Eastern District of California

SACRAMENTO, Calif. — Federal agents arrested Kenneth Knockum, 46, today at his home in Vallejo, United States Attorney Benjamin B. Wagner announced. A federal grand jury returned a three-count indictment on April 24, 2014, charging Knockum with making false claims for tax refunds on federal income tax returns.

According to the indictment, in 2009, Knockum filed three tax returns claiming fictitious income that he did not receive, withholdings that he did not make and refunds to which he was not entitled. One return was filed electronically for tax year 2008 claiming a refund of $522,786. Two returns were submitted to different IRS locations for the tax year 2007, both claiming a $1,435,813 refund.

This case is the product of an investigation by the Internal Revenue Service, Criminal Investigation with assistance from the Vallejo Police Department. Assistant United States Attorney Sherry Hartel Haus is prosecuting the case.

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

SACRAMENTO, Calif. — Today, a training aimed at combatting the serious crime of labor trafficking was held, organized by U.S. Attorney Benjamin B. Wagner in partnership with California Attorney General Kamala Harris. This training, held at the Attorney General’s offices in Sacramento, was the second in a series of awareness trainings focused on forced labor and labor-related human trafficking. The first training was held in Fresno on October 24, 2014, and additional trainings are planned throughout the district and California.

U.S. Attorney Wagner stated: “Labor trafficking can be an invisible crime, because it so often goes unreported. The federal and state laws that forbid the practice have no effect when law enforcement is unaware of the violations that occur. Our goal is to train government workers, who may visit various worksites for other purposes, to recognize the signs of forced labor and to be aware of how to report it.”

“Human trafficking is the world's fastest growing criminal enterprise,” said Special Assistant Attorney General Jeff Tsai. “Labor trafficking is the most prevalent form, but it is still under-reported and under-investigated. Training our first responders and government agencies to recognize the signs of labor trafficking is an important step in helping victims and going after the traffickers. Attorney General Harris has made fighting human trafficking a priority and is proud to partner with U.S. Attorney Wagner to provide this critical training.”

The training was attended by federal, state, and local workers who visit worksites as part of their duties, including employees from the U.S. Department of Labor, the U.S. Equal Employment Opportunity Commission, California’s Employment Development Department, Department of Industrial Relations, Department of Fair Employment and Housing, Department of Alcoholic Beverage Control, Agricultural Labor Relations Board, Contractors State Licensing Board, and representatives from El Dorado County and Yolo County, and the cities of Rancho Cordova, Folsom, and Elk Grove.

Speakers from the FBI, ICE’s Homeland Security Investigations, the U.S. Department of Labor’s Office of Inspector General, and California’s Department of Industrial Relations described key indicators of labor trafficking and how to report the crime. Speakers from the International Rescue Committee presented information about labor trafficking from the trafficking survivor’s perspective, and representatives of Opening Doors Inc. led an interactive discussion of the signs of labor trafficking.

Raymond D. Greenlee, the assistant special agent in charge of Homeland Security Investigations who oversees Sacramento Homeland Security Investigations stated: “Human trafficking, including forced labor trafficking, amounts to modern day slavery and represents one of the most deplorable crimes HSI investigates. Sadly, the egregious exploitation of workers by unscrupulous individuals and businesses occurs more frequently in the Central Valley than many people realize. Our hope is that by vigorously enforcing trafficking laws and raising public awareness, we can reduce the level of exploitation and bring those responsible to justice.”

If you or anyone you know is a victim of labor trafficking, you may call the National Human Trafficking Resource Center at any time at 1 (888) 373-7888. You may also text “HELP” or “INFO” to 233733, or visit www.traffickingresourcecenter.org. You may also use these resources to report suspected human trafficking.

FRESNO, Calif. — Ana Lilia Angulo, 30, of San Jose, pleaded guilty today to conspiring to distribute and possess with intent to distribute nine pounds of heroin, United States Attorney Benjamin B. Wagner announced.

According to court documents, on April 23, 2013, Angulo was stopped for a traffic violation while driving a vehicle northbound on I5 near Highway 198 by Fresno County Sheriff detectives. During the stop, detectives became suspicious that Angulo was involved in transporting drugs and found several packages of heroin weighing nine pounds behind the arm rest panel of the rear passenger seat near where Angulo’s infant child was sitting in a car seat.

This case was the product of an investigation by the U.S. Drug Enforcement Administration and Fresno County Sheriff’s Office. Assistant United States Attorney Karen Escobar is prosecuting the case.

Angulo is scheduled to be sentenced by United States District Judge Lawrence J. O'Neill on August 18, 2014. Angulo faces a statutory penalty of 10 years to life in prison and a $10 million fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

SACRAMENTO, Calif. —William Theodore Lewis, 50, and Lori Marie Dahl, 50, a married couple of Reno, Nevada, pleaded guilty today to possessing counterfeit U.S. currency and counterfeit or unauthorized access devices, United States Attorney Benjamin B. Wagner announced.

According to court documents, on May 14, 2013, the Angels Camp Police Department received a call from a Save Mart employee, reporting that a man had attempted to pass a counterfeit $20 bill. The chief of the department responded to the scene, identified a man matching the description the caller gave, and arrested Lewis. A search of Lewis’s person produced three additional counterfeit $20 bills.

After Lewis’s arrest, law enforcement searched the hotel were Lewis and Dahl were staying and the stolen rental vehicle they had driven from Reno. Law enforcement found evidence of counterfeiting activity including wholly and partially printed counterfeit U.S. currency in various denominations, a printer, and various solvents and equipment associated with the manufacture of counterfeit currency. Law enforcement personnel also found evidence of access device fraud and identity theft in Lewis and Dahl’s room at the motel and in the vehicle. They possessed over 1,000 unauthorized or counterfeit access devices such as credit, debit, and prepaid cards. Additionally, law enforcement found access device-making equipment including blank plastic cards, seals, and hologram stickers, and a card printer to be used for printing credit cards. They also possessed several lists with personal identifiers and information of many individuals.

This case is the product of an investigation by the United States Secret Service and the Angels Camp Police Department. Assistant United States Attorney Nirav Desai is prosecuting the case.

Both Lewis and Dahl remain in custody and are scheduled to be sentenced by Judge Kimberly J. Mueller on December 10, 2014. Lewis and Dahl each face a maximum statutory penalty of 25 years in prison, a $250,000 fine, and five years of supervised release. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

SACRAMENTO, Calif. — A federal grand jury returned a four-count indictment today against Satnam Singh, 54, of Rancho Cordova, charging him with passport fraud, unlawful procurement of naturalization and citizenship, making a false statement under oath in a matter relating to naturalization and citizenship, and use of a fraudulently obtained naturalization certificate, United States Attorney Benjamin B. Wagner announced.

According to court documents, Satnam Singh immigrated to the United States from India in the 1980s and naturalized as a United States citizen in 1996. However, in 1993, Satnam Singh filed an application for asylum under a fake identity “Rupinder Singh,” and also was naturalized under that second, false identity in 2012. Also in 2012, Satnam Singh successfully filed an application for a U.S. Passport in the false name “Rupinder Singh,” using the naturalization certificate issued to Rupinder Singh as proof of U.S. citizenship; He traveled internationally using the Rupinder Singh passport at least twice in 2013.

This case is the product of an investigation by the U.S. Department of State, Diplomatic Security Service. Assistant U.S. Attorney Nirav Desai is prosecuting the case.

Singh was released on a $150,000 bond and will be arraigned on the indictment on December 10, 2014.

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

FRESNO, Calif. —Gerardo Alvarez-Montanez, 32, an inmate at the Taft Federal Correctional Institution, was sentenced by United States District Judge Anthony W. Ishii today to five years in prison for conspiracy to provide and possess contraband in prison, United States Attorney Benjamin B. Wagner announced.

According to court documents, between November 2013 and February 27, 2014, Alvarez-Montanez recruited and then conspired with correctional officer Ramon Cano 28, of Bakersfield, to smuggle cellphones, cash, alcohol and controlled substances into the prison in return for cash.

This case is the product of an investigation by the Federal Bureau of Investigation and the U.S. Department of Justice Office of the Inspector General. Assistant United States Attorney Brian K. Delaney is prosecuting the case.

On August 25, 2014, Cano pleaded guilty today to conspiring to provide and possess contraband in prison. He is scheduled to be sentenced on December 15, 2014. He faces a maximum statutory penalty of five years in prison and a $250,000 fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

FRESNO, Calif. — Heath Lee Roberson, 39, of Modesto, pleaded guilty on Monday to conspiring to defraud the United States, United States Attorney Benjamin B. Wagner announced.

According to court documents, from about December 2010 to May 2011, Roberson and his former spouse obtained personal identifying information from more than 40 individuals. After this information was used to generate false tax returns, Roberson and his former spouse funneled the tax refunds into accounts they controlled. The false tax returns sought over $121,000 in tax refunds.  

This case is the product of an investigation by the Internal Revenue Service, Criminal Investigation. Assistant United States Attorney Michael G. Tierney is prosecuting the case.

Roberson is currently in custody and is scheduled to be sentenced by United States District Judge Anthony W. Ishii on July 7, 2014. He faces a maximum penalty of 10 years in prison and a $250,000 fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

SACRAMENTO, Calif. — Perry Sylvester Jackson, 28, of Marysville, was sentenced today by U.S. District Judge John A. Mendez to five years and 10 months in prison for violating the Matthew Shepard and James Byrd Jr. Hate Crimes Prevention Act for his role in a 2011 racially motivated attack on a white man and an African-American woman, United States Attorney Benjamin B. Wagner announced. Jackson, who previously pleaded guilty on Dec. 17, 2013, was also ordered to serve three years of supervised release following his prison sentence and to pay $175 in restitution. Jackson is the second of three defendants to be sentenced in the case.

According to court documents, on April 18, 2011, around 10:45 p.m., a white man and an African-American woman parked their car at a convenience store in Marysville. Shortly afterward, Jackson, Billy James Hammett, 30, of Marysville, and Anthony Merrell Tyler, 33, of Olivehurst, initiated an unprovoked attack on the man and woman based on race. Jackson punched the male victim twice in the head through the open passenger window. Co-defendant Hammett kicked the woman in the chest, and Tyler smashed the car’s windshield with a crowbar. As the attack continued, the woman managed to take refuge inside the convenience store, and the three assailants then beat the male victim in the parking lot. He sustained abrasions on his right forearm and knees, while the woman suffered bruising to her chest.

On March 25, 2014, Hammett, was sentenced to seven years and three months in prison in connection with the incident. Parole has been abolished in the federal system, and defendants are required by law to serve at least 85 percent of the prison sentence.

Tyler is scheduled for sentencing on July 8, 2014. He faces a statutory maximum sentence 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.

This case is the product of an investigation by the FBI. The case is being prosecuted by U.S. Attorney Wagner and Trial Attorney Chiraag Bains of the Civil Rights Division.

FRESNO, Calif. — One defendant was sentenced and one pleaded guilty today in two separate cases involving marijuana cultivation operations in Fresno and Kern Counties, according to U.S. Attorney Benjamin B. Wagner.

