximum penalty of 30 years in prison. If convicted of the possession of child pornography charge, Miller faces a maximum statutory penalty of 10 years in prison. Each charge in the indictment carries a potential fine of $250,000. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

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

BAKERSFIELD, Calif. — U.S. District Judge Dale A. Drozd sentenced a Bakersfield man to 15 years in prison today for federal hate crimes for firing a shotgun while yelling racist slurs at a Latino man, Acting Assistant Attorney General of the Civil Rights Division, Thomas Wheeler, and U.S. Attorney Phillip A. Talbert announced.

Justin Cole Whittington, 25, was convicted in December 2016 of interfering with a person’s housing rights because of his race, color, or national origin by use of force or threat of force; use of a firearm during a crime of violence; and making a false statement to a special agent of the FBI. Whittington had earlier pleaded guilty to unlawful possession of a prohibited firearm in connection to the same crime.

Judge Drozd also ordered Whittington to pay $2,000 in restitution to the victim and called the defendant’s actions: “Reprehensible conduct that’s had a significant impact on [the victim’s family] — outrageous, repugnant criminal conduct. He obstructed justice, he lied, he did everything he could to escape responsibility.”

According to court documents, on December 19, 2012, the victim, a Latino man, was standing in his front yard with his wife and son when a car drove past slowly and came to a stop in front of his neighbor’s house. The victim thought this was unusual and paid close attention to the car. Whittington, whom the victim had never seen before, got out of the front passenger seat of the car holding a sawed-off shotgun. Whittington used profanity and shouted a racial epithet as he fired one round toward the victim from about 15 yards away, and yelled that the victim should move out of Oildale. Whittington got back into the car and it drove away. Shortly thereafter, the shotgun was fired from the car at a nearby convenience store owned by a man of Middle Eastern descent. The blast left a large hole in the store’s glass door, and circles of missing paint on the metal gate in front of the store.

According to evidence presented at trial, the victim was able to describe Whittington and the car to Kern County Sheriff’s deputies, and they found Whittington nearby standing outside the car. The deputies recovered a sawed-off shotgun in the trunk of Whittington’s Crown Victoria, which was parked near the car identified by the victim.

Whittington was also found guilty of making false statements to an FBI agent when he falsely claimed that on the evening of the incident, he had been paid by someone to keep the sawed-off shotgun in the trunk of his car.

According to court documents and evidence presented at trial, the victim and his family no longer felt safe in their home, and as soon as they had the financial means to do so, they moved from the neighborhood.

“Hate violence has no place in our society. It harms individuals and entire communities by threatening their sense of security and freedom,” said Acting Assistant Attorney General Wheeler. “In this case, Whittington fired a shotgun at the victim, terrorizing him and his family, because of his Latino ethnicity. The Justice Department will continue to vigorously prosecute hate crimes so that all people, no matter the color of their skin, their country of origin, or how they worship, can live their lives freely and without fear.”

U.S. Attorney Talbert stated: “The sentence handed down today reflects the seriousness of hate crimes such as this, which cause not only the victims but entire communities to feel vulnerable and unsafe. Our district is one that is rich in diversity, and my office is committed to investigating and prosecuting those who violate community members’ civil rights through acts of hate and intimidation.”

“The FBI works closely with our law enforcement partners to ensure thorough investigation of allegations of hate crimes in the communities we serve and protect,” said Special Agent in Charge Monica M. Miller of the Federal Bureau of Investigation Sacramento field office. “Whittington’s threats and intimidation of his neighbors were despicable acts and not reflective of the America we all want to live in.”

Kern County Sheriff Donny Youngblood stated: “The Kern County Sheriff's Office will continue to work with our federal partners in investigating all hate crimes. I realize that these type of crimes reverberate through a community and cause fear to our community members. Violation of people’s civil rights impact all of us and will not be tolerated.”

This case was the product of an investigation by the Federal Bureau of Investigation and the Kern County Sheriff’s Office. Assistant U.S. Attorney Brian K. Delaney prosecuted the case with the assistance of Trial Attorney Samantha Trepel of the Justice Department’s Civil Rights Division.

U.S. District Judge Dale A. Drozd sentenced a Bakersfield man to 15 years in prison for federal hate crimes for firing a shotgun while yelling racist slurs at a Latino man, Acting Assistant Attorney General Tom Wheeler of the Justice Department’s Civil Rights Division, and U.S. Attorney Phillip A. Talbert of the Eastern District of California announced.

Justin Cole Whittington, 25, was convicted in December 2016 of interfering with a person’s housing rights because of race, color, or national origin by use of force or threat of force; use of a firearm during a crime of violence; and making a false statement to a special agent of the FBI. Whittington had earlier pleaded guilty to unlawful possession of a prohibited firearm in connection to the same crime.

“Hate violence has no place in our society.  It harms individuals and entire communities by threatening their sense of security and freedom,” said Acting Assistant Attorney General Wheeler.  “In this case, Whittington fired a shotgun at the victim, terrorizing him and his family, because of his Latino ethnicity.  The Justice Department will continue to vigorously prosecute hate crimes so that all people, no matter the color of their skin, their country of origin, or how they worship, can live their lives freely and without fear.”

“The sentence handed down today reflects the seriousness of hate crimes such as this, which cause not only the victims but entire communities to feel vulnerable and unsafe,” said U.S. Attorney Talbert.  “Our district is one that is rich in diversity, and my office is committed to investigating and prosecuting those who violate community members’ civil rights through acts of hate and intimidation.”

“The FBI works closely with our law enforcement partners to ensure thorough investigation of allegations of hate crimes in the communities we serve and protect,” said Special Agent in Charge Monica M. Miller of the Federal Bureau of Investigation Sacramento field office. “Whittington’s threats and intimidation of his neighbors were despicable acts and not reflective of the America we all want to live in.”

“The Kern County Sheriff's Office will continue to work with our federal partners in investigating all hate crimes,” said Kern County Sheriff Donny Youngblood.  ”I realize that these type of crimes reverberate through a community and cause fear to our community members. Violation of people’s civil rights impact all of us and will not be tolerated.’

According to evidence presented in court, on December 19, 2012, the victim, a Latino man, was standing in his front yard with his wife and son when a car drove past slowly and came to a stop in front of his neighbor’s house. The victim thought this was unusual and paid close attention to the car. Whittington, whom the victim had never seen before, got out of the front passenger seat of the car holding a sawed-off shotgun. Whittington used profanity and shouted a racial epithet as he fired one round toward the victim from about 15 yards away, and yelled that the victim should move out of Oildale. Whittington got back into the car and it drove away. Shortly thereafter, the shotgun was fired from the car at a nearby convenience store owned by a man of Middle Eastern descent. The blast left a large hole in the store’s glass door, and circles of missing paint on the metal gate in front of the store.  The victim was able to describe Whittington and the car to Kern County Sheriff’s deputies, and they found Whittington nearby standing outside the car. The deputies recovered a sawed-off shotgun in the trunk of Whittington’s Crown Victoria, which was parked near the car identified by the victim.  Subsequently, Whittington made false statements to an FBI agent when questioned about the sawed-off shotgun.

Following these crimes, the victim and his family no longer felt safe in their home, and as soon as they had the financial means to do so, they moved from the neighborhood.

This case was the product of an investigation by the Federal Bureau of Investigation and the Kern County Sheriff’s Office. Assistant U.S. Attorney Brian K. Delaney of the Eastern District of California and Trial Attorney Samantha Trepel of the Civil Rights Division’s Criminal Section prosecuted the case.

SACRAMENTO, Calif. — Ashley Nicole Leyba, aka Ashley Nicole Schlichting, 27, of Roseville, pleaded guilty today to bank fraud, aggravated identity theft, and possession of stolen mail, United States Attorney Phillip A. Talbert announced.

According to court documents, between September 15, 2016 and February 3, 2017, carried out an identity theft scheme in order to defraud banks and credit unions. She obtained stolen mail from victims and opened credit card accounts and lines of credit using the financial and identification information found in the stolen mail. Leyba created notebooks, which she labeled “THINK BIG” and “STAY OUT,” to organize the names, addresses and personal information of the mail theft victims.

According to the plea agreement, Leyba used the credit cards to purchase goods at Wal‑Marts in Sacramento and Rocklin, Kohls in Citrus Heights, Foot Locker in Roseville, Lowes in Rancho Cordova, and other stores in Sacramento and Placer counties. Leyba was depicted in surveillance images during several of these fraudulent transactions.

Leyba was arrested on February 13, 2017. In her plea agreement, she admits that while in custody, she instructed associates to destroy stolen identification and financial information that she had in her residence. One associate was arrested for driving while intoxicated, and during an inventory search of the vehicle, some of the stolen mail was recovered before being destroyed according to Leyba’s instruction.

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

Leyba is scheduled to be sentenced by U.S. District Judge Garland E. Burrell Jr. on June 23, 2017. Leyba faces up to 30 years in prison for bank fraud, a mandatory two years in prison for aggravated identity theft, and five years in prison for possession of stolen U.S. Mail.

FRESNO, Calif. — Today, after a four-day trial, a federal jury found Jeffrey G. Vincent, 66, of Madera, guilty of five counts of evading income taxes, United States Attorney Phillip A. Talbert announced.

