Northern District of California

OAKLAND – Consuelo “Connie” Puente was sentenced today to 4 years imprisonment and ordered to pay restitution in the amount of $779,854.53 for wire fraud and aggravated identity theft, announced United States Attorney Melinda Haag and Internal Revenue Service, Criminal Investigation, Acting Special Agent in Charge José M. Martinez.

Puente pleaded guilty on December 4, 2014.  According to court documents, from May 19, 2008 to June 18, 2013, Puente was employed by a company in Concord, Calif. In January 2009, Puente was assigned to the payroll department and was the only employee responsible for handing payroll for her employer. Puente admitted she devised a scheme to defraud her employer from June 2009 through June 2013 by receiving wages paid in the names of former employees. Pursuant to her scheme, Puente obtained from the company’s personnel files personal identifying information of three former employees. She changed their status to current employees so that her employer would pay wages in their names. Puente listed her own bank account information as the bank account to receive the wages.

As a result, between 2009 and 2013, her employer erroneously transferred net wages of $543,545.08 into Puente’s bank accounts. The company also paid to the IRS withholdings of $84,362.45 for a total of $627,907.53 in gross wages. To account for the wages paid in the names of the former employees, Puente prepared IRS Forms W-2 for each of the former employees. Puente also admitted that she filed false tax returns for 2009 through 2013 that omitted the $543,545.08 she stole from the company, resulting in $151,987 in tax liabilities.

Puente, 44, of Sacramento, was indicted on March 18, 2014, and charged with three counts of wire fraud and three counts of aggravated identity theft. She pleaded guilty to one count of each.

The sentence was handed down by the Honorable Yvonne Gonzalez Rogers, United States District Court Judge. Judge Rogers also sentenced the defendant to a three year period of supervised release and restitution. The defendant who is in custody will begin serving the sentence immediately.

Assistant US Attorneys Jose A. Olivera and Thomas Moore are prosecuting the case. The prosecution is the result of an investigation by the IRS, Criminal Investigation and the Concord Police Department.

SAN FRANCISCO – Defendant Jaime Balam (a/k/a “Tweety”) appeared in U.S. District Court in San Francisco today following his extradition from Mexico on a variety of gang-related charges, including racketeering conspiracy and racketeering murder, announced United States Attorney Melinda Haag and Tatum King, Acting Special Agent in Charge for U.S. Immigration and  Customs Enforcement’s (ICE), Homeland Security Investigations (HSI) San Francisco.

According to court records, a federal grand jury in San Francisco indicted Jaime Balam on August 21, 2012. As alleged in the indictment, Balam, 26, a native and citizen of Mexico, was a member of La Mara Salvatrucha, or “MS-13,” a transnational criminal gang operating in various Central American countries and in numerous states across the United States. The defendant is alleged to have been a member of MS-13 who conspired to engage in the conduct of the affairs of MS-13 through a pattern of racketeering activity that included murder, attempted murder, and other acts of violence. The indictment also charges the defendant with the February 19, 2009, gang-related racketeering murder of a victim in Daly City, as well as three attempted racketeering murders arising from the same incident, and firearms-related offenses.

According to the indictment, MS-13 was a Sureño or “Southern” street gang, whose members generally were born outside the United States, claimed Southern California as their base, and acknowledged the primacy of the Mexican Mafia prison gang. The principal rivals of MS-13 in the San Francisco Bay Area were members of the area’s various Norteño or “Northern” gangs, whose members generally were born in the United States, claimed Northern California as their base, and acknowledged the primacy of the Nuestra Familia prison gang. According to the indictment, one of the principal rules of MS-13 is that its members must “hunt” – that is, attack and kill – Norteños and other rivals whenever possible. The indictment specifically alleges that all three defendants conspired to kill actual and suspected members of other gangs.

The 2012 indictment and the 2015 extradition of Balam stem from the government’s efforts, commenced in approximately 2005, to investigate and prosecute members of the MS-13 transnational gang operating in the Bay Area. Balam was arrested on October 21, 2013, in Mexico, and was subsequently ordered extradited to the United States on February 10, 2015.

“This successful extradition culminates years of outstanding investigative work by our federal law enforcement partners with Homeland Security Investigations, and illustrates the lengths to which we will go to pursue justice for victims,” stated United States Attorney Melinda Haag.

“As this case makes clear, we will not allow our borders to be barriers to bringing accused violent criminals to justice,” said Acting Special Agent in Charge Tatum King. “In addition to the tireless efforts by HSI special agents in the Bay Area and Mexico City, we also owe a tremendous debt to authorities in Mexico, whose cooperation was vital to assuring this defendant’s return. HSI will continue to work closely with its law enforcement counterparts in Mexico to assure the safety of law-abiding citizens in both nations.”

Balam is charged with the following crimes, which carry the corresponding maximum terms of imprisonment:

• Racketeering conspiracy in violation of 18 U.S.C. § 1962(d) – life in prison and a $250,000 fine;
• Conspiracy to commit murder in aid of racketeering activity in violation of 18 U.S.C. ' 1959(a)(5)  – ten years in prison and a $250,000 fine;
• Conspiracy to commit assault with a dangerous weapon in aid of racketeering activity in violation of 18 U.S.C. § 1959(a)(6) – three years in prison and a $250,000 fine;
• Murder in aid of racketeering activity in violation of 18 U.S.C. ' 1959(a)(1) – life imprisonment, and a $250,000 fine;
• Attempted murder in aid of racketeering activity in violation of 18 U.S.C. § 1959(a)(5) (three counts) – 10 years in prison and a $250,000 fine;
• Carrying and using a firearm during and in relation to a crime of violence, in violation of 18 U.S.C. ' 924(c)(1)(A) – is a mandatory consecutive prison term of five years to life in prison (or seven years to life in prison if the firearm is brandished; or ten years to life in prison if the firearm is discharged), and a $250,000 fine;
• Causing death in the commission of a violation of 18 U.S.C. ' 924(c) – if the death constitutes murder as defined in 18 U.S.C. ' 1111, in violation of 18 U.S.C. § 924(j) – life in prison and a $250,000 fine;
• Being an alien unlawfully in possession of a firearm or ammunition in violation of 18 U.S.C. § 922(g)(5) – ten years in prison and a fine of $250,000.

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.  Please note, an indictment contains only allegations and, as with all defendants, Balam must be presumed innocent unless and until proven guilty.

Balam appeared before the Honorable Joseph C. Spero, United States Magistrate Judge, and was ordered detained pending further proceedings in front of Judge Spero tomorrow morning at 9:30 am. The case is assigned to the Honorable William H. Alsup, U.S. District Judge.  The defendant was ordered to appear before Judge Alsup on March 3, 2015, at 2:00 p.m. for status conference.

Andrew M. Scoble is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Legal Tech Ponly Tu.  The prosecution is the result of more than seven years’ investigation by Homeland Security Investigations, the San Francisco Police Department, and the Daly City Police Department.

SAN FRANCISCO – Jesse “Babe” Amaral, Jr., owner of the now-defunct Petaluma slaughterhouse Rancho Feeding Corporation, pleaded guilty on February 18, 2015 to conspiracy to distribute adulterated, misbranded, and uninspected meat, announced United States Attorney Melinda Haag and Lori Chan, Special Agent in Charge of the U.S. Department of Agriculture (USDA), Office of Inspector General, Investigations, Western Region.

In pleading guilty, Amaral, 77, admitted that from 2012 through January 10, 2014, he knowingly and with intent to defraud directed Rancho employees to process for human consumption cattle that had been condemned by the USDA veterinarian; to circumvent inspection procedures for certain cattle exhibiting symptoms of cancer eye; and to process these cancer eye cattle for human consumption without full inspection. Amaral further admitted knowingly causing Rancho to submit fraudulent cattle invoices to farmers between at least 2012 and January 2014.

Amaral was indicted on August 14, 2014, along with Rancho employees Eugene Corda, 66, and Felix Cabrera, 56. All were charged with fraudulent distribution of adulterated, misbranded, and uninspected meat, in violation of the Federal Meat Inspection Act (FMIA), 21 U.S.C. §§ 610(c) & 676(a); conspiracy to commit the same, in violation of 18 U.S.C. § 371; and mail fraud conspiracy in furtherance of the same scheme, in violation of 18 U.S.C. § 1349. Amaral was also charged with mail fraud, in violation of 18 U.S.C. § 1341, and mail fraud conspiracy, in violation of 18 U.S.C. § 1349, in a separate scheme to defraud farmers by means of false invoicing.

Arising out of the same scheme, Robert Singleton, 78, owner of Petaluma-based Rancho Veal Corporation, was charged by Information on August 18, 2014, with one count of fraudulently distributing adulterated, misbranded, and uninspected meat in violation of the FMIA.

Singleton pleaded guilty to the Information on August 22, 2014. In so doing, he admitted knowingly participating in a scheme by which Rancho employees were instructed to carve “USDA Condemned” stamps out of cattle carcasses, to conceal from USDA inspection cows showing signs of cancer eye by switching the diseased heads with healthy heads, and to process the adulterated and uninspected carcasses for human consumption. He also admitted participating in the scheme to fraudulently invoice farmers.

Cabrera, Rancho’s “kill floor” supervisor, pleaded guilty to conspiracy to fraudulently distribute adulterated, misbranded, and uninspected meat on November 26, 2014. Corda, Rancho’s yardman, pleaded guilty on October 10, 2014, to fraudulently distributing adulterated, misbranded, and uninspected meat as well as aiding and abetting such distribution in violation of the FMIA.

Amaral’s sentencing hearing is scheduled for July 1, 2015, before U.S. District Judge Charles R. Breyer. A status hearing is scheduled for Singleton, Cabrera, and Corda on August 12, 2015, also before Judge Charles R. Breyer.

The maximum statutory penalties for conspiracy to distribute adulterated meat are 5 years’ imprisonment, 3 years’ supervised release, a $250,000 fine, and a $100 special assessment. The maximum statutory penalties for fraudulent distribution of adulterated meat are 3 years’ imprisonment, 1 year supervised release, a $10,000 fine, and a $100 special assessment. The maximum statutory penalties for mail fraud and mail fraud conspiracy are 20 years’ imprisonment, 3 years’ supervised release, a $250,000 fine, and a $100 special assessment. Notwithstanding these statutory maximums, any sentence imposed by the court following conviction would take into consideration the U.S. Sentencing Guidelines and the federal statute governing imposition of a sentence, 18 U.S.C. § 3553.

Hartley M.K. West is the Assistant U.S. Attorney who is prosecuting this case with the assistance of Rosario Calderon. The prosecution is the result of an investigation by agents of the USDA’s Office of Inspector General, Investigations and USDA’s Food Safety Inspection Service, Office of Investigation, Enforcement and Audit, Compliance and Investigations.

SAN JOSE – Sharon Lynn Shaw pleaded guilty in federal court yesterday to bank fraud and theft by bank officer, announced United States Attorney Melinda Haag and U.S. Secret Service Acting Special Agent in Charge Charles Marino.
 
In pleading guilty, Shaw, 67, of San Jose, Calif., admitted that from 2001 through 2012 that she engaged in a scheme to defraud Wells Fargo Bank while serving as a manager at that bank. Shaw admitted that she used the names, Social Security numbers, and other personal information belonging to her parents, without their knowledge or authorization, to create false and fraudulent business loan applications which she submitted to her employer Wells Fargo Bank; and a checking account in the name of her parent to receive those loan proceeds. Shaw admitted that she used her position as a bank manager to submit fraudulent applications to Wells Fargo Bank, to approve the loans, and to conceal their fraudulent nature. Shaw admitted that she was advanced credit based on those fraudulent loans and then converted the proceeds for her own personal use (including paying off the mortgage on her house) without Wells Fargo’s knowledge or authorization. Shaw also admitted that she embezzled from Wells Fargo bank a $12,800 line of credit advance in January 2010 as well as a $20,000 line of credit advance in February 2010.
 
Shaw was charged in an indictment filed in San Jose federal district court on May 21, 2014. There is no plea agreement in the case. Shaw pleaded guilty to all six counts in the indictment. 
 
After Shaw’s guilty plea, U.S. District Court Judge Beth Labson Freeman set this matter for a sentencing hearing on May 19, 2015 at 9 a.m. The maximum statutory penalty for bank fraud, in violation of Title 18, United States Code, Section 1344, and Theft by Bank Officer, in violation of Title 18, United States Code, Section 656, is 30 years in prison, a $1,000,000 fine, and five years of supervised release. 
 
Assistant U.S. Attorneys Joseph Fazioli and Philip Guentert are prosecuting the case with the assistance of Laurie Worthen. The prosecution is the result of an investigation by the U.S. Secret Service.
 

OAKLAND – Robert Thomas Doyle pleaded guilty in federal court on February 13, 2015, to wire fraud and aggravated identity theft, announced United States Attorney Melinda Haag and Internal Revenue Service, Criminal Investigation, Special Agent in Charge José M. Martinez.

According to the plea agreement, during 2011, 2012, and 2013 Doyle, 64, of Oakland, implemented an identity theft and tax fraud scheme in which he caused the filing of a number of tax returns claiming fraudulent refunds.  As part of his scheme, Doyle, created false businesses and claimed false income and expenses for his clients in order to maximize the Earned Income Tax Credit to obtain a larger refund. Doyle did not ask his clients about any income earned or current or past employment history. Doyle also used the names and Social Security numbers of former clients to prepare and file false tax returns without these victims' knowledge or consent. On many of the tax returns, Doyle directed the refunds to be mailed to addresses where he could retrieve them or have the refunds direct deposited into bank accounts that he controlled. Doyle kept a portion of the refund as his fee.

Doyle was a Certified Public Accountant until 1987.  On February 20, 2014, he was charged in a sixteen count indictment with mail fraud, wire fraud, and aggravated identity theft.  Doyle pleaded guilty to one count of wire fraud and one count of aggravated identity theft. He is scheduled to be sentenced on June 19, 2015, before the Honorable Jon S. Tigar, United States District Judge, in Oakland.

The maximum statutory penalty for each count of wire fraud, in violation of Title 18, U.S.C § 1341 and 1343, is 20 years in prison and a fine of $250,000. The maximum penalty for aggravated identity theft, in violation of Title 18, U.S.C § 1028A, is two years in prison, consecutive to the underlying felony and a fine of $250,000.

Assistant US Attorney Thomas Moore is prosecuting the case. The prosecution is the result of an investigation by the Internal Revenue Service, Criminal Investigation.

SAN FRANCISCO – U.S. Attorney Melinda Haag, Drug Enforcement Agency, Acting Special Agent in Charge Bruce Balzano, and San Francisco Police Chief Greg Suhr announced that 19 people have been indicted by a federal grand jury on charges of drug trafficking near schools and playgrounds in San Francisco. The indictments and arrests resulted from a continued partnership between the U.S. Attorney’s Office, the DEA, and the San Francisco Police Department in a program called Operation Safe Schools.

This iteration of Operation Safe Schools focused on the Tenderloin neighborhood and portions of the South of Market neighborhood, two areas notorious for drug dealing in San Francisco. In announcing the charges, U.S. Attorney Melinda Haag stressed the significance of protecting school zones. “The goal of Operation Safe Schools is to use the law enforcement tools available to us to make neighborhoods like the Tenderloin safe, and to ensure that children who live and go to school in these neighborhoods are not exposed to crime and drug dealing,” said U.S. Attorney Haag. “We intend to continue with this initiative and others like it until the children in our community are no longer exposed to these dangerous situations.”

