Northern District of California

SAN JOSE – A federal jury convicted a Palo Alto man for aggravated sexual abuse, sexual abuse by fear, and making false statements to a federal agent during an investigation.  The jury reached its verdict late in the evening on Jan. 31, 2025, following a three-week trial before Senior U.S. District Judge Edward J. Davila.

Onofre Salas-Lozano, 42, worked as a night supervisor for the janitorial services contractor that cleaned the Palo Alto Veterans Affairs (VA) Hospital.  According to court documents and evidence presented at trial, Salas-Lozano isolated and trapped the victim in a patient exam room at the hospital late at night on July 2, 2021, and forced her to engage in sexual activity.  The victim suffered traumatic tissue injury during the assault, and DNA analysis confirmed the presence of Salas-Lozano’s sperm in the victim’s underwear.  At the time of the incident, Salas-Lozano was the victim’s direct supervisor.  

The jury also found that Salas-Lozano lied to a VA Office of Inspector General (OIG) special agent during a subsequent investigative interview when he denied having sexual intercourse with the victim on July 2, 2021, or at any other time.  At trial, the defendant testified and claimed to have had consensual sex with the victim at some other time and denied making a false statement.  

“Salas-Lozano used his position as a supervisor to sexually assault a fellow employee.  Federal law enforcement will do all it can to secure justice for any victim of sexual assault,” said United States Attorney Ismail J. Ramsey.  “This jury verdict ensures that the Salas-Lozano will now face severe consequences for his despicable acts.”

“The verdict sends a clear message that the VA OIG remains dedicated to holding those who commit an act of violence at a VA facility accountable,” said Special Agent in Charge Dimitriana Nikolov with the Department of Veterans Affairs Office of Inspector General’s Northwest Field Office. “The VA OIG is grateful for the commitment of the U.S. Attorney’s Office to seek justice for the victim.”

Salas-Lozano is scheduled to appear in court today to set a date for sentencing.  He faces a maximum penalty of life in prison on each count of aggravated sexual abuse and sexual abuse by fear, and a maximum penalty of eight years in prison on the count of materially false statement in a federal investigation.

Assistant U.S. Attorneys Marissa Harris and Christoffer Lee are prosecuting the case with the assistance of Sara Slattery, Susan Kreider, Sahib Kaur, Mimi Lam, and Fernanda Gonzalez. The prosecution is the result of an investigation by VA OIG, with significant assistance from the VA Police Service. 
 

SAN FRANCISCO – A federal grand jury has indicted Carlos Adolfo Haeckermann Cardenas on charges of aiding and abetting false statements on asylum applications.

According to an indictment filed Nov. 13, 2024, and unsealed Jan. 23, 2025, Haeckermann, 62, of Doral, Florida, held himself out to provide individuals with assistance in applying for immigration documents and benefits, including asylum.  Between 2019 and 2021, Haeckermann submitted or assisted in the submission of more than 100 asylum applications to U.S. Citizenship and Immigration Services (USCIS) and charged his clients, including some who resided in the Northern District of California, thousands of dollars to help them apply for asylum.

The indictment further alleges that it was Haeckermann’s practice to draft his clients’ personal statements, which frequently included stories of political persecution that formed the basis for the asylum claims. In so doing, Haeckermann allegedly included false and embellished details that were intended to substantiate his clients’ asylum claims and increase the chances that his clients would be granted asylum.

It was Haeckermann’s practice to send completed applications back to his clients for them to sign and submit rather than to list himself as a third-party preparer and to submit the applications himself. At times, the indictment says, Haeckermann solicited his clients for additional payments in exchange for falsified documents that Haeckermann told his clients were necessary to support their asylum claims.

Haeckermann made his initial appearance in San Francisco on Jan. 22, 2025. He is next scheduled to appear in federal court on Mar. 26, 2025, before the Hon. Vince Chhabria, U.S. District Judge.

United States Attorney Ismail J. Ramsey and U.S. Department of State Diplomatic Security Service (DSS) Criminal Fraud Investigations Branch Chief Jeff Rusinek made the announcement.

An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, the defendant faces a maximum sentence of 10 years’ imprisonment on each count, as well as a maximum fine of $250,000 on each count. Any sentence following a conviction would be imposed by a court only upon 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 Nicholas Parker is prosecuting the case. The prosecution is the result of an investigation by DSS and USCIS, with significant assistance from USCIS’s Fraud Detection and National Security Directorate.

Haeckermann Indictment
 

SAN FRANCISCO – A 25-count indictment was unsealed today charging Alexander Charles Beckman, the founder and former CEO of GameOn, Inc., also known as GameOn Technology or ON Platform (“GameOn”), and Valerie Lau Beckman (“Lau”), an attorney who worked on GameOn matters and is married to Beckman, with conspiracy, wire fraud, securities fraud, identity theft, and other offenses.  Lau was also charged with obstruction of justice.

According to the indictment filed on Jan. 21, 2025, Beckman, 41, and Lau, 38, both of San Francisco, allegedly conspired to defraud GameOn investors, GameOn, and a bank.  GameOn is a San Francisco-based private business that offers a software program claiming artificial intelligence functionality that mimics human conversation and interaction, commonly known as a chatbot or “chat.”  Its customers included prominent American professional sports leagues and teams and leading luxury fashion and retail brands.  Over the course of the alleged scheme, from September 2018 to July 2024, Beckman raised over $60 million from GameOn investors.  Lau was an attorney who worked on GameOn corporate and transactional matters from at least 2016 to 2024.  The couple married in October 2023.  Beckman and Lau allegedly used over $4 million of GameOn investor funds on personal expenses, including purchases of residences in San Francisco, payments to private schools, and payments to their wedding venue.

“The Bay Area is home to incredible innovation and hard-working entrepreneurs, but innovation cannot grow through fraud.  Schemes like the ones that defendants are charged with threaten our financial markets and cheat investors,” said First Assistant United States Attorney Patrick D. Robbins.  “This indictment should serve as a reminder that we will investigate and hold fraudsters accountable.”

“Fraud undermines the integrity of our capital markets and erodes the trust that investors place in them,” said FBI Acting Special Agent in Charge Dan Costin.  “The FBI is committed to ensuring our financial markets remain fair and transparent by investigating and holding accountable those who engage in deceptive practices.”

As alleged in the indictment, Beckman’s statements to GameOn investors often described non-existent revenue, inflated cash balances, and fake and otherwise exaggerated customer relationships.  To further the scheme, Beckman allegedly used the names of at least seven real people—including fake emails and signatures—without their permission to distribute false and fraudulent GameOn financial and business information and documents with the intent to defraud GameOn and its investors.  Among the individuals whose names Beckman used to commit the fraud scheme was a GameOn CFO, two bank employees, and an employee of a major professional sports league.  Beckman also fabricated two GameOn audit reports using the names, signatures, and trademarks of reputable accounting firms, including one of the Big Four accounting firms, to validate false financial statements, and distributed over a dozen fake bank statements for GameOn’s accounts as part of the scheme.

After changing law firms multiple times, Lau joined a venture capital firm in September 2021.  Lau is alleged to have provided Beckman with genuine audit reports that she obtained from her own employer that Beckman then used to create fake audit reports for GameOn.  The indictment alleges that Lau personally emailed one of these fake audit reports to a GameOn investor’s representative, knowing it to be fake, to induce further investment into the company.

In June 2024, Lau furthered the scheme to defraud by delivering a fake GameOn account statement—one that she knew falsely listed GameOn’s balance at a certain financial institution as over $13 million when the company’s true balance was just $25.93—to a bank branch in San Francisco and asking a bank employee to keep the fake statement in an envelope at the bank for Beckman to pick up later that day.  Lau knew that Beckman planned to pick up the fake statement with a GameOn director who represented a major investor on GameOn’s board.  Beckman picked up the fake statement with the GameOn director that day.

In August 2024, when Lau’s employer approached Lau regarding GameOn, Lau lied to her employer about her work for GameOn and then attempted to delete hundreds of files relating to that GameOn work from her employer’s records at a time when a grand jury investigation into GameOn was pending.

Beckman and Lau were arrested earlier today and made their initial appearances in federal court in San Francisco this morning.

An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt.  If convicted, defendants face the following maximum sentences: 20 years in prison for each count of wire fraud and wire fraud conspiracy under 18 U.S.C. §§ 1343 and 1349 and securities fraud under 15 U.S.C. §§ 78j(b) and 78ff; five years in prison for the count of securities fraud conspiracy under 18 U.S.C. § 371; 30 years in prison for each count of bank fraud conspiracy and false statements to a bank under 18 U.S.C. §§ 1349 and 1014; 10 years in prison for the count of engaging in monetary transactions in property derived from specified unlawful activity under 18 U.S.C. § 1957; and two years in prison for each count of aggravated identity theft under 18 U.S.C. § 1028A that must be consecutive to any other term of imprisonment imposed under any other provision of law.  Lau also faces a maximum sentence of 20 years in prison for the count of obstruction of justice under 18 U.S.C. § 1512(c)(1).  Any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.

Assistant U.S. Attorney Patrick O’Brien is prosecuting the case with the assistance of Lance Libatique and Maryam Beros.  The prosecution is the result of an investigation by the FBI.

Anyone with information about allegations of corporate and securities fraud can report it by contacting the FBI at (415) 553-7400 or tips.fbi.gov, or by reporting the allegations to the United States Attorney’s Office for the Northern District of California through its Whistleblower Pilot Program, using the instructions at link.

Beckman Indictment
 

SAN FRANCISCO – Darneko Yates, 30, of Richmond, Calif., was found guilty of being a felon in possession of a firearm, following a one-day bench trial on Jan. 17, 2025, before the Honorable Araceli Martínez-Olguín, U.S. District Judge.    

The evidence at trial established that on Aug. 27, 2023, San Pablo Police Officers attempted to stop Yates for a vehicle infraction.  Yates drove for several blocks before pulling up partially onto the sidewalk in front of a relative’s house.  Yates had his young nephew and niece in the backseat of his car.  At the time, Yates was on parole following three felony convictions for carjacking, solicitation to commit murder, and possessing a loaded firearm.  

Upon learning that Yates was on parole with a search condition, officers searched his person but did not find anything.  When Yates’s six-year-old nephew got out of the car, Yates urged the child to go inside the house.  The child moved slowly and kept his back to the officers.  When officers looked at the front of the child, they saw an object tucked into the front of his pants.  Upon further inspection, officers located a Glock firearm loaded with 11 rounds of ammunition inside the six-year-old’s pants.  The gun had a “Glock switch” or “machinegun conversion device,” which allows a shooter to fire an endless stream of bullets with one pull of the trigger.  During the traffic stop, Yates sent text messages telling an individual to come get the child out of the car before the police searched the vehicle, and admitting that the child had Yates’s gun on him.

“Defendant’s actions inexcusably endangered a young child.  Thanks to the careful work of the officers on the scene, this did not turn into a tragedy,” said U.S. Attorney Ismail J. Ramsey.  “My office will continue to use all resources available to reduce violent crime and gun violence in our communities.”

“Using a child to conceal a loaded, fully automatic firearm shows an alarming disregard for their safety and well-being,” said FBI Acting Special Agent in Charge Dan Costin. “The FBI, alongside our law enforcement partners, remains steadfast in our commitment to holding dangerous offenders accountable and removing illegal firearms from our streets.”

Yates was convicted of being a felon in possession of a firearm, in violation of 18 U.S.C. § 922(g).  He faces a maximum statutory sentence of 15 years in prison.  Defendant’s sentencing is scheduled for April 28, 2025.  

This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and gun violence, and to make our neighborhoods safer for everyone.  On May 26, 2021, the Department of Justice launched a violent crime reduction strategy strengthening PSN based on these core principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence from occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results.

Assistant U.S. Attorneys Leif Dautch and Richard Ewenstein are prosecuting this case, with the assistance of Madeline Wachs.  The prosecution is the result of an investigation by the FBI, the Contra Costa County Sheriff’s Office, and the San Pablo Police Department.  
 

OAKLAND – Jose Luis Garcia, the co-owner of Envios Express, a money transmitting business in Oakland, was sentenced this week to 12 months in federal prison. The Honorable Haywood S. Gilliam, Jr., United States District Judge, handed down the sentence on Jan. 15, 2025.