According to evidence presented at trial, since 1991, Vincent operated a Fresno-based engineering company called Veco Technologies, organized as Stafford Group Limited Partnership, for which Vincent was general partner. Vincent has 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 tax delinquencies in earlier years. 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.

“Today’s guilty verdict of Mr. Vincent sends a clear message to those who claim that there is no legal requirement to pay federal income taxes. All taxpayers are required to follow the law and the law requires accurate reporting and timely payment of any tax due and owing,” said Michael T. Batdorf, Special Agent in Charge IRS Criminal Investigation.

This case is the product of an investigation by the Internal Revenue Service Criminal Investigation. Assistant U.S. Attorneys Christopher D. Baker and Kirk E. Sherriff are prosecuting the case.

Vincent was remanded into custody following the announcement of the verdict. He is scheduled to be sentenced by U.S. District Judge Lawrence J. O’Neill on July 24, 2017. Vincent faces a maximum statutory penalty of 25 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. — U.S. Attorney Phillip A. Talbert and David Zebley, Special Agent in Charge, U.S. State Department Diplomatic Security Service, announced today the recent prosecution of five separate passport fraud offenses. According to court documents, the defendants possessed United States passports for themselves or for others that were produced without lawful authority. Three of those defendants appeared in court today before U.S. Magistrate Stanley Boone in Fresno.

Docket # 1:17-cr-017

Rafael Antonio Guilarte Rojas, 39, of Bakersfield, was arraigned today. He is charged with possessing an identification document with intent to defraud the United States. He is alleged to have possessed a California driver’s license in a false name when Diplomatic Security Special Agents encountered him on January 5, 2017, while investigating the passport application he submitted in the same false name.

Docket # 1:17-cr-016

Luis Alberto Hecht Rojas, 33, of Bakersfield, was also arraigned today. He is charged with possessing an identification document with intent to defraud the United States. He is alleged to have possessed a California driver’s license in a false name when Diplomatic Security Special Agents encountered him on January 5, 2017, while investigating the passport application he submitted in the same false name.

Docket # 1:17-cr-046

Maria Cruz Lopez, 42, of Bakersfield, pleaded guilty today to possessing a false United States identification document. She possessed a United States passport issued to her in her identity, but with another person’s photograph on it on August 13, 2012. United States Magistrate Judge Stanley A. Boone sentenced Lopez to two years of probation, a $1,500 fine, and 60 hours of community service.

Docket # 1:16-cr-161

Luis Garcia Jauregui, 53, of Bakersfield, is charged with possessing a false United States identification document. He is alleged to have possessed a United States passport issued to him in a false name when Diplomatic Security Special Agents encountered him on November 19, 2015, while investigating the passport application he submitted in the same false name. On February 24, 2017, a warrant was issued for his arrest.

Docket # 1:16-cr-160

On February 2, 2017, Carolina Garcia Velazquez, 41, of Fresno, was convicted of possessing a false United States identification document. She possessed a United States passport that had been issued to her in a false name when Diplomatic Security Special Agents encountered her during the course of her false passport investigation. U.S. Magistrate Judge Stanley Boone sentenced her to two years of probation, a $2,000 fine, and 100 hours of community service.

The defendants still facing charges face a maximum statutory penalty of one year in prison and a maximum statutory fine of $100,000 if convicted. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.

These cases are the product of an investigation by the Diplomatic Security Service. Assistant U.S. Attorney Megan S. Richards is prosecuting the cases.

SACRAMENTO, Calif. — U.S. District Judge Troy L. Nunley sentenced Dumitru Martin, 55, of Romania, today to 13 years in prison for conspiracy to commit bribery and bribery of a public official, U.S. Attorney Phillip A. Talbert announced.

According to court documents, Martin owned and operated a Romanian company called Polaris M. Holdings. Co-defendants Anamaria Cruceru, 49; Constantin Schiller, 63; and Marcelle Banaga, 41, all of Romania, were employees of Polaris. Between June 2014 and December 2015, Martin, Cruceru, Schiller, and Banaga conspired with each other to bribe a high-level United States Air Force (USAF) contracting officer in an effort to win multiple multimillion-dollar contracts for Polaris. The defendants offered to pay the contracting officer a bribe, which they called a “commission,” equal to 10 percent of the amount of any contract awarded. The defendants also suggested that the contracting officer use a fictitious consulting contract and other commercial contracts and documents to conceal payment of the bribe.

In July 2015, the defendants caused Polaris to submit a bid to the USAF to supply storage containers to the Mihail Kogalniceanu Air Base in Romania. The contract was valued at over $10 million. In September 2015, Martin traveled to Travis Air Force Base in Fairfield, California to sign the documents relating to the bid as well the fictitious contracts meant to conceal various bribe payments totaling just over $1 million. Thereafter, as part of the conspiracy, the defendants caused Polaris to wire $100,000 from Romania to a bank account in the United States as the initial bribe payment to the USAF contracting officer. Unbeknownst to the defendants, the USAF contracting officer was working with federal law enforcement, and there was no contract to be awarded to Polaris.

U.S. Attorney Talbert said: “The Eastern District of California has many military and other government facilities that obligate taxpayer money in the course of negotiating high-dollar contracts. The sentence imposed today acknowledges the importance of rooting out corruption and protecting the integrity of the contracting process. My office is committed to investigating and prosecuting those who attempt to bribe public officials or who engage in other acts of public corruption that undermine the public’s confidence in the integrity of the government.”

Judge Nunley said at sentencing that, “bribery is not a victimless crime.” He went on to note that bribery creates a “pay-to-play environment” in which people feel “they can’t participate if they do it the right way.”

This case is the product of an investigation by the Federal Bureau of Investigation. Assistant United States Attorneys Michael Beckwith and Todd Pickles are prosecuting the case.

Banaga, Schiller and Cruceru pleaded guilty to conspiracy to commit bribery. They are scheduled to be sentenced by Judge Nunley on May 11, 2017. They each face a maximum statutory penalty of five years in prison. The actual sentences, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

SACRAMENTO, Calif. — U.S. District Judge Morrison C. England Jr. sentenced Trevor Kintaro Lichnock-Gembe, 29, of Fair Oaks, today to four years and 10 months in prison for bank fraud, aggravated identity theft, and unlawful possession of identification documents of others, United States Attorney Phillip A. Talbert announced.

According to court documents, between June 14, 2015, and June 1, 2016, Lichnock-Gembe and co-defendant Shellby L. Moore, 29, of Sacramento, stole mail and obtained other stolen property containing personal and financial information of victims from residential and vehicle burglaries in Placer County, Sacramento County, and El Dorado County. Lichnock-Gembe and Moore used stolen mail and victim identification and financial information to alter and manufacture checks that were cashed at the expense of local banks and credit unions. Lichnock-Gembe possessed over five different stolen victim identifications, and he and Moore opened bank accounts using the stolen personal and financial information in order to deposit stolen checks and withdraw cash. Lichnock-Gembe was arrested on June 1, 2016, while leaving a Sacramento apartment complex at which he had just stolen mail.

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

This case is the product of an investigation of the United States Postal Inspection Service with assistance from the Sacramento County Sheriff’s Office. Assistant United States Attorney Michelle Rodriguez is prosecuting the case.

On March 13, 2017, Moore pleaded guilty to aggravated ID theft and using methamphetamine while in federal custody. She is scheduled for sentencing on June 8, 2017, before Judge England. Moore faces a maximum statutory penalty of five 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. — A jury found Omar Kabiljagic, 46, of Sacramento, guilty today of two counts of filing false claims with the United States, U.S. Attorney Phillip A. Talbert announced.

According to evidence presented at trial, in 2008 and 2009, Kabiljagic submitted a series of tax returns to the Internal Revenue Service which contained false information and fraudulently claimed millions of dollars in refunds. In each of these returns, Kabiljagic falsely claimed to have received large amounts of interest income, ranging from to $149,859 to $1,229,000, and then falsely claimed that all of the interest had been withheld by the payers. The returns requested refunds of the allegedly withheld tax. In reality, Kabiljagic had not received the interest and nothing had been withheld. Kabiljagic received repeated warnings from the IRS that his claims were frivolous, but continued to file false claims.

Kabiljagic also helped his co-defendant, Suvada Mahmutovic, 67, prepare and submit similar false claims. One of her false claims resulted in a fraudulent refund of more than $263,000, which the defendants deposited and cashed. At least some of the proceeds appear to have been wired overseas. Mamhutovic pleaded guilty to one count of filing false claims on March 3, 2017.

“Today’s guilty verdict of Mr. Kabiljagic once again shows the severe nature of fraudulent schemes perpetrated by those that wish to make a quick dollar from the U.S. government,” said Michael T. Batdorf, Special Agent in Charge IRS Criminal Investigation. “With the upcoming filing deadline of April 18, 2017, I want to remind all taxpayers that filing fraudulent tax returns is a crime with serious consequences.”

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

U.S. District Judge Garland E. Burrell Jr. is scheduled to sentence Kabiljagic on June 23, 2017 and Mahmutovic on May 19, 2017. The defendants face a maximum statutory penalty of five years in prison on each count, a $250,000 fine and restitution to the IRS. 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. — Tremayne Beard, 34, of Fresno, was sentenced on Monday by U.S. District Judge Lawrence J. O'Neill to nine years in prison for being a felon in possession of a firearm, U.S. Attorney Phillip A. Talbert announced.