According to Acting Special Agent in Charge Bruce Balzano, the DEA will continue to partner with other law enforcement agencies to protect children and schools from drug trafficking.  “These partnerships are important because they allow us to better protect our communities.  The Safe Schools program delivers an important message to drug dealers who do business in the Northern District of California:  We will not tolerate drug trafficking in school zones or anywhere else,” said Acting SAC Balzano.

"I wish to thank the US Attorney's Office and DEA for their continued partnership with the San Francisco Police Department and their commitment to Operation Safe Schools,” said San Francisco Police Chief Suhr. “Together, we are making a difference in the lives of all residents in the Tenderloin area by preventing drug dealers from preying on young children near the schools they attend on a daily basis. Every child deserves an education and should not ever have to navigate drug dealers to get to school."

Over the past nine days, the following defendants have been arrested and brought before U.S. Magistrate Judges to answer charges:

• Sholanda Adams         Case No. CR-15-0070 VC
• Crystal Anthony         Case No. CR-15-0005 SI
• William Brown           Case No. CR-15-0069 TEH
• Latonya Carey            Case No. CR-15-0004 MMC
• Jahnai Carter               Case No. CR-14-0642 MMC
• Tiffany Cross              Case No. CR-15-0059 CRB
• Holbert Lee                 Case No. CR-15-0056 EMC
• Aaron Mathews          Case No. CR-15-0049 WHA
• Vernon Hill, AKA Kali Muhammed Case No. CR-15-0068 CRB
• Mathew Mumphrey    Case No. CR-14-0643 RS
• Andre Patterson          Case No. CR-14-0642 MMC
• Ashley Pharr               Case No. CR-15-0007 CRB
• Darell Powell              Case No. CR-15-0006 WHA
• Tiana Reddic              Case No. CR-15-0052 WHA
• Nijah Reed                 Case No. CR-15-0050 RS
• Darlene Rouse            Case No. CR-15-0027 VC
• Irisha Smith                Case No. CR-14-0641 WHA
• Ebony Wallace           Case No. CR-15-0061 CRB
• Lakeysha White         Case No. CR-15-0029 EMC

According to the charging documents, the defendants are each charged with the distribution of prohibited drugs on or within 1,000 feet of a school or playground, in violation of 21 U.S.C. §§ 841(a)(1) and 860.  The defendants are charged with distributing various controlled substances, including “crack” cocaine, heroin, methamphetamine, and oxycodone, as specified in the individual indictments.

The maximum statutory penalty for violating the drug-free school zone statute is 40 years in prison, with a mandatory minimum sentence of one year in jail, at least six years and up to life on supervised release, and a maximum fine of up to $2,000,000.  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.

Sarah Hawkins and Lloyd Farnham are the Assistant U.S. Attorneys prosecuting these cases.  The prosecutions are the result of multiple investigations by the San Francisco Police Department, the San Francisco Field Division of the U.S. Drug Enforcement Administration (DEA) and the United States Attorney’s Office for the Northern District of California.

Please note, an indictment contains only allegations and, as in all cases, the defendants listed above must be presumed innocent unless and until proven guilty.

SAN JOSE –  Nathan Moser, Peter Siragusa, AKA Bobby Russo, Carlo Pacileo, Trent Williams, and Sumit Gupta, AKA Sumit Vishnoi, were charged with crimes related to a conspiracy to access the e-mail accounts, Skype accounts, and computers of people opposing Moser’s and Siragua’s clients’ in civil lawsuits, announced United States Attorney Melinda Haag and Federal Bureau of Investigation Special Agent in Charge David J. Johnson.

A federal grand jury indicted Moser, 41, of Menlo Park, Calif.; Siragusa, 59, of Novato, Calif.; Pacileo, 44, of El Segundo, Calif.; Williams, 24, of Martinez, Calif.; and Gupta, 26, of Jabalapur, India, on January 15, 2015, charging them with one count of Conspiracy, in violation of 18 U.S.C. § 1030(b), six counts of Accessing a Protected Computer and Obtaining Information, in violation of 18 U.S.C. § 1030(a)(2)(C), and two counts of Interception of Electronic Communications, in violation of 18 U.S.C. § 2511(1)(a). The indictment was unsealed in court in San Jose, Calif., yesterday.

According to the Indictment, Moser was a private investigator and owner of Moser and Associates in Menlo Park. Siragusa was also a private investigator and owner of Siragusa Investigations in Novato. Although Moser and Siragusa operated separate businesses, they often assisted in each other’s investigations. The Indictment further alleges that Williams and Gupta were computer hackers hired by Moser and Siragusa to access the e-mail accounts, Skype accounts, and protected computers of individuals without authorization. Pacileo was the director of security for ViSalus, a network marketing company based in Los Angeles and one of Moser’s clients.

The Indictment alleges that the object of the defendants’ conspiracy was to obtain information that would assist Moser’s and Siragusa’s clients, including Pacileo, in the clients’ lawsuits. According to the indictment, once retained by a client, Moser and Siragusa would hire Williams and Gupta, among others, to hack into the victims’ e-mail accounts, Skype accounts, and protected computers. In addition to that conduct, the defendants allegedly installed and used a keylogger—a tool that intercepts and logs the particular keys struck on a keyboard in a covert manner so that the person using the keyboard is unaware that his or her actions are being monitored—to obtain information that would assist Moser’s and Siragusa’s clients.

According to the Indictment, Ocean Avenue, a network marketing company based in South Jordan, Utah, was a competitor of ViSalus that had hired several former ViSalus employees. As a result, ViSalus initiated a civil lawsuit against Ocean Avenue employees. Pacileo hired Moser to investigate Ocean Avenue.  Moser allegedly enlisted Siragusa to assist with the investigation, and together they hired hackers to illegally obtain information to assist in the lawsuit.

Moser, Siragusa, and Williams made their initial appearances in San Jose yesterday before the Honorable Paul S. Grewal, U.S. Magistrate Judge. Moser was released on a $100,000 bond, with his wife signing as surety and custodian. Moser’s next hearing is scheduled for identification of counsel today before Judge Grewal.  Siragusa was released pending the filing of a $100,000 secured bond on or before February 20, 2015. His next hearing is scheduled for February 23, 2015, at 1:30 p.m. before the Honorable Edward J. Davila, U.S. District Judge, in San Jose. Williams, who remains in custody, has a detention hearing scheduled for February 13, 2015, at 1:30 p.m., before Judge Grewal.

Pacileo made his initial appearance in Los Angeles before the Honorable Ralph Zarefsky, U.S. Magistrate Judge, and was released pending the filing of a $25,000 secured bond on or before February 13, 2015. His next hearing is scheduled for February 23, 2015 before Judge Davila.

An arrest warrant has been issued by the court for Gupta, who is believed to be in India. FBI Agents in San Jose are working with the FBI office in New Delhi, India, to secure Gupta’s prosecution.

The maximum statutory penalty for a violation of 18 U.S.C. § 1030(b) is 5 years custody, 3 years supervised release, and a fine of $250,000.  The maximum statutory penalty for each violation of 18 U.S.C. § 1030(a)(2)(C) is 10 years custody, 3 years supervised release, and a fine of $250,000.  The maximum statutory penalty for each violation of 18 U.S.C. § 2511(1)(a) is 5 years custody, 3 years supervised release, and a fine of $250,000. 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.

Matt Parrella and Michelle Kane are the Assistant U.S. Attorneys who are prosecuting the case with the assistance of Elise Etter. The prosecution is the result of an investigation by the FBI.

SAN JOSE – Meili Lin, AKA Ally Lin, and Jyh-Chau Horng, AKA Henry Horng, were arraigned today on charges of tax and mortgage fraud, announced United States Attorney Melinda Haag and Internal Revenue Service, Criminal Investigation Special Agent in Charge José M. Martinez

A federal grand jury in San Jose indicted Lin and Horng on two counts of filing false tax returns, in violation of 26 U.S.C. § 7206(1), on January 28, 2015.  Horng was also charged with one count of making false statements to a government agency, in violation of 18 U.S.C. § 1001(a)(2), and two counts of making false statements to a federally insured institution, in violation of 18 U.S.C. § 1014. Lin was also separately charged with one count of making false statements to a federally insured institution, in violation of 18 U.S.C. § 1014.

According to the Indictment, Lin and Horng, then a married couple residing in Saratoga, Calif., filed joint federal income tax returns for 2006 and 2007 which underreported their income, and which failed to disclose Lin’s interest in foreign financial accounts in 2006. The Indictment alleges that Horng subsequently made several materially false statements to an IRS Revenue Agent regarding the couple’s income and Lin’s foreign accounts, among other things.  The Indictment further alleges that Lin and Horng both submitted mortgage applications to federally insured lenders that contained materially false information.

Lin and Horng were arrested and made their initial appearances in federal court today in San Jose before the Honorable Paul S. Grewal, U.S. Magistrate Judge.  Lin and Horng are next scheduled to appear before Judge Grewal on February 13, 2015 at 1:30 pm.

The maximum statutory penalty for each count of filing a false tax return, in violation of 26 U.S.C. § 7206(1), is three years in prison and a $250,000 fine. The maximum statutory penalty for making false statements to a government agency. in violation of 18 U.S.C. § 1001(a)(2), is five years in prison and a $250,000 fine. The maximum statutory penalty for each count of making false statements to a federally insured institution, in violation of 18 U.S.C. § 1014, is thirty years in prison and a $1,000,000 fine. 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.

Michael G. Pitman is the Assistant U.S. Attorney who is prosecuting the case.  The prosecution is the result of an investigation by the IRS, Criminal Investigation.

Please note, an indictment contains only allegations against an individual and, as with all defendants, Lin and Horng must be presumed innocent unless and until proven guilty.

SAN JOSE – Hector David Lopez-Banuelos was sentenced yesterday to 181 months in prison, announced United States Attorney Melinda Haag and U.S. Immigration and Customs Enforcement, Homeland Security Investigations Acting Special Agent in Charge Tatum King.

Lopez-Banuelos, 35, of Salinas, Calif., was convicted by a jury on August 27, 2014, of possession of cocaine with intent to distribute, possession of methamphetamine with intent to distribute, being a felon in possession of a firearm, and possessing a firearm in furtherance of a drug trafficking offense.

Evidence at trial showed that Lopez-Banuelos possessed 814.5 grams of cocaine, 464.7 grams of actual methamphetamine, and a loaded Smith and Wesson 9mm semi-automatic pistol. Law enforcement officers discovered the drugs and weapon during the execution of a state probation search on Lopez-Banuelos’s residence. During the search, officers found a digital scale, a cutting agent, and notebooks containing entries consistent with drug trafficking activity. Officers also found 50 rounds of ammunition hidden behind a false outlet box in the wall. In addition, officers found a bulletproof vest in the residence.    

Lopez-Banuelos was indicted by a federal grand jury on September 18, 2013. The sentence was handed down by the Honorable Edward J. Davila, U.S. District Court Judge, following the jury’s return of guilty verdicts on two counts of 21 U.S.C. Section 841, one count of 18 U.S.C. Section 922(g), and one count of 18 U.S.C. Section 924(c). Judge Davila also sentenced the defendant to a five-year period of supervised release. The defendant, who had been in custody, was remanded to the Bureau of Prisons to commence service of his sentence.

The prosecution is the result of an investigation by the Immigration and Customs Enforcement – HSI, the Monterey County Peninsula Regional Violence and Narcotics Team, the Seaside Police Department, and the Monterey County Probation Department.

SAN FRANCISCO - Robert Bradley Strahan, a/k/a Robin Bradley, a/k/a Kaola Bradley, was sentenced yesterday to 57 months in prison, and ordered to pay $1,105,481 in restitution for an embezzlement scheme, announced United States Attorney Melinda Haag, Federal Bureau of Investigation Special Agent in Charge David J. Johnson, and Internal Revenue Service, Criminal Investigation Special Agent in Charge José M. Martinez.

Strahan, 51, of San Francisco, pleaded guilty on November 3, 2014, to wire fraud, mail fraud, and tax evasion. According to the plea agreement, Strahan admitted to embezzling more than $920,000 from a non-profit trade association in San Francisco where he worked as the chief financial officer. Strahan’s responsibilities included bookkeeping, payroll, and accounting. As the CFO, he had complete control over and access to the association’s books, records, and bank accounts. Without the knowledge or authorization of the non-profit trade association, Strahan wrote and cashed checks payable to himself and to “Cash” totaling over $550,000; he used the association’s credit cards to make unauthorized purchases totaling over $250,000; and he put an acquaintance on the payroll who received over $120,000 but did almost no work. To conceal the money that he embezzled, Strahan made false entries in the association’s accounting systems. Strahan also emailed false financial statements to the board of directors that omitted the funds he was taking for his personal use. Finally, Strahan did not pay income taxes on any of the money he embezzled for calendar years 2009 through 2013, resulting in tax due and owing to the Internal Revenue Service of over $175,000.

Strahanwas charged by superseding indictment on August 7, 2014, with three counts of wire fraud, two counts of mail fraud, and two counts of tax evasion.

The sentence was handed down by the Honorable Thelton E. Henderson, United States District Court Judge, in San Francisco, following guilty pleas to four counts – two counts of wire fraud, in violation of 18 U.S.C. § 1343, one count of mail fraud, in violation of  18 U.S.C. § 1341, and one count of tax evasion, in violation of 26 U.S.C. § 7201. Judge Henderson also sentenced the defendant to a 3 year period of supervised release and ordered the defendant to pay $1,105,481 in restitution to victims. Strahan was arrested on May 30, 2014, and has remained in custody since that time.

Hallie Mitchell Hoffman is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Mary Mallory and Bridget Kilkenny. The prosecution is the result of an investigation by the FBI and the IRS, Criminal Investigation.

SAN FRANCISCO – On February 4, 2015, William Wise was sentenced to 262 months in prison for a Ponzi scheme he perpetrated against over 1,200 victims who were seeking safe investments in certificates of deposit (CDs), announced United States Attorney Melinda Haag, Federal Bureau of Investigation Special Agent in Charge David J. Johnson, and Internal Revenue Service, Criminal Investigation Special Agent in Charge José M. Martinez.

Wise pleaded guilty on September 12, 2012. According to the Plea Agreement, Wise operated a scheme from at least as early as 1999 until approximately 2009 to sell CDs issued by three entities—Millennium Bank, United Trust of Switzerland, and Sterling Bank and Trust. Millennium Bank was a bank licensed in St. Vincent and the Grenadines, and was represented to be a wholly-owned subsidiary of United Trust of Switzerland, which was purportedly a private financial services company in Switzerland.

CDs were sold primarily out of offices established by Wise in Napa, Calif., and Raleigh, North Carolina, and staffed by various salespeople overseen by Wise.  CD purchasers were told that Sterling Bank and Trust was an international private bank managed and administered in Switzerland. Millennium Bank, United Trust of Switzerland, and Sterling Bank and Trust were all controlled by Wise, though he enlisted others to aid him in selling CDs to his victims.