1,429 Marijuana Plants Seized from Squaw Valley Grow (1:12-cr-352 AWI)
United States District Judge Anthony W. Ishii sentenced Bounhome Singharath, 63, of Las Vegas, to two years in prison. On March 10, 2014, Singharath pleaded guilty and acknowledged that law enforcement officers had found 1,429 marijuana plants at a grow site on Ripple Lane in Squaw Valley in eastern Fresno County. Singharath was leaving the grow site in knee-high rubber boots and camouflage pants when he encountered the officers. Singharath said he is a resident of Las Vegas and had been living at the grow site for approximately two months for the purpose of growing marijuana. This case was the product of an investigation by the U.S. Drug Enforcement Administration (DEA) and Fresno County Sheriff’s Office.

9,746 Marijuana Plants, 2 Firearms, Illegal Pesticides Seized in Sequoia National Forest Grow (1:12-cr-221 LJO)
Marcelina Botello Charles, 46, of Murrieta, Calif. pleaded guilty to conspiring to manufacture, distribute and possess with intent to distribute 9,749 marijuana plants at a grow site in the Lilly Canyon area of the Sequoia National Forest. She also pleaded guilty to distributing illegal pesticides, in violation of the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) and agreed to make restitution to the U.S. Forest Service for damage caused by the marijuana cultivation operation.

According to court documents, the public land sustained extensive damage as a result of the marijuana cultivation activities there. Native oak trees and other vegetation were killed or cut down to make room for the marijuana plants. The soil was tilled, and fertilizers, pesticides, and rodenticides were spread throughout the site. Cans of a common Mexican rat poison, Fosfuro de Zinc and “Ratone: fosfuro de zinc,” and a Mexican insecticide, “QúFuran,” were found at both the cultivation site and the residence where Charles temporarily resided in Bakersfield, after she was found delivering supplies to the marijuana cultivation operation. In addition to the pesticides, two handguns and numerous items relating to marijuana cultivation were seized.

Botello Charles is scheduled for sentencing on August 11, 2014, by United States District Judge Lawrence J. O’Neill. The drug conspiracy carries a maximum prison term of 20 years in prison and a $4 million fine. The FIFRA violation carries a maximum penalty of one year in prison and a maximum fine of $25,000. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

This case is the product of an investigation by the U.S. Forest Service, DEA, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), U.S. Environmental Protection Agency Criminal Investigation Division (EPA-CID), and the Kern County Sheriff’s Department.

Assistant United States Attorney Karen Escobar is prosecuting both cases.

FRESNO, Calif. —Heather Lynn Necheff, 47, of Regina, Saskatchewan Canada, pleaded guilty yesterday to conspiracy to distribute and possess to distribute cocaine, United States Attorney Benjamin B. Wagner announced.

According to court documents, on December 17, 2013, Necheff’s vehicle was stopped for a traffic violation by a California Highway Patrol officer in Kern County in the Buttonwillow area. The officer obtained permission to search the vehicle and found approximately 20 kilograms of cocaine wrapped in individual duct-taped packages inside a suitcase. Necheff admitted that she was transporting the cocaine from Los Angeles to Seattle for eventual importation into Canada.

This case was the product of an investigation by the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and the California Highway Patrol. Assistant United States Attorney Brian K. Delaney is prosecuting the case.

Necheff is scheduled to be sentenced by Judge Lawrence J. O'Neill on July 21, 2014. Necheff faces a maximum statutory penalty of 20 years in prison and a $1 million fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

SACRAMENTO, Calif. — Michael Elliot Papac, 47, of Alturas, was sentenced today by United States District Judge John A. Mendez to 19 years and seven months in prison to be followed by a lifetime of serviced release for receipt and distribution of child pornography, United States Attorney Benjamin B. Wagner announced.

This case was the product of an investigation by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) with assistance from the Modoc County Sheriff’s Office and the Queensland Police Service in Australia. Assistant United States Attorney Josh F. Sigal prosecuted the case.

According to court documents, Papac was arrested on February 14, 2014, following a referral by the Queensland Police Service in Australia regarding the potential sexual abuse of a minor. A covert Internet investigator in Queensland come into contact with Papac on a Russian website known for being a source of child pornography.  back to Papac in Alturas. Papac had posted photos of a sleeping 8-year-old girl with her pajama top unbuttoned. He discussed his plan to sedate and molest her while she slept and to take and distribute photographs of the molestation. With the assistance of Australian police, HSI agents were able to trace Papac’s email to his residence in Alturas and arrest him before he was able to act on his plan. In addition, on at least three separate occasions between February 7, 2014, and February 10, 2014, he sent and received child pornography.

Papac pleaded guilty to the charges on June 24, 2014. He had been convicted in 2005 in Modoc County for lewd acts with a minor and had served six years in prison.

At sentencing, Judge Mendez noted that Papac “learned nothing” from his prior state prison term and explained that the defendant has “created and continues to create a danger to the public,” and that but for the “terrific” work of law enforcement, “further damage was not done” to the victim.

“This case shows the extraordinary level of collaboration among law enforcement agencies around the globe to combat the online sexual exploitation of children,” said Tatum King, acting special agent in charge of HSI San Francisco. “While the initial lead was uncovered on the other side of the world, owing to remarkable international cooperation and astute detective work, HSI special agents were able to locate this young girl and rescue her.  For that, we’re indebted to the efforts of the Queensland Police Service and, closer to home, to the Modoc County Sheriff’s Department.”

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.

RED BLUFF, Calif. — United States Attorney Benjamin B. Wagner is pleased to announce that the Tehama County Sheriff’s Office is the 2014 winner of the Eastern District of California Law Enforcement Award for Outstanding Law Enforcement Agency in the Sacramento Division. This award is one of four awards presented annually to a law enforcement agency in the Eastern District of California’s Sacramento and Fresno divisions to recognize outstanding collaboration between federal, state and local law enforcement in addressing public safety issues in this region.

The Tehama County Sheriff’s Office is receiving the Sacramento Division’s Outstanding Law Enforcement Agency Award for its critical efforts in keeping the peace this past summer when tensions arose at the Rolling Hills Casino, operated by the Paskenta Band of Nomlaki Indians, a federally recognized tribe within the Eastern District. The Paskenta tribe was embroiled in an intra-tribal dispute that led to the creation of rival security forces. These armed security forces engaged in a stand-off at the site of the tribe’s casino in Corning that lasted almost two weeks while members of the general public were on site, and in harm’s way. During the extended stand-off, the Tehama County Sheriff’s office almost single-handedly kept the peace with personnel who were on site around the clock. The Sheriff’s Office maintained open lines of communication with all parties to the dispute and were in constant contact with partner agencies in the state and federal government. The Sheriff’s Office respected the sovereignty of the tribe and never attempted to take a side in the dispute. Deputies treated all involved with civility and respect, and deserve credit for avoiding what could have been a tragic situation.

“The Tehama County Sheriff’s Office is truly deserving of recognition and our thanks for keeping the peace at Rolling Hills,” said U.S. Attorney Wagner. “The members of the Office, including Sheriff Dave Hencratt, Lieutenant David Greer, Assistant Sheriff Phillip Johnston, and all of the deputies who served during this tense time exhibited all of the best qualities that law enforcement can aspire to. They were brave, tireless, and respectful, and they showed an absolute commitment to doing everything possible to avoid physical harm to our citizens. It is our privilege to work alongside them in serving our District.”

FRESNO, Calif. — A federal grand jury has returned separate indictments today against three individuals who have previously been convicted of a felony, charging each with federal firearm offenses, United States Attorney Benjamin B. Wagner announced.

Dionicio Ramirez 28, of Fresno, was charged with one count of being a felon in possession of handgun and one count of being a felon in possession of ammunition. According to court documents, on March 24, 2015, Ramirez shot at an occupied vehicle and then drove away in his truck. When officers stopped Ramirez, he threw a Springfield Armory magazine loaded with 9mm ammunition out of the window, and a loaded 9mm handgun was found inside the truck. A 9mm casing was found at the scene of the shooting.

James Ernest Johnson, 26, of Fresno, was charged with three counts of being a felon in possession of a firearm. According to court documents, on three occasions between June 2014 and March 26, 2015, during traffic stops, police found a loaded firearm and narcotics hidden in a vehicle that Johnson was driving.

Jose Cuellar, 37, of Mexico, was charged with being a felon in possession of a loaded shotgun. According to court documents, on March 23, 2015, Fresno Police Department officers encountered Cuellar and saw the stock of a shotgun sticking out of the waistband of his pants. Cuellar reached for the firearm, and after a struggle, officers gained control of the firearm and arrested him.

These cases are the product of investigations by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the United States Marshal’s Service (USMS), the Fresno Police Department, the California Highway Patrol, and the Fresno County Sheriff’s Office. The cases are part of Project Safe Neighborhoods, which is a joint initiative to combat gang and gun violence. Assistant U.S. Attorney Kimberly Sanchez is prosecuting the cases.

If convicted, Ramirez faces 15 years to life in prison and a $250,000 fine on each count, Johnson faces up to 10 years in prison a $250,000 fine on each of the three counts, and Jose Cuellar faces up to 10 years in prison and a $250,000 fine. Any sentence, however, would be determined at the discretion of the court after consideration of statutory factors and the Federal Sentencing Guidelines. The charges are allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.

SACRAMENTO, Calif. — Austin Reed, 42, of Stockton, was sentenced today by United States District Judge Morrison C. England Jr. to seven years and eight months in prison for being a felon in possession of a firearm, United States Attorney Benjamin B. Wagner announced.

According to court documents, on November 16, 2012, officers attempted to make contact with Reed in Stockton. Reed ran from the officers and while in flight, threw an assault-style firearm from his person. The officers recovered the firearm, a 9mm pistol, with 25 live rounds in an extended magazine.

“This sentencing demonstrates ATF’s efforts in pursuing convicted felons and seizing firearms, and ultimately preventing impending violent acts from occurring in our neighborhoods,” stated Joseph M. Riehl Special Agent in Charge. “ATF and our partners will not surrender to those who are a threat to our communities and cannot lawfully possess a firearm.”

This case was the product of an investigation by the Bureau of Alcohol, Tobacco, Firearms, & Explosives, the Stockton Police Department, and the San Joaquin District Attorney’s Office. Assistant United States Attorney Olusere Olowoyeye prosecuted the case.

SACRAMENTO, Calif. — Four days before a trial was set to begin, Robert M. Schaefer, 68, of Sacramento, pleaded guilty today to possession of child pornography, United States Attorney Benjamin B. Wagner announced.

According to court documents, from 2001 to 2010, Schaefer uploaded thousands of images of children being sexually exploited, including children under 10, to various file‑sharing websites. He would surf the Internet looking for people seeking particular types of photos, which he would then share from his extensive collection. His computers were seized once by the Sacramento Police Department in 2006, but Schaefer rebuilt his pornography collection and began collecting and sharing the materials again. The FBI seized his computers again on 2010 after the German Federal Police provided a tip that Schaefer had recently been uploading child pornography to a file-sharing site there.

