Northern District of California

OAKLAND - A federal grand jury in Oakland indicted Thomas Henderson, Kexing Hu (a/k/a Peter Hu), and Cooper Lee on charges of conspiracy and wire fraud for their respective roles in a scheme to defraud investors in a jobs creation program administered by the United States Citizenship and Immigration Service (USCIS), announced United States Attorney David L. Anderson; U.S. Department of State’s Diplomatic Security Service (DSS) Special Agent in Charge Matthew Perlman; U.S. Homeland Security Investigations (HSI) San Francisco Special Agent in Charge Tatum King; and Federal Bureau of Investigation Special Agent in Charge John F. Bennett.  

The multi-count indictment, unsealed today, alleges that Henderson, 70, of Oakland; Hu, 40, of Ningbo, China; and Lee, 42, formerly of Oakland, conspired to misappropriate investor funds, to lie to foreign investors about the use of their funds, and to make false statements to USCIS in connection with the Employment-Based Immigration, Fifth Preference Category Program, referred to as the EB-5 visa program.  The indictment also alleges that Henderson fraudulently abused the EB-5 visa program and jeopardized the creation of over 2,000 jobs in Oakland and surrounding areas.  

According to the indictment, Henderson was the founder and owner of the San Francisco Regional Center, LLC (SFRC), which he used to solicit investments from foreign investors through the EB-5 visa program.  From 2011 to 2017, Henderson and Hu raised more than $110 million from more than 200 foreign investors, with each of the investors believing they were paying capital to fund one of seven EB-5 businesses sponsored by SFRC.  Henderson, assisted by Hu and Lee, allegedly improperly diverted funds raised for one business and used them for other purposes.  The indictment also alleges that Henderson diverted more than $17 million of $21 million raised for one of the projects and spent it in part on earlier money-losing projects. Henderson also allegedly made false statements and submitted false documents to the USCIS, falsely stating investor funds would be used for the start-up and operation of the EB-5 projects described in business plans.

“The Diplomatic Security Service is committed to protecting the integrity of all U.S. visas,” said Special Agent in Charge Matthew Perlman of the DSS San Francisco Field Office. “Together, with our law enforcement and prosecutorial partners, DSS was able to stop prominent local businessmen from further exploiting the U.S. visa process, and bilking foreign investors for illegal profit.” 

"The FBI is committed to assisting our local partners in protecting the integrity of our visa processes," said FBI San Francisco Special Agent in Charge John F. Bennett. "Businesses seeking to exploit these processes should know that we are vigilant and that we will work to bring them to justice."

“This case serves as a clear warning to all criminals who seek to profit off of the United States’ legal immigration system. We will locate, arrest, and aid in their prosecution in order to recoup any and all illicit gains,” said Tatum King, Special Agent in Charge, Homeland Security Investigations for San Francisco and Northern California. “Besides posing a significant threat to national security and public safety, immigration benefit fraud and related schemes seriously rob immigrants who are deserving of these benefits while deterring investors who genuinely want to assist them.”

USCIS administers the EB-5 program.  Under the program, foreign nationals may obtain permanent United States residency, commonly known as a Green Card, by investing in qualifying American businesses and creating jobs for U.S. citizens and residents.  To receive a two-year grant of conditional permanent residency status, foreign investors must meet certain requirements for an entry visa, comply with program requirements and make an investment of a minimum of $1 million, or $500,000 if the investment is made in certain areas of high unemployment.  After two years, the foreign investor can petition for permanent residency.  The granting of permanent legal residency for the foreign investor and immediate family is dependent, in part, on the creation of at least 10 jobs for United States citizens and residents through the business funded by the investment.

In this case, Henderson and Hu are charged with 12 counts of wire fraud, in violation of 18 U.S.C. § 1343, and Lee is charged with six counts of wire fraud.  Henderson, Hu, and Lee are charged with conspiracy to commit wire fraud, in violation of 18 U.S.C. § 1349, and conspiracy to commit offenses against the United States, in violation of 18 U.S.C. § 371.  Henderson is also charged with one count of making a false statement to a government agency, in violation of 18 U.S.C. § 1001(a)(2), and one count of false writings to a government agency, in violation of 18 U.S.C. § 1001(a)(3).

Henderson and Lee were arrested this morning.  Henderson was arrested in Oakland, Calif., and made his initial appearance before U.S. Magistrate Judge Donna Ryu.  He is scheduled to appear October 1, 2019, before the Honorable Jeffrey S. White, U.S. District Judge for a status conference.  Lee was arrested in Laguna Beach, Calif.  The date he will appear on the charges in the Northern District of California has not yet been set.  Hu has not been arrested. 

An indictment merely alleges that crimes have been committed, and all defendants, including Henderson, Hu, and Lee, are presumed innocent until proven guilty beyond a reasonable doubt.  If convicted, the defendants face a maximum penalty of 20 years in prison and a $250,000 fine (or twice the gross gain or loss) for each wire fraud count and the conspiracy to commit wire fraud count.  The defendants face a maximum of five years in prison for each conspiracy to commit offenses against the United States count and false statements or writings count.  Further, additional fines, forfeitures, and restitution may be ordered; however, any sentence following conviction would be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.  

Assistant United States Attorney Lloyd Farnham is prosecuting the case with the assistance of Sarah Lamparelli and Patricia Mahoney.  The prosecution is the result of an investigation led by the U.S. Department of State Diplomatic Security Service’s representative to the Document and Benefit Fraud Task Force (DBFTF), overseen by the HSI, with the participation of the Federal Bureau of Investigation.  The DBFTF is a multi-agency task force that coordinates investigations into fraudulent immigration documents.  U.S. Citizenship and Immigration Service’s Office of Fraud Detection and National Security also assisted with the investigation.  Additional assistance was provided by the San Francisco Regional Office of the Securities and Exchange Commission. 
 

SAN FRANCISCO – Tyler Goforth was sentenced to 27 months in prison and ordered to pay restitution for his role in a conspiracy to commit wire fraud stemming from a mail theft scheme, announced United States Attorney David L. Anderson and United States Postal Inspection Service Inspector in Charge Rafael Nuñez.  The Honorable Maxine M. Chesney, U.S. District Judge, handed down the sentence.

Goforth, 35, of Walnut Creek, Calif., pleaded guilty to the charge on May 29, 2019.  According to his plea agreement, Goforth admitted that he and his co-defendant, Jesslyn Felix, 35, also of Walnut Creek, traveled repeatedly to the Beacon Apartment Complex, a large apartment building in San Francisco, to steal mail from Beacon residents.  The defendants visited the Beacon more than a dozen times between August 2017 and February 2018.  Goforth and Felix entered one of the mailrooms at the Beacon, forced open mailboxes, and then stole mail.  They then used personal information and documents found in the stolen mail to steal money from Beacon residents, which they spent for personal gain.  Specifically, Goforth and Felix activated credit and debit cards in the victims’ names, stole checks and gift cards, accessed bank accounts belonging to Beacon residents, and stole photo identifications which they then used to carry out their scheme to steal money.  In total, Goforth and Felix stole mail from more than 80 residents of the Beacon and stole more than $40,000 from them.

A federal grand jury indicted Goforth and Felix on January 15, 2019.  The 14-count indictment charged each defendant with one count of conspiracy to commit wire fraud, in violation of 18 U.S.C. § 1349; five counts of wire fraud, in violation of 18 U.S.C. §1343; six counts of theft of mail, in violation of 18 U.S.C. §1708; one count of aggravated identity theft, in violation of 18 U.S.C. §1028A; and one count of possession with intent to use or transfer five or more documents or authentication features, in violation of 18 U.S.C. §1028(a)(3).  Goforth and Felix both pleaded guilty to the conspiracy charge on May 29, 2019.  

In addition to the prison term, Judge Chesney ordered Goforth to serve a three-year period of supervised release to begin at the completion of the prison term.  Goforth has been in custody since May 6, 2019.

Judge Chesney scheduled Felix’s sentencing for September 18, 2019.  Like Goforth, if Felix complies with the plea agreement, the remaining counts pending against her will be dismissed at sentencing.  

Assistant U.S. Attorney Ross Weingarten is prosecuting the case with the assistance of Marina Ponomarchuk.  The prosecution is the result of an investigation by the United States Postal Inspection Service.
 

SAN FRANCISCO – Luis Villarreal was sentenced to 36 months in federal prison and three years of supervised release for possessing with intent to distribute fentanyl, announced United States Attorney David L. Anderson and Drug Enforcement Administration Special Agent in Charge Chris Nielsen.  The sentence was handed down by the Honorable Edward M. Chen, United States District Judge.

Villarreal, 23, of San Francisco, pleaded guilty to the charge on May 8, 2019.  According to the plea agreement, Villarreal admitted that on February 25, 2019, he was arrested on an outstanding warrant while outside the Bill Graham Civic Auditorium in the Tenderloin neighborhood of San Francisco.  At the time of Villarreal’s arrest, San Francisco Police Department officers found him in possession of 160 individually wrapped baggies of fentanyl, 37 individually wrapped baggies of methamphetamine, 29 individual bindles of heroin, and 25 Zubsolv pills—a controlled substance that generally may not be possessed without a license or prescription.  In the plea agreement, Villarreal admitted that he knowingly possessed and intended to distribute all of the recovered narcotics.    

On March 21, 2019, a federal grand jury indicted Villarreal, charging him with one count of possession with intent to distribute fentanyl, one count of possession with intent to distribute heroin, and one count of possession with intent to distribute methamphetamine.  Villarreal pleaded guilty to the fentanyl charge and the remaining charges were dismissed at sentencing.  

Villarreal was taken into federal custody on March 28, 2019, and has remained in custody since that time.  He will begin serving the sentence immediately.   

Assistant United States Attorney Sloan Heffron is prosecuting the case with the assistance of Kimberly Richardson.  The prosecution is the result of an investigation by the DEA and the San Francisco Police Department.   
 

SAN FRANCISCO - John C. Fry pleaded guilty to illegally disclosing information from Suspicious Activity Reports (SARs), announced United States Attorney David L. Anderson, Financial Crimes Enforcement Network (FinCEN) Director Kenneth A. Blanco, and United States Department of the Treasury, Treasury Inspector General for Tax Administration (TIGTA), Special Agent in Charge Rod Ammari.  The plea agreement was accepted by the Honorable Edward M. Chen, United States District Judge.

In May of 2018, Fry, 54, of San Francisco, was an Investigative Analyst for the Internal Revenue Services’ law enforcement arm, the Criminal Investigation Division.  Fry’s responsibilities included supporting IRS Agents in the Northern District of California area and reviewing SARs for activity that could potentially lead to a criminal investigation.  In his position with the IRS, he had access to various law enforcement databases, including the FinCEN database that manages the collection and maintenance of SARs and an analytic software used to integrate investigative data from multiple internal and external data sources. According to his plea agreement, he admitted he knowingly and willingly disclosed confidential SAR information to Michael Avenatti.  

"Financial institutions trust that FinCEN will safeguard the sensitive information like SARs they are obligated to file, which is absolutely critical to protecting our national security” said FinCEN Director Blanco. “We take seriously our responsibility to protect this information, and we will not hesitate to investigate and help prosecute anyone who breaks the law by disclosing or misusing protected data.”

“When an IRS employee accesses and misuses government data, and then discloses that data for personal reasons, their selfish actions erode confidence in the IRS and in the institutions that are tasked with protecting this data,” said Special Agent in Charge Ammari.  “The Treasury Inspector for Tax Administration, along with our law enforcement partners, are committed to prosecuting these individuals to the fullest extent to deter illegal disclosures in the future.”

According to the plea agreement, Fry admitted that on May 4, 2018, he logged onto the a private government database from his work computer and downloaded five SARs related to Michael Cohen and his company Essential Consultants.  Fry further admitted he twice called Michael Avenatti, an attorney based in Newport Beach, Calif., from his personal cell phone.  Fry acknowledged that during his phone conversations with Avenatti, he verbally provided information to Michael Avenatti that was contained in the five SARs.  Fry further admitted that he used one of his personal email accounts to email screenshots of the SARs to Michael Avenatti.  

Further, Fry admitted that on May 7, 2018, he logged on to the FinCEN database from his work computer and conducted additional searches related to Michael Cohen and Essential Consultants.  He then called Michael Avenatti from his personal cell phone and verbally provided information contained in the searches.  Fry admitted he had no official reason to disclose SAR records related to Cohen or the various companies listed in the SARs.

On February 28, 2019, a federal grand jury indicted Fry with one count of unauthorized disclosure of suspicious activity reports, in violation of 31 U.S.C. § 5322(a); two counts of misuse of a computer, in violation of 18 U.S.C. § 1030(a)(2); and one count of illegal use of a social security number, in violation of 42 U.S.C. § 408(a)(8).  Fry pleaded guilty to the unauthorized disclosure count.  If Fry complies with the plea agreement, the remaining counts will be dismissed at sentencing.

Judge Chen scheduled Fry’s sentencing for December 18, 2019.  Fry faces a maximum sentence of 5 years in prison, and a fine of $250,000, for the violation.  However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.  

This case is being prosecuted by the Special Prosecutions Section of the United States Attorney’s Office for the Northern District of California.  This case was investigated by FinCEN and TIGTA.
 

SAN FRANCISCO – In his first press conference since being sworn in as the U.S. Attorney for the Northern District of California, the Honorable David L. Anderson announced a new federal initiative to address crime in San Francisco’s Tenderloin District.  The program, called the Federal Initiative for the Tenderloin, brings together the resources of more than 15 federal law enforcement agencies to combat endemic drug trafficking, firearms offenses, robberies, and other crime in the neighborhood.  At today’s press conference, U.S. Attorney Anderson also announced charges against 32 individuals as the first steps in implementing the new program.

Since being sworn in on January 15, 2019, U.S. Attorney Anderson has been the lead law-enforcement officer in the Northern District of California.  At today’s press conference, he was flanked by 13 law-enforcement partners including representatives from such agencies as the U.S. Marshal Service; the Drug Enforcement Administration; the Bureau of Alcohol, Tobacco, Firearms, and Explosives; and the Federal Bureau of Investigation.  The full list of federal participants is below.  Each partnering agency has pledged resources to investigate federal crime in the Tenderloin neighborhood, as well as to prioritize investigations and support the resulting prosecutions that follow.  For his part, U.S. Attorney Anderson announced that his office will devote 15 Assistant United States Attorneys (“AUSAs”) to the initiative.  

The Tenderloin neighborhood encompasses about 50 square blocks of downtown San Francisco.  Generally, it is bounded on the north by Geary Street, on the east by Powell Street, on the south by Mission Street, and on the west by Van Ness Avenue.  U.S. Attorney Anderson described the Tenderloin as ethnically, socially, and racially diverse; relatively more affordable than other neighborhoods in San Francisco; and having one of the highest concentrations of school-aged children in San Francisco according to published reports.  These attributes, argued U.S. Attorney Anderson, make for a wonderful neighborhood being “smothered by lawlessness.”  “Innocent residents, commuters, tourists, and persons with business in one of the four major federal buildings in the Tenderloin should not be required to run a gauntlet of crime,” said U.S. Attorney Anderson.     

During the press conference, U.S. Attorney Anderson also described some of the parameters of the initiative.  The initiative will prioritize federal charges for criminal misconduct with a nexus to the Tenderloin including drug trafficking, firearms offenses, escape, Hobbs Act robberies, false passports and visas, postal crimes, crimes on federal land, human trafficking, identity theft, and benefits fraud.  The initiative will not be directed against innocent homelessness.  The initiative will not be focused on drug use or possession without distribution.  The initiative will persist for a minimum of one year.  

“The Tenderloin neighborhood deserves the benefits of the rule of law every bit as much as other neighborhoods in this city.” U.S. Attorney Anderson said.  

U.S. Attorney Anderson also announced the existence of a number of law enforcement actions that already have taken place in connection with his plan.  The cases include the following:

Case Name

Case Number

U.S. v. Eduar Ramos et al.

19-CR-0305 RS

U.S. v. Francisco Padilla

19-CR-0306 WHO

U.S. v. Carlos Vargas

19-CR-0360 CRB

U.S. v. Jose Vasquez Arteaga et al.

19-CR-0287 CRB

U.S. v. Julio Viera-Chirinos

19-mj-71156

U.S. v. Eduardo Alfonso Viera-Chirinos et al.

19-mj-71145

U.S. v. Andy Reanos-Moreno et al.

19-mj-71162

U.S. v. Moyses Raudales

19-mj-71171

U.S. v. Henry Jovany Sevilla Sevilla

19-mj-71192

U.S. v. Jose Diaz

19-mj-71169

 

Separate press releases for these cases can be found here:

• Thirteen Defendants Charged In Cross-Bay Drug Trafficking Conspiracy
• Nine Defendants Charged In International Drug Trafficking Conspiracy

 

“Today,” U.S. Attorney Anderson announced, “we announce the unsealing of ten cases.  So far, there have been 32 individuals charged with more to come. While making no promises about the number or types of cases to be brought or the specific outcomes to be achieved, I can say that we intend to devote substantial federal resources over an extended period of time toward this initiative and the neighborhood that it will serve.”