The CDs issued by Millennium Bank, United Trust of Switzerland, and Sterling Bank and Trust all promised CD purchasers safe investments with guaranteed rates of return—sometimes over 16%—that were allegedly based on overseas investments. In fact, CD purchasers’ funds were not used for overseas investments that generated the promised returns. The funds were instead primarily used to enrich Wise and to make interest payments to earlier CD purchasers.  According to the Plea Agreement, Wise caused the sale of more than $129.5 million worth of fraudulent CDs from 2004 to 2009, causing investors to suffer actual losses of more than $75 million. He spent approximately $50 million himself, purchasing, among other things, a private plane and a luxury property in St. Vincent and the Grenadines.

Wise, 64, previously of Raleigh, North Carolina, was indicted by a federal grand jury on February 21, 2012, with one count of conspiracy, in violation of 18 U.S.C. § 1349; twelve counts of mail fraud, in violation of 18 U.S.C. § 1341; three counts of wire fraud, in violation of 18 U.S.C. § 1343; and one count of money laundering, in violation of 1957.  Wise was also charged in a separate indictment originating the Eastern District of North Carolina with one count of tax evasion, in violation of 26 U.S.C. § 7201. Wise pleaded guilty to all counts.

The sentence was handed down by the Honorable Edward M. Chen, U.S. District Court Judge. Judge Chen also sentenced the defendant to a three year period of supervised release, and scheduled a hearing for April 22, 2015, at 2:30 pm, to determine a restitution amount. The defendant is in custody and will begin serving the sentence immediately.

Benjamin Kingsley and Robin Harris are the Assistant U.S. Attorneys in the Northern District of California who are prosecuting the case, with the assistance of Beth Margen and Jessica Meegan. Assistant U.S. Attorney Evan Rikhye handled the charge that originated in the Eastern District of North Carolina. The prosecution is the result of a joint investigation with the IRS-Criminal Investigation and the Federal Bureau of Investigation.

SAN FRANCISCO – As part of the Obama Administration’s commitment to building trust between law enforcement and the communities they serve, Attorney General Eric Holder will travel to Oakland on THURSDAY, FEBRUARY 5, 2015, to participate in a Building Community Trust roundtable discussion. The roundtable will serve as an opportunity to bring law enforcement, elected officials and members of the community together to discuss next steps that the administration will take to improve relationships between law enforcement and the community, address concerns about violence directed at law enforcement, increase the integrity within our justice system and share best practices for policing.  In the afternoon, Attorney General Holder will meet with students, police academy recruits, and local police officers on building community trust at the Willie Mays Boys & Girls Club. Following the meeting, the Attorney General will tour the Boys & Girls Club, which is known for community-based programs that foster mentorship, collaborative relationships between young people and law enforcement.

The roundtable in Oakland marks the Attorney General’s sixth Building Community Trust roundtable discussion. The other roundtables were held in Atlanta, Cleveland, Memphis, Chicago and Philadelphia.

ATTORNEY GENERAL HOLDS BUILDING COMMUNITY TRUST ROUNDTABLE DISCUSSION IN OAKLAND:

NOTE:  All media must present government-issued photo I.D. (such as a driver’s license as well as valid media credentials). Members of the media must RSVP to press@usdoj.gov by Wednesday, Feb. 4, 2015, at 5:00 p.m. EST. Media planning to cover the event should arrive no later than 9:00 a.m. PST.  Space is limited and not guaranteed.  Press inquiries regarding logistics should be directed to Kevin Lewis at kevin.s.lewis@usdoj.gov and Meki Bracken at meki.bracken@usdoj.gov.

ATTORNEY GENERAL HOLDS MEETING WITH STUDENTS AND POLICE OFFICERS ON BUILDING COMMUNITY TRUST AND TOURS THE WILLIE MAYS BOYS & GIRLS CLUB OF SAN FRANCISCO:

NOTE:  All media must present government-issued photo I.D. (such as a driver’s license as well as valid media credentials).  Members of the media must RSVP to press@usdoj.gov by Wednesday, Feb. 4, 2015, at 5:00 p.m. EST.  Media planning to cover the event should arrive no later than 2:00 p.m. PST.  There will be limited access to the tour following the meeting.  Space is limited and not guaranteed.  Press inquiries regarding logistics should be directed to Kevin Lewis at kevin.s.lewis@usdoj.gov and Meki Bracken at meki.bracken@usdoj.gov.

SAN FRANCISCO – Kevin Fuqua was convicted of being a felon in possession of a firearm and ammunition by a federal jury last week, announced United States Attorney Melinda Haag and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Special Agent in Charge Joseph Riehl.

Evidence at trial showed that Kevin Fuqua, 29, of Oakland, possessed a firearm loaded with eleven rounds of ammunition. Specifically, Oakland Housing Authority Police Officers responding to reports of suspected drug dealing near Manzanita Park in East Oakland, encountered the defendant sleeping in a parked car.  The defendant gave a false name and birthdate to the officers and tried to run away.  During the struggle that followed, the officers recovered a loaded semiautomatic firearm.  The guilty verdict followed a jury trial conducted before the Honorable James Donato, U.S. District Court Judge.

Mr. Fuqua was indicted by a federal grand jury on May 22, 2014.  He was charged with being a felon in possession of a firearm.   On December 4, 2014, the grand jury returned a superseding indictment adding a count of felony possession of ammunition in addition to the original firearm charge.

Mr. Fuqua is currently being held in federal custody pending sentencing.

The defendant's sentencing hearing is scheduled for May 8, 2015, before Judge Donato in San Francisco.  The maximum statutory penalty for being a felon in possession of a firearm and ammunition, in violation of Title 18, Section 922(g)(1), is 10 years imprisonment 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.

Brigid Martin, Assistant U.S. Attorney, and Roger Dinh, Special Assistant U.S. Attorney, are the attorneys who are prosecuting the case with the assistance of Noble Hughes, Melissa Dorton, Katie Turner, and Tim Kingwell.  The prosecution is the result of an investigation by the ATF and the Oakland Housing Authority Police Department.

SAN FRANCISCO – A federal indictment charging Delores Reeves with three counts of mail fraud and two counts of aggravated identity theft was unsealed this afternoon in federal court, announced United States Attorney Melinda Haag and FBI Special Agent in Charge David J. Johnson.

Reeves, 59, was indicted by a federal grand jury on January 27, 2015.  According to the Indictment, Reeves operated iServe Residential Lending, LLC. Through this business and in her personal capacity, Reeves acted as a broker for “hard money” real estate loans, where she would purportedly match borrowers who needed cash loans with lenders who wanted to invest in loans secured by real estate. The Indictment alleges that Reeves defrauded one of her lenders by falsely soliciting three loans that Reeves represented would go to three borrowers and would be secured by real property owned by those borrowers. According to the Indictment, those borrowers knew nothing of the loans, and Reeves used their personal information without their consent to create fraudulent loan documents that she sent to the lender to make the transaction appear legitimate. After the lender paid Reeves the money for the loans, Reeves fraudulently retained the money for herself.

Reeves was arrested and made her initial appearances in federal court today in Eureka before the Honorable Nandor J. Vadas, U.S. Magistrate Judge, where she was released on bond.  Bail was set at $50,000.  Reeves is next scheduled to appear before the Honorable Joseph C. Spero, U.S. Magistrate Judge, at 9:30 am on February 4, 2015, for identification of counsel.

The maximum statutory penalty for each count of mail fraud, in violation of Title 18, United States Code, Sections 1341, is 20 years’ imprisonment and a fine of $250,000 or twice the gross gain or loss from the offense, plus restitution.  The statutory penalty for each count of aggravated identity theft, in violation of Title 18, United States Code, Section 1028A, is a mandatory minimum of 2 years’ imprisonment, and a fine of $250,000 or twice the gross gain or loss from the offense.  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.

Benjamin Kingsley is the Assistant U.S. Attorney who is prosecuting the case, with the assistance of Jessica Meegan.  The prosecution is the result of an investigation by the FBI.

Please note, an indictment contains only allegations against an individual and, as with all defendants, Reeves must be presumed innocent unless and until proven guilty.

SAN JOSE – Victor Manuel Rodriguez, a/k/a "Silencer," was sentenced today to 38 years in prison for Racketeering Conspiracy, including conspiracy to commit murder, Possession/Use of a Firearm During and in Relation to a Crime of Violence, Use of a Firearm in Furtherance of a Crime of Violence Resulting in Murder, and Distribution of Methamphetamine, announced United States Attorney Melinda Haag and Federal Bureau of Investigation Special Agent in Charge David J. Johnson.

Rodriguez, 26, of San Jose, Calif., pleaded guilty on March 26, 2014.

According to court records Rodriguez is a member of the Varrio Tami Lee Gangsters (VTG), a Sureño street gang in San Jose.  Members of the VTG gang are allied with members of another Sureño gang in San Jose, Varrio Colonias Trece (Colonias).  The united Colonias/VTG Gang engage in crimes such as robbery, narcotics trafficking, and murder.  Among other acts of violence, members of the Colonias/VTG Gang sought to attack and kill members of rival Norteño gangs.

On the afternoon of August 13, 2012, on Denair Avenue in the vicinity of Letitia Street in San Jose, Rodriguez and his co-defendant Jose Farias Barahas, a/k/a “Oso,” a Colonias gang member, were in a car “hunting” for rival Norteño gang members in retaliation for Norteño spray painted graffiti in the Colonias/VTG Gang’s territory.  Rodriguez spotted a young Hispanic man that he did not know standing in a driveway and believed the young man was a Norteño based on his appearance.  Rodriguez directed Barahas to turn the car around and pull up next to the young man.  Rodriguez exited the vehicle carrying a loaded .38 caliber revolver and fired two shots at the victim at close range, striking him once in the head.  The victim, who died two days later, was not a Norteño gang member.  Rather, he was simply standing alone in his own driveway after having just arrived home with his girlfriend from the veterinarian where they had taken their sick dog.

“While this sentence cannot relieve the pain and loss suffered by the victim’s family, it is my hope that it will at least lend them some measure of comfort, knowing that one of the perpetrators of this crime will spend over three decades in jail,” said U.S. Attorney Melinda Haag.  “This office will devote as many resources as necessary to partner with local and federal law enforcement agencies which are tirelessly working to rid this community of the senseless violence perpetrated by gang members.”

“The suppression of gang violence continues to be a top priority for the FBI.  In coordination with our state and local partners, we hope to continue efforts to dampen and eventually eradicate gang violence in our neighborhoods, “ said SAC David Johnson. “Today’s sentencing reinforces the impact our justice system can have on helping to bring closure to those effected by violent acts.”

The Honorable Edward J. Davila, United States District Court Judge, handed down the sentence of 38 years in prison for Rodriguez.  Co-defendant Barahas has also pleaded guilty and is scheduled to be sentenced by Judge Davila on March 26, 2015. Both defendants have been in custody since their arrest on October 3, 2012.

Stephen Meyer and Daniel Kaleba are the Assistant U.S. Attorneys who are prosecuting the case with the assistance of paralegal Nina Burney.  The prosecution is the result of an investigation by the FBI and the San Jose Police Department.

OAKLAND – A federal grand jury in Oakland has indicted David Tung and Concord Farms, Inc. for conspiracy to commit wire fraud and wire fraud, announced United States Attorney Melinda Haag and U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Acting Special Agent in Charge Tatum King.

According to the indictment, Tung, then of Hillsborough, CA, through his operation of Concord Farms as the Chief Executive Officer, is alleged to have engaged in a scheme to defraud the United States out of duties owed on imported items, namely produce items such as gourmet mushrooms.  Concord Farms claimed to be one of the largest importers and growers of gourmet mushrooms in the United States, with multiple business locations including operations in California and New York.

Duties are taxes assessed on the value of imported items.  The duties accrue when the items arrive at a United States port of entry.  According to the indictment, Tung carried out his scheme by creating fraudulent invoices that undervalued Concord Farms’ imports and then caused those fraudulent invoices to be transmitted to the U.S. Customs and Border Protection (CBP), who relied on the invoices in assessing the amount of import duties owed by the defendants.  Tung and others used computer file templates and photocopy machines to create some of the fraudulent undervalued invoices that were transmitted to CBP.  Through the scheme, Tung and Concord Farms were able to avoid the full payment of duties actually owed on the imported items.

Tung made his initial appearance today in Oakland.  Tung was released on a bond in the amount of $250,000.   Tung’s next scheduled appearance is at 9:30 a.m. on March 6, 2015 before the Honorable Jon S. Tigar, U.S. District Court 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, the Tung faces a maximum sentence of 20 years in prison, and a fine of $250,000, plus restitution for the alleged violation of 18 U.S.C. § 1349 (conspiracy to commit wire fraud) and for each alleged violation of 18 U.S.C. § 1343 (wire fraud).  Concord Farms faces a fine of $500,000 and five years of probation for each alleged 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.

Wade M. Rhyne is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Janice Pagsanjan and Noble Hughes.  The prosecution is the result of an investigation by the Department of Homeland Security, Homeland Security Investigations.

SAN FRANCISCO – Valorie Shaw pleaded guilty in federal court in San Francisco today to conspiracy to file false claims, announced United States Attorney Melinda Haag and Internal Revenue Service, Criminal Investigation Special Agent in Charge José M. Martinez.

In pleading guilty, Shaw, 38, of Oakland, admitted that for the past three years she was employed as a tax return preparer at “Kwiktax”.  Prior to working at Kwiktax, she held a variety of jobs, including working as a document transporter for the IRS.

According to the plea agreement, during 2011 and 2012, Shaw prepared false tax returns that she filed with the IRS. She received personal identifying information of Kwiktax clients, including their names, dates of birth, and Social Security numbers. The purported filers listed on those tax returns were not entitled to tax refunds because the wage and tax withholding information listed on the returns was fictitious. Shaw filed false W-2 information that reported to the IRS that the purported filers worked for the employers listed on the W-2’s, even though she knew that information was false. Shaw filed the false tax returns using both Kwiktax client and non-client personal information, all of which she obtained illegally.  When Shaw filed the false tax returns, she asked that the tax refunds be deposited onto debit cards and sent to various mailboxes that Shaw rented in the Bay Area.  Shaw admitted that she personally picked up the debit cards from those mailboxes and in some cases agreed to split the tax refunds with others.  During 2011, Shaw assisted in filing false tax returns requesting refunds in an amount no less than $487,248, for the 2010 tax year.  During 2012, Shaw assisted in filing false tax returns requesting refunds totaling amount $495,789, for the 2011 tax year.

Shaw was indicted on August 14, 2014.  She was charged with conspiracy to file false claims.  Under the plea agreement, Shaw pleaded guilty to that charge.

Shaw’s sentencing hearing is scheduled for May 22, 2015, before The Honorable Jon S. Tigar, U.S. District Court Judge.  The maximum statutory penalty for each count of conspiracy to file false claims, in violation of 18 U.S.C. § 286, is 10 years in prison and a fine of $250,000.  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.

Thomas Newman is the Assistant U.S. Attorney who is prosecuting the case.  The prosecution is the result of an investigation by the Internal Revenue Service, Criminal Investigation.

SAN FRANCISCO – The grand jury returned indictments charging 13 people in connection with four separate tax fraud schemes, announced United States Attorney Melinda Haag and Internal Revenue Service, Criminal Investigation, Special Agent in Charge José M. Martinez.
 