This case is the product of an investigation by the Federal Bureau of Investigation, the Sacramento Internet Crimes against Children Task Force, and the Sacramento Police Department. Assistant United States Attorneys Matthew G. Morris and Brian A. Fogerty are prosecuting the case.

Schaefer is scheduled to be sentenced by Judge Morrison C. England Jr. on June 25, 2015. Schaefer faces a maximum statutory penalty of 10 years in prison and a $250,000 fine on each of the two counts. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

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

SACRAMENTO, Calif. — On Thursday, April 2, the United States Attorney’s Office, in partnership with the United States Department of Justice, the Matthew Shepard Foundation, the Napa Valley Criminal Justice Training Center, the Central California Intelligence Center, and the Sacramento State Pride Center participated in events commemorating the 5th anniversary of the passage of the landmark Matthew Shepard and James Byrd Jr. Hate Crimes Prevention Act.

In the morning, the U.S. Attorney’s Office hosted local law enforcement representatives at the Central California Intelligence Center (CCIC) in McClellan Park. The four-hour Hate Crimes Prevention Act training featured instruction on federal and state hate crimes statutes, with particular emphasis on the importance of accurate reporting of hate crimes. The program featured several special guest speakers, including Judy Shepard, mother of Matthew Shepard (after whom the statute was named), U.S. Attorney Benjamin Wagner, and representatives from the Civil Rights Division of the U.S. Department of Justice and the Federal Bureau of Investigation. The training is part of the Civil Rights Division’s nationwide effort to provide training on the Hate Crimes Prevention Act to local law enforcement entities.

Later this evening, Judy Shepard, U.S. Attorney Wagner and others will address members of the community at a commemoration of the Act’s anniversary held at California State University Sacramento. Among other things, the event will focus on the history of the Shepard Byrd Hate Crimes Prevention Act, and current federal, state and local enforcement efforts to combat hate crimes.

“The Matthew Shepard and James Byrd, Jr. Hate Crimes Prevention Act is a critical tool in our ongoing fight against invidious bias motivated violence.  The Civil Rights Division is committed to working with our U.S. Attorney partners, local law enforcement, and community members to increase awareness about the Act and to continue our robust enforcement efforts.  This training in Sacramento is the first of five regional trainings and community events that we will co-host around the country to mark the fifth anniversary of the Act's passage.  Our hope is that these events will lead to greater collaboration between the community and law enforcement, more effective strategies to combat hate crimes, and enhanced public safety.”
“The five year anniversary of the Hate Crimes Prevention Act is an occasion to both celebrate the passage of this critical legislation and the significant enforcement actions that have already occurred, and to dedicate ourselves to the work necessary to enforce the Act even more effectively going forward,” said U.S. Attorney Wagner. “Our local law enforcement partners are dedicated to confronting this issue, and the training that my office is providing to them is part of a nationwide effort by the Department of Justice to increase our collective ability to investigate and prosecute hate crimes. We owe a great debt to the Shepard family for their unceasing efforts in support of this cause, and I am particularly grateful for their presence and participation in our efforts in Sacramento.”

Mrs. Shepard, who will speak to the victim’s perspective on hate crimes, said: “On the long road to passing this law, Dennis and I always kept in mind the true purpose, which was to not only see that justice is done for hate crime victims and their loved ones, but more importantly to educate the public about the sheer size of this problem and the community about the exact ways it can protect them. Trainings like these are vital to ensure the Act delivers its full potential.”

The Matthew Shepard and James Byrd Jr. Hate Crimes Prevention Act enables the Justice Department to prosecute crimes motivated by race, color, religion and national origin without having to show that the victim was engaged in a federally protected activity. The Shepard-Byrd Act also empowers the department to prosecute crimes committed because of a person’s sexual orientation, gender identity, gender or disability as hate crimes.

In 1998, Matthew Shepard — a 21-year-old student at the University of Wyoming — was robbed, tortured, tied to a fence along a country road and left to die by two men who offered him a ride home from a local bar. The investigation into Matthew Shepard’s death found strong evidence that his attackers targeted him because he was gay.

That same year, James Byrd Jr. — a 49-year-old African-American man living in Jasper, Texas — accepted a ride home from three men. They drove him to the remote edge of town where they beat him severely, tied him by the ankles to the back of a pickup truck, and dragged him to his death. The three men responsible for his killing were well-known white supremacists.

While the men responsible for the Shepard and Byrd killings were ultimately convicted of murder, none of them was prosecuted for committing a hate crime. At the time these murders were committed, neither Wyoming nor Texas had a hate crimes law, and existing federal hate crimes protections did not include violent acts based on the victim’s sexual orientation and only covered racial violence against those engaged in a federally protected activity, such as voting or attending school.

FRESNO, Calif. — Xue Heu, 38, of Modesto, pleaded guilty today to two counts of wire fraud in connection with a fraudulent real estate investment scheme, United States Attorney Benjamin B. Wagner announced.

According to court documents, between August 2007 and October 2013, Heu solicited individuals to invest in real estate businesses that purchased and sold real estate. Heu claimed to be an officer of Liquid Assets & Land Investments Inc. and Capital Land Investments LLC. In furtherance of the scheme and to persuade the investors that the investment opportunities were legitimate, Heu gave investors fraudulent documents, such as forged and fictitious grant deeds, fraudulent HUD-1 settlement statements, and portfolio listings of properties he claimed he intended to purchase, including properties that had already been sold and were no longer available to purchase. In his plea agreement, Heu admitted to defrauding investors of approximately $412,896.

This case is the product of an investigation by the Federal Bureau of Investigation and the Stanislaus County District Attorney’s Office. Assistant United States Attorney Christopher Baker is prosecuting the case.

Heu is scheduled to be sentenced by U.S. District Judge Lawrence J. O’Neill on June 8, 2015. The maximum statutory penalty for each of the two counts of wire fraud is 20 years in prison and a $250,000 fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

SACRAMENTO, Calif. — Tyler Jordan, 32, of Galt, was sentenced today by United States District Judge Garland E. Burrell Jr. to 17 and a half years in prison and a life-term of supervised release for production of child pornography, United States Attorney Benjamin B. Wagner announced.

According to court documents, Jordan offered files of child pornography for download on a file-trading website. Law enforcement downloaded 60 child pornography files from him. During a subsequent search of Jordan’s computer, law enforcement found over 20,000 images and videos that showed minors engaged in sexually explicit conduct. Jordan admitted to inappropriately touching two children, both of whom were under the age of 12, and taking sexually explicit pictures of them.

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 United States Attorney Justin Lee 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 a two-count indictment Thursday against 10 defendants, charging them with conspiracy to commit criminal copyright infringement and related crimes, and trafficking in counterfeit labels, documentation and packaging, United States Attorney Benjamin B. Wagner announced.

The defendants charged in the indictment are: Victor Flores Fuentes, 38; Edgar Hipatl Rodriguez, 25; Angel Gomez, 34; Ramiro Mendes, 34; Efrain Lozada Rosas, 33; Antonio Morales, 31; Enrique Aguilar, 25; and Eric Ivanez, 21, all of San Jose; Jesus Cuevas Lopez, 24, of southern California; and Cornelio Rojas, 50, of Ceres.

According to court documents, on March 13, 2015, warehouse and office space used by the defendants were found to contain tens of thousands of counterfeit music CDs and movie DVDs. The counterfeit materials included movie titles that were in theatrical release and not yet available for legitimate sale on DVD. The defendants distributed the counterfeit CDs and DVDs for resale in Atwater, Modesto, Stockton, Turlock, and throughout California.

This case is the product of an investigation by the Sacramento Intellectual Property Rights Task Force composed of the Federal Bureau of Investigation and the Sacramento County Sheriff’s Office. Assistant United States Attorney Henry Z. Carbajal III is prosecuting the case.

Cornelio Rojas is in custody and is scheduled to be arraigned in Fresno on Monday, March 30, 2015. The remaining defendants are in custody in San Jose and are expected to make their initial appearance in court in Fresno in the next few weeks.

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

FRESNO, Calif. — After a five–day trial, a federal jury found Ricky Davis, 36, of Modesto, guilty late Wednesday afternoon of production of child pornography and attempted sex trafficking of a minor, United States Attorney Benjamin B. Wagner announced. The trial was held before United States District Judge Anthony W. Ishii.

According to evidence presented at trial, in September 2011 Davis invited a 13-year-old minor to his home for the ostensible purpose of giving her a tattoo. After her arrival, Davis instead took sexually explicit photographs of her and posted them online within an advertisement for prostitution. Davis also provided the minor’s contact information to someone responding to this advertisement. An analysis of digital evidence revealed the photographs to have been on Davis’s cellphone and computer, and metadata from the pictures established that they were taken from a cellphone matching the make and model of defendant’s phone. After the presentation of evidence, the jury deliberated for less than three hours before reaching its verdict.

This case is the product of an investigation by the Federal Bureau of Investigation, the Sacramento Police Department, and the California Highway Patrol, all members of the FBI’s Sacramento-based Child Exploitation Task Force, as well as the South San Francisco Police Department and California Department of Corrections and Rehabilitation. Assistant United States Attorneys Brian W. Enos and Alyson A. Berg are prosecuting the case.

Davis has been in custody since his arrest on January 26, 2012, and is scheduled to be sentenced by Judge Ishii on June 22, 2015. Davis faces a maximum statutory penalty of 30 years in prison for the production of child pornography count and a maximum statutory penalty of life in prison for the attempted sex trafficking count, as well as 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.

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 US Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, PSC marshals federal, state, and local resources to prosecute those who sexually exploit children and to identify victims. For more information about PSC, visit www.usdoj.gov/psc.

FRESNO, Calif. — A federal grand jury returned two separate indictments Thursday, charging one defendant with a laser strike of a police helicopter in Fresno, and one with a laser strike of a sheriff’s helicopter in Bakersfield, United States Attorney Benjamin B. Wagner announced.

Laser Strikes of Fresno PD Helicopter
Johnny Alexander Quenga, 28, of Fresno, was charged with interfering with the safe operation of Air 1, a Fresno Police Department helicopter, and aiming the beam of a green laser at the aircraft. According to court documents, on March 5, 2015, Air 1 was repeatedly struck by a powerful green laser attached to an airsoft rifle that was seized from Quenga’s residence. As a result, it is alleged the airmen experienced various vision difficulties. Quenga is scheduled for arraignment on the indictment today at 1:00 p.m.

Laser Strikes of Kern County Sheriff’s Helicopter
According to court documents, on September 12, 2014, Barry Lee Bowser Jr., 51, of Bakersfield, aimed the beam of a green laser at Air-1, a Kern County Sheriff’s helicopter while it was providing support to ground units responding to a man armed with a gun. The mission was diverted when the cockpit of Air-1 was illuminated by a bright green laser. It is alleged that the illumination caused the pilot to experience vision difficulties. Bowser fled from Bakersfield following the incident last September and was recently arrested in San Luis Obispo. Bowser is scheduled for arraignment on the indictment on March 30, 2015. He was ordered detained as a flight risk.

The case against Quenga is the product of an investigation by the Federal Bureau of Investigation and the Fresno Police Department. The case against Bowser is the product of an investigation by the FBI, Kern County Sheriff’s Office, and the Bakersfield Police Department. Assistant U.S. Attorney Karen A. Escobar is prosecuting both cases.

