Northern District of California

SAN FRANCISCO – On May 29, 2014, a federal grand jury in San Francisco indicted Robert Bradley Strahan, a/k/a Robin Bradley, a/k/a Kaola Bradley for wire fraud and mail fraud, announced United States Attorney Melinda Haag, FBI Special Agent in Charge David J. Johnson, and Internal Revenue Service, Criminal Investigation, Special Agent in Charge José M. Martinez.

According to the Indictment, Strahan, 51, of San Francisco, allegedly embezzled in excess of $520,000 from the non-profit trade association he worked for in San Francisco. The Indictment also alleges that between December 2009 through April 2014, he carried out the scheme by, among other means, (1) writing, signing, endorsing, and cashing checks made payable to “Strahan” and “Cash” from the company’s bank accounts; and (b) using the company’s credit cards to make unauthorized purchases for his personal use. To perpetrate and to conceal his scheme to defraud, Strahan allegedly made false entries in the company’s accounting systems and sent falsified financial statements to the company’s board of directors.

Strahan was arrested in San Francisco on May 30, 2014, and made his initial appearance in federal court on the same day. Strahan is currently being held in custody pending a detention hearing scheduled for June 4, 2014, at 9:30 a.m. in a courtroom to be determined. Strahan will appear before the Honorable Thelton E. Henderson, United States District Court Judge, for arraignment on July 7, 2014, at 2:30 p.m.

The maximum statutory penalty for each count of wire fraud, in violation of 18 U.S.C § 1343, is 20 years imprisonment and a fine of $250,000. The maximum statutory penalty for each count of mail fraud, in violation of 18 U.S.C § 1341, is 20 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.

Hallie Hoffman is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Bridget Kilkenny. The prosecution is the result of an investigation by the Federal Bureau of Investigation and the Internal Revenue Service.

Please note, an indictment contains only allegations against a person and, as with all defendants, Robert Bradley Strahan must be presumed innocent unless and until proven guilty.

(Strahan indictment )

 

 

OAKLAND – Jessika Green pleaded guilty on May 30, 2014, to conspiring to file false claims, announced U.S. Attorney Melinda Haag and Internal Revenue Service, Criminal Investigation, Special Agent in Charge José M. Martinez.

According to the plea agreement, beginning in January 2011, Green assisted in filing several tax returns with the IRS that were false and fraudulent. Green admitted that the tax returns were false because the filings included fictitious Forms W-2 that inflated the purported filers’ wages. The filings included a tax return filed in Green’s name which falsely reported her earnings from a staffing agency. In other instances, Green admitted to filing the false tax returns without ever showing the fraudulent tax return to the purported filer. As part of her plea, Green admitted that she filed false tax returns asking for at least $154,823, all of which she was not entitled to receive, and agreed to pay restitution in the amount of $92,191, equaling the amount of returns sent to her.

Green was charged with Khyber Law who pleaded guilty to conspiring to file false claims on April 4, 2014.

Green, 33, of Antioch, was charged in a superseding indictment on Dec. 17, 2013, with conspiracy to file false claims, wire fraud, filing false claims and aggravated identity theft. Green, is scheduled to be sentenced before the Honorable Jon S. Tigar United States District Court Judge on October 10, 2014, in Oakland.

Law pleaded guilty to conspiracy to file false claims and agreed to pay restitution related to this offense. Law is scheduled to be sentenced for his role in this offense on Aug. 22, 2014, before Judge Tigar as well.

The maximum statutory penalty for each count of conspiracy to file false claim, in violation of 18 U.S.C § 286, is ten years in prison, and a fine of $250,000.

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

(Law indictment )

 

 

OAKLAND – Alex Gonzalez was sentenced yesterday to 10 years in prison, announced United States Attorney Melinda Haag and FBI Special Agent in Charge David J. Johnson.

According to court documents and information presented at court, Gonzalez convinced a fifteen year old freshman from a Bay Area high school to take several explicit nude photographs of herself, and to send them to Gonzalez using an online picture-sharing application. After the victim informed Gonzalez that she no longer wished to communicate with him, Gonzalez began a campaign to punish the victim by posting her nude photographs online. Gonzalez first posted the victim’s pictures on iMGSRC.ru, a free photo-sharing website hosted in Russia, and included the victim’s name, age, and phone number with the photographs. Gonzalez then created a fake Facebook account, “friended” many of the victim’s Facebook friends, and posted the nude photographs of the victim on his Facebook wall, “tagging” the victim in each of the pictures. Finally, Gonzalez posted the images on xHamster.com, a free-access pornography website. The FBI executed a search warrant at Gonzalez’s home and uncovered a laptop computer containing more than 2,500 images and 130 videos depicting minors engaging in sexually explicit conduct.

Gonzalez, 22, pleaded guilty on Nov. 6, 2013 to distribution of child pornography, in violation of 18 U.S.C. § 2252(a)(2), and possession of child pornography, in violation of 18 U.S.C. § 2252(a)(4)(B). The sentence was handed down by the Honorable Phyllis Hamilton, United States District Court Judge. Judge Hamilton also sentenced the defendant to a fifteen year period of supervised release. The defendant was immediately remanded into custody.

The case was prosecuted by Assistant U.S. Attorneys Randy Luskey and Rodney Villazor of the Northern District of California and was investigated by the Federal Bureau of Investigation.

(Gonzalez indictment )

 

 

OAKLAND – An eleven-count federal Indictment charging nine people with participation in a conspiracy to manufacture and distribute Xanax pills and other drugs was returned by the Grand Jury on May 22, 2014, and unsealed today in federal court, announced United States Attorney Melinda Haag, Drug Enforcement Administration Special Agent in Charge Jay Fitzpatrick, Internal Revenue Service, Criminal Investigation, Special Agent in Charge José M. Martinez, U.S. Postal Inspection Service, Inspector in Charge Rafael E. Nunez, U.S. Food and Drug Administration Office of Criminal Investigations, Special Agent In Charge Lisa Malinowski, and Tatum King, Acting Special Agent in Charge for U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) in San Francisco.

The Defendants and the charges are set forth below:

Defendant

Offenses Charged

Jeremy Donagal, 35, aka “Xanax King” aka “XK”

Counts One and Two: 21 U.S.C. § 846 – Conspiracy to Manufacture, Distribute, and Possess with Intent to Distribute a Controlled Substance
Counts Three, Four, and Five: 21 U.S.C. § 841(a)(1) – Manufacture, Distribution, and Possession with Intent to Distribute a Controlled Substance
Count Six: 21 U.S.C. § 331(i)(3) – Sale of Counterfeit Drugs
Count Seven: 18 U.S.C. § 1956(a)(2)(A) – International Money Laundering
Count Eight: 18 U.S.C. § 1956(a)(2)(B)(ii) – International Money Laundering
Counts Nine, Ten, and Eleven: 31 U.S.C. § 5324(a)(3) – Structuring

Laurence Lindberg, 42

Count One: 21 U.S.C. § 846 – Conspiracy to Manufacture, Distribute, and Possess with Intent to Distribute a Controlled Substance
Count Three: 21 U.S.C. § 841(a)(1) – Manufacture, Distribution, and Possession with Intent to Distribute a Controlled Substance

Alicia Mitts, 30

31 U.S.C. § 5324(a)(3) – Structuring

Thomas Elliott, 39

Count One: 21 U.S.C. § 846 – Conspiracy to Manufacture, Distribute, and Possess with Intent to Distribute a Controlled Substance
Count Three: 21 U.S.C. § 841(a)(1) – Manufacture, Distribution, and Possession with Intent to Distribute a Controlled Substance

Michael Tomada, 42

Count One: 21 U.S.C. § 846 – Conspiracy to Manufacture, Distribute, and Possess with Intent to Distribute a Controlled Substance
Count Three: 21 U.S.C. § 841(a)(1) – Manufacture, Distribution, and Possession with Intent to Distribute a Controlled Substance

Christopher Neely

Count Two: 21 U.S.C. § 846 – Conspiracy to Manufacture, Distribute, and Possess with Intent to Distribute a Controlled Substance
Count Five: 21 U.S.C. § 841(a)(1) – Manufacture, Distribution, and Possession with Intent to Distribute a Controlled Substance
Count Eight: 18 U.S.C. § 1956(a)(2)(A) – International Money Laundering

Kenneth Koskiniemi, 37

Count Four: 21 U.S.C. § 841(a)(1) – Manufacture, Distribution, and Possession with Intent to Distribute a Controlled Substance

Duston Kirk, 38

Count One: 21 U.S.C. § 846 – Conspiracy to Manufacture, Distribute, and Possess with Intent to Distribute a Controlled Substance
Count Three: 21 U.S.C. § 841(a)(1) – Manufacture, Distribution, and Possession with Intent to Distribute a Controlled Substance
Count Eight: 18 U.S.C. § 1956(a)(2)(B)(ii) – International Money Laundering
Counts Nine, Ten, and Eleven: 31 U.S.C. § 5324(a)(3) – Structuring

Michael Gonzalez, 41

Count One: 21 U.S.C. § 846 – Conspiracy to Manufacture, Distribute, and Possess with Intent to Distribute a Controlled Substance
Count Three: 21 U.S.C. § 841(a)(1) – Manufacture, Distribution, and Possession with Intent to Distribute a Controlled Substance

According to the Indictment, Donagal, a/k/a “Xanax King,” of Martinez, Calif., is alleged to have manufactured, distributed, and possessed with intent to distribute counterfeit alprazolam (Xanax) pills and other drugs. The Xanax pills at issue were manufactured to resemble alprazolam pills made by Pfizer, Inc., including stamping the Pfizer “Xanax” trademark on the pills. Donagal is also charged with two counts of international money laundering related to wire transfers of cash to China, both to promote the drug operation and to avoid the reporting requirements associated with such wires. Finally, Donagal is charged with structuring those wires in a way to avoid the $3,000 reporting requirement for such transactions, such as by arranging for multiple wires of below $3,000 to be sent to China from different Western Union locations in the Bay Area, all on the same day.

Lindberg, Kirk, Gonzalez, Elliott, Tomada, and Neely are charged with aiding Donagal in that enterprise.

Donagal, Lindberg, Mitts, Elliott, Tomada, and Neely were arrested yesterday in a joint law enforcement operation that took place in Martinez, Concord, Pleasant Hill, San Pablo, Pinole, Pacheco, Oakley, and Pittsburg, Calif. One additional defendant, Koskiniemi, was arrested in Fresno. Defendant Kirk is still at large, and Gonzalez is in state custody on another charge. The defendants in federal custody made their initial appearance in federal court in Oakland this morning, with the exception of Koskiniemi, who appeared in federal court in Fresno yesterday afternoon. Donagal, Lindberg, Mitts, Elliott, Tomada, and Neely were arraigned before the Honorable Donna M. Ryu, United States Magistrate Court Judge. Defendants Donagal, Lindberg, Elliott, Tomada, and Neely are currently in custody at North County Jail in Oakland, while Mitts was released on a bond in the amount of $50,000.

Donagal’s next scheduled appearance is at 9:30 a.m. on June 5, 2014, for a detention hearing before the Honorable Kandis A. Westmore, United States Magistrate Judge. Mitts, Tomada, and Neely will appear before Judge Ryu tomorrow at 9:30 a.m. for identification of counsel. Elliott will appear before Judge Westmore on June 2, 2014, for identification of counsel, and Lindberg will appear before Judge Westmore on June 3, 2014, for a detention hearing.

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 defendants face a maximum sentence of 20 years in prison and a fine of $1,000,000 on the drug charges, 20 years in prison and a $500,000 fine for the money laundering charges, and 10 years in prison and a $500,000 fine on the structuring charges. 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.

Kevin Barry and Katie Medearis are the Assistant U.S. Attorneys who are prosecuting the case with the assistance of Assistant U.S. Attorney David Countryman of the Asset Forfeiture Unit. The prosecution is the result of an investigation by the DEA, assisted by IRS Criminal Investigations, the U.S. Postal Inspection Service, the U.S. Food and Drug Administration Office of Criminal Investigations, U.S. Customs and Border Protection, Homeland Security Investigations, the Concord Police Department, the Martinez Police Department, the Pittsburg Police Department, the Contra Costa County Sheriff’s Office, the South San Francisco Police Department, the Oakland Police Department, the Oakland School Police Department, the Livermore Police Department, the Walnut Creek Police Department, the San Ramon Police Department, and the Pleasant Hill Police Department.

This case is the product of an extensive investigation by the Organized Crime Drug Enforcement Task Force, a focused multi-agency, multi-jurisdictional task force investigating and prosecuting the most significant drug trafficking organizations throughout the United States by leveraging the combined expertise of federal, state and local law enforcement agencies.

(Donagal et al indictment )

 

 

SAN JOSE – Briana Irene Roy pleaded guilty in federal court in San Jose today to wire fraud stemming from an employee embezzlement scheme, announced United States Attorney Melinda Haag.

In pleading guilty, Roy admitted that she had been employed in the marketing division of a local engineering company based in San Jose, Calif. She also admitted that she devised and implemented a scheme whereby she used a company credit card issued in the name of one of the company’s executives on approximately 80 separate occasions between March 2010 and February 2013. Using the company’s credit card, Roy made charges to her personal PayPal account for her personal benefit, and attempted to conceal these activities by generating fake invoices and receipts for products and services in the name of another San Jose business. Through this fraudulent scheme, Roy admitted that she attempted to gain funds to which she was not entitled in the amount of $247,387.45.

Roy, 38, of Hollister, Calif., was charged on Dec. 13, 2013, with one count of wire fraud, in violation of Title 18 United States Code Section, 1343. Under the plea agreement, Roy pleaded guilty to the single count and agreed to pay restitution for the full amount of the loss. Roy is currently released on bond. Bail was set previously at $50,000.

Roy’s sentencing hearing is scheduled for Oct. 23, 2014, at 10:00 a.m., before the Honorable D. Lowell Jensen, Senior United States District Court Judge, in San Jose. The maximum statutory penalty for the single count 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, plus restitution in the agreed upon amount of $197,240.95. 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.

Amie Rooney is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Tracey Andersen. The prosecution is the result of an investigation by the United States Secret Service.

(Roy information )

 

 

SAN FRANCISCO – James Contreras was sentenced today to 12 months in prison, and ordered to pay a $10,000 fine for making false statements to the government, announced United States Attorney Melinda Haag and United States Department of Justice Inspector General Michael E. Horowitz.

Contreras pleaded guilty on Feb. 26, 2014 in the United States District Court for the Western District of Washington in Seattle to one count of making material false statements to the government. According to the plea agreement, Contreras stated that while he was employed with the Bureau of Alcohol, Tobacco, Firearms, and Explosives (“ATF”) and assigned the position of Group Supervisor, he was responsible for disbursing and accounting for money in a cash fund used for investigative expenses, including making payments to confidential informants. In pleading guilty to one of the thirty false statement counts in the indictment, Contreras admitted that he wrote what purported to be the signature of an agent under his supervision on forms requesting and documenting use of money from the cash fund. Contreras also admitted that he signed a payment receipt falsely showing that the agent used the money to make a payment to an informant, although Contreras knew that the agent did not make the payment. Contreras admitted that he then submitted the forms for supervisory approval knowing that they contained falsified signatures and information.

Contreras, 52, of Ravensdale, Wash., was indicted by a federal grand jury in Seattle on Nov. 21, 2013. He was charged with thirty counts of making material false statements on sets of documents purporting to document expenditures from the cash fund over which he had custody and control, and with one count of embezzlement of public money in excess of $1,000.

As part of the plea agreement, Contreras agreed that the total funds disbursed from the cash fund in connection with the charges in the Indictment was $19,700.

Seattle Field Division of the Bureau of Alcohol, Tobacco, Firearms, and Explosives Special Agent in Charge Douglas R. Dawson, stated, “Jim Contreras’s actions should not reflect poorly on the men and women of the ATF who perform their jobs with honesty and integrity every day. Their tireless efforts to protect our communities, regularly in the face of great danger, is what we all should recognize and appreciate.”

The sentence was handed down by the Honorable Marsha J. Pechman, Senior United States District Court Judge, Western District of Seattle, following Contreras’s guilty plea to Count Nineteen of the indictment, charging making a material false statement to the government, in violation of Title 18, United States Code, Section 1001(a)(3). Judge Pechman also sentenced the defendant to a three-year period of supervised release. The defendant will be permitted to self-surrender for service of sentence. He will be notified of the date by the court.

Susan Badger of the U.S. Attorney’s Office for the Northern District of California is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Rosario Calderon. The prosecution is the result of an investigation by the United States Department of Justice Office of Inspector General, Investigations Division and the ATF Office of Professional Responsibility and Security Operations.

(Contreras indictment )

 

 

SAN JOSE – Juan Figueroa Garcia was sentenced today to 10 years in prison for conspiracy to possess with intent to distribute and to distribute methamphetamine, announced United States Attorney Melinda Haag and Drug Enforcement Administration Special Agent in Charge Jay Fitzpatrick.

Garcia pleaded guilty on Feb. 12, 2014. According to the plea agreement, Garcia admitted that, between May of 2012, and Nov. 30, 2012, he conspired with others to distribute methamphetamine in the Northern District of California. Garcia also admitted that he stored drugs and drug proceeds at his residence in Modesto, Calif. When law enforcement officers executed a search warrant at Garcia’s residence on Nov. 30, 2012, agents found approximately 8.7 kilograms of methamphetamine in his home, and a methamphetamine conversion laboratory in his garage. Laboratory tests of the methamphetamine seized from Garcia’s home revealed that it was 99.8% pure.

Garcia, 36, of Modesto, was indicted by a federal grand jury on Feb. 28, 2013.

The sentence was handed down by the Honorable Lucy H. Koh, United States District Court Judge, following Garcia’s guilty plea to Count One of the Second Superseding Indictment, charging him with conspiracy to possess with intent to distribute and to distribute methamphetamine, in violation of 21 U.S.C. § 841(a)(1). Judge Koh also sentenced the defendant to a 5 year period of supervised release. The defendant has been in federal custody since Jan. 8, 2013.

Richard Cheng and Chinhayi Cadet are the Assistant U.S. Attorneys who are prosecuting the case with the assistance of Yanira Osorio. This case is the product of an extensive investigation by the Organized Crime Drug Enforcement Task Force, a focused multi-agency, multi-jurisdictional task force investigating and prosecuting the most significant drug trafficking organizations throughout the United States by leveraging the combined expertise of federal, state and local law enforcement agencies.

(Figueroa Garcia second superseding indictment )

 

 

OAKLAND – Terry Howell was sentenced yesterday to 210 months in prison for distribution 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) in San Francisco.

Howell pleaded guilty on Feb. 10, 2014, to distributing child pornography to a person in another state, using his e-mail account. According to the plea agreement, Howell also admitted that he received child pornography images and videos through his email account on five occasions. Howell admitted that his cellular telephone, at the time he was arrested, contained over 80 videos and over 550 images depicting minors engaging in sexually explicit conduct, including minors being subjected to sadistic conduct.

Court documents indicate that Howell was trading child pornography materials with another man who had two prior convictions for child pornography offenses, and that Howell’s email messages contained graphic descriptions of his desire to commit extreme violence against a child. At the time Howell committed the child pornography offenses charged in this case, he had prior convictions for sexual offenses against a child.