Garcia, 57, of Oakland, was indicted in July 2023 and pleaded guilty in September 2024 to one count of conspiracy to commit money laundering, in violation of 18 U.S.C. § 1956(h).

According to court documents and Garcia’s plea agreement, Garcia and his wife, who was also charged in this case, owned a money transmitting business on International Boulevard in Oakland that operated under several names, including Envios Express.  The business was a local agent of and contracted with national wire service companies to provide wire transfer services to the public.  As a local agent, Garcia had access to wire services that facilitated the transfer of funds from Oakland to other parts of the United States, Mexico, Honduras, and other foreign countries.

Garcia completed annual Anti-Money Laundering training through these wire service companies.  As the designated anti-money laundering compliance officer for Envios Express, he agreed to monitor the store’s outgoing wires for structuring activity intended to evade reporting requirements.  Garcia admitted using fake sender names and IDs to process multiple structured wires to conceal the fact that a single sender was wiring amounts greater than $3,000, which he knew would have triggered mandatory federal reporting requirements.  He accepted large amounts of cash, sometimes as much as $9,000 or more, from unidentified customers, who asked that the cash be wired to well-known drug trafficking areas of Mexico or to persons in Honduras, without recording the true identity of the sender.  Garcia misused the names and IDs of legitimate customers to send large amounts of cash for unidentified customers in order to evade reporting requirements.  He also kept roughly 15,000 digital images of California driver’s licenses and Honduran, Mexican, and other national identity cards on cell phones, which he used to meet the wire companies’ ID requirements.

In August 2022, Garcia agreed to a request by a confidential source to wire $9,200 in cash to recipients in Mexico without providing an ID or using the sender’s real name as federal law requires. Garcia structured the $9,200 in cash in four wires, using fake names for the sender on the receipts, and charged an under-the-table fee of $50 for each of the wires.

In addition to the prison term, Judge Gilliam ordered the defendant to serve three years of supervised release.

United States Attorney Ismail J. Ramsey, IRS Criminal Investigation (IRS-CI) Special Agent in Charge of the Oakland Field Office Linda Nguyen, and Drug Enforcement Administration (DEA), San Francisco Field Division, Special Agent in Charge Bob P. Beris made the announcement.

This prosecution is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.

Assistant United States Attorneys Daniel Pastor and Nicholas Parker are prosecuting the case with assistance from Amanda Martinez and Andy Ding. The prosecution is the result of an investigation by IRS-CI and DEA.
 

OAKLAND – An eight-count indictment was unsealed today charging former Oakland Mayor Sheng Thao, her longtime romantic partner Andre Jones, and local businessmen David Trung Duong and Andy Hung Duong with bribery offenses, and charging Andy Duong with making false statements to government agents.

According to the indictment filed Jan. 9, 2025, in the weeks leading up to the City of Oakland mayoral election in November 2022 and following her election as mayor, Thao promised to take official actions as the mayor of Oakland to benefit David Duong and Andy Duong, in exchange for the Duongs providing various benefits to Thao and Jones.  David Duong was the president and CEO of a recycling company that provided residential recycling collection services to Oakland households, and was also the chairman and co-owner of a housing company formed to develop and manufacture prefabricated modular homes.  Andy Duong, David Duong’s son, was an employee of the recycling company and also a founder and co-owner of the housing company.

The indictment describes that Thao promised to commit the City of Oakland to purchase housing units from the Duongs’ housing company, extend the City’s contract with the Duongs’ recycling company, and appoint city officials selected by the Duongs.  In exchange, David and Andy Duong promised to and did fund a $75,000 negative mailer campaign targeting Thao’s opponents in the mayoral election, and made $95,000 in payments to Jones for a no-show job with their housing company, with the promise of additional payments, all intended for the benefit of Thao and Jones.

Once Thao became Mayor of Oakland in January 2023, she allegedly took steps in furtherance of the corrupt relationship with the Duongs, including using her influence to help appoint a high-level City of Oakland official selected by David and Andy Duong, and requesting that members of her staff meet with and tour the Duongs’ housing company.

Thao allegedly benefitted from the payments that the Duongs made to Jones.  Financial records indicate that before Jones began receiving payments as a result of the bribery scheme, Thao either paid the entirety of or split with Jones the rent for their shared residence.  However, starting in January 2023, soon after Jones began receiving payments as part of the bribery scheme, Jones began paying the entirety of their rent.  In addition, beginning in January 2023, Jones increased his contribution to, or paid the entirety of, shared bills with Thao, including household utility bills and mobile phone bills.

Defendants allegedly took steps to conceal their bribery scheme by, among other actions: at Thao’s direction, making the bribe payments to Jones to avoid a paper trial to Thao; misrepresenting that Jones had a legitimate job with the Duongs’ housing company to mask the bribery payments; creating false invoices for the bribe payments from the Duongs’ recycling company; and failing to disclose benefits received on California Form 700, Statement of Economic Interests.

“The public deserves honesty and transparency from City Hall.  When elected officials agree to a pay-to-play system to benefit themselves rather than work for the best interests of their constituents, that breaches the public trust,” said First Assistant United States Attorney Patrick D. Robbins.  “This indictment reaffirms the U.S. Attorney’s Office’s commitment to root out, investigate, and prosecute corruption in our local governments.”

“Our communities are entitled to leaders who act in their best interest, free from the shadow of corruption,” said FBI Acting Special Agent in Charge Dan Costin.  “Today’s actions demonstrate our resolute determination to protect the integrity of our government and ensure accountability for those who betray the public’s trust.”

“To protect the public trust, Postal Inspectors worked closely with the U.S. Attorney’s Office and our partners at the FBI and IRS Criminal Investigation (CI) to investigate and prosecute those individuals responsible for fraud schemes committed against a government agency, businesses, and the public,” said San Francisco Division Inspector in Charge Stephen M. Sherwood of the U.S. Postal Inspection Service (USPIS).

“The alleged crimes committed against the citizens of Oakland by former Mayor Thao and her co-conspirators are a clear breach of public trust and cannot be tolerated,” said IRS Criminal Investigation Oakland Field Office Special Agent in Charge Linda Nguyen.  “Public corruption schemes are rooted in greed and typically leave a money trail behind.  IRS-CI specializes in following that trail and building cases that lead to justice.”

The indictment charges each defendant with one count of conspiracy to commit bribery in violation of 18 U.S.C. § 371; one count of bribery concerning programs receiving federal funds in violation of 18 U.S.C. § 666(a)(1)(B) or 18 U.S.C. § 666(a)(2); one count of conspiracy to commit honest services mail and wire fraud in violation of 18 U.S.C. § 1349; one count of honest services mail fraud in violation of 18 U.S.C. §§ 1341, 1346; and two counts of honest services wire fraud in violation of 18 U.S.C. §§ 1343, 1346.  Andy Duong was also charged with one count of making false statements to government agents in violation of 18 U.S.C. § 1001(a)(2).

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

If convicted, defendants face a maximum sentence of 20 years in prison for each count under 18 U.S.C. § 1349, 18 U.S.C. § 1341, and 18 U.S.C. § 1343, a maximum sentence of 10 years in prison for each count under 18 U.S.C. §§ 666(a)(1)(B) and (a)(2), and a maximum of five years in prison for the count under 18 U.S.C. § 371.  Andy Duong faces a maximum sentence of five years in prison for the count under 18 U.S.C. § 1001.  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.

The defendants are scheduled to make their initial federal court appearance in Oakland at 10:30 a.m. on Jan. 17, 2025, before U.S. Magistrate Judge Kandis A. Westmore.

Assistant U.S. Attorneys Molly K. Priedeman, Abraham Fine, and Lloyd Farnham are prosecuting the case with the assistance of Amala James and Madeline Wachs.  The prosecution is the result of an investigation by the FBI, USPIS, and IRS-CI.

Sheng Thao Indictment
 

OAKLAND – Dublin resident Vamsikrishna Naganathanahalli was sentenced today to 18 months in federal prison for damaging computers belonging to his former employer. The Honorable Yvonne Gonzalez Rogers, U.S. District Judge, handed down the sentence.

Naganathanahalli, 49, pleaded guilty on Aug. 15, 2024, to three counts of knowingly causing the transmission of a program, information, code, or command, and as a result of such conduct, intentionally causing damage without authorization, to a protected computer.  According to his plea agreement, defendant worked for MedAmerica, Inc., part of the Vituity group of companies, from October 2018 to June 2022. Vituity, based in Emeryville, Calif., included physician partners and other healthcare professional employees who worked as contractors in hospital emergency rooms, outpatient clinics, telehealth providers, and other clinical settings. The company also employed non-clinical healthcare personnel who worked with healthcare providers in various facilities. Vituity used the Oracle Human Capital Management (“HCM”) platform to organize core human resources data for its approximately 7,000 employees. The HCM platform contained records for current and past Vituity employees, including their Social Security numbers, salaries, and addresses. Naganathanahalli worked for Vituity as a Senior HCM Architect.

Defendant admitted that, on May 28, 2022, the day after being told that his employment at Vituity was being terminated, he used his access to a privileged HCM service account to change the password for another employee’s privileged Vituity HCM account without authorization. On or about Sept. 6, 2022, after his employment had ended, he used that privileged HCM account to change the HCM password for a Vituity contractor. That same day, he used the contractor’s account to load files containing “dummy” or “masked” data, which replaced real data, to the Vituity HCM live production environment. As Naganathanahalli admitted, the generic masked data overwrote the real data for approximately 90 percent of Vituity employees, current and former. Defendant’s conduct caused a loss to Vituity of at least $400,930.

In addition to the term of imprisonment, Judge Gonzalez Rogers also ordered Naganathanahalli to pay $400,930 in restitution and a $300 special assessment and sentenced him to a three-year period of supervised release. The defendant will begin serving his sentence on July 20, 2025.

United States Attorney Ismail J. Ramsey and Federal Bureau of Investigation (FBI) Acting Special Agent in Charge Dan Costin made the announcement.

Assistant U.S. Attorneys Michelle J. Kane and Nikhil Bhagat are prosecuting the case with the assistance of Kathy Tat.  The prosecution is the result of an investigation by the FBI.
 

OAKLAND – Casey Robert Goonan, 34, of Oakland and Pleasant Hill, pleaded guilty today to federal arson charges in relation to a series of firebombings and arsons at the Oakland federal building and the University of California, Berkeley in June 2024.

According to a plea agreement filed in open court, in the early morning hours of June 11, 2024, Goonan arrived at the Ronald V. Dellums Federal Building and U.S. Courthouse in Oakland carrying a bag containing three explosive devices commonly known as “Molotov cocktails.”  Goonan threw rocks at the building, hoping to break a window in order to throw lit Molotov cocktails inside. That plan was disrupted by protective services officers; upon fleeing from the officers, Goonan placed the Molotov cocktails in a planter on the side of building and lit them on fire.

Goonan also admitted to placing a bag containing six Molotov cocktails underneath the fuel tank of a marked University of California Police Department (UCPD) patrol car at UC Berkeley in the early morning hours of June 1, 2024, lighting the bag on fire and fleeing, causing the patrol car to catch on fire, as depicted below:

In addition to these two attacks, Goonan admitted to setting other fires on the UC Berkeley campus on June 1, June 13, and June 16, 2024.

Goonan admitted that these crimes were designed to influence and affect the conduct of governments by intimidation and coercion and to retaliate against the governments of the United States and the State of California for their conduct. Goonan also agreed that the Court should apply Section 3A1.4 of the U.S. Sentencing Guidelines, the terrorism enhancement, in determining the appropriate sentence.

“In America, we are all free to express our political views and petition the government. But we are not free to do so using violence,” said U.S. Attorney Ismail J. Ramsey. “Politically motivated violence undermines our democracy, and we will continue to investigate and prosecute those who engage in it.”

“Protecting the public from acts of violence and terrorism is the FBI’s top priority,” said Federal Bureau of Investigation (FBI) Acting Special Agent in Charge Dan Costin.  “Acts of arson and violence that seek to intimidate or coerce government institutions undermine democracy and the rule of law. We are grateful to our state and local law enforcement partners for their swift efforts in identifying and bringing Casey Goonan to justice before further harm could be done.”

