Eastern District of California

FRESNO, Calif. — Gamaliel Salas-Mendoza, aka Rene Salas Mendoza (Salas), 38, of Mexico, pleaded guilty today to conspiracy to distribute and to possess with the intent to distribute methamphetamine, heroin, and cocaine, United States Attorney Benjamin B. Wagner announced.

According to court documents, Salas and Miguel Sanchez-Mendoza (Sanchez), 46, also of Mexico, maintained a stash house in Bakersfield where law enforcement officers seized seven pounds of methamphetamine, one and a half pounds of cocaine, and one half pound of heroin, all packaged for sale. In addition to the drugs, officers found digital scales, cutting agents, a kilogram press, and $9,483 in cash, which has been forfeited.

Sanchez previously entered a guilty plea to the drug conspiracy and was sentenced last month to an eight-year prison term.

This case was the product of an investigation by the U.S. Drug Enforcement Administration, Kern County Sheriff’s Office Narcotics Enforcement Team, Kern County Sheriff’s Office Major Violators Unit, and the California Multijurisdictional Methamphetamine Enforcement Team. Assistant United States Attorney Karen A. Escobar is prosecuting the case.

Salas is scheduled to be sentenced by Senior U.S. District Judge Anthony W. Ishii on September 15, 2014. Salas faces a mandatory minimum prison term of 10 years, a maximum prison term of life 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. Both Salas and Sanchez are subject to deportation to Mexico following the completion of any prison term imposed.

FRESNO, Calif. —Gerardo Alvarez-Montanez, 32, an inmate at the Taft Federal Correctional Facility, pleaded guilty Monday to 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 conspired with a correctional officer to smuggle cellphones, cash, alcohol, heroin and methamphetamine into the prison in return for the payment of cash.

Correctional officer Ramon Cano, 27, of Bakersfield was charged with acceptance of a bribe by a federal official and possession with intent to distribute heroin and methamphetamine. At a status conference for Cano on Monday, a change of plea hearing was scheduled for July 28, 2014, at 10:00 a.m.

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

Alvarez-Montanez is scheduled to be sentenced by United States District Judge Anthony W. Ishii on September 15, 2014. Alvarez-Montanez 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. — Marco Antonio Granados, 20, of Fontana, pleaded guilty Monday to conspiring to distribute and possess with intent to distribute methamphetamine, United States Attorney Benjamin B. Wagner announced.

According to court documents, Granados admitted that on October 16, 2013, he and his cousin met with a confidential informant to negotiate the sale of 30 pounds of methamphetamine. After several minutes of negotiations, Granados and his cousin showed the informant their stash of methamphetamine that was in a large brown cardboard box in the rear cargo area of their vehicle. At this point, law enforcement personnel arrived on scene and arrested them. Officers searched the vehicle and recovered 31 individually brown wrapped and “food saver” sealed packages of methamphetamine.

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.

Granados is scheduled to be sentenced by United States District Judge Anthony W. Ishii on September 15, 2014. Granados faces a statutory penalty of 10 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. — One defendant was sentenced and three others pleaded guilty to child exploitation offenses in separate cases in federal court today, United States Attorney Benjamin B. Wagner announced.

“As these cases make clear, identifying, arresting and prosecuting those who go online to download and distribute sexually explicit images of children is a top priority for HSI and its federal and local enforcement partners,” said Tatum King, acting special agent in charge for HSI San Francisco. “Many child predators mistakenly believe the anonymity of the Internet shields them from detection, but as these defendant learned firsthand, cyberspace is not a refuge from justice.”

Bakersfield Man Sentenced to 8 Years in Prison (1:13-cr-241 LJO)
Bradley James Ghilarducci, 67, was sentenced to eight years and one month in prison for receiving child pornography. According to court documents, between February and August 2012, Ghilarducci received images through the Internet of minors engaged in sexual activity. This case was the product of an investigation by the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and the Kern County Sheriff’s Office. Assistant United States Attorney Michael G. Tierney prosecuted the case.

Tuolumne County Man Pleads Guilty (1:13-cr-00396 AWI)
Curtis Benjamin Hults, 63, of Twain Harte pleaded guilty to four counts of sexual exploitation of a minor and one count of receipt of child pornography. According to the plea agreement, between May 1, 2008, and October 8, 2012, Hults created images of four different minors engaging in sexually explicit conduct, stored them on a digital camera, and then transferred them to a computer. Hults also downloaded from the Internet more than 600 images of minors engaged in sexually explicit conduct, some of whom were prepubescent and some of the images depicted violence.

Hults is scheduled to be sentenced on September 2, 2014. He faces 15 to 30 years in prison for each of the four counts of sexual exploitation of a minor and five to 20 years in prison for the receipt of child pornography 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. This case is the product of an investigation by the FBI, the Visalia Police Office, the Tulare County District Attorney’s Office, and the Tuolumne County Sheriff’s Office.

Turlock Man Pleads Guilty (1:14-cr-012-LJO)
Jeffrey Randall Metcalfe, 47, pleaded guilty to one count of receiving and distributing child pornography. According to court documents, between January 2012 and December 1, 2013, Metcalfe used a website to communicate with persons interested in exchanging images of child pornography. He knowingly received and distributed more than 600 images of child pornography, some of which were images of violence and prepubescent minors.

Metcalfe is scheduled to be sentenced on September 15, 2014. He faces 15 to 40 years in prison. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. This case is the product of an investigation by the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and the Turlock Police Department.

Former Bakersfield Resident Pleads Guilty to Sharing Child Pornography (1:13-cr-146 AWI)
Robert Aron Sprenkle, 36, of Baltimore, Md., pleaded guilty to one count of receiving and distributing child pornography in Kern County, between September 29, 2012, and November 4, 2012. An indictment was returned on April 18, 2013, and Sprenkle was arrested in Clearwater, Fla. where he had relocated. He was released on bond and relocated again to Baltimore. Sprenkles was taken into custody after his guilty plea today and is set for sentencing on September 15, 2014. He faces a sentence of five to 20 years in prison, a potential lifetime term of supervised release, and a $250,000 fine. This case is the product of an investigation by the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI).

These cases were 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. — Three men were sentenced today for their involvement in two separate marijuana cultivation operations based in Kern and Inyo Counties, according to U.S. Attorney Benjamin B. Wagner.

1,387 Pounds of Processed Marijuana/338 Marijuana Plants Seized from Arvin Grow (1:13CR28 AWI)

Bernabe Hernandez, aka Juan Hernandez Marin, aka Raul Hernandez, aka Bernabe Villa-Lobos, 54, of Arvin, was sentenced following his guilty plea on March 31, 2014, to one and a half years in prison and ordered to forfeit $178,179 to the United States. According to court documents, Hernandez is the owner and resident of a 29 acre parcel on Wheeler Ridge Road in Arvin where Kern County Sheriff deputies found and seized 1,387 pounds of processed marijuana and 338 marijuana plants during the execution of a search warrant there. They also found scales, packaging material, and ammunition.

The case was investigated by the U.S. Drug Enforcement Administration, the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), and the Kern County Sheriff’s Office. Assistant U.S. Attorney Karen Escobar handled the criminal case and Assistant U.S. Attorney Heather Mardel Jones handled the forfeiture of assets.

3,855 Marijuana Plants/350 Pounds of Processed Marijuana/Illegal Pesticides/Six Firearms Seized in Connection with Inyo National Forest Grow (1:13-cr-340 LJO)

Jose Santoyo-Aguilar (Santoyo), 26, of Michoacàn, Mexico, and Jose Salvador Garcia Rodriguez (Garcia), aka Christopher Lee Headspeth, 23, of Guanajuato, Mexico, were sentenced following their guilty pleas earlier this year. Santoyo was sentenced to five years and 10 months for his role in supplying equipment and supplies to a marijuana cultivation site in the Inyo National Forest. Garcia was sentenced to two and a half years in prison for working at the grow site. Both were also ordered to pay $6,572 in restitution to the U.S. Forest Service for damage caused to the public land as a result of their cultivation operation. Upon completion of their prison sentences, Santoyo and Garcia face deportation to Mexico.

According to court documents, U.S. Forest Service agents found a marijuana cultivation operation in the Hogback Creek area of the Inyo National Forest. The load vehicles were tracked to several stash houses in Riverside County. Ultimately, agents executed four search warrants at the grow site and three residences in Riverside County.

On April 14, 2014, a third defendant in this case, Javier Rios Morales, of Jalisco, Mexico, was sentenced to two and a half years in prison.

Agents seized 3,405 marijuana plants, 350 pounds of processed marijuana, three air rifles, two digital scales, 2,200 pounds of trash, and illegal pesticides, at the Hogback Creek grow site. Photos of a dead bear and fox were also found in the cameras of one of the growers who was arrested and prosecuted in Inyo County. According to U.S. Forest Service biologists, the photos do not depict natural deaths and the foaming on the mouth of the dead bear is consistent with poisoning caused by the illegal pesticides.

Agents in Riverside County seized two pounds of methamphetamine, a methamphetamine laboratory, five firearms, $10,000 in cash, and two pounds of marijuana from a stash house in Moreno Valley. Agents seized another 450 marijuana plants at a stash house in Homeland. At another stash house in Romoland, agents seized a firearm, marijuana shake and residue, and shipping labels consistent with the shipment of marijuana to Chicago.

This case was investigated by the U.S. Forest Service, U.S. Drug Enforcement Administration (DEA), Homeland Security Investigations of Immigration and Customs Enforcement, Inyo County Sheriff’s Office, and Riverside County Sheriff’s Office. Assistant United States Attorney Karen A. Escobar handled the federal prosecution.

FRESNO, Calif. — Mayra Alejandra Soria, 30, of Los Angeles, was sentenced today by United States District Judge Morrison C. England Jr. to four years and nine months in prison and $13,735 in restitution for conspiracy to steal mail and one count of possession of stolen access devices, United States Attorney Benjamin B. Wagner announced.

According to court documents, Soria was indicted with four co-defendants in May 2013 as part of Operation Broken Mailbox, the United States Postal Inspection Service’s ongoing effort to work with local law enforcement partners to investigate and prosecute stolen mail offenses. She is the last to be sentenced in the case.

According to court documents, from March 17, 2013 until May 21, 2013, Soria and others conspired to steal mail in Wasco and elsewhere in the Bakersfield area, in order to steal checks and commit identity theft. As part of the conspiracy, they used homemade devices to “fish” mail out of U.S. mail collection boxes at post offices. After stealing the mail, they looked for third party information and financial instruments, including checks and money orders that they could cash. The defendants then altered and negotiated the stolen checks – sometimes by depositing them into accounts they had opened in the names of the identity theft victims. In total, Soria and her co-defendants stole checks and other items valued at more than $120,000.

This case was the product of an investigation by the United States Postal Inspection Service with assistance from the Kern County Sheriff’s Office. Assistant United States Attorney Megan A. S. Richards prosecuted the case.

San Francisco Division Inspector in Charge Rafael Nunez of the U.S. Postal Inspection Service stated “we are working closely with the U.S. Attorney’s Office and our partners in law enforcement to arrest and prosecute those responsible for mail theft to protect postal customer’s mail from theft.”

The other defendants received the following sentences: Eric Alberto Herrera, 27, of Los Angeles: two years in prison; Elisee Torres-Pacheco, 36, of Los Angeles: three years of probation; Brisa Castillo, 33, of Los Angeles: five months in prison; Mateo Manuel Santiago, 25, of Bakersfield: one year in prison.

FRESNO, Calif. —Martin Barragan, 38, of Bakersfield, pleaded guilty today to use of an interstate facility to aid racketeering, United States Attorney Benjamin B. Wagner announced.

According to court documents, from June 1, 2012, to November 30, 2012, Barragan conspired with others to manufacture and distribute more than 900 marijuana plants. Barragan used a cellphone to manage his marijuana grow operation and business.

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.

Barragan is scheduled to be sentenced by United States District Judge Lawrence J. O'Neill on September 15, 2014. Barragan 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. —Alejandro Villarreal, 32, of Bakersfield, pleaded guilty today to two counts of wire fraud for a scheme to defraud the U.S. Department of Defense, United States Attorney Benjamin B. Wagner announced.

According to court documents, Villarreal was the president and manager of Oliver Supplies. From August 2009 until September 2011, Villarreal executed a scheme to defraud the U.S. Department of Defense by substituting “similar” goods that were inferior or were not manufactured by government approved suppliers. He did this in approximately 16 contracts awarded to Oliver Supplies. Villarreal admitted that he billed approximately $251,214 on these contracts, of which approximately $224,496 was actually paid.

This case is the product of an investigation by the Defense Criminal Investigative Service. Assistant United States Attorney Mark J. McKeon is prosecuting the case.

Villarreal is scheduled to be sentenced on September 15, 2014. He faces a maximum statutory penalty of 20 years in prison on each count 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 four-count indictment yesterday against Jacquline Hoegel, 57, of Pleasant Grove, CA, charging her with making and subscribing false tax returns, United States Attorney Benjamin B. Wagner announced.

According to the indictment, Hoegel filed her personal income tax returns for the years 2005, 2006, 2007, and 2008 on the same day in September 2009. Those returns substantially understated her gross receipts and falsely stated that she was a graphic designer during the relevant tax years.

This case is the product of an investigation by the Internal Revenue Service-Criminal Investigations. Special Assistant United States Attorneys Benjamin Kingsley and Robin Harris are prosecuting the case.