Quenga faces up to 20 years in prison and a fine of up to $250,000 if convicted of interfering with the safe operation of an aircraft, and five years in prison and a fine of up to $250,000 if convicted of aiming the beam of a laser pointer at an aircraft. Bowser faces a prison term of five years and a fine of up to $250,000. Any sentence imposed on either defendant, 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; both defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.

Reports of laser attacks have increased dramatically in recent years as powerful laser devices have become more affordable and widely available to the public. In 2014, the Federal Aviation Administration (FAA) received 3,894 reports of incidents involving laser strikes on aircraft. In the Eastern District of California, which encompasses 34 counties in the eastern portion of California, there were 150 reported incidents, with the majority in Bakersfield, Fresno, and Modesto. Lasers can completely incapacitate pilots who are trying to fly safely to their destination, endangering their crew members, passengers and people on the ground.

Thousands of laser attacks go unreported every year. If you have information about a lasing incident, or see someone pointing a laser at an aircraft, call your local FBI field office or dial 911.

FRESNO, Calif. —Judy Gutierrez, 22, of Fresno, pleaded guilty today to violating federal law by making a false bomb threat (false information and hoax), United States Attorney Benjamin B. Wagner announced.

According to court documents, on January 22, 2014, Judy Gutierrez emailed a bomb threat to her biology professor at Fresno City College resulting in classes in the science building being cancelled for the day. The science building was evacuated and searched, but no bomb was found by police.

This case is the product of an investigation by the Federal Bureau of Investigation and the State Center Community College District Police Department. Assistant United States Attorney Duce Rice is prosecuting the case.

Gutierrez is scheduled to be sentenced by United States District Judge Anthony W. Ishii on July 27, 2015. Gutierrez 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. — A federal grand jury returned a five-count indictment today against Lagranger Jones, 36, and Lamonte DeShannon Rush, 45, both of Sacramento, charging them with conspiracy to distribute methamphetamine and methamphetamine distribution, United States Attorney Benjamin B. Wagner announced.

According to court documents, between October 2014 and February 2015, Jones and Rush sold methamphetamine during controlled purchases conducted by DEA Special Agents in the Sacramento area. Court documents allege that Jones has a lengthy criminal history.

This case was the product of an investigation by the Drug Enforcement Administration and the Sacramento Police Department. Assistant United States Attorney Jason Hitt is prosecuting the case.

Jones was arrested by federal agents on March 9, 2015. He was ordered detained pending trial on the same day. Rush remains at large.

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

SACRAMENTO, Calif. — Danny M. Shatswell Jr., 44, of Modesto, pleaded guilty today to producing visual depictions of a minor engaged in sexually explicit conduct, United States Attorney Benjamin B. Wagner announced.

According to court documents, Shatswell used a webcam to produce sexually explicit images of a minor. The minor victim reported to law enforcement that Shatswell was abusing her. When they searched his electronic storage devices and equipment they recovered sexually explicit images that Shatswell produced of his victim in 2010 and 2011.

This case is the product of an investigation by the Modesto Police Department, the Federal Bureau of Investigation, and the Sacramento County Sheriff's Office’s High Tech Crimes Task Force. Assistant U.S. Attorney Michelle Rodriguez is prosecuting the case.

Shatswell is scheduled to be sentenced on June 4, 2015, by U.S. District Judge Troy L. Nunley. Shatswell faces a sentence of 15 years to life in prison. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

FRESNO, Calif. — United States Attorney Benjamin B. Wagner announced today the unsealing of a 10-count indictment following the arrest of Raul Oropeza Lopez, 47, and Ana Maria Oropeza, 41, both of Delano. The Oropezas are charged in the indictment with mail fraud and conspiracy to commit mail fraud in connection with a scheme to submit fraudulent claims for unemployment benefits.

According to court documents, Raul Oropeza Lopez obtained social security numbers, names, and other personal identifying information of U.S. citizens and legal residents and then used the information to provide undocumented workers with false identities so they could work in the United States as farm laborers. Then, when the workers were laid off at the end of the growing season, Oropeza and his wife allegedly filed fraudulent unemployment insurance claims in the names of the assumed identities, relying on the work performed by the undocumented workers to claim unemployment insurance benefits for the Oropezas’ benefit. Over a period of six years, Oropeza and his wife submitted more than 520 fraudulent unemployment insurance claims on behalf of over 70 individuals, collecting more than $1.8 million.

This case is the product of a joint investigation by the U.S. Department of Labor, Office of Inspector General; U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); Social Security Administration, Office of Inspector General; the Bureau of Alcohol, Tobacco, Firearms and Explosives; United States Postal Inspection Service; and the California Employment Development Department, Criminal Investigations Division. Assistant United States Attorney Mark J. McKeon is prosecuting the case.

Both defendants were released on bond. Their next court appearance is before Magistrate Judge Sheila K. Oberto on May 4, 2015.

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

FRESNO, Calif. — Three members of the same family entered guilty pleas today in connection with a $5.6 million mortgage fraud scheme in Bakersfield, U.S. Attorney Benjamin B. Wagner announced.

Bakersfield residents Eliseo Jara Jr., 35, and his brother, Sergio Jara, 33, pleaded guilty to conspiracy to commit bank fraud, mail fraud, and wire fraud. Sergio Jara’s wife, Melissa Jara, 34, pleaded guilty to wire fraud.

According to court documents, from 2007 to 2010, the Jara brothers conspired with others to use straw buyers to purchase residential properties in Bakersfield developed by Jara Brothers Investments (JBI) and Pershing Partners LLC. The conspirators paid straw buyers to purchase the properties from JBI and Pershing Partners, and funded the purchases using loans they obtained for the straw buyers based on false and fraudulent loan applications. Melissa Jara admitted to causing false loan applications and supporting documents to be submitted to a lender in order for a straw buyer to finance the purchase of a property from an LLC that she owned and controlled.

As part of their plea agreements, each defendant agreed to forfeit their interests in six properties in Bakersfield, a 2007 Lexus, and approximately $110,419 seized from a bank account. Additionally, Eliseo Jara agreed to a personal forfeiture money judgment of $5,664,250. Sergio Jara agreed to a personal forfeiture money judgment of $4,743,500. Melissa Jara agreed to a personal forfeiture money judgment of $534,750. Melissa Jara also agreed to deposit $100,000 with the Court toward her victim restitution obligation prior to her sentencing hearing.

This case is the product of a joint investigation by the Internal Revenue Service‑Criminal Investigation and the Federal Bureau of Investigation. Assistant U.S. Attorneys Kirk E. Sherriff, Henry Z. Carbajal III, and Megan A. S. Richards are prosecuting the case.

The maximum sentence for the conspiracy charge and the wire fraud charge is 30 years in prison and a $1 million fine. The actual sentence will be determined at the discretion of the court after consideration of any applicable statutory sentencing factors and the Federal Sentencing Guidelines, which take into account a number of variables.

Four co-defendants have previously pleaded guilty. Antonio Perez-Marcial was sentenced on May 12, 2014 to 46 months in prison. Arlene Mojardin is scheduled to be sentenced on May 18, 2015. Candace Gonzales is scheduled to be sentenced on June 8, 2015. Ricardo Salinas is set for sentencing on June 29, 2015. The indictment charges two additional defendants, who are set to proceed to trial on April 28, 2015, before Judge Ishii.  The charges as to these defendants are only allegations; they are presumed innocent until and unless proven guilty beyond a reasonable doubt.

FRESNO, Calif. — David Edward Hampton Jr., 34, of Taft, was sentenced today by United States District Judge Lawrence J. O’Neil to 10 years and one month in prison for possession with intent to distribute methamphetamine and heroin, United States Attorney Benjamin B. Wagner announced.

According to court documents, in February 2014, agents learned that Hampton had mailed a package to Rapid City, South Dakota from Taft. It was believed that the package was destined for one of Hampton’s methamphetamine distributors. The package was intercepted and found to contain approximately 444 grams of methamphetamine. On March 24, 2014, Hampton mailed another package from Taft to South Dakota, which was also seized and found to contain approximately 167 grams of methamphetamine.

On March 25, 2014, a federal search warrant was executed on Hampton’s residence and agents found approximately 459 grams of methamphetamine and 16 grams of heroin. Hampton admitted that the narcotics seized from his residence were his and that he intended to distribute them for profit.

This case was the product of an investigation by the Violent Crime Task Force which includes the Bakersfield Police Department, the Kern County Sheriff’s Office, the Kern County Probation Office, and the Federal Bureau of Investigation. Assistant United States Attorney Brian K. Delaney is prosecuting the case.

FRESNO, Calif. —Sandi Marie Hollifield, 49, of Fresno, pleaded guilty today to theft from a program receiving federal funds, United States Attorney Benjamin B. Wagner announced.

According to court documents, Hollifield worked under contract at Galen College, a now-defunct vocational college in Fresno, as a bookkeeper. Beginning in September 2008, Hollifield embezzled money from Galen College by creating false invoices for supplies and charging Galen College for those supplies. These charges caused Galen College to issue checks paying the false invoices to Hollifield under the name of her fictitious business, “Total Business Forms.” Between September 15, 2008, and April 13, 2010, Hollifield deposited Galen College checks made payable to Total Business Forms totaling approximately $85,448.

This case is the product of an investigation by the Department of Education, Office of Inspector General and the Federal Bureau of Investigation. Assistant United States Attorney Henry Z. Carbajal III is prosecuting the case.

Hollifield is scheduled to be sentenced by United States District Judge Lawrence J. O'Neill on June 15, 2015. Hollifield faces a maximum statutory penalty of 10 years in prison and a $250,000 fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

SACRAMENTO, Calif. — Terrylyn McCain, 67, of Stockton, was found guilty today by a federal jury of a scheme to defraud the United States by filing false tax returns and buying gold with the proceeds of the fraud, United States Attorney Benjamin B. Wagner announced.

The jury found McCain guilty of four counts of mail fraud in the fraud scheme for mailing false tax returns, four counts of making false claims against the United States by falsifying personal income tax returns for tax years 2005 to 2008, and three counts of money laundering for buying gold with proceeds of the fraud. After a five-day trial, the jury deliberated less than two hours.

According to court documents and evidence introduced at trial, McCain mailed tax returns to the IRS and claimed that banks, tow truck companies, department stores, interior designers and even her gardener had withheld income due to her. To support her scheme, she utilized false documents that indicated significant tax withholdings, including 1099–OID forms that were purportedly issued by financial institutions such as Bank of Stockton and national retailers such as Costco and Target. In reality, funds were never withheld, the 1099–OID forms were fraudulent, and McCain’s tax returns were falsely inflated by hundreds of thousands of dollars.

In total, McCain filed at least 12 fraudulent returns that sought nearly $3 million in tax refunds. In just one instance, early in the scheme, the IRS refunded $156,373 to McCain. Within the month, she had used the refund money to purchase approximately $62,000 in gold coins, forming the basis for the money laundering charges.