Goonan pleaded guilty to one count of Maliciously Damaging or Destroying Property Used in or Affecting Interstate Commerce by Means of Fire or an Explosive in violation of 18 U.S.C. § 844(i), which carries a maximum sentence of 20 years in prison and a minimum sentence of five years in prison.  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.

Goonan, who has been in custody since being arrested, is scheduled to be sentenced on April 8, 2025, before the Honorable Jeffrey S. White, Senior United States District Judge.

Assistant U.S. Attorney Nikhil Bhagat is prosecuting the case with the assistance of Tina Rosenbaum. The prosecution is the result of an investigation by the FBI, ATF, the California Office of the State Fire Marshal, and UCPD. 
 

The Justice Department announced today an agreement with the Antioch, California, Police Department (APD) and the City of Antioch to resolve an investigation of race discrimination and other discriminatory conduct by APD officers against members of the public in Antioch.

The department launched its investigation after the public disclosure of discriminatory text communications that dozens of APD personnel allegedly exchanged between September 2019 and January 2022. The Justice Department’s Civil Rights Division and the U.S. Attorney’s Office for the Northern District of California jointly investigated APD’s compliance with Title VI of the Civil Rights Act of 1964 (Title VI) and the nondiscrimination provisions of the Omnibus Crime Control and Safe Streets Act (Safe Streets Act). Title VI and the Safe Streets Act collectively prohibit discrimination on the basis of race, color, national origin, sex and religion by recipients of federal financial assistance, such as APD.

“Fair and non-discriminatory policing is fundamental to effective law enforcement, especially for those agencies that receive federal funding,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “In working with the Justice Department to institute policing reform, Antioch Police Department sends a strong message that the discrimination and misconduct that prompted this investigation will not be tolerated. The agreement we have secured will ensure that Antioch’s policing practices are free from discrimination in the road ahead — the community deserves nothing less.”

“Law enforcement is only effective when it inspires public confidence,” said U.S. Attorney Ismail J. Ramsey for the Northern District of California. “A police department that discriminates based on race and other protected classes undermines both public safety and public confidence. Today’s agreement will help ensure that policing in Antioch is done constitutionally and will help restore public trust.”

In response to the investigation, APD, the City of Antioch and the City Manager worked cooperatively with the department to reach a resolution agreement embodying a commitment to nondiscrimination in APD’s policing operations and advancing its ongoing efforts to prevent and address discriminatory law enforcement practices.

Under the agreement, APD will hire an expert law enforcement consultant jointly selected by the parties to review and update APD’s policies, procedures and training on a variety of topics, including non-discriminatory policing, use of force, hiring and promotions, investigations of misconduct, discipline, community policing, language access, and other topics. The agreement contemplates a role for the Antioch Police Oversight Commission and sets forth a framework for data collection and reporting for a five-year period of departmental monitoring, among other provisions.

Nondiscrimination under Title VI and the Safe Streets Act is a top priority of the Civil Rights Division. Additional information about the Civil Rights Division is available at www.justice.gov/crt. Members of the public may report possible civil rights violations at civilrights.justice.gov/report/.

OAKLAND — The Justice Department announced today an agreement with the Antioch, California, Police Department (APD) and the City of Antioch to resolve an investigation of race discrimination and other discriminatory conduct by APD officers against members of the public in Antioch.

The department launched its investigation after the public disclosure of discriminatory text communications that dozens of APD personnel allegedly exchanged between September 2019 and January 2022. The U.S. Attorney’s Office and the Justice Department’s Civil Rights Division jointly investigated APD’s compliance with Title VI of the Civil Rights Act of 1964 (Title VI) and the nondiscrimination provisions of the Omnibus Crime Control and Safe Streets Act (Safe Streets Act). Title VI and the Safe Streets Act collectively prohibit discrimination on the basis of race, color, national origin, sex, and religion by recipients of federal financial assistance, such as APD.

“Law enforcement is only effective when it inspires public confidence,” said United States Attorney Ismail J. Ramsey. “A police department that discriminates based on race and other protected classes undermines both public safety and public confidence. Today’s agreement will help ensure that policing in Antioch is done constitutionally and will help restore public trust.”

“Fair and non-discriminatory policing is fundamental to effective law enforcement, especially for those agencies that receive federal funding,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “In working with the Justice Department to institute policing reform, Antioch Police Department sends a strong message that the discrimination and misconduct that prompted this investigation will not be tolerated. The agreement we have secured will ensure that Antioch’s policing practices are free from discrimination in the road ahead — the community deserves nothing less.”

In response to the investigation, APD, the City of Antioch and the City Manager worked cooperatively with the department to reach a resolution agreement embodying a commitment to nondiscrimination in APD’s policing operations and advancing its ongoing efforts to prevent and address discriminatory law enforcement practices.

Under the agreement, APD will hire an expert law enforcement consultant jointly selected by the parties to review and update APD’s policies, procedures, and training on a variety of topics, including non-discriminatory policing, use of force, hiring and promotions, investigations of misconduct, discipline, community policing, language access, and other topics.

The agreement contemplates a role for the Antioch Police Oversight Commission and sets forth a framework for data collection and reporting for a five-year period of departmental monitoring, among other provisions.  

Assistant United States Attorney Michael Keough, with the assistance of Jonathan Birch, and attorneys from the Federal Coordination and Compliance Section of the Justice Department’s Civil Rights Division are handling this case.

Members of the public may report possible civil rights violations to this office via our website or at civilrights.justice.gov/report/.

Antioch Agreement
 

El Departamento de Justicia anunció hoy un acuerdo con la Policía de Antioch, California (APD, por sus siglas en inglés) y la Ciudad de Antioch para resolver una investigación de conducta racista y discriminatoria de agentes de la APD contra miembros del público en Antioch.

El Departamento inició su investigación después de la divulgación pública de mensajes de texto discriminatorios que decenas de miembros del personal de la APD supuestamente intercambiaron entre septiembre del 2019 y enero del 2022. La División de Derechos Civiles del Departamento de Justicia y la Fiscalía Federal para el Distrito Norte de California investigaron conjuntamente el cumplimiento de la APD con el Título VI de la ley de Derechos Civiles de 1964 (Título VI) y las disposiciones antidiscriminatorias de la Ley General de Control de Delitos y Calles Seguras (ley de Calles Seguras). El Título VI y la ley de Calles Seguras prohíben, en su conjunto, la discriminación por motivos de raza, color de piel, origen nacional, sexo o religión por parte de entidades que reciben apoyo financiero federal, tal como la APD.

«La vigilancia policial justa y no discriminatoria es fundamental para la aplicación efectiva de la ley, especialmente para aquellas agencias que reciben financiación federal», comentó Kristen Clarke, la Fiscal General Auxiliar de la División de Derechos Civiles del Departamento de Justicia. «Al trabajar con el Departamento de Justicia para instituir una reforma policial, la Policía de Antioch está enviando un mensaje fuerte que la discriminación y la conducta indebida que impulsaron esta investigación no se tolerarán. El acuerdo que hemos conseguido garantizará que las prácticas policiales de Antioch estén libres de discriminación en el camino futuro—la comunidad no merece menos».

«La aplicación de la ley sólo es eficaz cuando inspira la confianza pública», afirmó Ismail Ramsey, el Fiscal Federal para el Distrito Norte de California. «Una fuerza policial que discrimina por motivos de raza y otras clases protegidas socava tanto la seguridad pública como la confianza pública. El acuerdo de hoy ayudará a garantizar que la vigilancia policial en Antioch se realice de manera constitucional y ayudará a restablecer la confianza pública».

En respuesta a la investigación, la APD, la Ciudad de Antioch, y la Administradora de la Ciudad trabajaron en cooperación con el Departamento para alcanzar un acuerdo de resolución que encarnase un compromiso con la ausencia de discriminación en las operaciones de vigilancia policial de la APD y el avance de sus esfuerzos continuos por prevenir y abordar las prácticas discriminatorias de aplicación de la ley.

En virtud del acuerdo, la APD contratará a un consultor experto en aplicación de la ley seleccionado conjuntamente por las partes para revisar y actualizar los procedimientos, políticas y capacitación de la APD sobre una variedad de temas, lo que incluye la vigilancia policial no discriminatoria, el uso de la fuerza, la contratación y ascensos, investigaciones de conducta indebida, la disciplina, la vigilancia comunitaria y el acceso lingüístico, entre otros temas. El acuerdo contempla una función para la Comisión de Supervisión de la Policía de Antioch y establece un marco para la recopilación de datos y la presentación de informes durante un período de cinco años de supervisión departamental, entre otras disposiciones.

La no discriminación en virtud del Título VI y la ley de Calles Seguras es una de las principales prioridades de la División de Derechos Civiles. Hay más información sobre la División de Derechos Civiles a www.justice.gov/crt. Los miembros del público pueden denunciar posibles infracciones de los derechos civiles en civilrights.justice.gov/report/.

SAN FRANCISCO – Rajesh Kumar Kapoor, 57, of Sacramento, pleaded guilty on Dec. 19, 2024, to sexual assault of another passenger aboard an aircraft bound for San Francisco.

Defendant was indicted on Mar. 13, 2024.  The indictment alleged that, while on a flight from the Republic of Korea to San Francisco on Jan. 16, 2024, Kapoor touched the victim’s breasts and inner thigh without permission.

In connection with pleading guilty, Kapoor admitted that he intentionally touched the victim’s inner thigh without the victim’s permission and with the intent to harass her. Kapoor pleaded guilty, with no plea agreement from the government, to abusive sexual contact in violation of 18 U.S.C. § 2244(b).

“Sexual assault has no place in our society, not on the ground and not in the skies.  Airline passengers should not have to fear sexual assault while traveling.  These assaults are federal crimes, and I urge the public to report them to law enforcement so they can be investigated and prosecuted,” said United States Attorney Ismail J. Ramsey.

"Sexual misconduct on an aircraft is a serious violation of federal law and public trust,” said Federal Bureau of Investigation (FBI) Special Agent in Charge Robert K. Tripp. “Everyone has the right to feel safe while traveling. The FBI will continue working with our partners to ensure justice for victims of such outrageous criminal behavior.”

Kapoor’s sentencing is scheduled for Mar. 27, 2025, before the Honorable Edward M. Chen, Senior U.S. District Judge.  He faces a statutory maximum of two years in prison and a $250,000 fine.  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.

Special Assistant United States Attorney Matthew Chou and Assistant United States Attorney Nicholas M. Parker are prosecuting this case with the assistance of Claudia Hyslop, Marina Ponomarchuk, Andy Ding, and Tina Rosenbaum.  The prosecution is the result of an investigation by the FBI, with assistance from U.S. Customs and Border Protection and the San Francisco Police Department Airport Bureau.
 

SAN FRANCISCO - A federal grand jury in Oakland indicted four individuals on charges of operating an unlicensed money transmitting business, conspiracy to operate an unlicensed money transmitting business, and conspiracy to make false statements to a bank.

According to the indictment filed Nov. 7, 2024, and unsealed Dec. 16, 2024, Gaston Kolker, 49, of Connecticut, Michael Goldfine, 66, of New York, Astrid Jasnis, 52, of Argentina, and Joanna O’Donnell, 56, of Sherman Oaks, California, allegedly made false statements to FDIC-insured banks in order to initiate and maintain a business transmitting money on behalf of others, many of whom were foreign nationals in Argentina.  The defendants allegedly opened and maintained numerous accounts under false pretenses, claiming the accounts were held in the names of companies engaged in the importing and exporting of goods, when the defendants were operating the accounts for an unlicensed money transmitting business that transferred funds on behalf of others.  The defendants are also charged with operating, and conspiring to operate, a money transmitting business without a license.

Kolker was arrested in Connecticut on Dec. 13, 2024, made his initial appearance in Hartford that day, and was released on $250,000 bond.  Goldfine self-surrendered on Dec. 13, 2024, made his initial appearance in New York City that day, and was released on $100,000 bond.  Kolker and Goldfine are scheduled to appear in San Francisco on Jan. 21, 2025, for initial proceedings before Magistrate Judge Peter H. Kang.  O’Donnell self-surrendered and made her initial appearance in San Francisco on Dec. 16, 2024.  She is currently released on $100,000 bond following a hearing before Magistrate Judge Sallie Kim on Dec. 20, 2024.  Jasnis remains at large.