“This case should serve as a stern warning to those who mistakenly believe cyberspace affords them anonymity and they can use the Internet to sexually exploit children with impunity,” said Tatum King, acting special agent in charge for U.S. Immigration and Customs Enforcement ICE Homeland Security Investigations HSI. “Online predators should be on notice that ICE Homeland Security Investigations will do everything in its power and use every tool at its disposal to track them down and ensure that they are brought to justice.”

The sentence was handed down by the Honorable Claudia Wilken, Chief United States District Court Judge, following a guilty plea to a violation of distribution of child pornography, in violation of 18 U.S.C. 2252(a)(2). Judge Wilken also sentenced Howell to a ten year period of supervised release. Special conditions of Howell’s supervised release include: sex offender-specific treatment; registration with the state sex offender registration agency; suspicionless search of Howell’s residence and property; and no contact with any child under the age of 18. The defendant has remained in custody since his arrest on Sept. 13, 2013, and will begin serving the sentence immediately.

Christina McCall is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Vanessa Quant and Noble Hughes. The prosecution is the result of an investigation by ICE HSI.

(Howell indictment )

 

 

SAN FRANCISCO – The Justice Department filed a joint motion today for entry of a landmark consent decree to resolve allegations that the Law School Admission Council (LSAC) engaged in widespread and systemic discrimination in violation of the Americans with Disabilities Act (ADA). Under the proposed consent decree, LSAC will pay $7.73 million in penalties and damages to compensate over 6,000 individuals nationwide who applied for testing accommodations on the Law School Admission Test (LSAT) over the past five years. The decree also requires comprehensive reforms to LSAC’s policies and ends its practice of “flagging,” or annotating, LSAT score reports for test takers with disabilities who receive extended time as an accommodation. These reforms will impact tens of thousands of test takers with disabilities for years to come.

The United States intervened in DFEH v. LSAC Inc., which was originally brought on behalf of California test takers in the U.S. District Court for the Northern District of California. The United States’ intervention expanded the case to ensure comprehensive and nationwide relief under Title III of the ADA for individuals with disabilities who request testing accommodations for the LSAT – a required examination for anyone seeking admission to an American Bar Association approved law school in the United States. The allegations in the complaint detail LSAC’s routine denial of testing accommodation requests, even in cases where applicants have a permanent physical disability or submitted thorough supporting documentation from qualified professionals and demonstrated a history of testing accommodations since childhood. Without the necessary accommodations, test takers with disabilities are denied an equal opportunity to demonstrate their aptitude and achievement level. The lawsuit further alleged that LSAC engages in discrimination prohibited by the ADA through its practice of flagging the LSAT score reports of individuals who received extended time as a testing accommodation, thereby identifying to law schools that the test taker is a person with a disability.

“This landmark agreement compels systemic reforms to LSAC’s treatment of test takers with disabilities and brings an end to LSAC’s stigmatizing practice of flagging the score reports of individuals with disabilities who require certain testing accommodations,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division. “If entered by the court, this decree will impact tens of thousands of Americans with disabilities, opening doors to higher education that have been unjustly closed to them for far too long. We congratulate LSAC for signing this agreement, which will compensate victims of past discrimination and provide a model for the provision of testing accommodations to test takers with disabilities on standardized examinations.”

“The participation of the U.S. Attorney’s Office in this important litigation sends a strong message that no discrimination of any kind will be tolerated in this district,” said U.S. Attorney Melinda Haag for the Northern District of California. “We are fully committed to ensuring equal access to all opportunities society has to offer, including education.”

Under the consent decree, LSAC has agreed to:

• put a permanent end to the practice of flagging the LSAT score reports of individuals with disabilities who take the LSAT with the common testing accommodation of extended time;
• pay $7.73 million to be allocated for a civil penalty, compensation to individuals named in the United States’ and other plaintiffs’ complaints, and a nationwide victims’ compensation fund;
• streamline its evaluation of requests for testing accommodations by automatically granting most testing accommodations that a candidate can show s/he has previously received for a standardized exam related to post-secondary admissions (such as the SAT, ACT or GED, among others); and
• implement additional best practices for reviewing and evaluating testing accommodation requests as recommended by a panel of experts (to be created by the parties).

Individuals who applied for testing accommodations from LSAC between Jan. 1, 2009, and May 20, 2014 may be eligible to receive a monetary award from a nationwide victims’ compensation fund. The claims administrator for the fund has not yet been determined; this information will be posted on LSAC’s website following entry of the consent decree by the court. Questions about the victims’ compensation fund should be directed to the claims administrator.

For more information or for a copy of the consent decree, please visit the ADA website. Those interested in finding out more about the ADA may also call the Justice Department’s toll-free ADA Information Line at 800-514-0301 or 800-514-0383 (TDD).

Assistant U.S. Attorney Melanie Proctor prosecuted the case, with the assistance of Tiffani Chiu and Jonathan Birch. The U.S. Attorney’s Office partnered with attorneys from the Disability Rights Section of the Civil Rights Division in the U.S. Department of Justice to achieve this landmark settlement.

(LSAC joint motion )

(LSAC consent decree )

 

 

OAKLAND – An Indictment by a federal grand jury, unsealed here today, charges Ayman Shahid with conspiracy to commit bank fraud and seventeen individual counts of bank fraud, announced United States Attorney Melinda Haag, FBI Special Agent in Charge David J. Johnson, and Internal Revenue Service, Criminal Investigation, Special Agent in Charge José M. Martinez.

According to the indictment, Shahid, 38, of Danville, Calif., is alleged to have masterminded a scheme to cause banks to approve mortgage loans for unqualified buyers at the height of the financial crisis. Shahid managed Discovery Sales, Inc., which was the sales arm of affiliated residential construction companies, including Discovery Home Builders and Albert D. Seeno Construction Co. According to the indictment, Shahid devised and managed a scheme to provide undisclosed incentives to unqualified home buyers, which allowed Discovery to continue selling houses during the financial crisis. Shahid intentionally hid the scheme from appraisers and bank underwriters so that loans to unqualified buyers would be approved. According to the Indictment, the aggregate sales price of the homes affected by the scheme was almost $230 million and loans having a value of $150 million went into foreclosure or short sale proceedings.

Shahid was arrested in Concord, Calif., this morning at approximately 8:45 a.m. and his initial appearance is scheduled for today at 11:30 a.m. in federal court before the Honorable Donna M. Ryu, United States Magistrate Court Judge in Oakland.

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 could face a maximum sentence of 30 years in prison, and a fine of $1,000,000, plus restitution if appropriate, for each of the eighteen violations of 18 U.S.C. § 1344 alleged in the indictment. 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.

Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Since the inception of FFETF in November 2009, the Justice Department has filed more than 12,841 financial fraud cases against nearly 18,737 defendants including nearly 3,500 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.

This case is being prosecuted by Assistant United States Attorneys John Hemann and Randy Luskey and was investigated by the FBI, IRS – Criminal Investigative Division, and Federal Housing Finance Agency, Office of Inspector General.

(Shahid indictment )

 

 

SAN JOSE – A federal grand jury indicted Maria Anay Castaneda-Aleman, and Emmanuel Navarro Gallegos, a/k/a “Armando Roberto Espino,” on May 14, 2014, and charged both defendants with conspiring to distribute methamphetamine and possessing methamphetamine with the intent to distribute, announced United States Attorney Melinda Haag. Castaneda-Aleman was also charged with making available for use a house in San Jose for the purpose of unlawfully manufacturing, storing, and distributing methamphetamine.

An affidavit filed by a Special Agent with Homeland Security Investigations (HSI) in support of a criminal complaint filed in the same matter alleges that on May 3, 2014, HSI Special Agents responded to a house on Plateau Drive, San Jose, Calif., based on a report that drugs had been discovered on the premises. The agents found methamphetamine hidden beneath the stairwells. An HSI special agent weighted the bags and determined they had a total gross weight of 42.2 Kilograms (over 90 pounds).

According to the affidavit, the house was rented by Castaneda-Aleman who lived there with her boyfriend Emmanuel Navarro Gallegos. Castaneda-Aleman was arrested on May 3, 2014. According to the affidavit, the agents attempted to detain Emmanuel Navarro Gallegos on May 4, 2014, but he remains at large.

Castaneda-Aleman had her initial appearance before the Honorable Paul S. Grewal, United States Magistrate Court Judge, in San Jose, on May 5, 2014. She then had a detention hearing on May 9, 2014, and was ordered detained pending trial.

The following are the maximum statutory penalties for each charge in the indictment:

Counts 1 and 2 (against both defendants): Conspiracy to possess with intent to distribute methamphetamine and possession of methamphetamine with the intent to distribute (21 U.S.C. §§ 841(a)(1) and 846):

1. Maximum prison sentence life
2. Mandatory minimum prison sentence 10 years
3. Maximum fine $10,000,000
4. Minimum supervised release term 5 years
5. Mandatory special assessment $100

Count 3 (against Castaneda-Aleman only): Maintaining Drug-involved Premises (21 U.S.C. § 856):

1. Maximum prison sentence 20 years
2. Maximum fine $500,000
3. Maximum supervised release term 3 years
4. Mandatory special assessment $100

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

This case is in part the product of an extensive investigation by the Organized Crime Drug Enforcement Task Force (OCDETF), a focused multi-agency, multi-jurisdictional task force investigating and prosecuting the most significant drug trafficking organizations throughout the United States by leveraging the combined expertise of federal, state and local law enforcement agencies.

Please note, an indictment contains only allegations against a person and, as with all defendants, Maria Anay Castaneda-Aleman and Emmanuel Navarro Gallegos, must be presumed innocent unless and until proven guilty.

(Castaneda-Aleman and Navarro Gallegos complaint )

(Castaneda-Aleman and Navarro Gallegos indictment )

 

 

SAN FRANCISCO – United States Attorney Melinda Haag announced today that Reunion Mortgage, Inc. and its former co-owners have agreed to pay $1.04 million to settle allegations that the company submitted false claims to the Federal Housing Administration (“FHA”) in violation of the False Claims Act, 31 U.S.C. §§ 3729-33.

The United States alleged that Reunion Mortgage falsely certified that certain loans met the U.S. Housing and Urban Development’s (“HUD”) requirements and were eligible for FHA insurance. The complaint further alleged that Reunion Mortgage knew that the company’s underwriters routinely failed to perform basic due diligence, failed to verify information in the loan file that bore directly on the borrower’s ability to make payments on the mortgage, and repeatedly certified mortgage loans that contained serious defects and departures from HUD’s underwriting standards. Reunion Mortgage, now out of business, was formerly located in Milpitas. The United States also alleged that Reunion Mortgage improperly issued a dividend to co-owners David Thayer and R. Kent Harvey that rendered the company insolvent and unable to pay its debts to the United States, in violation of the Federal Debt Collections Procedures Act.

“This Office is committed to holding lenders accountable for fraudulent and reckless underwriting of federally insured FHA home loans. The systematic abuse of the system will not be tolerated,” said United States Attorney Melinda Haag.

Ila C. Deiss is the Assistant U.S. Attorney who handled the case with the assistance of Michael Zehr, Tina Louie, and Sarah Oldridge. The case is the result of an investigation by HUD’s Office of the Inspector General’s Civil Fraud Division, and is part of HUD's High Default Lender Initiative.

 

 

OAKLAND – A Newark man pleaded guilty to possession of child pornography and was sentenced yesterday to 92 months in prison, announced San Francisco Homeland Security Investigations Special Agent in Charge Clark Settles and United States Attorney Melinda Haag.

Jesse Yang, 25, was sentenced by the Honorable Yvonne Gonzalez Rogers, United States District Court Judge. Judge Gonzalez Rogers also sentenced Yang to ten years of supervised release.

According to court documents and information presented at court, on Nov. 16, 2011, the Royal Canadian Mountain Police received a telephone call from a man who reported that he found his 14 year old daughter partially dressed in front of a computer and webcam at their home. During the investigation, the victim’s father provided the laptop computer to officers. The computer was open to a Skype chat window between the victim and Yang, identifying himself online as “J”. The chat window contained text messages back and forth with Yang instructing the victim to remove her clothing and open her legs in front of the computer. Yang continued on to suggest to the victim that she engage in sexual acts in front of the webcam.

Yang met the victim through momegl .com, a website designed to allow users to anonymously chat with strangers. In order to entice his minor victim to undress and perform sexual acts, Yang, posing as a 15 year old boy, told the victim how beautiful he thought she was and encouraged her to play sexual explicit games while in front of the webcam, during which she would receive points for following instructions suggested by Yang while on line. Yang provided the victim instructions on how to set up her webcam.

Through Yang’s email address, which he provided to the victim, law enforcement officers were able to ascertain his computer’s IP address and thereafter identify him as Jessy Yang.

The case was prosecuted by Assistant U.S. Attorneys Randy Luskey and Rodney Villazor of the Northern District of California and was investigated by the Department of Homeland Security.

(Yang superseding information )

 

 

SAN JOSE – John Nyunt pleaded guilty yesterday in federal court to extortion and wire fraud, announced United States Attorney Melinda Haag and FBI Special Agent in Charge David J. Johnson.

In pleading guilty, Nyunt admitted that he obtained property from a victim who came to the police department to report a crime. Specifically, Nyunt told the victim that the police department would not investigate her complaint that she was the victim of electronic surveillance and stalking. Instead of taking official action, Nyunt instructed the victim to seek the assistance of a private investigative agency. Nyunt ran said investigative agency with the assistance of another person. Upon receiving the request for assistance at his investigative agency, Nyunt and his accomplice pretended to investigate the victim’s complaint and also pretended to provide the victim with security in the form of off-duty police officers, neither of which was true. The victim paid Nyunt and his accomplice $10,000 for their purported services.

Nyunt also admitted that he instructed another Pacific Grove police officer not to make an official investigation of the victim’s complaint, and rather to give Nyunt any evidence provided by the victim. Nyunt maintained a file of this evidence without the knowledge of the police department. When the victim could make no further payments for the services of the investigative agency, Nyunt told her falsely that the police department and the FBI would continue to investigate her complaint.

Furthermore, Nyunt admitted that he gave his accomplice his departmental password, and access, to a commercial database intended for the sole use of law enforcement. He did so, without the authorization or knowledge of the police department, in order that his accomplice could obtain financial and personal information belonging to various other people. With Nyunt’s knowledge, his accomplice presented herself falsely as an authorized departmental user of the commercial database and did, in fact, obtain financial and personal information belonging to various people. Nyunt concealed this wrongful use from the department, in part by making false statements to department officials.

On April 24, 2014, Nyunt pleaded guilty in state court in Monterey County to one count of dissuading a person from reporting a crime by threats of violence, one count of being an accessory after the fact to theft and burglary, and one count of being an accomplice to the burglary of a business, all felonies, and received a sentence of three years imprisonment. Nyunt is currently being held in federal custody.

Nyunt, 51, was charged by information on April 24, 2014, with one count of extortion, in violation of 18 U.S.C. § 1951, and one count of wire fraud, in violation of 18 U.S.C. § 1343. Under the plea agreement, Nyunt pleaded guilty to both counts.

Nyunt’s sentencing hearing is scheduled for Sept. 2, 2014, at 9:00 a.m., before the Honorable Beth L. Freeman, United States District Court Judge, in San Jose. The maximum statutory penalty for each count in violation of 18 U.S.C. §§ 1951 and 1343 is twenty 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 two years imprisonment, to run concurrent with his state sentence. 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. This investigation was conducted jointly by the FBI and investigators from the Monterey County District Attorney’s Office.

(Nyunt information )

 

 

SAN FRANCISCO – Monico Dominguez was sentenced today to thirty two years imprisonment, announced United States Attorney Melinda Haag and FBI Special Agent in Charge David J. Johnson.

Dominguez, of Santa Rosa, was indicted by a federal grand jury on Nov. 29, 2012 and was charged with of one count of robbery, one count of attempted robbery, two counts of conspiring to commit robbery, two counts of possession of a firearm in furtherance of a crime of violence, three counts of money laundering, and one count of structuring. Dominguez was found guilty by a jury on Feb. 24, 2014. The jury found that on Aug. 11, 2011, Dominguez committed an armed robbery of the Garda Cash Logistics warehouse in Santa Rosa, Calif., that he laundered and structured the substantial cash proceeds from that robbery, and that he attempted to commit a second robbery at that same facility on Aug. 6, 2012. The guilty verdict followed a two week jury trial before the Honorable Edward M. Chen, United States District Court Judge.

Evidence at trial showed that on Aug. 11, 2011, Dominguez and an accomplice dove under the closing garage door of the Garda warehouse as an armored car was returning from the night shift, that Dominguez held up the guards with an AK-47 assault rifle before tying them up and entering the vault. Dominguez stuffed just over $909,000 in cash into a duffel bag before fleeing the scene. Dominguez got away with this heist for approximately one year, during which he opened new bank accounts, made substantial cash deposits, and purchased multiple Harley Davidson motorcycles, cars, and expensive construction equipment. The evidence at trial showed that on August 6, 2012, Dominguez set in motion a plan to steal an armored car from the Garda warehouse, but the robbery was foiled before it could happen with the assistance of a confidential informant who had reported Dominguez’s plan to the Federal Bureau of Investigation and Santa Rosa Police Department.

The sentence was handed down by the Edward M. Chen, United States District Court Judge in San Francisco. Judge Chen also sentenced the defendant to a 3 year period of supervised release, $907,000 in restitution to Garda, and a $100 special assessment.

Assistant U.S. Attorneys Randy Luskey and Ben Tolkoff prosecuted this case with the assistance of Daniel Charlier-Smith and Christine Tian. This prosecution is the result of a joint investigation by the Federal Bureau of Investigation and the Santa Rosa Police Department.

(Dominguez superseding indictment )

 

 

SAN FRANCISCO - Michael Thomas Hamilton, a/k/a Thomas Smith, pleaded guilty today in federal court in San Francisco to two counts of wire fraud, announced United States Attorney Melinda Haag and FBI Special Agent in Charge David J. Johnson.

In pleading guilty, 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 minimum amount of revenue. To induce investors to turn over their money and to lull them into falsely believing their investment was profitable, he 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.

According to the plea agreement, by October 2013, Hamilton had solicited approximately $1,616,000 from more than 20 investors in Calif., Ore., and Mass.

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. He is currently released on a $75,000 bond.

Hamilton’s sentencing hearing is scheduled for Sept. 4, 2014, at 1:30 p.m., before the Honorable William H. Orrick, United States District Court Judge, in San Francisco. The maximum statutory penalty for each count of wire fraud, in violation of 18 U.S.C. § 1343, is 20 years’ imprisonment and a fine of $250,000 or twice the gross gain or loss from the offense, 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.

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.

(Hamilton indictment )

 

 

SAN FRANCISCO – U.S. Attorney Haag, Alameda County District Attorney Nancy O’Malley, DEA, HIDTA, State Superintendent of Public Instruction Tom Torlakson, National HIDTA Director Mike Gottlieb, District Attorneys George Gascon (San Francisco), Ed Berberian (Marin), Mark Peterson (Contra Costa), Steve Wagstaffe (San Mateo), Gary Lieberstein (Napa), Board Presidents of the Medical Board of California, Pharmacy Board of California and Dental Board of California, The Partnership at DrugFree.org, UCSF, pharmaceutical CEOs, educators, pharmacists, medical insurers, coroners, physicians, local, state and federal law enforcement officials, policymakers, families and community members whose lives have been devastated by prescription drug abuse, and community members who have formed coalitions to address awareness, education and prevention efforts are joining together today for the Bay Area Prescription Drug Abuse Summit.