According to court documents, on the evening of December 5, 2016, and continuing into the early hours of December 6, 2016, the defendant was at a party at the Fresno Fairgrounds. Fresno police officers were assigned to patrol the event after a recent surge in gang violence in Fresno. When shots were fired, officers observed Beard leaving the Fairgrounds parking lot at a high rate of speed. Police officers followed Beard’s vehicle, and he ultimately crashed into a parked car and a retaining wall. As he got out of his car and fled into a neighboring backyard, a witness saw him throw something. Beard was subsequently arrested and police found a .45‑caliber handgun where the witness indicated something had been thrown. Numerous shell casings were found in the area where Beard had been parked at the Fairgrounds, including a .45‑caliber casing that matched bullets in the gun found by the police. A partial .45‑caliber bullet was also found lodged in a vehicle parked near the Fairgrounds. Beard has multiple prior convictions, and he was identified as a gang member by the Fresno police.

“This case highlights how the prosecution of firearms offenses helps to protect the community,” said U.S. Attorney Talbert. “The defendant’s conduct on the night of the offense put several lives in dangers, and I am grateful for the cooperative work among our law enforcement partners to hold him accountable for his crimes. My office is committed to prosecuting cases such as these, which have a direct impact on the communities we serve.”

“The Bureau of Alcohol, Tobacco, Firearms and Explosives, or ATF, has the country’s only crime gun-tracing facility,” said Special Agent in Charge Jill Snyder. “The mission of ATF’s National Tracing Center is to conduct firearms tracing that will provide investigative leads for federal, state, local and foreign law enforcement agencies. In this case, the capabilities of ATF’s National Tracing Center provided information on the firearm used to investigators. ATF works closely with our partners in law enforcement to prosecute felons who illegally possess firearms and engage in acts of violence. This case is an example of how agencies can work together to help make our neighborhoods a safer place.”

Fresno Chief of Police Jerry Dyer stated, “Removing Tremayne Beard from our community will have a tremendous positive impact on the safety of our neighborhoods.”

This case was the product of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Fresno Police Department, the California Department of Justice, and the California Highway Patrol. The case was a part of Project Safe Neighborhoods, which is a joint initiative to combat gang and gun violence. Assistant U.S. Attorney Kimberly A. Sanchez prosecuted the case.

FRESNO, Calif. — Juan Carlos Lopez, 32, of Lake Elsinore; Rafael Torres-Armenta (Torres), 30; and Javier Garcia-Castaneda (Garcia), 38, both of Michoacán, Mexico, pleaded guilty today to conspiring to manufacture, distribute and possess with intent to distribute marijuana in connection with a large-scale cultivation operation on public land in Tulare County in the Sequoia National Forest., United States Attorney Phillip A. Talbert announced. In pleading guilty, the men also agreed to make 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, the men conspired with each other and co-defendant Carlos Piedra‑Murillo (Piedra), 30, of Mexico, to cultivate marijuana at a prehistoric Tübatulabal Native American archaeological site in the Domeland Wilderness area. The Domeland Wilderness is a federally designated wilderness area that is located about 55 miles northeast of Bakersfield. Law enforcement officers eradicated over 8,000 marijuana plants from this and another site and seized 17 pounds of processed marijuana, a .22-caliber rifle, a pellet rifle, and numerous rounds of .22‑caliber ammunition. Piedra pleaded guilty to the conspiracy charge last month.

The marijuana cultivation operation caused extensive environmental damage to about 10 acres of public land. The area was located 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. Fertilizer and pesticides, including illegal zinc phosphide from Mexico were found at the site. Large piles of trash were also found near the campsite. The northernmost area of the operation caused extensive damage to a large prehistoric Tübatulabal 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, 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 United States Attorney Karen Escobar is prosecuting the case.

Lopez, Torres, and Garcia are scheduled for sentencing on June 26, 2017, by U.S. District Judge Lawrence J. O’Neill. Piedra is scheduled for sentencing on June 5, 2017. Lopez faces a mandatory prison sentence of five years in prison and a maximum term of 40 years in prison and a $5 million fine. The other men face 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. Piedra, Torres, and Garcia are subject to deportation to Mexico following the completion of any prison sentence imposed.

FRESNO, Calif. —Juan Penaloza-Ramirez, aka Juan Penaloza-Herrera, aka Juan Penaloza (Penaloza), 46, of Michoacán, Mexico, residing in Taft, California, pleaded guilty today to conspiring to manufacture, distribute and possess with intent to distribute marijuana grown at three separate marijuana cultivation sites in the Sequoia National Forest, U.S. Attorney Phillip A. Talbert announced. In pleading guilty, Penaloza agreed to pay $10,198 to the U.S. Forest Service for the damage to public land and natural resources caused by the cultivation activities.

According to court documents, Penaloza employed growers, deliverymen, and others to cultivate marijuana at Fay Creek, Brush Creek, and The Needles in the Sequoia National Forest in Tulare and Kern Counties. Every winter, Penaloza traveled to Mexico to recruit people to grow marijuana on public lands in the United States.

At the Fay Creek cultivation site, springs were dammed and diverted to irrigate the marijuana plants and large amounts of trash were scattered throughout the site, including in a flowing stream. Law enforcement officers seized 3,151 marijuana plants from this location. In pleading guilty, Penaloza agreed to the forfeiture of firearms and ammunition seized during a search of his home.

The Brush Creek grow site contained 2,719 marijuana plants. To make room for the marijuana plants, the growers had eradicated new vegetation and trees that sprouted after the 2002 McNally Fire. Law enforcement officers found large piles of trash stuffed between boulders and buried along a stream that supports trout. The officers also found toxic pesticides from Mexico and fertilizers spread throughout the 10-acre site.

The Needles grow site contained 2,608 marijuana plants. In addition to the presence of toxic chemicals and waste, officers found that the water source for the marijuana plants had been derived from a spring that drains into the Upper Kern River.

This case is the product of an investigation by the U.S. Forest Service, the U.S. Drug Enforcement Administration, the Bureau of Land Management, the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Southern Tri-County High Intensity Drug Trafficking Area (HIDTA) task force, the California Department of Justice’s Campaign Against Marijuana Planting (CAMP), and the Kern County Sheriff’s Office. Assistant United States Attorney Karen Escobar is prosecuting the case.

Penaloza is scheduled for sentencing before U.S. District Judge Dale A. Drozd on June 19, 2017. Penaloza faces a mandatory minimum statutory penalty of five years in prison and 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.

Co-defendant Russell Lee Riggs, 68, of Weldon, California is scheduled for a status conference on May 8, 2017. The charges against Riggs are only allegations; he is presumed innocent until and unless proven guilty beyond a reasonable doubt.

FRESNO, Calif. — U.S. District Judge Dale A. Drozd sentenced Mary Williams, 70, of Fresno, today to one year in prison for embezzling from a pension plan, U.S. Attorney Phillip A. Talbert announced. Judge Drozd ordered Williams to pay $509,405 in restitution to the Pension Benefit Guaranty Corporation (PBGC).

According to court documents, Williams was the Chief Executive Officer of Aeroplate Corporation, an engineering and contracting firm in Fresno. From June 2011 to November 2016, Williams embezzled approximately $509,000 from a pension plan that Aeroplate established for its employees. One of the fund’s assets was a set of real estate parcels in Fresno that at one point was appraised at over $900,000 in value. Williams pleaded guilty to the embezzlement on January 17, 2017.

Under federal law, assets that belong to pension plans can only be used to fund the plan, which must pay future benefits to employees, and not the business that started the plan.

According to the plea agreement, Williams and the company used the properties to raise money for the company. Eventually, the company was unable to repay its loans, and the properties were foreclosed on. The fund became insolvent because it did not have enough money to pay expected benefit claims. However, the plan’s benefits are federally insured by the Pension Benefit Guaranty Corporation, which protects employees from losing their benefits when their plans are insolvent.

This case was the product of an investigation by the U.S. Department of Labor’s Employee Benefit Security Administration. Assistant U.S. Attorney Michael G. Tierney prosecuted the case.

FRESNO, Calif. —Sylvia Ochoa, 34, of Fresno, pleaded guilty today to embezzlement by a bank employee, United States Attorney Phillip A. Talbert announced.

According to court documents, Ochoa was the manager of a Bank of America branch on Tulare Street in downtown Fresno. On multiple occasions in 2013, Ochoa entered the bank vault after other employees had left for the day and removed cash without authorization. Ochoa used the money to purchase items for herself and her boyfriend, including designer handbags and a truck that she purchased for $24,000 in cash. Ochoa also caused Bank of America to electronically credit accounts that she set up. For example, Ochoa transferred at least $69,000 of Bank of America’s money into her boyfriend’s bank account. Ochoa admitted that she embezzled at least $100,000 from Bank of America during this time.

This case was the product of an investigation by the Federal Bureau of Investigation and the Fresno Police Department. Assistant United States Attorney Michael G. Tierney is prosecuting the case.

Ochoa is scheduled to be sentenced by U.S. District Judge Dale A. Drozd on July 11, 2017. Ochoa faces a maximum statutory penalty of 30 years in prison and a $1 million fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

FRESNO, Calif. — Ramiro Catano, 51, and his brother Tereso Catano Casas, 49, both of Bakersfield, pleaded guilty today to felonies involving the failure to file IRS forms required for cash transactions over $10,000, United States Attorney Phillip A. Talbert announced.