United States Attorney Ismail J. Ramsey, Federal Bureau of Investigation (FBI) Special Agent in Charge Robert K. Tripp, Federal Deposit Insurance Corporation, Office of Inspector General (FDIC-OIG) Special Agent in Charge Ryan Korner, and San Francisco Division Inspector in Charge Stephen M. Sherwood of the U.S. Postal Inspection Service (USPIS) made the announcement.

An indictment merely alleges that crimes have been committed.  All defendants are presumed innocent until proven guilty beyond a reasonable doubt.  If convicted, defendants each face a maximum sentence of five years in prison and a $250,000 fine for each violation of 18 U.S.C. §§ 371 & 1014, conspiracy to make false statements to a bank, 18 U.S.C. §§ 371 & 1960, conspiracy to operate an unlicensed money transmitting business, and 18 U.S.C. § 1960, operation of an unlicensed money transmitting business.  Any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.

Assistant United States Attorney Robert David Rees is prosecuting the case with the assistance of Kay Konopaske and Veronica Hernandez.  The prosecution is the result of an investigation by the FBI, FDIC-OIG, and USPIS.
 

SAN FRANCISCO – A Brentwood man was sentenced yesterday to 37 months in prison for defrauding the United States by obtaining approximately $300,000 in COVID-19 relief funds for his “nonprofit” that was an unlicensed marijuana distribution business.  The sentence was handed down by the Honorable Rita F. Lin, U.S. District Judge, following defendant’s guilty plea on two counts of wire fraud.

According to court documents, Thanh Duy Nguyen, 53, ran and was the sole officer of T&A Distribution, an unlicensed interstate marijuana trafficking scheme with grow houses around the Bay Area.  Nguyen used T&A Distribution to obtain two Economic Injury Disaster Loans (EIDL) from the U.S. Small Business Administration (SBA).  The Coronavirus Aid, Relief, and Economic Security Act authorized the SBA to provide EIDL loans to small businesses experiencing substantial financial disruption due to the COVID-19 pandemic.

In the first application, which he submitted in April 2020, Nguyen certified that he was not engaged in any illegal activity as defined by federal law, even though he knew that his marijuana distribution business was illegal under federal law.  Nguyen fraudulently claimed that T&A Distribution was a nonprofit in the business of “Antiques/Collectibles,” when its business was marijuana distribution.  Nguyen also made other false statements, including about T&A Distribution’s gross revenue and employee count.  The true amount of T&A Distribution’s gross revenues in the 12 months before Jan. 31, 2020, was approximately $2.4 million.

On a second EIDL application, which he submitted in June 2020, Nguyen again falsely certified that he was not engaged in any illegal activity as defined by federal law, and misrepresented T&A Distribution as a nonprofit in the business of “Miscellaneous Services.”  He also made false statements about the business’s gross revenues, cost of operations, and employee count.

As a result of the falsified applications, Nguyen received approximately $300,000 in EIDL funds.  He used a significant amount of the loan funds for his marijuana distribution business and for gambling.

In addition to the term of imprisonment, Judge Lin sentenced Nguyen to three years of supervised release and to pay $300,000 in restitution and $300,000 in forfeiture.  Nguyen will begin serving his sentence on Feb. 28, 2025.

United States Attorney Ismail J. Ramsey, Drug Enforcement Administration (DEA) Special Agent in Charge Bob P. Beris, and SBA Office of Inspector General (OIG) Special Agent in Charge of the Western Region Weston King made the announcement.

This prosecution is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation.  OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.

Assistant United States Attorney Joseph Tartakovsky prosecuted the case with the assistance of Sara Slattery.  The prosecution is the result of an investigation by DEA and SBA OIG.
 

SAN FRANCISCO – The government of Honduras extradited Gustavo Erazo, a Honduran national, to the United States this week to appear on charges stemming from his alleged involvement in a conspiracy to distribute fentanyl, heroin, and cocaine in the San Francisco Bay Area. The extradition marks the sixth extradition of an alleged drug trafficker from Honduras to the Northern District of California this year.

On Jan. 5, 2023, a federal grand jury indicted Erazo, 49, at the time a resident of Oakland, and two other defendants, on charges of conspiring to distribute fentanyl and possessing fentanyl, heroin, and cocaine with the intent to distribute those substances. Erazo was charged in four of the eight counts in the indictment:

1

Life

2

Life

3

40 years

4

40 years

According to a criminal complaint filed before the indictment, Erazo was arrested in November 2022 outside an apartment in Berkeley, Calif. At the time of his arrest, Erazo was carrying a backpack in which he had nearly four pounds of suspected drugs, including almost a kilogram of suspected fentanyl and more than half a pound each of suspected heroin and suspected cocaine. Inside the apartment, law enforcement officers found nearly 21 pounds of suspected drugs, including nearly 15 pounds of suspected fentanyl, more than two pounds of suspected cocaine, and more than one pound of suspected heroin. Officers also found drug manufacturing equipment, two firearms, ammunition, and cash inside the apartment.

According to court documents, the Drug Enforcement Administration (DEA) learned after Erazo was charged in federal court that he had traveled back to Honduras. The Justice Department’s Office of International Affairs worked with Honduran authorities and the DEA to secure the arrest and extradition of Erazo, who arrived back in the United States on Dec. 19, 2024. He appeared before U.S. Magistrate Judge Sallie Kim today for arraignment on the indictment and further proceedings. Erazo is next scheduled to appear in court for a status hearing before U.S. Magistrate Judge Lisa J. Cisneros on Dec. 23, 2024.

An indictment merely alleges that crimes have been committed.  All defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, Erazo faces a maximum sentence of life imprisonment and a maximum fine of $10,000,000 on Counts 1 and 2, and a maximum sentence of 40 years in prison and a maximum fine of $5,000,000 on Counts 3 and 4. He also faces a lifetime term of supervised release and a mandatory $100 special assessment on each count. Any sentence following a conviction would be imposed by a court only upon consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.

United States Attorney Ismail J. Ramsey and DEA Special Agent in Charge Bob P. Beris made the announcement.

Assistant U.S. Attorney Nicholas Parker is prosecuting the case with the assistance of Jessie Chelsea and Linda Love. The prosecution is the result of an investigation by the DEA, with assistance from the San Francisco Police Department.
 

SAN JOSE – Jacinto Correa Cruz, 56, a Mexican national, pleaded guilty in federal court this week to one count of depredation against federal lands and one count of manufacture of, and possession with intent to manufacture and distribute, marijuana plants, stemming from his participation in a large-scale illegal cannabis cultivation operation in the Los Padres National Forest.

As part of his plea agreement entered on Dec. 17, 2024, Correa Cruz admitted to damaging federal property by willfully participating in an illegal marijuana grow operation on public lands and knowingly manufacturing marijuana plants.  According to court documents, Correa Cruz was arrested in July 2022 during a multi-agency search of a large-scale marijuana cultivation complex in an area of the Los Padres National Forest known as the “Ventana Complex.”  The complex is located in the Ventana Wilderness region of the national forest, a federally protected area that is known as a top “biodiversity hotspot” and is home to more threatened and endangered species than any other national forest in California.

The search and investigation of the cultivation site where Correa Cruz was arrested revealed two plots that had been cleared of most native vegetation to make way for approximately 10,000 marijuana plants.  Law enforcement also discovered a camp area with a tent and 15 sleeping bags, and a kitchen area with thousands of pounds of trash and dead animal parts.

Significant quantities of hazardous materials and chemicals were also found on site.  The illegal marijuana grow also had an irrigation system with two large water structures fed by a hose that was diverting water from a natural source.  An environmental damage assessment found that the illegal operation diverted and used approximately 33,780 gallons of water a day in an area that was experiencing severe drought conditions.  Furthermore, highly toxic and illegal chemicals, such as carbofuran, methamidophos, and diphacinone, were found on site and detected in the soil and water.  These pesticides are known to have killed sensitive and endangered wildlife species throughout California.  Fixing the environmental damage to this area cost over $92,540 per site and required a multi-step process spanning over a year.

“The illegal cultivation of marijuana on public land poses significant environmental risks to public lands and wildlife that must be combatted.  We will continue to work with our law enforcement partners to prosecute those who abuse natural resources and harm the environment while illegally growing marijuana on federal land,” said United States Attorney Ismail J. Ramsey.

“Disrupting and dismantling the illegal cultivation of marijuana on federal lands remains a top priority for the U.S. Forest Service Law Enforcement and Investigations team. We are committed to protecting our nation’s valuable resources for future generations and ensuring our national forests are safe for recreational use. This allows the public to enjoy these spaces without concerns for their health and safety. Our efforts would not have been possible without the strong cooperation of our partners at the Integral Ecology Research Center, California Department of Fish and Wildlife, and the U.S. Attorney’s Office,” said Brandon Robinson, Special Agent in Charge, U.S. Forest Service (USFS) Law Enforcement and Investigations, Pacific Southwest Region.

“Jacinto Correa Cruz helped poison the pristine lands of the Los Padres National Forest,” said Federal Bureau of Investigation (FBI) San Francisco Special Agent in Charge Robert Tripp. “He now stands accountable for the damage that will take years to heal. We will continue to stand firm with our federal, state, and local partners to keep our lands safe and prevent further depredation.”

Correa Cruz has been in federal custody since Aug. 22, 2022.  His sentencing hearing is scheduled for March 4, 2025, before the Honorable Eumi K. Lee, United States District Judge.  Defendant faces a maximum statutory penalty for each offense of 20 years in prison and a fine of $1,000,000, plus restitution.  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 Anne C. Hsieh is prosecuting the case with the assistance of Sara Slattery.  The prosecution is the result of an investigation by USFS and the FBI, with assistance from the California Department of Fish and Wildlife.
 

OAKLAND - A federal grand jury has indicted Paul Raymond Flood with cyberstalking, witness tampering, and obstruction of a criminal investigation by bribery.  Flood, 54, of Castro Valley, was arrested yesterday and made his initial appearance in federal court this morning.

According to the indictment, which was filed May 16, 2024, and unsealed today, Flood was a Special Agent with the Federal Bureau of Investigation (FBI) from 2007 through 2019.  In early October 2018, Flood met a first-year law student, referred to in the indictment as “Victim-1” or “V-1,” who had contacted him for information on pursuing a future career with the FBI.  A family member of V-1’s, referred to in the indictment as “B-1,” knew Flood and referred V-1 to him.

Within a few weeks of meeting V-1, Flood allegedly began to make unwelcome romantic advances toward V-1 and engage in a pattern of harassing and intimidating conduct.  The indictment charges that, among other conduct, Flood had a diamond ring delivered to V-1 in mid-October 2018; used different numbers and messaging applications to call and text V-1, creating and using at least 79 different numbers between mid-October 2018 through September 2019; sent messages demonstrating that he was surveilling V-1 and her family; and repeatedly pressured B-1 to have V-1 call or unblock Flood.

Although V-1 initially did not report Flood due to her family’s fear of retaliation, V-1 reported him in June 2019 to federal and local law enforcement authorities.  Shortly thereafter, the FBI suspended Flood from duty and the Department of Justice Office of the Inspector General (DOJ OIG) opened an investigation into Flood’s conduct.  In response, Flood allegedly employed various means to pressure, harass, intimidate, and persuade V-1 to help him by not providing statements or testimony in the investigations against him, including threatening to commit suicide, offering V-1 various bribes, and pressuring V-1’s family members to persuade her not to cooperate with law enforcement.  Flood allegedly succeeded in persuading V-1 to help him obstruct the pending investigations.  This included V-1’s evading multiple attempts by DOJ OIG investigators to contact her for an interview and to serve her with a federal grand jury subpoena in July 2019. According to the indictment, Flood also persuaded V-1 to agree to enter a sham marriage with him so that she would not have to testify against him, buying her a $17,000 engagement ring in the process.  V-1 did not follow through with the sham marriage plan.

The indictment charges Flood with one count of cyberstalking in violation of 18 U.S.C. § 2261A(2)(B), two counts of witness tampering by intimidation, threats, corrupt persuasion, or misleading conduct in violation of 18 U.S.C. §§ 1512(b)(2) and (b)(3), one count of witness tampering by harassment in violation of 18 U.S.C. §§ 1512(d), and one count of obstruction of a criminal investigation by bribery in violation of 18 U.S.C. § 1510(a).