PARTICIPANT REPRESENTATIVES

David L. Anderson, U.S. Attorney for the Northern District of California 
Chris Nielsen, Special Agent in Charge, U.S. Drug Enforcement Administration 
Jay Bieber, Chief Deputy U.S. Marshal 
Jennifer Cicolani, Assistant Special Agent in Charge, U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives 
Scott Schelble, Assistant Special Agent in Charge, Federal Bureau of Investigation 
Tatum King, Special Agent in Charge, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations 
Timothy McHugh, Deputy Regional Director, Federal Protective Service 
Thomas Edwards, Special Agent in Charge, U.S. Secret Service 
Mike Sena, Director, Northern California High Intensity Drug Trafficking Area/Northern California Regional Intelligence Center 
Kareem Carter, Special Agent In Charge, Oakland Field Office, U.S Internal Revenue Service- Criminal Investigation 
Steve Ryan, Special Agent in Charge, U.S. Department of Health and Human Services, Office of the Inspector General 
Don Hoang, Special Agent in Charge, U.S. Forest Service 
Richard Sheehan, Assistant Inspector in Charge, U.S. Postal Inspection Service 
Julie Ryer, Special Agent, U.S. Food and Drug Administration 
Garrett Shore, Special Agent, U.S. Social Security Administration, Office of the Inspector General 
 

SAN FRANCISCO – The U.S. Attorney’s Office has charged thirteen defendants with engaging in a conspiracy to distribute controlled substances, announced United States Attorney David L. Anderson and Drug Enforcement Administration (DEA) Special Agent in Charge Chris Nielsen.  The charges were made in a complaint filed July 31, 2019, and unsealed today following the arrest of 11 defendants.  

The complaint, described by U.S. Attorney Anderson in a press conference today, is one of the first steps in the Federal Initiative for the Tenderloin (FIT).  The initiative seeks to reduce crime in the Tenderloin neighborhood of San Francisco and is described here.  

The complaint describes a conspiracy involving a large-scale drug-trafficking organization with networks extending across the Bay Area.  According to the complaint, from at least January 15, 2019, to July 31, 2019, Andy Reanos-Moreno worked with Karol Erazo-Reanos to rent housing throughout the Easy Bay for persons, including “redistributors,” who were part of the drug-distribution network.  Reanos-Moreno, Erazo-Reanos, and Manuel Arteaga allegedly also supplied the redistributors with heroin, methamphetamine, and cocaine.  The redistributors, including Allan Josue Funez Osorto, Brayan Martinez, Josue Natanael Perdomo Moreno, Jose Franklin Rodriguez Garcia, Cesar Estrada Cruz, Arnold Cruz Rodriguez, Christian Rodriguez-Valle, Alex Gomez Barrientos, Eric Montoya Marquez, and Kevin Arteaga-Morales, allegedly traveled to the Tenderloin neighborhood to sell drugs, often by carpooling together across the Bay Bridge.  

According to the criminal complaint, Reanos-Moreno, along with Arteaga, took drug orders on a nearly daily basis from the individuals living in houses across the East Bay.  The persons living in the houses occasionally would negotiate prices and would specify daily the quantities of heroin, cocaine powder, cocaine base, and methamphetamine they wanted to receive.  Reanos-Moreno and Arteaga would then deliver these drugs to redistributors who would travel to the Tenderloin neighborhood to sell the drugs, referring to the neighborhood as “Civic Cen.”  The complaint describes numerous alleged seizures of heroin, cocaine, fentanyl, and methamphetamine from houses where the redistributors lived as well as numerous seizures of drugs from the redistributors in the Tenderloin, including near several federal buildings.  

All defendants are charged with engaging in a conspiracy to distribute controlled substances, in violation of 21 U.S.C. §§ 846 and 841(a)(1) and (b)(1)(C).  If convicted, the defendants face up to 20 years’ imprisonment and between 3 years and a lifetime term of supervised release.  Further, additional fines, forfeitures, and restitution may be ordered; however, any sentence following conviction would be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.  

The complaint contains allegations only and all defendants are presumed innocent until proven guilty beyond a reasonable doubt.  

Several of the defendants were arrested on Tuesday, August 6, 2019, as part of a criminal enforcement operation.    

Assistant U.S. Attorneys Julie Garcia, Sailaja Paidipaty, and Ryan Rezaei are prosecuting the case.  The prosecution is the result of an investigation by the DEA, San Francisco Police Department, and Richmond Police Department.
 

SAN FRANCISCO – The U.S. Attorney’s Office has charged nine defendants, many members of the same family, with engaging in a conspiracy to distribute controlled substances, announced United States Attorney David L. Anderson and Drug Enforcement Administration (DEA) Special Agent in Charge Chris Nielsen.  The charges were made in a complaint filed July 26, 2019, and unsealed today following the arrest of eight defendants.  

The complaint, described by U.S. Attorney Anderson in a press conference today, is one of the first steps in the Federal Initiative for the Tenderloin (FIT).  The initiative seeks to reduce crime in the Tenderloin neighborhood of San Francisco and is described here.  

The complaint describes a conspiracy involving a large-scale drug trafficking organization a network extending across the Bay Area.  According to the complaint, between March 4, 2019, and July 26, 2019, Eduardo Alfonso Viera-Chirinos, a/k/a “Rojo”, worked with his family members Victor Viera-Chirinos, a/k/a “Mojarra”; Jorge Alberto Viera-Chirinos; Jorge Enrique Torres-Viera, a/k/a “Enrique”; and Karen Castro-Torres, a/k/a “Delany Ellieth Cardona Velasquez”, a/k/a “Belanie Elyzabeth Artiaga”, to obtain drugs.  The defendants brought the drugs from Mexico through Los Angeles to the Bay Area.  The defendants then repackaged the drugs for redistribution both in the Bay Area and in Seattle.  The complaint also describes the execution of search warrants in June 2018 by the Richmond and San Francisco Police Departments and how Jorge Alberto Viera-Chirinos thereafter remained in the Bay Area to run the family drug-trafficking business while Eduardo Alfonso Viera-Chirinos and his partner, Karen Castro-Torres, moved to Seattle.

Also described in the complaint is how Karen Castro-Torres, Cilder Velasquez, and Jorge Enrique Torres-Viera coordinated housing for individuals who redistributed drugs for the drug-trafficking organization.  Drug redistributors, including Gustavo Adolfo Gamez-Velasquez and Luis Almicar Erazo-Centeno, allegedly placed orders for drugs on a regular basis from Cilder Velasquez and Jorge Enrique Torres-Viera.  The complaint includes excerpts from calls and text messages intercepted over federally authorized wiretaps.  According to the complaint, the Viera family obtained drugs in Los Angeles, packaged them for local redistribution in Livermore, Calif., and then shipped the drugs to the Seattle area.  Eduardo Alfonso Viera-Chirinos, speaking with an individual using a Honduras-based area code, also allegedly plotted to murder an individual in Honduras.  The complaint also describes a traffic stop in Washington State during which Alexander Gonzalez-Vasquez and Eduardo Alfonso Viera-Chirinos allegedly concealed cocaine and heroin in a hidden compartment inside Gonzalez’s truck.  

DEA Special Agent in Charge Chris Nielsen stated, “Street-level drug dealing has, unfortunately, become somewhat 'normalized' in the Tenderloin. As for me and my law enforcement partners, and I suspect most people in this community, we are tired of drug traffickers preying on and profiting from the vulnerable. This case and the Federal Initiative for the Tenderloin is a sustained effort, and we are focused on drug dealers, their sources of supply and anyone else who assists them, while keeping in mind we need to help those suffering from addiction.  Our message is simple: we will continue to do our best to prevent these bold criminals from destroying any more lives.  There is much work to be done.”

All defendants are charged with engaging in a conspiracy to distribute controlled substances, in violation of 21 U.S.C. §§ 846 and 841(a)(1) and (b)(1)(C).  If convicted, defendants face up to 20 years’ imprisonment and between 3 years and a lifetime term of supervised release.  Further, additional fines, forfeitures, and restitution may be ordered; however, any sentence following conviction would be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.  

The complaint contains allegations only, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt.  

Several of the defendants were arrested on July 26, 2019, as part of a criminal enforcement operation.  

Assistant U.S. Attorneys Julie Garcia, Sailaja Paidipaty, and Ryan Rezaei are prosecuting the case.  The prosecution is the result of an investigation by the DEA, San Francisco Police Department, and Richmond Police Department.
 

SAN FRANCISCO – A federal jury convicted Abhijit Prasad of 21 counts of visa fraud and two counts of aggravated identity theft.  U.S. Attorney David Anderson for the Northern District of California and U.S. Attorney McGregor W. Scott for the Eastern District of California made the announcement.  The verdict was handed down today after a one-week trial before Charles R. Breyer, United States District Judge. 

According to the evidence at trial, Prasad, 52, of Tracy, filed 19 petitions for H-1B nonimmigrant visas containing false statements, made under penalty of perjury, as to purported work projects to be performed at locations in California, including Cisco Systems.  The evidence at trial showed that Cisco had no expectation that the foreign workers who were the beneficiaries of the visa petitions would actually work at Cisco on an existing work project. The evidence at trial further showed that the defendant knowingly submitted forged Cisco documents to United States Citizenship and Immigration Services in support of his claims that the beneficiaries would work at Cisco.  The evidence at trial also showed that Prasad fraudulently used the digital signature of a Cisco employee, who was not authorized to sign Cisco employment documents, to create a document that would leave the impression that two of the H-1B workers had an existing work project at Cisco. Prasad obtained two of the H-1B visas using this fraudulent document that purports to be a fully executed Cisco contract.

“This verdict sends a strong message: the Diplomatic Security Service is committed to making sure those who commit visa fraud face consequences for their criminal actions,” said Matthew Perlman, Special Agent in Charge of the DSS San Francisco Field Office. “Diplomatic Security’s strong relationship with the U.S. Attorney’s Office and with the Document and Benefit Fraud Task Force continues to be essential in the pursuit of justice.”

“Homeland Security Investigations remains laser focused to conduct document and benefit fraud investigations, arresting and bringing to justice individuals, like Prasad, who seek to undermine and abuse the laws of the United States,” said Tatum King, Special Agent in Charge of Homeland Security Investigations (San Francisco and Northern California). “These types of fraudulent activities pose a severe threat to national security and public safety as it creates vulnerabilities for terrorists and other criminals to exploit. HSI and our law enforcement partners will not tolerate such criminal activities and will hold violators accountable to the fullest extent of the law.”

Judge Breyer scheduled Prasad’s sentencing hearing for October 16, 2019. Prasad faces a maximum statutory penalty of 10 years in prison and a $250,000 fine for the visa fraud.  He faces a two-year mandatory prison sentence and a $250,000 fine for the aggravated identity theft counts.  Further, additional fines, forfeitures, and restitution may be ordered; however, any sentence following conviction would be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.  

Assistant U.S. Attorneys Audrey B. Hemesath and Michael A. Rodriguez are prosecuting the case.  The case is the product of an investigation by the U.S. Department of State, Diplomatic Security Service’s representative to the Document and Benefit Fraud Task Force (DBFTF), overseen by Homeland Security Investigations. The DBFTF is a multi-agency task force that coordinates investigations into fraudulent immigration documents. U.S. Citizenship and Immigration Service’s Office of Fraud Detection and National Security also assisted with the investigation. 
 

OAKLAND – Saleem M. Khan was sentenced today to 30 months in prison related to his participation in an insider-trading conspiracy and related scheme, announced United States Attorney David L. Anderson and Federal Bureau of Investigation Special Agent in Charge John F. Bennett.  The sentence was handed down by the Honorable Haywood S. Gilliam, Jr., U.S. District Judge.

Khan pleaded guilty to the charges on January 31, 2019.  According to the plea agreement, Khan admitted that during the period July 2009 to October 2012, he obtained from a friend material, non-public information relating the sales and financial performance of Ross Stores, Inc. (“Ross”), a discount-clothing retailer then headquartered in Pleasanton, Calif.  Khan’s friend worked in Ross’s finance department.  Based on the material, non-public information, Khan entered into options contracts regarding Ross securities in advance of Ross’s monthly sales announcements.  Khan used brokerage accounts held both in his name and in names of nominees.  In his plea agreement, Khan admitted he compensated the Ross “tipper,” including by providing $130,000 to the tipper through third parties and by purchasing items on the tipper’s behalf.  Khan also admitted he made profits in excess of $3,500,000 as a result of the scheme.  At sentencing, the government presented evidence showing that Khan had made realized gains from trading in Ross option of as much as $8.2 million between July 2009 and October 2012. 

On November 2, 2017, a federal grand jury returned a superseding indictment against Khan charging him with one count of conspiracy to commit securities fraud, in violation of 18 U.S.C. § 1349; nine counts of securities fraud, in violation of 18 U.S.C. § 1348; and one count of obstruction of justice, in violation of 18 U.S.C. § 1505.  Khan pleaded guilty to the conspiracy and securities fraud counts.  The remaining count was dismissed at today’s sentencing hearing.

Khan was sued by the Securities and Exchange Commission (SEC) pertaining to the same insider-trading scheme in the following civil case: Securities and Exchange Commission v. Saleem Khan et al., Civil Action No. 3:14-cv-02743 HSG (N.D. Cal., filed June 13, 2014).  In September 2016, the court entered a final judgment in the civil case against Khan ordering him to pay more than $15 million in disgorgement, penalties, and prejudgment interest.  In that case, Khan agreed to settle the charges against him without admitting or denying the allegations in the civil complaint, and he consented to the entry of final judgment.

In addition to the prison term, Judge Gilliam sentenced the defendant to a two-year period of supervised release.  The Court scheduled a hearing on October 21, 2019, for the purpose of determining whether and to what extent Khan should be ordered to pay restitution to Ross.  Khan may be ordered to pay attorney’s fees incurred by Ross resulting from the company’s participation in the government’s investigation and prosecution of Khan.  The defendant will begin serving his prison term on November 4, 2019.

Assistant U.S. Attorneys Kyle F. Waldinger and Karen Beausey are prosecuting the case with the assistance of Kathy Tat.  The prosecution is the result of an investigation by the FBI.
 

SAN FRANCISCO – Shayne Gregory Maupin was sentenced today to 36 months in prison for being a felon in possession of a firearm, announced United States Attorney David L. Anderson and Federal Bureau of Investigation Special Agent in Charge John F. Bennett. 

Maupin, 27, of Humboldt County, Calif., pleaded guilty on May 14, 2019, to one count of being a felon in possession of a firearm, in violation of 18 U.S.C. § 922(g)(1).  According to his plea agreement, on January 2, 2019, Maupin possessed a Romarm WASR-10 assault rifle, with a 30-round magazine, loaded with 7.62 x 39 mm ammunition, inserted into it.  Maupin further admitted he possessed additional equipment including a 10-round magazine loaded with 7.62 x 39 mm ammunition, additional rounds of ammunition, and a camouflage body vest.  Maupin admitted that at the time he possessed these items, he already had been convicted of a felony punishable by a term of imprisonment exceeding one year and therefore he was not eligible to possess a firearm.

On February 7, 2019, a federal grand jury indicted Maupin charging him with one count of being a felon in possession of a firearm and one count of being a felon in possession of ammunition, both in violation 18 U.S.C. § 922(g)(1).  Pursuant to his plea agreement, Maupin pleaded guilty to the firearm charge. The ammunition charge was dismissed at sentencing. 

The sentence was handed down by the Honorable Richard Seeborg, U.S. District Judge.  Judge Seeborg also sentenced the defendant to a three-year period of supervised release.  The defendant will begin serving the sentence immediately.

Assistant U.S. Attorney Lina Peng is prosecuting the case with the assistance of Margoth Turcios.  The prosecution is the result of an investigation by the FBI with assistance from the Arcata Police Department.
 

SAN FRANCISCO–  The Department of Justice filed a civil complaint in federal court against digital currency exchange BTC-e, also known as Canton Business Corporation, and one of its chief owners and operators Alexander Vinnik, announced United States Attorney David L. Anderson and U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) Director Kenneth A. Blanco.  The complaint seeks to enforce monetary penalties FinCEN assessed against BTC-e and Vinnik for alleged violations of the Bank Secrecy Act (BSA), 31 U.S.C. §§ 5311-14 and 5316-32.  

BTC-e is a digital currency exchange organized as a corporation under the laws of Cyprus and/or the Seychelles Islands.  BTC-e operated in Bulgaria, the Seychelles Islands, and other jurisdictions, including the Northern District of California, and allowed its users to buy and sell bitcoin and other digital currencies anonymously through its web domain, btc-e.com.  Vinnik, a Russian national, occupied a senior leadership position within BTC-e, controlled multiple BTC-e administrative accounts used to process BTC-e’s transactions, and participated in the direction and supervision of BTC-e’s operations and finances.  The civil complaint alleges that Vinnik operated several BTC-e accounts, including some tied to thefts from other virtual currency exchanges such as Mt. Gox.  Vinnik is currently incarcerated in Greece and is the subject of an extradition request to the Northern District of California in connection with criminal charges filed in this district.

On July 26, 2017, FinCEN assessed monetary penalties against BTC-e and Vinnik for violations of the BSA.  FinCEN assessed $12 million in penalties against Vinnick and $88,596,314 in penalties against BTC-e for BTC-e’s alleged willful violations of the BSA.  The civil complaint seeks to enforce the monetary penalties issued by FinCEN.  