The defendant, who is not in custody, is expected to appear on July 17, 2014, at 2:00 pm for her arraignment in federal court before Magistrate Judge Carolyn K. Delaney.

If convicted, Hoegel faces a maximum statutory penalty of up to three years in prison and a $100,000 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.

YUBA CITY, Calif. — An ongoing investigation into an unemployment and disability benefits fraud scheme has led to the indictment and arrest of four Sutter County residents for their participation in the scheme and a superseding indictment bringing additional charges against others previously named as defendants, announced United States Attorney Benjamin B. Wagner, U.S. Department of Labor, Office of Inspector General Special Agent in Charge Abel Salinas, FBI Special Agent in Charge Monica M. Miller, and Employment Development Department Investigation Division Chief Lisa Schmith.

The Sutter County-based scheme used farm labor contracting companies to sell false paystubs that indicated the purchasers had been employed by the companies when it fact they had not.  These fraudulent paystubs enabled the purchasers to apply for unemployment and disability benefits to which they were not entitled. The fraud scheme is alleged to have defrauded the California Employment Development Department of more than $14 million.

The federal grand jury returned a superseding indictment yesterday that expands the original charges brought in 2012 against six defendants. The grand jury also returned a new indictment charging one of those defendants and another man with starting a new scheme to sell false wages. Two new defendants were also charged in that indictment with committing perjury before the investigating federal grand jury.

The superseding indictment charges that Mohammad Nawaz Khan, 56; Mohammad Adnan Khan, 31; Iqila Begum Khan, 31, all of Live Oak; and Mohammad Shahbaz Khan 56, of Yuba City, controlled a series of companies that were reported to the Employment Development Department as farm labor contractors. The Khans, together with Gurdev Kaur Johl, 69, and Kewal Singh, 76, both of Yuba City, who were also charged, sold fake paystubs to other people in the community and used the companies they controlled to report false wages for the individuals who purchased those paystubs. According to the superseding indictment, the Khans at times instructed the purchasers how the fake paystubs could be used to fraudulently claim unemployment and disability benefits. Over the course of the conspiracy, which allegedly began in the early 1990s, the defendants reported false wages for more than 1,000 separate individuals that resulted in more than 2,000 fraudulent claims for unemployment and disability benefits.

The new indictment charges that while out on bond for the first indictment, Mohammad Shahbaz Khan began a new conspiracy with Mohammad Riaz Khan, aka Ray Khan, 53, of Live Oak, to commit unemployment and disability fraud. It is alleged in the indictment that Mohammad Riaz Khan issued checks to his supposed employees and directed those individuals to cash the checks and return the money to him in order to make it appear that the individuals were actually being paid wages by Mohammad Riaz Khan. Also in that indictment, Harmit Chechi, 27, of Yuba City, and Harjit Johal, 47, of Yuba City, are charged with committing perjury before a federal grand jury in connection with that investigation. Mohammad Riaz Khan, Mohammad Shahbaz Khan, Chechi, and Johal were arrested this morning.

“The indictments returned yesterday allege that the defendants ran a scheme that ripped off the Employment Development Department for many years,” said U.S. Attorney Wagner. “Those responsible for this scheme are likely to end up in prison, and those who purchased false wages from them should come clean rather than try to conceal the scheme. Today, two people were arrested on charges of lying to the grand jury, and more people are under investigation for perjury. Obstructing a federal fraud investigation is unacceptable, and those who engage in such conduct will face the full weight of federal law enforcement.”

“Despite indictments of more than 20 individuals in 2012 and 2013, allegations of continued criminal activity persisted,” said Monica M. Miller, Special Agent in Charge of the Sacramento division of the FBI. "Continued, open contribution among EDD, DOL-OIG, and the U.S. Attorney’s office ensured a thorough and successful investigation, and we are thankful for the opportunity to work together to protect the integrity of government at all levels.”

“Any fraud against the employer-funded Unemployment Insurance Program or the employee-funded Disability Insurance Program is unacceptable,” said Patrick W. Henning, Jr., Director of the California Employment Development Department (EDD).  “The EDD is committed to protecting these vital programs and working with our law enforcement partners to prosecute offenders to the fullest extent of the law.  And we will soon become only the second state in the nation to employ the latest in technology and predictive analysis tools to identify new fraud trends and prevent benefit fraud.”

This latest indictment brings the total to 28 individuals who have been charged in this investigation. Thirteen have pleaded guilty to various charges. A status conference as to Mohammad Nawaz Khan et al. is schedule for June 26, 2014 at 9:00 a.m. before Chief U.S. District Judge Morrison C. England Jr. A jury trial is scheduled for January 12, 2015.

This case was the product of an investigation by the U.S. Department of Labor, Office of Inspector General; the Federal Bureau of Investigation; and the Employment Development Department-Criminal Investigations. Assistant United States Attorneys Jared C. Dolan and Sherry D. Hartel Haus are prosecuting the cases.

If convicted, each defendant faces a maximum statutory penalty of 20 years in prison and a $250,000 fine for each count. Chechi and Johal face a maximum statutory penalty of five years in prison for perjury. 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 in the indictments are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.

SACRAMENTO, Calif. — A federal grand jury returned a six-count indictment last week against Daniel Crowninshield, 45, of Sacramento, charging him with unlawfully manufacturing and dealing in firearms, possessing a firearm after having been previously convicted of a crime of domestic violence, and possessing machineguns and unregistered firearms, United States Attorney Benjamin B. Wagner announced.  Crowninshield was arrested today in Sacramento by ATF special agents.

According to court documents, Crowninshield, who was also known by his online moniker “Dr-Death,” operated an unlicensed firearms manufacturing business out of C&G Tool, a metal shop in North Sacramento. Crowninshield, himself a prohibited person who is not legally able to possess firearms due to a prior domestic violence conviction, did not conduct background checks, enforce waiting periods, or complete firearm transaction paperwork in connection with the sale of firearms.

Using sophisticated computer-controlled machines, Crowninshield allegedly manufactured lower receivers for AR-15s and other firearms. A lower receiver is the part of a firearm that holds the mechanical parts (e.g. the hammer, bolt or breechblock, and firing mechanism) that combine with a trigger, firing pin, and other parts to form a functioning firearm. The lower receiver was made from a metal casting called a “blank” that is not considered a firearm by ATF. Once the blank is converted into a lower receiver using a drill press or automated machine, it is considered a firearm by statute even if there is no barrel, handle, or trigger, and it is subject to federal regulation.

This case was the product of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the California Department of Justice’s Bureau of Firearms, with the assistance of the Sacramento Police Department, the Sacramento County Sheriff’s Department, and the California Highway Patrol. Assistant United States Attorney Justin Lee is prosecuting the case.

“The production and sale of assault rifles without serial numbers, background checks or waiting periods poses a serious danger to public safety,” said U.S. Attorney Wagner. “We will continue to investigate and prosecute those who seek to profit from such conduct.”

“Individuals who manufacture and sell unregistered and unmarked machine guns and short barrel rifles pose a grave danger to our communities,” said ATF Special Agent in Charge Joseph M. Riehl. “These unmarked firearms used in violent crime make it difficult if not impossible to trace back to the perpetrator of the offense.”

Crowninshield will make his initial appearance today at 2:00 before U.S. Magistrate Judge Kendall J. Newman in Sacramento.  If convicted, Crowninshield faces a maximum statutory penalty of 10 years in prison and a $250,000 fine for each of the seven possession-of-firearm counts and a maximum of five years in prison and a $250,000 fine on the manufacturing and dealing charge. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

FRESNO, Calif. — A federal grand jury returned a one-count indictment today against Tryvell Powell, 33, of Fresno, charging him with sex trafficking of a minor, United States Attorney Benjamin B. Wagner announced.

According to court documents, on June 3, 2014, a relative of a teenaged runaway reported to Fresno police that pictures of her were posted online in advertisements for prostitution. Fresno detectives used the advertisements to contact the girl and arrested Powell. Powell had prostituted her for five months. He forced her earn $300 a day, all of which he kept, and he threatened to kill her and her unborn child if she left him.

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

Powell is scheduled to be arraigned at 1:30 p.m. in federal court in Fresno before U.S. Magistrate Judge Gary S. Austin on Friday, June 20, 2014.

If convicted, Powell faces a minimum penalty of 15 years to life in prison. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

SACRAMENTO, Calif. —Joseph Gekko, 45, of Yorba Linda, pleaded guilty today to three counts of wire fraud in connection with a mortgage fraud scheme, United States Attorney Benjamin B. Wagner announced.

Gekko’s guilty plea marks another event in a wide-ranging series of prosecutions related to Loomis Wealth Solutions, a “wealth-building” program offered to the public in California, Illinois, Washington, and elsewhere, from 2006 through 2008. According to indictments, persons connected to Loomis Wealth Solutions are alleged to have committed various acts of investment fraud, mortgage fraud, and money laundering.

Gekko participated in a mortgage fraud scheme that caused more than $10 million in losses to mortgage lenders and others. Gekko controlled an escrow company called Lender Services Direct (LSD), in Mission Viejo, Calif., and Tulsa, Okla. According to his plea agreement, Gekko admitted to preparing fraudulent Form HUD-1 Final Settlement Statements that reflected false sales prices and that indicated down payments had been made by the nominee buyers when in fact they had not.

This case is the product of an investigation by the Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigation. Assistant United States Attorneys Paul A. Hemesath and Jared Dolan are prosecuting the case.

Gekko is scheduled to be sentenced by United States District Judge John A. Mendez on September 23, 2014. Gekko faces a maximum statutory penalty of twenty 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. — A Tacoma, Wash. man was sentenced today for participating in an oxycodone and hydrocodone trafficking conspiracy where co-conspirators obtained prescriptions from a Central Valley doctor, filled them in area pharmacies and mailed the drugs to Washington and other states, United States Attorney Benjamin B. Wagner announced.

United States District Judge Anthony W. Ishii sentenced David Ruem, 32, to 10 years and one month in prison for his role in the drug trafficking conspiracy and for conducting illegal cash transactions to evade reporting requirements. Ruem was indicted with 12 others on April 11, 2013, and pleaded guilty in February 18, 2014. According to court documents, the defendants obtained prescriptions for oxycodone and hydrocodone from a doctor in Visalia, filled those prescriptions at pharmacies in Modesto, and then transported or mailed the pills to Washington for distribution on the black market. After illegally selling the pills, the defendants then deposited the cash proceeds of those sales into bank accounts held by the defendants in California.

In addition, Ruem admitted to structuring deposits of $145,000 into various accounts opened by co‑conspirators in California. Deposits and withdrawals were made in amounts less than $10,000 to prevent the bank from filing Currency Transaction Reports that banks are required to file on transactions greater than $10,000. These reports are filed with the Department of Treasury and are made available to law enforcement.

This case is being brought as part of Operation Footprint, a nationwide law enforcement initiative led by the U.S. Attorney’s Offices, the Internal Revenue Service- Criminal Investigation, the Drug Enforcement Administration, and the United States Postal Inspection Service. Operation Footprint targets large drug trafficking organizations by identifying the transfer of drug proceeds through financial institutions, bulk cash smuggling and other forms of money transfers. Operation Footprint is focused on bringing criminal charges based on Bank Secrecy Act violations in addition to violations of the Controlled Substances Act and the Money Laundering Control Act.

This case is also the product of the Organized Crime Drug Enforcement Task Force (OCDETF), a focused multi-agency, multi-jurisdictional task force investigating and prosecuting the most significant drug trafficking organizations throughout the United States by leveraging the combined expertise of federal, state and local law enforcement agencies. Assistant U.S. Attorney Grant B. Rabenn is prosecuting the case.

Seven co-defendants have been sentenced as follows: Phary Chim, of Kent, Wash.: four years and three months in prison; Sdey Chim, of Modesto: three years and 10 months in prison; Chanrath Yath, of Modesto: three years and four months in prison; Phally Thach, of Modesto: two and a half years in prison; Raeb Chou, of Modesto: two years in prison; Cindy Doeum, of Kent, Wash.: three years of probation; and
Chantha Chim, of Murietta: three years of probation.

In connection with this case, on June 7, 2013, Visalia doctor Terrill Eugene Brown, 62, was charged with conspiracy to dispense oxycodone, dispensing of oxycodone and hydrocodone, and structuring currency transactions to avoid bank reporting requirements. The charges against him and the remaining five defendants are pending. The charges are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.

SACRAMENTO, Calif. — Alfred John Schlette, 60, of San Ramon, was sentenced today in San Francisco by Chief United States District Judge Claudia Wilken of the Northern District of California to three years and five months in prison for mail fraud, United States Attorney Benjamin B. Wagner announced. Schlette was also ordered to pay $1.7 million in restitution to more than 10 victims.

According to court documents, Schlette told individuals that they could invest funds with him that would be pooled and used for day trading. Schlette sent his investors monthly statements showing a significant return on each individual's investment. In truth, Schlette never invested any of the money, using the funds on personal expenses. The monthly statements he generated and sent to investors were from an educational stock trading tool and had no connection to any actual investments.

This case was the product of an investigation by the Federal Bureau of Investigation and the Contra Costa County Sheriff's Department. The United States Attorney's Office for the Northern District of California was recused from the case. Assistant United States Attorney Jared C. Dolan from the Eastern District of California prosecuted the case in the United States District Court for the Northern District of California.