On January 6, 2015, San Francisco residents Josiah Larkin, 38, Monica Cobbins, 47, Krishell Robinson, 25, Thomalyn Virden, 51, and Ursula Choice, 28, were charged in a 32 count indictment with conspiracy to file false claims and filing false claims.  According to the indictment, Larkin owned and operated a tax preparation business in San Francisco that he called Colbert Ball Tax Service. “Colbert/Ball Tax Service” is a national income tax preparation service with over 283 locations. The indictment alleges that Larkin did not have a franchise or other licensing arrangement with Colbert/Ball and used its name without authority from the company. Cobbins, Robinson, Virden, and Choice were hired by Larkin and prepared tax returns for his Colbert Ball Tax Service. Between November 2012 and August 2013, the defendants filed with the IRS, or assisted in filing, federal income tax returns falsely claiming that education expenses had been paid and the taxpayers were therefore eligible for the American Opportunity Tax Credit and a corresponding tax refund. Larkin directed that the tax refunds be paid in a manner that allowed him to control the refunds and collect his fee, which was approximately half the refund.
 
Cobbins made her initial appearance in federal court in San Francisco on January 21, 2015, and was released on bail set at $20,000. Larkin, Choice, and Robinson made their initial appearance in federal court in San Francisco on January 22, 2015. Larkin was released on bail set at $200,000. Choice and Robinson were released on bail set at $50,000. These defendants appeared before the Honorable Jacqueline Scott Corley, U.S. Magistrate Court Judge.  Virden made her initial appearance in federal court in San Francisco on January 26, 2015, before the Honorable Joseph Spero, U.S. Magistrate Court Judge. The next scheduled appearance for Larkin, Cobbins, Choice, Robinson, and Virden is a status conference set at 2:30 on January 30, 2015, before the Honorable Susan Illston, U.S. District Court Judge. 
 
On January 8, 2015, Jamillah Thompson, 23, of Antioch, was charged in a four count indictment with conspiracy to file false claims and wire fraud, unrelated to the conspiracy alleged in the indictment of Cobbins, Robinson, Virden, and Choice. According to the indictment charging Thompson, between January 2010 and February 2012, Thompson and others filed or helped file false claims with the IRS requesting refunds in the names of others. The indictment alleges that, as part of the scheme, Thompson procured the names and identities of taxpayers through illegal means or by agreement with participants in the scheme. The tax returns were electronically filed and included fictitious Forms W-2 to support the wages reported on the false tax returns filed. 
 
Thompson was arrested in Antioch on January 21, 2015, and made her initial appearance in federal court the same day.  Thompson was released on a $50,000 unsecured bond.  Thompson appeared before the Honorable Kandis A. Westmore, U.S. Magistrate Court Judge in Oakland. Her next scheduled appearance is set for January 29, 2015. 
 
On January 8, 2015, Kenneth Brown, 49, of Oakland, and Kenya Brown, 30, of Dublin, were charged in a nine count indictment with conspiracy to file false claims, wire fraud, theft of public money, and aggravated identity theft.  Between April 2009 and June 2011, the defendants filed or help file false claims with the IRS requesting refunds in the names of others. The indictment alleges that the defendants electronically filed with the IRS or assisted in filing with the IRS false federal income tax returns using personal information obtained by illegal means. The returns falsely claimed that the people listed on the returns earned wages in amounts specified on a fictitious Form W-2 that was filed with the tax return. The defendants forged the purported filers’ electronic signature on the filed tax returns.     

Kenneth Brown was arrested in Oakland on January 21, 2015, and made his initial appearance in federal court the same day before Judge Westmore in Oakland. He was released on a $100,000 unsecured bond and is set to appear next at a status conference on January 30, 2015, before the Honorable Jon S. Tigar, U.S. District Court Judge. Kenya Brown has not made her initial appearance in federal court. 
 
On January 15, 2015, Cassandra Tompkins, of Oakland, Cordia Spearman, of Vacaville, Damien Mitchell, of El Sobrante, and Tanya Keith,  of Oakland, were charged in a 13 count indictment with conspiracy to file false claims.  Tompkins was also charged with theft of government property, filing false claims, and aggravated identity theft. Keith was also charged with wire fraud and aggravated identity theft.  Mitchell was also charged with theft of government property and aggravated identity theft. The indictment alleges that between January 15, 2011, and May 15, 2012, these defendants conspired to defraud the IRS by obtaining and aiding to obtain the payment of false claims. According to the indictment, as part of the scheme, the defendants filed or helped others file false federal income tax returns with the IRS requesting refunds. These federal income tax returns falsely reported that taxpayers earned wages in amounts specified on fictitious Forms W-2 filed with each return. The false income tax returns reported that taxes had been withheld by employers and falsely claimed refunds from the IRS. 
 
Tompkins and Spearman made their initial appearances in federal court in Oakland on January 20, 2015, and were released on bail set at $50,000. Mitchell made her initial appearance in federal court in Oakland on January 21, 2015, and was released on bail set at $50,000. The defendants all appeared before Judge Westmore. Keith has not made her initial appearance in federal court. The next scheduled appearance for Tompkins, Spearman, and Mitchell is on March 20, 2015, before the Honorable James Donato, U.S. District Court Judge. 
 
An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt.  The maximum sentence for conspiracy to file false claims, in violation of 18 U.S.C § 286, is 10 years in prison and a fine of $250,000. The maximum penalty for each count of false claims, in violation of a Title 18, U.S.C § 287, is five years in prison and a fine of $250,000. The maximum penalty for theft of public money, in violation of Title 18, U.S.C § 641, is 10 years in prison and a fine of $250,000.  The maximum penalty for wire fraud, in violation of Title 18, U.S.C § 1343, is 20 years in prison and a fine of $250,000.  The maximum penalty for each count of identity fraud, in violation of a Title 18, U.S.C § 1028A, is two years in prison, consecutive to the underlying felony and a fine of $250,000.  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. 
 
Thomas Newman and Cynthia Stier are the Assistant U.S. Attorneys who are prosecuting these cases.  The prosecution is the result of an investigation by the Internal Revenue Service, Criminal Investigation.

SAN FRANCISCO – Yesterday, Michael Pitamber Ramdat was sentenced to 21 months in prison and ordered to pay restitution for a fraud scheme he perpetrated against small business owners and others seeking lines of credit around the nation, announced United States Attorney Melinda Haag; Christy Romero, Special Inspector General for the Troubled Asset Relief Program (SIGTARP); and David Johnson, Special Agent in Charge of the Federal Bureau of Investigation (FBI) San Francisco Field Office.

Ramdat pleaded guilty on June 11, 2014. According to the Plea Agreement, Ramdat and his partner, Leigh Farrington Fiske, operated a business referred to as “Corporate Funding Solutions.” The purported purpose of this business was to obtain credit lines for customers in exchange for a fee. Ramdat’s role was to vouch for the legitimacy of the business with victims recruited by Fiske, and to provide “customer service” by giving excuses to the victims. In reality, neither Fiske nor Ramdat ever intended to provide any services to their customers. Instead, they accepted approximately $433,000 from approximately 30 victims and never helped any of these victims obtain credit. Ramdat admitted that he kept over $200,000 of these payments for himself. Monies obtained through the fraudulent scheme were funneled through banks that received Troubled Asset Relief Program funding.

Ramdat, 30, of Palm Bay, Fla., was indicted by a federal grand jury on Nov. 21, 2013, on five counts of wire fraud, in violation of 18 U.S.C. § 1343, and one count of conspiracy, in violation of 18 U.S.C. § 1349. Ramdat pleaded guilty to all counts.

The sentence was handed down by the Honorable Edward M. Chen, United States District Court Judge. Judge Chen also sentenced the defendant to a three year period of supervised release and restitution. The defendant is in custody and will begin serving the sentence immediately. Fiske was previously sentenced by Judge Chen to a term of imprisonment of 37 months.

Benjamin Kingsley is the Assistant U.S. Attorney who is prosecuting the case, with the assistance of Mary Mallory and Jessica Meegan. The prosecution is the result of an investigation by SIGTARP and the FBI.

This prosecution was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force, which was established to wage an aggressive and coordinated effort to investigate and prosecute financial crimes. SIGTARP is a member of the task force. To learn more about the President’s Financial Fraud Enforcement Task Force, please visit www.StopFraud.gov.

SAN JOSE, CA—Paul Lawrence Vella was sentenced on January 15, 2015, to 59 months in prison for possession of child pornography, announced United States Attorney Melinda Haag, and Tatum King, acting special agent in charge for U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) San Francisco.

On August 4, 2014, Vella pleaded guilty to possession of child pornography, in violation of 18 U.S.C. § 2252(a)(4)(B).  In pleading guilty, Vella, 60, of Morgan Hill, Calif., admitted that he used his computer to download child pornography through a P2P network and saved those images on hard drives, discs, and other digital medium. Vella also admitted that he knowingly possessed over 600 images of child pornography, including images of prepubescent minors and images portraying sadistic or masochistic conduct. Vella further admitted that law enforcement had identified approximately 86,284 images and 2,162 videos of child pornography, and that the National Center for Missing and Exploited Children identified 915 known child victims from his collection of child pornography. Filed documents and statements in open court confirmed that Vella possessed one of the largest collections of child pornography ever discovered in Silicon Valley, including numerous images and videos depicting the forcible rape of, and other sadistic violence against, very young children.

The Honorable Edward J. Davila, U.S. District Court Judge, handed down the 59 month sentence. Judge Davila also sentenced the defendant to a seven year period of supervised release, ordered him to register as a sex offender, to participate in a sex offender treatment program, and to pay $29,500 in restitution. Vella has been in federal custody since he pleaded guilty on August 4, 2014

Assistant U.S. Attorneys Joseph Fazioli and Daniel Kaleba prosecuted the case with the assistance of Laurie Worthen. The prosecution is a result of an investigation by HSI and the Santa Clara County Sheriff’s Office.

SAN FRANCISCO – A former 32 year FBI employee and his wife were sentenced on January 14, 2015, to 90 days in prison plus six months location monitoring and 200 hours of community service for bank fraud, announced United States Attorney Melinda Haag.

Charles Espinel, 61, and Jeannette Espinel, 59, of both Daly City, (the Espinels) were both originally charged in a Criminal Information on June 3, 2014, with one count of Bank Fraud, in violation of 18 United States Code Section 1344. The Espinels both pleaded guilty to the information on July 24, 2014.

The Espinels both admitted in their separate plea agreements that, beginning in 2006 and continuing through 2010, the two of them defrauded First California Bank and Wells Fargo Bank in connection with mortgage loans they obtained to purchase a $750,000 rental property in Daly City, and a $600,000 rental property in San Bruno. The Espinels admitted that they purchased these rental properties by jointly submitting to banks in June 2006 and April 2007 fraudulent mortgage loan applications in which they knowingly overstated their incomes and falsely claimed that it was their intention to occupy the rental properties as their primary residence. The Espinels also admitted that they subsequently obtained favorable modifications to these loans through fraud, including submitting false Individual Income Tax Returns which they had altered. The Espinels both admitted in their plea agreements that the total loss from their bank fraud was over $83,000.

Charles Espinel in his plea agreement further admitted that from May 1979 until February 2012, he worked as a Support Services Technician in the San Francisco Division of the FBI.  Espinel’s professional responsibilities as a FBI Support Services Technician included records and file management technical support, telecommunications and investigative automation support, office management support, and operations security support. As an FBI employee with Top Secret clearance as well as access to sensitive information, Espinel was required annually to file a security financial disclosure form (SFDF) disclosing certain financial information (including listing all assets and liabilities). Espinel knew that his FBI supervisors and the FBI Security Division/Internal Security Section would review the financial information on his SFDFs to assess whether he had personal financial problems that might threaten his continued suitability for a Top Secret security clearance. Espinel admitted that he knew that lying on his SFDFs about his bank accounts and owned real estate would be significant issues of concern for FBI management. Espinel admitted in his plea agreement that in 2007, 2008, 2009, and 2010, he knowingly submitted SFDFs in which he made several false statements and material omissions. Espinel admitted that he knowingly failed to disclose on those SFDFs his wife’s income, and failed to disclose the real estate properties he owned or the rental income he was receiving from those properties.

The sentence was handed down by the Honorable Charles R. Breyer, United States District Court Judge.  In addition to 90 days in prison, Judge Breyer also ordered both of the Espinels to serve a three year term of supervised release which will include six months location monitoring and 200 hours of community service, and also to pay $83,326.50 in restitution.  Jeannette Espinel will begin serving her sentence on March 2, 2015. Charles Espinel will begin serving his sentence on September 8, 2015.

Assistant U.S. Attorney Joseph Fazioli is prosecuting the case with the assistance of Laurie Worthen. The prosecution is the result of an investigation by the United States Department of Justice Office of the Inspector General.

SAN FRANCISCO – Robert Anderson was arraigned today and Scott Steever was arraigned yesterday on charges of conspiracy to commit wire fraud and wire fraud, and conspiracy to commit money laundering and money laundering, announced United States Attorney Melinda Haag, Federal Bureau of Investigation Special Agent in Charge David J. Johnson, and Internal Revenue Service, Criminal Investigation, Special Agent in Charge José M. Martinez.

A federal grand jury in San Francisco indicted Anderson and Steever on December 18, 2014, each on one count of conspiracy to commit wire fraud, one count of conspiracy to commit money laundering, six counts of wire fraud, and one count of money laundering.  According to the Indictment Anderson and Steever, who were both partners at the law firm Lanahan Steever and Anderson LLP (LSA), formerly known as Lanahan & Reilly LLP, in Santa Rosa, Calif., spent money held in a trust account for a client, identified in the Indictment as B.M., and used the money to pay expenses that were not related to B.M.’s representation.  According to the Indictment, in November 2009, B.M. gave LSA approximately $300,000 to be held in trust on her behalf.  Some of the money was intended to be used for outstanding legal issues and the remaining balance was to be returned to her.  Shortly after the check was deposited, Anderson and Steever, and LSA employees acting at the defendants’ direction, began spending B.M.’s funds without authorization on expenses unrelated to the representation of B.M.  By April 2010, all of the funds held on behalf of B.M. had been spent.  In March 2012, after an attorney acting on behalf of B.M. asked for an accounting of the money remaining in the account for the benefit of B.M, Anderson sent B.M.’s attorney an email in which he falsely represented that, as of February 2012, B.M. had a remaining trust balance of approximately $252,511.55.

Anderson, of Redwood Valley, Calif. voluntarily surrendered and made his initial appearance today in federal court in San Francisco.  Steever, of Rohnert Park, Calif. was arrested and made his initial appearance yesterday in federal court in San Francisco.  Anderson and Steever were each released on a $100,000 bond.  Anderson and Steever are scheduled for an initial appearance before the Honorable Edward M. Chen, U.S. District Court Judge, 2:30 p.m. on February 4, 2015.

An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. The maximum statutory penalty for conspiracy to commit wire fraud and wire fraud, in violation of 18 U.S.C. § 1349 and 18 U.S.C. § 1343, respectively, is 20 years in prison, a fine of $250,000, and restitution.   The maximum statutory penalty for conspiracy to commit money laundering and money laundering, in violation of 18 U.S.C. § 1956(h) and 18 U.S.C. § 1957, respectively, is 10 years in prison and a fine of $250,000.  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.

Denise Marie Barton is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Denise Oki and Trina Khadoo.  The prosecution is the result of an investigation by the Federal Bureau of Investigation and the Internal Revenue Service, Criminal Investigation.