According to court documents, the defendants co-owned Catano’s Auto Sales and Repair in Bakersfield. Their auto dealership was required by federal law to file a form, called a Form 8300, on any cash transaction from a single customer that exceeded $10,000 in a one-year period. On April 2, 2013, an undercover federal agent purchased a vehicle for $12,000 cash from the dealership and requested that the dealership not file a Form 8300 on the transaction. The undercover agent also stated to Ramiro Catano that the cash used to purchase the vehicle was from the sale of cocaine. Following the sale, the defendants did not file a Form 8300 on the transaction. Then, on July 26, 2013, an undercover federal agent purchased a vehicle for $16,000 cash from the dealership. As with the earlier transaction, the undercover agent requested that the dealership not file a Form 8300 on the transaction, and the defendants did not do so.

Ramiro Catano pleaded guilty to conspiring to not file a Form 8300, and Tereso Catano Casas pleaded guilty to misprision of (or failing to report) a felony because he knew that not filing a Form 8300 was a felony, but he failed to report the crime to the proper authorities.

This case is the product of an investigation by the IRS Criminal Investigation, the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), and the Bakersfield Police Department. Assistant United States Attorneys Grant Rabenn and Jeffrey A. Spivak are prosecuting the case.

As part of the plea agreement, the defendants have agreed to pay a $28,000 forfeiture money judgment.

The defendants are scheduled to be sentenced on July 10, 2017, at 10:00 a.m. before U.S. District Judge Dale A. Drozd. Ramiro Catano faces a maximum statutory penalty of five years in prison and a $250,000 fine. Tereso Catano Casas faces a maximum statutory penalty of three years in prison and a $250,000 fine. The actual sentences, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

SACRAMENTO, Calif. — Dennis Joseph Machado, 44, of Stockton, was sentenced today by U.S. District Judge Garland E. Burrell Jr. to nine years and eight months in prison for schemes to distribute methamphetamine and defraud banks in Sutter, Sacramento, and San Joaquin Counties using identities obtained from stolen mail, U.S. Attorney Phillip A. Talbert announced.

According to court documents, Machado and co-defendant Breneth L. Chase, 46, also of Stockton, obtained U.S. mail and postal keys stolen during burglaries of post offices in Sutter and Sacramento Counties. They used stolen mail to manufacture checks and government identifications to cash the phony checks, apply for lines of credit, and make purchases at local department stores at the expense of local banks and credit unions. When he was arrested, Machado had in his possession various manufactured identifications and stolen personal and financial information for numerous residents of Sutter, San Joaquin, and Sacramento Counties. Machado also possessed a scanner magnetic strip writer to re-encode bank cards to tap into victims’ lines of credit. In addition, Machado had in his possession methamphetamine for purposes of distribution. At the time of his arrest on October 20, 2015, Machado — who had previous felony convictions — unlawfully possessed ammunition.

San Francisco Division Inspector in Charge Rafael Nunez of the U.S. Postal Inspection Service stated, “Postal Inspectors worked closely with the U.S. Attorney’s Office and our partners in law enforcement to arrest and prosecute those individuals responsible for the post office burglaries, mail thefts and fraud schemes committed against the public by the defendants in this case.”

This case was the product of an investigation of the United States Postal Inspection Service, the California Highway Patrol, the Sutter County Sheriff's Office, the Stockton Police Department, and the Sutter Creek Police Department, with assistance from the Sacramento County Sheriff's Office. Assistant U.S. Attorney Michelle Rodriguez prosecuted the case.

On December 2, 2015, in a related case, Chase was sentenced to four years and nine months in prison. (2:15-cr-173 GEB)

SACRAMENTO, Calif. — U.S. District Judge Garland E. Burrell Jr. sentenced Michael Hampton, 40, of Stockton, today to two and a half years in prison for trafficking in counterfeit goods, U.S. Attorney Phillip A. Talbert announced. Judge Burrell also ordered Hampton to pay $282,670 in restitution to Brand Security Corporation on behalf of the trademark holders.

On January 6, 2017, Hampton pleaded guilty to one count of trafficking in counterfeit goods. According to court documents, Michael Hampton imported counterfeit handbags, jackets, accessories, shoes, and jerseys from Asia and supplied them to resellers. Hampton rented storage units in Stockton and sold the counterfeit goods at the storage facility. The counterfeit goods included, Adidas, Chi, Coach, Gucci, Juicy Couture, Louis Vuitton bags, Majestic, Mitchell & Ness shirts and jerseys, New Era sporting goods, Nike shoes, Northface, and 47. In addition, Michael Hampton sold counterfeit Nike shoes on eBay.

This case was the product of an investigation by the Federal Bureau of Investigation. Assistant United States Attorney Roger Yang prosecuted the case.

SACRAMENTO, Calif. — Catalin Kifan, 26, of Manteca, was sentenced today to eight years and one month in prison by U.S. District Judge Garland E. Burrell Jr., United States Attorney Phillip A. Talbert announced today. On August 26, 2016, Kifan pleaded guilty to possession of MDMA with intent to distribute.

According to the plea agreement, on April 21, 2015, federal agents searched Kifan’s residence in Manteca and found a variety of drugs, including 1.7 kilograms of cocaine, 608 grams of MDMA and lesser amounts of marijuana, bath salts, steroids, methamphetamine, adrenaline, and prescription pills. In March and April 2015, law enforcement seized two packages of MDMA destined for the Manteca residence, as well as one package of MDMA sent to his co-defendant’s residence in Las Vegas. A search of the Las Vegas residence resulted in the seizure of additional quantities of drugs, including MDMA and steroids.

This case was the product of an investigation by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the Southern Nevada Heroin Task Force (SNHTF), and the Manteca Police Department. Assistant U.S. Attorney Kevin Khasigian prosecuted the case.

Co-defendant Jason Matecki, 42, pleaded guilty on April 8, 2016, and is scheduled to be sentenced on April 14, 2017.

The investigation is part of the Organized Crime Drug Enforcement Task Force (OCDETF) that was established in 1982 to conduct comprehensive, multilevel attacks on major drug trafficking and money laundering organizations.

SACRAMENTO, Calif. — Kyn K. Naope, 41, of Sherman Oaks, pleaded guilty today to conspiracy to commit mail fraud for a scheme that submitted fraudulent unemployment benefit claim forms to the California Employment Development Department (EDD) via the U.S. mail, United States Attorney Phillip A. Talbert announced.

According to court documents, between March 2008 and February 2011, Naope and others involved in the scheme registered fictitious employers, such as “Peco Media,” “Sona Entertainment,” and “Money Alley,” with the EDD and then recruited other individuals to pose as laid-off employees of those companies. These fake employees would then file for and collect unemployment insurance benefits based on the wages reported to EDD by the fictitious employers.

This case is the product of an investigation by the U.S. Department of Labor, Office of Inspector General and the California Employment Development Department-Criminal Investigations. Assistant U.S. Attorneys Jared C. Dolan and Matthew M. Yelovich are prosecuting the case.

The total amount of unemployment benefit checks cashed as a result of this scheme was at least $2.5 million. Naope is the seventh individual to be convicted for participating in this fraud scheme, which was charged across three separate cases. Andre Walters of Long Beach was convicted following a jury trial in August 2016 and is scheduled to be sentenced on May 4, 2017. Kenneth Kim Parks of Pomona and Long Beach was sentenced to five years in prison. Donye Marcell Mitchell Sr., of Los Angeles, was sentenced to four years in prison. Gregory Bart Martin of Lakewood was sentenced to 18 months of probation. Michael Ray Taylor Sr., of Fontana, was sentenced to three years in prison, and Michael Ray Taylor Jr., of El Monte, is scheduled to be sentenced on May 11, 2017.

Naope is scheduled to be sentenced by U.S. District Judge Garland E. Burrell Jr. on June 16, 2017. Naope faces a maximum statutory penalty of five years in prison and a $250,000 fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

SACRAMENTO, Calif. —Sherrell Davis, 43, of Benicia, pleaded guilty today to submitting false claims for tax refunds, U.S. Attorney Phillip A. Talbert announced.

According to court documents, from February 2011 through May 2013, Davis repeatedly engaged in tax fraud by submitting fraudulent claims for tax refunds in the names of other people to the Internal Revenue Service. The tax returns used fraudulent W-2 tax forms from purported employers that reflected false wages and false withholdings in order to generate tax refunds to which the people listed on the returns were not entitled. The refunds sought also included amounts for tax credits to which the taxpayers were not entitled, including the Earned Income Credit, the American Opportunity Credit, and the Making Work Pay Credit. Davis submitted or assisted in the presentation of fraudulent tax returns seeking a total over $350,000 in tax refunds, of which at least $210,320 were paid out by the IRS.

This case is the product of an investigation by IRS Criminal Investigation. Assistant United States Attorney Christopher S. Hales is prosecuting the case.

Davis is scheduled to be sentenced by U.S. District Judge Garland E. Burrell Jr. on June 16, 2017. Davis faces a maximum statutory penalty of five years in prison and a $250,000 fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

SACRAMENTO, Calif. — Herman Keese, 57, of San Francisco, was sentenced on Thursday to 13 years and eight months in prison by U.S. District Judge Troy L. Nunley, United States Attorney Phillip A. Talbert announced today. Keese pleaded guilty to drug trafficking and money laundering charges on August 25, 2016.