According to the complaint, FinCEN assessed penalties based, in part, on the following conduct: 

• Failure to Register as an MSB:  BTC-e did not register with FinCEN as a Money Services Business (MSB).  The BSA defines an MSB and requires, among other things, MSBs to register with FinCEN within 180 days of beginning operations.  In this case, FinCen assessed penalties, in part, because the agency concluded BTC-e was an MSB and failed to register with the agency. 
• Failure to Establish Anti-Money Laundering Programs and Procedures:  Under the BSA, an MSB must develop, implement, and maintain an effective anti-money laundering (AML) program that is reasonably designed to prevent the MSB from being used to facilitate money laundering and the financing of terrorist activities.  FinCEN’s fines were based, in part, on BTC-e’s failure to have reasonable AML policies or procedures in place to prevent criminal activity on the digital currency exchange.  
• Failure to File Suspicious Activity Reports:  Under the BSA, an MSB must file a suspicious activity report (SAR) if it becomes aware of transactions that the MSB “knows, suspects, or has reason to suspect” are suspicious where those transactions involve the MSB and aggregate to at least $2,000 in value.  FinCEN’s penalties were assessed, in part, because BTC-e did not file SARs and instead received proceeds from ransomware schemes, transferred funds to and from known dark net marketplaces, and deposited funds stolen from other digital currency exchanges into BTC-e accounts that Vinnik controlled.

This case is being handled by Assistant United States Attorney Kirstin Ault and U.S. Department of Justice Trial Attorney John Siemietkowski with assistance from Tina Louie.
 

SAN JOSE – A federal grand jury indicted Miguel Angel Bravo Vasquez, Francisco Heredia Munoz, and Jose Alberto Cruz Garcia with conspiring to distribute methamphetamine and fentanyl, and related charges, announced United States Attorney David L. Anderson and Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Special Agent in Charge Ryan L. Spradlin.

The indictment, filed earlier today, describes a drug distribution conspiracy that continued from about September 11, 2018, to July 17, 2019, including distributions of methamphetamine and fentanyl.  An affidavit filed by a special agent with HSI in connection with a criminal complaint filed in the same case describes an investigation into a drug trafficking organization in San Jose.  The complaint alleges that on September 11, 2018, in San Jose, Bravo Vasquez, 33, and Heredia Munoz, 47, sold HSI undercover agents five pounds of methamphetamine, then delivered the payment to Cruz Garcia, 37, for that methamphetamine.  In addition to the methamphetamine, Bravo Vasquez and Heredia Munoz allegedly gave the undercover agents a sample of 100 blue fentanyl pills.  Further, on December 18, 2018, Bravo Vasquez, Heredia Munoz, and Cruz Garcia allegedly sold the undercover agents additional fentanyl pills.  The complaint alleges that on July 17, 2019, the three defendants attempted to sell the undercover agents another 37 pounds of methamphetamine, but were arrested during the transaction.

The indictment filed today charges all three defendants with one count of conspiracy to distribute and possess with intent to distribute a controlled substance, in violation of 21 U.S.C. §§ 846 and 841(a)(1); one count of possession with intent to distribute and distribution of methamphetamine, in violation of 21 U.S.C. § 841(a)(1) and (b)(1)(B)(viii); and one count of possession with intent to distribute and distribution of fentanyl, in violation of 21 U.S.C. § 841(a)(1) and (b)(1)(B)(vi).  Defendants Bravo Vasquez and Heredia Munoz are also charged with one additional count of possession with intent to distribute and distribution of methamphetamine.  All three defendants were arrested on July 17, 2019, and remain in federal custody.  In proceedings today before U.S. Magistrate Judge Virginia K. DeMarchi, defendants Heredia Munoz and Cruz Garcia were arraigned on the charges.  Bravo Vasquez is scheduled to be arraigned before Magistrate Judge DeMarchi on July 29, 2019, at 1:30 p.m.

An indictment merely alleges that crimes have been committed, and Bravo Vasquez, Heredia Munoz, and Cruz Garcia, like all defendants, are presumed innocent until proven guilty beyond a reasonable doubt.  If convicted of any of the drug charges, the defendants face a maximum statutory sentence of 40 years in prison and a fine in the amount of $5,000,000.  The court also may order an additional term of supervised release, and fines or other assessments.  However, any sentence following conviction would be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.

Assistant U.S. Attorney Scott Simeon is prosecuting the case with the assistance of Tong Zhang.  The prosecution is the result of an investigation by HSI.  
 

SAN FRANCISCO – Franklin Efijemueh was indicted on wire fraud charges related to an alleged romance fraud scheme, announced United States Attorney David L. Anderson and Federal Bureau of Investigation Special Agent in Charge John F. Bennett.  

In an indictment filed July 18, 2019, and unsealed today, a federal grand jury charged Efijemueh, 37, of Lawrenceville, Ga., with participating in a scheme to defraud a San Francisco victim.  According to the indictment, the fraud began in April 2018 when a man going by the name “Allen Green” developed a romantic relationship electronically with the female victim.  The indictment describes how “Allen Green” told the victim he had traveled to Bahrain and was having financial issues while there.  In reality, the indictment alleges, “Allen Green” was in Nigeria.  Based on Green’s representations, the victim sent him money.  Then, in June of 2018, Green began to refer to another individual named “Rashad Cosmos” who purportedly could provide funds for the victim.  The indictment alleges that “Rashad Cosmos” was actually Efijemueh.

The indictment charges Efijemueh with receiving three payments from the victim in connection with the fraudulent promise to provide the victim money.  First, Efijemueh, using the “Rashad Cosmos” moniker, agreed to travel to San Francisco to provide money to the victim if she first would agree to pay him in advance.  Based upon this representation, the victim sent money to accounts designated by Efijemueh.  Second, Efijemueh arranged to meet the victim in a San Francisco hotel room if she brought additional cash to the meeting.  The victim brought the additional cash to the meeting and gave it to Efijemueh when they met.  Third, when the victim arrived at the San Francisco hotel room, Efijemueh showed the victim a safe and claimed that the safe contained large amounts of currency that would have to be cleaned before it could be used.  Efijemueh agreed to clean the currency for an additional fee.  Based on those representations, the victim sent Efijemueh more money.  According to the indictment, the safe actually contained primarily pillows.

In sum, the indictment charges Efijemueh with three counts of wire fraud, in violation of 18 U.S.C. § 1343, for his part in the scheme.  Efijemueh was arrested today in Lawrenceville, Georgia.  He made his initial appearance in Atlanta and was released on bond.  His next appearance is scheduled to be on August 9, 2019, at 10:30 a.m., before U.S. Magistrate Judge Joseph C. Spero in San Francisco.  

An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt.  If convicted, the defendant faces a maximum sentence of 20 years in prison and a maximum $250,000 fine on each count of wire fraud.  In addition, the court also may order an additional term of supervised release, fines or other assessments, and restitution, if appropriate.  However, any sentence following conviction would be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.

Assistant U.S. Attorney Robert David Rees is prosecuting this case with the assistance of Kathy Tat.  This prosecution is the result of an investigation by the FBI.  
 

SAN FRANCISCO – Paul Colvard was sentenced to 18 months in prison for social security fraud, announced United States Attorney David L. Anderson and Social Security Administration Office of Inspector General Special Agent in Charge Robb Stickley.  The sentence was handed down today by the Honorable James Donato, United States District Judge.  

Colvard, 66, of Jersey City, New Jersey, pleaded guilty to the charge on April 17, 2019.  According to his plea agreement, Colvard and his mother jointly owned a bank account into which her Social Security retirement benefits were being deposited.  Colvard’s mother died on December 23, 1987, and Colvard did not disclose that fact to the SSA.  Instead, Colvard continued to let the SSA deposit his mother’s Social Security retirement benefits into the bank account so he could collect his mother’s benefits.  Colvard acknowledged that his decision to conceal his mother’s death caused the SSA to pay retirement benefits that she was not entitled to receive and that the loss to the United States attributed to his fraud exceeded $400,000.   

A federal grand jury indicted Colvard on November 6, 2018, charging him with one count of social security fraud, in violation of 42 U.S.C. § 408(a)(4), and one count of theft of government property, in violation of 18 U.S.C. § 641.  Colvard pleaded guilty to the fraud count and the theft count was dismissed at sentencing.

In addition to the prison term, Judge Donato sentenced the defendant to a 3-year period of supervised release and ordered him to pay $407,007.00 in restitution.  Judge Donato ordered Colvard to begin serving his prison term on August 7, 2019.

Special Assistant U.S. Attorney Christopher Vieira is prosecuting the case with the assistance of Kimberly Richardson.  The prosecution is the result of an investigation by the SSA Office of the Inspector General.  
 

SAN FRANCISCO - Malik Swinton was sentenced to 37 months in prison for wire fraud in connection with various schemes to defraud the federal government for disability and workers’ compensation benefits, announced United States Attorney David L. Anderson; U.S. Department of Veterans Affairs (VA) Office of Inspector General, Criminal Investigations Division, Special Agent in Charge James Wahleithner; U.S. Department of Justice Office of the Inspector General, Los Angeles Field Division, Special Agent in Charge James K. Cheng; Social Security Administration (SSA) Office of Inspector General Special Agent in Charge Robb Stickley; Office of Personnel Management Office of Inspector General Acting Inspector Norbert Vint; and U.S. Department of Labor (DOL) Office of Inspector General Acting Special Agent in Charge Quentin Heiden.  The sentence was handed down today by the Hon. Yvonne Gonzalez Rogers, U.S. District Judge.

Swinton pleaded guilty to the charge on May 9, 2019.  According to his plea agreement, Swinton, 40, of Las Vegas, Nev., admitted he engaged in schemes to defraud the VA, the SSA, the DOL, and the Office of Personnel Management.  In sum, the court found Swinton caused losses to the United States in excess of $600,000.

According to the plea agreement, Swinton submitted a fraudulent claim for benefits to the Department of Veterans Affairs in July 2012.  Swinton admitted that he submitted a form in which he claimed he suffered from post-traumatic stress disorder (PTSD) as a result of an incident that occurred while he was in the U.S. Army.  In the form, Swinton claimed that his squad leader pulled out a weapon, shot his platoon sergeant in front of him, and then later threatened to kill or hurt Swinton or his family if Swinton told anyone about the shooting.  In his plea agreement, Swinton admitted that the incident never occurred.  Swinton acknowledged that as a result of this scheme, from June 2013 through April 2019 he received approximately $222,000.00 in fraudulently obtained disability benefits.

Further, Swinton admitted in his plea agreement that he improperly claimed and received dependency benefits from the VA.  Although Swinton divorced his wife in April 2009, he continued to represent to the VA that he was married and he claimed his former wife as a dependent on his disability payment record through November 2018.  As a result, Swinton received over $20,000 in improper dependency benefits.  

Swinton also defrauded the SSA.  Swinton falsely represented to the SSA that the VA determined he was unemployable.  Swinton also wrote and submitted to the SSA a fraudulent letter that purported to be from VA doctor.  The letter claimed that Swinton was unemployable due to various medical conditions including his alleged PTSD.  In reality, the VA doctor did not write nor authorize Swinton to write the letter.  As a result of his false statements, Swinton fraudulently convinced the SSA to pay him $98,431.30 in undeserved disability benefits from February 2013 to April 2019.

Finally, Swinton defrauded the DOL by submitting a fraudulent application for workers’ compensation benefits.  Swinton admitted that to obtain the benefits, he failed to disclose to the agency that he was receiving VA benefits, testified falsely about the manner in which he supported himself, and wrote and signed letters in other people’s names to support his claim.  Further, after he began receiving benefits, Swinton failed to disclose that he was receiving VA and SSA benefits and repeatedly wrote and submitted letters that purported to be from VA doctors to confirm that his alleged injuries prevented him from working.

On December 6, 2018, a federal grand jury indicted Swinton charging him with seven counts of wire fraud, in violation of 18 U.S.C. § 1343, and one count of aggravated identity theft, in violation of 18 U.S.C. § 1028A(a)(1).  Swinton pleaded guilty to one count of wire fraud and the remaining counts were dismissed at sentencing.  

In addition to the prison term, Judge Gonzalez Rogers ordered Swinton to pay $632,368.34 in restitution and to serve 3 years on supervised release following his prison term.  Swinton has been in custody since his arrest in December 2018 and will begin serving his prison term immediately.

Special Assistant U.S. Attorney Christopher Vieira is prosecuting the case with the assistance of Kimberly Richardson. The prosecution is a result of an investigation by the Offices of Inspectors General of the Department of Veterans Affairs, the Department of Justice, the Social Security Administration, the Office of Personnel Management, and the Department of Labor.
 

SAN JOSE– Michael Anthony Lamb pleaded guilty in federal court today to being a felon in possession of a firearm, announced U.S. Attorney David L. Anderson and Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) Special Agent in Charge Rayfield Roundtree.  The guilty plea was accepted by the Honorable Lucy H. Koh, U.S. District Judge.

According to his plea agreement, Lamb, 28, of San Jose, admitted that on February 6, 2018, he was drinking beer out of a beer can while sitting on a planter box on a VTA light rail platform in San Jose when he noticed two law enforcement officers approaching him.  Lamb saw one of the officers wave at him and ask him to approach.  Instead, Lamb picked up his backpack and ran.  Lamb admitted that he ran because he knew he would get in trouble were he to be arrested.  Specifically, Lamb knew he was a convicted felon who was not entitled to possess a firearm and still he had in his possession a loaded 9mm Kel-Tec PF-9 pistol with seven full-metal jacket 9mm ammunition rounds in the magazine.  He also had in his possession approximately four grams of cocaine and a jar containing approximately 53 grams of marijuana buds.  While running away, Lamb heard the officers order him to stop.  Instead of stopping, Lamb continued to run, threw the loaded gun into some nearby bushes, and threw his backpack aside. Shortly thereafter, an officer arrested Lamb.  Also, his firearm and backpack were recovered.  

On June 27, 2019, Lamb was charged by information with one count of being a felon in possession of a firearm and ammunition, in violation of 18 U.S.C. § 922(g)(1).  Lamb pleaded guilty to the charge.  

Lamb has been in custody since March 11, 2019.  Judge Koh scheduled his sentencing hearing for January 15, 2020.  Lamb faces a statutory maximum sentence of ten years in prison and a fine of up to $250,000.  In addition, Judge Koh also may order that defendant serve an additional period of supervised release of up to three years.  However, any sentence will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553. 

Assistant United States Attorney Jeff Nedrow is prosecuting the case with the assistance of Susan Kreider.  The prosecution is the result of an investigation conducted by the ATF and the Santa Clara County Sheriff’s Office.  
 

OAKLAND – Giovonni Gaines was sentenced today to 30 months in prison for possession of an unregistered firearm, announced United States Attorney David L. Anderson and Federal Bureau of Investigation (FBI) Special Agent In Charge John F. Bennett.  The sentence was handed down by the Hon. Yvonne Gonzalez Rogers, U.S. District Judge.             

Gaines, 23, of Oakland, pleaded guilty to the charge on April 4, 2019.  According to his plea agreement, weeks before July 23, 2018, Gaines bought an explosive device from somebody in his neighborhood.  The device was comprised of a metallic substance capped at both ends, was one inch in diameter, was six inches long, and contained an explosive charge.  On July 23, 2018, he traveled by bicycle with the device in a backpack to a protest near the 1900 block of Broadway in Oakland.  There were approximately 1000 people and dozens of law enforcement officers present.  Gaines saw officers from the Oakland Police Department clashing with some protesters and took the device out of his backpack.  He lit the device and handed it to a juvenile near him.  Gaines admitted he instructed the juvenile to throw the device toward law enforcement officers to create a distraction and disrupt the officers’ efforts to maintain a peaceful protest.  The juvenile threw the device and it exploded.  Gaines acknowledged that he heard the blast and later learned the explosion injured approximately ten officers and caused damage to Oakland Police Department property.

On December 21, 2018, Gaines was charged by Information with one count of possessing an unregistered firearm, in violation of 26 U.S.C. § 5861(d).  Gaines pleaded guilty to the charge.  

In addition to the prison term, Judge Gonzalez Rogers sentenced the defendant to a three-year period of supervised release.  Judge Gonzalez Rogers ordered the defendant to surrender on a date in September to begin serving his prison term.  

The case is being prosecuted by the Special Prosecutions and National Security Unit of the U.S. Attorney’s Office in San Francisco and investigated by the FBI.
 

SAN FRANCISCO - Kia Zolfaghari pleaded guilty today to charges regarding his role in a conspiracy to distribute fentanyl, as well as to related weapons and money laundering charges, announced United States Attorney David L. Anderson and Drug Enforcement Administration Special Agent in Charge Chris Nielsen.  The plea was accepted by the Honorable Susan Illston, Senior United States District Judge.

In the plea agreement, Zolfaghari, 42, of San Francisco, admitted that from May of 2014 until June of 2016 he agreed with others to distribute and possess with intent to distribute fentanyl.  Fentanyl, a Schedule II controlled substance, is a highly potent opiate that can be diluted with cutting agents to create counterfeit pills that attempt to mimic the effects of oxycodone, and can typically be obtained at a lower cost than genuine oxycodone.   However, small variations in the amount or quality of fentanyl can have significant effects on the potency of the counterfeit pills, raising the danger of overdoses.  In this case, Zolfaghari admitted that his role in the conspiracy included buying a pill press, using it to manufacture pills, and selling the pills, principally online.  Zolfaghari admitted he stamped the pills in a manner consistent with genuine oxycodone and advertised the pills as oxycodone, but that the pills did not contain oxycodone and instead contained fentanyl.  

In his plea agreement, Zolfaghari also described the roles of two of his co-conspirators in the drug trafficking conspiracy.  For example, Zolfaghari acknowledged that one of his co-conspirators assisted him in the operation by packaging and mailing pills as well as cleaning up after he manufactured the pills.  Additionally, Zolfaghari explained that another co-conspirator assisted him by maintaining a post office box for the delivery of fentanyl powder that he used to make pills and by delivering the powder that arrived in that post office box.  Zolfaghari admitted that over the course of the conspiracy he made over $400,000 through his sales, and sold at least 13,000 fentanyl pills.