The event is being held at Futures Without Violence, 100 Montgomery Street, Presidio of San Francisco. Agenda attached.

Attorney General Eric Holder has recently stated that the rise in overdose deaths from heroin and prescription painkillers in the United States in recent years is an “urgent public health crisis.”

As part of the presentations it was revealed that nationally drugs overtook traffic accidents as a cause of death in 2009, and this trend continues. In Contra Costa County, accidental drug poisoning has been exceeding traffic accident fatalities in recent years. The majority of those overdoses involved prescription drugs. In 2013, for the first time in Marin County, the same is true.

U.S. Attorney Haag stated: “The Department of Justice has made combatting prescription drug abuse a high priority. U.S. Attorneys across the country are working hand in hand with law enforcement and the community to break down silos and force the conversation among relevant industries and agencies to bring this epidemic under control. Today’s summit furthers that effort. Awareness is a key component in bringing the issue out into the open so that parents and young people understand the prevalence of these dangerous drugs, and the devastating effects when they are misused.”

“Prescription drug abuse is a public safety and public health issue,” stated co-host Alameda County District Attorney Nancy O’Malley. “These drugs are highly susceptible to misuse and abuse, which can lead to addiction, accidental poisoning, or other grave consequences. Rates of prescription drug abuse and addiction in Alameda County as well as around the state and nation are alarmingly high, as are the numbers of tragic accidental overdoses due to these drugs. I applaud our Federal partners for their attention and dedication to addressing this epidemic.”

California State Superintendent of Public Instruction Tom Torlakson made opening remarks: “Prescription drug abuse continues to be a major threat to the safety and wellbeing of our young people, and it comes with some unique challenges. We need to educate parents and grandparents, educators, health care providers, and communities about how to keep young people safe from the abuse of prescription drugs.”

Co-host and DEA Special Agent in Charge Jay Fitzpatrick added: “Prescription drug abuse continues to plague the nation at an alarming rate, crossing all age, gender, and socioeconomic boundaries. It is the fastest growing drug problem in America and has reached epidemic proportions. Not only will this summit provide us with an opportunity to learn the extent of the problem in our communities, but also allows us to create an important dialog as we work toward the common goal of combatting this serious public health and safety issue.”

Prescription drug abuse has taken hold in every community and every state in the union. Governors across the country are facing the burgeoning issue of prescription drug abuse and the related resurgence of heroin, and like the Bay Area, are grappling with this public health crisis.

The Centers for Disease Control and Prevention has classified prescription drug abuse as an epidemic in the United States. According to CDC, one in twenty people 12 years and older used prescription painkillers without a prescription in 2010. And more than 2.1 million people in the U.S. are addicted to prescription opioid painkillers.

Many people who misuse prescription drugs, particularly teens, believe these substances are safer than illicit drugs because they are prescribed by a healthcare professional and dispensed by a pharmacist. The number of unintentional overdose deaths from prescription pain relievers has soared in the United States, more than quadrupling since 1999. In 2010 nearly 60% of drug overdoses involved pharmaceutical drugs. Opioids (oxycodone, hydrocodone and methadone) were involved in approximately three of every four pharmaceutical deaths.

Opioid addiction can lead to heroin addiction. As an addict’s tolerance for opioids increases, the habit becomes increasing and exponentially more expensive. At some point, heroin becomes the drug of choice for many because of its wide availability and far lower cost. A recent study concluded that 81% of heroin initiates mis-used prescription pain relievers before turning to heroin.

DEA and HIDTA addressed the substantial uptick in heroin in the Bay Area and California – much of it driven by a voracious appetite for prescription drugs. Co-host Mike Sena, HIDTA Director for Northern California said: “The uptick in the availability of prescription drugs on our streets and the resurgence of heroin on a large scale in Northern California is of great concern to law enforcement. It is essential that we focus our attention on enforcement, but equally important is raising awareness and providing education about the dangers of prescription drug abuse. We are hearing of too many young people descending into heroin when they can no longer obtain or afford prescription drugs. It is best to prevent their use of prescription drugs and make them aware of the dangers associated with this behavior.”

Michael Gottlieb, Director of the High Intensity Drug Trafficking Area Program at the White House Office of National Drug Control Policy spoke at the event. “The abuse of prescription drugs is having a devastating impact on public health and safety in communities throughout the Bay area and across the United States,” he said. “While there are no silver bullet solutions to this challenge, we know that every sector of our society - parents, patients, healthcare providers, law enforcement and manufacturers – each play a vital role in making our communities healthier and safer. The drug challenge is a public health issue, not just a criminal justice issue and by pursing a holistic response to this epidemic we know we can save lives.”

To address the threat of prescription drug abuse and diversion while also protecting legitimate access to these drugs for those suffering from pain, the Administration released Epidemic: Responding to America's Prescription Drug Abuse Crisis in 2011. This action plan provides a national framework for reducing prescription drug diversion and abuse by supporting education for patients and healthcare providers, recommending more convenient and environmentally responsible disposal methods to remove unused medications from the home, supporting the expansion of state-based prescription drug monitoring programs, and reducing the prevalence of pill mills and doctor shopping through enforcement efforts.

The Governor of Vermont recently dedicated his state of the union speech to the issue of heroin addiction. In Vermont, last year there were 21 fatal heroin overdoses, twice as many as the year before, and five times the number just five years ago.

A few more disturbing national statistics:

• The number of prescriptions written for opioids has increased ten-fold since 1990.
• There was a five-fold increase in treatment admissions for prescription painkillers between 2000 and 2010.
• Between 2006 and 2010, heroin overdose deaths increased nationally by 45%. Heroin treatment numbers are up over 250% since 2000 and over 40% in the past year.
• 69% of those who mis-used pain relievers obtained them from a friend or relative.
• In Ohio, from 1999-2010, drug overdose deaths increased by 372%, and 45% of those involved prescription drugs.

Drug abuse is not a problem that law enforcement can solve alone. This is the reason for bringing experts in the Bay Area together today -- educators, doctors, pharmacists, pharmaceutical companies, researchers, policymakers, community activists, elected officials, local, state and federal law enforcement, practitioners in the rehabilitation world, the media, and others, to help tackle this challenging issue and highlight the absolute need for a focused effort in this area including prevention, awareness, treatment, and enforcement.

One significant challenge in the Bay Area is a lack of local statistics. Anecdotally participants and panelists are all seeing prescription drug abuse in the Bay Area on the rise and our teenagers and young adults are increasingly becoming the new face of heroin addiction. One local rehab director with decades of experience in the field called the influx of prescription drug and heroin addicted young adults in the Bay Area a “tsunami.”

U.S. Attorney Haag remarked: “The summit is intended to be the start of a movement to get in front of the issue in Northern California – to collect information, share best practices, develop ways to track and measure this growing phenomenon, and devise ways to contain this growing epidemic – before we are years down the road and more lives are lost or destroyed.”

(Summit Agenda )

 

 

When: May 7, 2014.

Where: Futures Without Violence, 100 Montgomery Street, Presidio of San Francisco.

Who: U.S. Attorney Haag, Alameda County District Attorney Nancy O’Malley, DEA, HIDTA, State Superintendent of Public Instruction Tom Torlakson, National HIDTA Director Mike Gottlieb, District Attorneys George Gascon (San Francisco), Ed Berberian (Marin), Mark Peterson (Contra Costa), Steve Wagstaffe (San Mateo), Gary Lieberstein (Napa), Board Presidents of the Medical Board of California, Pharmacy Board of California and Dental Board of California, The Partnership at DrugFree.org, UCSF, pharmaceutical CEOs, educators, pharmacists, medical insurers, coroners, physicians, local, state and federal law enforcement officials, policymakers, families and community members whose lives have been devastated by prescription drug abuse, and community members who have formed coalitions to address awareness, education and prevention efforts.

Agenda: Attached/Included.

Attorney General Eric Holder has recently stated that the rise in overdose deaths from heroin and prescription painkillers in the United States in recent years is an “urgent public health crisis.”

Prescription drug abuse has taken hold in every community and every state in the union. Governors across the country are facing the burgeoning issue of prescription drug abuse and the related resurgence of heroin, and like the Bay Area, are grappling with this public health crisis.

The Centers for Disease Control and Prevention has classified prescription drug abuse as an epidemic in the United States. According to the CDC, one in 20 people 12 years and older used prescription painkillers without a prescription in 2010. And more than 2.1 million people in the U.S. are addicted to prescription opioid painkillers.

Many people who misuse prescription drugs, particularly teens, believe these substances are safer than illicit drugs because they are prescribed by a healthcare professional and dispensed by a pharmacist. The number of unintentional overdose deaths from prescription pain relievers has soared in the United States, more than quadrupling since 1999. In 2010 nearly 60 percent of drug overdoses involved pharmaceutical drugs. Opioids (oxycodone, hydrocodone and methadone) were involved in approximately 3 of every 4 pharmaceutical deaths.

Opioid addiction can lead to heroin addiction. As an addict’s tolerance for opioids increases, the habit becomes increasing and exponentially more expensive. At some point, heroin becomes the drug of choice for many because of its wide availability and far lower cost. A recent study concluded that 81 percent of heroin initiates mis-used prescription pain relievers before turning to heroin.

The Governor of Vermont recently dedicated his state of the union speech to the issue of heroin addiction. In Vermont, last year there were 21 fatal heroin overdoses, twice as many as the year before, and five times the number just five years ago. DEA and HIDTA will talk about the substantial uptick in heroin in the Bay Area and California – much of it driven by a voracious appetite for prescription drugs.

A few more disturbing statistics:

• The number of prescriptions written for opioids has increased 10-fold since 1990.
• There was a five-fold increase in treatment admissions for prescription painkillers between 2000 and 2010.
• Between 2006 and 2010, heroin overdose deaths increased nationally by 45 percent. Heroin treatment numbers are up over 250% since 2000 and over 40% in the past year.
• 69% of those who mis-used pain relievers obtained them from a friend or relative.
• In Ohio, from 1999-2010, drug overdose deaths increased by 372%, and 45% of those involved prescription drugs.

Nationally, drugs overtook traffic accidents as a cause of death in 2009, and this trend continues. In Contra Costa County, accidental drug poisoning has been exceeding traffic accident fatalities in recent years. The majority of those overdoses involved prescription drugs. In 2013, for the first time in Marin County, the same is true.

Drug abuse is not a problem that law enforcement can solve alone. President Obama, through the Office of National Drug Control Policy (ONDCP), released the 2011 Prescription Drug Abuse Prevention Plan, which outlines the need for a multi-pronged approach involving education, tracking and monitoring, proper disposal of medicines, and enforcement. This is the reason for bringing experts in the Bay Area together on May 7th -- educators, doctors, pharmacists, pharmaceutical companies, researchers, policymakers, community activists, elected officials, local, state and federal law enforcement, practitioners in the rehabilitation world, the media, and others, to help tackle this challenging issue and highlight the absolute need for a focused effort in this area including prevention, awareness, treatment, and enforcement.

One significant challenge in the Bay Area is a lack of local statistics. Anecdotally we are all seeing prescription drug abuse in the Bay Area on the rise and our teenagers and young adults are increasingly becoming the new face of heroin addiction. One local rehab director with decades of experience in the field called the influx of prescription drug and heroin addicted young adults in the Bay Area a “tsunami.”

This gathering is intended to be the start of a movement to get in front of this issue in Northern California – to collect information, share best practices, develop ways to track and measure this growing phenomenon, and devise ways to contain this growing epidemic – before we are years down the road and more lives are lost or destroyed.

(Summit Agenda )

 

 

SAN FRANCISCO – Thomasha Mayfield was sentenced yesterday to more than 6 years in prison, announced U.S. Attorney Melinda Haag and FBI Special Agent in Charge David J. Johnson.

Mayfield, 39, of San Francisco, and Tony Patton, 47, of San Mateo, were indicted by a federal grand jury on Jan. 8, 2013. Mayfield and Patton were charged with conspiracy to possess with intent to distribute and distribution of cocaine base in the form of crack cocaine (Count One), and possession with the intent to distribute and distribution of cocaine base in the form of crack (Counts Two through Eight). Mayfield was charged with a total of seven drug trafficking counts. Tony Patton was charged with three counts of drug trafficking.

Mayfield pleaded guilty on Jan. 21, 2014, to Count Seven for possession with the intent to distribute and distribution of cocaine base in the form of crack, in violation of 21 U.S.C. § 841(a). According to the plea agreement, Mayfield admitted to distributing approximately 100 grams of crack cocaine to another individual on Feb. 18, 2010. Mayfield also admitted that the total amount of crack cocaine attributable to her in the case is approximately 472 grams, as she also sold crack cocaine on numerous other occasions between September 2008 and February 2010.

The sentence was handed down by the Honorable Richard Seeborg, United States District Court Judge in San Francisco, following a guilty plea on Count Seven of the Indictment in violation of 21 U.S.C. § 841(a). Judge Seeborg also sentenced the defendant to a 4 year period of supervised release. Mayfield has been in federal custody since her remand on March 11, 2014. Patton pleaded guilty on June 25, 2013, and was sentenced on Sept. 24, 2013.

Chinhayi Coleman Cadet is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Yanira Osorio. The prosecution is the result of a an investigation by the Federal Bureau of Investigation.

(Mayfield indictment )

 

 

SAN FRANCISCO –Yaowapha Ritdet and Steve Walter were arraigned today in court on five counts of filing false tax returns. Yaowapha Ritdet was also arraigned on two counts of willfully failing to report a foreign bank account, announced U.S. Attorney Melinda Haag and Internal Revenue Service, Criminal Investigation, Special Agent in Charge José M. Martinez.

According to the Indictment, unsealed today, Ritdet and Walter were residents of Ukiah, Calif. and owners of Tuen Tong Thai Cuisine and Walter Café. For the tax years 2007 through 2011, Ritdet and Walter willfully signed Form 1040 U.S. Individual Income Tax Returns which they did not believe to be true and correct. The returns failed to disclose rental income, foreign bank accounts, and gross receipts or sales and income received from their business activities.

The Indictment also alleges that from 2009 through 2010, Ritdet maintained a passbook savings account at Kasikorn Bank, Public Company Limited, a bank organized under the laws of Thailand and operating in Thailand. In 2009 and 2010, Ritdet failed to file a Foreign Bank Account Report (FBAR) disclosing her financial interest in the passbook savings account, which had a value of greater than $10,000 during the calendar years 2008 and 2009.

Ritdet, 53, and Walter, 52, both of Ukiah were indicted on April 15, 2014. They were arrested this morning and made their initial appearance before the Honorable Nandor J. Vadas in Eureka, United States Magistrate Court Judge. Ritdet and Walter’s next court appearance is on May 7, 2014 at 9:30 a.m. before the Honorable Jacqueline Scott Corley, United States Magistrate Court Judge in San Francisco.

The maximum penalty for each count of failure to file a FBAR, in violation of Title 31, U.S.C §§ 5314 and 5322(a) is five years in prison and a fine of $250,000. The maximum penalty for filing a false tax return, in in violation of Title 26, U.S.C § 7206(1) is three 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 Internal Revenue Service, Criminal Investigation.

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

(Ritdet and Walter indictment )

 

 

SAN JOSE – Jamal Raphael Broussard pleaded guilty in federal court today, to transportation of minors for prostitution, announced U.S. Attorney Melinda Haag and FBI Special Agent in Charge David J. Johnson.

In pleading guilty, Broussard admitted that beginning in the summer of 2010 and continuing at least through May 2013, he recruited and transported two minor females and caused them to engage in commercial sex acts, knowing that they were high school students younger than 18-years-old. Broussard admitted that he received the money from the minors for their engaging in these commercial sex acts as he acted as a “pimp” for these minors, providing them with clothing, giving them instructions, and advertising their services on the Internet using pictures of the minors to solicit customers. Further, Broussard admitted to having arranged or induced the travel of these minor victims, providing the minors with fake identifications and sending them from California to almost every state across the country for the express purpose of engaging in prostitution.

Broussard, 24, of Hercules, CA, was indicted by a federal Grand Jury on Oct. 16, 2013. He was charged with two counts of sex trafficking of children in violation of Title 18, United States Code Section 1591, two counts of transportation of minors for prostitution in violation of Title 18 United States Code Section 2423, and two counts of coercion and enticement for prostitution in violation of Title 18 United States Code Section 2422. Under the plea agreement, Broussard pled guilty to the two counts of transportation of minors for prostitution.

Broussard, who has been in custody since his arrest on Oct. 30, 2013, is currently being held in Santa Clara County Main Jail pending his sentencing.

Broussard’s sentencing hearing is scheduled for Aug. 13, 2014, at 9:30 a.m., before The Honorable Lucy H. Koh, United States District Court Judge, in San Jose. The maximum statutory penalty for each count in violation of 18 U.S.C. § 2423 is 30 years, with a mandatory minimum sentence of 10 years imprisonment, and a fine of $250,000, plus restitution if appropriate. However, any sentence will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.

Amie Rooney is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Nina Williams and Tracey Andersen. The prosecution is the result of an investigation by the Federal Bureau of Investigation and the San Jose Police Department Human Trafficking Task Force.

Anyone who suspects instances of human trafficking are encouraged to call the FBI or the Human Trafficking Hotline at 1-888-373-7888. Anonymous calls are welcome.

In addition, suspected child sexual exploitation or missing children may be reported to the National Center for Missing & Exploited Children, via its toll-free 24-hour hotline, 1-800-843-5678.

(Broussard indictment )

 

 

OAKLAND – Anthony Keslinke was indicted by a federal grand jury yesterday and charged with money laundering, announced U.S. Attorney Melinda Haag, Drug Enforcement Administration Special Agent in Charge Jay Fitzpatrick, and Internal Revenue Service, Criminal Investigation, Special Agent in Charge José M. Martinez.

The Indictment alleges that between August of 2013 and February of 2014, Keslinke met with an undercover agent on multiple occasions purporting to be a drug dealer. On five separate occasions, Keslinke accepted a total of $550,000 from the undercover agent. In an attempt to conceal the true source of the funds, Keslinke repeatedly deposited the money received from the undercover agent into business bank accounts under Keslinke's control. Keslinke then attempted to launder the money by wiring it from his business bank accounts to an account controlled by the undercover agent. During the investigation, Keslinke routinely kept 8-10% of the money provided to him from the undercover agent as a fee for his services.

Keslinke was arrested on Feb. 10, 2014, at his residence in Danville, Calif. According to the Indictment, that same day, agents seized over $320,000 in cash from Keslinke’s residence and approximately $1.4 million from bank accounts under his control. Keslinke is currently out of custody on a $450,000, bond pending trial. Keslinke’s next court appearance is on June 5, 2014, at 9:30 a.m. in front of the Honorable Kandis A. Westmore, Magistrate Court Judge in Oakland for arraignment on the Indictment.

The maximum statutory penalty for each count of money laundering alleged in the indictment is 20 years imprisonment.

Assistant U.S. Attorney Aaron Wegner is prosecuting the case with the assistance of Jeanne Carstensen. The prosecution is the result of an investigation by the Drug Enforcement Administration and Internal Revenue Service. The Contra Costa Sheriff’s Office and Livermore Police Department have also provided assistance during the investigation. The investigation was conducted and funded by the Organized Crime Drug Enforcement Task Force (OCDETF), a multi-agency task force that coordinates long-term narcotics trafficking investigations.