SACRAMENTO, Calif. — Bart Wayne Volen, 54, of San Diego and Haiku, Hawaii, pleaded guilty today to conspiring commit mail and wire fraud, conspiring to launder monetary instruments, and filing a false tax return, United States Attorney Benjamin B. Wagner announced.

In pleading guilty, Volen admitted to defrauding the United Auburn Indian Community (UAIC) of more than $17 million dollars. The UAIC is a federally recognized Native American tribe consisting mostly of Miwok and Maidu Indians indigenous to the Sacramento Valley region. The UAIC is located at the historic Auburn Rancheria in the Sierra Nevada foothills near Auburn. In pleading guilty, Volen agreed to a restitution order requiring that he and any co-defendants who are convicted to pay at least $17 million to their victims, which include both the UAIC and the Internal Revenue Service.

According to his plea agreement, Volen was hired as a developer by the UAIC in October of 2006 to finish construction on four tribal buildings — a school, a community center, and two administrative offices — on UAIC property on Indian Hills Road in Auburn. Between October 2006, and November 2007, Volen regularly submitted false and inflated invoices to the UAIC for work purportedly done on the tribal construction projects. In many instances, these invoices were based upon cost proposals from Volen’s subcontractor that he caused to be inflated. In other instances, Volen submitted false change order invoices for work that was never performed. Volen admitted making payments to co-conspirators employed by the UAIC to ensure that his fraudulent invoices were approved and paid.

With regard to the tax offense, according to court documents, Volen filed tax returns that contained a Schedule C in which Volen falsely claimed business loss deductions to which he was not entitled. As a result, the United States suffered a tax loss of between $2.5 million and $7 million.

“Utilizing insiders and an extensive trail of false documents to back up his scheme, Bart Volen managed to steal an incredibly large amount of money from a community that plays a very special role in our district,” said U.S. Attorney Wagner. “My office, our colleagues at the IRS, and all of our law enforcement partners are committed to bringing to justice those who would commit crimes against our tribal communities.”
This case is the product of an investigation by the Internal Revenue Service, Criminal Investigation. Assistant United States Attorney Michael M. Beckwith is prosecuting the case.

Also named in the indictment with Volen are UAIC employees Greg Scott Baker, 46, of Newcastle; and Darrell Patrick Hinz, 48, of Cameron Park. Baker and Hinz are scheduled for trial in Sacramento on October 20, 2014. The charges against them are only allegations; they are presumed innocent until and unless proven guilty beyond a reasonable doubt.

Volen is scheduled to be sentenced by United States District Judge Troy L. Nunley on December 4, 2014. Volen faces a maximum sentence of 20 years in prison, a $250,000 fine, or twice the value of the gross gain or loss, and a three-year term of supervised release for conspiring to commit mail and wire fraud. The maximum statutory penalty for conspiring to launder monetary instruments is 20 years in prison, a $500,000 fine or twice the value of the laundered money, and a three-year term of supervised release. The maximum statutory penalty for the tax violation is three years in prison, a $100,000 fine, or a fine of twice the value of the gross gain or loss, and a one-year term of supervised release. Any sentence, however, would 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.

FRESNO, Calif. — A federal grand jury returned a three-count indictment today against Mexican nationals Jesus Avalos-Cervantes, 26, and Pedro Pantoja-Padilla, 46, charging them with one count of conspiring to distribute, possess with intent to distribute, and manufacture marijuana, one count of manufacturing marijuana, and one count of causing more than $1,000 in damage to the national forest, United States Attorney Benjamin B. Wagner announced.

According to court documents, on June 4, 2014, United States Forest Service agents and Kern County Sheriff’s deputies executed a search warrant in the Kern River drainage of the Sequoia National Forest in Kern County. Officers located over 5,500 marijuana plants. Pantoja-Padilla was placed under arrest, but Cervantes was able to flee and avoid apprehension. Cervantes was identified through documents he left behind. Extensive damage was caused to the national forest as a result of the marijuana cultivation. Native vegetation had been cut and removed, and the steep hillside had been dug and terraced into plots. Fertilizers, pesticides and rodenticides were found throughout the site, including the banned pesticides zinc phosphide and furadan.

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

If convicted, Pantoja-Padilla faces a maximum statutory penalty of 40 years in prison and a $5 million fine. If convicted, Jesus Avalos-Cervantes faces a maximum statutory penalty of life in prison and a $10 million fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.

SACRAMENTO, Calif. — United States Attorney Benjamin B. Wagner announced today the successful resolution of a civil prosecution alleging violations of the Controlled Substances Act (CSA) against Ronnie E. Stone, aka Ron Stone, and Ron Stone M.D. Medical Weight Management Inc. Dr. Stone paid the United States $250,000 to settle the federal claims.

Dr. Stone was the owner and operator of two Sacramento area weight loss clinics. The United States alleged that on various occasions from January 2010 to July 2012, Dr. Stone (1) distributed controlled substances to patients without first performing a physical examination and adequate medical screening of those patients; (2) distributed controlled substances to patients in re-sealable plastic baggies that did not satisfy CSA labeling, packaging and sealing requirements; and (3) failed to properly maintain records and perform required drug inventories. In resolving this case, Dr. Stone admitted the United States’ allegations.

Dr. Stone surrendered the clinics’ DEA Registrations in June 2012. Dr. Stone no longer practices medicine, and he no longer operates the clinics.

United States Attorney Wagner stated: “Physicians are responsible for ensuring that controlled substances are properly prescribed to their patients The practices at the Stone clinics put patients and other potential end-users at risk. The successful resolution of this matter demonstrates the DEA’s and my office’s commitment to enforcing the CSA and protecting the patient community.”

DEA Special Agent in Charge Jay Fitzpatrick stated: “Doctors are entrusted with protecting public health and those who dispense controlled substances without regard put the safety of the community at risk. The DEA will seek appropriate civil remedies when this trust is broken. Today’s settlement holds Mr. Stone responsible for failing to act appropriately.”

Assistant United States Attorney Kurt A. Didier prosecuted the case.

SACRAMENTO, Calif. — Ramiro Suarez, 47, of Modesto, was sentenced today by United States District Judge William B. Shubb to 18 years in prison for conspiracy to manufacture, to distribute and to possess with intent to distribute marijuana, distribution of methamphetamine, possession with intent to distribute methamphetamine, and being an alien in possession of a firearm, United States Attorney Benjamin B. Wagner announced.

According to court documents, from November 17, 2008, until July 14, 2009, Suarez conspired with a number of people to cultivate and distribute more than a thousand marijuana plants, and distribute more than a kilogram of methamphetamine.

According to statements made during the sentencing hearing today, Suarez sold undercover agents an AK-47 and ammunition magazine, and during the search of Suarez’s home, agents found methamphetamine, marijuana seeds, three more firearms, processed marijuana, and a digital scale.

This case was the product of an investigation by the Drug Enforcement Administration (DEA), the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the California Department of Justice, and the Mountain and Valley Marijuana Investigation Team (MAVMIT). Assistant United States Attorneys Heiko Coppola and Olusere Olowoyeye prosecuted the case.

SACRAMENTO, Calif. — A federal grand jury returned a four-count indictment today against James Christopher Malcolm, 29, of Carmichael, charging him with transfer of explosive materials for use in a crime of violence or drug trafficking crime; unlawful dealing in firearms; and two counts of possession of machine guns, U.S. Attorney Benjamin B. Wagner announced.

According to court documents, Malcolm met with a confidential informant to discuss a plan to sell fully automatic rifles. At the meeting, Malcolm told the informant that distributing firearms was only a side business, and his main business was distributing explosives and poison. Later, Malcolm sold four short-barrel AR-15-style machine guns, 1.5 pounds of improvised explosive material, three blasting caps, and a firearm silencer to undercover agents posing as arms dealers for drug trafficking organizations. Additionally, Malcolm told undercover law enforcement agents that he could manufacture parts to convert Glock pistols into fully automatic machine guns. Malcolm actually demonstrated the process of converting pistols to machine guns and over the course of various meetings sold the agents parts to convert 10 pistols.

“Trafficking in explosives and machine guns poses a real threat to public safety,” said U.S. Attorney Wagner. “Fortunately, federal law enforcement agencies acted swiftly in neutralizing the threat in this case.”

“Firearms trafficking is the mechanism in which criminals obtain their firearms used in violent crimes,” said Bureau of Alcohol, Tobacco, Firearms and Explosives, Special Agent in Charge Joseph M. Riehl. “ATF will continue to focus our efforts on criminals who are unlawfully manufacturing and selling machine guns, and explosive materials.”

This case was the product of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the FBI. Assistant United States Attorney Justin Lee is prosecuting the case.

Malcolm is currently in custody at the Sacramento County Jail. He is scheduled to be arraigned on June 12, 2014.

If convicted of the first count, Malcolm faces a mandatory sentence of 10 years in prison and a $250,000 fine to be run consecutive to any other sentence. The maximum sentence count two is five years in prison a $250,000 fine, and for counts three and four the maximum sentence is 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. — The owner of a Catholic-interest news and information website was arrested at his home in Bakersfield this morning charged with tax evasion, United States Attorney Benjamin B. Wagner announced. A federal grand jury brought the four-count indictment last week, and it was unsealed today after the arrest.

Michael Galloway, 59, of Bakersfield, owns and operates the website for Catholic Online. According to court documents, Galloway generated revenue by selling advertising and hosting to faith-based businesses.

For tax years 2003 through 2006, the indictment alleges that Galloway improperly deducted personal expenses as business expenses, including his homeowner’s association fees for his personal residence, car payments and insurance, utilities and cable service for his personal residence, department store credit card bills, tile work, and personal legal fees. In addition, Galloway deducted payroll expenses for his employees including federal and FICA withholdings, but kept the withholdings and failed to remit them to the IRS.

For the four charged years, Galloway reported an income of $13,241 (2003); $28,846 (2004); -$60,438 (2005); and -$37,438 (2006), yet paid personal bills during those years of $167,318 (2003); $170,004 (2004); $135,941 (2005); and $178,458 (2006). Cumulatively, the indictment alleges that he underreported his and his spouse’s taxable income during those years by $1,006,167, resulting in an additional tax due and owing of $234,473. The indictment also alleges that he made false statements to IRS agents in 2010 when they interviewed him about his income, in an attempt to evade assessment of income taxes.

Galloway was arraigned in federal court in Bakersfield this afternoon. He pleaded not guilty and was released on his own recognizance. His next court appearance will be in federal court in Fresno on June 23, 2014 at 1:00 p.m.

This case is the product of an investigation by IRS Criminal Investigation. Assistant United States Attorney Megan A. S. Richards is prosecuting the case.

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

SACRAMENTO, Calif. — Lida Amin, 40, of Dubai, United Arab Emirates, and Dublin, Calif., pleaded guilty today to conspiring to bribe a public official in furtherance of an ongoing effort to secure government contracts through graft, United States Attorney Benjamin B. Wagner announced.

On August 8, 2013, a federal grand jury charged Lida Amin and her brother Nabil Amin with conspiring to bribe a public official in exchange for a military contract to supply medical clothing and linens that were to be shipped to Afghanistan via Travis Air Force Base. Lida Amin was also charged with three counts of using interstate commerce facilities to aid in her bribery activities: one of those counts is for transportation of goods on Interstate 80 and two of the counts are for using Internet-based email to communicate with officials at Travis Air Force Base.

According to the plea agreement, from 2007 to 2010, Lida Amin engaged in a related scheme for which she is facing federal charges in Texas. In that scheme she conspired to bribe a member of the U.S. Air Force who was serving in Afghanistan as a contracting officer. He awarded contracts to the conspirators in exchange for the promise of $30,000. In 2008, the contracting officer was paid $18,000, but the remaining $12,000 was still owed.

The charges to which Amin pleaded guilty today relate to a second round of contacts with the same contracting officer. In June 2012, he was working for the U.S. government as a civilian acquisition analyst (or contract administrator) in Afghanistan and contacted Lida Amin to see if she was interested in working with government contracts again. Lida Amin replied that she was and agreed to meet in Budapest, Hungary to talk. The scheme involved the contract administrator assisting Lida Amin to obtain as many new government contracts as possible. In exchange, she promised to make bribe payments to the contract administrator.

In September 2012, Lida Amin met with the contract administrator in Budapest. They discussed two upcoming contracts, the manner and amount of the bribe, and in addition to that amount, Lida Amin would pay him an extra $12,000 to cover the debt that he was owed from 2008. Lida Amin and the contract administrator arranged a means to communicate covertly about the government contract bidding process.

Lida Amin established companies and bank accounts in Afghanistan to receive the proceeds from government contracts. In July 2013, Lida Amin, using the alias “Sabrina Samir” and acting through one of her companies, Striker Logistics, shipped contract goods, including medical clothing and linens, to Travis Air Force Base.

On August 28, 2013, Lida Amin was arrested in Prague after she traveled there to meet with the contract administrator.

This case is the product of an investigation by the U.S. Federal Bureau of Investigation, the U.S. Drug Enforcement Administration, and the Fremont Police Department. Assistance was provided by the U.S. Department of Justice, Office of International Affairs and the Czech National Police. Assistant United States Attorney Michael M. Beckwith is prosecuting this case and the case in Texas.

Nabil Amin is scheduled for a status conference in Sacramento on July 9, 2014. The charge against him is only an allegation; he is presumed innocent until and unless proven guilty beyond a reasonable doubt. On June 17, 2014, Lida Amin is scheduled to plead guilty to the charges brought in the Northern District of Texas for the earlier bribery scheme. That hearing will be held in the federal courthouse in Dallas.