According to court documents, between April 2007 and March 1, 2012, Keese distributed methamphetamine and PCP from San Francisco to Sacramento and to the East Coast. Keese also engaged in a conspiracy to launder the proceeds of the drug trafficking enterprise using a 97-cent store he owned in San Francisco.

“Today’s sentencing of Herman Keese should send a clear message to would-be criminals—you will be caught and prosecuted to the full extent of the law,” said Michael T. Batdorf, Special Agent in Charge, IRS Criminal Investigation. “Together with our partners at the U.S. Attorney’s Office, DEA, and ATF, we will hold those engaged in similar conduct ‎fully accountable.”

According to the plea agreement, one of the methods Keese used to launder drug proceeds involved having his associates deposit money in various banks across the East Coast, which would later be withdrawn at various banks in California, some in the Eastern District of California (EDCA). On numerous occasions, Keese spoke with the undercover agents regarding a means to move his drug proceeds from the East Coast to California. He indicated that he needed a method by which he could move $150,000 per week from Philadelphia to California.

On May 11, 2011, Keese directed his associates to deposit $20,000 into a Philadelphia bank. The $20,000 was then withdrawn from a bank in Sacramento and transported to San Francisco. Keese also received a bulk cash shipment of $42,000 concealed in a stereo tuner.

Further analysis of Keese’s financial records revealed that between 2007 and October 2011, between $2 million and $3 million was deposited in various bank accounts while the reported income for the 97-cent store was approximately $355,742 for the same time period.

This case was the product of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the IRS Criminal Investigation, the Drug Enforcement Administration, the California Highway Patrol, the Sacramento Police Department, and the Sacramento Sheriff’s Department. Assistant U.S. Attorneys Heiko P. Coppola and Kevin Khasigian prosecuted the case.

The investigation is part of the Organized Crime Drug Enforcement Task Force (OCDETF) that 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. — A three-count indictment was unsealed Thursday following the arrest of David G. Bruce II, 32, of Merced. Bruce is charged with conspiring to provide inmates with prohibited objects; attempting to possess marijuana and heroin with the intent to distribute; and taking a bribe as a public official, U.S. Attorney Phillip A. Talbert announced.

According to court documents, Bruce was employed as a cook foreman at the Federal Bureau of Prisons’ United States Penitentiary Atwater (USP Atwater) in Merced County. Between May and December 2015, Bruce conspired with others to provide USP Atwater inmates with marijuana and heroin. In return, Bruce received $1,580 from associates of the inmates. On December 2015, Bruce attempted to possess marijuana and heroin.

This case is the product of an investigation by the Department of Justice Office of the Inspector General. Assistant U.S. Attorney Vincenza Rabenn is prosecuting the case.

If convicted, Bruce faces a maximum statutory penalty of 20 years in prison and a $1 million fine for possessing a controlled substance with intent to distribute. The maximum statutory penalty for conspiring to commit an offense against the United States is five years in prison and a $250,000 fine. The maximum statutory penalty for a public official taking a bribe is 15 years in prison and a $250,000 fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

SACRAMENTO, Calif. — United States District Judge John A. Mendez sentenced Kenneth Knockum, 48, of Vallejo, today to three years and 10 months in prison for three counts of filing false claims against the United States, U.S. Attorney Phillip A. Talbert announced.

According to court documents, Knockum was scheduled to be sentenced on May 10, 2016. When he failed to appear, a no bail bench warrant was issued and he was arrested in Vallejo on March 14, 2017.

According to evidence presented at a three–day bench trial in January 2016, Knockum prepared and filed taxes on behalf of himself and others utilizing an OID tax fraud scheme. Knockum prepared and filed tax returns claiming massive amounts of a particular kind of investment interest income, known as Original Issue Discount income. He also claimed that large portions of such income were withheld by financial institutions and paid to the Internal Revenue Service. The returns sought large refunds of such income — one return requested a refund of over $1.4 million, and another made a claim for over $500,000. Through a complex process, Knockum generated false 1099-OIDs and other tax forms to support the claimed income and taxes and filed those documents utilizing an IRS electronic filing system that requires special software and is used primarily by financial institutions and brokerage firms. The IRS caught the majority of the false returns and declared the claims to be frivolous, though the agency did sustain losses of over $125,000 in fraudulent refunds that were actually issued.

This case was the product of an investigation by the IRS, Criminal Investigation. Assistant United States Attorney Roger Yang prosecuted the case.

BAKERSFIELD, Calif. — Edward Padilla, 56, of Bakersfield, pleaded guilty today to embezzlement of union funds, U.S. Attorney Phillip A. Talbert announced.

According to court documents, between September 2012 and December 31, 2014, while Padilla was the secretary-treasurer and business manager of the Bakersfield office of a construction workers’ union, he embezzled approximately $168,780 from the union. He did this by writing unearned salary checks, unauthorized sick leave payments, and paying for personal expenditures on his union credit cards. Padilla used a signature stamp for the union president’s signature on the unauthorized checks and concealed the checks from the president. As part of the plea agreement, Padilla has agreed to pay $168,780 in restitution to the union.

This case is the product of an investigation by the United States Department of Labor. Assistant United States Attorney Angela Scott is prosecuting the case.

Padilla is scheduled to be sentenced by Judge Lawrence J. O'Neill on July 10, 2017, at 10:00 a.m. Padilla faces a maximum statutory penalty of five years in prison and a $10,000 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.

SACRAMENTO, Calif. — Dianna Woods, 60, of Citrus Heights, was sentenced today by Senior U.S. District Judge William B. Shubb to three years in prison for four counts of making false statements on loan applications, U.S. Attorney Phillip A. Talbert announced.

According to evidence presented at her four-day trial in December 2016, Woods was a licensed real estate salesperson who worked at a company called VLD Realty, doing business as Trade House USA, in the Sacramento area. VLD built and sold houses in residential developments in Sacramento, Carmichael, and Copperopolis. As the housing market began to weaken from 2006 through 2008, VLD sought to sell the houses by offering money to buyers in the form of paying the down payment or giving the buyers money after the transaction, neither of which was disclosed to the lenders.

For her part, Woods purchased two houses based on the undisclosed kickbacks. Further, for the purpose of obtaining mortgage loans to purchase the properties, Woods also signed and submitted loan applications and other documents that contained false statements as to Woods’s income, employment, assets, the purpose of the property, the sales price, and whether the down payment was borrowed. Woods also assisted another buyer in making false statements to the lenders to get loans for the purchase of two properties in the housing developments and falsely verified his employment. The banks suffered nearly $2 million in losses with respect to fraudulent transactions in which Woods was involved.

This case was the product of an investigation by the Federal Bureau of Investigation and Internal Revenue Service-Criminal Investigation. Assistant U.S. Attorneys Shelley Weger and Todd Pickles prosecuted the case.

SACRAMENTO, Calif. — Edwin Forrest Ludwig III, 61, and Donald Loyde Harned, 72, both of Oklahoma, pleaded guilty today for their roles in a conspiracy to defraud the United States with false claims for federal tax refunds, U.S. Attorney Phillip A. Talbert announced.

According to court documents, beginning in 2011, Ludwig III, Harned, and five others operated a tax fraud scheme out of the California Correctional Center in Susanville. Four of the co-conspirators who were incarcerated at the correctional center obtained personal identification information of other inmates. Harned and other co‑defendants who were not incarcerated took this information and prepared and filed false income tax returns with the IRS, claiming refunds that they knew to be false and to which the inmates were not entitled. Ludwig III, not an inmate, assisted the scheme by depositing the fraudulently obtained refunds in bank accounts he opened and transferring the criminal proceeds to the prison accounts of the incarcerated co-defendants. Both Ludwig III and Harned received money in return for their participation in the scheme.

This case is the product of an investigation by the Internal Revenue Service, Criminal Investigation, the Federal Bureau of Investigation, and the Investigative Unit at the California Correctional Center. Assistant U.S. Attorney Amy Schuller Hitchcock is prosecuting the case.

Ludwig III and Harned are scheduled to be sentenced by U.S. District Judge Garland E. Burrell Jr. on June 30, 2017. Both face 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.

To date, four co-conspirators have pleaded guilty and been sentenced for their participation in this scheme, including Ludwig III’s son, Ludwig IV, who was sentenced to seven years in prison for his role in the scheme. The charges against one remaining co-defendant are pending. Those charges are only allegations, and that co-defendants is presumed innocent until and unless proven guilty beyond a reasonable doubt.

SACRAMENTO, Calif. — Today, after a six-day trial, a federal jury found Harjit Kaur Johal, 50, and Jasvir Kaur, 47, guilty of making false declarations before a grand jury, U.S. Attorney Phillip A. Talbert announced.

According to evidence presented at trial, 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.

U.S. Attorney Talbert stated: “Before the defendants testified before the grand jury, they swore to tell the truth. Unfortunately, motivated by a desire to conceal their participation in the schemes, they lied. Anyone who fails to tell the truth under oath should be ready to face the consequences of their actions.”