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

(Keslinke indictment )

(Keslinke affidavit redacted )

 

 

OAKLAND, Calif. – Jonathan Davis pleaded guilty today to wire fraud, announced United States Attorney Melinda Haag and IRS-CI Special Agent in Charge José M. Martinez.

According to the plea agreement, Davis devised a scheme to obtain money by preparing and filing false federal income tax returns in the names of other people. To carry out this scheme, Davis had friends obtain names, birthdates, and social security numbers of people who did not authorize use that information on the filed tax returns. Davis opened bank accounts in the names of these victims and linked those accounts to debit cards for the purpose of receiving the fraudulent tax refunds. Davis directed the banks to mail the debit cards to himself or his friends and paid his friends up to $200 for addresses that he could use for bank accounts, debit cards, and tax returns.

During 2011 and 2012, Davis caused 111 materially false federal income tax returns to be electronically filed. On those 111 returns, Davis falsely claimed refunds of $484,546, and successfully obtained $178,426 from the IRS.

Davis, 32, of Oakland, was indicted on August 22, 2013. He was charged with 11 counts of wire fraud and 11 counts of aggravated identity theft. He pleaded guilty to one count of wire fraud.

Davis’s sentencing hearing is scheduled for Aug. 24, 2014, before the Honorable Jon S. Tigar, U.S. District Judge, in San Francisco. The maximum statutory penalty for each count of wire fraud, in violation of Title 18, U.S.C § 1343, is 30 years in prison and a fine of $1,000,000. 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.

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

 

 

OAKLAND – Craig Goatley was sentenced today to 78 months in prison and Calvin Earl Odom, Jr., was sentenced on April 10, 2014, to 86 months in prison for armed bank robbery, announced U.S. Attorney Melinda Haag and FBI Special Agent in Charge David J. Johnson.

In pleading guilty, both men admitted that on the morning of Aug. 3, 2013, they robbed the Citibank, located at 1526 Webster Street in Alameda, Calif. Odom entered the bank first and sat down at a desk in the lobby area, purporting to be a bank customer. Goatley entered the bank moments later and proceeded to the customer line, where he waited for the next available teller. When the next teller became available, Goatley walked to the counter and brandished what appeared to be a black handgun. Goatley pointed the gun at the teller and demanded money. The frightened teller grabbed money from her teller drawers and tossed it in Goatley’s direction, ducking behind the teller counter. Goatley, thereafter, robbed a second teller who emerged from the back of the bank during the robbery. While Goatley was robbing the tellers, Odom pulled what appeared to be a black handgun from his waistband and pointed it at a bank employee who had been assisting him. Odom told the employee that the bank was being robbed and not to move. Goatley and Odom fled the bank, stealing $8,869. It was later discovered that the guns carried by Odom and Goatley were pellet guns.

Goatley, 28, of Oakland, and Odom, 25, of Berkeley, were indicted by a federal grand jury on Oct. 10, 2013, for armed bank robbery, in violation of 18 U.S.C. § 2113(a) and (d). Both men were arrested on Aug. 14, 2013, by the Alameda County’s Sheriff’s Office on separate charges and remained in state custody on those charges. The men initially appeared in federal court in November 2013, and have remained in federal custody since that time.

Both sentences were handed down by the Honorable Yvonne Gonzalez Rogers, United States District Court Judge in Oakland. Judge Gonzalez Rogers also sentenced each defendant to a 5-year period of supervised release.

Assistant U.S. Attorney Brian C. Lewis prosecuted this case with the assistance of Janice Pagsanjan. This prosecution is the result of an investigation by the Alameda Police Department and the Federal Bureau of Investigation.

(Goatley and Odom indictment )

 

 

SAN FRANCISCO – Martin Christopher Edwards of Napa, California, pleaded guilty yesterday to mail fraud and tax evasion, announced U.S. Attorney Melinda Haag, FBI Special Agent in Charge David J. Johnson, and Internal Revenue Service, Criminal Investigation, Special Agent in Charge José M. Martinez.

According to the plea agreement, while Edwards was the Vice President and General Manager of the WineTasting Network (“WTN”), he created Dufrane Compliance Trust, a fictitious entity that purported to provide compliance services to wineries and wine retailers. Edwards directed WTN to make payments to the Dufrane Compliance Trust totaling approximately $894,000. Edwards falsely represented to WTN employees that these payments were for tax compliance services rendered by Dufrane Compliance Trust, when, in fact, no such services were rendered. He deposited those funds into an account that he controlled and then used the money for his own personal expenses, including the purchase of a BMW, vacations, meals, and a cruise. In addition, during tax years 2010, 2011, and 2012, Edwards did not declare any of the fraudulently obtained funds on his federal income tax returns.

The maximum statutory penalty for mail fraud in violation of Title 18, United States Code, Section 1341, is 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 tax evasion in violation of Title 26, United States Code, Section 7201, is a prison term of 5 years, and a fine of $250,000 or twice the gross gain or loss from the offense, plus restitution.

Edwards sentencing is scheduled for Aug. 5, 2014, before the Honorable William Alsup, United States District Court Judge in San Francisco.

Kim A. Berger and Arvon Perteet are the Assistant U.S. Attorneys who are prosecuting the case with the assistance of Rawaty Yim and Bridget Kilkenney. This prosecution is the result of an investigation by the FBI, and the IRS, Criminal Investigation Division.

(Edwards information )

(Edwards indictment )

 

 

SAN FRANCISCO – Karim Iskander Bayyouk was sentenced today to 18 months in prison for obstructing an investigation by the Securities and Exchange Commission (SEC) into insider trading, announced U.S. Attorney Melinda Haag and FBI Special Agent in Charge David J. Johnson.

Bayyouk, 49, of Livonia, Mich., was found guilty by a jury on Sept. 3, 2013, of one count of obstruction of justice, in violation of 18 U.S.C. § 1505. The jury found that on or about May 31, 2007, Bayyouk obstructed and impeded an SEC investigation into securities fraud and insider trading relating to Biosite Incorporated securities. The guilty verdict followed a five-day jury trial before the Honorable Edward M. Chen, United States District Court Judge, in San Francisco.

Evidence at trial showed that on or about March 23, 2007, Bayyouk purchased approximately $100,000 in Biosite call options. Two days later, on March 25, 2007, Biosite announced it was merging with another company. After the merger announcement, Bayyouk sold the options and realized a profit of approximately $947,922. On or about May 31, 2007, attorneys from the SEC’s Division of Enforcement in San Francisco, Calif., conducted a telephone interview of Bayyouk as part of an insider trading investigation. During the interview, Bayyouk falsely stated, among other things, that he did not speak to anyone before investing in Biosite, that no one suggested Biosite to him, and that he did not suggest Biosite to his brother, who also traded Biosite call options on March 23, 2007. Evidence showed that the defendant traded in Biosite based on a tip from Bassam Salman, his brother-in-law.

On Sept. 30, 2013, in a separate trial, Salman was found guilty by a jury of one count of conspiracy to commit securities fraud, in violation of 18 U.S.C. § 371, and four counts of securities fraud, in violation of 15 U.S.C. §§ 78j(b) and 78ff. On April 9, 2014, Salman was sentenced to three years in prison and ordered to pay $738,539.42 in restitution.

Judge Chen also sentenced Bayyouk to three-years of supervised released and ordered him to pay a $5,000 fine.

Adam A. Reeves and Robert S. Leach are the Assistant U.S. Attorneys prosecuting the case with the assistance of Maryam Beros, Rayneisha Booth, and Patricia Mahoney. The prosecution is the result of a lengthy investigation by the FBI with substantial assistance from the Division of Enforcement of the SEC’s San Francisco Regional Office.

(Bayyouk indictment )

 

 

OAKLAND – Akysha Rockwell made her initial appearance today and Paul Lamont Lee made his initial appearance on Friday, April 11, 2014, in federal court on a 20-count indictment charging them with conspiracy to file false claims, false claims, and identity fraud, announced U.S. Attorney Melinda Haag and Internal Revenue Service, Criminal Investigation, Special Agent in Charge José M. Martinez.

According to the Indictment, unsealed today, between Jan. 12, 2012 and July 16, 2012, Lee and Rockwell participated in a scheme to obtain and help others obtain refunds from the IRS based on false claims. To accomplish this scheme, Lee and Rockwell allegedly obtained names, social security numbers, and dates of birth for numerous people. The defendants then electronically filed federal income tax returns, in the names of these other people, claiming refunds derived from false tax credits, including the Earned Income Credit, the Additional Child Tax Credit, and the American Opportunity Credit.

Lee and Rockwell, both of Oakland, were indicted on March 13, 2014.

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. 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 each count of identity fraud, in violation of a Title 18, U.S.C § 1028(a)(7), is two years in prison and a fine of $250,000.

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

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

(Lee & Rockwell indictment )

 

 

OAKLAND – Runnveer Singh, made his initial appearance today in federal court after being charged with 24 counts of aiding and assisting in the filing false tax returns, announced U.S. Attorney Melinda Haag and Internal Revenue Service, Criminal Investigation, Special Agent in Charge José M. Martinez.

According to the Indictment, unsealed today, from about April 15, 2010, through April 17, 2012, Singh willfully prepared and presented U.S. Individual Income Tax Returns, Forms 1040, to the IRS, on behalf of numerous taxpayers. False items on the returns included Schedule A deductions, Schedule C Expenses and Form 8863 – Part IV and Part V – Refundable and Nonrefundable Education Credits.

Singh, of Hayward, was indicted on March 25, 2014. He was arrested this morning and made his initial appearance before the Honorable Kandis A. Westmore, United States Magistrate Court Judge in Oakland. Singh was released on $100,000 bond. Singh’s next court appearance is scheduled for May 9, 2014 at 9:30 a.m. before the Honorable Jon S. Tigar, United States District Court Judge in Oakland.

The maximum penalty for each count assisting in filing tax returns in violation of Title 26, U.S.C § 7206(2) is three 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 Internal Revenue Service, Criminal Investigation.

(Singh indictment )

 

 

OAKLAND – An eight count indictment was unsealed in federal court this morning charging Dr. Toni Daniels with conspiracy to commit health care fraud, conspiracy to distribute and dispense controlled substances, distribution of controlled substances, and willful failure to file a tax return, announced U.S. Attorney Melinda Haag, FBI Special Agent in Charge David J. Johnson, U.S. Department of Health & Human Services, Office of Inspector General Special Agent in Charge Ivan Negroni, Drug Enforcement Administration Special Agent in Charge Jay Fitzpatrick, and Internal Revenue Service, Criminal Investigation, Special Agent in Charge José M. Martinez.

According to the Indictment, from October 2010 through April 2011, Toni Daniels was a self-employed medical doctor who met with customers at various retail establishments in and around Oakland, including Burger King, Chicken and Waffles, Dick’s Donuts, and Starbucks. During these meetings, Daniels allegedly sold prescriptions for oxycodone, hydrocodone, and other controlled substances, in exchange for cash payments, without first determining whether the purchasers had any medical need for these prescriptions. The Indictment further alleges that Daniels knew that many of her customers used Medicare, Medi-Cal, and other private health insurance plans to cover the cost of the medically unnecessary medications that she prescribed. Between Oct. 15, 2010 and April 15, 2011, Medicare and Medi-Cal paid over $64,000 in false and fraudulent claims for drugs prescribed by Daniels. The Indictment also alleges that Daniels made a gross income of $143,869 during calendar year 2010 and willfully failed to file an income tax return for that year.

Daniels, 62, of Berkeley, was indicted on March 27, 2014. She was arrested last night and made his initial appearance today before the Honorable Kandis A. Westmore, United States Magistrate Court Judge in Oakland. Daniels was remanded into custody and her next court appearance is scheduled for Monday, April 14, at 9:30am before judge Westmore for identification of counsel.

The maximum statutory penalties for conspiring to commit health care fraud, in violation of 18 U.S.C. § 1349, are a prison term of 10 years, a fine of $250,000, and 3 years of supervised release. The maximum statutory penalties for conspiring to distribute controlled substances and for distributing controlled substances, in violation of 21 U.S.C. §§ 846 and 841(a)(1), are a prison term of 20 years, a fine of $1,000,000, and 3 years of supervised release. The maximum statutory penalties for willfully failing to file a tax return, in violation of 26 U.S.C. § 7203, are a prison term of 1 year, a fine of $25,000, and 3 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.

Assistant U.S. Attorney Randy Luskey is prosecuting this case with the assistance of Vanessa Vargas. The prosecution resulted from a joint investigation by the FBI, the U.S. Department of Health & Human Services, Office of Inspector General, the Tactical Diversion Squad of the Drug Enforcement Administration, and IRS-Criminal Investigation.

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

(Daniels indictment )

 

 

SAN FRANCISCO – Bassam Yacoub Salman was sentenced yesterday to three-years in prison and ordered to pay $738,539.42 in restitution for engaging in an insider trading scheme, announced U.S. Attorney Melinda Haag, FBI Special Agent in Charge David J. Johnson,

Salman was found guilty by a jury on Sept. 30, 2013, of one count of conspiracy to commit securities fraud, in violation of 18 U.S.C. § 371, and four counts of securities fraud, in violation of 15 U.S.C. §§ 78j(b) and 78ff. The jury found that between 2004 and 2007, Salman, 54, of Orland Park, Ill., engaged in securities fraud and insider trading relating to securities issued by United Surgical Partners International, Inc. (USPI) and Biosite Incorporated (BSTE).

The charges against Salman were part of a larger, $5.3 million, insider trading scheme first charged in 2009 against Maher Fayez Kara, of San Carlos, Calif., a former investment banker at Citigroup Global Markets Inc. in N.Y., and Maher Kara’s brother, Mounir Fayez Kara, also known as Michael F. Kara, of Walnut Creek, Calif. In July 2011, Maher Kara and Michael Kara both pleaded guilty to conspiracy and securities fraud charges.

“Insider trading is a scourge that too often victimizes innocent investors and publicly traded companies alike,” said U.S. Attorney Melinda Haag. “This sentence should warn those who might engage in insider trading that the consequences can be severe.”

“Forming a network of conspirators in an attempt to cheat the marketplace has consequences,” said FBI SAC David Johnson. “Our financial system is designed to benefit honest working people; contradicting this through white collar crimes such as insider trading have criminal implications.”

Evidence at trial showed that on or about March 23, 2007, Salman, trading in an account owned by his brother-in-law, Karim Bayyouk, caused the purchase of approximately $100,000 in Biosite call options. Salman obtained the inside information about Biosite from Michael Kara, who had first obtained it from his brother, Maher Kara, who worked at Citigroup. Two days later, on March 25, 2007, Biosite announced it was merging with another company. After the merger announcement, Salman sold the options and realized a profit of approximately $947,922. Evidence at trial showed that Salman purchased securities in United Surgical Partners International, Inc. using inside information obtained from Michael Kara and, initially, from Maher Kara.

On Sept. 4, 2013, in a separate trial, another federal jury convicted Bayyouk, 49, of Livonia, Mich., of obstructing and impeding an investigation by the Securities and Exchange Commission (“SEC”) into securities fraud and insider trading relating to Biosite Incorporated, in violation of 18 U.S.C. § 1505, arising from a telephone interview with the SEC on or about May 31, 2007. Bayyouk is scheduled to be sentenced on April 15, 2014.

The sentence was handed down by the Honorable Edward M. Chen, United States District Court Judge in San Francisco. Judge Chen also sentenced the defendant to a three-year period of supervised release. Salman will begin serving the sentence on July 7, 2014.

Assistant U.S. Attorneys Adam A. Reeves and Robert S. Leach are handling these cases with the assistance of Maryam Beros, Rayneisha Booth, and Patricia Mahoney. The prosecution is the result of a lengthy investigation by the FBI with substantial assistance from the Division of Enforcement of the SEC’s San Francisco Regional Office.

(Salman unsealed indictment )

 

 

WASHINGTON – Bijan Madjlessi, David Lonich, Sean Cutting, and Brian Melland were arrested yesterday on federal charges of conspiracy, bank fraud, wire fraud, money laundering, false statements to a bank, false bank entries, and attempted obstruction of justice, announced United States Attorney Melinda Haag, Scott O’Briant, Special Agent in Charge, Special Inspector General for the Troubled Asset Relief Program, Leslie DeMarco, Special Agent in Charge, Federal Housing Finance Agency, Office of Inspector General, and Wade V. Walters, Special Agent in Charge, Federal Deposit Insurance Corporation, Office of Inspector General.

According to the Indictment returned by a federal grand jury on March 19, 2014, and unsealed yesterday, Madjlessi, 58, of Mill Valley, Calif., is alleged to have defaulted on a loan of more than $30,000,000, which he had personally guaranteed, relating to a real estate project known as the Park Lane Villas East in Santa Rosa, Calif. Working with attorney David Lonich, 59, of Santa Rosa, Calif., Cutting, 44, of Sonoma, Calif., then-CEO of Sonoma Valley Bank, and Melland, 45, of Santa Rosa, Calif., then-Senior Vice President of Sonoma Valley Bank, as well as a nominee borrower, Madjlessi allegedly obtained a loan from Sonoma Valley Bank to purchase his own defaulted loan on the premise that the nominee was the actual borrower when, in fact, he and Lonich were the true borrowers. According to the Indictment, Cutting and Melland failed to disclose their knowledge of the true identities of the borrowers to Sonoma Valley Bank and took steps to authorize the loan. Madjlessi’s nominee successfully obtained the loan from Sonoma Valley Bank and purchased the defaulted loan from a Federal Deposit Insurance Corporation contractor. Madjelssi, Lonich, and the nominee later settled litigation regarding the foreclosed loan, and Madjlessi and Lonich obtained title to the Park Lane Villas East.

The Indictment also alleges that Cutting helped Madjlessi and Lonich gain control of additional units at the Park Lane Villas East by issuing letters on Sonoma Valley Bank letterhead falsely stating that potential nominee buyers had sufficient funds at Sonoma Valley Bank for purchase. Madjlessi and Lonich are also alleged to have instructed the nominee to make false claims to federal agents and to a federal grand jury investigating the transactions.

Ultimately, Madjlessi and Lonich obtained refinancing on the Park Lane Villas East through Freddie Mac, but not before Sonoma Valley Bank failed in August 2010. Until it failed, Sonoma Valley Bank was insured by the Federal Deposit Insurance Corporation (FDIC), was a member of the Federal Home Loan Bank of San Francisco, and had received $8.65 million in funds from the Troubled Asset Relief Program.

All four defendants were arrested yesterday in Marin and Sonoma Counties in California and made initial appearances in federal court in San Francisco. Each defendant was released on a $250,000 bond. Defendants’ next scheduled hearing will be before the Honorable Susan Illston, United States District Court Judge, on April 18, 2014 at 11:00 a.m.

An Indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. The defendants face the following charges and maximum sentences:

DEFENDANT

CHARGES

Madjlessi, Lonich, Cutting, and Melland

One count of conspiracy to commit wire and bank fraud, in violation of 18 U.S.C. § 1349, with up to 30 years of imprisonment, 5 years of supervised release, and a fine of $1,000,000.

Madjlessi, Lonich, Cutting, and Melland

One count of bank fraud, in violation of 18 U.S.C. § 1344, with up to 30 years of imprisonment, 5 years of supervised release, and a fine of $1,000,000.