According to documents and evidence introduced at trial, the IRS attempted to collect the money it mistakenly paid McCain in response to one of her fraudulent tax returns. The trial evidence revealed that McCain refused to return the mistaken payment, going so far as to fraudulently prepare a counterfeit cashier’s check using an IRS payment voucher to satisfy her tax debt.

U.S. Attorney Wagner said: “As millions of Americans prepare to file their tax returns in the coming weeks, the jury’s swift guilty verdict on all counts in this case is a reminder that these few who attempt to cheat their country should expect little sympathy from federal law enforcement or from the citizens who are called to serve their civic duty as jurors.”

This case is the product of an investigation by the Internal Revenue Service-Criminal Investigation. Assistant United States Attorneys William S. Wong and Kevin Khasigian are prosecuting the case.

McCain is scheduled to be sentenced by United States District Judge Troy L. Nunley on June 4, 2015. She was ordered detained in custody pending sentencing. She faces a maximum sentence of 20 years in prison for the mail fraud counts, five years in prison for the false claims against the United States counts, and 20 years in prison for the money laundering counts. 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. — As part of the Department of Justice’s ongoing commitment to strengthening the relationship between law enforcement and the communities they serve and protect, Attorney General Eric Holder announced that Stockton, California has been selected as one of only six cities to serve as a pilot site for the National Initiative for Building Community Trust and Justice.

United States Attorney Benjamin Wagner was present in Washington D.C. with the Attorney General when the formal announcement of Stockton’s selection was made earlier today. This $4.75 million national initiative will seek to assess the police-community relationship in each of the six pilot sites, as well as develop a detailed site-specific plan that will enhance procedural justice, reduce bias and support reconciliation. The other five pilot sites are Birmingham, Alabama; Ft. Worth, Texas; Gary, Indiana; Minneapolis, Minnesota; and Pittsburgh, Pennsylvania.

Stockton’s selection was based in part on its size, crime rates, and demographics. However, a critical element in its selection was the Stockton Police Department's willingness to openly participate in this initiative.

Stockton’s City Manager Kurt Wilson said, “Chief Eric Jones is one of the most respected law enforcement leaders in the country. He has been fully engaged locally, statewide, and nationally. We are thankful for his leadership, and by his team joining this initiative, we feel it will boost these leading edge efforts because some of his evidence-based strategies that are already underway fit into this model.”

“The Department of Justice is committed to using innovative strategies to enhance procedural justice, reduce bias and support reconciliation in communities where trust has been eroded,” said Attorney General Holder. “By helping to develop programs that serve their own diverse experiences and environments, these selected cities will serve on the leading edge of our effort to confront pressing issues in communities around the country.”

“I am grateful for Stockton’s enthusiastic participation in this initiative,” said U.S. Attorney Wagner. “Recent events across the country highlight the profound consequences where there is a lack of trust between law enforcement and the communities it serves. Stockton is committed to building and maintaining trust with its community, and ensuring that the difficulties experienced elsewhere do not occur here. Through this initiative, Stockton will set examples that can be used throughout our District.”

“The Stockton Police Department places a high value on building strong relationships with our citizens, and many recent efforts have been undertaken in the City of Stockton to build community trust,” said Chief Eric Jones. “I am proud of the men and women of the Stockton Police Department because they have all helped us to be successful with our Ceasefire Crime-Fighting Strategy and our Police Legitimacy and Procedural Justice Training and application.”

Attorney General Holder also announced that the Department of Justice is providing additional training and technical assistance to police departments and communities that are not pilot sites. Through the Office of Justice Program’s Diagnostic Center (www.OJPDiagnosticCenter.org), police departments and community groups can request training, peer mentoring, expert consultation and other types of assistance on implicit bias, procedural justice and racial reconciliation. Additionally, the initiative launched a new online clearinghouse that includes up-to-date information about what works to build trust between citizens and law enforcement. The clearinghouse can be found at www.trustandjustice.org.

The Justice Department established the National Initiative for Building Community Trust and Justice as part President Obama’s groundbreaking launch of the My Brother’s Keeper initiative, which seeks to create opportunities for all young people in this country—regardless of their background—to improve their lives and reach their full potential.

The three-year grant has been awarded to a consortium of national law enforcement experts from John Jay College of Criminal Justice, Yale Law School, the Center for Policing Equity at UCLA, and the Urban Institute. The initiative is guided by a board of advisors that includes national leaders from law enforcement, academia and faith-based groups, as well as community stakeholders and civil rights advocates. In a holistic approach, the initiative simultaneously addresses the tenets of procedural justice, reducing implicit bias and facilitating racial reconciliation. The initiative complements and is advised by other Justice Department components such as the Office of Justice Programs, the Office of Community Oriented Policing Services, the Office on Violence Against Women, the Civil Rights Division and the Community Relations Service.

SACRAMENTO, Calif. — One defendant pleaded guilty and another was sentenced today in two related cases involving the theft of military equipment that was being inventoried at the U.S. Army base in Herlong, California, United States Attorney Benjamin B. Wagner announced.

Tony Herrin, 36, of Reno, Nevada, pleaded guilty today to theft of government property, and Devon Biggs, 38, formerly of Reno, Nevada, was sentenced today by U.S. District Judge Kimberly J. Mueller to 16 months in prison and restitution of $200,000 for the theft of government property.

According to court documents, Herrin and Biggs worked as civilian employees at the Sierra Army Depot (SIAD) in Herlong. As part of their job responsibilities, Biggs and Herrin received, catalogued, and inventoried military equipment returned from Iraq and Afghanistan. Biggs and Herrin worked in the same building, and the two stole numerous items of sophisticated military equipment. Specifically, Herrin played a role in stealing 10 Taser devices, three Vectronix systems used to detect targets (total value $221,787), six military grade flashlights (total value $11,267), and 25 thermal imaging sights. The total value of all these items is approximately $411,000.

Biggs also stole numerous items of sensitive military equipment: machine gun components, night vision goggles, laser GHOST Illumination technology, and low-light video recording equipment.

These cases are the product of investigations by the Law Enforcement Division of the United States Army, Naval Criminal Investigative Service, and the Federal Bureau of Investigation. Assistant United States Attorneys Jean Hobler and Christiaan Highsmith are prosecuting the cases.

Herrin is scheduled to be sentenced by United States District Judge Kimberly J. Mueller on May 27, 2015. Herrin faces a maximum statutory penalty of 10 years in prison and a $250,000 fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

SACRAMENTO, Calif. — A federal grand jury returned a three-count indictment today against Jeffrey Lamson, 51, of El Dorado Hills, charging him with wire fraud, United States Attorney Benjamin B. Wagner announced.

According to court documents, from at least 2009 through 2011, Lamson embezzled over $400,000 from a company located in Placer and Sacramento Counties while he served that company as controller. Lamson used company funds to make unauthorized payments to himself and others and made payments to a fictitious vendor, controlled by Lamson, for services that were never performed.

This case is the product of an investigation by the Internal Revenue Service‑Criminal Investigation. Assistant United States Attorneys Shelley D. Weger and Jean M. Hobler are prosecuting the case.

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

FRESNO, Calif. — Arlene Jeanette Mojardin, 32, of Bakersfield, pleaded guilty today to conspiracy to commit bank fraud, mail fraud, and wire fraud, in connection with a mortgage fraud scheme in Bakersfield, U.S. Attorney Benjamin B. Wagner announced.

According to court documents, from 2007 to 2010, Mojardin conspired with others to use straw buyers to purchase residential properties in Bakersfield. They paid straw buyers to purchase properties developed by Jara Brothers Investments (JBI) and Pershing Partners LLC and funded the purchases using loans they obtained based on false and fraudulent loan applications. The loan applications contained false statements concerning the straw buyers’ employment status, income, assets, intent to occupy the properties as their personal residences, and source of down payments for the purchase of the properties. The conspirators concealed from the lenders that the property developers funded some down payments. The conspirators also submitted false supporting documentation to lenders such as false and altered bank account statements purporting to show that the straw buyers had a high bank account balances, false verifications of the straw buyers’ bank account funds, false verifications of rent purporting to be from straw buyers’ landlords, false pay stubs, and false verifications of employment.

Mojardin was a licensed real estate agent and handled many of the real estate transactions in furtherance of the conspiracy. She was also employed at relevant times at JBI, was a property buyer from Pershing Partners on at least two of the real estate transactions in the conspiracy, and obtained loans based on false and fraudulent information. Mojardin received proceeds from the conspiracy including payments for purchasing property as a nominee buyer and payments for acting as the real estate agent on many of the other transactions in the conspiracy. Mojardin admitted she caused lenders approximately $3,713,600 in losses due to her role in the conspiracy.

This case is the product of an investigation by the Internal Revenue Service‑Criminal Investigation and the Federal Bureau of Investigation. Assistant U.S. Attorneys Kirk E. Sherriff, Henry Z. Carbajal III, and Megan A. S. Richards are prosecuting the case.

Mojardin is scheduled to be sentenced on May 18, 2015, by Senior United States District Judge Anthony W. Ishii. The maximum sentence for the conspiracy charge is 30 years in prison and a $1 million fine. The actual sentence will be determined at the discretion of the court after consideration of any applicable statutory sentencing factors and the Federal Sentencing Guidelines, which take into account a number of variables.

Co-defendant Antonio Perez-Marcial was sentenced on May 12, 2014, to 46 months in prison for his role in the conspiracy. Co-defendant Candace Gonzales previously pleaded guilty to conspiracy to commit bank fraud, mail fraud, and wire fraud, and her sentencing is set for June 8, 2015. Co-defendant Ricardo Salinas previously pleaded guilty to bank fraud, and his sentencing is set for June 29, 2015. The indictment charges five additional defendants, who are set to proceed to trial on April 28, 2015, before Judge Ishii. The charges as to these defendants are only allegations; they are presumed innocent until and unless proven guilty beyond a reasonable doubt.

FRESNO, Calif. — Cedar Pharmacy has agreed to pay $1 million to settle claims that it failed to properly record hundreds of transactions involving controlled substances, failed to maintain complete and accurate records, and failed to follow prescription issuance guidelines in violation of the Controlled Substances Act (CSA), United States Attorney Benjamin Wagner announced today.

An audit and investigation of Cedar Pharmacy began in April 2013 when a drug offender on probation was found to be in possession of approximately $9,000 in cash and 34 prescription receipts with different patient names and addresses. All of the prescription receipts were from Cedar Pharmacy. The prescriptions, which were primarily for oxycodone, had been written by Dr. Jose Luis Flores who surrendered his medical license on April 16, 2014, following an investigation by the Medical Board of California. Cedar Pharmacy disclosed that the prescriptions had been filled a month earlier for a man who had paid in cash and had brought in 30 different driver’s licenses.

Cedar Pharmacy has also agreed to comply with a detailed action plan developed by the U.S. Attorney’s Office and the Drug Enforcement Administration. Per the action plan, employees who handle controlled substances must immediately complete a training program that addresses methods of detecting and preventing diversion as well as the requirements of federal law that a prescription may not be filled when a pharmacist has reason to know that it was issued for other than a legitimate medical purpose or by a practitioner acting outside the usual course of professional practice.