Amin is scheduled to be sentenced by United States District Kimberly J. Mueller on September 3, 2014. The plea agreement under which she entered her plea is subject to the approval of Judge Mueller. If the agreement is accepted, Amin’s 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.

The public is encouraged to report instances of public corruption and government fraud to the FBI by calling toll free 855-4NO-PCGF (855-466-7243).

SACRAMENTO, Calif. — Jamie Golladay, 32, of Antelope, was sentenced today by United States District Judge Kimberly J. Mueller to 14 years in prison for possession with intent to distribute methamphetamine, possession with intent to distribute heroin, and possession of a firearm during and in relation to a drug trafficking crime, United States Attorney Benjamin B. Wagner announced.

According to court documents, on July 27, 2013, Roseville police officers, investigating a vehicle theft, conducted a search at Golladay’s residence in Antelope. Officers discovered three firearms, baggies with heroin and methamphetamine, tablets of oxycontin, oxycodone, and methadone. Officers also found firearm magazines, three digital scales, syringes, ammunition, and two large safes. Inside the safes, officers found approximately two pounds of methamphetamine, one pound of heroin, and a pink slip tied to their stolen vehicle investigation. On March 12, 2014, Golladay pleaded guilty to possessing a .40-caliber semi-automatic pistol and a 6.35 mm semi-automatic Berretta pistol in furtherance of a drug trafficking offense. He also admitted that he possessed the methamphetamine and heroin with the intent to distribute.

This case was the product of an investigation by the Drug Enforcement Administration, the Roseville Police Department, and the Citrus Heights Police Department with close coordination with the Sacramento County District Attorney’s Office. Assistant United States Attorney Olusere Olowoyeye prosecuted the case.

FRESNO, Calif. — David Walter Fee, 22, of Fresno, entered a guilty plea on Monday to aiming a laser pointer at a California Highway Patrol airplane, announced U.S. Attorney Benjamin B. Wagner and Monica Miller, Special Agent in Charge of the FBI’s Sacramento Field Office.

According to court documents, the CHP airplane, identified as Air 43, was struck up to 50 times by a powerful green laser pointer. As a result, the pilot suffered temporary blindness and Air 43 was forced to break away from its duties relating to a burglary in progress at a Fresno middle school.

Fee is scheduled to be sentenced before U.S. District Judge Lawrence J. O’Neill on August 25, 2014. He faces a maximum prison term of five years and a fine of up to $250,000. 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 was investigated by the FBI’s Fresno Office, the California Highway Patrol, and the Fresno Police Department. Assistant U.S. Attorneys Karen A. Escobar and Michael G. Tierney are prosecuting this case.

The FBI announced a national campaign today to deter people from pointing lasers at aircraft. The FBI is offering a reward of up to $10,000 for information that leads to the arrest of any individual who aims a laser at aircraft. The reward is available for 90 days in all 56 FBI field offices. Thousands of laser attacks go unreported every year. If you have information about a laser strike, or see someone pointing a laser at an aircraft, call your local FBI field office or dial 911.

FRESNO, Calif. —Victor Duane Smith, 59, of Fresno, was sentenced today to eight years in prison by Judge Anthony W. Ishii, to be followed by 15 years of supervised release, for receiving child pornography, United States Attorney Benjamin B. Wagner announced. Smith was also ordered to pay $5,000 to a child shown in five images he received.

According to court documents, in July 2013, law enforcement began tracking an individual who was using the Fresno County Public Library’s public wireless system to view child pornography through a file-sharing program. Investigators were able to watch Smith in the library while he used the program. Smith later confessed to the offense.

“The sentence is a stern reminder about the consequences facing those who use the Internet to sexually exploit innocent children,” said Mike Prado, resident agent in charge of Homeland Security Investigations (HSI) Fresno. “The fact this defendant was accessing child pornography in a public place where young people and their families congregate makes his actions even more disturbing. HSI will continue to work with its law enforcement partners here in the Fresno area and across the country to target child sexual predators who mistakenly believe they can act with impunity in cyberspace.”

This case was the product of an investigation by the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the Central California Internet Crimes Against Children Task Force, and the Fresno County Sheriff’s Office. Assistant United States Attorney Michael G. Tierney is prosecuting 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. — Ernedina Madrigal, 78, of Fresno, aka Mary Louise Madrigal, pleaded guilty today to stealing social security benefits, United States Attorney Benjamin B. Wagner announced.

According to court documents, in September 1996, Madrigal applied for and began receiving social security benefits using a fraudulently-obtained social security number in her sister’s name. At that time, Madrigal already had applied for and was receiving social security benefits under her own name and legitimate social security number. For more than 16 years, Madrigal to unlawfully received social security benefits under the illicit social security number while also receiving benefits under her legitimate social security number. Madrigal also failed to report her receipt of earned income to the Social Security Administration. In all, Madrigal received approximately $113,000 in unlawful benefits.

This case was the product of an investigation by the U.S. Social Security Administration, Office of Inspector General. Assistant U.S. Attorneys Christopher Baker and Patrick Delahunty are prosecuting the case.

Madrigal is scheduled to be sentenced by Senior U.S. District Judge Anthony W. Ishii on August 25, 2014. Madrigal faces a maximum statutory penalty of ten years in prison, a $250,000 fine, or both. The actual sentence, however, 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.

SACRAMENTO, Calif. — Medtronic Inc. of Fridley, Minn., has agreed to pay the United States $9.9 million to resolve allegations under the False Claims Act that the company used various types of payments to induce physicians to implant pacemakers and defibrillators manufactured and sold by Medtronic, United States Attorney Benjamin B. Wagner announced today.

“Improper financial incentives have the potential to compromise physician medical judgment,” said Stuart F. Delery, Assistant Attorney General for the Civil Division of the Department of Justice. “This case demonstrates the Department of Justice’s commitment to pursue medical device manufacturers that use improper financial relationships to influence physician decision-making.”

The United States alleges that Medtronic caused false claims to be submitted to Medicare and Medicaid by using multiple types of illegal kickbacks to induce physicians to implant Medtronic pacemakers and defibrillators. Specifically, Medtronic allegedly induced physicians to use its products by: 1) paying implanting physicians to speak at events intended to increase the flow of referral business; 2) developing marketing and business development plans for physicians at no cost; and 3) providing tickets to sporting events. The United States alleges that Medtronic paid the remuneration to persuade the physicians to continue using Medtronic products or to convert their business from a competitor’s products.

“Decisions about devices used to treat cardiac rhythmic disease should be based on the best interests of the patient, not on whether the manufacturer is going to pay a kickback,” said U.S. Attorney Wagner. “These sorts of improper financial incentives not only undermine the integrity of medical decisions, they also waste taxpayer funds and are unfair to competitors who are trying to play by the rules.”

“As this settlement indicates, health care executives who try to boost profits by paying kickbacks to doctors will instead pay the government for their improper conduct,” said Ivan Negroni, Special Agent in Charge for the U.S. Department of Health and Human Services Office of Inspector General’s San Francisco Office. “We will continue to work with the Department of Justice to root out illegal, wasteful business arrangements.”

The settlement announced today stems from a whistleblower complaint filed by a former employee of Medtronic, Adolfo Schroeder, according to the qui tam provisions of the False Claims Act that permits private persons to bring a lawsuit on behalf of the United States and to share in the proceeds of the suit. Mr. Schroeder will receive approximately $1.73 million.

The settlement with Medtronic Inc. was the result of a coordinated effort among the Department of Justice’s Civil Division, Commercial Litigation Branch; the U.S. Attorney’s Office for the Eastern District of California; and the Office of Inspector General of the U.S. Department of Health and Human Services. Assistant United States Attorney Catherine Swann handled the investigation for the Eastern District of California.

The claims settled by this agreement are allegations only, and there has been no determination of liability.

SACRAMENTO, Calif. — Bruce Austin Watkins, 43, of Westwood, was sentenced today by United States District Judge Lawrence K. Karlton to seven years and six months in prison, to be followed by 36 months of supervised release, for receiving child pornography, United States Attorney Benjamin B. Wagner announced.

According to court documents, law enforcement executed a search at Watkins’s residence on May 6, 2013. Two laptops and an external hard drive seized from Watkins contained 500 videos and 220 images of child pornography that had been collected by Watkins between January 21, 2007, and April 29, 2013. Among the files were images showing the violent sexual molestation of children as young as toddlers. At the time of the search, Watkins told law enforcement that he had been looking at child pornography online for 15 to 20 years.

This case was the product of an investigation by the Federal Bureau of Investigation and the Northern Nevada Child Exploitation Task Force. Assistant United States Attorney Kyle Reardon is prosecuting the case.

Thisase 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. — One man was sentenced and another pleaded guilty to child pornography offenses in separate cases in federal court today, United States Attorney Benjamin B. Wagner announced.

Sentencing in Case # 1:12-cr-435-LJO-SKO
United States District Judge Lawrence J. O’Neill sentenced Kevin Munoz, 24, of Modesto, today to six years in prison, to be followed by 15 years of supervised release, for his conviction of one count of receipt of child pornography. According to the plea agreement, between December 25, 2011, and April 20, 2012, Munoz knowingly received or distributed more than 600 images of minors engaged in sexually explicit conduct. Some of the images were of prepubescent minors and some images depicted violence. The case is the result of an investigation by the Ceres Police Department with assistance from the Federal Bureau of Investigation.

Guilty Plea in Case # 1:14-cr-055-LJO-SKO
Allen Kendrick, 47, of Escalon, pleaded guilty today to one count of receiving and distributing child pornography from June 2013 though December 2013. According to a criminal complaint, Google reported to the National Center for Missing & Exploited Children (NCMEC) that on December 10, 2013, six images of suspected child pornography were associated with a Google account. NCMEC referred the matter to law enforcement, and a detective with the Ceres Police Department discovered that the Google account had been accessed from residences in Modesto and Escalon. Kendrick was a registered sex offender on GPS location monitoring, and GPS records confirmed that he was at the residences when the accounts had been accessed. Kendrick was ordered detained as a danger to the community and a flight risk on March 11, 2014, at his initial court appearance.

Kendrick faces a sentence of 15 to 40 years in prison, a potential lifetime term of supervised release and $250,000 fine when he is sentenced on August 11, 2014, at 8:30 a.m. The actual sentence imposed, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines. This case is the result of an investigation by the Ceres Police Department and the Modesto FBI Office with assistance from the California Department of Corrections and Rehabilitation Division of Adult Parole Operations.

Assistant United States Attorney David Gappa is prosecuting both cases. They have been 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.justice.gov/psc. Click on the “resources” tab for information about Internet safety education.

SACRAMENTO, Calif. — After a four-day trial, a federal jury found James O. Molen, 70, of Chico, guilty today on five counts — two counts of filing false liens against federal officers, two counts of contempt, and one count of interference with the administration of tax laws, United States Attorney Benjamin B. Wagner announced. The trial was held before United States District Judge Troy L. Nunley.

According to evidence presented at trial, Molen ran Touch of Class Florist in Chico, and in beginning in 2000, he stopped withholding and paying federal employment and unemployment taxes. After years of collection efforts by the IRS, Molen filed false liens in 2004 against people who had been involved in his case: two federal judges, the United States Attorney, two civil Department of Justice attorneys, an IRS revenue officer, and a witness. The liens claimed collateral of more than $93 billion. After a 2007 court order prohibited him from filing more false liens against federal officers, in 2010, Molen filed false liens against two revenue officers assigned to collect his taxes, claiming more than $199,000 in collateral. Molen ignored several court orders, sent a bogus tax payment to the IRS that he called an “International Bill of Exchange,” and sought to frustrate collections by placing his residence and bank accounts in trusts.

In 2003, Molen told the New York Times of the government, “"They can take a hike. … I do not intend to abide by any command of me, flesh and blood, to do anything.” This afternoon, Molen was immediately remanded upon conviction. Judge Nunley noted that Molen “thinks the law doesn’t apply to him” and has put “people through the ringer” by filing liens “retaliating against them.”

This case is the product of an investigation by the Internal Revenue Service –Criminal Investigation and the United States Treasury Inspector General for Tax Administration (TIGTA). Assistant United States Attorneys Matthew D. Segal and Sherry D. Hartel Haus are prosecuting the case.

Molen is scheduled to be sentenced by Judge Nunley on August 21, 2014. He faces a maximum statutory penalty of 10 years in prison and a $250,000 fine for each count of filing false liens, and three years in prison and a $5,000 fine for impeding the due administration of the internal revenue laws. The charge of contempt holds no maximum penalty. 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. — Rathanak Van, 28, of Stockton, was sentenced on Thursday by United States District Judge Morrison C. England Jr. to 11 years and three months in prison for conspiring to commit a robbery and conspiring to possess with intent to distribute more than five kilograms of cocaine, United States Attorney Benjamin B. Wagner announced.

According to court documents, from December 4, 2012 through February 13, 2013, Van agreed to lead in the planning of robbery of a “stash house”— a residence in Stockton where he and other members of the conspiracy believed that individuals were holding a large quantity of cocaine. Van was arrested before he could follow through with the planned robbery.

This case was the product of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Stockton Police Department. Assistant United States Attorney Paul Hemesath prosecuted the case.