Zolfaghari also pleaded guilty to conspiring to launder the proceeds of the drug trafficking operation.  Specifically, Zolfaghari admitted that sometime before May 1, 2014, he agreed with others to engage in several financial transactions to conceal the of those proceeds of his drug sales. For example, he arranged to be paid in the digital currency bitcoin, he used unlicensed bitcoin brokers to exchange the bitcoin for cash, and he directed a co-conspirator to purchase gift cards with the cash.  Zolfaghari further admitted that these transactions were intended to conceal the source and ownership of the proceeds of his drug transactions.  Zolfaghari also admitted he used the proceeds from his drug trafficking operation to make a $40,000 down payment (and additional monthly payments) on a 2015 Audi RS5 Coupe; to make payments on an apartment in San Francisco; and to make purchases of luxury goods such as high-end watches, designer shoes, and jewelry.

Zolfaghari was arrested on June 10, 2016.  At the time of his arrest, Zolfaghari was found in possession of a Smith & Wesson handgun and 500 pills containing fentanyl.  

On November 29, 2016, a federal grand jury returned a superseding indictment against Zolfaghari, charging him with four counts of distribution and possession with intent to distribute fentanyl, in violation of 21 U.S.C. §§ 841(a)(1) and (b)(1)(B); four counts of distribution and possession with intent to distribute 40 grams or more of fentanyl, in violation of 21 U.S.C. §§ 841(a)(1) and (b)(1)(B); and one count each of conspiracy to manufacture, to possess with intent to distribute, and to distribute 400 grams or more of fentanyl, in violation of 21 U.S.C. § 846; using, carrying, or possessing a firearm during and in relation to a drug trafficking crime, in violation of 18 U.S.C. § 924(c); conspiracy to launder drug proceeds, in violation of 18 U.S.C. § 1956(h); and engaging in money laundering in violation of 18 U.S.C. § 1957.  Today, Zolfaghari pleaded guilty to the drug trafficking and money laundering conspiracies, as well as to the weapons charge.    

Judge Illston scheduled Zolfaghari’s sentencing for November 22, 2019.  Zolfaghari faces a maximum sentence of life in prison and a $10,000,000 fine for the conspiracy to manufacture and distribute fentanyl charge.  The charge also carries a minimum 10 years in prison. The statutory maximum for the money laundering conspiracy charge is 20 years in prison, and a fine of $500,000 or twice the gain or loss from the criminal activity.  The statutory maximum for the weapons charge is life in prison and a $250,000 fine.  This charge carries a minimum five years in prison, which term must run consecutive to any other sentence imposed.  Additional terms of supervised release and monetary assessments also may be ordered; however, any sentence will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.  

In April 2017, Zolfaghari jumped bail and failed to appear for a hearing in this case.  On February 9, 2018, Judge Illston sentenced his wife and co-defendant, Candelaria Dagandan Vazquez, 43, who was also a fugitive, to 151 months imprisonment.  In February 2019, the United States Marshals Service, together with the Mexican Federal Police, located Zolfaghari and Vazquez in Mexico.  Vazquez is currently serving her sentence in the custody of the Federal Bureau of Prisons.  Also prosecuted for his role in the drug distribution scheme was King Edward Harris, II, 37, of Oxnard.  On September 22, 2017, Judge Illston sentenced Harris to five years in prison for possession and distribution of 40 grams or more of fentanyl.

Assistant U.S. Attorney Nikhil Bhagat is prosecuting the case with the assistance of Linda Love.  The prosecution is the result of an investigation by the Drug Enforcement Administration, Homeland Security Investigations, the Internal Revenue Service Criminal Investigation Division, the United States Postal Inspection Service, and U.S. Customs and Border Protection, with assistance from the United States Marshals Service, the San Francisco Police Department, the San Francisco Fire Department, and the Mexican Federal Police.  This case is the product of an extensive investigation by the Organized Crime Drug Enforcement Task Force, 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. 
 

SAN JOSE – A federal grand jury indicted Alexander Taylor on charges of impersonating a federal officer and possession of a counterfeit seal of an agency of the United States, announced United States Attorney David L. Anderson and Drug Enforcement Administration Special Agent in Charge Chris Nielsen.  

The indictment, filed earlier today, describes an incident on Christmas Eve of 2018 during which Taylor, 49, of San Jose, pulled over a driver and falsely stated he was a Drug Enforcement Administration (DEA) agent.  Taylor allegedly showed the driver a fake DEA badge and stated he intended to issue the driver a traffic citation.  Additional documents filed in the case contain allegations that suggest Taylor may be the person behind other bogus traffic stops.  For example, an affidavit filed in the case states that in November of 2018, a person fitting Taylor’s description was driving a dark colored Volkswagen Jetta with red and blue lights.  The person in the Jetta pulled over a tow truck on Highway 17 in Los Gatos that was on its way to assist the California Highway Patrol to remove a car from the scene of an accident.  On that occasion, the person fitting Taylor’s description demanded to see the driver’s license and then asked the driver, “Do you want to die today?”  Similarly, on February 27, 2019, someone in a dark-colored Jetta flashed red and blue lights to pull over a driver on Highway 85 near Interstate 280.  Soon after the car pulled over, the Jetta veered back into traffic without speaking to the driver.  A witness stated that the driver of the Jetta appeared to be laughing.

The indictment filed today charges Taylor with one count of false impersonation of a federal officer, in violation of 18 U.S.C. § 912, and one count of possession of a counterfeit seal of an agency of the United States, in violation of 18 U.S.C. § 506(a)(3).  Taylor was arrested on March 2, 2019, and remains in federal custody.  Taylor is scheduled to be arraigned on the charges on July 12, 2019, at 1:30 p.m., before U.S. Magistrate Judge Virginia K DeMarchi.  

An indictment merely alleges that crimes have been committed, and Taylor, like all defendants, is presumed innocent until proven guilty beyond a reasonable doubt.  If convicted of the impersonation charge, Taylor faces a maximum statutory sentence of 3 years in prison and a fine in the amount of $250,000.  If convicted of the impersonation charge, Taylor faces a maximum statutory sentence of 5 years in prison and a fine in the amount of $250,000.  The court also may order an additional term of supervised release, fines or other assessments, and restitution, if appropriate. However, any sentence following conviction would be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.  

Assistant U.S. Attorney Jeffrey Backhus is prosecuting the case with assistance from Elise Etter.  This prosecution is the result of an investigation by the DEA. 
 

OAKLAND – Raj Kumar Ditta pleaded guilty today in federal court to misappropriating and embezzling funds he held as a fiduciary for incompetent and disabled veterans, announced United States Attorney David L. Anderson and the U.S. Department of Veterans Affairs (VA), Office of Inspector General, Criminal Investigations Division, Special Agent in Charge James Wahleithner.  The plea was accepted by the Hon. Yvonne Gonzalez Rogers, U.S. District Judge.

In pleading guilty, Ditta, 51, of San Ramon, admitted that from 2010 through 2012, he entered into fiduciary agreements with the VA.  Under the agreements, he agreed to act as a fiduciary for eight different veterans or beneficiaries that the VA had determined were not competent to handle their own financial affairs.  As a fiduciary, Ditta was required to establish bank accounts to receive each beneficiary’s VA income and to ensure the beneficiary’s debts were paid.  Ditta admitted that in each case, he set up a separate bank account for the beneficiary and, within months, began syphoning funds from the beneficiary’s account.  Ditta moved thousands of dollars to his own personal account and used those funds for his own benefit.  In sum, Ditta misappropriated and embezzled no less than $39,500 from the veterans and beneficiaries. 

Ditta was charged by Information on May 24, 2019, with one count of misappropriation of funds held by a fiduciary, in violation of 38 U.S.C. § 6101(a), and 15 counts of theft of government money, in violation of 18 U.S.C. § 641.  Under the plea agreement, Ditta pleaded guilty to the misappropriation of funds count and, if he complies with the plea agreement, the remaining counts will be dismissed at sentencing.

Judge Gonzalez Rogers scheduled Ditta’s sentencing hearing for November 14, 2019 at 3:00 p.m.  Ditta faces a maximum statutory penalty of five years’ imprisonment and a fine of $250,000 for the 38 U.S.C. § 6101(a) violation.  In addition, as part of sentencing the court may order an additional period of supervised release and restitution, if appropriate. However, any sentence will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.

Assistant U.S. Attorney Jose Apolinar Olivera is prosecuting the case with the assistance of Jessica Rodriguez Gonzalez.  The prosecution is the result of an investigation by the VA Office of Inspector General, Criminal Investigations Division. 
 

SAN FRANCISCO – Ryan Alan Balletto was sentenced to 372 months in prison today for his role in a conspiracy to manufacture, possess with intent to distribute, and distribute marijuana; his possession of firearms in furtherance of narcotics trafficking; and his employment of a minor to violate drug laws, announced United States Attorney David L. Anderson and Homeland Security Investigations (HSI) Special Agent in Charge San Francisco and Northern California) Ryan Spradlin.  The sentence was handed down by the Honorable Charles R. Breyer, Senior United States District Judge.  

Balletto, 36, of Lake County, Calif., pleaded guilty to the charges on December 7, 2018.  According to his plea agreement, Balletto admitted he worked with others to grow more than 1,300 plants of marijuana in 2013 in Lake County with the intention of selling the marijuana for profit.  In connection with the marijuana-growing operation, Balletto coerced a female minor (then 15 years old) into working in the marijuana grow.  Balletto initially met the 15-year-old victim in Los Angeles, and offered to let her live with his family in Northern California.  Instead, he drove her to his rural marijuana cultivating site in Lake County and coerced her into helping with marijuana cultivation.  In connection with this coercion, Balletto admitted to physically abusing the minor victim, including by forcibly confining her in a small, metal tool chest for an extended period of time, restraining her, and electrically shocking her.  In addition, Balletto admitted to sexually abusing the minor victim by having non-consensual sex with her while requiring her to work on the marijuana grow.

In addition, Balletto admitted to possessing numerous firearms, including two .223 caliber assault rifles, in furtherance of the marijuana-growing operation.

Balletto further admitted that, upon learning that the police were looking for the minor victim, a co-conspirator instructed her to call 9-1-1 and tell them that she was with friends and was “all right.”  

A federal grand jury handed down an indictment on August 1, 2013, charging Balletto with one count of each of conspiracy to manufacture, possess with intent to distribute, and distribution of marijuana, in violation of 21 U.S.C. § 846; manufacturing marijuana, in violation of 21 U.S.C. § 841(b)(1)(A); possession of firearms in furtherance of narcotics trafficking, in violation of 21 U.S.C. § 924(c); employment of a minor to violate drug laws, in violation of 21 U.S.C. § 861.  Balletto pleaded guilty to all counts except the substantive distribution charge.  Balletto has been in custody since his arrests in May 2013 and will begin serving his prison term immediately.

Also charged in the August 1, 2013, indictment was Balletto’s co-defendant Patrick Stephen Pearmain, 31, of Lake County.  On October 23, 2018, Pearmain, pleaded guilty to employment of a minor to violate drug laws and conspiracy to manufacture, possess with intent to distribute, and distribute marijuana.  On April 19, 2019, Judge Breyer sentenced Pearmain to serve 150 months in prison for his role in the scheme. 

The female, minor victim was rescued, and both men were arrested, as a result of the joint efforts of the Department of Homeland Security – Homeland Security Investigations, the Drug Enforcement Administration, the Department of Defense – Criminal Investigation Service, the Lake County Sheriff’s Department, the Los Angeles Police Department, and the West Sacramento Police Department.  The men were prosecuted by the United States Attorney’s Office for the Northern District of California with significant assistance from the Lake County District Attorney’s Office.

Assistant U.S. Attorneys Matthew L. McCarthy and Kevin J. Barry are prosecuting the case on behalf of the United States Attorney’s Office, with assistance from the Lake County District Attorney’s Office.  The prosecution is the result of an investigation by Homeland Security Investigations, with the cooperation of the law-enforcement agencies listed above.
 

SAN FRANCISCO –Michael Mauricio was sentenced to 120 months of imprisonment today for conspiring to distribute methamphetamine and being a felon in possession of a firearm announced United States Attorney David L. Anderson and Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) Special Agent in Charge Rayfield Roundtree.  The sentence was handed down today by the Hon. Charles R. Breyer, United States District Judge.  Judge Breyer also sentenced Mauricio to a 5-year term of supervised release.

Mauricio pleaded guilty to the charges on April 24, 2019.  According to his plea agreement, Mauricio admitted the he and a co-conspirator distributed methamphetamine and guns in the San Francisco Bay Area.  Mauricio attempt to avoid detection from law enforcement by using a co-conspirator to enter into transactions for him.  For example, on November 1, 2018, Mauricio gave his co-conspirator 98 grams of methamphetamine and a handgun to sell to a customer.  Similarly, on November 8, 2018, Mauricio gave 170 grams of methamphetamine to his co-conspirator to sell to a customer and on December 6, 2018, Mauricio gave his co-conspirator 226 grams of methamphetamine and several guns to sell to a customer. Mauricio also admitted he was a convicted felon, which made his mere possession of the firearms illegal.    

On April 23, 2019, Mauricio was charged by superseding information with one count of conspiracy to distribute and possess with intent to distribute methamphetamine, in violation of 21 U.S.C. §§ 846 and 841(b)(1)(B)(viii), and two counts of being a felon in possession of a firearm, in violation of 18 U.S.C. § 922(g)(1).  Mauricio pleaded guilty to all three counts.

Assistant United States Attorney Neal C. Hong prosecuted the case with the assistance of Linda Love.  The prosecution is the result of an investigation by the ATF and the San Mateo County Police Department.
 

SAN FRANCISCO - Ryan Michael Spencer was sentenced to 360 months in prison for production of child pornography, conspiracy to distribute and receive child pornography, and related charges, announced United States Attorney David L. Anderson and Federal Bureau of Investigation Special Agent in Charge John F. Bennett.  The sentence was handed down today by the Hon. Charles R. Breyer, United States District Judge.

Spencer, 21, of Aptos, pleaded guilty to the charges on October 10, 2018.  According to papers filed publicly in the case, the FBI began investigating after a witness reported to law enforcement that Spencer’s co-defendant, Bryan Petersen of Tiburon, had child pornography on his computer and in a Dropbox account.  After executing a search warrant at Petersen’s residence, the FBI learned that Petersen had received thousands of images and videos containing child pornography from Spencer.  The FBI also learned that the two men worked with children—Petersen as a babysitter, chess coach, and tutor in Tiburon and Spencer as a babysitter, camp counselor, and teacher-in-training in Aptos—and that they had been taking and exchanging pornographic images children entrusted to their care.

Further investigation revealed that, on several occasions, Spencer had molested at least two of the children he had babysat, including by raping one boy who was less than 10 years old at the time.

When the FBI executed a search warrant at Spencer’s residence in April 2017, several of the seized devices were encrypted and/or password-protected.  United States Magistrate Judge Jacqueline Scott Corley ordered Spencer to decrypt the devices and Judge Breyer affirmed the magistrate judge’s order in April 2018. After Spencer continued to refuse to enter his passwords, the Court held Spencer in civil contempt and fined him $1,000 per day until he decrypted the devices.  Spencer agreed to decrypt his devices twenty-two days after being held in civil contempt.  

Spencer’s external hard drive contained tens of thousands of images and videos of child pornography downloaded from the internet.  Further, his iPhone contained thousands more images of child pornography, including at least some of the child pornography Spencer had created himself.  These images included dozens, and sometimes hundreds, of images of children’s genitalia that appeared to have been taken surreptitiously as boys—some as young as four or five—were attempting to change their clothes in camp cabins, pool locker rooms, and other locations.  The iPhone also contained images of Spencer molesting one minor. 

On May 31, 2018, a federal grand jury returned a superseding indictment charging Spencer with conspiracy to distribute and receive child pornography in violation of 18 U.S.C. § 2252(a)(2) and (b)(1), two counts of production of child pornography in violation of 18 U.S.C. § 2251(a), two counts of distribution of child pornography in violation of 18 U.S.C. § 2252(a)(2), receipt of child pornography in violation of 18 U.S.C. § 2252(a)(2), and possession of child pornography in violation of 18 U.S.C. § 2252(a)(4)(B).  The superseding indictment also contained a criminal contempt charge based on Spencer’s refusal to comply with the Court’s decryption order.  

In addition to the 30-year prison term, Judge Breyer imposed a 15-year term of supervised release and ordered Spencer to pay restitution to the victims in an amount to be determined at a later hearing.

On July 25, 2017, Petersen was charged by information with the same charges, except the contempt-of-court charge.  On July 28, 2017, he pleaded guilty to all the charges pending against him.  Judge Breyer has scheduled his sentencing for August 21, 2019.  

Assistant U.S. Attorney Julie D. Garcia is prosecuting the case with the assistance of Tong Zhang.  The prosecution is the result of an investigation by the Federal Bureau of Investigation.  
 

OAKLAND— A federal grand jury in Oakland indicted real estate agent Min Jin Zhao, a/k/a Michael Zhao, a/k/a Michael West, on charges of wire fraud, mail fraud, and money laundering, announced United States Attorney David L. Anderson; Internal Revenue Service, Criminal Investigation (IRS-CI), Special Agent in Charge Kareem Carter; and Federal Bureau of Investigation (FBI) Special Agent In Charge John F. Bennett. 