SAN JOSE – Christopher Luck was sentenced yesterday to 130 months in prison, and ordered to pay $33,222,148.82 in restitution for his role in a securities fraud, announced United States Attorney Melinda Haag and Federal Bureau of Investigation Special Agent in Charge David J. Johnson.

Luck pleaded guilty on July 21, 2014, to one count of conspiracy to commit mail and wire fraud, one count of mail fraud, and one count of securities fraud.  According to the plea agreement, Luck admitted that he made false and misleading statements to investors in order to cause them to invest in the GLR Growth Fund, an investment fund managed by his investment company, Geringer, Luck, and Rode LLC.  Luck admitted that at the end of April 2009, his partner, John Geringer confessed to Luck that Geringer had been falsifying the Growth Fund’s trading records for several years.  Instead of terminating the Growth Fund, or reporting Geringer to the authorities, Luck admitted that he began to recruit investors by making false and misleading statements to them, including that the Fund had a positive historical performance, and that the Fund made diversified equity trades.

Through his guilty plea, Luck acknowledged that these false and misleading statements to investors were necessary in order to cause new investors to invest and existing investors to maintain their investments or invest more money.  Luck admitted that if he was truthful with potential investors after Geringer’s confession, new investors would most certainly choose not to invest, and that new investor money was critical to keeping the Growth Fund afloat.  Luck also admitted that this new investor money was used to pay Luck’s salary and bonus payments.  In total, from May 2009 through the end of the Growth Fund in 2012, Luck defrauded investors out of over $33 million. 

Luck, 58, of Scotts Valley, California, was indicted by a federal grand jury on December 20, 2012.  He was charged with conspiracy, mail, wire, securities fraud, and money laundering, all related to his fraudulent conduct at Geringer, Luck, and Rode, LLC.

The sentenced was handed down by the Honorable Judge Edward J. Davila, U.S. District Court Judge, following a guilty plea to one count of conspiracy to commit mail and wire fraud, in violation of Title 18, United States Code, Section 1349; one count of mail fraud, in violation of Title 18, United States Code, Section 1341; and one count of securities fraud, in violation of Title 15, United States Code, Sections 78j(b) and 78ff, and Title 17, Code of Federal Regulations, Sections 240.10b-5 and 240.10b5-2.  Judge Davila also sentenced the defendant to a three year period of supervised release, ordered the defendant to pay restitution in the amount of $33,222,148.82, and forfeit $33,222,148.82 to the United States government.  The defendant will begin servicing the sentence on April 9, 2015.

Jeff Schenk is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Nina Williams and Laurie Worthen.  The prosecution is the result of an investigation by the Federal Bureau of Investigation. 

OAKLAND – Akysha Rockwell pleaded guilty in federal court today for her role in a false tax refund scheme, announced U.S. Attorney Melinda Haag and Internal Revenue Service, Criminal Investigation, Special Agent in Charge José M. Martinez.

In pleading guilty, Rockwell admitted that, during late 2011 and early 2012, Rockwell’s boyfriend at the time taught her how to prepare and electronically file fraudulent income tax returns, targeting people at their church and drug-rehabilitation clinics with the promise of an “Obama Stimulus,” a non-existent government program fabricated to attract clients.

As part of their scheme, Rockwell and her former boyfriend prepared tax returns that claimed false income and false occupations, regardless of the information that was provided to them by their clients.  Rockwell’s former boyfriend acquired an identification information form (ID-Doc), to obtain the means of identification of actual persons to prepare and electronically file false federal individual income tax returns, claiming fraudulent tax credits and fraudulent tax refunds.  Together, Rockwell and her former boyfriend prepared 116 tax returns in 2012, 54 claimed exactly $6,500 in income, a number they chose to maximize the refund amounts.  All the tax returns claimed one of the following sources of “Household Employee” income: babysitter, caretaker, cleaning person, domestic worker, housekeeper, maid, and yard-worker.  The clients thought they were applying for payments from an Obama stimulus program, they did not know that Rockwell and her former boyfriend were filing false tax returns in their names.

Even though a majority of the clients were unemployed or disabled with no income, Rockwell filed income tax returns reporting false earned income and false refundable educational credits.  Rockwell received a portion of the false tax refunds and spent it on personal items such as clothing, hotels, rental cards and illegal drugs.

After ending their relationship, Rockwell continued to file false tax returns from her residence in Oakland.  She used the same fake “Obama Stimulus” program to attract victims.  She obtained at least $58,131 by filing false and fraudulent tax refund claims.

Rockwell, 39, a bus driver for a private transportation company in Oakland, was indicted by a federal grand jury on Mar. 13, 2014 and charged with conspiracy to file false claims and two counts of false claims.  She pleaded guilty to conspiracy to file a false claim and to filing false claims.

The maximum penalty for each count of conspiracy to file false claims, in violation of a Title 18, U.S.C § 286, is 10 years in prison and a fine of $250,000, or twice the intended gain or loss, whichever is greater. The maximum penalty for each count of false claims, in violation of a Title 18, U.S.C § 287, is five years in prison and a fine of $250,000, or twice the intended gain or loss, whichever is greater. 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.

Rockwell’s sentencing hearing is scheduled for May 1, 2015, at 9:30 a.m. before The Honorable Jon Tigar, U.S. District Court Judge, in Oakland.

Assistant U.S. Attorney Colin Sampson is prosecuting the case. The prosecution is the result of an investigation by the Internal Revenue Service, Criminal Investigation.

SAN JOSE - Jamie Harmon, also known as Jamie Harley, was sentenced yesterday to two years in prison for money laundering, announced United States Attorney Melinda Haag and Tatum King, Acting Special Agent in Charge for Homeland Security Investigations, San Francisco.

Harmon, 57, of Morgan Hill, was convicted on July 20, 2010, of five counts of laundering monetary instruments after a three-week trial. During the trial, evidence showed that Harmon accepted two checks made payable to Silicon Valley Resale (“SVR”), a San Jose company that sold used computer equipment previously owned and operated by her former client, Christian Pantages, and another individual. Pantages testified that he told Harmon from the first time that he met with her that SVR was in the illegal business of selling stolen computer hardware, and that the two checks that Harmon accepted were the proceeds from the sale of stolen computer equipment. The jury convicted Harmon of laundering the two checks, knowing that the checks constituted the proceeds of the sale of stolen property, in an effort to conceal or disguise the nature of those funds.

Harmon was indicted by a federal grand jury on December 31, 2008. She was charged with conspiracy to commit money laundering, in violation of 18 U.S.C. § 1956(h), and five counts of money laundering, in violation of 18 U.S.C. § 1956(A)(i)(b)(i).

The two-year prison sentence was handed down by The Honorable Lucy H. Koh, U.S. District Court Judge, who also sentenced Harmon to a three-year period of supervised release and 200 hours of community service. Former United States District Court Judge James Ware presided over the trial in which a jury found Harmon guilty of five counts of laundering monetary instruments, in violation of 18 U.S.C. § 1956(A)(i)(b)(i). He declared a mistrial on the count charging Harmon with conspiracy to commit money laundering, in violation of 18 U.S.C. § 1956(h), after the jury was unable to reach a verdict.  Following extensive post-trial litigation, the defendant was sentenced yesterday.  The defendant will begin serving the sentence on June 30, 2015.

Christian Pantages pleaded guilty on March 9, 2010, to charges of conspiracy to buy stolen goods constituting an interstate shipment and conspiracy to commit money laundering. He will be sentenced on February 18, 2015.

Susan Knight and Richard Cheng are the Assistant U.S. Attorney who is prosecuting the case with the assistance of Tracey Andersen. The prosecution is the result of an extensive investigation by Immigration and Customs Enforcement, Homeland Security Investigations, the Rapid Enforcement Allied Computer Team, Fremont Police Department, and Mountain View Police Department.

SAN FRANCISCO –Catherine O’Shea was arraigned today on charges of embezzling approximately $240,000 from her employer to pay her personal credit card bills, announced United States Attorney Melinda Haag and Federal Bureau of Investigation Special Agent in Charge David J. Johnson.

A federal grand jury in San Francisco indicted Catherine O’Shea, 42, on January 6, 2015 on five counts of wire fraud, in violation of 18 U.S.C. § 1343.  According to the Indictment, shortly after her employer, identified in the Indictment as C.J., gave her on line access to his business bank accounts to pay business-related expenses, O’Shea began using her employer’s business checking account and business line of credit to pay her personal credit card bills.  To cover up her use of her employer’s money, O’Shea made false entries in the accounting records of the business, falsely claiming that the money had been used to pay for office rent or office supplies.

O’Shea made her initial appearance in federal court in San Francisco today before the Honorable Jacqueline Scott Corley, U.S. Magistrate Court Judge.  She was released on a $50,000 unsecured bond and ordered to return on January 16, 2015, for a further detention hearing before the Honorable Jacqueline Scott Corley.  O’Shea is also scheduled to appear on January 20, 2015, for an initial appearance before the Honorable Edward M. Chen, U.S. District Court 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 of wire fraud, O’Shea faces a maximum sentence of 20 years imprisonment for each violation of 18 U.S.C. § 1343, plus 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.

Denise Marie Barton is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Trina Khadoo.  The prosecution is the result of an investigation by the Federal Bureau of Investigation.

SAN JOSE – Evelyn Sineneng-Smith pleaded guilty in federal court in San Jose yesterday to filing a false tax return, announced United States Attorney Melinda Haag and Internal Revenue Service, Criminal Investigation Special Agent in Charge José M. Martinez.

In pleading guilty, Sineneng-Smith admitted that she operated an immigration consultation business and most of the income listed on her tax returns came from payments from her clients. She admitted that she filed false individual income tax returns for the 2002 and 2003 tax years by only providing her accountant with some of the financial records from her business, and these records materially understated her gross business income for each tax year. She further admitted that when she mailed the returns to the Internal Revenue Service, she knew that each return was not true and correct as to the amount of the gross receipts reports on the returns and would be paying less income taxes than she actually owed.

Sineneng-Smith, 67, of San Jose, Calif., was indicted by a federal Grand Jury on July 14, 2010. She was charged with two counts of willfully subscribing to a false tax return, in violation of 26 U.S.C. § 7206(1), three counts of encouraging and inducing illegal immigration for private financial gain, in violation of 8 U.S.C. §§ 1324(a)(1)(A)(iv) and (B)(i), and three counts of mail fraud, in violation of 18 U.S.C. § 1341.  The tax counts were severed from the immigration and mail fraud counts. On July 30, 2013, a jury convicted Sineneng-Smith of three counts of encouraging and inducing illegal immigration for private financial gain, in violation of 8 U.S.C. §§ 1324(a)(1)(A)(iv) and (B)(i), and three counts of mail fraud, in violation of 18 U.S.C. § 1341.

Sineneng-Smith’s sentencing hearing is scheduled for May 18, 2015, before the Honorable Ronald M. Whyte, U.S. District Court Judge, in San Jose. The maximum statutory penalty for each count in violation of 26 U.S.C. § 7206(1) is three years in prison and a fine of $100,000, plus restitution. The maximum statutory penalty for each count in violation of 8 U.S.C. §§ 1324(a)(1)(A)(iv) and (B)(i) is 10 years in prison and a fine of $250,000, plus restitution. The maximum statutory penalty for each count in violation of 18 U.S.C. § 1341 is 20 years in prison and a fine of $250,000 fine, 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.

Susan Knight and Philip Guentert are the Assistant U.S. Attorney who is prosecuting the case with the assistance of Tracey Andersen and Nina Burney. The prosecution is the result of an investigation by the Internal Revenue Service, Criminal Investigation.

SAN FRANCISCO – A federal grand jury in San Francisco indicted Konrad P. Wolff, on Dec. 18, 2014, with one count of possessing child pornography, announced United States Attorney Melinda Haag and Federal Bureau of Investigation, Special Agent in Charge David J. Johnson.

According to the indictment, Wolff, 27, previously of Albany, Calif., is alleged to have knowingly possessed video and image files depicting minor and prepubescent children engaging in sexually explicit conduct. Wolff was arrested on Jan. 8, 2015, at Ft. Benning, Georgia, and made his initial appearance in federal court in Columbus, Ga., that same day. Wolff has been remanded to the custody of the U.S. Marshals Service and will be returned to the Northern District of California to answer the Indictment. His next appearance will be before the Honorable James Donato, United States District Court Judge, at a time to be determined.

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 fine of $250,000, for his alleged violation of 18 U.S.C. § 2252(a)(4)(B). 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.

Scott D. Joiner is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Patricia Mahoney. The prosecution is the result of an investigation by the FBI and the University of California, Berkeley, Police Department.

SAN JOSE – Vivian Chike Obichere was arraigned on Friday, Jan. 9, 2015, on charges of making false statements in passport applications, unlawfully obtaining naturalization, and committing perjury in two interviews concerning her application for citizenship, announced United States Attorney Melinda Haag and Special Agent in Charge David Zebley of the U.S. Department of State, Diplomatic Security Service.

A federal grand jury in San Francisco indicted Obichere, 61, of Antioch, on Jan. 6, 2015. According to the indictment, Obichere submitted a fraudulent passport application using the identity of a deceased American citizen. The indictment also alleges that Obichere lied about her use of the false identity in her application to become a naturalized American citizen, which she filed in her own identity, and in the interviews concerning her naturalization application. As a result of those lies, Obichere’s application for American citizenship was granted. According to the indictment, Obichere also lied about her use of the false identity in a subsequent passport application submitted in her own identity after becoming a citizen.

Obichere was arrested at her home early Friday morning and made her initial appearance in federal court in San Jose that afternoon. Obichere was released on bond. Bail was set at $50,000. Obichere’s next scheduled appearance is at 1:30 p.m. on Feb. 9, 2015, before the Honorable Edward J. Davila, United States District Court Judge.

An indictment merely alleges that crimes have been committed, and defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, the defendant faces a maximum sentence of ten years imprisonment, and a fine of $250,000, for each violation of 18 U.S.C. §§ 1542 (false statement in application for a passport) and 1425(b) (unlawful naturalization), and a maximum sentence of five years imprisonment, and a fine of $250,000, for each violation of 18 U.S.C. § 1621 (perjury). 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.

Rita F. Lin is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Marina Ponomarchuk. 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 U.S. Immigration and Customs Enforcement 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 – Starkisha Benson was sentenced to 30 months in prison on Friday, Jan. 9, 2015, for conspiring to file false claims and aggravated identity theft, United States Attorney Melinda Haag and IRS-CI Internal Revenue Service – Criminal Investigation Division Special Agent in Charge José M. Martinez, announced.

Benson pleaded guilty on Oct. 3, 2014. According to her plea agreement, Benson filed false tax returns from her residence and from other locations along with her co-conspirators. Bensons admitted that she filed these false tax returns using stolen identities. Benson specifically acknowledged that she stole one person’s identity and used that information to file false 2009 and 2010 tax returns. Benson also misused the identity of that same person’s minor child. Benson further acknowledged embezzling fraudulent tax refunds from the Internal Revenue Service and keeping the money for her own use. In addition to the prison sentence, Benson was ordered to pay restitution in the amount of $98,927.

The charges against Benson were the result of an investigation initiated by the Berkeley Police Department.  On April 7, 2011, during a consent search of a vehicle, the Berkeley Police Department uncovered a notebook with co-defendant Khyber Law’s name on the cover. The notebook contained the identity profiles of eleven people including their names, dates of birth, bank account numbers, bank routing numbers, email addresses, and passwords. Eight of these eleven identity profiles were used to file false federal income tax returns.