Madjlessi, Lonich, Cutting, and Melland

Six counts of wire fraud affecting a financial institution, in violation of 18 U.S.C. § 1343, each with up to 30 years of imprisonment, 5 years of supervised release, and a fine of $1,000,000.

Madjlessi, Lonich, Cutting, and Melland

One count of conspiracy to make false statements to a bank, in violation of 18 U.S.C. § 371, with up to 5 years of imprisonment, 3 years of supervised release, and a fine of $250,000.

Madjlessi, Lonich, Cutting, and Melland

One count of conspiracy to launder money, in violation of 18 U.S.C. § 1956(h), with up to 10 years of imprisonment, 3 years of supervised release, and a fine of $250,000 or twice the derived property.

Madjlessi, Lonich, Cutting, and Melland

Twelve counts of money laundering, in violation of 18 U.S.C. § 1957, each with up to 10 years of imprisonment, 3 years of supervised release, and a fine of $250,000 or twice the derived property.

Cutting and Melland

One count of conspiracy to misapply bank funds, in violation of 18 U.S.C. § 371, with up to 5 years of imprisonment, 3 years of supervised release, and a fine of $250,000.

Madjlessi, Lonich, and Cutting

Five counts of false bank entries, in violation of 18 U.S.C. § 1005, each with up to 30 years of imprisonment, 5 years of supervised release, and a fine of $1,000,000.

Madjlessi and Lonich

One count of attempted obstruction of justice, in violation of 18 U.S.C. § 1512(c), with up to 20 years of imprisonment, 3 years of supervised release, and a fine of $250,000.

In addition, the defendants face a $100 mandatory special assessment for each charge against them as well as potential forfeiture and restitution if convicted. 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.

Robert David Rees is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Rawaty Yim. The prosecution is the result of a three and a half year investigation by the Special Inspector General for the Troubled Asset Relief Program, the Federal Housing Finance Agency Office of Inspector General, and the Federal Deposit Insurance Corporation Office of Inspector General, with the assistance of the Marin County Sheriff’s Office, the Sonoma County Sheriff’s Office, and the Santa Rosa Police Department.

(SVB indictment )

 

 

WASHINGTON – ZAO Hewlett-Packard A.O. (HP Russia), an international subsidiary of the California technology company Hewlett-Packard Company (HP Co.), has agreed to plead guilty to felony violations of the Foreign Corrupt Practices Act (FCPA) and admit its role in bribing Russian government officials to secure a large technology contract with the Office of the Prosecutor General of the Russian Federation.

Deputy Assistant Attorney General Bruce Swartz of the Justice Department’s Criminal Division, U.S. Attorney Melinda Haag of the Northern District of California, Assistant Director in Charge Valerie Parlave of the FBI’s Washington Field Office and Chief Richard Weber of the Internal Revenue Service – Criminal Investigation (IRS-CI) made the announcement.

A criminal information filed today in U.S. District Court for the Northern District of California charges HP Russia with conspiracy and substantive violations of the anti-bribery and accounting provisions of the FCPA. In addition, the government is entering into criminal resolutions with HP subsidiaries in Poland and Mexico relating to contracts with Poland’s national police agency and Mexico’s state-owned petroleum company, respectively. Pursuant to a deferred prosecution agreement, the department filed a criminal information charging Hewlett-Packard Polska, Sp. Z o.o. (HP Poland) with violating the accounting provisions of the FCPA. Hewlett-Packard Mexico, S. de R.L. de C.V. (HP Mexico) has entered into a non-prosecution agreement with the government pursuant to which it will forfeit proceeds and admit and accept responsibility for its misconduct as set forth in the statement of facts. In total, the three HP entities will pay $76,760,224 in criminal penalties and forfeiture.

In a related FCPA matter, the U.S. Securities and Exchange Commission (SEC) filed a proposed final judgment to which HP Co. consented. Under the terms of the proposed final judgment, HP Co. agreed to pay $31,472,250 in disgorgement, prejudgment interest, and civil penalties, bringing the total amount of U.S. criminal and regulatory penalties paid by HP Co. and its subsidiaries (collectively, HP) to more than $108 million.

“Hewlett-Packard subsidiaries created a slush fund for bribe payments, set up an intricate web of shell companies and bank accounts to launder money, employed two sets of books to track bribe recipients, and used anonymous email accounts and prepaid mobile telephones to arrange covert meetings to hand over bags of cash,” said Deputy Assistant Attorney General Swartz. “Even as the tradecraft of corruption becomes more sophisticated, the department is staying a step ahead of those who choose to violate our laws, thanks to the diligent efforts of U.S. prosecutors and agents and our colleagues at the SEC, as well as the tremendous cooperation of our law enforcement partners in Germany, Poland and Mexico.”

“The United States Attorney’s Office, working alongside our colleagues in the Criminal Division, will vigorously police any efforts by companies in our district to illegally sell products to foreign governments using bribes or kickbacks in violation of the FCPA,” said U.S. Attorney Haag. “Today’s resolution with HP reinforces the fact that there is no double standard: U.S. businesses must respect the same ethics and compliance standards whether they are selling products to foreign governments or to the United States government.”

“This case demonstrates the FBI's ability to successfully coordinate with our foreign law enforcement partners to investigate and bring to justice corporations that choose to do business through bribery and off-the-book dealings,” said Assistant Director in Charge Parlave. “I want to thank the agents who worked on this case in Washington, New York and in our Legal Attaché offices in Mexico City, Moscow, Berlin and Warsaw as well as the prosecutors. Their work ensures a level playing field for businesses seeking lucrative overseas government contracts.”

“This agreement is the result of untangling a global labyrinth of complex financial transactions used by HP to facilitate bribes to foreign officials,” said IRS-CI Chief Weber. “IRS-CI has become a trusted leader in pursuit of corporations and executives who use hidden offshore assets and shell companies to circumvent the law. CI is committed to maintaining fair competition, free of corrupt practices, through a potent synthesis of global teamwork and our dynamic financial investigative talents.”

According to court documents, in 1999, the Russian government announced a project to automate the computer and telecommunications infrastructure of its Office of the Prosecutor General of the Russian Federation (GPO). Not only was that project itself worth more than $100 million, but HP Russia viewed it as the “golden key” that could unlock the door to another $100 to $150 million dollars in business with Russian government agencies. To secure a contract for the first phase of project, ultimately valued at more than €35 million, HP Russia executives and other employees structured the deal to create a secret slush fund totaling several million dollars, at least part of which was intended for bribes to Russian government officials.

As admitted in a statement of facts, HP Russia created excess profit margins for the slush fund through an elaborate buy-back deal structure, whereby (1) HP sold the computer hardware and other technology products called for under the contract to a Russian channel partner, (2) HP bought the same products back from an intermediary company at a nearly €8 million mark-up and paid the intermediary an additional €4.2 million for purported services, and (3) HP sold the same products to the GPO at the increased price. The payments to the intermediary were then largely transferred through a cascading series of shell companies – some of which were directly associated with government officials – registered in the United States, United Kingdom, British Virgin Islands and Belize. Much of these payments from the intermediary were laundered through off-shore bank accounts in Switzerland, Lithuania, Latvia and Austria. Portions of the funds were spent on travel, cars, jewelry, clothing, expensive watches, swimming pool technology, furniture, household appliances and other luxury goods. To keep track of these corrupt payments, the conspirators inside HP Russia kept two sets of books: secret spreadsheets that detailed the categories of recipients of the corrupt funds and sanitized versions that hid the corrupt payments from others outside of HP Russia. They also entered into off-the-books side agreements. As one example, an HP Russia executive executed a letter agreement to pay €2.8 million in purported “commission” fees to a U.K.-registered shell company, which was linked to a director of the Russian government agency responsible for managing the GPO project. HP Russia never disclosed the existence of the agreement to internal or external auditors or management outside of HP Russia and conducted no due diligence of the shell company.

According to an agreed statement of facts, in Poland, from 2006 through at least 2010, HP Poland falsified HP books and records and circumvented HP internal controls to execute and conceal a scheme to corruptly secure and maintain millions of dollars in technology contracts with the Komenda Glówna Policji (KGP), the Polish National Police agency. HP Poland made corrupt payments totaling more than $600,000 in the form of cash bribes and gifts, travel and entertainment to the KGP’s Director of Information and Communications Technology. Among other things, HP Poland gave the government official bags filled with hundreds of thousands of dollars of cash, provided the official with HP desktop and laptop computers, mobile devices and other products and took the official on a leisure trip to Las Vegas, which included drinks, dining, entertainment and a private tour flight over the Grand Canyon. To covertly communicate with the official about the corrupt scheme, an HP Poland executive used anonymous email accounts, prepaid mobile telephones and other methods meant to evade detection.

In Mexico, according to the non-prosecution agreement, HP Mexico falsified corporate books and records and circumvented HP internal controls in connection with contracts to sell hardware, software, and licenses to Mexico’s state-owned petroleum company, Petroleos Mexicanos (Pemex). To secure the contracts, HP Mexico understood that it had to retain a certain third-party consultant with close ties to senior executives of Pemex. HP agreed to pay a $1.41 million “commission” to the consultant and hid the payments by inserting into the deal structure another third party, which had been approved by HP as a channel partner. HP Mexico made the commission payment to the channel partner, which in turn forwarded the payments to the consultant. Shortly thereafter, the consultant paid one of the Pemex officials approximately $125,000.

Court filings acknowledge HP Co.’s extensive cooperation with the department, including conducting a robust internal investigation, voluntarily making U.S. and foreign employees available for interviews, and collecting, analyzing, and organizing voluminous evidence for the department. Court filings also acknowledge the extensive anti-corruption remedial efforts undertaken by HP Co., including taking appropriate disciplinary action against culpable employees, and enhancing HP Co.’s internal accounting, reporting, and compliance functions.

The case is being investigated by the FBI’s Washington Field Office with assistance from the FBI’s New York City Field Office and FBI Legal Attache offices in Mexico City, Moscow, Berlin and Warsaw, and the IRS-CI’s Oakland Field Office. The case is being prosecuted by Trial Attorneys Ryan Rohlfsen and Jason Linder of the Criminal Division’s Fraud Section, and Assistant U.S. Attorney Adam Reeves of the Northern District of California with the assistance of Phillip Villanueva, Maryam Beros and Rayneisha Booth. The Criminal Division’s Office of International Affairs also provided significant assistance in this matter.

The Justice Department expresses its deep appreciation for the significant assistance provided by the SEC’s Division of Enforcement, the Polish Anti-Corruption Bureau (CBA), the Polish Appellate Prosecutor’s Office, the Public Prosecutor’s Office in Dresden, Germany, and our law enforcement partners in Mexico, the United Kingdom, Lithuania, Latvia, Italy, Spain and Hungary.

Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.

(HP Mexico NPA )

(HP Poland DPA )

(HP Poland information )

(HP Russia information )

(HP Russia plea agreement )

 

 

SAN FRANCISCO – A federal grand jury returned an Indictment yesterday charging twenty-nine defendants with firearms trafficking, money laundering, murder-for-hire, drug distribution, trafficking in contraband cigarettes, and honest services fraud, announced U.S. Attorney Melinda Haag, FBI Special Agent in Charge David J. Johnson, and Internal Revenue Service, Criminal Investigation, Special Agent in Charge José M. Martinez. The indictment follows the March 26, 2014 arrests authorized by criminal complaint.

The defendants are charged in the indictment as follows:

DEFENDANT

CHARGES

Kwok Cheung CHOW, a/k/a Raymond CHOW, a/k/a Shrimp Boy

Money Laundering (18 USC § 1956), Conspiracy to Traffic Contraband Cigarettes (18 USC §§ 371, 2342, 2344), Conspiracy to Transport and Receive Stolen Property in Interstate Commerce (18 USC §§ 371, 2314, and 2315)

Leland YEE

Honest Services Conspiracy (18 USC §1349), Wire Fraud (18 USC §§ 1343, 1346), Conspiracy to Deal in Firearms and Import Firearms (18 USC §§ 371, 922(a), 922(l))

George NIEH, a/k/a Heng Nieh, a/k/a Ah Fei

Money Laundering (18 USC 1956), Unlicensed Firearms Dealing (18 USC § 922(a)), Felon in Possession of Firearm (18 USC § 922(g)), Conspiracy to Traffic Contraband Cigarettes (18 USC §§ 371, 2342, 2344), Conspiracy to Transport and Receive Stolen Property in Interstate Commerce (18 USC §§ 371, 2314, and 2315), Narcotics Conspiracy (21 USC § 846)

Keith JACKSON

Wire Fraud (18 USC §§ 1343, 1346), Engaging in Business of Dealing in Firearms (18 USC § 922(a)), Narcotics Conspiracy (21 USC § 846), Murder for Hire (18 USC § 1958), Conspiracy to Deal in Firearms and Import Firearms (18 USC §§ 371, 922(a), 922(l))

Brandon JACKSON

Narcotics Conspiracy (21 USC § 846), Unlicensed Firearms Dealing (18 USC § 922(a)), Murder for Hire (18 USC §1958)

Marlon SULLIVAN

Narcotics Conspiracy (21 USC § 846), Unlicensed Firearms Dealing (18 USC § 922(a)), Murder for Hire (18 USC § 1958)

Rinn ROEUN

Unlicensed Firearms Dealing (18 USC § 922(a)), Murder for Hire (18 USC § 1958)

Alan CHIU, a/k/a Alan Shiu

Money Laundering (18 USC § 1956)

Kevin SIU

Money Laundering (18 USC § 1956)

Kongphet CHANTHAVONG, a/k/a “Joe,” a/k/a “Fat Joe”

Narcotics Conspiracy (21 USC § 846), Money Laundering (18 USC § 1956), Felon in Possession of a Firearm (18 USC § 922(g)), Possession of Narcotics with Intent to Distribute (21 USC § 841), Possession of a Firearm in Furtherance of a Drug Trafficking Crime (18 USC § 924(c))

Michael MEI

Possession of Narcotics with Intent to Distribute (21 USC § 846)

Andy LI

Money Laundering (18 USC § 1956), Narcotics Conspiracy (21 USC 846), Unlicensed Firearms Dealing (18 USC § 922(a)), Felon in Possession of Firearm (18 USC § 922(g))

Leslie YUN

Money Laundering (18 USC § 1956), Conspiracy to Traffic in Stolen and Contraband Cigarettes (18 USC §§ 371, 2315, 2342, 2344)

James PAU

Money Laundering (18 USC § 1956), Conspiracy to Traffic in Stolen and Contraband Cigarettes (18 USC §§ 371, 2315, 2342, 2344)

Jane LIANG

Conspiracy to Transport and Receive Stolen Property (18 USC §§ 371, 2315)

Tina LIANG

Conspiracy to Transport and Receive Stolen Property (18 USC §§ 371, 2315), Narcotics Conspiracy (21 USC § 846)

Brian TILTON

Conspiracy to Transport and Receive Stolen Property (18 USC §§ 371, 2315), Narcotics Conspiracy (21 USC § 846)

Ming MA

Conspiracy to Receive Stolen Property (18 USC §§ 371, 2315)

Hon SO

Conspiracy to Receive Stolen Property (18 USC §§ 371, 2315)

Norge MASTRANGELO

Money Laundering (18 USC §1956)

Albert NHINGSAVATH

Money Laundering (18 USC § 1956)

Serge GEE

Money Laundering (18 USC § 1956)

Xi Ling LIANG, a/k/a Elaine LIANG

Money Laundering (18 USC § 1956)

Gary CHEN

Money Laundering (18 USC § 1956)

Anthony LAI

Money Laundering (18 USC § 1956)

Tong ZHANG

Conspiracy to Traffic Contraband Cigarettes (18 USC §§ 371, 2342, 2344)

Zhanghao WU

Conspiracy to Traffic Contraband Cigarettes (18 USC §§ 371, 2342, 2344)

Barry Blackwell HOUSE

Dealing Firearms without a License (18 USC § 922(a)), Possession of Firearm by a Felon (18 USC § 922(g)(1))

WILSON SY LIM, a/k/a “Dr. Lim”

Conspiracy to Traffic in Firearms Without a License, and to Illegally Import Firearms, in violation of (18 USC §§ 371, 922(a)(1))

The maximum penalties for the violations are as follows:

18 U.S.C. § 1956(a)(1) Twenty years in prison
Three years supervised release
$500,000 fine
$100 special assessment
18 U.S.C. § 1956(a)(3) Twenty years in prison
Three years supervised release
$500,000 fine
$100 special assessment
18 U.S.C. § § 371,
2314, 2315
Five years in prison
Three years supervised release
$250,000 fine
$100 special assessment
18 U.S.C. § § 371, 2315,
2342(a), 2344
Five years in prison
Three years supervised release
$250,000 fine
$100 special assessment
18 U.S.C. § 922(a)(1)
Five years in prison
Three years supervised release
$250,000 fine
$100 special assessment
18 U.S.C. § 922(g)(1)
Ten years in prison
Three years supervised release
$250,000 fine
$100 special assessment
18 U.S.C. §§ 371,
922(a)(1), 922(l)
Five years in prison
Three years supervised release
$250,000 fine
$100 special assessment
18 U.S.C. § 924(c)
From five years to life
Five years supervised release
$250,000 fine
$100 special assessment
18 U.S.C. § 1958
Ten years in prison
Three years supervised release
$250,000 fine
$100 special assessment
18 U.S.C. § § 1343,
1346, 1349
Twenty years in prison
Three years supervised release
$250,000 fine
$100 special assessment
21 U.S.C. § 841
From five years to forty years in prison
Four years supervised release
$5 million fine
$100 special assessment
21 U.S.C. § 841, 846
Five years in prison, with five or ten year
mandatory minimum in some instances
Three to five years supervised release
$250,000 to $10 million fine
$100 special assessment

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 defendants are subject to the maximum penalties stated above. 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.

William Frentzen, Susan Badger, and Waqar Hasib are the Assistant U.S. Attorneys who are prosecuting the case. The prosecution is the result of a five-year investigation by the FBI, Internal Revenue Service-Criminal Investigations Division, San Francisco Police Department, Oakland Police Department, and Antioch Police Department.

(Chow indictment )

 

 

OAKLAND – Khyber Law pleaded guilty today to conspiring to file false claims, announced U.S. Attorney Melinda Haag and Internal Revenue Service, Criminal Investigation, Special Agent in Charge José M. Martinez.

According to the plea agreement, beginning in January 2011, Law assisted in filing several tax returns with the IRS that were false and fraudulent. Law admitted that the tax returns were false because the filings included fictitious Forms W-2 that inflated the individuals’ wages. The filings included a tax return filed in Law’s name which falsely reported that he was employed at a staffing agency. In other instances, Law admitted to filing the false tax returns without ever showing the fraudulent tax return to the purported filer. Law helped file the false returns from his residence and from other places.

Law, of Antioch, was charged in a superseding indictment on Dec. 17, 2013. He was charged with conspiracy to file false claims, wire fraud, filing false claims and aggravated identity theft. Law pleaded guilty to conspiracy to file false claims and agreed to pay restitution related to this offense.

The maximum statutory penalty for each count of conspiracy to file false claim, in violation of 18 U.S.C § 286, is ten years in prison and a fine of $250,000. Sentencing is scheduled for Aug. 22, 2014, before the Honorable Jon S. Tigar, United States District Court Judge in Oakland.