An indictment merely alleges that crimes have been committed.  All defendants are presumed innocent until proven guilty beyond a reasonable doubt.  If convicted, Flood faces a maximum sentence of 20 years in prison on each witness tampering count under 18 U.S.C. § 1512(b), three years in prison on the witness tampering count under 18 U.S.C. § 1512(d), and five years in prison on each count of cyberstalking and obstruction.  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.

Flood is currently on conditional release.  His next appearance in federal court is scheduled for Jan. 15, 2025.

United States Attorney Ismail J. Ramsey and Zachary Shroyer, Special Agent in Charge of DOJ OIG Western Region, made the announcement.

Assistant United States Attorney Anne C. Hsieh is prosecuting the case with the assistance of Mimi Lam, Lakisha Holliman, and Helen Yee.  The prosecution is the result of an investigation by DOJ OIG, with assistance from the FBI and Homeland Security Investigations.

Paul Raymond Flood Indictment
 

OAKLAND – An Oakland man was arrested yesterday on charges of being a felon in possession of a firearm.  Jason Nious, 42, made his initial appearance in federal district court this morning.

According to the criminal complaint and court documents unsealed today, Oakland police encountered Nious on Sept. 18, 2024, while searching the 500 block of East 15th Street in Oakland for a different individual who had an active arrest warrant for gun possession.  Officers saw Nious standing next to the wanted person and next to a car that was registered to Nious.  Officers determined that Nious was a convicted felon, currently on probation. They then searched Nious’s car and found a gun with a live round in the chamber in a bag on the front passenger seat, along with a loaded 10-round magazine.  Nious has prior convictions in Alameda County for human trafficking of a minor, providing controlled substances to a minor, and armed robbery.

Nious is next scheduled to appear in federal district court for a detention hearing on Dec. 23, 2024.

As detailed in the criminal complaint, the 500 block of East 15th Street in Oakland is within “the Blade,” an area surrounding International Boulevard between 5th Avenue and 23rd Avenue that is known throughout the Bay Area for its widespread pimping and pandering. The Blade also has seen a significant increase in other violent crimes in recent years.  Consequently, this year, the U.S. Attorney’s Office, the Federal Bureau of Investigation (FBI), and the Oakland Police Department have been actively coordinating and increasing enforcement to combat sex trafficking and violent crime in the area.

United States Attorney Ismail J. Ramsey and FBI San Francisco Special Agent in Charge Robert K. Tripp made the announcement.

A criminal complaint merely alleges that crimes have been committed.  All defendants are presumed innocent until proven guilty beyond a reasonable doubt.  If convicted, Nious faces a maximum sentence of 15 years and a fine of $250,000 on the count of being a felon in possession of a firearm in violation of 18 U.S.C. § 922(g)(1).  A court would impose any sentence following conviction after considering the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.

Assistant U.S. Attorney Ivana Djak is prosecuting the case with the assistance of Amala James.  The prosecution is the result of an investigation by the FBI and the Oakland Police Department.
 

SAN JOSE – Todd Baldwin, a former sports coach, teaching assistant, and operations manager at Valley Christian High School in San Jose, was arraigned in federal court this afternoon on charges of enticement of minors and receipt of child pornography.

Baldwin, 44, currently of Bremerton, Wash., was charged by complaint on Oct. 10, 2024, and by information on Nov. 19, 2024.  According to the complaint, Baldwin allegedly persuaded, induced, and enticed two minor boys, both high school students at the time, to produce child sexual abuse materials in exchange for money from December 2022 to August 2023.  Baldwin allegedly paid thousands of dollars via mobile payment services to the minor boys and to at least two other students whom Baldwin had recruited to create child sexual abuse materials for resale online.  The complaint further alleges that Baldwin designated some of the exploited minors as his “Teacher Assistants.”  The information formally charges Baldwin with two counts of enticement of minors in violation of 18 U.S.C. § 2422(b) and two counts of receipt of child pornography in violation of 18 U.S.C. §§ 2252(a)(2) and (b).

An information merely alleges that crimes have been committed.  All defendants are presumed innocent until proven guilty beyond a reasonable doubt.  If convicted, Baldwin faces a maximum sentence of life imprisonment and a minimum sentence of 10 years’ imprisonment, a maximum fine of $250,000, a term of supervised release, and restitution.  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.

Baldwin surrendered to federal authorities in San Jose on Oct. 28, 2024, and made his initial appearance in federal court on the same day.  He is currently on conditional release.  He is next scheduled to appear before the Honorable Beth Labson Freeman, U.S. District Judge, on Feb. 4, 2025.

United States Attorney Ismail J. Ramsey and Federal Bureau of Investigation (FBI) Special Agent in Charge Robert K. Tripp made the announcement.

Assistant United States Attorney Marissa Harris is prosecuting the case with the assistance of Sahib Kaur.  The prosecution is the result of an investigation by the FBI and the San Jose Police Department’s Internet Crimes Against Children Squad.

• Baldwin Information
• Baldwin Complaint
   

OAKLAND – A Berkeley man was sentenced this week to 72 months in federal prison for possession of firearm and ammunition by a person convicted of a felony.  The Honorable Haywood S. Gilliam, Jr., U.S. District Judge, imposed the sentence following the defendant’s guilty plea on one count of felon in possession of a firearm and one count of felon in possession of ammunition.

According to his plea agreement, Rufus Rogers, 45, admitted to possession of firearms and ammunition when he knew he was a convicted felon.  On Feb. 17, 2023, Rogers approached another person outside of a liquor store on San Pablo Avenue in Oakland with a loaded firearm between Rogers’s hands.  Rogers followed the other person around the corner and engaged in a verbal altercation.  After the other person fired one shot into the air, Rogers raised his gun towards the person and fired three rounds.  Rogers also admitted to having multiple firearms in his possession on or about Aug. 2, 2023.

In addition to the term of imprisonment, Judge Gilliam also sentenced Rogers to a three-year period of supervised release and ordered Rogers to forfeit his interest in the recovered firearms and ammunition.  The defendant was remanded into custody on Dec. 11, 2024.

United States Attorney Ismail J. Ramsey and Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Special Agent in Charge Jennifer Cicolani made the announcement.

Special Assistant United States Attorney Jillian Harvey is prosecuting the case with the assistance of Amala James.  The prosecution is the result of an investigation by ATF.
 

SAN FRANCISCO – A Palm Springs man pleaded guilty today to one count of bank fraud and one count of money laundering related to a years-long scheme to embezzle more than $1.3 million from his former employers, two San Francisco law firms.

According to court documents, Tony Archuleta-Perkins, 48, formerly of San Francisco, held various roles at the firms, eventually becoming Chief Financial Officer (CFO).  As the CFO, Archuleta-Perkins was in a position of trust and had access to the law firms’ payroll systems and end-to-end payments automation platforms. During the course of his employment, Archuleta-Perkins used this access to embezzle funds in various ways.

The primary way that Archuleta-Perkins stole money from the law firms was to cause the firms to make false and fraudulent payments to a non-profit organization he had set up and solely controlled. Archuleta-Perkins admitted to stealing more than $1.1 million using this method. Archuleta-Perkins also embezzled funds from the law firms by falsely adding “one-time reimbursements” to his regular paychecks or special bonus payroll checks through the use of the law firms’ payroll software. He admitted to stealing more than $106,000 using this method. Archuleta-Perkins also admitted that he endorsed a $41,663.69 tax refund check made out to one of the law firms, deposited it into a bank account belonging to the non-profit, and then wrote himself a check for the same amount.  

As part of his plea agreement, Archuleta-Perkins admitted that he knew that the principal of one of the law firms was undergoing serious health issues that kept him out of the office, and that the principal’s physical condition made him unusually vulnerable and particularly susceptible to Archuleta-Perkins’s criminal conduct.

In total, Archuleta-Perkins admitted that he was responsible for at least $1,321,752.72 in losses to his victims. Archuleta-Perkins used the stolen money for personal expenses, including payments on a Best Buy credit card.

Archuleta-Perkins pleaded guilty to one count of bank fraud in violation of 18 U.S.C. § 1344(2) and one count of engaging in monetary transactions in property derived from specified unlawful activity (money laundering) in violation of 18 U.S.C. § 1957.  He faces a maximum sentence of 30 years in prison as to the bank fraud charge and a maximum sentence of 10 years in prison as to the money laundering charge. A federal district judge will determine and impose a sentence after considering the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553(a).

Archuleta-Perkins, who was arrested on June 28, 2024, remains free on a $500,000 bond and is scheduled to be sentenced on March 26, 2025, at 10:00 a.m. before the Honorable Jacqueline Scott Corley, U.S. District Judge.

U.S. Attorney Ismail J. Ramsey for the Northern District of California and Federal Bureau of Investigation (FBI) San Francisco Special Agent in Charge Robert K. Tripp made the announcement. 
           
Assistant U.S. Attorney Nikhil Bhagat is prosecuting the case with the assistance of Madeline Wachs. The prosecution is the result of an investigation by the FBI.
 

SAN JOSE – A California man pleaded guilty today to not paying employment taxes to the IRS.

According to court documents and statements made in court, John Comeau, of Santa Clara, was the CEO of Vivid, Inc., a company that provided metal coating services across various industries in Campbell and elsewhere. From at least the first quarter of 2010 through the end of 2019, Vivid withheld Social Security, Medicare, and income taxes from the wages paid to its employees. However, Comeau, who was responsible for ensuring those funds were reported and paid to the IRS, did not do so.

In total, Comeau caused a tax loss to the IRS of approximately $1,150,000.

Comeau is scheduled to be sentenced on Apr. 30, 2025, and faces a maximum penalty of five years in prison. He also faces a period of supervised release, restitution, and monetary penalties. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

U.S. Attorney Ismail J. Ramsey, Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division, and IRS Criminal Investigation (IRS-CI) Oakland Field Office Special Agent in Charge Linda Nguyen made the announcement.

IRS-CI is investigating the case.

Assistant U.S. Attorney Ilham Hosseini and Trial Attorney Mahana Weidler of the Tax Division are prosecuting the case.
 

SAN JOSE – Erick Escalante-Torres and Jose Noe Ramirez-Avelar, members of the La Mara Salvatrucha gang (better known as MS-13) based in Santa Cruz, were sentenced today to 27 years and 11 months in prison and 22 years in prison, respectively, for racketeering conspiracy, conspiracy to commit murder in aid of racketeering, and other crimes. The sentences were handed down by the Honorable Edward J. Davila, U.S. District Judge, following the defendants’ convictions by guilty plea.

Escalante-Torres, 29, also known as “Deceptico” or “Problematico,” and Ramirez-Avelar, 34, also known as “Chepito” or “Sparky,” were both actively involved in the MS-13 enterprise in Northern California from approximately 2015 to 2017.  According to their plea agreements, MS-13 members and associates earn promotions and prestige by committing criminal activities benefitting the gang, including by engaging in violent crimes such as murder and attempted murder of rival gang members.

In the summer of 2016, Escalante-Torres, Ramirez-Avelar, and others began planning to murder a man they believed to be associated with the rival 18th Street gang.  Once the gang received approval for the killing from higher-up gang leaders in El Salvador, the group began surveilling the victim’s movements and plotting different ways to kill him.  According to court documents, they decided to kill the victim late at night when he would routinely walk to a nearby taqueria to escort home his fiancée who worked the late shift.  On Sept. 22, 2016, they executed their plan, fatally shooting the victim on his way to pick up his fiancée.  The victim was not actually affiliated with the rival gang.

Both defendants were also involved in other gang shootings.  In May and June 2016, Escalante-Torres and Ramirez-Avelar helped destroy the evidence from a murder committed by another Northern California MS-13 clique.  In July 2016, Escalante-Torres and others drove into rival gang territory and, after spotting suspected rival gang members, Escalante-Torres fired two shots, hitting one victim in the leg.

“Defendants engaged in murder and other violent crimes to carry out the goals of MS-13, a transnational criminal organization.  Their ruthless actions threatened public safety in Santa Cruz,” said United States Attorney Ismail J. Ramsey.  “With these sentences, we are sending a strong message to gang members that these crimes will be fully investigated and prosecuted, and justice will be served.”