"As the federal agency charged with fighting violent crime ATF is committed to working with our local partner the Stockton Police Department to bring to justice those who commit these violent acts," said Bureau of Alcohol, Tobacco, Firearms and Explosives, Special Agent in Charge Joseph M. Riehl. "Today’s sentencing removes another criminal who was willing to participate in committing an armed robbery and subject the public to danger.”

Two of Van’s alleged co-conspirators have been sentenced, and another co-defendant is awaiting further court proceedings.

FRESNO, Calif. — Dorothy Brown, aka Dorothy Hickey, 62, of Modesto, was indicted today by a federal grand jury charging her with stealing benefits paid by the United States Social Security Administration (SSA), misrepresenting her eligibility for benefits to the SSA, and concealing material information from the SSA, United States Attorney Benjamin B. Wagner announced.

According to the indictment, Brown misrepresented her true economic resources to the SSA, failing to disclose her savings in multiple bank accounts and the true cost of her living expenses. She also concealed her true living situation from the SSA. As a result, and over the course of nearly four years, Brown received approximately $36,000 in SSA benefits to which she was otherwise not entitled.

This case is the product of an investigation by the U.S. Social Security Administration, Office of Inspector General. Assistant United States Attorney Patrick R. Delahunty is prosecuting the case.

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

FRESNO, Calif. — Today a federal grand jury indicted the man alleged to be responsible for pipe bombs found at a Chowchilla Shell Gas Station on March 28, 2014, and at the Crossroads Christian School in Madera on May 4, 2014, United States Attorney Benjamin B. Wagner announced.

The nine-count indictment returned against Richard Wilson Key, 37, of Raymond, charges him with crimes associated with the possession and use of three pipe bombs, including two counts of attempting to damage property by use of explosives, two counts of carrying a destructive device in relation to a crime of violence, three counts of unlawfully making a destructive device, possession of destructive device, and carrying a firearm in relation to a crime of violence.

According to court documents, on March 28, 2014, Chowchilla police responded to a report of a possible pipe bomb in a trash can by a Shell gas station. Inside the trash can was a silver pipe with a cap on both ends. Written on the top of one of the caps were the words, “PULL TO OPEN,” and a smiley face was drawn on the bottom of the cap. When the pipe was rendered safe, an inspection showed that it was set to be triggered with a nine‑volt battery that would spark when the plastic center piece on one of the caps was pulled. According to the criminal complaint, the “PULL TO OPEN” and the smiley face drawn on the bomb demonstrated that this bomb was manufactured for the purpose of killing or seriously injuring an unsuspecting victim.

On May 4, 2014, a similar device was found by children at a private grade school on property owned by the Grace Community Church. A third destructive device was found in Key’s possession when he was arrested by law enforcement on May 8, 2014.

“Thanks to the work of the federal agents and local law enforcement officers whatever plans Key had were disrupted and no one was injured,” stated U.S. Attorney Wagner. “Through these partnerships, we will continue to investigate and bring to justice those who threaten the safety of our residents.”

“Luck was on our side as no serious injuries or fatalities were incurred during either incident,” said Special Agent in Charge Monica M. Miller of the Sacramento FBI. “The FBI responds swiftly with all available resources when individuals act with such blatant disregard for life, especially when innocent children have been placed at risk. By selecting busy public areas, it was clear that the devices were planted with an intent to cause death or serious bodily injury. The FBI will work closely with the US Attorney’s Office to ensure Key will face the fullest extent of federal prosecution. I am grateful for our dedicated agents who stopped this serial bomber before he was able to strike again.”

This case is the product of an investigation by the Federal Bureau of Investigation, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Madera County Sheriff’s Office, the Fresno County Sheriff’s Office, and the Chowchilla Police Department. Assistant United States Attorney Kathleen A. Servatius is prosecuting the case.

Key is in custody and is scheduled for arraignment on May 23, 2014. If convicted, he faces the following statutory penalties: at least 30 years in prison and up to life for each count of using and carrying a destructive device; and at least 20 years and up to life in prison for using and carrying a firearm in relation to a crime of violence; a term of between five and 20 years in prison on each count of the attempted use of explosives to damage property; and a term of up to 10 years in prison for each of the three counts of making a destructive device and the one count of possessing destructive devices. In addition, Key could be fined up to $250,000 for each count. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

SACRAMENTO, Calif. — United States District Judge Morrison C. England Jr. sentenced Sergey Potepalov, 58, of Citrus Heights, today to two years and three months in prison for directing a marriage fraud scheme, United States Attorney Benjamin B. Wagner announced. He was the last of nine defendants to be sentenced in the case.

According to court documents, Potepalov, a naturalized U.S. citizen of Russian descent, was involved in an elaborate immigration fraud scheme involving foreign nationals from Eastern Europe and Russia who paid up to five-figure fees to enter into sham marriages with locally recruited U.S. citizens in an effort to legalize their immigration status. For foreign nationals, marriage to an American citizen is one means of obtaining lawful permanent residency in the United States. To initiate that process, aliens who are outside the country must apply for a fiancé visa that enables them to travel to the United States to marry the citizen spouse. Alternatively, foreign nationals who are already in the United States and entered the country legally may wed here and apply for lawful permanent residence based upon the marriage. Upon entry to the United States, they might also apply for political asylum.

According to court documents, co-defendant Keith O’Neil, 47, of Sacramento, entered into two sham marriages and accompanied Potepalov on three trips to Moscow. He filed petitions for fiancé visas for four women from Russia, Uzbekistan, and Armenia; all of the petitions were ultimately denied.

The other defendants sentenced in the case were either foreign nationals who attempted to obtain fiancé visas and “green cards” or U.S. citizens who agreed to enter into sham marriages with the aliens in return for promised payments of up to $5,000. Documents filed in the case reveal that participants in the scheme went to significant lengths to make the sham marriages appear legitimate: posing for wedding pictures together, establishing apartments in both spouses’ names, and rehearsing false answers for interviews with immigration officials. All have pleaded guilty and sentenced as follows:

Keith O’Neil sentenced to 18 months in prison
Marla Brennan, 33, of Sacramento, sentenced to six months prison and six months home confinement
Richard Vargas, 39, of Sacramento, sentenced to one year in prison
Olga Nekrasova, 29, of San Francisco, sentenced to four months in prison
Brian Barnes, 35, of Sacramento, sentenced to 10 months in prison
Anthony Rivera, 38, Sacramento, sentenced to two years in prison
Veranika Koushal, 35, of West Palm Beach, Fla., sentenced to two years of probation
Marlena Colvin, 30, of Sacramento, sentenced to 10 months of probation

U.S. Attorney Wagner said: “Potepalov essentially built a business out of phony marriages between U.S. Citizens and persons who sought citizenship. Our office is committed to prosecuting those — aliens and U.S. citizens alike — who try to profit from circumventing our immigration laws through fraud and deceit.”

“Marriage fraud and other immigration benefit fraud schemes undermine the integrity of our legal immigration system and potentially rob deserving immigrants of benefits they rightfully deserve,” said Daniel Lane, assistant special agent in charge of HSI Sacramento. “America’s legal immigration system is not for sale—and as this sentence makes clear —HSI will aggressively target those who conspire to corrupt the integrity of that system simply for personal profit.”

According to documents filed in the case, ICE HSI first began investigating Potepalov’s activities in 2006 after receiving information from the U.S. Department of State’s Diplomatic Security Service indicating the immigration consultant was filing fraudulent visa petitions on behalf of Russian and Ukrainian nationals. As the investigation progressed, HSI agents worked closely with personnel from U.S. Citizenship and Immigration Service’s (USCIS) Fraud Detection and National Security Unit (FDNS) in Sacramento to identify aliens who may have sought to benefit from the scheme.

“Immigration scams meant to circumvent our laws are a cruel insult to those who wait patiently to immigrate, respectful of our laws,” said Mari Carmen Jordan, district director of USCIS Sacramento District. “We’re proud of the work our Fraud Detection and National Security unit did to reveal this scheme, including site visits, interviews and in-depth research.”

This case is the product of an investigation spearheaded by the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), with substantial assistance from U.S. Citizenship and Immigration Services and the Department of State’s Diplomatic Security Service. Assistant United States Attorney Michele M. Beckwith prosecuted the case.

FRESNO, Calif. — A federal grand jury returned a one-count indictment today against Santos Acevedo Gutierrez, 41, of Shafter, charging him with possession with intent to distribute methamphetamine, United States Attorney Benjamin B. Wagner announced.

According to court documents, on April 30, 2014, Kern County Sheriff’s deputies executed a search warrant at Gutierrez’s home and seized approximately four pounds of methamphetamine as well as a digital scale, packaging materials, and more than $10,000 in cash.

This case is the product of an investigation by the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and the Kern County Sheriff’s Office.

Last week, a federal grand jury returned a two-count indictment against Armando Andrade Rubio, 26, of Fontana, charging him with conspiracy to distribute, and possession with intent to distribute methamphetamine. (Docket #: 1:14-cr-100-LJO)

According to court documents, on May 7, 2014, Rubio arranged to deliver a shipment of methamphetamine from Mexico to a government informant in Bakersfield. When the two met in a Lowes parking lot, Rubio showed the informant a suitcase with 18 pounds of methamphetamine.

This case is the product of an investigation by the Drug Enforcement Administration, the Kern County Sheriff’s Office, and the Southern Tri-County High Intensity Drug Trafficking Area Task Force. Assistant United States Attorney Brian K. Delaney is prosecuting both cases.

If convicted, both 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.

SACRAMENTO, Calif. — Grand juries in Fresno and Sacramento have indicted eight current or former members of the California National Guard, in seven separate cases, charging them with wire fraud for fraudulently obtaining recruiting referral bonuses, United States Attorney Benjamin B. Wagner announced.

According to court documents, the United States Army contracted with a company called Document and Packaging Broker Inc. (DOCUPAK) to administer the Guard Recruiting Assistance Program (G-RAP). Under G-RAP, members of the California National Guard served as Recruiting Assistants. If a Recruiting Assistant referred a potential Guard member to a recruiting office and that person ultimately enlisted, the Recruiting Assistant was eligible to receive monetary compensation disbursed by DOCUPAK.

Each of the defendants indicted today served in the California National Guard and is alleged to have played a role in causing DOCUPAK to issue unearned recruiting compensation by falsely claiming that various enlistees had been referred to recruiting offices by particular eligible Recruiting Assistants, when in fact they had not. Each of the indicted defendants is alleged to have received recruiting compensation as a result of those false referrals.

U.S. Attorney Wagner stated: “Ripping off a program intended to enhance our armed services is not just illegal, it is reprehensible. We will continue to pursue those who attempt to undermine the military for their own personal profit.”

“We take allegations of fraud very seriously in the U.S. Army and will continue to pursue those allegations with steadfast commitment and aggressive investigative techniques where ever the evidence leads us,” said Mr. Frank Robey, Director of the Major Procurement Fraud Unit of the Army's Criminal Investigative Command.

“The Army National Guard trusted the individuals indicted today to attract and assist others through the recruiting process, and compensated them for these efforts,” said Special Agent in Charge Monica M. Miller of the Sacramento FBI. “Instead, the recruiting assistants are alleged to have stolen federal funds by circumventing established processes, claiming recruitment of individuals whom they often had never met, and in some cases, diverting portions of the payments to others who are prohibited from receiving the funds.”

"Today's indictments reflect the essential interagency coordination between the California National Guard and law enforcement agencies across the nation," said Maj. Gen. David S. Baldwin, Adjutant General for the California National Guard. "We stand ready to fully cooperate with civil and law enforcement agencies as these cases progress, ensuring that those who fall short of the California Guard's core values are held accountable."

These cases are the product of an ongoing investigation by the Army Criminal Investigative Command Major Procurement Fraud Unit, the Defense Criminal Investigative Service, and the Federal Bureau of Investigation. Assistant United States Attorney Michael G. Tierney is prosecuting the Fresno cases and Assistant United States Attorney Matthew G. Morris is prosecuting the Sacramento cases.

The defendants indicted today are as follows:

• Joaquin Cuenca, 36, of San Diego, was a Recruiter and allegedly is responsible for causing $30,000 in fraudulent bonuses.
• Leonardo Pesta, 46, of Mountain View, was a Recruiter and allegedly is responsible for causing $20,000 in fraudulent bonuses.
• Nicholas Huerta, 32, of Fresno; was a Recruiter and allegedly is responsible for causing $25,000 in fraudulent bonuses.
• Jimmy Maldonado, 33, a Recruiter, and his wife, Mayra Garcia Maldonado, 27, a Recruiting Assistant, both of Fresno, are allegedly responsible for causing $40,000 in fraudulent bonuses.
• Sarah N. Nattress, 26, of Paradise, was a Recruiting Assistant and is allegedly responsible for $28,000 in fraudulent bonuses.
• Brian M. Kaps, 40, of Chico, was a Recruiting Assistant and is allegedly responsible for $16,000 in fraudulent bonuses.
• Richard C. Sihner, 52, of Elk Grove, was a Recruiting Assistant and is allegedly responsible for $95,000 in fraudulent bonuses. Sihner is also charged with one count of making false statements to a federal agent.

If convicted, each defendant faces a maximum statutory penalty of 20 years in prison and a $250,000 fine for each count of wire 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.

SACRAMENTO, Calif. — Justin Isaac Jackson, 24, of Sacramento, was sentenced today by United States District Judge John A. Mendez to 11 years and four months in prison for sex trafficking of a minor, United States Attorney Benjamin B. Wagner announced.