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

(Law indictment )

 

 

SAN JOSE – Fauzia Lodhi, formerly of Mountain View but now residing in Mission Viejo, Calif., was sentenced on April 2, 2014, to 16 months in custody for her conviction on mail fraud, announced U.S. Attorney Melinda Haag and Bureau of Alcohol, Tobacco, Firearms, and Explosives Special Agent in Charge Joseph M. Riehl.

Lodhi, 53, pleaded guilty to committing mail fraud on May 1, 2013. Lodhi admitted that she submitted both fraudulent business income interruption claims and fraudulent business personal property claims to State Farm Insurance arising from damage incurred during a fire at her business on May 17, 2006. The business was Postal Express, located at 801 West El Camino Real, Mountain View, Calif. Previous to the fire, Lodhi had provided inflated inventory and revenue statements to a State Farm insurance agent in order to induce State Farm to insure Postal Express for business interruption and loss of business personal property in excess of the actual value of the business. Lodhi then submitted insurance claims to State Farm based on the falsely inflated inventory and revenue statements.

In addition, Lodhi intentionally misrepresented the amount of business interruption insurance payments and loss of business personal property insurance payments to which she was entitled under her State Farm insurance policy. She admitted that she used the fraudulently-obtained business interruption payments to satisfy her outstanding debts.

The sentence was handed down by the Honorable Lucy H. Koh, United States District Court Judge. Judge Koh also sentenced Lodhi to a three-year period of supervised release and ordered the defendant to pay restitution of $54,896 to State Farm Insurance. Lodhi was ordered to self-surrender on July 30, 2014.

Matt Parrella 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 Bureau of Alcohol, Tobacco, Firearms, and Explosives, the Mountain View Police Department, and the Mountain View Fire Department.

(Lodhi indictment )

 

 

SAN JOSE-- Asaf Nass, the operations manager for AY Transport, was sentenced today to 18 months in prison for his role in a conspiracy to commit extortion in a moving fraud scheme, announced U.S. Attorney Melinda Haag. The sentencing hearing follows an earlier sentencing hearing on March 5, 2014 in the same case in which Randy Goldberg, the chief executive officer of National Moving Network, was sentenced to 18 months imprisonment for his involvement in the same scheme.

Nass pleaded guilty on March 8, 2012, to conspiracy to commit extortion. According to the plea agreement, Nass worked as the operations manager for AY Transport, also known as Progressive Van Lines, a moving company headquartered in San Jose, California. Nass admitted to participating in a scheme to extort moving customers by working with a Miami-based moving broker, National Moving Network, to falsely lure customers into moves based upon inaccurate prices, and to subsequently holding customer goods hostage unless the victim paid increased fees. The increased fees for the release of the goods sometimes amounted to two or three times the amount of the original bid provided by National Moving Network. If a customer refused to pay the fees, their goods were sometimes held in storage lockers, and Nass on occasion instructed AY Transport employees to sell the customers’ goods at auction. According to the plea agreement, the losses resulting from the scheme exceeded $250,000. The final restitution amount remains undetermined and is the subject of a restitution hearing scheduled for May 21, 2014.

Nass is the ninth defendant to be sentenced in connection with the AY Transport/National Moving Network case. On March 5, 2014, Randy Goldberg, the president of the National Moving Network, was also sentenced to 18 months imprisonment as a result of his guilty plea to one count of criminal possession of household goods in violation of 49 U.S.C. § 14915. Seven other defendants holding different positions in the two companies have been sentenced to probationary sentences following guilty pleas for their respective roles in the scheme.

The Department of Transportation, Office of Inspector General, and Federal Bureau of Investigation initiated the investigation in 2003 following numerous customer complaints regarding the tactics employed by AY Transport and National Moving Network.

The sentence was handed down by U.S. District Court Judge Lucy H. Koh following the defendant’s guilty plea to one count of conspiracy to commit extortion in violation of 18 U.S.C. § 371. Judge Koh also sentenced the defendant to a term of 3 years of supervised release. The defendant will begin serving the sentence on June 18, 2014. A separate hearing to determine the restitution amount is scheduled for May 21, 2014 at 9:30 a.m.

Jeff Nedrow and Jeff Schenk are the Assistant U.S. Attorneys who are prosecuting the case with the assistance of Susan Kreider. The prosecution is the result of a four-year investigation by the U.S. Department of Transportation Office of Inspector General, the Federal Bureau of Investigation, and the Internal Revenue Service, Criminal Investigation Division.

 

 

SAN JOSE – Leo Joshua Kennedy pleaded guilty in federal court in San Jose today to committing wire fraud, announced U.S. Attorney Melinda Haag and FBI Special Agent in Charge David J. Johnson.

In pleading guilty, Kennedy admitted to fraudulently transferring money out of Backhouse Fiduciary Services trust accounts. Kennedy worked as an accountant at Backhouse Fiduciary Services, a San Jose-based company engaged in the business of administering beneficiary trust accounts. Kennedy further admitted to having stolen an amount of money between $7 million and $20 million from various beneficiary trust accounts at Backhouse Fiduciary Services. Kennedy made these illegal transfers without account-holders? permission and used the funds to pay for his personal investments and living expenses.

Kennedy, 62 of Danville, was indicted by a federal Grand Jury on October 31, 2012. He was charged with ten counts of wire fraud in violation of 18 United States Code Section 1343. Under the plea agreement, Kennedy pled guilty to one count of wire fraud.

Kennedy is currently released on bond. Bail was set in the amount of $50,000.

Kennedy’s sentencing hearing is scheduled for August 20, 2014 before The Honorable Lucy Koh, U.S. District Court Judge, in San Jose. The maximum statutory penalty for each count in violation of wire fraud in violation of 18 United States Code Section 1343 is 20 years imprisonment and a fine of $250,000, plus restitution in the amount of $13,787,151. However, any sentence will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.

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

 

 

SAN FRANCISCO, Calif. – On April 1, 2014, a federal grand jury for the Northern District of California returned an indictment charging Pacific Gas and Electric Company (“PG&E”) with multiple violations of the Natural Gas Pipeline Safety Act of 1968 (“PSA”), announced U.S. Attorney Melinda Haag, California Attorney General Kamala D. Harris, San Mateo County District Attorney Stephen M. Wagstaffe, U.S. Department of Transportation Office of Inspector General Special Agent in Charge William Swallow, and FBI Special Agent in Charge David J. Johnson. PSA violations were uncovered in the course of an investigation initiated after the fatal San Bruno natural gas pipeline explosion in 2010.

The indictment alleges that PG&E knowingly and willfully violated the PSA and its regulations between 2003 and 2010. According to the indictment, the charges stem from PG&E’s record keeping and pipeline “integrity management” practices. The indictment alleges that PG&E failed to address recordkeeping deficiencies concerning its larger natural gas pipelines knowing that their records were inaccurate or incomplete.

The indictment also alleges that PG&E failed to identify threats to its larger natural gas pipelines and that PG&E did not take appropriate actions to investigate the seriousness of threats to pipelines when they were identified. In addition, the indictment alleges that PG&E failed to adequately reprioritize and assess threatened pipelines after the pipelines were over pressurized as required by the PSA and its regulations.

“The citizens of Northern California deserve to have their utility providers put the safety of the community first,” said U.S. Attorney Haag. “Today’s indictment of PG&E for violating the minimum safety standards established by the Natural Gas Pipeline Safety Act reflects the company’s failure to follow that very basic principle. This investigation is the result of strong collaboration among federal, state, and local law enforcement authorities, the California Attorney General’s Office, and the San Mateo County District Attorney’s Office. I look forward to continuing to work closely with these partners in our efforts to hold PG&E accountable for their disregard for the safety of our community.”

“Today’s indictment is an important step in providing justice for the individuals, families and community devastated by the 2010 pipeline explosion and fire in San Bruno,” said California Attorney General Kamala D. Harris. “As alleged in the indictment, PG&E knowingly and willfully failed to identify and evaluate threats to its transmission pipelines, including Line 132 underneath much of San Bruno. When allegedly faced with evidence of transmission line problems, PG&E knowingly and willfully chose not to assess and remediate the problems. My office will continue our work with local and federal partners in prosecuting this matter in federal court and holding PG&E accountable for its alleged conduct."

“The indictment returned by the Grand Jury is an important step in holding PG&E criminally responsible for their willful misconduct,” said San Mateo County District Attorney Stephen M. Wagstaffe. “The San Bruno Police Department and my office will continue to support and work closely with the offices of the United States Attorney and the California Attorney General to bring PG&E to justice.”

“Pipeline safety is a top priority for the Department of Transportation and the Office of Inspector General,” said William Swallow, DOT OIG regional Special Agent-in-Charge. “The lasting impacts among families and the community stemming from the tragic explosion in San Bruno remind us of why it is important to exercise vigorous management and oversight. The DOT OIG will continue to work with our law enforcement and prosecutorial colleagues to ensure that parties responsible for protecting public health and safety are held to the highest standards.”

“The Federal Pipeline Safety Act is designed to guard against risks to life or property in the course of distributing goods and services to entrusting consumers,” said FBI Special Agent in Charge David J. Johnson of the San Francisco Field Office. “This office has the responsibility not only to uphold and enforce the criminal laws of the United States but also to do everything we can to protect the public. The charges alleged in this indictment should be symbolic of the FBI’s commitment to serving justice no matter how long it takes.”

PG&E is charged with 12 separate violations of the PSA. The maximum statutory penalty for each count for a corporation is $500,000 or a fine based on the gain the corporation made as a result of the violation or the loss caused to victims.

An indictment merely alleges that crimes have been committed, and the defendant is presumed innocent until proven guilty beyond a reasonable doubt.

The prosecution is the result of a three-year investigation conducted by the U.S. Attorney’s Office for the Northern District of California, the California Attorney General’s Office, the San Mateo County District Attorney’s Office, the United States Department of Transportation Office of Inspector General, the FBI, the Pipeline and Hazardous Material Safety Administration, and the city of San Bruno Police Department.

Arraignment on the indictment in the United States Magistrate Court has not yet been scheduled. Electronic court filings and further procedural and docket information are available at https://ecf.cand.uscourts.gov/cgi-bin/login.pl.

(PG&E indictment )

 

 

SAN JOSE, CA - A Cupertino businessman pleaded guilty in federal court yesterday afternoon to 19 counts of Visa Fraud, U.S. Attorney Melinda Haag announced.

In pleading guilty, Balakrishnan Patwardhan admitted that between July 2008 and October 2010 he knowingly submitted to U.S. Citizenship and Immigration Services false immigration forms and supporting documentation in I-129 applications seeking to obtain H-1B visas for 19 applicants. I-129 petitions relate to the H-1B high-technology worker visa program which requires, among other things, that an American employer certify it has high-technology jobs that cannot be filled by Americans. Patwardhan submitted 19 fraudulent I-129 petitions in which he falsely represented that the applicants had high technology job offers with Gilead Sciences in Foster City, California, an American employer, when in reality he knew that he did not have jobs for the applicants. Patwardhan also admitted that he had included altered contracts and false Statements of Work that he had created in connection with the fraudulent I-129 applications.

Patwardhan, 53, of Cupertino, CA, was indicted on March 27, 2013 on 19 counts of Visa Fraud, in violation of Title 18, United States Code, Section 1546(a). As part of his plea agreement, Patwardhan pleaded guilty to all 19 counts of the indictment. Patwardhan also agreed to pay a $100,000 forfeiture money judgment constituting proceeds he obtained as a result of his Visa Fraud. Patwardhan has been out of custody since his March 29, 2013 arrest on a $50,000 bond with one of the conditions of his pretrial release being that he not provide consulting services for technology companies or provide any visa services.

Patwardhan’s sentencing is scheduled for August 18, 2014 at 1:30 p.m. before United States District Judge Edward J. Davila in San Jose, CA. The maximum statutory penalty for Visa Fraud, in violation of Title 18, United States Code, Section 1546(a) is 10 years in prison and a $250,000 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.

Joseph Fazioli and Jeff Nedrow are the Assistant U.S. Attorneys who are prosecuting the case with the aid of Legal Assistants Laurie Worthen and Susan Kreider. 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.

(Patwardhan indictment )

 

 

OAKLAND – A federal grand jury in Oakland yesterday returned a two-count indictment charging Benny Chetcuti, Jr. with wire fraud, stemming from Chetcuti’s Walnut Creek, Calif., based real estate investment business, announced United States Attorney Melinda Haag and FBI Special Agent in Charge David J. Johnson.

According to the Indictment, as early as Oct. 2002 and continuing through June 2010, Chetcuti allegedly defrauded private investors who loaned money to him and his business, Chetcuti & Associates. Chetcuti started Chetcuti & Associates in 1998 for the purpose of purchasing homes, renovating them, and selling them within a short time period. Chetcuti financed his business, in part, by obtaining loans from private investors in exchange for promissory notes that were supposed to be secured by interests in real properties. The Indictment alleges that Chetcuti defrauded investors by misrepresenting how much debt was already secured by the properties, falsely promising to record deeds of trust that would have secured the investors’ interests in the properties, directing others to impersonate lenders or title company officers in telephone calls, and forging letters purportedly written by lenders and title company officers.

A summons was issued upon filing of the Indictment. Chetcuti is scheduled to make his initial appearance on April 2, 2014 at 9:30 a.m. before the Honorable Kandis A. Westmore, United States Magistrate 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 imprisonment and a fine of $250,000, or twice the gross loss or gain resulting from the offenses, plus restitution and forfeiture, if appropriate. However, any sentence following conviction would be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.

Andrew S. Huang is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Vanessa Quant. The prosecution is the result of an investigation by the Federal Bureau of Investigation.

Please note, an Indictment contains only allegations against a defendant and, as with all defendants, Benny Chetcuti, Jr. must be presumed innocent unless and until proven guilty.

(Chetcuti indictment )

 

 

SAN FRANCISCO – A federal criminal complaint, filed on March 24, 2014, was unsealed in San Francisco today, charging twenty-six defendants with firearms trafficking, money laundering, murder-for-hire, drug distribution, trafficking in contraband cigarettes, and honest services fraud, announced United States Attorney Melinda Haag, FBI Special Agent in Charge David J. Johnson, and Internal Revenue Service, Criminal Investigation, Special Agent in Charge José M. Martinez.

The defendants include Raymond “Shrimpboy” Chow, the current Dragonhead, or leader, of the San Francisco-based Chee Kung Tong organization (CKT), and State Senator Leland Yee, who represents San Mateo County and part of San Francisco County in the California Senate.

With respect to Chow, according to the Complaint, as FBI undercover agents infiltrated the CKT through introductions made by Chow and others, a pattern of alleged racketeering activity was uncovered.

According to the Complaint, as the relationship developed among the primary undercover agent, Chow, and other defendants, the undercover agent informed the defendants that he was interested in generating income from illegal schemes. The undercover agent was inducted into the CKT as a “Consultant.” Thereafter, during the course of multiple undercover operations, the undercover agent was allegedly introduced to a number of the defendants in order to launder money, traffic narcotics, traffic in firearms, traffic purportedly stolen cigarettes and liquor, and engage in murder-for-hire schemes.

Chow also introduced Keith Jackson to the undercover agent. Jackson, the owner and operator of “Jackson Consultancy,” a San Francisco based consulting firm, is a “Consultant” to the CKT. Jackson and his son, Brandon Jackson, allegedly responded to a request for weapons by the undercover agent, by indicating that Brandon Jackson, and an associate would be able to accommodate his request. Subsequently, Jackson, Brandon Jackson, and Marlon Sullivan sold various types of firearms, and two ballistic vests, to the undercover agent. Additionally, Jackson, Brandon Jackson, and Sullivan allegedly conspired to commit a purported murder for hire scheme requested by the undercover agent, in addition to other illegal activity, including the sale of stolen credit cards and the purported sale of cocaine to Jackson, Brandon Jackson, and Sullivan from the undercover agent.

Brandon Jackson introduced the undercover agent to Rinn Roeun, one of Brandon Jackson’s sources of supply for firearms. Roeun sold multiple firearms to the undercover agent and, during a series of conversations, told the undercover agent that he was willing to commit murder for a fee.

According to the Complaint, in addition to his relationship with Chow, and the CKT, Keith Jackson is also a close associate of Senator Leland Yee. From at least May 2011 through the present, Jackson has been involved in raising campaign funds for Yee.

With respect to Yee, the Complaint alleges that over the course of 2012 and continuing to the present time, Yee and Keith Jackson allegedly raised money and campaign funds for Yee’s Secretary of State campaign by soliciting donations from FBI undercover agents, in exchange for multiple official acts, and that Yee and Jackson were involved in a conspiracy to traffic firearms.

Starting in May 2011, according to the Complaint, and continuing for several months, Jackson solicited an undercover agent with the FBI to make contributions to Yee’s San Francisco mayoral campaign. These solicitations allegedly included asking the agent for donations in excess of the $500 individual donation limit. The agent declined to make any donations to Yee, but introduced Jackson and Yee to a purported business associate, another undercover FBI agent. Jackson and Yee then solicited the second undercover agent for campaign contributions. This solicitation resulted in at least one personal donation in the amount of $5,000 to Yee’s mayoral campaign.

After Yee lost the November 8, 2011, election, according to the Complaint, he had at least $70,000 in debt from that campaign. In connection with efforts to retire the mayoral campaign debt, according to the complaint, Yee and Jackson allegedly agreed that Yee would make a telephone call to a manager with the California Department of Public Health in support of a contract under consideration with the second undercover agent’s purported client, and would provide an official letter of support for the client, in exchange for a $10,000 campaign donation. Yee allegedly made the call on October 18, 2012, and provided the letter on or about January 13, 2013. On November 19, 2012, Jackson accepted the $10,000 cash donation.

According to the Complaint, in a further attempt by Jackson and Yee to gain money from one of the undercover agents, in August 2013, Jackson told the undercover agent that Yee had a contact who deals in arms trafficking. Jackson requested that the undercover agent provide a campaign donation on behalf of Yee, for Yee to facilitate a meeting with the arms dealer with the intent of the undercover agent to purportedly purchase a large number of weapons. During a meeting with the undercover agent, Yee and Jackson allegedly discussed details of the specific types of weapons the undercover agent was interested in buying and importing.