According to the indictment filed May 9, 2019, and unsealed today, Zhao, 56, of San Francisco, is a real estate agent working in the Bay Area who defrauded his clients out of down payments meant for the purchase of homes in and around the Bay Area.  From 2014 through 2015, Zhao misrepresented to prospective homebuyers and investors that Portfolio Consulting, Inc., offered a loan program that would enable his clients to procure financing to make all-cash offers on real property.  Zhao told his victims that, as part of the loan program, they had to wire, transfer, or deposit 10% to 20% of the sale price of the real property they sought to purchase into Portfolio’s bank account.  According to the indictment, Zhao told his clients that once they delivered their funds to Portfolio, the company then would provide the remaining portion of the purchase price.  In reality, however, after Zhao’s victims deposited their funds into Portfolio’s account, Zhao either spent the funds or transferred the funds to another bank account in Portfolio’s name.  Further, Zhao used the funds to make purchases unrelated to the purchase of real property for the victims, including for purchases for Zhao’s benefit and the benefit of businesses he controlled.  In sum, Zhao is charged with three counts of wire fraud, in violation of 18 U.S.C. § 1343; two counts of mail fraud, in violation of 18 U.S.C. § 1341; and one count of money laundering, in violation of 18 U.S.C. § 1957.

Zhao was arrested in San Francisco on July 2, 2019, and made his initial federal court appearance this morning in Oakland.  Zhao is currently out on bond.  His next scheduled appearance is on September 11, 2019, at 10:30 a.m., for an initial appearance before the Honorable James Donato, U.S. District Judge.    

An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt.  If convicted, Zhao faces a maximum sentence of 20 years in prison and a fine of $250,000, plus restitution for each violation of wire and mail fraud, as well as 10 years in prison and a fine of $250,000, plus restitution for the money laundering count.  However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.  

Assistant U.S. Attorney Jose Apolinar Olivera is prosecuting the case with the assistance of Jessica Rodriguez Gonzalez and Katie Turner.  The prosecution is the result of an investigation by the IRS-CI and the FBI. 
 

OAKLAND– Eugene Latrell McNeely, aka Sleepy, aka Slim Sleep da Mac, pleaded guilty in federal court to transportation of a minor with intent to prostitute, announced United States Attorney David L. Anderson and Federal Bureau of Investigation Special Agent in Charge John F. Bennett. The Honorable James Donato, U.S. District Judge, accepted the plea.

In pleading guilty, McNeely, 36, of Oakland, admitted that on October 3, 2015, he drove from Oakland to Salem, Oregon, picked up a fourteen-year-old minor female that he had been communicating with by text message and through Facebook messenger, and drove her across state lines back to Oakland, California to work as one of his prostitutes.  For approximately three months thereafter, the minor female worked as a prostitute and McNeely was her pimp.  

On November 1, 2018, a federal grand jury issued a superseding indictment charging McNeely with one count of transportation of a minor for prostitution, in violation of 18 U.S.C. § 2423(a); one count of sex trafficking of children, in violation of 18 U.S.C. §§ 1591(a)(1), (b)(2), and (c); and two counts of sex trafficking by force, fraud, or coercion, in violation of 18 U.S.C. §§ 1591(a)(1) and (b)(1).  McNeely pleaded guilty to the first count.  The remaining counts are pending.  

McNeely is currently in federal custody awaiting sentencing.  Judge Donato scheduled his sentencing hearing for October 16, 2019.  The maximum statutory penalty for a violation of 18 U.S.C. § 2423(a) is life in prison, with a mandatory minimum term of ten years’ imprisonment, and a $250,000 fine.  Any sentence imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.

Assistant U.S. Attorneys Ross Weingarten and Shailika Kotiya are prosecuting the case with the assistance of Madeline Wachs.  The prosecution is the result of an investigation by the FBI and the Oakland Police Department. 
 

SAN FRANCISCO – Devon Davey Hudson, a/k/a Davey Wayne Hudson, was sentenced to 120 months in prison for possessing child pornography, announced United States Attorney David L. Anderson and Federal Bureau of Investigation (FBI) Special Agent in Charge John F. Bennett.  The sentence was handed down today by the Honorable Jon S. Tigar, U.S. District Judge.

Hudson, 56, of Alameda County pleaded guilty to the charge on February 15, 2019.  In pleading guilty, Hudson admitted he possessed images of child pornography.  According to court filings, Mr. Hudson possessed more than 100,000 images and videos of child pornography, some depicting physical acts of sexual abuse of children.  

A federal grand jury indicted Hudson on May 31, 2018, charging him with one count of possession of child pornography, in violation of 18 U.S.C. § 2252(a)(4)(B).  Hudson pleaded guilty to the count.  

In addition to the prison term, Judge Tigar also sentenced the defendant to a ten-year period of supervised release and ordered him to pay restitution to one victim in the amount of $1,000.  The defendant was immediately remanded into custody.

Assistant United States Attorney Jose Olivera is prosecuting the case with the assistance of Jessica Rodriguez. The prosecution is the result of an investigation by FBI in partnership with the Oakland Police Department.
 

OAKLAND – James Medeiros was sentenced to 84 months in prison for using, carrying and brandishing a firearm during and in relation to a crime of violence, announced United States Attorney David L. Anderson and Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) Special Agent in Charge Rayfield Roundtree.  The sentence was handed down by the Honorable Haywood S. Gilliam, Jr., U.S. District Judge.

In November of 2018, Medeiros, 25, of San Leandro, agreed with Anthony Reed, 23, of San Leandro; Jesus Angel Sanchez, 20, of Oakland; and Marcos Antonio Martenez, 25, of Oakland, to rob a person who they lured to a location purportedly to purchase firearms.  Specifically, Medeiros understood that his co-conspirators had persuaded the customer, unbeknownst to them an undercover ATF agent, to travel to a building in Oakland to purchase firearms for $8,000.  Medeiros brought a firearm to the robbery as instructed by one of his co-conspirators.  One of the co-conspirators met the undercover agent in front of a building and instructed the agent to follow him to the back of the building.  Medeiros was waiting at the back of the building with another co-conspirator.  When the agent arrived, the co-conspirators robbed him.  Medeiros and a co-conspirator brandished firearms and pointed them at the agent while another co-conspirator demanded the agent’s money.  Reed, Sanchez, and Medeiros were apprehended leaving the scene of the robbery.  Martenez was arrested days later.

On November 29, 2018, a federal grand jury returned a superseding indictment, charging Medeiros, Reed, Sanchez, Martenez, and others with multiple crimes related to the conspiracy in which Medeiros participated.  Medeiros was charged with conspiracy, in violation of 18 U.S.C. § 371; robbery of mail, money, or other property of the United States, in violation of 18 U.S.C. § 2114(a) and 2; assault on a federal officer with a deadly or dangerous weapon, in violation of 18 U.S.C. §§ 111(b) and 2; and using, carrying and brandishing a firearm during and in relation to a crime of violence, in violation of 18 U.S.C. § 924(c)(1)(A)(ii).  He pleaded guilty to the § 924(c)(1)(A)(ii) charge and the remaining charges were dismissed at sentencing.  

In addition to the prison term, Judge Gilliam also sentenced Medeiros to a three-year term of supervised release to begin at the conclusion of his prison term.

Reed, Sanchez and Martenez also pleaded guilty to using, carrying and brandishing a firearm during and in relation to a crime of violence.  All three defendants face a mandatory minimum term of seven years’ imprisonment and a maximum term of life imprisonment, as well as a $250,000 fine. The sentencing hearings for Reed, Sanchez, and Martinez are scheduled for August 26, 2019; September 16, 2019; and July 29, 2019, respectively.  

Special Assistant U.S. Attorney Samantha Schott is prosecuting the case with the assistance of Jessica Rodriguez Gonzalez.  The prosecution is the result of an investigation by the ATF, with the assistance of the Alameda County Sheriff’s Office, California Highway Patrol, and the Oakland Police Department.
 

SAN FRANCISCO – Former San Francisco Deputy Sheriff April Myres was convicted today by a federal jury of mail and wire fraud, announced United States Attorney David L. Anderson and Federal Bureau of Investigation (FBI) Special Agent in Charge John F. Bennett. The guilty verdict followed an eight-day jury trial before the Honorable Richard Seeborg, U.S. District Judge. 

The jury concluded Myres, 55, of San Francisco, filed a false insurance claim in which she asserted she was the victim of a home burglary in which, among other things, her San Francisco Sheriff’s Department (SFSD)-issued firearm was stolen.  Evidence at trial showed that Myres reported a burglary of her home to the San Francisco Police Department on March 25, 2016.  She claimed numerous items were stolen, including the firearm, her SFSD-issued radio, and numerous luxury goods.  After making the report, Myres repeatedly refused to cooperate with the investigation.  

Then, in May 2016, Myres filed an insurance claim under her homeowner’s policy.  In her claim, Myres stated that the SFSD-issued firearm, the SFSD-issued radio, and the luxury goods had been stolen.  Myres asserted in her insurance claim that she was entitled to over $67,000 in reimbursement for all of the items stolen.

An investigation by the FBI revealed that Myres made numerous false statements in her insurance claim.  The evidence showed that while she had been working at the San Francisco County Jail, Myres had carried on a romantic relationship with an inmate, Antoine Fowler.  Immediately after Fowler was released from custody in January 2016, he went to Myres’ house where he lived until March 24, 2016, the morning of the claimed burglary, when he moved out after a late-night dispute with Myres. 

Following its investigation into Myres and Fowler, the FBI arrested Fowler on February 2, 2017, and found in his possession Myres’ SFSD-issued firearm.  Fowler had an extensive criminal record and Myres had accused him of stealing from her.  Still, Myres did not disclose to the San Francisco Police Department, the SFSD, the FBI, or the insurance company the relationship she had with Fowler, nor the fact that he had been living with her.  In addition, Myres told the insurance company she had no suspects in the burglary and no estranged boyfriends who might have been responsible.

In addition, the evidence demonstrated Myres made numerous false statements about the items she claimed had been stolen.  For example, she falsely claimed she owned the SFSD-issued firearm and SFSD-issued radio that she said had been stolen, and provided false details about the purchase prices and locations to bolster her claim.  She also made false statements about items that had been stolen, including claiming that three items – a Louis Vuitton purse, Gucci boots, and a fox fur vest – were stolen, when all three of these items were located in her house when the FBI conducted a search in February 2017.

“The U.S. Attorney’s office will vigorously pursue law enforcement officers like Myres who abuse their positions of trust, especially when motivated by the sort of greed and avarice seen in this case,” said U.S. Attorney David L. Anderson.  “The defendant not only lied repeatedly to profit from a so-called burglary, but allowed her service firearm to remain in the possession of a dangerous criminal for almost a full year.”

The investigation began when the FBI learned that Myres and Fowler were having a relationship while Fowler was an inmate in the San Francisco County Jail and that Fowler had made it known that he would be getting a firearm from Myres upon his release from custody. 

On April 11, 2017, a federal grand jury indicted Myres and Fowler.  In connection with her false claim to the insurance company, the grand jury charged Myres with one count each of mail fraud, in violation of 18 U.S.C. § 1341, and wire fraud, in violation of 18 U.S.C. § 1343.  In addition, the grand jury charged Myres with misprision of a felony, in violation of 18 U.S.C. § 4, for deliberately concealing from law enforcement that Fowler had her firearm.  In today’s verdict, the trial jury found Myres guilty of the wire fraud and mail fraud counts and acquitted her of the misprision of a felony charge.  

Judge Seeborg ordered Myres’ sentencing hearing to take place in October 2019.  The maximum statutory penalty for both the mail fraud and wire fraud counts is 20 years imprisonment, five years of supervised release, and a fine of $250,000.  However, any sentence will be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.  Myres was released on a $1,000,000 secured bond and remains out of custody pending sentencing.

For his part in the events, the grand jury charged Fowler with one count of being a felon in possession of a firearm, in violation of 18 U.S.C. § 922(g)(1).  Fowler pleaded guilty to the charge on May 14, 2019, at a hearing in which he stated Myres gave him her firearm.  Fowler was released on a $50,000 bond and remains out of custody pending sentencing.  Judge Seeborg scheduled a status hearing regarding Fowler’s sentencing for July 16, 2019.  The maximum statutory penalty for felon in possession of a firearm, in violation of 18 U.S.C. § 922(g)(1), is 10 years imprisonment, three years of supervised release, and a fine of $250,000.  However, any sentence will be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.

Assistant U.S. Attorneys Laura Vartain and Nicholas Walsh are prosecuting the case with the assistance of Helen Yee, Kimberly Richardson, Margoth Turcios, Sutton Pierce, and Ian Meader.  The prosecution is the result of an investigation by the FBI.
 

SAN FRANCISCO – A federal arrest warrant was issued for the arrest of Lixiong Chen, also known as John Chen, a defendant in an eighteen-count superseding indictment who failed to appear at what was supposed to be the first day of a jury trial, announced United States Attorney David L. Anderson and Homeland Security Investigations (HSI) Special Agent in Charge (San Francisco and Northern California) Ryan L. Spradlin.  The warrant was signed by the Honorable James Donato, U.S. District Judge. 

On April 25, 2019, a federal grand jury returned a superseding indictment charging Chen, 45, a citizen of China, with conspiracy, trafficking in counterfeit goods, and smuggling goods into the United States.  According to court documents, the government intended to prove that over the course of at least six years, the defendant illegally imported and sold small electronics, such as power adapters, that bore counterfeit trademarks.  The criminal trial in Chen’s case was scheduled to begin yesterday morning.  Nevertheless, on Sunday, June 23, 2019, Chen’s counsel filed a document with the Court stating, “defense counsel has just learned that Defendant Lixiong Chen will not be present for Court tomorrow morning, June 24, 2019, at 9 am.”  

At a hearing held in lieu of jury selection, Chen’s lawyers confirmed they did not anticipate the defendant would be present for trial at any point.  Further, attorneys for the United States informed the Court that they had received information indicating someone with Chen’s name boarded a flight to Beijing, China, that landed Sunday, June 23, 2019.  At the close of the hearing, Judge Donato issued a bench warrant for the defendant’s arrest.

Documents submitted to the court in anticipation of the trial describe the case against Chen.  While residing in China, Chen operated businesses, known as CBK Auto, CBK Holdings, CBK Wholesale, CBK USA, bestcompu.com, and Silicon Electronics, among other names, through employees in the United States.  Chen’s various businesses sold millions of dollars in electronic goods each year through online platforms such as Amazon and eBay.  The government alleges that a significant percentage of Chen’s business involved the sale of counterfeit goods. Further, the government alleges that Customs and Border Protection (CBP) agents repeatedly seized goods that violated U.S. law and could not legally be brought into the United States, but the defendant nevertheless continued to import counterfeit merchandise from China.  In sum, the superseding indictment charges Chen with nine counts of smuggling goods into the United States, in violation of 18 U.S.C. §  545; eight counts of trafficking counterfeit goods, in violation of 18 U.S.C. § 2320(a), and one count of conspiracy, in violation of 18 U.S.C. § 371. 

If convicted, the defendant faces the following maximum penalties:

• 18 U.S.C. § 371: 5 years of imprisonment, $250,000 fine, 3 years of supervised release, $100 special assessment, restitution.
• 18 U.S.C. § 545: 20 years of imprisonment, $250,000 fine, 3 years of supervised release, $100 special assessment, forfeiture, and restitution.
• 18 U.S.C. § 2320: 10 years of imprisonment, $2,000,000 fine, 3 years of supervised release, $100 special assessment, forfeiture, and restitution.

However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.

Following his arrest in January 2019, Chen was released by United States Magistrate Judge Kandis Westmore on a $1,000,000 bond secured by real property. He was also ordered not to travel outside of the Northern District of California, not to change residence without prior approval of Pretrial Services, and not to apply for any passports or other travel documents.

An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt.

Anyone with information regarding the defendant’s whereabouts should contact Homeland Security Investigations at 1-866-347-2423. Callers outside the United States should call 802-872-6199.

Assistant United States Attorneys Michelle Kane and Matthew Parrella are prosecuting this case with assistance from Rebecca Shelton, Elise Etter, and Sarah Lamparelli.  The prosecution is the result of an investigation by HSI.
 

SAN FRANCISCO – Taj Armon Reid was sentenced to 12 months in prison for conspiracy and receiving bribes, announced United States Attorney David L. Anderson; Federal Bureau of Investigation Special Agent in Charge John F. Bennett; and Department of Energy Office of the Inspector General, Inspector General Teri L. Donaldson.  The sentence was handed down today by the Honorable Charles R. Breyer, U.S. District Court Judge.

After a four-day jury trial, a federal jury found Reid, 48, of Oakland, guilty of the crimes on May 24, 2018.  Reid was a construction consultant and business partner with Eric Worthen, 46, of Pleasant Hill, who, at the time, was also an employee of the California Department of Veterans Affairs (CalVet).  The evidence at trial demonstrated Reid received bribes on two occasions in connection with business being offered by CalVet.  The jury also concluded Reid conspired with Worthen to receive the bribes. 

The evidence at trial showed that Reid accepted cash from a source on April 18, and again on May 8.  In April, Reid offered a developer an inside advantage on two CalVet construction projects in exchange for $10,000 cash.  Specifically, Reid offered to use Worthen’s position at CalVet to circumvent the normal bidding process for a residential home project in Ventura, Calif.  The May transaction involved a kitchen remodel project at the veterans’ home in West Los Angeles.  On this occasion, Reid and Worthen accepted $2,000 cash in exchange for providing to the developer inside information that the co-conspirator took from the CalVet office.  Unbeknownst to Reid and Worthen, the “developer” to whom they were providing an inside track on the CalVet contracts was a source working under the direction of the FBI and posing as a developer willing to pay bribes in order to obtain contracts with public agencies.  At the conclusion of the trial, the jury found Reid guilty of conspiracy, in violation of 18 U.S.C. § 371, and two counts of receiving a bribe or reward, in violation of 18 U.S.C. § 666(a)(1)(B).  