According to court documents, from January to April 2009, Jackson acted as a pimp for a 16-year-old runaway girl in Sacramento and Santa Cruz. Although he was aware of her age, he purchased motel rooms for her use, drove her to meetings with customers, and provided her with a phone to use to coordinate her prostitution activities. In exchange, Jackson received some of the money that she earned. On April 26, 2009, police stopped Jackson while he was driving a car with the girl and an adult prostitute and arrested him.

At sentencing, Judge Mendez told Jackson that the 135-month sentence was warranted because his conduct reflected “a level of callousness and cultural acceptance of juvenile prostitution that is alarming. As an adult, Jackson thought nothing of promoting the prostitution activities of a young girl he knew to be troubled. Where others would seek to protect, Jackson chose to exploit.”

Supervisory Special Agent Maria Johnson of the Sacramento FBI stated: “Jackson used his victim’s vulnerability and naiveté to coerce her into an exploitive and abusive situation that no minor should ever experience. The FBI and its Child Exploitation Task Force partners are united and committed to identifying and recovering victims of child sex trafficking. We hope that a sense of normalcy will eventually be restored to these minors.”

This case is the product of an investigation by the Federal Bureau of Investigation’s Innocence Lost Task Force, a task force composed of the FBI, the Sacramento Police Department, and the Sacramento County Sheriff. Assistant United States Attorney Kyle Reardon 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. — Jose Antonio Hernandez, 41, and Genaro Vela-Rodriguez, 28, both of Fresno, pleaded guilty today before Senior U.S. District Judge Anthony W. Ishii to one count each of conspiracy to commit criminal copyright infringement and traffic in counterfeit labels and counterfeit documentation and packaging, United States Attorney Benjamin B. Wagner announced.

According to court documents, Hernandez and Vela-Rodriguez admitted that from July to September 18, 2012, they were involved in an extensive scheme with others to store and distribute thousands of counterfeit DVD movies and audio CDs. Both men admitted to selling counterfeit movie DVDs and CDs, including some movies that had not yet been commercially distributed. Defendant Hernandez admitted to manufacturing counterfeit DVD movies.

This case is the product of an extensive investigation by the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI). Assistant United States Attorneys Henry Z. Carbajal III and Patrick R. Delahunty are prosecuting the case.

The defendants are scheduled to be sentenced by Judge Ishii on August 11, 2014, at 10:00 a.m. The maximum statutory penalty for conspiracy to commit criminal copyright infringement and traffic in counterfeit labels and counterfeit documentation and packaging is five years in prison. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

SACRAMENTO, Calif. —Joshua Clymer, 28, currently of San Francisco, pleaded guilty today to conspiracy to commit mail and wire fraud in connection with a mortgage fraud scheme, United States Attorney Benjamin B. Wagner announced.

According to court documents, from approximately October 2006 through August 2008, Clymer participated in a mortgage fraud scheme involving multiple properties in the Sacramento area. As a part of the scheme, Clymer and a business partner used several fraudulent tactics to help buyers secure home loans from lenders, including inflating the buyer’s income, providing false employment histories, falsifying gifts made to the buyers, and giving undisclosed cash back to some buyers outside of escrow. Buyers of the properties later defaulted on their loans, leading to foreclosure sales, and in one instance a loan modification. The estimated loss associated with Clymer as a result of these activities is approximately $352,000.

This case was the product of an investigation by the Federal Bureau of Investigation and the Internal Revenue Service, Criminal Investigation. Assistant United States Attorneys Christopher S. Hales and Audrey Hemesath are prosecuting the case.

Clymer is scheduled to be sentenced by Judge William B. Shubb on September 22, 2014. Clymer faces a maximum statutory penalty of 30 years in prison and a $1 million fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

SACRAMENTO, Calif. — Barry Rhodes, 28, of Stockton, was sentenced today by United States District Judge Morrison C. England Jr. to over 7 years and three months in prison for being a felon in possession of a firearm, United States Attorney Benjamin B. Wagner announced.

According to court documents, on March 9, 2013, in the city of Stockton, an officer pulled over Rhodes’s 1999 Buick Regal for an expired vehicle registration. Rhodes was unable to provide his driver’s license. The officer discovered that Rhodes had a suspended license, two outstanding arrest warrants, and was on active searchable probation. A search of the vehicle uncovered a 9 mm Sig Sauer semi-automatic handgun and a 15-round magazine with 12 live rounds of ammunition inside. Rhodes has five felony convictions since 2004.

This case is the product of an investigation by the Stockton Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant United States Attorney Olusere Olowoyeye prosecuted the case.

“Today’s sentencing demonstrates our continued effort to apprehend violent offenders and to keep our citizens and our streets safe,” said Bureau of Alcohol, Tobacco, Firearms and Explosives, Special Agent in Charge, Joseph M. Riehl. “Our expertise in firearms investigations is a valuable asset we bring to the program as we continue our fight against violent crime with our partners.”

This case is the product of “Operation Gideon IV,” an ATF initiative targeting violent criminals and criminal organizations operating in Stockton. Experienced undercover ATF special agents from throughout the U.S. were deployed with local ATF agents and Stockton police officers to conduct covert investigations into violent criminals in Stockton and surrounding areas. As a result of this partnership, 52 defendants were charged federally, and 19 others were charged in state prosecutions. The operation also resulted in the collective seizure of 84 firearms, 36 pounds of methamphetamine, and 21 pounds of marijuana.

SACRAMENTO, Calif. — Stockton residents Rudy A. Trujillo, 35, and Regina L. Perea, 34, pleaded guilty today to three counts each of aggravated identification theft related to the fraudulent use of identification documents of others, United States Attorney Benjamin B. Wagner announced.

This case is the product of an investigation by the Stockton office of the United States Postal Inspection Service and the San Joaquin County Sheriff's Office with assistance from the Stockton and San Jose police departments, the Placer County Sheriff's Office, and the Delta Regional Auto Theft Task Force. Assistant United States Attorney Michelle Rodriguez is prosecuting the case.

San Francisco Division Inspector in Charge Rafael Nunez of the U.S. Postal Inspection Service stated: "We are working closely with the U.S. Attorney's Office and our partners in law enforcement to arrest and prosecute all those responsible for stealing U.S. Mail and using the contents of stolen U.S. Mail in furtherance of fraud and identity theft crimes."

According to court documents, Trujillo and Perea possessed hundreds of pieces of stolen U.S. mail, along with hundreds of stolen checks, credit cards and identification documents at their Stockton residence. During the January 21, 2014, search of their residence, law enforcement recovered the stolen mail and found evidence indicating that the defendants were altering checks, and manufacturing credit cards. During the search, Trujillo and Perea successfully fled from law enforcement, and a high-speed chase ensued through Stockton residential streets. On March 7, 2014, Trujillo and Perea were arrested in San Jose. Upon arrest, the defendants were driving a stolen vehicle with stolen license plates and were again in possession of a large quantity of stolen U.S. mail, checks, credit cards, and identification documents. Perea had assumed the identity of at least two additional female victims while she and Trujillo were on the run from law enforcement.

Trujillo and Perea are scheduled to be sentenced by U.S. District Judge Morrison C. England Jr. on August 7, 2014. They face a mandatory minimum sentence of 24 months for each of the three aggravated identity theft convictions. 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. — Victor Anthony Nottoli, 51, of Hillsborough, Calif., pleaded guilty today to one count of conspiracy to defraud the United States and one count of causing at least 24 tons of misbranded smokable synthetic cannabinoids (SSC) to be introduced into interstate commerce. Four defendants arrested last week for manufacturing and distributing SSC were indicted today. The guilty plea and the indictments were announced by United States Attorney Benjamin B. Wagner; Jeffrey J. Fitzpatrick, Special Agent in Charge of the San Francisco Field Division of the U.S. Drug Enforcement Administration; Jose Martinez, Special Agent in Charge of the Oakland Field Office, Internal Revenue Service, Criminal Investigation; and Clark E. Settles, Special Agent in Charge of the San Francisco Field Office of the U.S. Immigration and Customs Enforcement’s, Homeland Security Investigations.

Nottoli pleaded guilty to one count of conspiracy to defraud the United States by interfering with the lawful governmental regulatory and enforcement functions of the FDA and DEA. According to court documents, between April 1, 2011, and June 26, 2013, Nottoli generated more than $20 million by distributing the SSC products commonly known as K2 or spice in retail outlets throughout the U.S. and from his six smoke shops doing business under the name “The Stuffed Pipe,” and located at 5135 W. Shaw Ave., Fresno; 2377 E. Shaw Ave., Fresno; 7273 N. Blackstone Ave., Fresno; 516 E. Olive Ave., Fresno; 1318 S. Mooney Ave., Visalia; and 3719 Wilson Rd., Bakersfield. In 2012, Nottoli bought a Florida company that manufactured and distributed SSC products and brought the production and distribution operations to a warehouse in Millbrae, Calif. Then in January 18, 2013, Nottoli leased a warehouse in Stockton and began manufacturing and distributing SSC products from that location.

According to court documents, Nottoli and his co-conspirators manufactured and distributed SSC products containing hallucinogenic chemical compounds AM‑2201 and XLR11. They referred to the SSC products as herbal incense, spice, botanicals, and potpourri and marketed them under names such as “Bizarro,” “Posh,” “Sonic Zero,” “Headhunter,” “Neutronium,” and “Orgazmo.” The products were labeled, “Not for Human Consumption.”

As charged in count two, Nottoli pleaded guilty to causing misbranded SSC products or drugs to be introduced into interstate commerce. According to court documents, between August 1, 2012, and June 26, 2013, twenty-four tons of misbranded drugs intended for human consumption were packaged and sold without the labeling required by law and necessary to protect the user such as: the place of business of the manufacturer, packer, or distributor; an accurate statement of the contents; adequate directions for use; warnings against use by children or where its use may be dangerous to health; warning against unsafe dosage; or methods or duration of administration or application.

In pleading guilty, Nottoli specifically agreed to the forfeiture of more than $6.6 million of drug proceeds: $6,488,000 in cash and $191,000 in other assets, including a truck and an Airstream Trailer.

Also today, a federal grand jury indicted Douglas Jason Way, 41, of Evanston, Ill.; Timothy Ortiz, 43, of Waukegan, Ill.; Timothy New, 31, of Pensacola, Fla.; and Natalie Middleton, 28, of Clovis, Calif., for their roles in Nottoli’s synthetic drug enterprise. The indictment charges Way, Ortiz, and New with conspiring to manufacture and distribute synthetic cannabinoids and with manufacturing, distributing, and attempting to possess with intent to distribute SSC products. Middleton, along with Way, Ortiz, and New, are also charged with causing the introduction of misbranded drugs into interstate commerce. Middleton individually was charged with engaging in a monetary transaction in property derived from drug trafficking to buy a time share in Lake Tahoe, Nevada.

“The use of synthetic or designer drugs has increased dramatically among teenagers and young adults. Although synthetic cannabinoids are marketed as ‘legal’ alternatives to marijuana, they are not only illegal but can be extremely harmful,” U.S. Attorney Wagner said. “We are committed to working with our law enforcement partners to shut down the manufacturers and distributors who reap tremendous profits without regard for the law or public safety.”

If convicted of the drug charges, Way, Ortiz, New, and Middleton face a maximum statutory penalty of 20 years in prison and a $1 million fine or twice the gain. The maximum statutory penalty for money laundering is 10 years in prison and a $250,000 fine. The FDA mislabeling charge carries a maximum penalty of three years in prison and a $10,000 fine or twice the gross gain. Any sentence imposed 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.

Way, Ortiz, and Middleton are scheduled for arraignment on May 21, 2014, in Fresno. New was ordered detained by a U.S. Magistrate Judge in Dallas, and is awaiting transportation to federal court in Fresno.

Today’s guilty plea and indictment follows on the heels of last week’s nationwide synthetic drug takedown in connection with Project Synergy Phase II. Project Synergy is a law enforcement initiative coordinated by the DEA that brings together federal, state, local, and international law enforcement resources to target the dangerous global synthetic designer drug industry.

President Obama signed the Synthetic Drug Abuse Prevention Act into law in 2012, making 26 types of synthetic cannabinoids, including AM-2201, Schedule I drugs under the Controlled Substance Act. Last May, DEA placed XLR11 in Schedule I after the Centers for Disease Control and Prevention found that acute kidney injury is associated with XLR11.

This case is the product of an Organized Crime Drug Enforcement Task Force (OCDETF) investigation by the DEA, IRS-CI, and U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), with assistance from the Office of Criminal Investigations of the Food and Drug Administration (FDA) and the Fresno County Sheriff’s Office. Assistant United States Attorney Karen A. Escobar is prosecuting the case and Assistant United States Attorney Heather Mardel Jones is handling the forfeiture of assets.

SACRAMENTO, Calif. — United States Attorney Benjamin B. Wagner announced that this week, in the Eastern District of California, two defendants were sentenced, three defendants pleaded guilty and one defendant was indicted for child pornography offenses. These cases were brought as part of Project Safe Childhood, a nationwide initiative by the Department of Justice to combat the epidemic of child sexual exploitation and abuse.