Benson, 36, of Antioch, was charged with Khyber Law and Jessika Green in a twenty-four count superseding indictment on Dec. 17, 2013. The defendants were all charged with wire fraud, conspiracy to file false claims, filing false claims, effecting fraudulent transactions with an access device, theft of public money, and aggravated identity theft. Law and Green each pleaded guilty to conspiracy to file false claims.  Law, 26, of Antioch is scheduled to be sentenced on Jan. 30, 2015. Green, 33, also of Antioch, is scheduled to be sentenced on Feb. 20, 2015.

The sentence was handed down by the Honorable Jon S. Tigar, United States District Court Judge. Judge Tigar also sentenced the defendant to a three year period of supervised release and restitution. The defendant will begin serving the sentence on March 6, 2015.

Assistant U.S. Attorney Thomas Newman and Special Assistant U.S. Attorney Kate Patchen and are prosecuting the case. The prosecution is the result of an investigation by the Berkeley Police Department and the IRS, Criminal Investigation Division.

SAN FRANCISCO –  Green Bag Co., Inc., an importer of reusable shopping bags located in San Francisco has agreed to pay $500,000 to settle allegations that it violated the civil False Claims Act by underpaying customs duties it owed, announced United States Attorney Melinda Haag and Brian J. Humphrey, U.S. Customs and Border Protection Director of Field Operations, San Francisco.

The United States alleges that, from July 2007 through October 2009, Green Bag underpaid customs duties on goods imported into the United States from China.  Green Bag allegedly used two sets of invoices for each shipment: one true invoice that Green Bag paid, and a second invoice falsely stating a lower cost. The false invoices were allegedly used to calculate the customs duties that Green Bag paid on the imported goods, resulting in substantial underpayments.

“Companies that import goods into the United States must disclose the true costs of imports and pay all customs duties owed,” said U.S. Attorney Haag. “This office has a responsibility to make sure the system is fair to those companies that play by the rules and we will not hesitate to take action against those who so brazenly cheat. I commend the work of the Department of Homeland Security Office of Inspector General and the U.S. Customs and Border Protection.”

“U.S. Customs and Border Protection has direct responsibility for enhancing U.S. economic competitiveness by enforcing U.S trade laws on foreign manufactured goods entering our country. The men and women of CBP have an essential role in protecting American economic security while fostering legitimate trade and travel. Attempting to avoid Customs Duty brings serious consequences,” said Director of Field Operations Humphrey.

The settlement resolves a whistleblower lawsuit filed in the United States District Court for the Northern District of California. An executive who formerly worked at Green Bag filed the case pursuant to the qui tam provisions of the False Claims Act.  Under those provisions, private citizens, known as “relators,” may file lawsuits on behalf of the United States and receive a portion of the proceeds of a settlement or judgment.  The relator will receive $100,000 as his share of the government’s recovery.

Assistant U.S. Attorney Sara Winslow handled the matter on behalf of the U.S. Attorney’s Office for the Northern District of California, with assistance from Financial Fraud Investigator Michael Zehr and Legal Assistant Kathy Terry. The matter was investigated by the DHS Office of Inspector General.

SAN FRANCISCO –Daniel Rosenthal was arraigned today on charges of submitting fraudulent loan applications to three Bay Area banks using a false name and then laundering more than $2.5 million in fraudulently obtained proceeds, announced United States Attorney Melinda Haag and Federal Bureau of Investigation Special Agent in Charge David Johnson.

A federal grand jury in San Francisco indicted Daniel Rosenthal on December 23, 2014. According to the Indictment, Rosenthal, 31, of Yorba Linda, Calif., submitted fraudulent loan applications to three Bay Area banks using a false name, false bank statements, and false financial statements in support of the loan applications. According to the Indictment, Rosenthal falsely claimed that the loans were to be used to finance Sunshine Daydream, an event planning business that he falsely claimed to own.  The Indictment also alleges that after receiving the loan proceeds, Rosenthal used some of the proceeds to purchase gold and send some of the money to a bank in Cyprus and to third parties.

Rosenthal was first charged in a Criminal Complaint filed on December 9, 2014.  He was arrested in Yorba Linda, Calif., on December 11, 2014.  He made his initial appearance in federal court in Santa Ana, California, on December 11, 2014, where he was detained and ordered transported to the Northern District of California. Rosenthal first appeared in federal court in San Francisco on December 22, 2014. Today, Rosenthal was ordered detained by the Honorable Bernard Zimmerman, U.S. Magistrate Judge, and is currently being held in the custody of the United States Marshal’s Service. Rosenthal is next scheduled to appear on January 12, 2015, at 2:00 p.m., for an initial appearance before the Honorable Vince Chhabria, U.S. District Court 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 of bank fraud, Rosenthal faces a maximum sentence of 30 years in prison for each violation of 18 U.S.C. § 1344, plus restitution. If convicted of money laundering, Rosenthal faces a maximum sentence of 10 years in prison for each violation of 18 U.S.C. § 1957. If convicted of aggravated identity theft, Rosenthal faces a mandatory two-year sentence for each violation of 18 U.S.C. § 1028A . 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.

Denise Marie Barton is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Trina Khadoo.  The prosecution is the result of an investigation by the Federal Bureau of Investigation.

SAN FRANCISCO – Paul D. Woodward was arraigned yesterday for allegedly operating a scheme to defraud Medicare and allegedly distributing controlled substances, announced United States Attorney Melinda Haag, Office of Inspector General – Health and Human Services Special Agent in Charge Ivan Negroni, and Drug Enforcement Administration Special Agent in Charge Jeffrey J. Fitzpatrick.

A federal grand jury in San Francisco indicted Paul D. Woodward and Karen Kramer on December 4, 2014. The indictment remained under seal until December 11, 2014, when Kramer was arraigned on the charges. According to the Indictment, Woodward, 71, and Kramer, 54, both of Napa, Calif., were charged with conspiring to defraud Medicare by having Woodward write prescriptions to Kramer, at her request, for controlled substances, including fentanyl; Woodward falsely representing that the prescriptions were prescribed in the usual course of professional medical practice and for a legitimate medical purpose; and both Woodward and Kramer causing claims for those prescriptions to be submitted to Medicare for payment. Between January 2006 and June 2010, Medicare allegedly paid over $1.3 million for false and fraudulent prescriptions prescribed by Woodward to Kramer. Woodward is also charged with prescribing controlled substances, including oxycodone, hydromorphone, and hydrocodone, outside the usual course of professional medical practice and not for a legitimate medical purpose, to other patients.

Kramer was arrested on December 10, 2014, in Napa, and made her initial appearance in federal court in San Francisco on December 11, 2014. Kramer was ordered detained and is currently being held in the custody of the United States Marshal’s Service. Kramer will next appear before the Honorable Laurel Beeler, United States Magistrate Judge, on January 8, 2015, at 10:30 a.m. Woodward voluntarily appeared and made his initial appearance yesterday before the Honorable Bernard Zimmerman, United States Magistrate Judge.  Woodward was released on a $100,000 secured bond. Both defendants are scheduled to appear on January 29, 2015, at 1:30 p.m., for an initial appearance before the Honorable William H. Orrick, U.S. District Court 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 of the conspiracy to commit health care fraud or health care fraud charges, Woodward and Kramer face a maximum sentence of 10 years imprisonment and a fine of twice the gross gain or loss for each violation of 18 U.S.C. § 1347 and 1349, plus restitution if ordered. If convicted of the distribution of a controlled substance charges, Woodward faces a maximum sentence of 20 years imprisonment and a fine of $1 million. 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.

Denise Marie Barton is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Maryam Beros, Trina Khadoo, and Bridget Kilkenny. The prosecution is the result of an investigation by Office of Inspector General – Health and Human and the Drug Enforcement Administration, with the assistance of the California Department of Insurance, the Napa County Sheriff’s Office, and the Napa Police Department.

SAN FRANCISCO – St. Helena Hospital, an acute care hospital within the Adventist Health System, has agreed to pay the United States $2,250,000 to settle allegations that it submitted false claims to Medicare for certain cardiac procedures and related inpatient admissions, United States Attorney Melinda Haag announced today.

The settlement resolves allegations that St. Helena Hospital knowingly charged Medicare for medically unnecessary percutaneous coronary interventions during the period Jan. 1, 2008 through July 31, 2011. Percutaneous coronary intervention, commonly referred to as angioplasty, is a procedure to open narrowed or blocked blood vessels that supply blood to the heart. The United States also alleged that St. Helena Hospital unnecessarily admitted angioplasty patients who should have been treated on a less costly, outpatient basis.

This settlement resolves a lawsuit filed in the U.S. District Court for the Northern District of California by Kacie Carroll, a former employee of St. Helena Hospital, under the qui tam or whistleblower provisions of the False Claims Act, which permit private citizens to bring lawsuits on behalf of the United States and obtain a portion of the government’s recovery. Carroll will receive $450,000.

Assistant U.S. Attorney Steven J. Saltiel handled the matter on behalf of the U.S. Attorney?s Office, with the assistance of Michael Zehr and Kathy Terry.

The case is captioned United States ex rel. Carroll v. Adventist Health Systems, et al., Case No. CV-10-4925 DMR. The claims resolved by this settlement are allegations only and there has been no determination of liability.       

OAKLAND – Juancho Tango Andres pleaded guilty in federal court today for his role in a false tax refund scheme, announced United States Attorney Melinda Haag and Internal Revenue Service, Criminal Investigation, Acting Special Agent in Charge Andrew Toth.

In pleading guilty, Andres admitted that he had a history of problems with substance abuse. To obtain the funds necessary to support his drug problem, Andres intentionally devised a scheme to defraud the United States by filing false tax returns claiming tax refund payments for 2010, 2011 and 2012.

Andres used an identification information form, ID-Doc, created by Sean Cowgill, to obtain the means of identification of actual persons. The ID-Doc required the person’s name, date of birth, and Social Security number. The ID-Doc also sought their income, number of dependents, expenses, and type of work. Andres trained and used recruiters to convince people to complete the ID-Doc by telling them they were being screened for eligibility for a President Obama sponsored stimulus program. Andres explained to his victims that they could qualify for a refund even if they did not work at all during the year.

Andres intentionally sought out homeless and low-income people to complete the ID-Doc, recruiting from various drug rehabilitation centers located throughout the San Francisco Bay Area, such as Hayward Fellowship and the East Oakland Recover Center. Andres also recruited people while they were waiting in a food line outside of St. Vincent DePaul Church, located in Oakland. During the time Andres recruited people  for the tax refund scheme, Guadalupe Nieves and Andres were house managers at a halfway house, located in San Leandro. Nieves and Andres recruited members of the halfway house to participate in the tax refund scheme. Andres listed the address of the halfway house as the primary residence address on the false tax returns he prepared, even if purported filer had never lived there.

Andres also opened up a joint Wells Fargo bank account with Nieves for the sole purpose of receiving fraudulent tax refunds. Once the refunds were received in the mail or in the bank account, Andres instructed the people  in whose names he filed false tax returns to meet with him so he could provide them with a portion of their fraudulent refund. He met a number of people in the parking lot of a coffee shop located in San Leandro. Andres and Nieves set up a table in the parking lot and passed out money to the people he arranged to meet. Nieves paid an individual with fraudulent tax refund proceeds to provide security while they distributed the money in the coffee shop Starbucks parking lot.

Sean Cowgill provided Andres and Nieves with the blueprint for operating the false tax refund scheme.  In return, Andres and Nieves paid Cowgill a $50 “franchise fee” for each fraudulent tax refund.

Andres, 47, of San Francisco, was indicted by a federal Grand Jury on July 23, 2013. He was charged with one count 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) and (c)(5). According to the plea agreement, Andres pleaded guilty to wire fraud. As part of the plea agreement, Andres has agreed to pay restitution in the amount of $444,687.

Andres is scheduled to be sentenced on April 2, 2015 at 3:00 pm before the Honorable Yvonne Gonzalez Rogers, United States District Court Judge, in Oakland. The maximum statutory penalty for each count of wire fraud in violation of 18 U.S.C. § 1343 is 20 years in prison and a fine of $250,000 or twice the gross gain or loss, which is greater.  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.

Thomas Moore is the Assistant U.S. Attorney who is prosecuting the case. The prosecution is the result of an investigation by the IRS, Criminal Investigation.

SAN FRANCISCO – Behnam Halali, Ernesto Magat, Kraig Jilge, Karen Gagarin, and Alomkone Soundara, a/k/a Alex Soundara, were charged in an indictment unsealed yesterday in federal court in connection with a scheme involving fraudulent life insurance policies while each was employed at the American Income Life Insurance Company (AIL), announced U.S. Attorney Melinda Haag, FBI Special Agent in Charge David J. Johnson, Internal Revenue Service, Criminal Investigation, Acting Special Agent in Charge Andrew Toth, and Commissioner Dave Jones of the California Department of Insurance.

According to the indictment, the defendants participated in a scheme involving the submission of applications for life insurance policies on behalf of people who did not know that a policy was applied for or issued in their name and/or did not want a life insurance policy. The defendants then shared the commissions and bonuses issued by AIL in connection with the fraudulent policies. The indictment alleges that the defendants paid recruiters to find people willing to take medical exams in exchange for approximately $100, and then took the personal information associated with those people and submitted applications for life insurance in their names, in many cases without the individuals’ knowledge. The defendants also allegedly paid people to participate in a fictitious survey of a medical exam company, and took the personal information associated with those people and submitted applications for life insurance, in many cases without the individuals’ knowledge. In some cases, the defendants allegedly created phony driver’s licenses so that they and their co-conspirators could take medical exams purporting to be the applicants. The defendants opened hundreds of bank accounts to fund the premiums on the fraudulent policies, and typically paid one to four months of premiums before letting the policies lapse, according to the Indictment. The defendants and their co-conspirators also returned verification calls to AIL purporting to be the applicants on the fraudulent applications from telephones set up exclusively for the fraudulent scheme. In an effort to avoid detection, the defendants listed addresses of gas stations and apartment complexes on many of the fraudulent applications, and fabricated the names of the beneficiaries of the policies.

Halali, 29, of San Jose; Magat, 32, of Hayward; Jilge, 30, San Jose; Gagarin, 29, of San Jose; and Soundara, 33, of Oakland, are charged with conspiracy to commit wire fraud in violation of Title 18, United States Code, Section 1349; substantive wire fraud counts, in violation of Title 18, United States, Code, Section 1343; and aggravated identity theft, in violation of Title 18, United States Code, § 1028A(a)(1). Halali, Magat, and Jilge are also charged with money laundering, in violation of Title 18, United States Code, § 1957.

The maximum statutory penalties for conspiracy to commit wire fraud and for wire fraud charges in violation of 18 U.S.C. §§ 1349 and 1343 are a prison term of 20 years, and a fine of $250,000 or twice the gross gain or loss from the offense, plus restitution. The maximum statutory penalty for aggravated identity theft in violation of 18 U.S.C. § 1028A is a mandatory prison sentence of 2 years. The maximum statutory penalties for money laundering in violation of 18 U.S.C. § 1957 is a prison term of 10 years, and a fine of $250,000 or twice the value of the criminally derived property.