In addition to the prison term, Judge Breyer ordered Reid to serve 3 years of supervised release.  

Worthen pleaded guilty in August of 2017 to his part in the conspiracy and for taking bribes.  Judge Breyer scheduled his sentencing for November 6, 2019.  

The case is being prosecuted by the Special Prosecutions and National Security Unit of the U.S. Attorney’s Office and the FBI, with assistance from the Department of Energy, Office of Inspector General.
 

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On December 18, 2020, United States Attorney David L. Anderson issued the following statement:

On Friday, December 18, 2020, we moved to vacate the judgment and dismiss the superseding indictment against Job Torres Hernandez.  In this case, a jury concluded Mr. Torres Hernandez was guilty of multiple crimes, and the district court entered a criminal judgment against Mr. Torres Hernandez based upon that verdict.  During the pendency of Mr. Torres Hernandez’s appeal to the Ninth Circuit Court of Appeals, we learned of circumstances leading us to the firm conclusion that at this point only a dismissal would meet the interests of justice.  It is a serious step for the United States to dismiss criminal charges.  Likewise, it is the solemn duty of the United States to seek justice in all its cases, and to evaluate the appropriateness of its charges throughout the course of the proceedings.

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OAKLAND - Job Torres Hernandez was sentenced to 103 months in prison and was also ordered to pay $919,738.64 of unpaid wages in restitution, after being convicted earlier this year on charges that he obtained forced labor from victims and harbored illegal aliens for commercial advantage or private financial gain, announced United States Attorney David L. Anderson and Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Special Agent in Charge Ryan L. Spradlin.  The sentence was handed down today by the Honorable Jeffrey S. White, U.S. District Judge.

Torres, 38, of Hayward, Calif., was convicted of the charges on March 18, 2019, after a 10-day jury trial. The evidence at trial demonstrated that since at least May 2015, Torres owned construction companies in Northern California at which he employed workers to whom he paid little to nothing for their labor.  Torres recruited workers from Mexico to work for his construction companies and then refused to pay them the wages they had earned.  Further, Torres knew the workers had come to, entered, and remained in the United States in violation of law; he kept the workers in squalid conditions and shielded them from detection while making them work as long as 24 consecutive hours at a time.  Many victims testified at trial, with the assistance of an interpreter, about how Torres treated them.  Witnesses testified that Torres paid them far less than what he had promised to pay them, and when they complained, Torres threatened them or their family members.  Specifically, the evidence demonstrated Torres warned his victims that if they reported him, then he would harm them physically, have associates in Mexico harm their family, or have them deported.  The evidence also demonstrated that Torres told his victims that if they went to police or filed suit against him, no one would believe them.  In addition, Torres housed dozens of workers on makeshift beds in a commercial warehouse in Hayward and other properties including a garage in Hayward.  The workers had limited access to toilets and showers, and at times, the properties were locked, preventing the workers from leaving.  The evidence demonstrated Torres harbored these individuals for the purpose of obtaining an advantage in the construction industry and for his private financial gain.  

On December 6, 2018, a federal grand jury handed down a superseding indictment, charging Torres with one count of harboring illegal aliens for commercial advantage or private financial gain, in violation of 8 U.S.C. §§ 1324(a)(1)(A)(iii) and (B)(i), and one count of forced labor, in violation of 18 U.S.C. § 1589(a).  The jury convicted Torres of both counts.

Torres was remanded into custody on the day the jury rendered its verdict, and he remains in custody pending assignment to a Bureau of Prisons facility. He was also sentenced to a three year term of supervised release to begin at the conclusion of his prison term.

Assistant U.S. Attorneys Ravi T. Narayan and Jonathan U. Lee are prosecuting the case with the assistance of Vanessa Quant, Jessica Rodriguez Gonzalez, and Kimberly Richardson.  The prosecution is the result of an investigation by the Department of Homeland Security’s Human Trafficking Unit; Department of Labor’s Wage and Hour Division; and the San Francisco Police Department’s Special Victims Unit.  
 

SAN JOSE - A federal grand jury in San Jose indicted Matthew Wilcox Hutchings today, charging him with possession with intent to distribute controlled substances, announced United States Attorney David L. Anderson and U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Special Agent in Charge Ryan L. Spradlin.    

The three-count indictment alleges that on or about May 7, 2019, Hutchings, 24, of Soquel, possessed with the intent to distribute LSD (distribute lysergic acid diethylamide), MDMA (3,4 methylenedioxymethamphetamine or Molly), and psilocybin mushrooms.  

An affidavit filed by an agent with Homeland Security Investigations in connection with a previously-filed criminal complaint in the case alleged that Hutchings sold psilocybin mushrooms and MDMA to an undercover agent on three occasions in March and April of 2019.  On May 7, 2019, UC Santa Cruz police and others executed a search warrant at Hutchings’ residence.  The indictment charges Hutchings with three counts of possession with intent to distribute controlled substances, in violation of 21 U.S.C. §§ 841(a)(1) and 841(b)(1)(C).  

Hutchings was arrested on June 4, 2019, and currently remains in federal custody. His next court appearance is scheduled for June 24 2019, before U.S. Magistrate Judge Susan van Keulen for a status conference.

An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, the defendant faces a maximum sentence of 20 years prison time, and a fine of $1,000,000, on each count.  However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.  

Assistant U.S. Attorney Sarah E. Griswold is prosecuting the case with the assistance of Elise Etter and Nina Burney.  The prosecution is the result of an investigation by HSI and the University of California Santa Cruz Police Department. 
 

SAN FRANCISCO – Nicholas Alan Hodges was sentenced today to 60 months in prison for receiving, distributing, and possessing child pornography, announced United States Attorney David L. Anderson and Homeland Security Investigations (HSI) Special Agent in Charge Ryan L. Spradlin.  The sentence was handed down by the Honorable William H. Orrick, U.S. District Judge.

Hodges, 30, of Oakland, pleaded guilty to the charges on February 7, 2019.  In pleading guilty, Hodges admitted that between approximately August 2016, and March 24, 2017, he knowingly received and distributed through the Internet images and videos of minors engaged in sexually explicit conduct. Defendant acknowledged he used a social media application to engage in conversation with other individuals about child pornography and sent child pornography in chats to those individuals.  In addition, Hodges admitted he possessed four flash drives and a cellular telephone containing visual depictions of minors engaged in sexually explicit conduct, some of which contained depictions of sadistic or masochistic conduct or other depictions of violence.  Hodges admitted he possessed more than 600 videos and images of child pornography.  

A federal grand jury indicted Hodges on June 29, 2017, charging him with one count each of receipt of child pornography, in violation of 18 U.S.C. § 2252(a)(2); distribution of child pornography, in violation of 18 U.S.C. § 2252(a)(2); and possession of child pornography, in violation of 18 U.S.C. § 2252(a)(4)(B).  Hodges pleaded guilty to all three charges.  

In addition to the prison term, Judge Orrick sentenced the defendant to a five-year period of supervised release.  Judge Orrick ordered defendant to surrender to the Bureau of Prisons on August 24, 2019, to begin serving his prison term.

Assistant United States Attorneys Sailaja M. Paidipaty is prosecuting the case with the assistance of Marina Ponomarchuk.  The prosecution is the result of an investigation by HSI and the San Francisco Police Department.
 

SAN FRANCISCO – Francisco Puga Camacho was sentenced today to 74 months in prison for his role in a conspiracy to possess with the intent to distribute methamphetamine and related charges announced United States Attorney David L. Anderson and Federal Bureau of Investigation Special Agent in Charge John F. Bennett.  The sentence was handed down by the Honorable Lucy H. Koh, U.S. District Judge.  Puga is the last of seven defendants apprehended and sentenced in connection with the drug distribution scheme.  

Puga, 49, of Salinas, Calif., pleaded guilty to the charges on March 6, 2019.  The charges stem from an FBI investigation in Monterey County into methamphetamine trafficking networks in and around Salinas.  According to court filings, Puga agreed with Horacio Quintana Medina, Joel Quintana Medina, and Jesus Bernal Nunez to distribute methamphetamine to customers. According to Puga’s plea agreement, he conspired to distribute drugs since at least March of 2017.  Puga admitted that he was involved in a shipment of drugs intercepted on March 23, 2017. On that date, California Highway Patrol (“CHP”) officers in Salinas pulled over a vehicle for multiple violations of the California Vehicle Code.  During the stop and subsequent search of the vehicle, the officers located approximately eight pounds of methamphetamine concealed in the trunk.  Puga admitted that he had contacted his source in Mexico to arrange for the delivery of the methamphetamine and that the methamphetamine found in the trunk was the drugs he was arranging for delivery.  Further, Puga admitted that on July 15, 2017, he sold approximately two pounds of methamphetamine to a customer in the garage of his residence. Puga admitted that he contacted his source of supply in Mexico to request the two pounds of methamphetamine and that prior to the transaction, he had multiple telephone conversations with the customer to arrange the deal.

On September 26, 2017, a federal grand jury indicted Puga and seven co-defendants, charging them with their respective roles in the methamphetamine trafficking scheme.  All of Puga’s codefendants except one have pleaded guilty to charges as follows:

Name

Age

Charges

Date of Sentencing and Sentence

Horacio Quintana Medina

24

21 U.S.C. § 846- conspiracy to distribute and possess with intent to distribute methamphetamine

May 29, 2019 and received 68 months of imprisonment, 5 years supervised release.

Joel Quintana Medina

27

21 U.S.C. § 846- conspiracy to distribute and possess with intent to distribute methamphetamine

May 22, 2019 and received 60 months of imprisonment, 5 years supervised release.

Jesus Bernal Nunez

44

21 U.S.C. § 841-Possession with intent to distribute methamphetamine

May 29, 2019 and received 60 months of imprisonment, 5 years supervised release.

Nestor Tavarez

46

21 U.S.C. § 843(b)- Use of a communication facility (telephone) to commit felony drug offense

May 15, 2019 and received 42 months of imprisonment, 3 years supervised release

Alejandro Dominguez Hernandez

38

21 U.S.C. § 841-Possession with intent to distribute methamphetamine

April 24, 2019 and received 68 months of imprisonment, 5 years supervised release.

Ernesto Calderon Ramirez

23

21 U.S.C. § 841-Possession with intent to distribute methamphetamine

April 3, 2019, 24 months of imprisonment, 4 years supervised release

Oscar Gonzalez Quevedo remains a fugitive.  He is presumed innocent until proven guilty beyond a reasonable doubt. 

In addition to the prison term, Judge Koh ordered Puga to serve a 5-year period of supervised release.  Judge Koh ordered Puga to surrender to the Bureau of Prison on or before August 14, 2019, to begin serving his prison term.  

Assistant U.S. Attorneys Jeffrey Backhus is prosecuting the case with the assistance of Elise Etter.  The prosecution is the result of an investigation by the FBI.  This case was investigated and prosecuted by member agencies of the Organized Crime Drug Enforcement Task Force, 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.
 

In a criminal complaint unsealed today, a citizen of Sweden and his company were charged with securities fraud, wire fraud and money laundering in a scheme to defraud potential investors.

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney David L. Anderson for the Northern District of California and Special Agent in Charge Kelly R. Jackson of the IRS Criminal Investigation’s (IRS-CI) Washington, D.C. Field Office made the announcement.  

In a complaint filed March 4, 2019, and unsealed today, Roger Nils-Jonas Karlsson and his company, Eastern Metal Securities (EMS), were charged with engaging in a scheme to defraud victims of more than $11 million. 

According to the complaint, since September 2006, Karlsson allegedly used websites to communicate false representations to victims in a scheme to defraud potential investors.  For example, one website, www.easternmetalsecurities.com, allegedly was registered to a fictitious person and advertised shares in a product called a “Pre Funded Reversed Pension Plan” (PFRPP).  The complaint alleges Karlsson used the website to invite potential investors to purchase shares of the plan for $98 per share in exchange for an eventual payout of 1.15 kilograms of gold per share, even though as of Jan. 2, 2019, 1.15 kilograms of gold was worth more than $45,000.  Karlsson also allegedly advised investors that, in the unlikely event that the gold payout did not happen, he guaranteed to return to them 97 percent of the amount they invested.  According to the complaint, the government found no evidence of any accounts held by Karlsson that would allow him to pay off the investors.  Instead, the complaint alleges, the funds provided by victims were transferred to Karlsson’s personal bank accounts and now appear to be tied up in real estate in Thailand.

The complaint further describes how Karlsson allegedly used a second website, www.hci25.com, to make multiple false communications to potential investors.  Karlsson allegedly brought the investors in HCI25 together with the investors in the PFRPP and posted multiple communications to delay the moment investors would realize there would be no payout.  For example, on one occasion, Karlsson allegedly explained that a payout had not occurred because releasing so much money all at once could cause a negative effect on financial systems throughout the world.  Karlsson also allegedly falsely represented that EMS was working with the U.S. Securities and Exchange Commission to prepare the way for a payout.

The complaint alleges Karlsson directed his victims to make investments using virtual currencies, such as Bitcoin.  Karlsson allegedly defrauded no less than 3,575 victims of more than $11 million. 

Karlsson was arrested on June 18 in Thailand.  The United States is seeking his extradition to stand trial in the Northern District of California.

A criminal complaint merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt.

Trial Attorney Catherine Alden Pelker of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney William Frentzen are prosecuting this case with the assistance of Bridget Kilkenny.  This prosecution is the result of an investigation by the IRS-CI Washington, D.C. Cyber Crimes Unit.  Significant assistance was provided by the Criminal Division’s Office of International Affairs, the FBI Legal Attaché Office in Thailand, the IRS Criminal Investigation Attaché Office in Hong Kong and the Royal Thai Police Crime Suppression Division.

SAN FRANCISCO – Roger Nils-Jonas Karlsson, a citizen of Sweden, and his company, Eastern Metal Securities (EMS), were charged with securities fraud, wire fraud, and money laundering, announced United States Attorney David L. Anderson; Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division; and Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), Washington, D.C. Field Office.  In a complaint filed March 4, 2019, and unsealed today, the defendants were charged with engaging in a scheme to defraud victims of more than $11 million.  

According to the complaint, since September 2006, Karlsson used websites to communicate false representations to victims in a scheme to defraud potential investors.  For example, one website, www.easternmetalsecurities.com, allegedly was registered to a fictitious person and advertised shares in a product called a “Pre Funded Reversed Pension Plan” (PFRPP).  The complaint alleges Karlsson used the website to invite potential investors to purchase shares of the plan for $98 per share in exchange for an eventual payout of 1.15 kilograms of gold per share, even though as of January 2, 2019, 1.15 kilograms of gold was worth more than $45,000.  Karlsson also allegedly advised investors that, in the unlikely event that the gold payout did not happen, he guaranteed to them 97% of the amount they invested. According to the complaint, the government found no evidence of any accounts held by Karlsson that would allow him to pay off the investors.  Instead, the complaint alleges, the funds provided by victims were transferred to Karlsson’s personal bank accounts and now appear to be tied up in real estate in Thailand.

The complaint further describes how Karlsson allegedly used a second website, www.hci25.com, to make multiple false communications to potential investors.  Karlsson allegedly brought the investors in HCI25 together with the investors in the PFRPP and posted multiple communications to delay the moment investors would realize there would be no payout.  For example, on one occasion, Karlsson allegedly explained that a payout had not occurred because releasing so much money all at once could cause a negative effect on financial systems throughout the world.  Karlsson also falsely represented that EMS was working with the U.S. Securities and Exchange Commission to prepare the way for a payout.

The complaint alleges Karlsson directed his victims to make investments using virtual currencies, such as Bitcoin.  Karlsson allegedly defrauded no less than 3,575 victims of more than $11 million.  

The complaint charges Karlsson with wire fraud, in violation of 18 U.S.C. § 1343; securities fraud, in violation of 15 U.S.C. §§ 78j(b) and 78ff and 17 C.F.R. § 240.10b-5; and money laundering, in violation of 18 U.S.C. § 1957.  Karlsson was arrested June 17, 2019, in Thailand.  The United States is seeking his extradition to stand trial in the Northern District of California.  

A criminal complaint merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. 

If convicted, the defendant faces a maximum sentence of 20 years in prison and a maximum $250,000 fine for the wire fraud and securities fraud charges, and 20 years in prison and a $500,000 maximum fine for the money laundering charge.  In addition, the court also may order an additional term of supervised release, fines or other assessments, and restitution, if appropriate. However, any sentence following conviction would be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.  

Assistant U.S. Attorney William Frentzen and Trial Attorney Catherine Alden Pelker of the Department of Justice Criminal Division’s Computer Crime and Intellectual Property Section are prosecuting this case with the assistance of Bridget Kilkenny.  This prosecution is the result of an investigation by the IRS-CI Washington, D.C. Cyber Crimes Unit.  Significant assistance was provided by the Criminal Division’s Office of International Affairs, the FBI Legal Attaché Office in Thailand, the IRS Criminal Investigation Attaché Office in Hong Kong and the Royal Thai Police Crime Suppression Division.
 