Jason Garrett Duran Sentenced to 20 Years in Prison, 2:12-cr-371 TLN
Jason Garrett Duran, 44, formerly of Bishop, was sentenced on Thursday by United States District Judge Troy L. Nunley to 20 years in prison for possession of child pornography. Duran was convicted by the State of California in June 2002 of a felony involving the aggravated sexual abuse, sexual abuse, or abusive sexual contact involving a minor and received a 10-year sentence for that crime. Approximately three months after being paroled, Duran began acquiring a collection of child pornography and engaging in sexually explicit online chats. FBI agents conducted a parole search of his Sacramento apartment on October 10, 2012, and found approximately 375 images and one video of child pornography on his computer and a removable thumb drive.

At sentencing, Judge Nunley stated, “Child pornography is not a victimless crime.” He told Duran that he was “a person who committed one of the most horrendous and atrocious crimes a person could commit against the most vulnerable members of our community – our children.”

This case was the product of an investigation by the District of Columbia Metropolitan Police Department, and the FBI’s Washington DC and Sacramento field offices.

Erik David McKinney Sentenced to 5 Years, 2:13-cr-035 JAM
Erik David McKinney, 28, of Oroville, was sentenced on Tuesday, May 13, 2014, by United States District Judge John A. Mendez to five years in prison for receipt and distribution of child pornography, to be followed by a 20-year term of supervised release. McKinney is also required to register under the federal Sex Offender Registration and Notification Act (SORNA). In October 2012, agents identified a computer at McKinney’s residence that was offering files of child pornography over the Internet and obtained a search warrant. On his computers agents found 10 videos and 617 images of child pornography some showing the sadistic and masochistic abuse of prepubescent boys and girls and the abuse of toddlers. This case was the product of an investigation by the FBI and the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI).

Larry Steven Occhipinti Jr. Indicted
A federal grand jury indicted Larry Steven Occhipinti, 38, of Red Bluff, on Thursday, charging him with receipt of child pornography. The indictment alleges that between May 31, 2012, and April 29, 2014, Occhipinti downloaded child pornography through the Internet. Occhipinti was arrested on May 1, 2014, and made his initial appearance in Sacramento the next day. On May 9, 2014, he was ordered released into the custody of his parent, and placed on electronic monitoring. He was also ordered to not access the Internet, and to have no contact with children. He is scheduled for arraignment on May 16, 2014. This case was the product of an investigation by HSI.

If convicted, Occhipinti faces a sentence of five to 20 years in prison, a fine of up to $250,000, and a term of five years to life of supervised release. The charges are only allegations and the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

Keith Richard Hill Pleads Guilty, 2:12-cr-420 TLN
Keith Richard Hill, 33, of Sacramento, pleaded guilty on Thursday to possession of child pornography. In October 2011, agents identified a computer at Hill’s residence offering child pornography through the Internet. Among the files being offered were videos of prepubescent girls engaged in sexually explicit conduct. During a search of his residence, agents found two computers with approximately 60 videos of child pornography. Hill is scheduled to be sentenced by Judge Troy L. Nunley on July 31, 2014. He faces a maximum statutory penalty of 10 years in prison and a $250,000 fine. This case was the product of an investigation by the Sacramento Internet Crimes Against Children Task Force.

John Franklin Bye Pleads Guilty, 2:14-cr-034 JAM
John Franklin Bye, 45, of Marysville, pleaded guilty on Tuesday, May 13, 2014, to distribution of child pornography. In the summer of 2013, the Nevada County Sheriff’s Department received a tip from the National Center for Missing and Exploited Children (NCMEC) that Bye had sent an email that contained child pornography. Law enforcement obtained a state search warrant for the contents of Bye’s emails and found a “Saved” folder and a “Sent” folder that contained emails with multiple attachments showing child pornography, including images of prepubescent children and images of sadistic and masochistic conduct. Bye is scheduled to be sentenced by Judge John A. Mendez on August 26, 2014, and faces a sentence of five to 20 years in prison and a fine up to $250,000. This case was the product of an investigation by the Federal Bureau of Investigation.

Jason Michael Carlsen Pleads Guilty; 2:14-CR-066 JAM
Jason Michael Carlsen, 41, of Citrus Heights, pleaded guilty on Tuesday, May 13, 2014, to distribution of child pornography. A person in Kentucky received a series of text messages with several pictures of child pornography and reported it to Kentucky State Police who determined that the sender of the messages lived in Citrus Heights. Citrus Height Police Department investigated and a forensic examination of Carlsen’s phone located more than 600 images and videos of child pornography. Also located on the phone were email folders titled “Sent”, “Drafts”, “Inbox” and “Uncategorized” that contained numerous emails with child pornography videos attachments that had been sent to various other email accounts. Carlsen is scheduled to be sentenced by Judge John A. Mendez on August 26, 2014, and faces a maximum statutory penalty of 10 years in prison and a $250,000 fine. This case was the product of an investigation by the Citrus Heights Police Department, Kentucky State Police, and the Sacramento Internet Crimes Against Children Task Force.

Any sentences 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.

Assistant United States Attorney Kyle Reardon is the prosecutor for all of the foregoing cases.

The Sacramento Internet Crimes Against Children (ICAC) Task Force is 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.

Project Safe Childhood is led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section. It 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, visit www.usdoj.gov/psc. Click on the “resources” tab for information about Internet safety education.

FRESNO, Calif. — In three separate cases, defendants convicted of carrying out mortgage fraud schemes in Fresno and Bakersfield were sentenced to prison today, United States Attorney Benjamin B. Wagner announced.

Randy Lee Wilkins, 48, of Gilroy, was sentenced to four years and nine months in prison for carrying out a mortgage fraud scheme in Fresno. Wilkins was also ordered to pay $736,965 in restitution. A federal jury found Wilkins guilty in January 2014 of one count of conspiracy to commit wire fraud and bank fraud, three counts of bank fraud, and three counts of wire fraud. The court found that Wilkins obstructed justice by testifying falsely at trial, and also found that he directed other conspirators in carrying out the scheme. According to court documents and evidence presented at trial, between April 2006 and May 2007, Wilkins had applications for three home loans submitted in a co-conspirator’s name that contained false statements concerning the co-conspirator’s income, assets, liabilities, and intent to occupy the properties as his personal residence. Wilkins also received kickbacks funded by loan origination fees and other charges. Wilkins has been in custody since the verdict was returned in January.

Antonio Perez-Marcial, 41, of Bakersfield, was sentenced to three years and 10 months in prison for conspiracy to commit bank fraud, mail fraud, and wire fraud in connection with a mortgage fraud scheme in Bakersfield. Perez-Marcial was also ordered to pay $3,455,250 in restitution. From 2007 to 2010, Perez-Marcial conspired with others to use straw buyers to purchase residential properties in Bakersfield. The loan applications the conspirators submitted to lenders frequently 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. They also submitted false supporting documentation to lenders such as false bank account statements, rent verifications, pay stubs, and employment verifications.

Jeriel Salinas, 32, of Bakersfield, was sentenced to 19 months in prison and ordered to pay $1,488,762 in restitution for charges stemming from his involvement in an extensive Bakersfield mortgage fraud scheme that ran from January 2004 to September 2007. Salinas was a real estate agent at Crisp & Cole Real Estate (CCRE). According to court documents, the scheme defrauded mortgage companies and federally insured financial institutions by using straw buyers to acquire properties with funds borrowed from lenders based on false and fraudulent loan applications. The properties were nominally owned by the straw buyers, but were controlled by CCRE and held for the benefit of CCRE. According to his plea agreement, Salinas acted as a straw buyer for CCRE and knowingly made misstatements and omitted information in loan applications he submitted to lenders. Salinas also served as a real estate agent on other transactions in the scheme.

Seven other defendants have been sentenced in the CCRE scheme: David Crisp and Carl Cole were each sentenced to 17 years and seven months in prison. Jayson Peter Costa was sentenced to six years and six months in prison. Michael Munoz was sentenced to two years in prison. Caleb Cole was sentenced to five months in prison. Jennifer Crisp was sentenced to five years of probation. Robinson Nguyen has completed his 27-month sentence. Two remaining defendants, Julie Farmer and Sneha Mohammadi, are scheduled to be sentenced on July 14, 2014.

In 2009 and 2010, five cases related to the CCRE scheme were brought against five defendants. All have pleaded guilty to the charges and two of those defendants are scheduled to be sentenced on May 27, 2014: Kevin Patrick Sluga and Leslie Sluga. Three are scheduled to be sentenced on June 2, 2014: Jerald Allen Teixeira, Megan Balod, and Christopher Lance Stovall.

The Wilkins and Salinas cases were the product of investigations by the Federal Bureau of Investigation. The Perez-Marcial case is the product of an investigation by the Federal Bureau of Investigation and the Internal Revenue Service - Criminal Investigation. Assistant United States Attorneys Kirk E. Sherriff and Grant B. Rabenn prosecuted the Wilkins case. The Perez-Marcial case was prosecuted by Assistant U.S. Attorneys Kirk E. Sherriff and Henry Z. Carbajal III. The Salinas case was prosecuted by Assistant U.S. Attorneys Kirk E. Sherriff, Henry Z. Carbajal III, and Christopher D. Baker.

FRESNO, Calif. — Today, United States District Judge Lawrence J. O'Neill sentenced Jennifer Lorraine Coleman, 24, of Clovis, to two years in prison, to be followed by three years of supervised release, for aiming a laser pointer at a law enforcement aircraft, and Brett Lee Scott, 26, of Bakersfield, entered a guilty plea to the same crime, United States Attorney Benjamin B. Wagner announced.

Coleman and her boyfriend, Sergio Patrick Rodriguez, 26, of Clovis, were both convicted by a federal jury after a three–day trial in Fresno in December 2013.

“Coleman and Rodriguez demonstrated outrageous and willful disregard for the safety of aviators, Air George’s patients, and the public,” said Special Agent in Charge Monica M. Miller of the Sacramento FBI. “The FBI and our state and local law enforcement partners are committed to locating, identifying, and arresting individuals who intentionally shine lasers at aircraft aloft, recklessly jeopardizing the safety of the communities we serve.”

According to evidence presented at trial, Coleman and Rodriguez used a high‑powered green laser pointer to repeatedly strike the cockpit of a Fresno Police helicopter, Air 1, during a clear summer night in 2012. Air 1 had responded to the apartment complex where Coleman and Rodriguez lived near the Fresno Yosemite International Airport, to investigate the report of laser strikes on Air George, an emergency transport helicopter for Children’s Hospital of Central California. The laser pointer that Coleman and Rodriguez used was 13 times more powerful than the permissible power emission level for hand-held laser devices. The crew members of both Air 1 and Air George testified that the laser strikes caused significant visual interference.

In imposing sentence, Judge O’Neill considered the opinion of Dr. Leon McLin, a Senior Research Optometrist for the Air Force Research Laboratory who testified at trial, that the laser pointer that Coleman used was an instrument capable of inflicting serious bodily injury and, indirectly, death due to a high potential for crash caused by visual interference.

Judge O'Neill found the high‑powered laser pointer was a dangerous weapon, and referring to the potential for a crash resulting from the pilots’ impaired vision stated, "I physically shudder to think of what could have happened."

The Coleman case was the product of an investigation by the Federal Bureau of Investigation, with assistance from the Clovis and Fresno Police Departments, Federal Aviation Administration, and the National Institute of Standards and Technology of the U.S. Department of Commerce. Assistant United States Attorneys Karen A. Escobar and Michael G. Tierney prosecuted the case.

In a separate laser case, Scott pleaded guilty to aiming a laser pointer at a Kern County Sheriff helicopter, also known as Air-1. Scott acknowledged that he used two different laser pointers to strike Air-1 over a six-month period. The lasers emitted powerful green and purple laser beams. As a result, the pilots of Air-1 suffered flash blindness that lasted a few minutes, causing disorientation. The pilots were ultimately able to pinpoint the origin of the beams and, with the help of patrol deputies, identified Scott as a suspect.

Sentencing for Scott is set for July 21, 2014. He faces a maximum statutory penalty of five years in prison and a $250,000 fine for aiming a laser pointer at Air-1. 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.

The case against Scott was the result of a joint investigation conducted by the FBI and Kern County Sheriff’s Office. Assistant U.S. Attorney Karen A. Escobar is prosecuting this case.

According to the FAA, there were 3,960 reports of people shining lasers at aircraft in the United States in 2013. In the Eastern District of California, which encompasses 34 counties in the eastern portion of California, reported 94 laser strikes, with the largest number of laser incidents reported by the Fresno Yosemite International Airport and Bakersfield Meadows Field Airport. Law enforcement and emergency transport helicopters are particularly vulnerable, since they typically fly at lower altitudes. Their convex-shaped windows also cause greater refraction and visual interference when the beam of a laser strikes. Night-vision goggles can also amplify the beam and pose a greater threat of visual interference.

Earlier this year, as a result of the increasing threat of laser strikes on aircraft, the FBI in Sacramento, along with several other cities in the United States that have reported a large number of laser incidents, launched a public awareness campaign regarding the issue and offered a $10,000 reward for information that leads to the arrest of a laser offender. Since the launch of the public awareness campaign, the FBI reports a decrease in the number of laser incidents.

FRESNO, Calif. — Noe Alvarez Ramirez, 28, of Michoacàn, Mexico, was sentenced today to two years and nine months in prison, and Rudy Alberto Gonzalez Rocha, 28, and his brother, Eloy Damian Gonzalez Rocha, 32, both of Jalisco, Mexico, entered guilty pleas to being aliens in possession of firearms seized from a marijuana cultivation site, according to U.S. Attorney Benjamin B. Wagner.