All of the defendants appeared before Magistrate Judge Laurel Beeler for their initial appearances yesterday morning, and the case has been assigned to the Honorable Susan Illston, United States District Judge. The defendants are scheduled to have a follow-up appearance before Judge Beeler for ID of counsel and to finalize the defendants bail conditions tomorrow, Dec.19, 2014, at 9:30 a.m. All five defendants are also scheduled to appear before Judge Illston on Jan. 23, 2015, at 11:00 a.m.

Kim A. Berger is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Bridget Kilkenney. This prosecution is the result of an investigation by the FBI, the IRS, Criminal Investigation Division, and the California Department of Insurance.

Please note that an indictment contains only allegations. As with all defendants, Behnam Halali, Ernesto Magat, Kraig Jilge, Karen Gagarin, and Alomkone Soundara, must be presumed innocent unless and until they are proven guilty.

SAN JOSE – Lena “Mickey” Jacobs Coombs pleaded guilty yesterday afternoon on wire fraud charges alleging she embezzled money from her former employer, Symantec, announced United States Attorney Melinda Haag and FBI Special Agent in Charge David J. Johnson.

Coombs admitted in her plea agreement that from January 2010 through April 2012 she was employed by Symantec as a Director of Marketing and worked at Symantec’s Lindon, Utah facility outside of Salt Lake City. Between January 2010 and May 2012, Coombs used various methods to embezzle a total of over $1.137 million from Symantec. Coombs admitted that she spent these embezzled Symantec funds on various personal expenses such as such as trips to Hawaii and the 2012 Super Bowl in Indianapolis, concerts, home remodeling, automobile payments, and a personal nanny. Coombs charged personal and other unauthorized expenses on the Symantec American Express Cards and then knowingly submitted fraudulent expense reports to disguise these charges as legitimate business expenses. Coombs also submitted fraudulent invoices falsely claiming that a shell company she had created had done marketing work for Symantec. Coombs then diverted the payments on those fraudulent invoices for her personal use.

Coombs, 48, of Highland, Utah, was charged by indictment on June 11, 2014, with 26 counts of wire fraud in violation of 18 U.S.C. § 1343, and 10 counts of money laundering, in violation of 18 U.S.C. § 1957(a). Under the plea agreement, Coombs pleaded guilty to one count of wire fraud.

Coombs’ sentencing hearing is scheduled for April 1, 2015, at 9:30 a.m. before the Honorable Lucy H. Koh, United States District Court Judge, in San Jose. The maximum statutory penalty for wire fraud, in violation of 18 U.S.C. § 1343, is 20 years in prison and a fine of $250,000, 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.

Assistant U.S. Attorney Joseph Fazioli is prosecuting the case with the assistance of Laurie Worthen. The prosecution is the result of an investigation by the FBI.

SAN FRANCISCO – Scott Charles McCauley pleaded guilty in federal court in San Francisco today, to tax evasion, announced United States Attorney Melinda Haag and Acting IRS Criminal Investigation in Charge Thomas McMahon.

In pleading guilty, McCauley admitted that he was General Partner and 80% owner of McCauley & Father Construction. During 2007 and 2008, McCauley oversaw all the aspects of McCauley & Father Construction, from the day-to-day field operations to financial matters, including the creation of invoices and cashing of checks.

McCauley admitted he filed false 2007 and 2008 federal income tax returns on which he did not report income that he received and wrongfully took from McCauley & Father Construction. During these years, McCauley provided the business bank account statements to a tax return preparer. The tax return preparer relied on the bank statements to prepare the federal income tax returns for the business and for McCauley. Each time McCauley deposited checks into the business bank account, he also withdrew cash. McCauley knew that the bank statements he provided to the tax preparer only showed the net deposit, that is, the sum of the deposited checks less the simultaneous cash withdrawals. In 2007 and 2008, McCauley deposited $516,592 and $422,142, respectively, in business receipts into his personal bank account, which resulted in additional taxes due in the amount of $117,994 and $31,519, respectively.

McCauley’s personal income tax returns and McCauley Construction’s partnership tax returns for 2007 through 2009 were the subject of a routine civil audit in 2010. During the audit, McCauley falsely told a revenue agent that he deposited all the business receipts into the business bank account and provided the revenue agent with an incomplete set of the company’s invoices and business receipts.

McCauley, 50, of Novato, was charged on Dec. 12, 2014, with two counts of tax evasion, in violation of 26 U.S.C. § 7201. McCauley made his first appearance today, before the Honorable Laurel Beeler, United States Magistrate Court Judge, in San Francisco, and pleaded guilty to both counts in the Information before the Honorable Richard Seeborg, United States District Court Judge.

McCauley is scheduled to be sentenced on April 14, 2015 at 2:30 p.m. before Judge Seeborg. The maximum statutory penalty for each count, in violation of 26 U.S.C. § 7201, is five years in prison and a fine of $250,000 or twice the gross gain or loss, whichever is greater, and up to three years of supervised release. 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.

Colin Sampson is the Assistant U.S. Attorney who is prosecuting the case. The prosecution is the result of an investigation by the IRS – Criminal Investigation.

SAN JOSE – John Nyunt pleaded guilty in federal court today, to possession of stolen firearms, announced United States Attorney Melinda Haag and FBI Special Agent in Charge David J. Johnson.

Nyunt was a commander at the Pacific Grove Police Department (PGPD) and an instructor at the former police academy at the Monterey Peninsula College (MPC). In pleading guilty, Nyunt admitted to stealing assault rifles, shotguns, and semi-automatic pistols that the MPC was seeking to divest after its decision to close the police academy. The MPC asked Nyunt if the PGPD would accept them as a donation. Knowing that the PGPD did not want the firearms, Nyunt signed a memorandum of understanding with the MPC that falsely stated he was accepting the firearms on PGPD’s behalf, even though he was not authorized to execute such an agreement nor accept the firearms.

After the MPC relinquished possession of the firearms to Nyunt in or about August of 2009, he consigned most of them, including 27 Glock semi-automatic pistols and 5 Smith & Wesson semi-automatic pistols, to a firearms dealer, who over time sold them on Nyunt’s behalf, paying Nyunt the proceeds from those sales minus his commission. Nyunt took back five of the Glocks and personally sold or gave them to other people. In this manner Nyunt maintained possession and control of some or all of the firearms he stole from the MPC until in or about November of 2012, when he had disposed of the last of the guns.

Nyunt, 52, was charged by information on Dec. 11, 2014 with a violation of 18 U.S.C. § 922(j). This is Nyunt’s second pending federal case. Earlier this year, on May 13, 2014, Nyunt pleaded guilty in case no. CR-14-00235-BLF to extortion and wire fraud charges that, like the charges to which he pleaded guilty today, were based on his conduct while commander at the PGPD.

Nyunt’s consolidated sentencing hearing for both cases is scheduled for April 7, 2015, at 9:00 a.m., before the Honorable Beth L. Freeman, United States District Court Judge, in San Jose. The maximum statutory penalty for a violation of 18 U.S.C. § 922(j) is ten years imprisonment and a fine of $250,000, plus restitution. Pursuant to the binding plea agreement, if accepted by the court, the parties have agreed that the defendant should be sentenced to thirty months’ imprisonment, to run concurrent with his sentence in case no. CR-00235-BLF. 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.

Philip A. Guentert is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Elise Etter. The prosecution is the result of an investigation by the FBI.

SAN FRANCISCO – Yesterday, Leigh Farrington Fiske was sentenced to 37 months in prison and ordered to pay restitution for a fraud scheme he perpetrated against small business owners and others seeking lines of credit around the nation, announced United States Attorney Melinda Haag, Special Inspector General for the Troubled Asset Relief Program Christy Romero, and FBI Special Agent in Charge David J. Johnson.

Fiske pleaded guilty on June 11, 2014. According to the Plea Agreement, Fiske and his partner, Michael Ramdat, operated a business referred to as “Corporate Funding Solutions.” The purported purpose of this business was to obtain credit lines for customers in exchange for a fee. Fiske’s role was to solicit customers, which he generally did over the Internet and by word of mouth. In reality, neither Fiske nor Ramdat ever intended to provide any services to their customers. Instead, they accepted approximately $433,000 from approximately 30 victims and never helped any of these victims obtain credit. Fiske admitted that he kept $102,000 of these payments for himself, and that he passed the remainder on to Ramdat.

Fiske, 51, of Tampa, Fla., was indicted by a federal grand jury on Nov. 21, 2013, on five counts of wire fraud, in violation of 18 U.S.C. § 1343, and one count of conspiracy, in violation of 18 U.S.C. § 1349. Fiske pleaded guilty to all of the wire fraud counts.  Pursuant to the Plea Agreement, the government dismissed the conspiracy charge at sentencing.

The sentence was handed down by the Honorable Edward M. Chen, United States District Court Judge. Judge Chen also sentenced the defendant to a three year period of supervised release and restitution. The defendant will begin serving the sentence on March 31, 2015. Ramdat is scheduled to be sentenced on Dec. 17, 2014 before Judge Chen.

Benjamin Kingsley is the Assistant U.S. Attorney who is prosecuting the case, with the assistance of Mary Mallory and Jessica Meegan. The prosecution is the result of an investigation by the Office of the Special Inspector General for the Troubled Asset Relief Program and the FBI.

OAKLAND – Madhu Santhanam pleaded guilty in federal court in Oakland today to conspiracy to commit visa fraud, announced United States Attorney Melinda Haag and Special Agent in Charge David Zebley of the U.S. Department of State, Diplomatic Security Service.

In pleading guilty, Santhanam admitted that, between September 2009 and June 2013, he made at least 25 fraudulent I-129 petitions. These documents are required by U.S. immigration laws and regulations to be submitted in order to obtain H-IB visas for highly skilled immigrant applicants seeking to work in the United States. In these petitions, an American employer must certify that it has high-technology jobs that it cannot fill with U.S. citizens. In many of Santhanam’s fraudulent I-129 applications, he falsely represented that the applicants would be working at his company, MAAN Systems, Inc., on an in-house, proprietary product named “e-ntelligent Applications manager.” In others, he falsely represented that the applicants would be working at Western Digital and Walmart, and he included forged documentation, including forged employment offer letters, with each of these petitions. In his plea agreement, Santhanam agreed to pay a forfeiture money judgment in the amount of $400,000.

Santhanam, 41, of Union City, was arrested on Nov. 19, 2013, and made his initial appearance in federal court after being charged by federal complaint on Nov. 14, 2013. He has remained free on bond since his initial appearance. Santhanam was charged by information on March 13, 2014.

Santhanam’s sentencing hearing is scheduled for May 27, 2015, before United States District Judge Yvonne Gonzalez Rogers. The maximum statutory penalty for conspiracy to commit visa fraud, in violation of 18 U.S.C. §§ 371 and 1546, is a maximum term of 5 years in prison, a fine of $250,000, and 3 years of supervised release. 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.

Brian C. Lewis is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Janice Pagsanjan. 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 U.S. Immigration and Customs Enforcement HSI. 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.

SAN JOSE – Sanjeev Bais pleaded guilty yesterday afternoon to 14 counts of theft of government property, announced United States Attorney Melinda Haag and Internal Revenue Service, Criminal Investigation, Acting Special Agent in Charge Thomas McMahon.

According to the plea, between February 2009 and April 2010, Bais and his partner stole $224,792 in IRS refunds by filing false tax returns. Bais, an eBay, Inc. manager at that time, had an email list consisting of employees of San Jose based technology companies. Using that email list, Bais sent an email soliciting tax return preparation services by a Certified Public Accountant named “Raj Malhotra.”

Bais admitted that while operating under the alias “Raj Malhotra,” he asked these victims for personal information, including copies of their driver’s licenses, Forms W-2, Forms 1099 and 1098, and other tax related documents. He also instructed these people to pay for the tax returns by submitting payments to his PayPal account. Bais and his partner prepared tax returns showing false Schedule C business losses, false “Other” losses, and false Schedule A items. Additionally, instead of sending the victims copies of the tax returns filed with the IRS, Bais and his partner sent fake copies that accurately reflected the individual tax liability of the victims.  Bais and his partner submitted the tax returns to the IRS using Intuit, Turbo Tax, and by submitting paper tax returns. To further conceal his crimes, Bais and his partner deposited cash into the victims’ real bank accounts in amounts that matched the refunds shown on the fake tax returns that he sent to them. Bais used the fraudulently obtained money to pay his mortgage on a property in Belmont and provided $27,000 to his partner to deposit into an account with the State Bank of India.

Bais, 41, of San Jose, was charged on April 17, 2013, with 14 counts of theft of government property and 14 counts of aggravated identity theft. He pleaded guilty to the 14 counts of theft of government property.

Bais’s  sentencing hearing is scheduled for March 30, 2015, at 1:30 p.m. before the Honorable Edward J. Davila, United States District Court Judge, in San Jose. The maximum statutory penalty for each count of theft of government property, in violation of 18 U.S.C. § 641, is 10 years imprisonment and a fine of $250,000. 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.

Thomas Moore is the Assistant U.S. Attorney who is prosecuting this case. The prosecution is the result of an investigation the IRS, Criminal Investigation.

Please note, an indictment contains only allegations and, as with all defendant, Sanjeev Bais must be presumed innocent unless and until proven guilty.

SAN FRANCISCO – Craig S. On pleaded guilty today to one count of Conspiracy to Make a Materially False and Misleading Statement to an Accountant, announced U.S. Attorney Melinda Haag; Federal Deposit Insurance Corporation, Office of the Inspector General, Special Agent in Charge Wade Walters; Special Inspector General for the Troubled Asset Relief Program Christy Romero; Board of Governors of the Federal Reserve System and the Consumer Financial Protection Bureau, Office of the Inspector General, Special Agent in Charge Scott Redington; and FBI Special Agent in Charge David J. Johnson.

On, 62 of Berkeley, Calif., is the former Chief Financial Officer of United Commercial Bank (UCB). UCB was a commercial bank headquartered in San Francisco, Calif., with branch offices throughout the United States as well as in China and Taiwan. Until 2009, its holding company, UCBH Holdings, Inc., was publicly traded on NASDAQ.

On Nov. 6, 2009, UCB was taken over by the Federal Deposit Insurance Corporation (FDIC). According to the Information, the Troubled Asset Relief Program provided approximately $297 million in federal funds to UCB on Nov. 14, 2008, during the 2008 financial crisis.

According to court documents, On, beginning in 2009, together with others, engaged in a conspiracy to deceive UCB’s auditors by manipulating the bank’s books and records in a manner that misrepresented and concealed the bank’s true financial condition and performance and caused the bank to issue materially false and misleading financial statements in violation of 18 U.S.C. § 371. On further admitted that he did not inform UCB’s auditors about approximately $67 million in potential losses from the sale of loans or “notes” held by the bank even though he knew he was required to do so.

The maximum statutory penalty for a conviction for conspiracy, in violation of 18 U.S.C. § 371, is five years in prison and a fine of $250,000, plus restitution. 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.

Adam A. Reeves and Robert David Rees are the Assistant U.S. Attorneys who are prosecuting the case with the assistance of Denise Oki, Phillip Villanueva, and Bridget Kilkenny. The prosecution is the result of a five year investigation by the FDIC Office of Inspector General, the SIGTARP, the Board of Governors of the Federal Reserve System and the Consumer Financial Protection Bureau Office of Inspector General, and the FBI.