“This case illustrates the direct threat transnational gang activity is to our communities and the indiscriminate and needless devastation it brings to innocent families,” said Homeland Security Investigations (HSI) San Francisco Special Agent Charge Tatum King.  “HSI San Francisco will aggressively pursue individuals engaged in this criminal activity and ensure they face the consequences for their actions.  HSI San Francisco appreciates the dedicated work of its special agents together with the U.S. Attorney’s Office and the Santa Cruz Police Department in bringing these individuals to justice.”

Both defendants pleaded guilty on Aug. 19, 2024, to one count of racketeering conspiracy, one count of conspiracy to commit murder in aid of racketeering, and one count of using a firearm in furtherance of a crime of violence resulting in death.  Escalante-Torres also pleaded guilty to one count of attempted murder in aid of racketeering and one count of discharge of a firearm in furtherance of a crime of violence.

Judge Davila also sentenced each defendant to a five-year term of supervised release in addition to the terms of imprisonment.  Escalante-Torres has been in federal custody since 2018, and Ramirez-Avelar has been in federal custody since 2017.  Both defendants began serving their sentences today.  In addition to Escalante-Torres and Ramirez-Avelar, 10 other members of the Santa Cruz clique have been convicted and sentenced for their involvement in criminal activity as members of the gang.

Assistant United States Attorneys George Hageman and Aseem Padukone are prosecuting this case with the assistance of Mimi Lam.  The prosecution is the result of a years-long investigation by HSI and the Santa Cruz Police Department.
 

SAN FRANCISCO – Veronica Katz was sentenced today to two years in federal prison and ordered to pay $543,634.34 in restitution for committing health care fraud.  The sentence was handed down by the Honorable James Donato, U.S. District Judge.

Katz, 36, of San Francisco, was indicted by a federal grand jury on Oct. 17, 2023, along with two co-defendants.  Katz pleaded guilty on Apr. 18, 2024, to one count of health care fraud.  Katz was the owner and operator of HealthNow Home Healthcare and Hospice (HealthNow), a home health agency that provided in-home medical care to patients in the Bay Area.  HealthNow billed Medicare and private insurance companies for in-home medical care.  In the course of operating HealthNow, Katz submitted false documentation to Medicare in order to obtain reimbursements in violation of Medicare’s rules and regulations.

According to Katz’s plea agreement, she participated in a scheme to defraud Medicare that took a number of forms, including using the identities of licensed medical practitioners on electronic medical records and billing information without the practitioners’ knowledge or consent; directing certain individuals to prepare “Start of Care” (SOC) forms even though the individuals were not Registered Nurses (RNs), as required by Medicare; manipulating electronic patient medical records in order to make it appear as if RNs had completed the patient SOCs; and billing Medicare for physical therapy services that Katz knew had not been provided.

In addition, Katz admitted that she took steps to thwart law enforcement’s investigation into HealthNow.  In October 2019, Katz met with one of her HealthNow employees, who informed Katz that Federal Bureau of Investigation (FBI) agents had questioned the employee regarding the company’s billing practices and SOC assessments.  Katz instructed the employee to lie to the FBI and falsely state that the employee had been trained and supervised by an RN in the course of conducting SOC assessments.

The announcement was made by United States Attorney Ismail J. Ramsey, FBI Special Agent in Charge Robert K. Tripp, and Steven J. Ryan, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services (HHS-OIG).

In addition to the term of imprisonment and restitution, Judge Donato also sentenced Katz to a three-year period of supervised release and ordered her to pay a $50,000 fine.  Defendant will begin serving her sentence on Jan. 6, 2025.

Co-defendant Vennesa Herrera pleaded guilty on Aug. 30, 2021, to conspiracy to commit health care fraud and health care fraud, and will be sentenced on Mar. 17, 2025.  Co-defendant Simon Katz’s trial is scheduled for May 12, 2025.

Assistant United States Attorney Christiaan Highsmith is prosecuting the case with the assistance of Helen Yee and Mark DiCenzo.  The prosecution is the result of a lengthy investigation by the FBI, HHS-OIG, and the California Department of Public Health.
 

SAN FRANCISCO – Nemr Hallak was sentenced today to 30 months in prison for his role in a large-scale “Yellow Pages” telemarketing fraud scheme that he and others orchestrated from Canada.  The sentence was handed down by the Honorable Edward M. Chen, Senior U.S. District Judge.  

Hallak, 43, of Quebec, Canada, was indicted by a federal grand jury in 2016 on charges of conspiracy to commit money laundering, conspiracy to commit mail and wire fraud, mail fraud, and wire fraud.  He was initially arrested in Greece in 2016, and was re-arrested and extradited to the United States in late 2023.  Hallak pleaded guilty to conspiracy to commit mail and wire fraud on Sept. 12, 2024.

In his plea agreement, Hallak admitted that he conspired with co-defendants and others to carry out a “business directory” telemarketing scheme.  Using a variety of means, including false and misleading cold calls and false invoices, Hallak and his co-conspirators caused victims to pay for business directory services they neither ordered nor received.  Co-defendants Tolga Suatac and Michelina Perna pleaded guilty to conspiracy to commit mail and wire fraud and were sentenced in March 2023.  Co-defendant Roberto Mancini’s case is pending.

“The defendant and his co-conspirators devised a scheme that targeted small businesses, misleading those businesses into believing they owed money for fake directory listings,” said United States Attorney Ismail J. Ramsey.  “Regardless of where they are operating, fraudsters who cheat and deceive U.S. businesses will be investigated and brought to justice.”

“To protect the public, Postal Inspectors worked closely with the U.S. Attorney’s Office and our partners at the IRS’s Criminal Investigation Division to arrest and prosecute those individuals responsible for fraud schemes committed against small businesses and the public,” said San Francisco Division Inspector in Charge Stephen M. Sherwood of the U.S. Postal Inspection Service (USPIS).

“Nemr Hallak’s sentencing demonstrates IRS-CI’s commitment to bringing to justice those who prey upon American businesses. The intricacy of the telemarketing scheme that victimized thousands of individuals out of more than $5 million was complicated by it largely being run abroad,” said IRS Criminal Investigation (IRS-CI) Oakland Field Office Special Agent in Charge Linda Nguyen. “What Hallak and his co-conspirators did not account for is the global reach of IRS-CI international operations and our partnerships with international law enforcement. We are committed to following the money no matter where it takes us.”

Court documents described that Hallak and others caused shell companies to be formed in Florida and Delaware in the names of nominees, who were paid in cash to be listed as officers and directors of the shell companies but did no meaningful work and did not really control the companies.  Many of the shell companies used the term “Yellow Pages” to suggest their operations were legitimate.    

According to Hallak’s plea agreement, thousands of victims were cold called and told that they had a pre-existing business relationship with a “Yellow Pages” or other entity formed by members of the conspiracy, that they had previously purchased business directory services from the defendants, and that they owed money for those services.  Victims were told that they owed anywhere between $400 and $1,800 for a previously purchased business directory listing, and were sent fake invoices.  When such initial misrepresentations were not sufficient to induce payment, some victims were harassed and threatened with legal action and sent additional false invoices with additional charges.  

In addition to the terms of imprisonment, Judge Chen sentenced Hallak to three years of supervised release.  Hallak was also ordered to pay $5,381,702.86 in restitution.  Hallak is currently in federal custody and will begin serving his sentence immediately.

Assistant United States Attorney Lloyd Farnham is prosecuting the case with the assistance of Kathy Tat and Helen Yee.  The prosecution is the result of an investigation by USPIS and IRS-CI.  The Justice Department’s Office of International Affairs provided critical assistance in securing the extradition of Hallak.  The Justice Department thanks the Ministry of Justice of the Hellenic Republic and the Hellenic Police which provided excellent cooperation in the arrest and re-arrest of Hallak and his subsequent extradition.
 

SAN FRANCISCO – Tjoman Buditaslim, Jose De Jesus Martinez, and Jose Alfonso Tellez were sentenced today to 24 months, 14 months, and 12 months in prison, respectively, for their participation in a mortgage fraud conspiracy.  The sentences were handed down by the Honorable Charles R. Breyer, Senior U.S. District Judge.

Buditaslim, 52, of San Francisco, Martinez, 59, of Daly City, Tellez, 27, of San Jose, and a fourth defendant, Travis Holasek, 52, of San Francisco, were indicted in November 2023 on charges of conspiracy to commit wire fraud and wire fraud.  All four defendants pleaded guilty to conspiracy to commit wire fraud.

As detailed in court records, from 2018 through 2022, Buditaslim, a licensed real estate broker until his license was revoked in 2019, conspired to originate approximately 102 home loans worth more than $55 million based on false and fraudulent loan application information.  Buditaslim obtained home loans for his clients, potential homebuyers, by submitting false loan applications and income information to multiple loan companies.  Buditaslim knew that the applicants could not qualify using truthful income information.  Unbeknownst to the applicants, Buditaslim created fraudulent documents, including judicial divorce decrees, alimony and child support checks for nonexistent children, bank statements, and loan applications, that falsely inflated the applicants’ income.  The loan companies extended home loans to Buditaslim’s clients relying on the falsely inflated income information.  Buditaslim and his co-conspirators profited from the conspiracy via payments from escrow when the clients purchased homes or direct payment from the clients.  Buditaslim admitted that the Federal Housing Administration (FHA), which insured many of the fraudulently obtained mortgage loans, lost approximately $486,484.38 to keep certain of the loans from going into foreclosure.

According to Martinez’s plea agreement, Martinez, who worked as a licensed real estate agent, directed clients to Buditaslim knowing that Buditaslim would qualify his clients for home loans based on false and fraudulent loan application materials and information.  Buditaslim obtained approximately 49 loans for Martinez’s real estate clients totaling about $27.7 million.  As the agent for the buyers, Martinez earned nearly $590,000 in real estate broker commissions.

According to Tellez’s plea agreement, Tellez worked as a loan officer at a mortgage company where he received home mortgage loan applications and supporting documentation to determine if applicants qualified for a mortgage based on his employer’s and FHA rules and guidelines.  As part of the conspiracy, Tellez helped originate approximately 30 home mortgage loans worth more than $17 million based on what he knew to be false and fraudulent income information.  Despite knowing that he was required to stop and flag applications based on false and fraudulent income representations, Tellez knowingly assisted in originating and funding the loans.  Tellez earned more than $134,000 in commissions on the 30 fraudulently obtained loans.

“The defendants tried to line their own pockets at the expense of homebuyers, lenders, and federally insured programs.  Instead of helping potential homebuyers obtain home loans for which they were qualified, defendants chased loans that should never have been extended,” said United States Attorney Ismail J. Ramsey.  “Today’s sentences hold the defendants accountable for their conduct.”

“Justice was served today. People seeking to fulfill their American dream of homeownership must not be victimized,” said Herminia Neblina, Special Agent in Charge of the Federal Housing Finance Agency Office of Inspector General’s Western Region. “FHFA-OIG will continue to aggressively investigate allegations of mortgage frauds and we will always seek to hold such criminal fraudsters accountable in the justice system.”

“The defendants and other co-conspirators engaged in a $55 million mortgage fraud scheme, fabricating material documents to falsely qualify individuals for loans they would not have otherwise qualified for.  When individuals commit fraud against federally funded programs, it creates significant risks to the viability of the program and limits the financial resources available to assist hard working Americans with homeownership,” said Acting Special Agent-in-Charge Joshua Stockman with the U.S. Department of Housing and Urban Development (HUD), Office of Inspector General (OIG).  “HUD OIG will continue to work with the U.S. Attorney’s Office and its law enforcement partners to vigorously pursue those who seek to profit by abusing HUD-funded programs.”

“To protect the public, Postal Inspectors worked closely with the U.S. Attorney’s Office and our partners at Federal Housing Finance Agency OIG and the U.S. Housing and Urban Development OIG to arrest and prosecute those individuals responsible for fraud schemes committed against businesses and the public,” said San Francisco Division Inspector in Charge Stephen M. Sherwood of the U.S. Postal Inspection Service (USPIS).