Should Cedar Pharmacy successfully complete the terms of the action plan and have no material violations, the United States will reduce the amount ultimately paid in settlement. The payment and action plan resolve the United States’ claims that Cedar Pharmacy violated the CSA.

“The abuse of prescription painkillers has become epidemic,” said United States Attorney Wagner. “The Controlled Substances Act is a tool to assist the DEA with better monitoring the movement of prescription drugs to end users. When pharmacies are lax in their record keeping or supervision of their drug-dispensing operations as required by the CSA, opportunities arise for the diversion of powerful drugs to unintended users who may be injured by them. Our office will continue to work with our law enforcement partners to investigate these cases and enforce federal law.”

“This significant civil penalty demonstrates our commitment to preventing the diversion of these substances by holding those accountable who are responsible for their distribution. The public can report illicit pharmaceutical activities online at www.DEAdiversion.usdoj.gov,” stated DEA Acting Special Agent in Charge Bruce C. Balzano. “The successful outcome of this investigation represents cooperation between DEA, the Clovis Police Department, Fresno County Sheriff’s Office, Kings County Sheriff’s Office and the California State Board of Pharmacy.”

Assistant United States Attorney Marilee L. Miller prosecuted the case.

FRESNO, Calif. — Martin Rojas-Cuamba (Rojas), 46, of Escondido, was sentenced today to 364 days in custody for smuggling cash proceeds from the cultivation of marijuana in Tulare, Kern, and San Diego Counties, U.S. Attorney Benjamin B. Wagner announced. U.S. District Judge Lawrence J. O’Neill also ordered the forfeiture of $53,750 in drug proceeds that was seized from Rojas’ residence.

According to court documents, Rojas intended to smuggle $88,950 in cash from the United States to Mexico to evade the currency transaction reporting requirement. Rojas was connected to several marijuana cultivation operations on agricultural lands in Terra Bella and Bakersfield. During a search of his residence, law enforcement officers seized $53,750 in cash. During a search of the cultivation operation in Terra Bella, law enforcement officers also seized records showing wire transfers of money to Mexico from Rojas’ address in Escondido.

This case was the product of an investigation by the U.S. Forest Service, the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the Drug Enforcement Administration, the Tulare County Sheriff’s Office, the Kern County Sheriff’s Office, the Ventura County Sheriff’s Office, the San Luis Obispo County Sheriff’s Office, and the Escondido Police Department. Assistant United States Attorney Karen Escobar prosecuted the case.

Fresno, California –Miguel Marquez, 30, of Bakersfield, was sentenced today to 14 years and eight months in prison for conspiracy to distribute and possess with intent to distribute methamphetamine, United States Attorney Benjamin B. Wagner announced. U.S. District Judge Lawrence J. O’Neill also ordered Marquez to forfeit over $30,000.

According to court documents, an investigation indicated that on October 22, 2014, Marquez would be receiving a shipment of crystal methamphetamine from his source of supply. On that day, task force agents set up surveillance at Marquez’s residence. Agents observed Marquez meet with two individuals who drove to Marquez’s residence from the Los Angeles area to deliver the suspected narcotics. Agents arrested Marquez and the two individuals identified as Luis Alfonso Mendivil, 23, of Riverside, and Jonathen Leyva, 28, of Rialto. Subsequent searches resulted in the seizure of $30,630 from Mendivil and Leyva’s vehicle, approximately 2.6 kilograms of crystal methamphetamine from inside Marquez’s home, and a firearm. In addition to the crystal meth seized from Marquez’s residence, officers also located a stash location just outside of Marquez’s home where officers seized a stolen loaded machine pistol and approximately 1.9 kilograms of additional crystal methamphetamine.

Mendivil and Leyva pleaded guilty to use of an interstate facility to aid racketeering, and were sentenced to five years in prison.

This case is the product of an investigation by the Drug Enforcement Administration and the Kern County Sheriff’s Office. Assistant United States Attorney Brian K. Delaney is prosecuting the case.

FRESNO, Calif. –Vincent Deleon, 32, of Bakersfield, was sentenced today by United States District Court Judge Lawrence J. O’Neil to five years and nine months in prison for possession of a firearm by a previously convicted felon, United States Attorney Benjamin B. Wagner announced.

On November 6, 2013, the FBI’s Violent Crime Task Force received information that Deleon, who was wanted on two Kern County felony warrants, was in an apartment on Monterey Street in Bakersfield. Task force agents set up surveillance and when Deleon came out of the residence, they identified themselves and told him to stop. Deleon immediately fled from the agents and in his flight, threw a Smith & Wesson 9 mm pistol over a fence. Agents arrested Deleon and found the firearm at the adjacent property.

This case was the product of an investigation by the Violent Crime Task Force, which includes Federal Bureau of Investigation, the Kern County Sheriff’s Office, and the Kern County Probation Office. Assistant U.S. Attorney Brian K. Delaney prosecuted the case.

SACRAMENTO, Calif. — On Thursday, a federal judge ordered Deepal Wannakuwatte, 64, of Sacramento, to pay $108,199,425 in restitution to victims of his long-running fraud scheme, United States Attorney Benjamin B. Wagner announced today. This ruling concludes the federal criminal prosecution; civil proceedings in the United States Bankruptcy Court are ongoing.

On November 13, 2014, United States District Judge Troy L. Nunley sentenced Wannakuwatte to 20 years in prison and ordered him to forfeit multiple properties, vehicles, business interests, and bank accounts totaling at least $3.5 million to be used to provide restitution to victims.

According to court documents, from 2002 to 2014, Wannakuwatte convinced nearly 200 victims, including individuals, corporate entities, and financial institutions, to invest in a number of business opportunities by misrepresenting the financial worth of himself and his companies. Ultimately, Wannakuwatte obtained well over $230 million from his victims, some of which was returned to victims as illusory profit payments. Contrary to his representations, Wannakuwatte used much of the money he obtained to pay himself and his family, make lulling payments to participants in his fraudulent investment schemes, and pay outstanding debts unrelated to his false representations.

“Today’s order brings to an end the criminal proceedings against Mr. Wannakuwatte, who operated the largest Ponzi scheme in Sacramento history,” said U.S. Attorney Wagner. “The agony of his victims, however, continues. While Mr. Wannakuwatte contemplates his situation from behind prison walls in the coming years, my office will continue to try to identify and liquidate ill-gotten gains that rightfully belong to his victims.”

This case was the product of an investigation by the Federal Bureau of Investigation, the Internal Revenue Service, Criminal Investigation, and the Federal Deposit Insurance Corporation, Office of Inspector General, Office of Investigations. Assistant United States Attorneys Michael M. Beckwith and Kevin C. Khasigian prosecuted the case.

FRESNO, Calif. — A federal grand jury has returned separate indictments against Mikkey Santos, 18; Tyrone Smith, 19; Javier Lamadrid, 33; Humberto Garcia, 23; and Michael Johnson, 35, all of Fresno; and Samuel Zaragoza-Villanueva, 37, of Mexico, for violating federal firearm laws, United States Attorney Benjamin B. Wagner announced today.

The indictments resulted from joint investigations by the Fresno Police Department, the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the Department of Homeland Security/Homeland Security Investigations (HSI), and the Federal Bureau of Investigation (FBI).  The cases are part of Project Safe Neighborhoods, which is a joint initiative to combat gang and gun violence.  The cases are being prosecuted by Assistant U.S. Attorney Kimberly Sanchez.

Samuel Zaragoza-Villanueva was charged with being an alien in possession of ammunition.  According to court documents, on February 26, 2015, members of the Multi-Agency Gang Enforcement Consortium (MAGEC) conducted a search at the defendant’s residence and seized ammunition.  The government alleges that the defendant is a citizen and native of Mexico, and is unlawfully present in the United States.

Mikkey Santos was charged with possession of an unregistered firearm.  According to court documents, on February 12, 2015, Fresno Police Department officers served a search warrant at the defendant’s apartment in Fresno.  An unregistered rifle, with a barrel length of less than 16 inches and an overall length less than 26 inches, was recovered during the search.

Tyrone Smith was charged with being a felon in possession of a firearm.  According to court documents, on February 16, 2015, Fresno Police Department officers attempted to stop a vehicle in which the defendant was a passenger.  The vehicle fled at high speed and officers pursued it.  The defendant threw a handgun out of the window during the pursuit, and was ultimately apprehended.

Javier LaMadrid was charged with being a felon in possession of a firearm.  According to court documents, on February 4, 2015 Fresno Police Department officers made a traffic stop on a vehicle in which the defendant was a passenger.  A small child and another adult female were also in the car.  Police found a loaded handgun between the passenger-side door and the passenger seat where the defendant was seated. 

Humberto Garcia was charged with being a felon in possession of a firearm.  According to court documents, on February 21, 2015, the defendant was in possession of a shotgun.  The defendant has multiple prior felony convictions.

Michael Johnson was charged with being a felon in possession of a firearm.  According to court documents, on February 19, 2015, the defendant was in possession of a Glock, .40 caliber firearm.  The defendant has multiple prior felony convictions.

“ATF remains committed to working with Fresno Police Department and our other federal partners to combat gun violence and remove violent offenders from the streets of Fresno,” said Joseph M. Riehl, Special Agent in Charge of the ATF San Francisco Field Division.  “Project Safe Neighborhoods is one way that ATF agents are working to remove guns from the hands of convicted felons and violent criminals.”

If convicted, the defendants face up to 10 years imprisonment, a $250,000 fine (except for Santos, who faces up to a $10,000 fine), and 3 years of supervised release. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines. The charges are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.

SACRAMENTO, Calif. — After a seven–day trial, a federal jury found Moo Hoon “Steve” Kim, 54, resident of Cypress, Calif., guilty today of mail fraud, United States Attorney Benjamin B. Wagner announced.  The trial was held before United States District Judge William B. Shubb.

Between 2006 and 2009, Kim was responsible for bringing over $35 million in untaxed other tobacco products (“OTP”) into the State of California.  OTP is any tobacco product other than cigarettes, and consists primarily of cigars, chewing tobacco, and leaf tobacco.

The evidence at trial showed that Kim went to great lengths to conceal his OTP purchases from the State.  He used front companies, set up by others at his direction, to disguise his illegal purchases and subsequent sales of untaxed OTP from out-of-state sources.  These companies included KS Wholesale located in Vernon, Calif., and Cheap Cig Distributor located in Paramount, Calif.  Kim also used another front company as a retail outlet for some of the untaxed OTP that he sold through his company, Jobber’s Wholesale.  That business was Discounted Tobacco located in Long Beach, Calif.  As a result of Kim’s scheme, the State of California was defrauded of over $16 million in excise taxes.  A large percentage of the proceeds of the excise tax are used to fund California’s early childhood development program, First 5 California.

This case is the product of investigations by a specialized task force comprising the U.S. Attorney’s Office, the California Attorney General’s office, the Bureau of Alcohol, Tobacco, Firearms, and Explosives, and the California State Board of Equalization.  For the last several years, these offices have supported a task force dedicated to combating the systemic problem of tobacco excise tax evasion in California.  In 2007, the BOE estimated that the state lost approximately $90 million in unstamped tobacco excise taxes to contraband distributors, and approximately $120 million in excise taxes for taxed stamped tobacco like cigarettes.  Because California has a relatively high tobacco excise tax rate, it is a frequent target for contraband tobacco smugglers and tax evaders.  Assistant United States Attorney Michael D. Anderson and U.S. D.O.J. Antitrust Division Trial Attorney Richard A. Powers, designated as a Special Assistant United States Attorney, prosecuted the case.