“Today’s guilty verdicts send a powerful message that individuals who perjure themselves in federal proceedings will be held accountable. Jasvir Kaur and Harjit Johal lied under oath to a federal grand jury about their purchase of bogus wages they intended to use to file for Unemployment Insurance benefits. We will continue to work with our law enforcement partners to investigate these types of allegations,” said Abel Salinas, Special Agent in-Charge of the Los Angeles Regional Office of the United States Department of Labor, Office of Inspector General.

“The Employment Development Department works closely with our law enforcement partners to prosecute attempts to defraud the employer-funded Unemployment Insurance Program, including those who perjure themselves in federal court,” said Patrick W. Henning Jr., Director of the California EDD. “We're happy to see coordination with law enforcement helping to avert losses to a benefit program that is a lifeline for unemployed Californians.”

The defendants’ trial was the latest in a series of cases involving the Khan family 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.

These cases are 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 United States Attorneys Jared C. Dolan and Jeremy J. Kelley are prosecuting the cases.

Johal and Kaur are scheduled to be sentenced by U.S. District Judge Garland E. Burrell Jr. on June 16, 2017. Each defendant face a maximum statutory penalty of five 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. — U.S. District Judge Morrison C. England Jr. sentenced Jesse Davenport, aka Draco John Flama, 41, of Chico, today to 50 years in prison for conspiracy to sexually exploit a child, two counts of receipt of child pornography, and one count of distribution of child pornography, U.S. Attorney Phillip A. Talbert announced. Davenport was found guilty by a jury on October 3, 2016.

According to court documents and evidence presented at trial, in August 2013, Davenport conspired with a woman in Connecticut to produce a video of child pornography after meeting her in an online chat room that focused on bondage, domination, sadism, and masochism. At the time, Davenport was on parole and on an electronic ankle monitor for a prior offense. On September 5, 2013, during a parole search, Davenport’s parole officer found an internet-capable cellphone in Davenport’s possession. The officer seized a micro-SD card from the phone to search it for contraband. Several days later, Davenport cut off his electronic monitor and fled from parole. Davenport was arrested in Redding, California on September 12, 2013.

According to evidence presented at trial, a subsequent search of the seized micro-SD card revealed a video of a woman engaged in sexually explicit conduct with a child approximately two to three years old. Further investigation led to the woman in Connecticut who was later arrested. She testified at trial that when Davenport learned she babysat for a two-and-half-year-old girl, he requested that she record a sexually explicit video of the minor and send it to him. The Connecticut woman made the video following Davenport’s instructions and sent it to him two times. Davenport then distributed the video to another person. Court documents indicate that Davenport has prior convictions for sex offenses against minors.

U.S. Attorney Talbert said, “Children are the most vulnerable members of our society, and we must do everything we can to protect them from horrific crimes like those committed by this defendant. The sentence handed down today rightly punishes the defendant for his conduct and seeks to ensure that he will not be able to commit crimes against children in the future. My office is committed to protecting the public by continuing to prosecute crimes against children.”

This case was the product of an investigation by the Federal Bureau of Investigation, the Butte County District Attorney's Office, the Redding Police Department, and the California Department of Corrections and Rehabilitation. Assistant U.S. Attorney André M. Espinosa prosecuted the case.

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

FRESNO, Calif. — A federal grand jury returned an eight-count indictment today against Jason Leroy Geiser, 36, of Bakersfield, charging him with conspiracy to possess stolen U.S. mail and to unlawfully possess 15 or more unauthorized access devices (credit or debit cards), and other related charges, U.S. Attorney Phillip A. Talbert announced.

According to court documents, between October 1, 2016, and March 2, 2017, Geiser conspired with others to steal mail and to use information and access devices obtained from the stolen mail for their own monetary benefit.

This case is the product of an investigation by the United States Postal Inspection Service and the Bakersfield Police Department. Assistant United States Attorney Brian K. Delaney is prosecuting the case.

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

SACRAMENTO, Calif. — Marco Antonio Ramirez Zuno, 32, of Cancun, Mexico, pleaded guilty today to conspiracy to commit wire fraud in relation to a timeshare resale fraud scheme, U.S. Attorney Phillip A. Talbert announced.

According to court documents, between 2011 and 2012, Zuno and others conducted a timeshare resale fraud scheme based in Puerto Vallarta, Mexico. Sales agents including co‑defendant Juan Montalbo, aka John Monte, conducted sales meetings to convince prospective customers to purchase a timeshare vacation package marketed under the names Platinum Access Program or World Luxury Destinations. If customers had existing timeshare properties, Montalbo assured them that another company, Continental Resources, would arrange for their sale. When the customers returned from Mexico, they were contacted by co-defendant Wayne York, aka Tim Hamick or Michael Halston, who claimed to represent companies named Property Marketing Group or Eagle Market Solution and claiming that a bona fide purchaser had been found and was ready to purchase their existing timeshares. Others were contacted directly by York without first giving their information to Montalbo.

According to court documents, York and others would then extract a series of upfront payments from the victims, which York claimed were required to be wired to bank accounts in Mexico in order for the guaranteed sale to be completed. York and the others would falsely claim that a buyer for the timeshare had already been located and that all the prepaid fees wired to Mexico were being held in escrow and would be refunded to the victims as soon as the transaction was completed. After the victims wired the money to Mexico, York and the others would break off all contact with them. According to court documents, Ramirez Zuno managed the Mexican bank accounts used in the fraud, trained co-conspirators on how to conduct the fraud, and managed the disbursement of the proceeds of the fraud.

The charges against Montalbo and York are only allegations; those defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.

This case is the product of an ongoing investigation by the Federal Bureau of Investigation. Assistant U.S. Attorney Matthew G. Morris is prosecuting the case.

Ramirez Zuno has been in custody since his arrest on April 14, 2016, in Miami, Florida. Montalbo and York have been released on bond. Montalbo and York are next scheduled to appear in court on June 6, 2017, for a further status hearing on their cases.

Ramirez Zuno is scheduled to be sentenced by U.S. District Judge John A. Mendez on June 27, 2017. Ramirez Zuno faces a maximum statutory penalty of 20 years in prison and a $250,000 fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

FRESNO, Calif. — Aryca Danieyelle Williams, 38, of Fresno, pleaded guilty today to two counts of extortion under color of official right, U.S. Attorney Phillip A. Talbert announced.

According to court documents, Williams was a Housing Program Coordinator at the Fresno Housing Authority from 2007 through 2013. The Fresno Housing Authority is a state agency responsible for administering federal housing benefits programs, such as the Section 8 housing choice voucher program. To obtain housing benefits, applicants must put their names in a lottery system, which is supposed to randomly award benefits to qualified applicants. As a Housing Program Coordinator, Williams was responsible for managing the files of housing assistance applicants. She solicited bribe payments from housing authority applicants and promised to switch their names with the names of individuals who had been legitimately selected to receive housing benefits. In switching the names, Williams enabled the applicants to bypass the lottery system and immediately qualify to receive housing benefits. The bribe payments received by Williams included a $1,150 payment to her landlord and a $500 payment to her utility company. In total, Williams received bribe payments from 10 to 12 housing applicants.

This case is the product of an investigation by the Federal Bureau of Investigation. Assistant United States Attorney Grant Rabenn is prosecuting the case.

Williams is scheduled to be sentenced on June 19, 2017, at 10:00 a.m. before U.S. District Judge Dale A. Drozd. Williams faces a maximum statutory penalty of 20 years in prison and a $250,000 fine for each count. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

FRESNO, Calif. — A federal grand jury returned an eight-count indictment on Thursday against Terry Ford, 37, and Dawn Peters, 35, both of Clovis, charging them with distributing synthetic drugs, conspiracy, and money laundering, U.S. Attorney Phillip A. Talbert announced.

According to court documents, Ford and Peters possessed with intent to distribute Dibutylone HCI, a controlled substance, and Alpha-PHP, an analogue of a controlled substance. The indictment further alleges that Ford and Peters conspired to launder money internationally by wiring money to China to promote the distribution of controlled substances or analogues.

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

If convicted, the defendants face a maximum statutory penalty of 20 years in prison and a $1 million fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

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

SACRAMENTO, Calif. — Harminder Phagura, 37, of Yuba City, was sentenced today by U.S. District Judge Garland E. Burrell Jr. to 18 months in prison for one count of federal programs bribery in connection with a drug trafficking scheme, U.S. Attorney Phillip A. Talbert announced.

According to court documents, Harminder Phagura worked as a police officer for the Yuba City Police Department, which receives grant funds from a Federal program. During the course of his crime, Phagura exchanged sensitive information gained from his official position for money. Co‑defendant Gursharan Phagura transmitted this police-only information to a government source, who was posing as a cocaine trafficker.

On July 29, 2014, federal agents observed Gursharan Phagura meet with Harminder Phagura in a Yuba City Police vehicle. At the same time, Gursharan Phagura and the government source were exchanging text messages regarding the state of police presence in the area. Agents then caused an alert to be transmitted on the Yuba City Police Department’s dispatch system. Within a few minutes, the government source received text messages indicating, in coded language, that law enforcement was in the area.

Over the course of several undercover operations, the government source paid a total of $6,000 for the information.

At sentencing, Judge Burrell characterized Phagura’s conduct as reprehensible and as a breach of the public trust.

U.S. Attorney Talbert said: “When a police officer violates the public trust, the community suffers. My office takes seriously any allegation of official misconduct. We hope that this prosecution makes clear that no one is above the law – especially those who have taken an oath to protect the community.”