The defendants are charged as follows:

LELAND LIN YEE

• Conspiracy to Traffic in Firearms Without a License, and to Illegally Import Firearms, in violation of 18 U.S.C. § § 371, 922(a)(1), and (l)
• Scheme to Defraud Citizens of Honest Services, in violation of 18 U.S.C. § § 1343, 1346, 2 (six counts)

KEITH JACKSON

• Conspiracy to Traffic in Firearms Without a License and to Illegally Import Firearms, in violation of 18 U.S.C. § § 371, 922(a)(1), and (l)
• Trafficking in Firearms Without a License, in violation of 18 U.S.C. § 922(a)(1)
• Scheme to Defraud Citizens of Honest Services, in violation of 18 U.S.C. § § 1343, 1346, 2 (six counts)
• Use of an Interstate Commerce Facility for the Commission of a Murder-for-Hire, in violation of 1958
• Conspiracy to Distribute Narcotics, in violation of 21 U.S.C. § 846

KWOK CHEUNG CHOW, a/k/a RAYMOND CHOW, a/k/a SHRIMPBOY

• Money Laundering of Funds Believed to be Proceeds of Specified Unlawful Activity, in violation of 18 U.S.C. § 1956(a)(3) (three counts)
• Money Laundering, in violation of 18 U.S.C. § 1956(a)(1) (two counts)
• Conspiracy to Receive and Transport Stolen Property in Interstate Commerce, in violation of 18 U.S.C. § § 371, 2314, and 2315 (two counts)
• Conspiracy to Traffic and Trafficking in Contraband Cigarettes, in violation of 18 U.S.C. § § 371, 2315, 2342(a), and 2344

GEORGE NIEH

• Money Laundering of Funds Believed to be Proceeds of Specified Unlawful Activity, in violation of 18 U.S.C. § 1956(a)(3) (three counts)
• Money Laundering, in violation of 18 U.S.C. § 1956(a)(1) (two counts)
• Conspiracy to Receive and Transport Stolen Property in Interstate Commerce, in violation of 18 U.S.C. § § 371, 2314, and 2315 (two counts)
• Conspiracy to Traffic and Trafficking in Contraband Cigarettes, in violation of 18 U.S.C. § § 371, 2315, 2342(a), and 2344
• Trafficking in Firearms Without a License, in violation of 18 U.S.C. § 922(a)(1) (two counts)
• Felon in Possession of a Firearm, in violation of 18 U.S.C. § 922(g)(1) (two counts)
• Conspiracy to Distribute Narcotics, in violation of 21 U.S.C. § § 841 and 846.

KEVIN SIU

• Money Laundering of Funds Believed to be Proceeds of Specified Unlawful Activity, in violation of 18 U.S.C. § 1956(a)(3)

ALAN CHIU

• Money Laundering of Funds Believed to be Proceeds of Specified Unlawful Activity, in violation of 18 U.S.C. § 1956(a)(3)

KONGPHET CHANTHAVONG

• Conspiracy to Distribute Narcotics, in violation of 21 U.S.C. § § 841 and 846 (two counts)
• Possession With Intent to Distribute Narcotics, in violation of 21 U.S.C. § 841
• Possession of a Firearm in Furtherance of a Drug Trafficking Crime, in violation of 18 U.S.C. § 924(c)
• Trafficking in Firearms Without a License, in violation of 18 U.S.C. § 922(a)(1) (three counts)
• Felon in Possession of a Firearm, in violation of 18 U.S.C. § 922(g)(1)(three counts)

XIAO CHENG MEI, a/k/a MICHAEL MEI

• Possession With Intent to Distribute Narcotics, in violation of 21 U.S.C. § 841

BRANDON JACKSON

• Conspiracy to Distribute Narcotics, in violation of 21 U.S.C. § 846
• Trafficking in Firearms Without a License, in violation of 18 U.S.C. § 922(a)(1)
• Use of an Interstate Commerce Facility for the Commission of a Murder-for-Hire, in violation of 1958

MARLON SULLIVAN

• Conspiracy to Distribute Narcotics, in violation of 21 U.S.C. § 846
• Trafficking in Firearms Without a License, in violation of 18 U.S.C. § 922(a)(1)
• Use of an Interstate Commerce Facility for the Commission of a Murder-for-Hire, in violation of 1958

RINN ROEUN

• Trafficking in Firearms Without a License, in violation of 18 U.S.C. § 922(a)(1)
• Use of an Interstate Commerce Facility for the Commission of a Murder-for-Hire, in violation of 1958

ANDY LI

• Money Laundering, in violation of 18 U.S.C. § 1956(a)(1)
• Conspiracy to Distribute Narcotics, in violation of 21 U.S.C. § 846
• Trafficking in Firearms Without a License, in violation of 18 U.S.C. § 922(a)(1) (two counts)
• Felon in Possession of a Firearm, in violation of 18 U.S.C. § 922(g)(1) (two counts)

LESLIE YUN

• Money Laundering of Funds Believed to be Proceeds of Specified Unlawful Activity, in violation of 18 U.S.C. § 1956(a)(3)
• Conspiracy to Traffic and Trafficking in Contraband Cigarettes, in violation of 18 U.S.C. § § 371, 2315, 2342(a), and 2344

YAT WAH PAU, a/k/a JAMES PAU

• Money Laundering of Funds Believed to be Proceeds of Specified Unlawful Activity, in violation of 18 U.S.C. § 1956(a)(3)
• Conspiracy to Traffic and Trafficking in Contraband Cigarettes, in violation of 18 U.S.C. § § 371, 2315, 2342(a), and 2344

JANE MIAO XHEN LIANG, a/k/a JANE LIANG

• Conspiracy to Receive and Transport Stolen Property in Interstate Commerce, in violation of 18 U.S.C. § § 371, 2314, and 2315

TINA YAO GUI LIANG, a/k/a TINA LIANG

• Conspiracy to Receive and Transport Stolen Property in Interstate Commerce, in violation of 18 U.S.C. § § 371, 2314, and 2315
• Conspiracy to Distribute Narcotics, in violation of 21 U.S.C. § 846

BRYAN TILTON

• Conspiracy to Receive and Transport Stolen Property in Interstate Commerce, in violation of 18 U.S.C. § § 371, 2314, and 2315
• Conspiracy to Distribute Narcotics, in violation of 21 U.S.C. § 846

HUAN MING MA

• Conspiracy to Receive and Transport Stolen Property in Interstate Commerce, in violation of 18 U.S.C. § § 371, 2315

HON KEUNG SO

• Conspiracy to Receive and Transport Stolen Property in Interstate Commerce, in violation of 18 U.S.C. § § 371, 2315

NORGE MASTRANGELO

• Money Laundering, in violation of 18 U.S.C. § 1956(a)(1)

ALBERT NHINGSAVATH

• Money Laundering, in violation of 18 U.S.C. § 1956(a)(1)

SERGE GEE

• Money Laundering, in violation of 18 U.S.C. § 1956(a)(1) (three counts)

XIU YING LIANG, a/k/a ELAINE LIANG

• Money Laundering, in violation of 18 U.S.C. § 1956(a)(1) (three counts)

GARY KWONG YIU CHEN

• Money Laundering, in violation of 18 U.S.C. § 1956(a)(1) (two counts)

ANTHONY LAI

• Money Laundering, in violation of 18 U.S.C. § 1956(a)(1) (two counts)

WILSON SY LIM

• Conspiracy to Traffic in Firearms Without a License, and to Illegally Import Firearms, in violation of 18 U.S.C. § § 371, 922(a)(1), and (l)

In a related case, a complaint filed on March 25, 2014, charging defendant BARRY HOUSE with one count of trafficking in firearms without a license, in violation of 18 U.S.C. § 922(a)(1), and one count of felon in possession of a firearm, in violation of 18 U.S.C. § 922(g)(1).

The maximum penalties for the violations are as follows:

18 U.S.C. §  1956(a)(1)

Twenty years in prison
Three years supervised release
$500,000 fine
$100 special assessment

18 U.S.C. §  1956(a)(3)

Twenty years in prison
Three years supervised release
$500,000 fine
$100 special assessment

18 U.S.C. § § 371, 2314, 2315

Five years in prison
Three years supervised release
$250,000 fine
$100 special assessment

18 U.S.C. § §  371, 2315, 2342(a), 2344

Five years in prison
Three years supervised release
$250,000 fine
$100 special assessment

18 U.S.C. § 922(a)(1)

Five years in prison
Three years supervised release
$250,000 fine
$100 special assessment

18 U.S.C. § 922(g)(1)

Ten years in prison
Three years supervised release
$250,000 fine
$100 special assessment

18 U.S.C. §§  371, 922(a)(1), 922(l)

Five years in prison
Three years supervised release
$250,000 fine
$100 special assessment

18 U.S.C. §  924(c)

From five years to life
Five years supervised release
$250,000 fine
$100 special assessment

18 U.S.C. §  1958

Ten years in prison
Three years supervised release
$250,000 fine
$100 special assessment

18 U.S.C. § § 1343, 1346, 2

Twenty years in prison
Three years supervised release
$250,000 fine
$100 special assessment

21 U.S.C. § 841

From five years to forty years in prison
Four years supervised release
$5 million fine
$100 special assessment

21 U.S.C. § 841, 846

Five years in prison, with five or ten year mandatory minimum in some instances
Three to five years supervised release
$250,000 to $10 million fine
$100 special assessment

The defendants, with the exception of Brandon Jackson, Sullivan, Liang, Nhingsavath, Mastrangelo, Gee, Yun, and Pau, were arrested today and made their initial appearances in federal court in San Francisco in front of United States Magistrate Judge Nathanael M. Cousins.

Yun and Pau were arrested yesterday in New York. Sullivan was arrested this morning in New Jersey and Brandon Jackson was arrested in Connecticut. Liang, Nhingsavath, Mastrangelo, and Gee are fugitives.

A complaint merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, the defendants are subject to the maximum penalties stated above. 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.

William Frentzen, Susan Badger, and Waqar Hasib are the Assistant U.S. Attorneys who are prosecuting the case. The prosecution is the result of a five-year investigation by the FBI, Internal Revenue Service-Criminal Investigations Division, San Francisco Police Department, Oakland Police Department, and Antioch Police Department.

(CKT Criminal Complaint )

SAN FRANCISCO – Leigh E. Sprague was sentenced yesterday to fifty months in prison and ordered to pay $1.4 million in restitution after being convicted of transporting stolen money in foreign commerce, announced United States Attorney Melinda Haag and FBI Special Agent in Charge David J. Johnson.

Sprague, 43, of Fort Atkinson, Wis., pleaded guilty on Dec. 16, 2013, to transporting more than $5 million of stolen funds in foreign commerce. According to court records, Sprague graduated from Columbia Law School and then worked in two large law firms in New York, eventually transferring to a law firm’s Moscow office. After leaving the law firm, in 2007 he joined United Company Rusal in Moscow, where he served as the Head of the Corporate Finance Unit until he was fired in April 2011.

In June 2010, Sprague incorporated a shell corporation set up in the Republic of Seychelles. Although Sprague owned and managed the shell corporation, he forged a stock certificate falsely reflecting that the shell corporation was owned by his employer. After setting up a bank account in Geneva, Switzerland, in the name of the shell company, Sprague falsely represented to Goldman Sachs that he was authorized to direct Goldman to liquidate $10 million of an asset belonging to Sprague’s corporate employer. Relying on Sprague’s false statements and forged documents, Goldman liquidated $10 million of the asset and paid that amount into the shell company’s Swiss bank account.

According to court records, Sprague then transferred the funds to bank accounts he controlled in various parts of the world, including Belize, Switzerland, Hong Kong, and the United States. He also used the money on lavish personal expenditures, including more than $800,000 on rare collectors’ automobiles, remodeling an ocean-view home he owned in Malibu, Calif., and paying off significant credit card bills. Several months after stealing the $10 million, Sprague allegedly tried to have Goldman liquidate an additional $5 million through the same scheme. Goldman and Sprague’s employer discovered the scheme, however, and did not transfer this money. Sprague then allegedly fled from Moscow.

Sprague transferred more than $5 million of the stolen money to the United States. According to court records, Sprague then tried to transfer much of that money to an account in Belize, but he failed. Law enforcement authorities seized more than $6 million of the stolen funds as well as many luxury collector automobiles Sprague had purchased with the stolen funds. In all, law enforcement authorities and Sprague’s employer have recovered approximately $8.5 million of the $10 million Sprague diverted.

Sprague, formerly resided in New York, N.Y., and in Moscow, Russia. The United States Attorney’s Office filed an Information on Oct. 30, 2013, charging Sprague with one count of transporting stolen money in foreign commerce, in violation of Title 18, United States Code, Section 2314.

The sentence was handed down by the Honorable Thelton E. Henderson, United States District Court Judge, following Sprague’s guilty plea. Judge Henderson also sentenced the defendant to a three-year period of supervised release and ordered Sprague to pay $1,416,260.85 in restitution. The defendant will begin serving the sentence on May 5, 2014.

Doug Sprague and Patricia Kenney are the Assistant U.S. Attorneys who are prosecuting the case with the assistance of Rayneisha Booth. The prosecution is the result of an investigation by the Federal Bureau of Investigation.

(Sprague indictment )

 

 

SAN JOSE – Liping Liu pleaded guilty today to tax evasion, United States Attorney Melinda Haag and Internal Revenue Service, Criminal Investigation, Special Agent in Charge José M. Martinez announced.

According to the plea agreement, Liu, 56, of Saratoga, was the receptionist and office manager for her spouse’s pediatric dental and orthodontic practice. Liu created a tax evasion scheme in which she skimmed money from various sources, including rental properties and her spouse’s dental and orthodontic practice. Liu admitted that knew her actions were against the law and she was evading the assessment and payment of federal taxes throughout the course of her scheme.

Liu evaded taxes by funneling money from the dental and orthodontic practice into the various bank accounts to prevent those funds from appearing in the business bank accounts. The only funds deposited into the business bank account were insurance payments, aside from thirteen personal checks in 2006 and one personal check in 2009. Liu deposited the insurance proceeds exclusively into the business accounts because she knew the insurance company reported these payments to the IRS. Liu offered a 10% discount to dental clients if they paid in cash or by check if they left the payee section blank. Liu wrote “cash” in the blank payee section or left it blank, then deposited the checks into the non-business accounts. Liu also modified checks, in the memo and payee fields to disguise the source of the payment. This enabled her to deposit the checks into the non-business account holder’s names.

In addition, according to her plea agreement, from 2006 through 2010, Liu was a 50% partner in a limited liability corporation, HSL, which was created to hold rental property. Liu diverted rental checks paid to HSL to non-business bank accounts for the purpose of evading taxes on the HSL entity. She also changed the payee information on numerous rental checks. From 2006 through 2010, Liu omitted $2,147,741.04 in gross receipts. This resulted in additional tax due and owing of $744,248. Liu provided incomplete and false information to the family bookkeeper

Liu also admitted to engaging in a series of structured cash transactions from September 2008 to September 2009, which allowed her to continue to hide taxes from the IRS.

Liu was charged on March 19, 2014, with one count of tax evasion. She pleaded guilty to the charge. Liu’s sentencing hearing is scheduled for September 15, 2014, at 9:00 a.m. before the Honorable Ronald M. Whyte, United States District Court Judge, in San Jose. The maximum statutory penalty for each count of tax evasion, in violation of Title 26, U.S.C § 7201, is five years in prison and a fine of $250,000.

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

(Liu indictment )

 

 

SAN FRANCISCO – Today, a federal jury convicted Susan Xiao-Ping Su of wire fraud, mail fraud, conspiracy to commit visa fraud, visa fraud, use of a false document, false statements to a government agency, alien harboring, unauthorized access to a government computer, and money laundering, announced United States Attorney Melinda and U.S. Immigration and Customs Enforcement’s Principal Deputy Assistant Secretary Thomas S. Winkowski.

The jury found Su guilty of 31 counts all arising from Su’s visa fraud scheme, which she carried out in her role as the Founder, Chief Executive Officer, and President of Pleasanton-based Tri-Valley University, described as “a Christian higher education institution.” The guilty verdict followed a three-week jury trial before the Honorable Jon S. Tigar, United States District Court Judge.

Evidence at trial showed that Su, 43, of Pleasanton, engaged in a two-year scheme to defraud the Department of Homeland Security (DHS) by submitting fraudulent documents in support of Tri-Valley University’s petition for approval to admit foreign students and, after having obtained such approval, fraudulently issued visa-related documents to student aliens in exchange for “tuition and fees.” In her petition for approval, Su made material false representations to DHS regarding Tri-Valley University’s admission requirements, graduation requirements, administrators, instructors, class transferability, and intent to comply with federal regulations.

Three purported Tri-Valley University professors testified that they never authorized Su to use their credentials in connection with the university. Multiple Tri-Valley University employees testified that the university had no requirements for admission or graduation, and that Su routinely instructed her staff to fabricate fraudulent transcripts.

In carrying out the scheme, Su made additional false representations to DHS through Tri-Valley University’s use of the Student and Exchange Visitor Information System (SEVIS), which the United States government uses, in part, to monitor the “F-1” student visa program. Through her false representations, Su was able to unlawfully obtain and issue F-1 visa-related documents without regard to the students’ academic qualifications or intent to pursue a course of study required to maintain a lawful immigration status. Su admitted and maintained student aliens in exchange for tuition and other payments. The jury also convicted Su of harboring two Tri-Valley University student-employees to assist her in making the false representations to SEVIS. One of the harbored student employees testified that Su asked him to paint her house and to move furniture.

Su made over $5.9 million through her operation of Tri-Valley University and engaged in seven money laundering transactions using proceeds to purchase commercial real estate, a Mercedes Benz car, and multiple residences, including a mansion on the Ruby Hill Golf Club in Pleasanton, each in her name. The investigation began in May 2010 following a tip to HSI pertaining to irregularities at Tri-Valley University.

Su was indicted by a federal grand jury on Nov. 10, 2011. She was charged with wire fraud, mail fraud, conspiracy to commit visa fraud, visa fraud, use of a false document, false statements to a government agency, alien harboring, unauthorized access to government computer, and money laundering.

Su was remanded to the custody of the U.S. Marshal after the jury’s verdict. Su’s sentencing hearing is scheduled for June 20, 2014, before Judge Tigar in San Francisco. The maximum statutory penalty for each violation is as follows:

• 18 U.S.C. § 1343 (wire fraud): 20 years of imprisonment, $250,000 fine, 5 years of supervised release, and restitution;
• 18 U.S.C. § 1341 (mail fraud): 20 years of imprisonment, $250,000 fine, 5 years of supervised release, and restitution;
• 18 U.S.C. § 1546(a) (visa fraud): 10 years of imprisonment, $250,000 fine, 3 years of supervised release, and restitution;
• 18 U.S.C. § 1001(a)(3) (use of a false document): 5 years of imprisonment, $250,000 fine, 3 years of supervised release, and restitution;
• 8 U.S.C. § 1324 (alien harboring): 10 years of imprisonment, $250,000 fine, 3 years of supervised release, and restitution;
• 18 U.S.C. § 1030 (unauthorized access of government computer): 5 years of imprisonment, $250,000 fine, 3 years of supervised release, and restitution; and
• 18 U.S.C. § 1957(a) (money laundering): 10 years of imprisonment, $250,000 fine, 3 years of supervised release, and 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.

Wade Rhyne and Hartley West are the Assistant U.S. Attorneys who are prosecuting the case with the assistance of Noble Hughes, Janice Pagsanjan, and Rosario Calderon. The prosecution is the result of a multi-year investigation by ICE Homeland Security Investigations (HSI).

(Su superseding indictment )

 

 

OAKLAND – Yasuhiro Watanabe pleaded guilty in federal court in Oakland today to conspiracy to commit bank fraud, announced United States Attorney Melinda Haag and FBI Special Agent in Charge David J. Johnson.

In pleading guilty, Watanabe admitted that, between 2009 and early September 2013, he engaged in a scheme to defraud Compass Bank and Bank of America. The scheme involved multiple participants, and victimized bank branches in the Northern District of California, Nevada, and Arizona, among other places. According to the plea agreement, approximately once a month, Watanabe recruited individuals in Japan to travel with him to the United States for the purpose of opening bank accounts at Compass Bank and Bank of America. Once the accounts were opened, Watanabe funded the accounts by causing a $1,000 - $2,000 wire transfer to be made, from bank accounts in Japan, to the newly-opened accounts held in the names of Watanabe’s coconspirators. For their role in the scheme, Watanabe typically paid his coconspirators’ travel costs, and a fee of approximately $1,000. Watanabe directed his coconspirators to obtain debit cards for the accounts and give them to Watanabe. He then used the cards in Japan to purchase goods valued in amounts in excess of the funds on deposit. Watanabe then will sell those goods for cash. Watanabe’s fraud scheme caused combined losses to Compass Bank and Bank of America of over $550,000.