OAKLAND – David John Telles, Jr., was sentenced today to serve 302 months in prison, announced United States Attorney David L. Anderson and Homeland Security Investigations Special Agent in Charge (San Francisco and Northern California) Ryan L. Spradlin.  The sentence was handed down by the Honorable Jeffrey S. White, U.S. District Judge.

After a two-week trial, Telles, 43, of Pleasanton, Calif., was convicted on October 29, 2018, of all counts in the indictment against him: online enticement of a minor; travel with intent to engage in illicit sexual conduct in a foreign place; and engaging in illicit sexual conduct in a foreign place.  Evidence at trial showed that Telles spent weeks using an online game, a social media application, and his cellular telephone to groom the 14-year-old victim, who lived in England—telling her that she was his girlfriend and that he wanted to marry her.  Telles then traveled to England in June 2014 with the intent to sexually abuse the victim.  After arriving in England, Telles took the victim to two different hotels, where he sexually abused her over the course of two days.  Police officers from the Devon and Cornwall Constabulary in England caught Telles and rescued the child. 

Telles was indicted by a federal grand jury on October 13, 2013, on one count each of online enticement of a minor, in violation of 18 U.S.C. § 2422(b); traveling with intent to engage in illicit sexual conduct, in violation of 18 U.S.C. § 2423(b); and engaging in illicit sexual conduct in a foreign place, in violation of 18 U.S.C. § 2423(c).

“The United States Attorney’s Office is committed to protecting vulnerable children, in our district and throughout the world, from dangerous people who use the internet to meet and groom them, while intending to do them harm,” U.S. Attorney Anderson said.

“This and similar investigations illustrate that people like Telles really exist and target our most vulnerable members of society. While kids may seek to locate imaginative monsters under their beds, we need parents to assist us with educating their children about the real monsters that are using the internet to enter their rooms through smart phones, tablets, and laptops,” said Special Agent in Charge Spradlin. “Homeland Security Investigations is committed to public safety, which includes protecting the children and youth of our communities who are most vulnerable to online predators.” 

In addition to the prison term, Judge White also sentenced Telles to a 15-year period of supervised release. While on supervised release, Telles must register as a sex offender and must participate in sex-offender-specific treatment.  Judge White also ordered Telles to have no contact with the victim without permission of the probation office.  The defendant will begin serving the sentence immediately, and will receive credit toward his sentence for the time he has spent in custody since his arrest by federal authorities on October 20, 2016.

Assistant U.S. Attorneys Christina McCall, Vanessa Baehr-Jones, Jonas Lerman, and Katherine Lloyd-Lovett are prosecuting the case with the assistance of Vanessa Quant, Kathleen Turner and Jessica Rodriguez-Gonzalez.  The prosecution is the result of an investigation by United States Homeland Security Investigations and Devon and Cornwall Constabulary.

If members of the public have any information relevant to suspected child predators or suspicious activity, they should contact Homeland Security Investigations through the toll-free Tip Line at 1-866-DHS-2-ICE or complete the online tip form at: https://www.ice.gov/webform/hsi-tip-form.  Both are staffed around the clock by investigators.  Suspected child sexual exploitation or missing children may also be reported to the National Center for Missing & Exploited Children, via its toll-free 24-hour hotline, 1-800-THE-LOST.
 

SAN JOSE – Ana Bajo, a/k/a Ana Covarrubias, was sentenced to 14 months in prison for her role in a conspiracy to file fraudulent claims for income tax refunds, announced U.S. Attorney David L. Anderson, Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division, and Internal Revenue Service, Criminal Investigation (IRS-CI), Special Agent in Charge Kareem Carter.  The sentence was handed down today by the Honorable Lucy H. Koh, U.S. District Judge. 

According to documents and information provided to the court, during 2012, Bajo, 43, of Salinas, conspired with Jacqueline Ramos and Norma Morfin to obtain the personal identifying information of others and use it to file more than 2,300 fraudulent income tax returns with the Internal Revenue Service (IRS).  These returns reported fake wages and fraudulently claimed dependents, education expenses, and tax credits.  In total, the returns sought approximately $9.7 million in refunds, of which the IRS paid more than $7.5 million. Bajo and her co-conspirators directed the fraudulently obtained refund checks into bank accounts that they controlled. 

On July 13, 2017, a federal grand jury indicted Bajo charging her with conspiracy to submit false claims, in violation of 18 U.S.C. § 286.  Bajo pleaded guilty to the charge. 

In addition to the prison term, Judge Koh ordered Bajo to pay $1,641,610 in restitution and to serve three years of supervised release, following the completion of her term in prison.  

Bajo was the fourth defendant to be sentenced by Judge Koh for having a role in the tax fraud scheme: Ramos was ordered to serve 60 months in prison, Morfin was sentenced to serve 30 months in prison, and Antonio Ahumada Rivas was ordered to serve 21 months in prison.  

Assistant U.S. Attorney Michael G. Pitman and Trial Attorney Christopher Magnani of the Tax Division are prosecuting this case.   This prosecution is a result of an investigation by the IRS Criminal Investigation.
 

OAKLAND – Marcus Wilson was sentenced today to 30 months in prison and to pay $1,026,340 in restitution for filing false claims with the government, announced United States Attorney David L. Anderson and Internal Revenue Service, Criminal Investigation (IRS-CI), Special Agent in Charge Kareem Carter.  The sentence was handed down by the Honorable Judge Jon S. Tigar, U.S. District Judge.

Wilson, 32, of Sacramento, pleaded guilty to the charge on January 31, 2019.  According to his plea agreement, Wilson admitted that during 2011 and 2012 he filed numerous false tax returns on behalf of others.  Wilson admitted he told people that they may qualify for “Obama Stimulus” or “Renter’s Rebates” if they had not filed any tax return in a given year.  In reliance on his representations, the individuals provided Wilson with information sufficient for him to file a tax return on their behalf.  Nevertheless, the individuals generally did not provide any financial or other tax-related information; instead, Wilson falsified information regarding the individuals’ wage and business income so he could obtain refunds from the IRS.  Wilson admitted he caused the IRS to fund over $1 million worth of refunds to numerous individuals for tax year 2011 by presenting tax returns he knew contained false information.

A federal grand jury indicted Wilson on January 17, 2017.  He was charged with one count of conspiracy to file false claims, in violation of 18 U.S.C. § 286; five counts of filing false claims, in violation of 18 U.S.C. § 287; five counts of wire fraud, in violation of 18 U.S.C. § 1343; and five counts of aggravated identity theft, in violation of 18 U.S.C. § 1028A.  Wilson pleaded guilty to one count of filing a false claim and the remaining counts were dismissed.

In addition to the prison term, Judge Tigar ordered Wilson to serve a 36 month term of supervised release. Wilson will begin serving his prison term in July, 2019.

Assistant U.S. Attorneys Robert Rees and Meredith Osborn are prosecuting the case with the assistance of Bridget Kilkenny.  The prosecution is the result of an investigation by the IRS-CI.
 

OAKLAND - A federal grand jury indicted Henry Obdulio Cordon with receipt of child pornography and possession of child pornography, announced United States Attorney David L. Anderson and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) Special Agent in Charge Ryan L. Spradlin. 

An affidavit filed by a Task Force Officer with Homeland Security Investigations in connection with a criminal complaint filed in the same case also alleges that various email accounts controlled by Cordon contained child pornography images of young children being sexually abused.  The complaint also alleges that Cordon emailed himself images of young children being sexually abused by adult men.  Additionally, the complaint alleges that in 2011 Cordon participated in sexually explicit conduct with a 2 or 3-year-old girl and that he took a photograph of the girl while she was engaging in the conduct.  The indictment charges Cordon with one count of receipt of child pornography, in violation of 18 U.S.C. §§ 2252(a)(2) and (b)(1), and one count of possession of child pornography, in violation of 18 U.S.C. §§ 2252(a)(4)(B) and (b)(2).

The investigation began when Yahoo! sent a series of CyberTips to the National Center for Missing and Exploited Children after discovering child pornography materials in accounts that Cordon controlled.  

Cordon was arrested at his residence in Antioch the day the search warrant was executed, and made his initial appearance in federal court in Oakland on May 20, 2019.  Today, Cordon waived a detention hearing and remains in the custody of the United States Marshal.  Cordon’s next scheduled appearance is at 1:00 p.m. on June 11, 2019, for a status conference before the Honorable Jeffrey S. White, U.S. District Judge.

Anyone with information about Cordon or his alleged sexual interest in children should contact the Contra Costa County District Attorney’s Office Bureau of Investigations at 925-957-2200.  

An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, the defendant faces a maximum sentence of 20 years in prison, with a mandatory minimum sentence of five years in prison, and a lifetime of supervised release, plus restitution, if convicted of violating 18 U.S.C. 2252(a)(2) (receipt of child pornography).  However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.  

Assistant U.S. Attorney Christina McCall is prosecuting the case with the assistance of Jessica Rodriguez.  The prosecution is the result of an investigation by the Internet Crimes Against Children (ICAC) Task Force of Contra Costa County, the Contra Costa Sheriff’s Department, the Contra Costa District Attorney’s Office, and the United States Homeland Security Investigations. 
 

SAN FRANCISCO –Rain Olson Daugherty was sentenced today to 30 months in prison for robbing two San Francisco banks, announced United States Attorney David L. Anderson and Federal Bureau of Investigation Special Agent in Charge John F. Bennett. The sentence was handed down by the Honorable William H. Orrick, United States District Judge.

Daugherty, 44, of San Francisco, pleaded guilty to the charges on February 21, 2019.  According to the plea agreement, on November 29, 2018, Daugherty entered a bank in the Sunset District of San Francisco and slid a note containing a demand for money across the counter.  The teller gave Daugherty cash from her drawer.  Then, two weeks later, on December 13, 2018, Daugherty robbed a bank on Clement Street in San Francisco.  Again, he approached a bank teller and slid a note containing a demand for money across the counter.  Again, the teller gave Daugherty cash from the drawer.   According to court records, San Francisco Police Department Internal Affairs officers identified Daugherty as the robber when they were shown surveillance camera footage from the first robbery.  At the time, Daugherty was, and still is, an SFPD officer who was under suspension without pay.  

A federal grand jury indicted Daugherty on January 10, 2019, charging him with four counts of bank robbery— two counts for each robbery, all in a violation of 18 U.S.C. § 2113(a).   Daugherty pleaded guilty to two counts of 18 U.S.C. § 2113(a), one for each bank robbery.  The remaining two counts were dismissed.   

In addition to the prison term, Judge Orrick ordered Daugherty to serve three years of supervised release to begin at the end of his prison term.  Daugherty has been in custody since his arrest on December 18, 2018 and will begin serving his prison term immediately.    

Assistant U.S. Attorney Ajay Krishnamurthy is prosecuting this case with the assistance of Kimberly Richardson.  The prosecution is the result of an investigation by the FBI with assistance from the San Francisco Police Department.  
 

OAKLAND – Jeremy Orr was sentenced to 30 months in prison for wire fraud after filing more than 200 fraudulent income tax returns with the Internal Revenue Service, announced United States Attorney David L. Anderson and Internal Revenue Service, Criminal Investigation (IRS-CI), Special Agent in Charge Kareem Carter.  The sentence was handed down today by the Honorable Jeffrey S. White, U.S. District Judge.

Orr, 36, of Richmond, Calif., pleaded guilty to the charge on March 12, 2019.  According to his plea agreement, Orr admitted he devised a scheme to defraud the IRS of hundreds of thousands of dollars by filing false federal income tax returns.  Orr obtained the personal identification information of individuals in and around the Bay Area and prepared false 2011 federal income tax returns in the names of those individuals.  The tax returns reported false wages, false education expenses, or both, that generated a fraudulent income tax refund.  In sum, Orr electronically filed more than 200 false tax returns with the IRS resulting in claimed fraudulent tax refunds totaling $335,142.  

A federal grand jury indicted Orr on January 15, 2015, charging him with four counts of wire fraud, in violation of 18 U.S.C. § 1343, and four counts of aggravated identity theft, in violation of 18 U.S.C. § 1028A.  Orr pleaded guilty to one count of wire fraud and the remaining charges were dismissed.

In addition to the prison term, Judge White ordered the defendant to serve a three year period of supervised release.  The defendant was remanded into custody on June 12, 2018, and will begin serving his prison term immediately.

Assistant U.S. Attorney Jose A. Olivera is prosecuting the case with the assistance of Jessica Rodriguez Gonzalez and Katie Turner.  The prosecution is the result of an investigation by the IRS-CI. 
 

OAKLAND– Laron Jamal Johnson was sentenced to 91 months in prison today for being a felon in possession of a firearm and ammunition, for possession of marijuana with intent to distribute, and for violating the terms of his supervised release, announced United States Attorney David L. Anderson and Federal Bureau of Investigation Special Agent in Charge John F. Bennett.  The sentence was handed down by the Honorable Jon S. Tigar, United States District Judge.

Johnson, 31, of San Leandro, pleaded guilty to the firearm and drug charges on March 8, 2019.  In pleading guilty, Johnson admitted that on September 22, 2018, he was traveling in Oakland and was in possession of a Glock .40 caliber handgun, 13 rounds of ammunition, and 100 grams of marijuana that he intended to distribute.  At the time, Johnson was a convicted felon and was not eligible to possess a firearm or ammunition.  Johnson further admitted that on the same day, he was subject to the conditions of a court order setting the conditions for his release from prison as a result of a previous drug-related weapons conviction.  On March 8, 2019, Johnson admitted that his possession of a gun and possession of marijuana with intent to distribute violated the terms of his supervised release.

On December 13, 2018, a federal grand jury indicted Johnson, charging him with being a felon in possession of a firearm, in violation of 18 U.S.C. § 922(g), and being in possession of marijuana with the intent to distribute, in violation of 21 U.S.C. § 841.  Johnson pleaded guilty to both counts.  Judge Tigar ordered Johnson to serve the combined 91 month prison term for the two crimes and for Johnson’s violation of the terms of his supervised release. 

In addition to the prison term, Judge Tigar ordered Johnson to serve a three-year term of supervised release to begin at the conclusion of his prison term.  Judge Tigar ordered that Johnson will be subject to being searched, with or without suspicion, during his three year term of supervised release.   

Assistant United States Attorney Thomas R. Green is prosecuting the case with the assistance of Jessica Rodriguez.  The prosecution is the result of an investigation by the FBI.  
 

SAN FRANCISCO – Alejandro Ramirez-Suarez was sentenced today to 120 months in prison for his role in a conspiracy to possess with the intent to distribute methamphetamine and related charges announced United States Attorney David L. Anderson and Drug Enforcement Administration Special Agent in Charge Chris Nielsen.  The sentence was handed down by the Honorable Lucy H. Koh, U.S. District Judge.  

A federal jury convicted Suarez, 38, of the charges on August 17, 2018.  According to the evidence submitted at the trial, Suarez was a distributor in a methamphetamine trafficking network operating in the San Jose area in 2013 and 2014. Specifically, co-defendant Juan Cervantes Aguilar provided crystal methamphetamine to Suarez who distributed the product to his own customers, as well as Cervantes’s customers. For example, in a series of calls and text messages on March 22, 2014, Suarez ordered “a hand” (i.e., five kilograms) from Cervantes and then Cervantes met Suarez to deliver the drugs.  A few days later, Cervantes and Suarez arranged for Suarez to pay for the methamphetamine.  After selling the product, Suarez repaid Cervantes in cash proceeds from the drug trafficking.  

The evidence further demonstrated that, on occasion, Suarez assisted Cervantes in other ways.  For example, Suarez procured acetone for use in the crystal methamphetamine manufacturing process, and wired money to other co-conspirators in Mexico.  

A federal grand jury indicted Suarez on April 14, 2016, charging him with conspiracy to possess with intent to distribute and to distribute 500 grams and more of methamphetamine, in violation of 21 U.S.C. §§ 846 and 841(a)(1) and 841(b)(1)(A)(viii).  On August 17, 2018, after a five-day jury trial, a federal jury convicted Suarez of this charge.   

In addition to the prison term, Judge Koh ordered Suarez to serve a five-year period of supervised release.  Suarez has been in custody since the August 17, 2018, conviction, and will begin serving his sentence immediately. 

Cervantes pleaded guilty to his role in the scheme on September 20, 2017.  On April 4, 2018, Judge Koh sentenced Cervantes to serve 156 months in prison to be followed by a 5-year period of supervised release.  

Assistant U.S. Attorneys Katherine Wawrzyniak and Shailika Kotiya are prosecuting the case with the assistance of Laurie Worthen, Linda Love, and Kolin Singh.  The prosecution is the result of an investigation by the DEA.  This case was investigated and prosecuted by member agencies of the Organized Crime Drug Enforcement Task Force, 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.
 

SAN JOSE – A federal criminal complaint was filed yesterday, charging Tracey Michael Mapes with violations of national defense airspace, announced United States Attorney David L. Anderson and U.S. Department of Transportation Office of the Inspector General Regional Special Agent in Charge Jeffrey Dubsick.

According to the affidavit filed in support of the complaint, Mapes, 56, of North Highlands, in Sacramento County, modified an unmanned aircraft, or drone, by adding a compartment underneath its belly to carry a payload and used that compartment to hold dozens of flyers.  On November 26, 2017, Mapes flew the drone over two National Football League games and dropped the flyers on the spectators below.  First Mapes piloted the drone over Levi’s Stadium, where the San Francisco 49ers were hosting the Seattle Seahawks.  He then piloted the drone over the Oakland-Alameda County Coliseum, where the Oakland Raiders were hosting the Denver Broncos.  Tens of thousands of spectators were present for both events.  