Co-defendant Gursharan Phagura is charged with possessing with intent to distribute cocaine. The charges are only allegations; he is presumed innocent until and unless proven guilty beyond a reasonable doubt. His next court date is March 31, 2017.

This case is the product of an investigation by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) with assistance from the Federal Bureau of Investigation and the Yuba City Police Department. Assistant United States Attorney Paul Hemesath is prosecuting the case.

SACRAMENTO, Calif. — In three separate Sacramento area cases involving the theft of mail for the purpose of committing identity theft, one defendant was sentenced and three pleaded guilty today, 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 worked closely with the U.S. Attorney’s Office and our partners in law enforcement to arrest and prosecute those individuals responsible for thefts of mail and Identity theft crimes committed against the public.”

2:16-cr-045 MCE

U.S. District Judge Morrison C. England Jr. sentenced Michele Reyes Serrano, 35, of Sacramento, to five years and 11 months in prison for bank fraud and attempted bank fraud, aggravated identity theft, and possession of stolen U.S. mail. According to court documents, between June 1, 2015, and January 21, 2016, Serrano and her husband, co-defendant Raleigh Figueras, 35, obtained personal and financial information from stolen U.S. mail and used the stolen bank account numbers, credit cards, and checks to get money, goods, and services at the expense of the banks. Surveillance cameras caught the defendants cashing checks or making purchases at Sacramento-area Target and Wal‑Mart stores.

On January 21, 2016, agents found in the defendants’ residence stolen mail and stolen and counterfeit identification documents with the true identification information of a victim. Serrano admitted to stealing U.S. mail on a regular basis. Figueras pleaded guilty on February 9, 2017, and is scheduled to be sentenced on July 13, 2017.

2:17-cr-037 TLN

Orangevale residents Patricia Ann Anchondo, 38, and Angel Marie Galvin, 27, pleaded guilty today to bank fraud, aggravated identity theft, and possession of stolen U.S. mail. Anchondo additionally pleaded guilty to possession with intent to distribute methamphetamine. Anchondo is scheduled to be sentenced May 25, 2017, and Galvin is scheduled to be sentenced on May 18, 2017.

According to court documents, between March 23, 2016, and November 17, 2016, Anchondo and Galvin stole mail and used the personal and financial information of the mail theft victims to open credit card accounts and to take over existing bank accounts owned by the victims. When a search was conducted at the defendants’ residence, law enforcement agents found stolen U.S. mail, profiles of victims’ information, bank records for a church, and numerous identification documents of a victim. The defendants confessed that they stole mail from the church and used the church’s bank account number to make payments to other victim credit cards to keep the cards’ associated lines of credit active for further unauthorized transactions.

Galvin admitted she drove to various counties and stole U.S. mail in order to take over mail theft victims’ identities. Anchondo and Galvin each stated that they would apply for bank accounts and credit cards online to go shopping and to buy gift cards, which the two would then sell online. Anchondo additionally confessed to law enforcement that she possessed methamphetamine, and evidence found in her home and on her phone indicated that she also sold the drug.

2:17-cr-035 MCE, 2:16-cr-147 MCE

Shellby Moore, 29, of Sacramento, pleaded guilty today to aggravated identity theft and possession of methamphetamine. According to court documents, Moore and co-defendant Trevor Lichnock-Gembe, 28, 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. Moore pleaded guilty to possessing methamphetamine on March 1, 2017, while housed as a federal inmate in the Nevada County Jail. Lichnock-Gembe has pleaded guilty to bank fraud, aggravated identity theft, and unlawful possession of five or more identification documents and is scheduled to be sentenced on April 6, 2017. Moore is scheduled to be sentenced on June 8, 2017.

These cases are the product of investigations by the United States Postal Inspection Service with assistance from the Sacramento County Probation Department, the Sacramento County Sheriff’s Office, and the Placer County Sheriff’s Office. The Postal Inspection Service conducted these investigations with assistance of its Narcotic and Economic Crimes Investigations Task Force (NECI). NECI is a partnership between local and federal law enforcement to combat theft and unlawful use of the U.S. Mail. The Placer County District Attorney’s Office and Sutter County Sheriff’s Office have each dedicated law enforcement personnel to the task force.

Assistant U.S. Attorney Michelle Rodriguez prosecuted each of these cases.

The statutory maximum penalties are 30 years in prison and a $1 million fine for bank fraud; two years in prison consecutive to any other sentence and a $250,000 fine for aggravated identity. theft; five years in prison and a $250,000 fine for possession of stolen U.S. mail, five to 40 years in prison and a $2 million fine for possession of methamphetamine with intent to distribute, and one year in prison and a $100,000 fine for possession of methamphetamine. The actual sentences, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

SACRAMENTO, Calif. — Paul La, 59, of Sacramento, was sentenced today by United States District Judge Morrison C. England Jr. to five years in prison, U.S. Attorney Phillip A. Talbert announced.

According to his plea agreement, in 2011, La set fire to his business, Golden Nails & Hair, located at 8335 Folsom Boulevard in Sacramento, using acetone as an accelerant. After burning down the business, La submitted fraudulent insurance claims based on purported losses from the fire.

This case was the product of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant U.S. Attorneys Michael D. Anderson and Amanda H. Beck prosecuted the case.

SACRAMENTO, Calif. — Brandon Lamont Walton, 38, of Sacramento, was sentenced today by United States District Judge Morrison C. England Jr. to 10 years in prison for transportation for illegal sexual activity, United States Attorney Phillip A. Talbert announced.

According to court documents, in June 2013, Walton contacted an 18-year-old female using an online social networking website. Soon thereafter, they met in person, and he transported her from Washington state to California where he posted online advertisements that offered her for paid sexual services. In July of 2013, he transported her to New Mexico and Texas, where he continued that activity. In mid-July, the victim’s mother contacted police in Texas, and they helped to arrange the victim’s return to her mother. At an earlier sentencing hearing, the district court determined that the victim credibly testified that the defendant sexually assaulted her during the course of his crime.

This case was the product of an investigation by the Federal Bureau of Investigation’s Child Exploitation Task Force, which includes FBI agents and detectives from the Sacramento Police Department. Assistant United States Attorneys Michele Beckwith and Jason Hitt prosecuted the case.

SACRAMENTO, Calif. — U.S. District Judge Morrison C. England Jr. sentenced Isreal “Puck” Washington, 43, of Sacramento, today to 34 years in prison for trafficking heroin, cocaine, cocaine base, and methamphetamine, U.S. Attorney Phillip A. Talbert announced.

According to court documents and evidence presented in July 9, 2015, at a five-day trial, Washington and oversaw the distribution of thousands of doses of crack cocaine, heroin, methamphetamine, and cocaine between 2006 and 2013 in Sacramento. Washington used various businesses as a front to conceal and disguise his extensive drug trafficking and operated a large “crew” of gang members as his drug distribution organization. During an investigation in 2010 and 2011, one of Washington’s businesses, Wet Ways Auto Body and Paint Shop, was identified as a place where Washington and his associates conducted drug deals.

In 2012, an undercover operative bought heroin and methamphetamine from Washington’s organization. The drug traffickers operating under Washington included co‑defendants Deyonte Spears, 29, of Oakland, and Sacramento residents Tyrone Weathersby, 48; Anthony Joaquin Sanchez, 32; and Myron Meadows, 45. On May 21, 2013, DEA agents served search warrants at two Sacramento-area stash pads controlled by Washington. Agents seized a stolen firearm and more than three pounds of heroin at stash pads maintained by the group.

U.S. Attorney Talbert stated: “Washington oversaw an extensive drug trafficking operation for several years and is responsible for the distribution of large amounts of dangerous drugs into our community. That conduct has devastating effects on the lives of those who abuse such drugs, their family members, and the community as a whole. The sentence handed down today appropriately reflects the seriousness of Washington's crime and the harm he caused. I want to thank the DEA, the Sacramento County Sheriff’s Office, the Sacramento Police Department, the Vallejo Police Department, and the Sacramento County District Attorney’s Office, whose hard work made this prosecution possible.”

“Motivated by greed and power, Washington led a gang-affiliated drug trafficking ring concealing criminal activity through a variety of his businesses,” said DEA Special Agent in Charge John J. Martin. “This type of behavior terrorizes a community and rips at its sense of security. Washington’s 34-year sentence pays a debt to society that he clearly owes.”

Co‑defendant Spears was sentenced on July 16, 2015, to 10 years in prison; co‑defendant Weathersby was sentenced to 18 months in prison on October 24, 2014; co‑defendant Sanchez was sentenced on December 17, 2015, to five years and 10 months in prison; and co‑defendant Meadows was sentenced on September 10, 2015, to three years in prison.

This case was the product of an investigation by the Drug Enforcement Administration, the Sacramento County Sheriff’s Office, the Sacramento Police Department, the Vallejo Police Department, and the Sacramento County District Attorney’s Office. Assistant U.S. Attorneys Jason Hitt and Jill M. Thomas prosecuted the case.

This case was part of an Organized Crime Drug Enforcement Task Force (OCDETF) program that 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.

When prosecuted in federal court, drug traffickers typically receive much harsher sentences. In addition to the longer sentences imposed, unlike state court prisoners who are released early on parole, there is no early release on parole in the federal system.