“The fraudulent importation and sale of untaxed tobacco punishes honest merchants who play by the rules, and it deprives the State of California of needed tax revenue,” said U.S. Attorney Wagner.  “We are gratified by the jury’s verdict, as the conviction of Steve Kim is a significant milestone in our ongoing partnership with the State of California and the ATF to put an end to this practice.” 

“ATF works diligently to investigate and disrupt tobacco traffickers. These investigations are arduous and require a long-term commitment from members of our task force and prosecution team,” stated ATF Special Agent in Charge, Joseph M. Riehl.  “Today’s guilty verdict is a win for law enforcement, the state of California, and our community.”

“Today’s verdict is a significant win in our battle against the underground economy,” said Board of Equalization Chairman Jerome E. Horton. “It reinforces the need for continued, persistent, and intelligent prosecution of these types of crimes."

Kim is scheduled to be sentenced by Judge Shubb on June 1, 2015.  Kim faces a maximum statutory penalty of 20 years in prison and a $250,000 fine.  The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

SACRAMENTO, Calif. — Alan David Tikal, 46, formerly of Brentwood, Calif., was sentenced today by United States District Judge Troy L. Nunley to 24 years in prison for his convictions on eleven counts of mail fraud and one count of mail fraud relating to a foreclosure rescue scam, United States Attorney Benjamin B. Wagner announced.  Tikal was convicted following a bench trial before Judge Nunley on September 15, 2014.

According to evidence presented at trial, between January 7, 2010, and August 20, 2013, Tikal was the principal behind a business known as KATN, which targeted distressed homeowners experiencing difficulties making their existing monthly mortgage payments.  Many of the victims did not speak English.  Tikal promised to reduce their outstanding mortgage debt by 75%, falsely claiming he was a registered private banker with access to an enormous line of credit and the ability to pay off homeowners’ mortgage debts in full.  Tikal told homeowners that in return for various fees and payments, their existing loan obligations would be extinguished, and the homeowners would then owe new loans to Tikal in an amount equaling 25% of their original obligation.  In reliance upon misrepresentations made by Tikal, many of these homeowners stopped making payments on their existing mortgage loans and lost their homes to foreclosure as a result. 

In fact, Tikal never made any payments to financial institutions on behalf of homeowners in satisfaction of their pre-existing mortgage debt obligations; the purported “loan” payments paid to Tikal were simply spent by himself, his family and his associates for personal use; and there was not a single instance in which a homeowner’s debt was paid, forgiven or otherwise extinguished as a result of the mortgage relief program.  In all, Tikal and his associated convinced more than 1,000 homeowners in California and other states to participate in the program.  As a result of their participation, many homeowners became delinquent on their loans and ultimately had their homes foreclosed upon.  Those homeowners paid more than $5,800,000 in fees and monthly payments into the program.  Of that, more than at least $2,500,000 was paid into accounts controlled by Tikal and/or his family. 

In sentencing Tikal, Judge Nunley referenced the victims who, as a result of their participation in Tikal’s scam, “can’t reside in houses they had, in some instances, spent their entire lives trying to pay off.”  Judge Nunley called Tikal “the mastermind behind this whole scheme,” and said Tikal was deserving of the sentence he was receiving.

“The financial crisis that hit our communities so hard made it very difficult for a lot of people to make ends meet,“ said U.S. Attorney Wagner.  “Alan Tikal cynically took advantage of the desperation those people felt for his own profit, stealing payments meant to preserve family homes.  Although we cannot undo the harm Tikal inflicted, today’s sentence provides a measure of justice.”  

“Alan Tikal’s actions were illegal and will not be tolerated in California.  He and his partners defrauded hundreds of hard-working Californians who were fighting to keep their homes during our state’s foreclosure crisis,” Attorney General Harris said. “This predatory scheme robbed families of their life savings and in many cases, their homes. I thank our California Mortgage Fraud Strike Force and the U.S. Department of Justice for their work to bring these individuals to justice.”

“The defendant preyed on desperate homeowners who were caught up in the financial melt-down and looking for ways to stay in their homes”, said José M. Martínez, Special Agent in Charge, IRS-Criminal Investigation. “Rather than making payments to the banks, the defendants pocketed the money.  Tikal lived a lavish lifestyle with new cars, chartered private airplane flights and a $5,000 suit.  While this sentence cannot reverse the damage caused by Mr. Tikal and his co-defendants, it highlights the ongoing commitment of IRS-CI to hold accountable those involved in these types of crimes.”

“Justice was served today when Tikal was sentenced to 24 years in federal prison for defrauding struggling homeowners out of millions of dollars, sending their homes into foreclosure, and destroying their lives,” said Christy Romero, Special Inspector General for TARP (SIGTARP).  “Tikal’s silver tongue and gilded promises enticed victims, many of whom weren’t fluent in English and were simply holding out hope of saving their homes from foreclosure, yet Tikal’s words were nothing more than lies and gibberish that he masqueraded as financial sophistication.  Tikal’s arrogance was supreme; he named his scheme ‘KATN Trust,’ short for ‘Kicking Ass, Taking Names,’ and even after being charged and locked-up, he continued to operate the scam from his jail cell with the help of co-conspirators.  Today’s sentence is a warning to anyone either considering or engaged in a scheme to defraud struggling homeowners and a reminder of the seriousness and moral reprehensibility of their crime.  SIGTARP stands united with our law enforcement partners to bring swift justice to perpetrators of fraud related to TARP.”

This case is a joint prosecution by the United States Attorney’s Office for the Eastern District of California and the California Attorney General’s Office.  It is the product of extensive investigation by the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), Internal Revenue Service - Criminal Investigation, the California Department of Justice, and the Stanislaus County District Attorney’s Office. Assistant United States Attorney Philip Ferrari and California Deputy Attorney General Maggy Krell are prosecuting the case.

A hearing on restitution has been scheduled for March 26, 2016.  Co-defendant Ray Kornfeld was previously sentenced to a term of imprisonment of 5 years.  Co-defendant Tamara Tikal previously entered a guilty plea and is scheduled to be sentenced by Judge Nunley on April 23, 2015.

SACRAMENTO, Calif. — Dana Faulkner, 48, resident of Oakland, CA, was sentenced today by United States District Judge John A. Mendez to one year in prison for conspiring to commit mail fraud and make false statements in loan applications, United States Attorney Benjamin B. Wagner announced.  In addition, Faulkner was ordered to pay over $3 million in restitution to defrauded financial institutions. 

Faulkner is the ninth defendant to be sentenced as the result of a large scale mortgage fraud scheme operating out of the Elk Grove headquarters of Liberty Real Estate & Investment Company and Liberty Mortgage Company.  Hoda Samuel, the owner and principal operator of both companies, was convicted after a jury trial in January of 2013, and is currently serving a ten year prison sentence. 

According to Faulkner’s plea agreement, and to the evidence presented at Samuel’s trial, in 2006 and 2007 the defendants participated in a scheme to defraud whereby misrepresentations were made to various financial institutions to convince them to finance the purchase of residential properties.  Loan applications prepared by Liberty Mortgage Company misrepresented borrowers’ abilities to pay back loans, by overstating and/or falsifying employment, income and assets.  In addition, the defendants drafted purchase contracts making offers significantly above what the sellers were asking for their properties.  The excess amounts were paid back to the purchasers at escrow, disguised as payments for fictional repairs and remodeling to the properties.  In many cases, these kickbacks were falsely described as payments to render the properties compliant with the Americans with Disabilities Act.  Although the indictment identified 30 such fraudulent residential real estate transactions, the evidence at trial was that the fraud at Liberty was pervasive.  

Although she was unlicensed, defendant Faulkner acted as both a real estate agent and loan officer as a Liberty employee.  She recruited people to serves as buyers, sometimes of more than one property.  She convinced the buyers that they could qualify for home loans, and added that they would receive cash payments at the close of transactions to help cover mortgage payments and pay off other bills.  She filled out fraudulent loan applications, and she helped to arrange for the disguised kickback payments to be made to her clients.  

 Almost all of the 30 properties listed in the indictment went into foreclosure, resulting in a loss of over $5 million to financial institutions. 

"Mortgage fraud is an incredibly destructive crime that leaves many victims in its wake," said José M. Martínez, Special Agent in Charge, IRS-Criminal Investigation.  "The defendant played a significant role in a scheme that hurt so many people and affected so many of our communities.  IRS-CI is committed to pursuing those who line their pockets with profits from these schemes."

“Faulkner made false promises and statements to benefit from a scheme that left ruin in its wake,” said Special Agent in Charge Monica M. Miller of the FBI’s Sacramento field office.  “These sorts of schemes damaged neighborhoods and the regional economy, flooding the market with foreclosed homes.  The FBI will continue to work with its law enforcement partners to ensure such crimes do not go unpunished.”

This case was the product of an investigation by the Internal Revenue Service – Criminal Investigations, and the Federal Bureau of Investigation. Assistant United States Attorneys Philip Ferrari and Todd Pickles prosecuted the case.

SACRAMENTO, Calif. — On Monday evening, a federal jury found Rachel Siders, 39, of Roseville, guilty of bank fraud, making a false loan application, and committing aggravated identity theft, United States Attorney Benjamin B. Wagner announced.  Siders’ week-long trial was held before United States District Judge John A. Mendez.

According to evidence presented at trial, in 2008 Siders and co-defendant Theo Adams applied for a home equity line of credit in the name of Adams’ relative on an underwater property owned by Adams in Roseville.  As part of the false loan application, Siders and Adams submitted false tax returns for the relative with significantly inflated income.  Siders and Adams also submitted mortgage application documents with forged signatures.  Siders, a notary public at the time of the crime, falsely notarized the loan application documents, which were sent to Washington Mutual Bank as part of the mortgage application.  Washington Mutual Bank relied upon the falsely notarized documents and the false tax returns in deciding to provide a $250,000 line of credit.  Siders received $170,000 of the proceeds and Adams received the rest.  They made minimal payments on the line of credit and the loan defaulted.  Siders’ counts of conviction all relate to this transaction.  The jury was unable to reach a verdict on counts relating to a second charged transaction.

This case was the product of an investigation by the Internal Revenue Service-Criminal Investigation and the Federal Bureau of Investigation. Assistant United States Attorneys Matthew D. Segal, Christiaan H. Highsmith, and Michele Beckwith are prosecuting the case.

Siders is scheduled to be sentenced by Judge Mendez on June 9, 2015. She faces a maximum statutory penalty of 30 years in prison and a $1,000,000 fine on the bank fraud charge, 30 years in prison and a $1,000,000 fine on the false loan application charge, and two years in prison and a $250,000 fine on the aggravated identity theft charge. 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.  Theo Adams pleaded guilty on September 3, 2013, and has yet to be sentenced.