In addition to the terms of imprisonment, Judge Breyer sentenced each of the three defendants to three years of supervised release.  Buditaslim was also ordered to pay $1,393,018.46 in restitution, Martinez was ordered to pay $840,847.35 in restitution, and Tellez was ordered to pay $858,321.67 in restitution.  Buditaslim, Martinez, and Tellez will begin serving their sentences on Feb. 3, 2025.  Holasek is scheduled to be sentenced on Dec. 4, 2024.

The case is being prosecuted by the Corporate and Securities Fraud and General Crimes Sections of the U.S. Attorney’s Office.  Assistant United States Attorney Christiaan Highsmith is prosecuting the case with the assistance of Lance Libatique.  The prosecution is the result of a multi-year investigation by FHFA-OIG, HUD OIG, USPIS, and the California Department of Justice.
 

SAN FRANCISCO – Thomas Aaron Signorelli pleaded guilty today in federal court to one count of bank fraud, two counts of wire fraud, one count of conspiracy to commit wire fraud, one count of theft of government property, one count of destruction of records, and one count of conspiracy to launder money.

Signorelli, 46, of West Palm Beach, Fla., was charged by information on Sept. 19, 2024.  In pleading guilty to all seven counts in the information, Signorelli admitted that beginning in January 2021 to around December 2023, he falsely claimed he could assist individuals and entities in need of capital by raising funds, obtaining loans, and securing profitable investments through his company WS Capital, which was registered with the Securities and Exchange Commission.  In fact, Signorelli did not raise capital, obtain loans, or secure profitable investments, and instead used the victims’ funds to pay his personal and living expenses, as well as to pay back other victims.

Signorelli engaged in one of the fraud schemes with his co-conspirator David Scott Cacchione.  As part of that scheme, Signorelli and Cacchione convinced investors that their money would be used to purchase accounts receivables that did not exist.  Rather than use the funds as promised, Signorelli typically shared a portion of the funds with Cacchione and used the remainder to pay personal and living expenses and repay other victims.  Through his various schemes, Signorelli defrauded individuals and entities of more than $2,500,000.  Signorelli further admitted that he conspired with an attorney in Florida to launder fraud proceeds through the attorney’s client trust account in order to disguise the source and nature of the fraud proceeds.

The plea agreement also describes that, in December 2021, Signorelli was introduced to an individual who claimed to be looking for someone to launder large sums of drug trafficking proceeds.  Signorelli offered to use WS Capital accounts to launder the supposed drug trafficking proceeds and accepted approximately $150,000 in government funds from an undercover government agent.  Instead of laundering those funds, Signorelli stole the money and used it to pay his personal expenses.

Signorelli further admitted that he caused applications for a Paycheck Protection Program loan and an Economic Injury Disaster Loan to be submitted to the Small Business Administration (SBA) on behalf of a Napa real estate venture that he had formed.  Signorelli made false representations about the venture’s revenues, payroll, and employee count in order to obtain over $50,000 in disaster relief loans.

Finally, in August 2022, Signorelli learned that the FBI had obtained a warrant to search his mobile phone.  As detailed in his plea agreement, prior to turning in his mobile phone, Signorelli deleted electronic communications on his device in order to obstruct the government’s investigation.

The announcement was made by United States Attorney Ismail J. Ramsey, FBI Special Agent in Charge Robert Tripp, IRS-CI Oakland Field Office Acting Special Agent in Charge Michael Mosley, and Small Business Administration (SBA) Office of Inspector General (OIG) Special Agent in Charge of the Western Region Weston King.

Signorelli remains free on a $200,000 appearance bond imposed on Sept. 20, 2024.  His sentencing hearing is scheduled for Mar. 24, 2025 before the Honorable James Donato, U.S. District Court Judge.  The maximum statutory penalty for each count is set forth below.

OFFENSE

STATUTE

MAXIMUM PENALTY

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.

Signorelli’s co-conspirator Cacchione pleaded guilty on Aug. 14, 2024, and was sentenced by Judge Donato on Nov. 4, 2024, to a 40-month term of imprisonment.

Assistant U.S. Attorney Garth Hire is prosecuting the case.  The prosecution is the result of an investigation by the FBI, IRS-CI, and SBA OIG.
 

OAKLAND – A federal grand jury indicted Avi Fogel, now known as Avi King, and Christos Chrestatos each with one count of conspiracy to commit wire fraud and four counts of wire fraud.  Fogel was also charged with one count of false writings to a government agency and an additional count of wire fraud.

Fogel, 47, of San Francisco (who was also known as, in addition to Avi King, Aaron Rose, Aaron Rothchild, and Aaron Gilman), self-surrendered on Nov. 7, 2024, and made his initial appearance in federal court in Oakland that same day.  Chrestatos, 45, of Long Island, N.Y., also known as Chris Silverman, was arrested today, and made his initial appearance in federal court in the Eastern District of New York.

According to the indictment filed Oct. 3, 2024, and unsealed Nov. 7, 2024, defendants allegedly engaged in an investment fraud scheme wherein they purported to be producers in the entertainment industry with close ties to “A-list” actors, directors, and other celebrities.  Fogel allegedly met potential victims in a variety of places, such as dating websites and shared taxi rides.  At various times, defendants claimed to be producers at “Universal.”  The indictment alleges that the men lied to victims about their ability to arrange investment and product integration deals in feature films, documentaries, and television series when they knew they had no actual connection to the productions and no affiliation with Universal.

Defendants allegedly created entities, including Suzy and the Sock Dragon Media Group, LLC, Rhinoheart Films, LLC, and The Book Media Group, LLC, to entice investors to invest in their fraudulent scheme.  According to the indictment, Fogel and Chrestatos fraudulently obtained investments from multiple victims totaling approximately $167,100, and used the funds for purposes other than as represented to investors.

Additionally, the indictment alleges that Fogel submitted a fraudulent loan application to the U.S. Small Business Administration through the Economic Injury Disaster Loan Program, ultimately receiving $52,400. Fogel allegedly claimed that his company, Suzy and the Sock Dragon Media Group, LLC, was engaged in “entertainment services,” had $125,000 in gross revenues and sold $20,000 in goods, amounts that were derived from the money obtained through defendants’ investment fraud scheme.

The announcement was made by United States Attorney Ismail J. Ramsey and Federal Bureau of Investigation (FBI) Special Agent in Charge Robert K. Tripp.

Both defendants were released on bond. Fogel’s next scheduled appearance is on Dec. 9, 2024, for a status hearing before the Honorable Araceli Martínez-Olguín, U.S. District Judge.

An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt.  If convicted, defendants each face a maximum sentence of 20 years of imprisonment, a fine of $250,000, three years of supervised release, and forfeiture for the charges of conspiracy to commit wire fraud and wire fraud in counts one to five.  Additionally, if convicted, Fogel faces a maximum sentence of 30 years of imprisonment, a fine of $250,000, three years of supervised release, and forfeiture for the wire fraud charge in count six, and five years of imprisonment, a fine of $250,000, three years of supervised release, and forfeiture for the false writings to a government agency charge in count seven.  However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.

Assistant U.S. Attorney Benjamin K. Kleinman is prosecuting the case with the assistance of Kay Konopaske. The prosecution is the result of an investigation by the FBI.

Avi Fogel Indictment
 

OAKLAND – An indictment was unsealed today charging three Indiana residents, Indigo Kiara Graham, Cortez Tarmar Crawford, and Trevon Demar Allen with conspiracy in connection with a SIM-swapping operation.

All three defendants were arrested yesterday and made their initial appearances in federal court in South Bend, Ind.

According to the indictment filed on Nov. 7, 2024, Graham, 27, Crawford, 22, and Allen, 30, all currently of Elkhart, Ind., are alleged to have conspired with each other and with additional co-conspirators to unjustly enrich themselves by targeting victims for SIM (subscriber identity module) swaps.  A SIM card is an integrated circuit that stores authentication and other information for devices on mobile phone networks.  In a SIM swap, a criminal actor causes the SIM card assigned to a victim’s account with a mobile service provider to be changed to a SIM card controlled by the criminal actor.  Upon obtaining control of the SIM card that is attached to the victim’s cell phone service, the criminal actor can impersonate the victim to other service providers (such as email providers, cryptocurrency exchanges, and social media accounts) by using the victim’s cell phone number to receive password reset codes.

The indictment describes how, beginning around April 2023 to around May 2024, the defendants allegedly created fraudulent identification documents in victims’ names, performed SIM swaps in exchange for money, and fraudulently obtained two-factor authentication codes, thereby accessing and stealing victims’ money and data, extorting victims for money in exchange for restoring access to data, and concealing the ill-gotten funds through cryptocurrency transactions.  Graham and Crawford are also charged with committing aggravated identity theft in connection with one incident involving both Graham and Crawford and a second incident involving only Crawford at a mobile service provider store in El Cerrito, Calif.

All three defendants were released and ordered to appear on Dec. 4, 2024, for their initial appearances before the Honorable Kandis A. Westmore, U.S. Magistrate Judge.

The announcement was made by United States Attorney Ismail J. Ramsey and Federal Bureau of Investigation (FBI) Special Agent in Charge Robert K. Tripp.

An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt.  If convicted, each defendant faces a maximum sentence of five years of imprisonment, $250,000 fine, three years of supervised release, $100 special assessment, forfeiture, and restitution for the conspiracy charge in count one; Graham and Crawford also face a mandatory minimum sentence of two years of imprisonment to run consecutively to any other sentence and in addition to the sentence for the underlying felony, $250,000 fine, three years of supervised release, $100 special assessment, and restitution for each count of aggravated identity theft with which they are charged.

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

Assistant U.S. Attorney Michelle J. Kane is prosecuting the case with the assistance of Kathy Tat. The prosecution is the result of an investigation by the FBI.
 

Indigo Kiara Graham Indictment

SAN FRANCISCO – Cruise LLC, an autonomous vehicle company based in San Francisco, has agreed to resolve a criminal charge in federal court for providing a false record to National Highway Traffic Safety Administration (NHTSA) with the intent to impede, obstruct, or influence the investigation of a crash involving one of Cruise’s autonomous vehicles.  A criminal information filed today charges Cruise with the offense, which Cruise has agreed to resolve through a deferred prosecution agreement and payment of a $500,000 criminal fine.

“Federal laws and regulations are in place to protect public safety on our roads.  Companies with self-driving cars that seek to share our roads and crosswalks must be fully truthful in their reports to their regulators,” said Martha Boersch, Chief of the Office of the U.S. Attorney’s Criminal Division.

“Today’s deferred prosecution agreement holds Cruise, LLC and its employees accountable for their lack of candor in a federal regulatory compliance action,” said Cory LeGars, Special Agent-in-Charge, U.S. Department of Transportation Office of Inspector General (DOT-OIG), Western Region. “Together with our law enforcement and prosecutorial partners, we will engage our collective resources to pursue companies and individuals who intentionally circumvent administration of federal regulations.”

The criminal information alleges that Cruise falsified records in a federal investigation under the jurisdiction of NHTSA within the U.S. Department of Transportation.  The criminal investigation and prosecution against Cruise is being resolved with a deferred prosecution agreement in which Cruise admits and accepts responsibility for the charge in the information.

According to the agreement, the crash occurred in San Francisco on Oct. 2, 2023, when a Cruise vehicle operating without a driver ran over a pedestrian who had been thrown into the autonomous vehicle’s path by a human-driven vehicle.  The Cruise vehicle stopped after running over the pedestrian.  However, because its detection system did not detect that a pedestrian was underneath it, the Cruise vehicle then attempted to pull over to the side of the road with the woman underneath it, dragging the woman over 20 feet.  Federal regulations require Cruise to report incidents, including crashes involving Cruise autonomous vehicles, to NHTSA.  Cruise subsequently filed a report with NHTSA describing the accident that omitted reference to the secondary movement and dragging.

In a videoconference with NHTSA the next morning, Cruise employees provided a verbal summary of the accident that did not include a description of the dragging.  The Cruise employees attempted to show a video of the accident that depicted the dragging, but due to technical difficulties, the portion of the video that showed the dragging did not play.  That afternoon Cruise submitted a 1-day-report, which specifically required “a written description of the pre-crash, crash, and post-crash details,” to NHTSA.  Cruise’s narrative omitted the dragging.  That omission rendered the report inaccurate and incomplete in light of NHTSA’s requirements.  The same day, Cruise employees provided NHTSA a copy of the video that showed the dragging, but Cruise did not correct the accident report or the disclosure in a later report submitted 10 days after the accident.