SACRAMENTO, Calif. — Matthew Muller, 39, of South Lake Tahoe, was sentenced today to 40 years in prison by U.S. District Judge Troy L. Nunley, United States Attorney Phillip A. Talbert announced.

According to court documents, between 3:00 a.m. and 5:00 a.m. on March 23, 2015, in Vallejo, Muller broke into the Mare Island home of Aaron Quinn and Denise Huskins. Armed with a stun gun and a simulated firearm with a laser sight, Muller ordered the victims to lie still while he bound them, blindfolded them, and forced them to drink a sedative. Muller played the victims a prerecorded message, which threatened that any noncompliance would be punished by face cutting or electric shock. Muller then placed Ms. Huskins in the trunk of a car and drove her to his residence in South Lake Tahoe. Once there, Muller kept her under his complete control, at times bound and blindfolded. Muller sent Mr. Quinn two emails demanding ransom for a total of $17,000. Muller released Ms. Huskins on March 25, 2015 in Huntington Beach, with no ransom ever being paid.

During and after the kidnapping, Muller sent emails to a reporter in San Francisco that falsely claimed, among other things, that the kidnapping had been carried out by a group of elite criminals who were perfecting their kidnapping-for-ransom tactics.

The case remained unsolved until after June 8, 2015, when Dublin Police Services of the Alameda County Sheriff’s Department arrested Muller and searched his South Lake Tahoe residence. The officers had been investigating a home invasion burglary, which led them to Muller’s residence where they located and seized evidence related to the Vallejo kidnapping.

The FBI then conducted its own follow-up investigation and searches that included Muller’s South Lake Tahoe residence, a vehicle in Reno, two other residences, and Muller’s Vallejo storage locker. The storage locker, which contained aerial drones referred to in Muller’s email to the media, had been located by an officer of the Vallejo Police Department.

FBI analysis of Muller’s computers uncovered a sound recording that simulated people whispering to each other and a sound recording consistent with the instructions given to Mr. Quinn and Ms. Huskins. FBI analysts also discovered video recordings of Muller together with Ms. Huskins in his South Lake Tahoe residence. She was blindfolded and fully under Muller’s control. FBI analysts also discovered video recordings of Muller in his South Lake Tahoe residence arranging cameras in a bedroom, trying out their viewing angles, and then twice sexually assaulting the blindfolded Ms. Huskins.

In sentencing Muller, Judge Nunley referred to the defendant’s actions as heinous and held him responsible for his actions.

U.S. Attorney Talbert said, “The sentence imposed today reflects the egregiousness of Muller’s conduct in this case. Muller had advantages in life that most people only dream of, yet he used his considerable intelligence to plan and execute the physical assault and psychological torture of two innocent strangers. It is difficult to imagine the level of suffering that Muller inflicted on his victims. The sentence handed down today takes into account that suffering and strives to ensure that Muller will never again commit such crimes.”

U.S. Attorney Talbert also said, “This serious violent crime was solved because Alameda County authorities responded so effectively to the Dublin burglary and then provided the evidence necessary for the effective federal investigation and prosecution of this case. The quality of local and federal investigative work is reflected in Muller’s two criminal convictions in Alameda County and in the Eastern District of California. I am grateful for the outstanding cooperation between the FBI, the Alameda County Sheriff’s Department, the Alameda County District Attorney, and the Vallejo Police Department.”

This case was the product of an investigation by the FBI, the Dublin Police Services of the Alameda County Sheriff’s Department, and the Vallejo Police Department. Assistant U.S. Attorneys Matthew D. Segal and Heiko P. Coppola prosecuted the case.

FRESNO, Calif. — Carlos Piedra-Murillo (“Piedra”), 30, a native and citizen of Mexico, entered a guilty plea today to conspiring to manufacture, distribute, and possess with intent to distribute marijuana in connection with a large-scale cultivation operation located in the Domeland Wilderness area in Tulare County in the Sequoia National Forest, United States Attorney Phillip A. Talbert announced. In pleading guilty, Piedra also agreed to make restitution to the U.S. Forest Service for the damage to public land and natural resources, including a prehistoric Tubatulabal Native American archaeological site, caused by his cultivation activities.

According to court documents, Piedra conspired with Juan Carlos Lopez, 32, of Lake Elsinore, California, Rafael Torres-Armenta (“Torres”), 30, and Javier Garcia-Castaneda (“Garcia”), 38, all citizens of 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 located over 8,000 marijuana plants at that location and seized fifteen pounds of processed marijuana, a .22 caliber rifle, a pellet rifle, and numerous rounds of .22 caliber ammunition.

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 that supports trout. Fertilizer and pesticides, including illegal zinc phosphide, a highly toxic rodenticide from Mexico, were found at the site. Large piles of trash were found near the campsite. The northernmost area of the operation caused extensive damage to a large prehistoric Tubatulabal 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, the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), and the California Department of Fish and Wildlife. Assistant United States Attorney Karen Escobar is prosecuting the case.

Piedra is scheduled for sentencing on June 5, 2017 in federal court in Fresno. Piedra faces faces a maximum statutory penalty of twenty years in prison and a $1,000,000 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 as to the co-defendants are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.

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FRESNO, Calif. — After a four-day trial, a federal jury found Martin Calzada, 29, of Norwalk, guilty today of one count of conspiracy to commit mail fraud and eight counts of mail fraud affecting a financial institution, United States Attorney Phillip A. Talbert announced. The trial was held before United States Chief District Judge Lawrence J. O'Neill.

According to evidence presented at trial, Calzada conspired to defraud homeowners facing foreclosure. Calzada and other employees of Star Reliable Mortgage, which had offices in Bakersfield, Visalia, and Salinas, 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, based on false promises that the clients could own their homes “free and clear” as a result of Star Reliable’s services. 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. In furtherance of the scheme, Calzada and other employees at Star Reliable filed at county recorders’ offices fraudulent documents on behalf of the homeowner-clients, which purported to replace the legitimate property trustees with fictitious trusts affiliated with the defendant and Star Reliable, all in an effort to “cloud title” and halt or stall the foreclosure process. Additionally, Calzada, and other employees working at his direction told Star Reliable clients to stop paying their mortgages. They also falsely represented that Star Reliable clients had one million dollars in a U.S. government account that could be used to pay-off a homeowner’s mortgage.

According to court documents, instead of owning their homes “free and clear,” many of Star Reliable’s clients lost their homes in foreclosure. The scheme caused more than 100 homeowner-clients to pay approximately $875,000 to Star Reliable and lending institutions to lose more than $4 million.

This case is the product of an investigation by the Federal Bureau of Investigation and the Tulare County District Attorney’s Office. Assistant United States Attorneys Christopher D. Baker and Patrick J. Suter are prosecuting the case.

Calzada was remanded into custody following the announcement of the verdict. In a related case in December 2014, co-conspirators Juan Ramon Curiel, 38, of Visalia, and Santiago Palacios-Hernandez, 47, of Salinas, pleaded guilty to conspiracy to commit mail fraud. Curiel additionally pleaded guilty to one count of bankruptcy fraud. They are scheduled to be sentenced by Judge O’Neill on April 10, 2017.

Calzada is scheduled to be sentenced by Judge O'Neill on June 5, 2017. Calzada faces a maximum statutory penalty of 30 years in prison and a $1 million fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

SACRAMENTO, Calif. — Kamyar Soltani, 47, of El Dorado Hills, pleaded guilty today to tax evasion, United States Attorney Phillip A. Talbert announced.

According to court documents, Soltani attempted to evade or defeat the assessment of his tax obligations for the tax years of 2005, 2006, and 2007. Soltani worked in the used car sales industry and was well-paid for his work. In each of the tax years in question, Soltani received income subject to taxation of between approximately $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 were false in that they 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 received tax refunds of over $2,000 by falsely claiming that he was entitled to an Earned Income Tax Credit. In entering his guilty plea, 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 payments made to third parties.

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

Soltani is scheduled to be sentenced by Judge Garland E. Burrell Jr. on May 26, 2017. Soltani faces a maximum statutory penalty of five years in prison and a $100,000 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. Under the terms of his plea agreement, Soltani must pay just over $150,000 towards restitution prior to sentencing.

SACRAMENTO, Calif. — A federal grand jury returned a 24-count indictment today against Sacramento residents James Smallwood, 25, and John Smallwood, 45, charging them with firearm-trafficking offenses, U.S. Attorney Phillip A. Talbert announced.

According to court documents, James Smallwood and John Smallwood conspired to manufacture and sell firearms without a license. Over the course of eight transactions between September 28, 2016, and February 9, 2017, James Smallwood sold 20 firearms for $31,960. Seventeen of these firearms were homemade AR-15 style rifles and pistols, and seven of these homemade firearms were short-barreled rifles. John Smallwood manufactured the AR-15 style firearms and accompanied James Smallwood on one of the sales. On February 22, 2017, James Smallwood was apprehended while en route to sell 14 additional homemade AR-15 style short-barreled rifles for $28,000.

This case is the product of an investigation by the Bureau of Alcohol, Tobacco, Firearms, and Explosives. Assistant U.S. Attorney Owen Roth is prosecuting the case.

If convicted, both defendants face maximum statutory penalties of five years in prison and a $250,000 fine for the conspiracy count and for the count of unlawful manufacturing and dealing firearms and 10 years in prison and a $10,000 fine for each count of unlawful possession of short-barreled rifles. 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.

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