Watanabe, 39, of Japan, was initially charged by complaint on Oct. 25, 2013. On Feb. 11, 2014, he was charged by Information with one count of conspiracy to commit bank fraud in violation of 18 United States Code, Section 1349. Under the plea agreement, Watanabe pleaded guilty to that sole count.

Watanabe has been in federal custody since his arrest at Seattle – Tacoma International Airport on Oct. 27, 2013.

Watanabe’s sentencing hearing is scheduled for Friday, July 11, 2014, at 9:30 a.m. before the Honorable Jon S. Tigar, United States District Court Judge, in Oakland. The maximum statutory penalty for each count, in violation of 18 United States Code, Section 1349, conspiracy to commit bank fraud, is 30 years’ imprisonment, and a fine of $1,000,000, plus restitution if appropriate. However, any sentence will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.

Thomas E. Stevens is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Kathleen Turner. The prosecution is the result of an investigation by the Federal Bureau of Investigation.

(Watanabe information )

 

 

OAKLAND – The Grand Jury returned a 21-count Superseding Indictment on Tuesday, March 18, 2014, against seven people for their participation in a case involving a spree of armed robberies of commercial businesses in and around the Bay Area and the subsequent attempted cover-up of those robberies, announced United States Attorney Melinda Haag, FBI Special Agent in Charge David J. Johnson, and Internal Revenue Service, Criminal Investigation, Special Agent in Charge José M. Martinez announced.

According to the Indictment, The Landry Crew is an enterprise based in Oakland, Calif. It is affiliated with the larger “Money Team” gang that also operates in and around Oakland, as well as with other groups. The Landry Crew’s members operate in the greater bay area including Richmond, Antioch, Vallejo, Fairfield, the North Bay, the East Bay, the Peninsula, and Sacramento.

Beginning at the latest in 2012, The Landry Crew allegedly engaged in numerous armed robberies of Rite Aid, Safe Way, and Walmart stores, during which they brandished firearms and stole cash, checks, and merchandise while the store was full of customers. They also engaged in armed home invasion-style robberies, credit card fraud, identity theft, as well as obstruction of justice. Much of the stolen merchandise was sold to third parties or “fences.”

The Indictment further alleges that the Landry Crew broadcast and boasted about their criminal activities on Facebook, Twitter, Instagram, and YouTube. Members of the crew took pictures of themselves in the aftermath of their crimes, literally rolling around in large amounts of cash and stolen items. They also documented themselves on spending sprees with the proceeds from their robberies. The group is notable for its use of female accomplices, who transported members of the group to the scene of crimes, held and concealed evidence, stole credit cards and identities, and rented or stole vehicles in which to commit crimes.

The Indictment alleges that following his arrest, the group’s ringleader, Melvin Landry, Jr. offered cash and goods to FBI agents, if they would allow him to escape.

Defendant

Charges

Melvin Landry Jr., a/k/a “New Hefner,”
22, of Oakland

Racketeering, Racketeering Conspiracy, Conspiracy to Commit Robbery Affecting Interstate Commerce, Robbery Affecting Interstate Commerce (Five Counts), Use/Possession of Firearm During and in Relation to Crime of Violence (Five Counts), Money Laundering, Attempting to Bribe a Federal Official, and Obstruction of Justice.

Dominique Marquis Martin, a/k/a “Domo,”
23, of Oakland

Racketeering, Racketeering Conspiracy, Conspiracy to Commit Robbery Affecting Interstate Commerce, Robbery Affecting Interstate Commerce (Four Counts), Use/Possession of Firearm During and in Relation to Crime of Violence (Four Counts), and Money Laundering.

Rudolpho Antoine James, a/k/a “Youngnrichdolpho,”
20, of Vallejo

Racketeering, Racketeering Conspiracy, Conspiracy to Commit Robbery Affecting Interstate Commerce, Robbery Affecting Interstate Commerce (Two Counts), Use/Possession of Firearm During and in Relation to Crime of Violence (Two Counts), Access Device Fraud (Two Counts), and Access Device Making Equipment.

Eric Carlisle, a/k/a “Pimpinassero,”
24, of Berkeley

Racketeering, Racketeering Conspiracy, Conspiracy to Commit Robbery Affecting Interstate Commerce, Robbery Affecting Interstate Commerce (One Count), and Use/Possession of Firearm During and in Relation to Crime of Violence (One Counts).

Veante Williams, a/k/a “V,” 22, of Oakland

Obstruction of Justice.

Desier Williams, 20, of Oakland

Access Device Fraud.

Reina Rodriguez, 23, of Vallejo

Access Device Fraud and Possession of Accessing Device Making Equipment.

The maximum statutory penalty for racketeering and racketeering conspiracy, in violation of 18 U.S.C. Section 1962(c) and 1962(d), are life imprisonment, maximum fine of the greatest of either $250,000 or twice the gross pecuniary gain to the defendant or twice the gross pecuniary gain loss inflicted on another. The maximum statutory penalties for Hobbs Act robbery and conspiracy to commit Hobbs Act robbery, in violation of 18 U.S.C. Section 1951(a), and for obstruction of justice, in violation of 18 U.S.C. Section 1512(c)(1), is 20 years in prison and a fine of $250,000. The maximum statutory penalty for use/possession of a firearm in furtherance of the Hobbs Act robbery, a crime of violence, in violation of 18 U.S.C. Section 924(c), is life imprisonment, a $250,000 fine, but carries a mandatory minimum consecutive prison term of 7 years for the first Section 924(c) conviction if the firearm was brandished, and a 25-year mandatory minimum consecutive term in prison for each second or successive 924(c) conviction. The maximum statutory penalty for money laundering, in violation of 18 U.S.C. Section 1956(a)(1)(b)(i), is 20 years imprisonment, a $500,000 fine, or twice the value of the property involved in the transactions. The maximum statutory penalty for attempting to bribe a federal official, in violation of 18 U.S.C. Section 201(b), is 15 years imprisonment, and a $250,000 fine. The maximum statutory penalty for Access Device Fraud, in violation of 18 U.S.C. section 1029(a)(1) & (2), is 10 years imprisonment, and a $250,000 fine or twice the gross pecuniary gain or loss from the offense. The maximum statutory penalty for Access Device Making Equipment, in violation of 18 U.S.C. section 1029(a)(4) & (2) is 15 years imprisonment, 3 years of supervised release, maximum fine of $250,000 or twice the gross pecuniary 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.

Please note, indictments and complaints contain only allegations and, as with all defendants, the defendants named herein must be presumed innocent unless and until proven guilty.

Kathryn Haun and Kimberly Hopkins are the Assistant United States Attorneys who are prosecuting the case with the assistance of Kevin Costello and Daniel Charlier-Smith, and with Assistant United States Attorney Olusere Olowoyeye of the Eastern District of California. The prosecution is the result of an investigation by the FBI, IRS Criminal Investigation, the California Highway Patrol, the Fremont Police Department, the Alameda County Sheriff’s Department, the Alameda County DA’s Office, the San Leandro Police Department, the San Mateo Police Department, the San Mateo District Attorney’s Office, the Oakland Police Department, the Pinole Police Department, the San Rafael Police Department, the Antioch Police Department, the Richmond Police Department, the Vallejo Police Department, and the Sacramento Police Department.

(The Landry Crew second superseding indictment )

 

 

SAN FRANCISCO – Ruben Rivera was sentenced on March 13, 2014, to 41 months in prison for attempting to transport monetary instruments for the purpose of laundering proceeds of heroin distribution, announced United States Attorney Melinda Haag, Drug Enforcement Administration Special Agent in Charge Jay Fitzpatrick, and FBI Special Agent in Charge David J. Johnson.

Rivera pleaded guilty on Oct. 4, 2013, to violation of 18 U.S.C. § 1956(a)(2)(B). According to the plea agreement, Rivera admitted that on May 11, 2001, he attempted to smuggle $43,658, which he knew to be proceeds of heroin sales in the United States, across the border to Mexico. Rivera was given the money by co-defendant Luis Manuel Garcia Hernandez, a/k/a “Piojo,” previously sentenced to 135 months of imprisonment for conspiracy to distribution heroin in violation of 21 U.S.C. § 846, whom Rivera knew to be a heroin dealer, to deliver to Garcia Hernandez’s contacts in Mexico. Rivera was stopped at the U.S.-Mexican border at Nogales, Arizona, by United States border agents, and the $43,658 was seized from him at that time. Rivera had intended to transport the money through the border and into Mexico, and he knew that the money represented the proceeds of a conspiracy to distribute heroin. Moreover, he knew the transportation was designed to avoid the reporting requirement for transporting that amount of money.

On June 18, 2001, Rivera was charged by Criminal Complaint in the United States District Court for the District of Arizona with a violation of 31 U.S.C. §§ 5316(a)(1)(A) and 5332, attempting to transport U.S. currency of more than $10,000 at one time out of the United States into Mexico, without filing a report, in Case No. CR 01-2737M. Rivera was released on a bond pending trial in Arizona, and he soon thereafter became a fugitive. Rivera was charged in the Northern District of California on Nov. 6, 2001, with participating in the conspiracy to distribute heroin. He remained a fugitive as to both cases until Jan. 17, 2013, when he was arrested in Illinois by deputies of the U.S. Marshal’s Service.

“A 41-month sentence sends a strong and important message that becoming and remaining a fugitive will have serious consequences,” said U.S. Attorney Melinda Haag. “Rivera knowingly remained a fugitive for 11 years, 3 months, and 8 days. He was apprehended through the hard work of the U.S. Marshal’s Service, as well as the Drug Enforcement Administration and Federal Bureau of Investigation, which originally investigated the heroin distribution conspiracy. Although Rivera’s offense conduct was based on a single event of attempt to transport heroin proceeds to Mexico, this act was directly and knowingly intended to facilitate a large heroin distribution network.”

The sentence was handed down by The Honorable Jeffrey S. White, United States District Court Judge, following a guilty plea to one count of attempting to transport monetary instruments for the purpose of laundering, in violation of 18 U.S.C. § 1956(a)(2)(B). Judge White also sentenced the defendant to a three-year period of supervised release. The Court imposed a sentencing enhancement for obstruction of justice, based on Rivera’s fugitive status. The defendant has remained in custody since his apprehension on Jan. 17, 2013.

The prosecution is the result of an investigation by the Drug Enforcement Administration and Federal Bureau of Investigation, with assistance from the U.S. Marshal’s Service.

(Rivera superseding information )

 

 

OAKLAND – David Busby was sentenced today to ten years in prison for downloading and viewing child pornography, announced United States Attorney Melinda Haag, Deputy Inspector General for Investigations at the U.S. Department of Energy John R. Hartman, and FBI Special Agent in Charge David J. Johnson.

On Sept. 19, 2013, after a three-day trial, a jury convicted Busby of possessing and accessing with the intent to view child pornography, in violation of 18 U.S.C. § 2252(a)(4)(B) and (b)(2). Evidence at trial showed that on April 20, 2010, a network security analyst detected internet traffic indicative of child pornography on the National Energy Research Scientific Computing Center (NERSC) computer network. The internet traffic was isolated to a single laptop computer being used by Busby.

Busby, a registered sex offender based on a prior conviction, was a computer support employee at the Lawrence Berkeley National Laboratory (LBL), and he worked part-time at NERSC, which is affiliated with LBL. Busby made two statements to law enforcement officers shortly after the April 20, 2010 incident, ultimately admitting that he did download child pornography to two of his work computers. Busby said he would store the child pornography for a period of time and then delete the images. A forensic examination of two of Busby’s computers recovered approximately 1,400 images of child pornography that had been deleted. At trial, Busby’s defense claimed that he accidentally downloaded the child pornography onto his computers while trying to access legal child modeling sites.

Busby, 61, of Richmond, was indicted by a federal grand jury in a superseding indictment on July 9, 2013. Busby was remanded into custody following his conviction at trial. The sentence was handed down by the Honorable Saundra B. Armstrong, United States District Court Judge. Judge Armstrong also sentenced the defendant to a ten-year period of supervised release.

Brian C. Lewis is the Assistant U.S. Attorney who is prosecuting this case with the assistance of Janice Pagsanjan and Patty Lau. This prosecution is the result of an investigation by the Department of Energy Office of Inspector General, University of California Police Department, and the Federal Bureau of Investigation.

(Busby superseding indictment )

 

 

SAN JOSE – Jose Miguel Aguilar (a/k/a “Lil Joe”) was sentenced today to twelve years in prison for methamphetamine trafficking, announced United States Attorney Melinda Haag and FBI Special Agent in Charge David J. Johnson.

Aguilar was indicted on October 17, 2013, and pleaded guilty two months later, on December 18, 2013. He pleaded to one count of Possession with Intent to Distribute, and Distribution of, Methamphetamine, in violation of Title 21, United States Code, Sections 841(a)(1) and 841(b)(1)(A)(viii).

Aguilar, one of the highest-ranking members of the Sunnyvale-based Norteño gang, “Varrio Via Sol,” or “VVS,” routinely sold ounce and greater quantities of methamphetamine. On a single day in 2013, while on probation for two separate state convictions, Aguilar convened five different methamphetamine buyers in a Sunnyvale residence to sell them methamphetamine. That day, Aguilar distributed a total of not less than 126 grams (approximately one quarter of a pound) of methamphetamine to the five buyers in exchange for more than $2,000. In his plea agreement, Aguilar conceded that under the United States Sentencing Guidelines, he is considered a “career offender” because of three violent felonies on his record, among many other prior convictions during the last two decades.

“Today’s sentence ends this defendant’s harmful activities and takes a notorious drug dealer and gang leader off the street for more than ten years,” said United States Attorney Melinda Haag. “This case demonstrates that the federal government will swiftly and aggressively prosecute gang members responsible for drug trafficking and other illegal activity in the Bay Area.”

The sentence was handed down by the Honorable Lucy H. Koh, United States District Court Judge. Judge Koh also sentenced Aguilar to a five-year period of supervised release to follow his term of imprisonment. Aguilar has been in federal custody since his arrest and will begin serving his sentence immediately.

Special Assistant United States Attorney Casey O’Neill and Assistant United States Attorney Stephen Meyer prosecuted the case with support from Susan Kreider, Tracey Andersen, and Nina Burney. The prosecution is the result of an investigation by the FBI’s Santa Clara County Violent Gang Task Force, which includes Task Force Officers from the Sunnyvale Police Department. Following the sentencing, United States Attorney Haag expressed her appreciation for the excellent work done by the FBI and Sunnyvale Police on this case and related matters.

(Aguilar indictment )

 

 

SAN FRANCISCO/SAN JOSE – A 41-count second superseding indictment against 27 members and associates of Sur Santos Pride, a San Jose-based criminal street gang, alleging a variety of charges, including a RICO conspiracy, violent crimes in aid of racketeering, including murder, several drug trafficking counts, and firearms related counts was unsealed today, announced United States Attorney Melinda Haag and FBI Special Agent in Charge David J. Johnson.

The defendants named in the Second Superseding Indictment are as follows:

1. MIGUEL MIRANDA, a/k/a “Payaso,” 27
2. GILBERTO VILLELA, a/k/a “Snowman,” 32
3. JESSE AGUILAR, a/k/a “Munchies,” 31
4. FRANCISCO FONSECA, a/k/a “Griffo,” 28
5. JORGE CISNEROS, a/k/a “Sleepy,” 28
6. DANIEL CORTEZ, a/k/a “Little Temper,” 21
7. JOSE DAVID SANCHEZ, a/k/a “Joker,” 32
8. MIGUEL VASQUEZ, a/k/a “Tweety,” 29
9. JUAN CHAVEZ, a/k/a/ “Dukester,” 29
10. MARCOS SALVADOR LOMELI, a/k/a “Cookie,” 27
11. JESSE PARRA, a/k/a “Little Looney,” 31
12. ANDY LAMB LOPEZ, a/k/a “Solo,” 36
13. JOSE ANGEL MORENO, a/k/a “Lil Chocolate,” 30
14. FERNANDO CRUZ, a/k/a “Nano,” 23
15. ALFREDO MOLDONADO, a/k/a “Junior,” 35
16. JESUS MANUEL ARMENDARIZ, a/k/a “Chumel,” 22
17. FELIX HERNADEZ CRISTOBAL, a/k/a “Pato,” 22
18. JORGE LUIS OLIVERA, a/k/a “Chivo,” 20
19. MARIO GUERRERO, a/k/a “Lil Junior,” 22
20. BENITO CANALES, a/k/a “Dopey,” 32
21. RAFAEL MARISCAL CAMBEROS, a/k/a “Bad Boy,” 23
22. ROBERTO MARTINEZ, a/k/a “Espantos,” 32
23. JORGE RODRIGUEZ, a/k/a “Brownie,” 24
24. OSCAR MARTINEZ DE LA CRUZ, a/k/a “Cuete,” 27
25. RICARDO MONTOYA, a/k/a “Necio,” 23
26. MARIO CARDENAS, a/k/a “Trusty,” 20
27. DENIS SANDOVAL, a/k/a “Criminal,” 26

The RICO conspiracy count and the violent crimes in aid of racketeering counts arise from the defendants’ participation as members and associates in the racketeering enterprise known as Sur Santos Pride (“SSP”). According to the Second Superseding Indictment, SSP constitutes a racketeering enterprise and its members and associates agreed to conduct the affairs of the enterprise through, among other crimes, murder, attempted murder, assault, robbery, narcotics trafficking, obstruction of justice, and tampering with witnesses.

Two defendants, including Roberto Martinez, are also charged with one count of murder in aid of racketeering committed on October 23, 2011. The defendants charged in the RICO Conspiracy face up to life in prison. Roberto Martinez is subject to a sentence of life imprisonment or possibly the death penalty.

The Second Superseding Indictment also includes a number of drug trafficking and firearms offenses committed between August 2010 and January 30, 2014. Many of these defendants on the drug trafficking charges face a maximum of life imprisonment and a mandatory minimum of 10 years in prison.

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, in accordance with 18 U.S.C. § 3553(a). In addition, although Roberto Martinez is eligible for the death penalty, the decision whether to seek the death penalty against him is pending. Please note, an indictment contains only allegations against a person and, as with all defendants, those charged in this case must be presumed innocent unless and until proven guilty.

This Indictment is the result of a long term investigation the by the Federal Bureau of Investigation Santa Clara County Violent Crime Task Force, with the assistance of the following agencies: San Jose Police Department, Milpitas Police Department, Morgan Hill Police Department, Mountain View Police Department, Sunnyvale Public Safety Service, Santa Clara Police Department, Santa Clara County Sheriff’s Office, Santa Clara County Probation, California Department of Corrections and Rehabilitation, and the Department of Homeland Security.

Cynthia Frey, Stephen Meyer, and Amie Rooney are the Assistant U.S. Attorneys who are prosecuting the case with the assistance of Kurt Kosek, Ponly Tu, and Tracey Andersen.

(Sur Santos Pride second superseding indictment )