SAN JOSE – Ryan Lopez Bernardez was arraigned today on charges that he violated the Endangered Species Act by transporting two endangered Asian Arowana fish, announced United States Attorney Melinda Haag and United States Fish and Wildlife Service Special Agent in Charge Jill Birchell.

A grand jury returned an indictment against Bernardez on October 15, 2014, but it remained under seal until his arrest and subsequent arraignment today. 

According to the indictment, Bernardez, 39, of San Jose, is alleged to have transported in the course of commercial activity, and sold, two fish. The fish are a species known as Asian Arowana, or Asian Bonytongue (scleropoges formosos).  These fish are listed as endangered under the Endangered Species Act, and any sales or transportation of them are therefore illegal.

Bernardez was arrested in San Jose on Friday, December 05, 2014, and made his initial appearance in federal court in San Jose on Monday, December 8, 2014.  Bernardez is currently out of custody. Bail was set at $100,000. His next scheduled appearance is at 1:30 on December 11, 2014, for a further detention hearing before the Honorable Howard R. Lloyd, United States Magistrate 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, the defendant faces a maximum sentence of five years, and a fine of $250,000. 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.

Gary G. Fry is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Legal Technician Laurie Worthen. The prosecution is one of several that resulted from an investigation by the United States Fish and Wildlife Service.

SAN FRANCISCO – Ian Furminger, 47, of Pleasant Hill and Edmond Robles, 46, of Danville, both San Francisco Police Department (SFPD) officers, were convicted today by a federal jury of conspiracy to violate civil rights, conspiracy to steal from a federally funded program, and devising a scheme to defraud and obtain money and property through wire fraud. Robles was also convicted of theft from a federally funded program.

The jury found the defendants, who worked in the plain clothes unit of SFPD’s Mission Station, conspired to use their official positions to enrich themselves by stealing money and other valuable items, such as computers, electronic devices, and gift cards that were seized on behalf of the City of San Francisco, and to deprive suspects of due process of law by taking these items without booking them into evidence or including them in their police reports.

The defendants were also convicted of defrauding the City and County of San Francisco by concealing their illegal activities by filing false police reports. Robles was convicted of theft from a federally funded program (the jury was unable to reach a unanimous decision as to Furminger’s participation in this offense). The defendants were acquitted of honest services wire fraud and one count of conspiring to distribute controlled substances.  Furminger also was acquitted of extortion. The verdicts followed a nine-day jury trial before the Honorable Charles R. Breyer, United States District Court Judge.

“Constitutional protections extend to each and every person,” said United States Attorney Melinda Haag, “These men victimized those they swore an oath to protect, ruined their own careers, and tarnished the star worn so proudly by other men and women of the San Francisco Police Department. With these convictions, we reaffirm our commitment to prosecuting police officers who choose to violate the civil rights of the people of the Bay Area.”

FBI Special Agent in Charge David J. Johnson said, “Preservation of the rule of law demands that police officers who betray the public trust and violate their oaths be held accountable for their actions. Corruption—with or without a badge—is unacceptable, and today’s verdicts are a reminder that no one is above the law.”

San Francisco Police Department Chief Greg Suhr remarked, “As I said on the day I was sworn in as Chief of Police, and repeated on the day these officers were arrested when asked about his ongoing investigation, ‘There is no place in the San Francisco Police Department and shouldn’t be in any police department for a dishonest cop.’ I meant what I said.  I am seeking the immediate termination of these officers and expect that the Police Commission will act expeditiously in making that happen.”

The defendants are currently released on bail pending their sentencing hearings. They have been suspended by SFPD without pay pending further proceedings before the Police Commission. The defendants’ sentencing hearings are scheduled for Feb. 23, 2014, at 10:00 a.m. before Judge Breyer in San Francisco. The maximum statutory penalties for each count of conviction are:

• Wire fraud (Counts 1 and 2), 18 U.S.C. § 1343 – 20 years in prison; $250,000 fine.
• Civil rights conspiracy (Count 5), 18 U.S.C. § 241 – 10 years in prison; $250,000 fine.
• Federal program theft conspiracy (Count 6), 18 U.S.C. §§ 371 and 666(a)(1)(A) – 5 years in prison & $250,000 fine.
• Federal program theft conspiracy (Count 7 – Robles only), 18 U.S.C. § 666(a)(1)(A) – 10 years in prison & $250,000 fine.

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.

This case is being prosecuted by Assistant U.S. Attorneys in the Special Prosecutions and National Security Unit of the United States Attorney’s Office. The prosecution is the result of an investigation by agents of the Federal Bureau of Investigation, with assistance from the San Francisco Police Department.

OAKLAND – Consuelo “Connie” Puente pleaded guilty to wire fraud and aggravated identity theft yesterday, announced United States Attorney Melinda Haag and Internal Revenue Service, Criminal Investigation, Acting Special Agent in Charge Thomas McMahon.

According to court documents, from May 19, 2008 to June 18, 2013, Puente was employed by a company in Concord, Calif. In January 2009, Puente was assigned to the payroll department and was the only employee responsible for handing payroll for her employer. From June 2009 through June 2013, Puente admitted she devised a scheme to defraud her employer by receiving wages paid in the names of former employees. Puente obtained three employees’ personal identifying information from the company’s personnel files. She changed their status to current employees so that her employer would pay wages in their names. Puente listed her bank account information as the bank account to receive the wages. As a result, between 2009 and 2013, her employer erroneously transferred net wages of $543,545.08 into Puente’s bank accounts. The company also paid withholdings of $84,362.45 for a total of  $627,907.53 in gross wages. To account for the wages paid in the names of the former employees, Puente prepared IRS Forms W-2 for each of the former employees. Puente also admitted that she filed false tax returns for 2009 through 2013 that omitted the $543,545.08 she stole from the company, resulting in $151,987 in tax liabilities.

Puente, 44, of Sacramento, was indicted on March 18, 2014, and charged with three counts of wire fraud and three counts of aggravated identity theft. She pleaded guilty to one count of each. Puente’s sentencing hearing is scheduled for Feb. 26, 2015, before the Honorable Yvonne Gonzales Rogers, United States District Court Judge, in San Francisco.

The maximum penalty for each count of wire fraud, in violation of Title 18, U.S.C. § 1343, is 20 years in prison and a fine of $250,000. The maximum penalty for aggravated identity theft, in violation of Title 18, U.S.C. § 1028A, is two years in prison and a fine of $250,000.

Assistant US Attorney Thomas Moore is prosecuting the case. The prosecution is the result of an investigation by the IRS, Criminal Investigation and the Concord Police Department.

OAKLAND – A Superseding Indictment from a federal grand jury in San Francisco was unsealed in district court today charging Richard Thomas Grant with tax evasion, announced United States Attorney Melinda Haag and Internal Revenue Service, Criminal Investigation, Acting Special Agent in Charge Thomas McMahon.

According to the indictment, Grant, of Point Richmond, is alleged to have failed to pay taxes owed for calendar years 2005 through 2009 by, among other things, concealing assets and income from the IRS. For the years 2005 through 2007, Grant concealed the nature, extent, and location of his assets by using a warehouse bank, prepaid debit cards, cashier’s checks, and postal money orders. For 2008 and 2009, Grant received taxable income of $310,129 and $327,729, respectively and failed to make individual income tax returns and pay income tax to the IRS. During 2008 and 2009, Grant attempted to conceal from the IRS his share of partnership income from Grant Engineering by not filing partnership tax returns and schedules, and concealing his income and assets using cashier’s checks and postal money orders.

Grant was arrested on Friday, Dec. 5, 2014, at his home in Point Richmond, Calif. and made his initial appearance in federal court in Oakland on the same day. Grant was release on a $100,000 unsecured bond. Grant’s next scheduled appearance is at 9:30 a.m. on Dec. 9, 2014, for identification of counsel before the Honorable Kandis A. Westmore, United States District Court Judge.

The maximum statutory sentence for tax evasion, in violation of Title 26 U.S.C. § 7201, is five years in prison and a fine of $250,000 or twice the intended gain or loss, whichever is greater. 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.

Colin Sampson is the Assistant U.S. Attorney who is prosecuting the case. The prosecution is the result of an investigation by the IRS, Criminal Investigation.

Please note that an indictment contains only allegations. As with all defendants, Richard Thomas Grant must be presumed innocent unless and until he is proven guilty.

SAN JOSE – Paul S. Devine was sentenced on Dec. 1, 2014, to 12 months and one day in prison, and ordered to pay $4,464,664 in restitution for wire fraud, conspiracy, money laundering, and engaging in transactions in criminally-derived property, announced United States Attorney Melinda Haag, FBI Special Agent in Charge David J. Johnson, and Internal Revenue Service, Criminal Investigation, Acting Special Agent in Charge Thomas McMahon.

According to the plea agreement, Devine admitted that, beginning in approximately February 2007, he engaged in a scheme to defraud Apple of money or property as well as to defraud Apple of its right to his honest services. He also admitted to engaging in a conspiracy with co-defendant Andrew Ang in which they agreed to the fraud against Apple.

Devine had been a Global Supply Manager at Apple from 2005 until he was terminated at the time of his arrest in August 2010. Devine’s job gave him access to confidential internal Apple information. In the course of the scheme, Devine transmitted confidential information, such as product forecasts, pricing targets, and product specifications, to suppliers and manufacturers of Apple parts, including Ang. Ang worked for several Apple suppliers located in Singapore. In return, the suppliers and manufacturers paid Devine kickbacks, including payments determined as a percentage of their Apple contracts. Devine shared the kickbacks with Ang.

In his plea agreement, Devine acknowledged that this scheme deprived Apple of its property right in the confidentiality of its information, its money, and its property, as well as its right to his honest services. The scheme enabled the suppliers and manufacturers to, among other things, negotiate more favorable contracts with Apple than they would have been able to obtain without the confidential information.

Devine admitted to receiving kickbacks as wire transfers into bank accounts that he opened for that purpose in the U.S. and South Korea, including accounts in the name of a shell corporation, “CPK Engineering.”

Devine also admitted that he knowingly transferred the proceeds of the wire fraud between his various accounts, including CPK Engineering accounts, in order to conceal and disguise the nature, location, source, ownership, and control of the proceeds. He specifically admitted to a May 18, 2010, transfer of $536,748.88 in funds derived from the wire fraud scheme.

Devine agreed that the loss attributable to the fraudulent scheme was approximately $2,409,000, which represented the amount he received in kickback payments. He agreed to forfeit $951,552 in proceeds of the fraud and a vehicle, all of which were seized by the FBI and IRS at the time of his arrest. Devine also agreed to forfeit $612,407 in proceeds of the fraud, which he transferred from overseas bank accounts and deposited with the clerk of the District Court following his arrest.

Devine, 41, of Sunnyvale, was indicted by a federal grand jury on Aug. 11, 2014. The indictment charged him with twenty-three counts related to engaging in the wire fraud scheme, conspiring to commit wire fraud with Andrew Ang, laundering the proceeds of the scheme, and engaging in transactions in funds derived from the scheme.

In a related case, Chua Kim Guan (a/k/a Jacky Chua), an executive at Jin Li Mould of Singapore, was charged by Singaporean authorities with corruptly giving gratifications to Devine. The U.S. indictment against Devine’s co-defendant, Andrew Ang, remain pending.

Devine pleaded guilty on Feb. 28, 2011, to one count of violating of 18 U.S.C. § 1343 (wire fraud), one count of violating 18 U.S.C. § 1349 (conspiracy to commit wire fraud), one count of violating 18 U.S.C. § 1956(a)(1)(B) (money laundering), and one count of violating 18 U.S.C. § 1957 (engaging in transactions with criminally-derived property).

Devine’s sentence was handed down by the Honorable Edward J. Davila, United States District Court Judge. Judge Davila also sentenced Devine to a three-year period of supervised release. Devine will begin serving the sentence on Feb. 19, 2015.

Michelle J. Kane is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Melissa Dorton and Elise Etter. The prosecution is the result of an investigation by the FBI and the IRS, Criminal Investigation.

SAN FRANCISCO – Michael Thomas Hamilton, a/k/a Thomas Smith, was sentenced today to 37 months in prison and ordered to pay $426,911 in restitution for wire fraud, announced United States Attorney Melinda Haag and FBI Special Agent in Charge David J. Johnson.

Hamilton, 49, of Sonoma, Calif., was indicted by a federal grand jury on Nov. 19, 2013. He was charged with 22 counts of mail fraud, wire fraud, and money laundering. On May 8, 2014, he pleaded guilty to two of the wire fraud counts.  

In his guilty plea, Hamilton admitted that he engaged in a scheme to obtain money and property by means of materially false and fraudulent representations regarding Small Leaf, a book-selling business he owned and operated.  Between February 2011 and continuing through October 2013, Hamilton solicited Small Leaf investors through Craigslist and other means. As part of the scheme, Hamilton falsely represented that: (1) investors would earn high rates of return through the sale of books on Amazon.com and other platforms; (2) if investors did not recoup their investment by a certain date, Small Leaf would reimburse the investor with interest of 10%; and (3) his book-selling business generated more than one million dollars in yearly revenue. In truth, Hamilton’s book-selling business generated a de minimus amount of revenue. To induce investors to turn over their money and to lull them into falsely believing their investment was profitable, Hamilton made periodic payments to investors, which he claimed were royalties earned on the sale of books through Amazon. Most of the payments made to investors, however, were from investments by new investors or additional investments by existing investors.

By October 2013, according to the plea agreement, Hamilton had solicited approximately $1,616,000 from more than 20 investors in California, Oregon, and Massachusetts.

The sentence was handed down by the Honorable William H. Orrick, United States District Court Judge, in San Francisco. Judge Orrick also sentenced the defendant to a three-year period of supervised release. The defendant, who is currently released on a $75,000 bond, will begin serving the sentence on Jan. 30, 2015. Judge Orrick also ordered a hearing on Jan. 15, 2013, at 1:30 p.m., to resolve additional restitution issues.

Robert S. Leach is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Mary Mallory and Bridget Kilkenny. The prosecution is the result of an investigation by the FBI.

SAN FRANCISCO – Cricket Communications, Inc., a wireless telecommunications carrier based in San Diego, California, has agreed to pay the government $2,174,432 to resolve allegations that it overcharged federal law enforcement agencies for the costs of carrying out court-ordered wiretaps and pen registers, United States Attorney Melinda Haag and the U.S. Department of Justice Office of Inspector General, Special Agent in Charge M. Elise Chawaga, announced today.

Telecommunications carriers like Cricket are authorized by statute to recover the “reasonable expenses” they incur in providing facilities or assistance in executing a court-ordered wiretap or pen register.  A pen register is a device that captures call identifying information transmitted by a particular telephone line, but not the content of the communication.  A joint investigation by the Office of Inspector General and the U.S. Attorney’s Office revealed that Cricket overcharged federal law enforcement agencies for executing wiretaps and pen registers from 2007 until Cricket lowered its fees in 2010.  The settlement agreement resolves the United States’ civil claims against Cricket based on the overbilling.  

The settlement with Cricket Communications, Inc. was the result of a coordinated effort among the United States Attorney’s Office, and the U.S. Department of Justice Office of Inspector General.       

Assistant U.S. Attorney Steven J. Saltiel handled the matter on behalf of the U.S. Attorney’s Office.