7,302 Marijuana Plants Seized from Sequoia National Forest (No. 1:13-cr-172 AWI)
Alvarez was sentenced following his guilty plea in March to conspiring to manufacture, distribute, and possess with intent to distribute marijuana grown in the Gibboney Canyon area of the Sequoia National Forest in Kern County. The area is also within the federally designated Domeland Wilderness area. According to court documents, U.S. Forest Service agents seized 7,302 marijuana plants from the site and found 5,000 marijuana plant stalks consistent with a prior harvest in 2012. During the execution of a federal search warrant at the site, agents found Alvarez sleeping in a tent. Alvarez was also ordered to pay $2,675 in restitution to the U.S. Forest Service caused by the negative environmental impact of the cultivation. Trash and fertilizer bags were scattered about the area and the ground was terraced after native vegetation, including oak trees, was cut down to make room for the marijuana plants. Trash also was found in the waterway of Gibboney Creek. Alvarez is subject to potential deportation to Mexico after he serves any prison sentence.

This case was investigated by the U.S. Forest Service, U.S. Drug Enforcement Administration, California Department of Fish and Wildlife, and the Kern County Sheriff’s Office.

Firearms Seized from Fresno County Grow (1:14-cr-39 AWI)
The Gonzalez brothers entered guilty pleas to being illegal aliens in possession of three firearms, one of which was reported stolen from Arkansas and another having an obliterated serial number. The guns were found during the execution of a narcotics search warrant at the men’s leased residence in Dunlap, Calif. According to court documents, at the beginning of this year, Fresno County Sheriff deputies had been dispatched to the property to investigate several calls about people coming and going to and from the property, which had a strong odor of marijuana. Deputies seized 260 marijuana plants, more than 200 pounds of processed marijuana, and $17,120 in cash, along with the firearms. The defendants have agreed to the forfeiture of the money and guns.

This case was the product of an investigation by the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and the Fresno County Sheriff’s Office, with assistance from the Bureau of Alcohol, Tobacco, Firearms, and Explosives.

The Gonzalez brothers are scheduled for sentencing on August 4, 2014. They face a maximum prison term of 10 years and a $250,000 fine. Their actual sentences, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

Assistant U.S. Attorney Karen A. Escobar is prosecuting the above cases.

SACRAMENTO, Calif. — Thanks to the efforts of federal and local law enforcement working together, over the course of the past week three federal indictments have been brought against Sacramento defendants Jose Manuel Hernandez, Michael Rojas Jr., and Gabriel Reyes Hernandez, charging each of them with illegal possession of firearms. This announcement was made by United States Attorney Benjamin B. Wagner, Bureau of Alcohol, Tobacco, Firearms and Explosives, Special Agent in Charge Joseph M. Riehl, and Sacramento Police Chief Sam Somers.

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

Jose Manuel Hernandez, 30, was charged with possessing a firearm after previously being convicted of a felony, and in addition with possessing with intent to distribute methamphetamine, cultivating marijuana, and possessing with intent to distribute marijuana.(Docket # 2:14-cr-122 JAM)  Michael Rojas Jr., 24, was charged with being a felon in possession of a firearm. (Docket # 2:14-cr-134 JAM)  Gabriel Reyes Hernandez, 27, was charged with being a felon in possession of a .40 caliber Glock 23 pistol with an obliterated serial number. (Docket # 2:14-cr-129 JAM)

These cases are the product of investigations by the Sacramento Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant United States Attorneys Michael McCoy and Justin Lee are prosecuting the cases.

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

SACRAMENTO, Calif. — Deepal Wannakuwatte, 63, of Sacramento, pleaded guilty today to one count of wire fraud in furtherance of a long-running and large-scale fraud scheme, announced United States Attorney Benjamin B. Wagner, Special Agent in Charge Monica M. Miller of the FBI’s Sacramento Field Office, Jose M. Martinez Special Agent in Charge for the IRS-Criminal Investigation (IRS-CI) and Wade V. Walters Special Agent in Charge of the Federal Deposit Insurance Corporation (FDIC) Office of Inspector General (OIG).

Under the terms of his plea agreement, the government will recommend that United States District Judge Troy L. Nunley sentence Wannakuwatte to 20 years in prison, the maximum punishment allowable for the offense to which he pleaded guilty. In addition, the agreement requires Wannakuwatte to forfeit multiple properties, vehicles, business interests, and bank accounts to be used to provide restitution to victims.

According to the plea agreement, from 2002 to 2014, Wannakuwatte convinced more than 100 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. Wannakuwatte’s companies, IMG and Relyaid, were involved in the international manufacture, shipment, and distribution of latex gloves. He falsely claimed that these companies did tens of millions of dollars in business with federal agencies every year, most notably the Department of Veterans Affairs. In 2013, Wannakuwatte claimed to have more than $125 million in VA contracts alone. In fact, while he did have a contract with the VA, it was worth up to only $25,000 a year.

In all, Wannakuwatte ultimately obtained well over $150 million from his victims. 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.

“Mr. Wannakuwatte’s guilty plea brings to an end to one of the longest running, most extensive, and most damaging fraud schemes our region ever has seen,” said U.S. Attorney Wagner. “We are still calculating the total damage resulting from his scheme, but he caused well over $50 million in losses, and the total losses could be closer to $100 million. Together with the FBI and the IRS, our office moved swiftly to ensure not only that he would be held accountable for this crime, but also that we could take all steps possible to return remaining funds to his victims. The very substantial sentence that he is likely to receive should send a clear message that my office will continue to prosecute financial crimes like this one vigorously.”

“Wannakuwatte’s financial empire collapsed because it was based on fraud and deceit. Unfortunately, he left a trail of victims — individuals, businesses, government agencies, venture funds, and other lenders — who suffered significant losses,” said Special Agent in Charge Monica M. Miller of the Sacramento FBI. “The FBI is committed to working with our agency partners to aggressively pursue those who betray the trust of the public for personal gain.”

“This was not your average Ponzi scheme,” said José M. Martínez, Special Agent in Charge, IRS-Criminal Investigation. “The fraud involved hundreds of millions of dollars and more than 100 victims including individuals, corporate entities and financial institutions. The defendant conned investors through the use of false documents, inflated tax returns, and convincing lies. IRS-CI will continue to work closely with our law enforcement partners to aggressively pursue fraud schemes such as these.”

“The Federal Deposit Insurance Corporation (FDIC) Office of Inspector General (OIG) is pleased to have joined the Department of Justice and our law enforcement colleagues in conducting this investigation,” stated FDIC OIG Special Agent in Charge Wade V. Walters. “We are especially concerned when individuals like Mr. Wannakuwatte defraud our nation’s financial institutions. We are firmly committed to joint efforts such as this one in the interest of ensuring integrity in individual institutions and the financial system as a whole.”

Wannakuwatte used a variety of false and fraudulent means to back up his claims of financial success. For example, Wannakuwatte regularly provided investors with inflated financial statements that supported his claims that he had more than $100 million in sales with the VA. He also regularly provided victims with false corporate ledgers from IMG and Relyaid. Some ledgers falsely showed tens of millions of dollars in accounts receivable from the VA. Other ledgers falsely showed tens of millions of dollars in glove inventory.

Wannakuwatte also provided his victims with personal and corporate tax returns. Wannakuwatte actually reported and paid taxes on returns that falsely overstated his annual personal income and the annual gross receipts and sales for IMG. He used these returns to establish his financial credibility with financial institutions and individual investors.

On at least two occasions, Wannakuwatte set up fake conference calls between himself, a victim, and a person whom he directed to act as a VA representative. The conference calls were to convince victims of the value of the VA contracts and the relationship Wannakuwatte claimed to have with the VA.

Wannakuwatte’s plea agreement contains multiple provisions designed to return as much investor money as possible. He must disclose the existence of any assets or property that he obtained as the result of his scheme, and forfeit his interest in 16 properties, four vehicles, multiple bank accounts, insurance policies, business interests, and any tax refunds to which he may be entitled. Wannakuwatte’s properties are in Hawaii, Oregon, and in the counties of Sacramento, Yolo, and Yuba. They include his residence, vacation homes, and commercial properties. In addition, Wannakuwatte agreed to file for personal bankruptcy, and to file bankruptcy petitions on behalf of any business in which he may have an interest. These filings must be done by the end of May 2014 and should give creditor victims a forum to pursue claims against him.

This case is 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 Beckwith and Kevin Khasigian are prosecuting the case.

Wannakuwatte is scheduled to be sentenced by Judge Nunley on July 24, 2014. The plea agreement is subject to the approval of Judge Nunley. If the agreement is accepted, Wannakuwatte’s 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.

FRESNO, Calif. —Mark Jeff Zeldes, 52, of Broomfield, Colo., appeared today in federal court in Fresno to face charges contained in an indictment of cultivating and distributing marijuana, United States Attorney Benjamin B. Wagner announced.

According to court documents, between June 1, 2009, and March 9, 2010, Zeldes was responsible for a large-scale marijuana cultivation and distribution operation with multiple indoor grow locations in Bakersfield, Newbury Park, and Northridge, Calif. After being questioned by law enforcement agents in California, Zeldes relocated to Colorado where he continued to engage in marijuana cultivation and interstate distribution activities.

Following his arrest on April 8, 2014, Zeldes was brought before a U.S. Magistrate Judge in Denver, who ordered him detained as a flight risk and danger to the community. Zeldes remains in custody and is next scheduled to appear in court in Fresno for a status conference on June 23, 2014.

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

This case is the product of an investigation by the U.S. Drug Enforcement Administration with assistance from the U.S. Marshal Service and Bakersfield Police Department. Assistant United States Attorney Karen Escobar is prosecuting the case.

FRESNO, Calif. — Douglas Jason Way, 41, of Evanston, Ill.; Timothy Ortiz, 43, of Waukegan, Ill.; and Natalie Middleton, 28, of Clovis, Calif., have been arrested as part of a nationwide law enforcement effort to combat the threat of synthetic drugs. The arrests were announced by United States Attorney Benjamin B. Wagner; Jeffrey J. Fitzpatrick, Special Agent in Charge of the San Francisco Field Division of the U.S. Drug Enforcement Administration; Jose Martinez, Special Agent in Charge of the Oakland Field Office, Internal Revenue Service, Criminal Investigation; and Clark E. Settles, Special Agent in Charge of the San Francisco Field Office of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations.

The defendants were charged in a federal criminal complaint with conspiracy to traffic synthetic cannabinoids, commonly known as “spice,” “K2,” or “herbal incense.” They were also charged with causing the introduction of misbranded drugs into interstate commerce. Middleton, individually, was charged with money laundering the proceeds of drug trafficking. According to the complaint, the conspiracy involved the manufacture and distribution of at least 11 tons of smokable synthetic cannabinoids that contained the synthetic drugs AM-2201, JWH-018, and XLR11 to smoke shops and retail outlets throughout the United States and generated in excess of $20 million in illicit income. Manufactured by companies called Zencense and Zenbio, the drugs were processed in warehouses in Millbrae and Stockton, Calif. and marketed under the brand names of Bizarro, Posh, Sonic Zero, Headhunter, Neutronium, and Orgazmo. They were distributed to The Stuffed Pipe smoke shops in Central Valley, as well as to other retail establishments in 47 other states.

Public health and law enforcement agencies have seen the emergence of synthetic drug use. State and local public health departments note that synthetic cannabinoids can cause serious adverse health effects, including agitation, anxiety, nausea, vomiting, tachycardia, elevated blood pressure, tremor, seizures, hallucinations, and paranoid behavior. According to the American Association of Poison Control Centers, poison centers throughout the United States received 5,230 calls about exposures to these drugs in 2012 and 2,656 calls about exposures in 2013. Synthetic cannabinoids are not regulated as drugs for human consumption, and are often marketed as “legal” substances and sometimes labeled as “herbal incense” or “potpourri.” To address this emerging challenge, President Obama signed the Synthetic Drug Abuse Prevention Act into law in 2012, classifying 26 types of synthetic cannabinoids, including AM-2201, as Schedule I drugs under the Controlled Substance Act. DEA placed JWH-018 in Schedule I in 2011 and placed XLR11 in Schedule I last year.

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

This enforcement action called Project Synergy began January 2014 and culminated this morning in 29 states. Project Synergy involves more than 45 DEA offices serving nearly 200 search warrants. As of today, more than 150 individuals have been arrested and federal, state and local law enforcement authorities have seized hundreds of thousands of individually packaged, ready-to-sell synthetic drugs as well as hundreds of kilograms of raw synthetic products to make thousands more. Additionally, more than $20 million in cash and assets were seized. These numbers are expected to grow as investigations continue.

The three Eastern District of California defendants were arrested in other districts. They will make their initial in the district where they were arrested, and a court date in the Eastern District of California has not yet been set.

If convicted of the drug charges, Way, Ortiz, and Middleton face a maximum statutory penalty of 20 years in prison and a $1 million fine. The FDA mislabeling charge carries a maximum statutory penalty of three years in prison and a fine of $10,000. Middleton also faces a maximum statutory penalty of 20 years in prison and a $250,000 fine if convicted of the money laundering charge. 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.

Assistant United States Attorney Karen A. Escobar is prosecuting the case, and Assistant United States Attorney Heather Mardel Jones is handling the forfeiture of assets.