Leonid Yakovlev Withdrew In Cash the Proceeds of a Credit Card Fraud Scheme

SACRAMENTO, Calif. — Leonid “Leo” Yakovlev, 43, of Sacramento, was sentenced today by Senior United States District Judge William B. Shubb to 41 months in prison for structuring financial transactions to avoid bank reporting requirements, United States Attorney Benjamin B. Wagner announced.

According to court documents, between April 2008 and August 2008, Yakovlev permitted the use of his bank account in a fraudulent credit card scheme in which thousands of American Express customers were charged fees ranging from $11 to $100, purportedly for “business services” provided by an entity called “24Hour.” During that period, Yakovlev controlled a bank account in the name of 24 Hour Corp. As a result of the fraudulent scheme, nearly $1 million was deposited in Yakovlev’s bank account. Yakovlev withdrew a total of approximately $230,000 from the account by making multiple cash withdrawals in smaller amounts in an effort to ensure the bank would not file mandatory currency transaction reports for the withdrawals.

When sentencing Yakovlev, Judge Shubb observed that Yakovlev was “responsible for misappropriating the identities of approximately 20,000 individuals.  Every time one of those individuals got charged for something they didn’t do, they were violated.  You caused that.  You understood it was wrong because you carefully made your withdrawals” to avoid the reporting requirements. 

“The defendant structured his transactions to hide the true source of his money,” said José M. Martínez, Special Agent in Charge, IRS-Criminal Investigation.  “Currency report information filed by banks and financial institutions provides a paper trail, or roadmap, for investigations involving financial crimes.  IRS-CI will continue to pursue individuals who deliberately break up cash transactions to avoid the filing of CTRs and to conceal their illegal acts.”

This case was the product of an investigation by the Internal Revenue Service – Criminal Investigation. Assistant United States Attorneys Jean M. Hobler and Brian A. Fogerty prosecuted the case.

FRESNO, Calif. — Agustin Simon, 53, of Patterson, was sentenced today by U.S. District Judge Lawrence J. O’Neill to 15 months in prison for conspiring to commit bank fraud, United States Attorney Benjamin B. Wagner announced.  Simon also was ordered to pay restitution to financial institutions in the amount of $421,372 and to forfeit to the United States all rights, title and interest he had in a Patterson home that was the subject of his fraud scheme.

According to court documents, beginning in or around March 2010, Simon, with the assistance of his real estate agent, undertook a short-sale of Simon’s home in Patterson, California, to the real estate agent’s son.  Simon submitted to Tri Counties Bank and Freddie Mac false and fraudulent short-sale applications, and caused these financial institutions to approve the charge-off of funds for the short-sale of Simon’s home.  In these applications, Simon did not disclose that he provided the buyer with the full purchase price of the home ($355,000).  Simon also made false statements to the lenders regarding his hidden agreement with the buyer that Simon would regain ownership of his home following the short-sale, and also misrepresented his ownership of other real estate and assets.

Simon’s real estate agent, Minerva Sanchez, 48, of Freemont, was charged in a separate indictment for her role in the scheme.  On February 17, 2015, Sanchez was sentenced by Senior U.S. District Judge Anthony W. Ishii to 21 months in prison.

“Agustin Simon and his real estate agent, Minerva Sanchez, acted together to willfully exploit and abuse the short sale process, which was designed to assist legitimately distressed homeowners,” said Leslie DeMarco, Special Agent in Charge, Federal Housing Finance Agency Office of Inspector General.  “Such selfish acts of fraud will not go undetected or unpunished. Our office, along with our law enforcement partners, is committed to protecting taxpayers, and thus the integrity of the short sale process, and ensuring that real estate professionals maintain the highest ethical standards.”

           This case was the product of an investigation by the Federal Housing Finance Agency-Office of Inspector General and the Internal Revenue Service-Criminal Investigation.  Assistant United States Attorney Christopher Baker prosecuted the case.

FRESNO, Calif. — A federal grand jury returned a three-count indictment Thursday against Bakersfield residents Guillermo Magallanes, 36; Pasqual Gonzales Magallanes, 44; and Juan Lascano Jr, 32, charging them with conspiracy to distribute methamphetamine, United States Attorney Benjamin B. Wagner announced.

According to court documents, the three men conspired to distribute methamphetamine in the Bakersfield area. In addition to the criminal charges the United States is seeking the forfeiture of $31,242 in United States Currency, a 2014 Lexus IS250 F Sport, and a 2012 Acura TL sedan as proceeds of the illegal drug trafficking activity.

This case is the product of an investigation by the Drug Enforcement Administration, the Federal Bureau of Investigation, the Kern County Sheriff’s Office, and the Bakersfield Police Department. Assistant United States Attorney Brian K. Delaney is prosecuting the case.

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

FRESNO, Calif. — Yolanda Castro, 45, a Fresno employee of the U.S. Internal Revenue Service, was arrested today following her indictment by a federal grand jury on February 26, 2015, on 10 counts of tax fraud and making false statements to a government agency, United States Attorney Benjamin B. Wagner announced.

According to the indictment, Castro has been employed by the IRS for approximately 20 years, including as a tax examiner and contact representative. Between 2007 and 2013, she prepared and filed false federal income tax returns for herself, her family members and others in which she fraudulently claimed tax deductions and credits. For instance, on her own 2008 tax return, Castro claimed a credit for education expenses that she did not incur, and provided the IRS phony textbook receipts to support the claim. Likewise, in tax returns she prepared for herself and others, Castro claimed child care expenses that had not been incurred.

This case is the product of an investigation by the U.S. Department of the Treasury Inspector General for Tax Administration and the IRS‑Criminal Investigation. Assistant United States Attorneys Christopher Baker and Mark McKeon are prosecuting the case.

If convicted, Castro face a maximum statutory penalty of three years in prison and a $100,000 fine for each of the six counts of aiding in the preparation of a false tax return, five years in prison and a $10,000 fine for each of the two counts of making a false return by a U.S. employee, and five years in prison and a $250,000 fine for each of the two counts of making false statements to a government agency. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

FRESNO, Calif. —United States Attorney Benjamin B. Wagner announced today the unsealing of an indictment, returned by the grand jury February 19, 2015, charging Christina Antonia Martinez, 27; Lance Aaron Wilson, 30; and Mona Alicia Chavarin, 43, all of Modesto; and Lenele Maria Nunez, 31, of Hughson, with conspiring to distribute oxycodone and hydrocodone and possession of the same substances on two occasions.
 
Oxycodone (street names “Hillbilly Heroin,” “Kicker,” “OC,” “Ox,” “Oxy,” “Perc,” or “Roxy”) and hydrocodone (street names “Hydro,” “Norco,” or “Vikes”) are classified under federal law as Schedule II controlled substances although hydrocodone, until October 6, 2014 was previously a Schedule III controlled substance.  Both substances, when legally prescribed for a legitimate medical purpose, are used for the relief of mild to moderate pain and can be habit forming.  However, they are commonly unlawfully abused as recreational drugs and sold illegally.

According to court documents, as early as December 1, 2013 and until January 13, 2015, the defendants conspired to unlawfully distribute oxycodone and hydrocodone.  Nunez was an office manager at a Modesto pain management clinic and stole blank prescriptions from the clinic.  Nunez provided these prescriptions to Martinez knowing that Martinez would enter false information on them, resulting in fraudulent prescriptions for large quantities of highly addictive, frequently diverted prescription drugs, including oxycodone and hydrocodone.  Martinez and Wilson would provide these prescriptions to Chavarin, a pharmacy technician employed at a Modesto pharmacy.  Nunez would verify the prescriptions to the pharmacy and Chavarin would provide the filled prescriptions of oxycodone or hydrocodone, or cause others to provide them, to Martinez and Wilson.  Martinez and Wilson would distribute the unlawfully obtained oxycodone and hydrocodone to individuals for whom it had not been prescribed.

This case was the product of an investigation by the Modesto Police Department and the involvement of the Drug Enforcement Administration. Assistant United States Attorney Kathleen A. Servatius is prosecuting the case.

Martinez, Nunez, and Chavarin were arrested yesterday on the federal charges and  appeared today in the United States District Court in Fresno for their first appearance.  Nunez and Chavarin were ordered released from custody.   Martinez will have a detention hearing tomorrow at 1:30.   All defendants have a status conference on May 18 at 1:00 p.m.

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

SACRAMENTO, Calif. — Thomas Roullier, 34, a former resident of Spokane, Washington, and an inmate at the Federal Correctional Institution at Herlong, California, ("FCI Herlong") was sentenced today by United States District Judge Kimberly J. Mueller to 8 years in prison for an assault resulting in serious bodily injury to another prison inmate, United States Attorney Benjamin B. Wagner announced.   The Court also ordered the payment of $15,040.34 in restitution to reimburse the United States Bureau of Prisons for expenses incurred in providing medical treatment, transportation, and other services to the victim of the assault. 

According to court documents, on April 26, 2012, Roullier, a Norteno gang member, committed the assault on the victim inmate, a Bulldog gang member, in a recreation area in the Special Housing Unit (SHU) within FCI Herlong.  At the time of the assault, Roullier was one of four handcuffed prisoners (2 Norteno and 2 Bulldog gang members) who had just been escorted into the recreation area.  The prison guard first removed the handcuffs from the two Norteno gang members.  Before the guard could remove the handcuffs from the two Bulldog gang members, Roullier assaulted and severely beat the handcuffed victim.  Within a very short time thereafter, a sufficient number of guards responded, entered the locked recreation area, and secured Roullier.

The victim suffered serious bodily injury, including displaced fractured bones in the face near his left cheek/sinus and a non-displaced fractured bone at the bottom of his left eye socket.  The victim suffered extreme pain, trauma, bruises, headaches, and difficulty opening his mouth.  The victim's fractured and sunken cheekbone near his left cheek/sinus had to be repaired by a physician specialist, who performed facial surgery to lift up the broken and sunken area of the victim's face.

"Judge Mueller's sentence of an additional eight years for the assault of another inmate sends a strong message that such crimes will not be tolerated,” said Acting FCI Herlong Warden G.J. Bissett.  “Sentencing in cases that involve inmate on inmate assaults have a significant effect on the safe and orderly running of correctional facilities.  The sentences imposed in the cases prosecuted by the United States Attorney's Office have helped to decrease the amount of inmate assaults that take place in a correctional environment, especially here at FCI Herlong."

This case was the product of an investigation by the United States Bureau of Prisons and the Federal Bureau of Investigation.

SACRAMENTO, Calif. — A federal grand jury returned an eight-count indictment today against Gabriela Carter, 43, resident of Sacramento, charging her with bank fraud, United States Attorney Benjamin B. Wagner announced. 

According to court documents, from 2007 through 2008, Carter repeatedly submitted fraudulent loan applications to federally insured financial institutions to obtain real estate loans that her clients were not qualified to receive.  In many instances, Carter falsely represented her clients’ income and generated false W-2s and paystubs for various shell companies that did not, in fact, employ them.  Many of Carter’s clients were low-income immigrants who did not speak English and were unaware of the false representations. 

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

If convicted, Carter faces a maximum statutory penalty of thirty 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 are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.