The Federal Aviation Administration, as part of the U.S. Department of Transportation, is responsible for the control and use of navigable airspace within the United States.  This responsibility includes designating certain airspace as important to national security, and restricting aircraft from operating within that airspace.  This “national defense airspace” includes the area above and within a three-mile radius of National Football League stadiums during NFL games.

Mapes is scheduled to make his initial appearance in federal court on June 4, 2019 at 1:30 before the assigned duty Magistrate Judge in San Jose.              

A complaint merely alleges that crimes have been committed, and the defendant is presumed innocent until proven guilty beyond a reasonable doubt.  If convicted, the defendant faces a sentence of up to one year, as well as a fine of $100,000.  Further, the court may order additional periods of supervised release, fines, and restitution; however, any sentence following conviction would be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.  

Assistant U.S. Attorney Scott Simeon prosecuted the case with the assistance of Tong Zhang.  The prosecution is the result of an investigation by the DOT.
 

SAN FRANCISCO – Thirteen defendants were indicted on narcotics trafficking charges, announced United States Attorney David L. Anderson and Drug Enforcement Administration (DEA) Special Agent in Charge Chris D. Nielsen.  The indictment follows the arrest of five of the defendants on April 30, 2019, and the execution of search warrants at thirteen locations, including nine residences in Contra Costa County, Humboldt County, Fairfield, Suisun City and Modesto.  

All thirteen defendants were charged in a single indictment which charges controlled substance offenses involving methamphetamine, heroin, fentanyl, cocaine and cocaine base. The defendants and the charges pending against them are as follows:

Defendant

Age

Residence

Charges

Maximum Statutory Penalty

LORENZO LEE, a/k/a “O.G.”

66

Antioch, California

Conspiracy to Distribute and Possess with Intent to Distribute Controlled Substances (Count 1)

 

21 U.S.C. § 846

Not less than 10 years imprisonment and up to life

 

Not less than 5 years supervised release and up to life

 

$10 million fine

Distribution of and Possession with Intent to Distribute Controlled Substances, Including Cocaine, Cocaine Base, Methamphetamine, and Heroin (Counts 4, 7, and 13-15)

 

21 U.S.C. § 841(a)(1)

Not less than 10 years imprisonment and up to life

 

Not less than 5 years supervised release and up to life

 

$10 million fine

JEFFREY MCCOY

46

Pittsburg, California

Conspiracy to Distribute and Possess with Intent to Distribute Controlled Substances (Count 1)

 

21 U.S.C. § 846

Not less than 5 years imprisonment and up to 40 years imprisonment

 

Not less than 4 years supervised release and up to life

 

$5 million fine

Distribution of Controlled Substances, Including Cocaine Base, Cocaine, and Heroin (Counts 2-7 and 9)

 

21 U.S.C. § 841(a)(1)

Not less than 5 years imprisonment and up to 40 years imprisonment

 

Not less than 4 years supervised release and up to life

 

$5 million fine

ANTHONY BROWN, a/k/a “Ant Man”

57

Bay Point, California

Conspiracy to Distribute and Possess with Intent to Distribute Controlled Substances (Count 1)

 

21 U.S.C. § 846

Not less than 5 years imprisonment and up to 40 years imprisonment

 

Not less than 4 years supervised release and up to life

 

$5 million fine

Distribution of Cocaine Base

 

21 U.S.C. § 841(a)(1) (Count 7)

Not less than 5 years imprisonment and up to 40 years imprisonment

 

Not less than 4 years supervised release and up to life

 

$5 million fine

DESHAWNTE GAMBOA

38

Pittsburg, California

Conspiracy to Distribute and Possess with Intent to Distribute Controlled Substances (Count 1)

 

21 U.S.C. § 846

Not less than 5 years imprisonment and up to 40 years imprisonment

 

Not less than 4 years supervised release and up to life

 

$5 million fine

Distribution of Heroin (Count 9)

 

21 U.S.C. § 841(a)(1)

Not less than 5 years imprisonment and up to 40 years imprisonment

 

Not less than 4 years supervised release and up to life

 

$5 million fine

DEBORAH POLK

63

Antioch, California

Conspiracy to Distribute and Possess with Intent to Distribute Controlled Substances (Count 1)

 

21 U.S.C. § 846

Not less than 5 years imprisonment and up to 40 years imprisonment

 

Not less than 4 years supervised release and up to life

 

$5 million fine

Possession with Intent to Distribute Heroin (Count 15)

 

21 U.S.C. § 841(a)(1)

Not less than 5 years imprisonment and up to 40 years imprisonment

 

Not less than 4 years supervised release and up to life

 

$5 million fine

Maintaining a Drug-Involved Premises (Count 16)

 

21 U.S.C. § 856(a)(2)

20 years imprisonment

 

3 years supervised release

 

$500,000 fine

EVAN MARTINEZ-DIAZ

26

Bay Point, California

Conspiracy to Distribute and Possess with Intent to Distribute Controlled Substances (Count 1)

 

21 U.S.C. § 846

Not less than 10 years imprisonment and up to life

 

Not less than 5 years supervised release and up to life

 

$10 million fine

Possession with Intent to Distribute Methamphetamine and Cocaine (Counts 13 and 14)

 

21 U.S.C. § 841(a)(1)

Not less than 10 years imprisonment and up to life

 

Not less than 5 years supervised release and up to life

 

$10 million fine

MAGO AGUILAR-PACHECO

38

West Covina, California

Conspiracy to Distribute and Possess with Intent to Distribute Controlled Substances (Count 1)

 

21 U.S.C. § 846

Not less than 5 years imprisonment and up to 40 years imprisonment

 

Not less than 4 years supervised release and up to life

 

$5 million fine

CESAR ALVARADO

38

Desert Springs, California

Conspiracy to Distribute and Possess with Intent to Distribute Controlled Substances (Count 1)

 

21 U.S.C. § 846

Not less than 10 years imprisonment and up to life

 

Not less than 5 years supervised release and up to life

 

$10 million fine

Possession with Intent to Distribute Cocaine, Heroin, and Methamphetamine (Counts 11-14)

 

21 U.S.C. § 841(a)(1)

Not less than 10 years imprisonment and up to life

 

Not less than 5 years supervised release and up to life

 

$10 million fine

JESSE LOPEZ, III

30

Fowler, California

Possession with Intent to Distribute Fentanyl (Count 8)

 

21 U.S.C. § 841(a)(1)

Not less than 10 years imprisonment and up to life

 

Not less than 5 years supervised release and up to life

 

$10 million fine

JOSE DELGADILLO, a/k/a “Tepa”

41

Fairfield, California

Conspiracy to Distribute and Possess with Intent to Distribute Controlled Substances (Counts 1 and 10)

 

21 U.S.C. § 846

Not less than 10 years imprisonment and up to life

 

Not less than 5 years supervised release and up to life

 

$10 million fine

MARCO DELGADILLO, a/k/a “Tonio”

39

Fairfield, California

Conspiracy to Distribute and Possess with Intent to Distribute Controlled Substances (Count 10)

 

21 U.S.C. § 846

Not less than 10 years imprisonment and up to life

 

Not less than 5 years supervised release and up to life

 

$10 million fine

LUIS TORRES-GARCIA, a/k/a “Guero”

33

Rio Dell, California

Conspiracy to Distribute and Possess with Intent to Distribute Controlled Substances (Count 10)

 

21 U.S.C. § 846

Not less than 10 years imprisonment and up to life

 

Not less than 5 years supervised release and up to life

 

$10 million fine

TIMOTHY PEOPLES, a/k/a “Tee”

40

Antioch, California

Possession with Intent to Distribute Cocaine and Cocaine Base (Counts 17 and 18)

 

21 U.S.C. § 841(a)(1)

Not less than 5 years imprisonment and up to 40 years imprisonment

 

Not less than 4 years supervised release and up to life

 

$5 million fine

The defendants arrested on April 30, 2019, were originally charged by complaint.  The complaints have been unsealed.  Eight defendants were charged in complaints that were supported by an affidavit describing the underlying investigation (the Affidavit).  In addition, a separate complaint was filed against defendant Timothy Peoples, and that complaint has been unsealed as well.

According to the Affidavit, this investigation started in 2017 and involved the DEA, the United States Internal Revenue Service, the Bureau of Alcohol, Tobacco, Firearms, and Explosives, Antioch Police Department, Oakley Police Department, and Concord Police Department.  In 2017 and 2018, the investigators used informants to conduct a series of purchases of cocaine, cocaine base and heroin from JEFFREY MCCOY.  In furtherance of their investigation, the agents also obtained federal wiretap orders in 2018 and 2019 to monitor communications over telephones used by the conspirators.

According to the Affidavit, the agents also seized significant quantities of narcotics from various defendants during the investigation.  The following chart summarizes the seizures, which are discussed in more detail in the Affidavit: 

DATE

SEIZED

CIRCUMSTANCES

5/15/2018

4 kg of heroin mixed with fentanyl and $46,000

Seized from courier after leaving LEE’s residence

8/8/2018

18 lbs of methamphetamine

Seized en route to TORRES-GARCIA from Jose DELGADILLO

1/26/2019

2 kg of cocaine

Seized en route to meeting point with LEE

2/9/2019

7 kg of narcotics and $104,505

Seized from courier after leaving LEE’s residence

2/9/2019

20 lbs of methamphetamine and 1 kg of cocaine

Discarded from courier’s vehicle after leaving LEE’s residence

In addition, any sentence following conviction will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553. 

This case was investigated and prosecuted by member agencies of the Organized Crime Drug Enforcement Task Force, 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.

SAN JOSE – Van-Seyla Mork pleaded guilty in federal court in San Jose today to wire fraud and money laundering, announced United States Attorney David L. Anderson and Federal Bureau of Investigation Special Agent in Charge John F. Bennett. 

In pleading guilty, Mork admitted to perpetrating a refund fraud scheme against Apple, Inc.  Specifically, Mork admitted that he initiated fraudulent complaints to Apple’s customer service department, each complaint alleging, on behalf of Apple customers, that a purchased Apple product had not been mailed to an Apple customer as it should have been, but that instead only an empty Apple box had been mailed to the Apple customer’s mailing address.  Mork further admitted that at the time he submitted these complaints, he knew these assertions were false and that Apple had, in fact, mailed the purchased products to the individual purchasers.  Through this fraudulent scheme, Mork admitted that he caused Apple to issue $1,000,000 in refunds for undelivered Apple products that had, in fact, been delivered.  Moreover, Mork admitted that he transferred the proceeds of this fraudulent scheme through various bank accounts with the intent of concealing the nature and location of these wire-fraud proceeds.   

Mork, 25, of Kalamazoo, Michigan, was charged by an Information filed on November 30, 2018.  He was charged with one count of conspiracy to commit wire fraud, in violation of Title 18, United States Code, Section 1349, five counts of wire fraud, in violation of Title 18, United States Code, Section 1343, and four counts of money laundering, in violation of Title 18, United States Code, Section 1956(a)(1)(B)(i).  Under the plea agreement, Mork pled guilty to one count of wire fraud and one count of money laundering.  

Mork was released on bond.   Bail was set at $50,000.  

Mork’s sentencing hearing is scheduled for October 21, 2019 at 1:30 before the Honorable Edward J. Davila, U.S. District Court Judge, in San Jose.  The maximum statutory penalty for each count of wire fraud in violation of Title 18, United States Code, Section 1343 is 20 years imprisonment and a fine of $250,000, plus restitution and each count of money laundering in violation of Title 18, United States Code, Section 1956(a)(1)(B)(i) is 20 years imprisonment and a fine of $500,000, plus restitution.  However, any sentence will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.

Jeff Schenk is the Assistant U.S. Attorney who prosecuted the case with the assistance of Tong Zhang.  The prosecution is the result of an investigation by the Federal Bureau of Investigation. 
 

SAN FRANCISCO – Sushovan Hussain, the former Chief Financial Officer of Autonomy Corporation plc, was sentenced to sixty (60) months in prison today following his convictions after trial for one count of conspiracy, fourteen counts of wire fraud and one count of securities fraud by a federal jury, announced United States Attorney David L. Anderson and Federal Bureau of Investigation Special Agent in Charge John F. Bennett.  The sentence was imposed by the Honorable Charles R. Breyer, U.S. District Judge.

In addition to the prison term, the Court ordered a fine in the amount of $4 million, the forfeiture of assets in the amount of $6.1 million, a three year term of supervised release and a special assessment of $1,600.  Hussain was ordered to surrender to the custody of the Bureau of Prisons on June 15, 2019.  

In 2011, Hewlett-Packard Company acquired Autonomy, the former software technology company dual headquartered in the United Kingdom and San Francisco, for about $11.7 billion.  The evidence at trial demonstrated that for more than two years prior to the sale, Hussain, 55, a citizen and resident of the United Kingdom, used sophisticated accounting methods to falsely inflate Autonomy’s revenues to make it appear Autonomy was growing when it really was not.  Specifically, Hussain used backdated contracts, roundtrips, channel stuffing, and other forms of accounting fraud to fraudulently inflate Autonomy’s publicly-reported revenues by as much as 14.6% in 2009, 17.9% in 2010, 21.5% in the first quarter of 2011, and 12.4% in the second quarter of 2011.  In addition, Hussain, and his co-conspirators, fraudulently concealed from investors and market analysts the scale of Autonomy’s hardware sales, which were used to boost the company’s reported revenue.  The evidence demonstrated Automony’s sales were inflated by $53.3 million in 2009, $99.08 million in 2010, $20.09 million in the first quarter of 2011 and $20.85 million in the second quarter of 2011.  

On November 10, 2016, a federal grand jury indicted Hussain charging him with one count of conspiracy to commit wire fraud, in violation of 18 U.S.C. § 1349, and 14 counts of wire fraud, in violation of 18 U.S.C. § 1343. On May 4, 2017, the grand jury superseded the indictment adding one count of securities fraud, in violation of 18 U.S.C. § 1348.

Assistant U.S. Attorneys Robert S. Leach, Adam A. Reeves, and William Frentzen prosecuted the case with the assistance of Elizabeth Margen, Phillip Villanueva, and Bridget Kilkenny.  The prosecution is the result of an investigation by the FBI and the United States Securities and Exchange Commission.
 

Jesse James Marquez was sentenced on Friday to 33 months in prison for his role in the theft and subsequent sale of 55 firearms from a sporting goods store in Eureka, California, in August 2015.  The sentence was imposed by the Honorable Charles R. Breyer, U.S. Senior District Judge.

In a plea agreement, Marquez admitted he cut the power lines to disable the alarm at Pacific Outfitters, located at 1600 Fifth Street, Eureka, California 95501, in the early morning hours of August 8, 2015.  He then climbed on the roof and broke through a skylight to gain access to the firearms.  He broke into a cabinet containing firearms and then carried 55 handguns out of the store in a backpack, forcing open a roll up door to exit the store.  After he stole the guns, Marquez stored them until he was able to sell them. 

A number of the stolen firearms have been recovered by police officers in California, Oregon, Georgia and elsewhere, including at the scene of a homicide in Arcata, California in September 2017.

In addition to the prison term, Judge Breyer sentenced Marquez to a 3-year term of supervised release and ordered Marquez to pay restitution to Pacific Outfitters in the amount of $56,600.  He has been remanded into custody since entering his guilty plea and will begin serving his sentence immediately.

Assistant United States Attorney Jonathan U. Lee prosecuted this case with the assistance of Kimberley Richardson and Hector Lopez.  The prosecution is the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms & Explosives and the Eureka Police Department.
 

SAN FRANCISCO – Bernardo Olivas Leyva was sentenced today to 4 years in prison and 5 years of supervised release for conspiring to distribute and possess with intent to distribute more than 500 grams of methamphetamine, announced United States Attorney David L. Anderson, Drug Enforcement Administration Special Agent in Charge Chris Nielsen, and Bureau of Alcohol, Tobacco, Firearms and Explosives Special Agent Ray M. Roundtree.  The sentence was handed down by the Honorable Charles R. Breyer, Senior U.S. District Judge.

Olivas Leyva pleaded guilty on December 19, 2018, to a single count indictment charging a violation of 21 U.S.C. §§ 846 and 841(a)(1) and (b)(1)(A)(viii), conspiracy to distribute and possess with intent to distribute 500 grams or more of a mixture and substance containing methamphetamine.  According to the plea agreement Olivas Leyva admitted that he had agreed with an individual based in Mexico to bring methamphetamine into the United States.  Olivas Leyva admitted that he and his co-defendant, Carlos Luna Rodriguez, obtained methamphetamine, heroin, and a quantity of pills in Fontana, California, in a truck that they intended to drive to Seattle, Washington.  Olivas Leyva admitted that there were 126 pounds of methamphetamine, 2.5 pounds of suspected heroin, and 2,990 pills that contained fentanyl in the truck.

Olivas Leyva, 63, a citizen of Mexico, along with Luna Rodriguez, 23, also a citizen of Mexico, were indicted by a federal grand jury on June 5, 2018, with engaging in a conspiracy to distribute and possess with intent to distribute methamphetamine.  Luna Rodriguez pled guilty on December 19, 2018, to a superseding information that charged him with possession with intent to distribute methamphetamine, in violation of 21 U.S.C. § 841(a)(1) and (b)(1)(A).  He was sentenced on March 15, 2019, to 15 months in prison.

Sheila Armbrust is the Assistant U.S. Attorney who prosecuted the case with the assistance of Linda Love.  The prosecution is the result of a multi-year investigation by the Drug Enforcement Administration and Bureau of Alcohol Tobacco, Firearms and Explosives.