Under the deferred prosecution agreement, Cruise is required to pay a $500,000 criminal fine, cooperate with government investigations, implement a Safety Compliance Program, and provide annual reports to the United States Attorney’s Office on implementation and remediation.

If Cruise fails to completely perform or fulfill its obligations under the agreement during the agreement’s three-year term, the U.S. Attorney’s Office can proceed with prosecution of the charged offense.

The government reached this resolution with Cruise based on a number of factors, including the nature and seriousness of the offense conduct; Cruise’s timely notification to the government of an internal investigation and offer of cooperation, after being notified that the government had opened an investigation; Cruise’s cooperation, which included (1) conducting a thorough internal investigation and making the findings of that investigation public; (2) proactively identifying certain issues and facts that would likely be of interest to the government; (3) making factual presentations to the government and sharing information that would not have been otherwise available to the government; (4) sharing certain privileged documents with the government pursuant to a limited waiver of privilege; (5) making available witnesses for interviews by the government; and (6) remedial measures, such as ensuring that employees identified as responsible for the conduct at issue are no longer employed by Cruise, and operation improvements made by Cruise as set forth in the deferred prosecution agreement.

The announcement was made by Martha Boersch, Chief of the Office of the U.S. Attorney’s Criminal Division, Cory LeGars, Special Agent-in-Charge, DOT-OIG, Western Region, and FBI Special Agent in Charge Robert K. Tripp.

Assistant U.S. Attorneys Noah Stern and Lloyd Farnham are prosecuting the case with the assistance of Maryam Beros.  The prosecution is the result of an investigation by DOT-OIG and the FBI.

Cruise LLC Agreement
 

SAN FRANCISCO – A South Carolina man currently residing in Brazil pleaded guilty yesterday in federal court to conspiracy to submit a false claim.

According to court documents and statements made in court, Robert Xan Paul, 45, of Sao Paulo, Brazil, conspired with others to defraud the United States by preparing and submitting to the IRS a fraudulent income tax return that claimed a nearly $600,000 refund, which the IRS paid.  Paul was a client of O.I.D. Process, a business owned by his co-conspirators that helped others prepare and file individual federal income tax returns that claimed fictitious Original Issue Discount interest income and federal tax withholdings, resulting in fraudulent claims for tax refunds.

To support his refund claim, Paul created fraudulent IRS forms from financial institutions where he had accounts.  Those forms falsely indicated that the financial institutions had withheld federal income tax on his behalf.  

In total, Paul caused a tax loss to the IRS of $595,110.

Paul pleaded guilty to one count of conspiracy to submit false claims. He is set to be sentenced on Jan. 21, 2025. Paul faces a maximum sentence of 10 years in prison. He also faces a period of supervised release, restitution, and monetary penalties. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

First Assistant United States Attorney Patrick D. Robbins, Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division, and IRS Criminal Investigation (IRS-CI) Oakland Field Office Acting Special Agent in Charge Michael Mosley made the announcement.

Assistant U.S. Attorney Michael Pitman and Trial Attorney J. Parker Gochenour of the Tax Division are prosecuting the case.  The prosecution is the result of an investigation by IRS-CI.
 

SAN FRANCISCO – United States Attorney Ismail J. Ramsey today announced the United States Attorney’s Office’s participation in the Northern District of California’s newly formed Veterans Court (VC).  VC is a program for justice-involved veterans that provides a viable and appropriate alternative to incarceration for eligible veteran-defendants.

“We are deeply indebted to the military veterans within the Northern District of California for their service and sacrifice.  We recognize, however, that some veterans struggle and come into contact with the federal criminal justice system,” said U.S. Attorney Ramsey.  “Where appropriate and consistent with our mission to keep the community safe, Veterans Court offers an alternative to incarceration.”

For veterans who meet the eligibility requirements and are determined to be suitable candidates, VC offers dedicated programming as an alternative to incarceration.  VC integrates court supervision and an extensive network of treatment services and community support.  The program offers a four-phased structured approach: (1) engagement and assessment; (2) stability and accountability; (3) wellness and community connection; and (4) program transition.

In order to participate in VC, a veteran-defendant must meet the minimum eligibility requirements:

• At least 12 months of service in the U.S. armed forces (Army, Army Reserve, Army National Guard, Navy, Navy Reserve, Air Force, Air Force Reserve, Air National Guard, Marine Corps, Marine Corps Reserve, Coast Guard, Coast Guard Reserve, Space Force), unless discharged early due to a service-connected disability or a reservist/guardsman who served the full period for which he or she was called to active duty.
• Not charged with a sex offense or crimes against minors.
• Not involved in removal proceedings or with an immigration detainer.

Participants must plead guilty in order to participate.  Upon determination of suitability for the program, the U.S. Attorney’s Office will schedule a meeting with the defendant and his or her counsel and may offer either a Track I plea agreement (to low to moderate risk defendants) or a Track II plea agreement (to any risk level of defendants).  The participant will then begin a tailored, phased program lasting between 12-24 months.  For Track I participants who successfully complete all program requirements, the government will move to dismiss the charges.  For Track II participants who successfully complete all program requirements, the government will recommend a noncustodial sentence.  Participants who do not successfully complete the program will proceed to sentencing in accordance with standard procedures and timelines.

Admission to VC and determination of Track I or Track II eligibility lie solely with the United States Attorney’s Office.

For more information about alternative sentencing programs in the Northern District of California, please see https://www.cand.uscourts.gov/about/court-programs/cap-frequently-asked-questions/.

• Veterans Justice Court Application
• Veterans Court Quick Overview Guide

SAN JOSE – Kishore Dattapuram pleaded guilty in federal court this week to visa fraud and conspiracy to commit visa fraud.

Dattapuram, 55, of Santa Clara, and two other defendants, Kumar Aswapathi, 55, of Austin, Tex., and Santosh Giri, 48, of San Jose, were each charged in an indictment filed Feb. 28, 2019, with one count of conspiracy to commit visa fraud and 10 counts of substantive visa fraud.  Aswapathi pleaded guilty to all counts on Oct. 19, 2020.  Giri pleaded guilty to all counts on Oct. 28, 2024.

Dattapuram and Aswapathi owned and operated Nanosemantics, Inc., a staffing firm headquartered in San Jose that provided skilled employees to technology companies in the Bay Area.  Under its agreements with the companies and the employees it placed, Nanosemantics received a commission for workers placed at client companies.  Giri worked closely with Nanosemantics and was also the owner of a separate business, LexGiri, a legal process outsourcing firm that served as a “remote-virtual corporate immigration specialist” for companies.

In connection with its staffing work, Nanosemantics regularly submitted H-1B petitions for foreign workers.  As described in court records, the H-1B visa program allows foreign workers to obtain temporary authorization to live and work for employers in the United States.  In order to secure an H-1B visa, an employer or other sponsor must submit a Form I-129 petition to the United States Citizenship and Immigration Services (USCIS).  A petition and associated documentation must confirm the existence and duration of the job waiting for the worker, and describe key details including the wages associated with the position.

In pleading guilty, Dattapuram admitted to working with Aswapathi and Giri to submit fraudulent H-1B applications that falsely represented that foreign workers had specific jobs waiting for them at designated end-client companies when in fact the jobs did not exist.  On multiple occasions, Dattapuram paid companies to be listed as end-clients for the foreign workers, even though he knew the workers would never work for those employers.  As defendants admitted, the goal of the scheme was to allow Nanosemantics to obtain visas for job candidates before securing jobs for them, thereby allowing Nanosemantics to place those workers with employers as soon as those jobs were available, rather than waiting for the visa application process to conclude, and giving Nanosemantics an unfair advantage over its competitors.

The announcement was made by First Assistant United States Attorney Patrick D. Robbins and Homeland Security Investigations (HSI) Special Agent in Charge Tatum King.

Dattapuram’s sentencing hearing is scheduled for Feb. 24, 2025, before the Honorable Edward J. Davila, U.S. District Judge.  Giri’s sentencing hearing is also scheduled for Feb. 24, 2025, before Judge Davila.  Aswapathi has a status regarding sentencing on Nov. 25, 2024, before Judge Davila.  Each defendant faces a maximum sentence of 10 years in prison and a fine of $250,000 for each visa fraud count, and a maximum sentence of five years in prison and a fine of $250,000 on the conspiracy count.  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 Sarah Griswold and Special Assistant United States Attorney Johnny James are prosecuting this case with the assistance of Lynette Dixon and Nina Burney.  The prosecution is the result of an investigation by HSI, with assistance from USCIS.
 

SAN FRANCISCO – David Scott Cacchione was sentenced today to 40 months in federal prison for conspiracy to commit wire fraud and wire fraud in connection with an investment fraud scheme and a false federal disaster loan application, and tax evasion.  The sentence was handed down by the Honorable James Donato, U.S. District Judge.

Cacchione, 59, of San Carlos, was initially charged by complaint on Jan. 16, 2024, and by superseding information on Aug. 7, 2024.  On Aug. 14, 2024, he pleaded guilty to all four counts in the superseding information — one count of conspiracy to commit wire fraud, two counts of wire fraud, and one count of tax evasion in connection with multiple schemes.  According to his plea agreement, Cacchione admitted that he and an alleged co-conspirator defrauded multiple investors by convincing them that their money would be used to purchase accounts receivable that did not exist.  Instead, Cacchione used the investor funds to pay personal expenses and to reimburse other victims.  Cacchione admitted that victim investors were defrauded out of more than $1.13 million in this scheme.  As detailed in court documents, in addition to the investment fraud scheme, Cacchione submitted an Economic Injury Disaster Loan application in September 2020 for a company that he falsely claimed had $1 million in revenue and three employees in the 12-month period prior to Jan. 31, 2020.  Based on these false statements, Cacchione obtained a $149,900 loan that he used to pay personal expenses.

“The defendant made multiple misrepresentations in order to enrich himself.  He did so by convincing multiple individuals to invest in accounts receivable that did not exist and by diverting disaster relief funds intended to help small businesses to a business that was a sham,” said United States Attorney Ismail J. Ramsey.  “My office will vigorously investigate and prosecute those who seek to defraud individuals and federal programs.”

“David Cacchione treated other people’s money as his own,” said Federal Bureau of Investigation (FBI) San Francisco Special Agent in Charge Robert Tripp. “He broke promise after promise and paid his own personal expenses instead of investing his victims’ money. Today, however, he learned a lesson in accountability. The FBI is committed to safeguarding the public from fraud schemes and will continue to work alongside our partners to bring perpetrators like Cacchione to justice.”

“White collar crime is not victimless, and today’s sentencing reinforces it does not go unpunished. Mr. Cacchione’s multiple schemes victimized individual investors and preyed upon federal programs designed to help small businesses recover from dire natural disaster impacts,” said IRS Criminal Investigation (IRS-CI) Oakland Field Office Acting Special Agent in Charge Michael Mosley. “IRS-CI stands up for individuals victimized by financial fraudsters and defends the sanctity of benevolent government programs by putting those who willfully abuse them in jail.”

In addition to the 40-month prison term, Judge Donato also ordered defendant to pay more than $1.4 million in restitution, sentenced the defendant to a three-year period of supervised release, and ordered the defendant to forfeit his $450,000 equity stake in a technology company.  Defendant has been in custody since Apr. 24, 2024, and will begin serving his sentence immediately.

The announcement was made by United States Attorney Ismail J. Ramsey, FBI Special Agent in Charge Robert Tripp, and IRS-CI Oakland Field Office Acting Special Agent in Charge Michael Mosley.

Assistant United States Attorney Garth Hire is prosecuting the case.  The prosecution is the result of an investigation by the FBI and IRS-CI.
 

OAKLAND – Neil Divers was sentenced today to 12 months and one day in federal prison for wire fraud and money laundering.  The sentence was handed down by the Honorable Jon S. Tigar, U.S. District Judge.

Divers, 66, of Godley, Tex., who previously resided in Chico, Calif., pleaded guilty on July 17, 2024, to one count of wire fraud and one count of money laundering.  As described in court documents, in 2015, Divers partially owned and operated Kodiak Precision, Inc. (Kodiak), a machined component manufacturer in Richmond, Calif.  According to the plea agreement, based on prior events, in 2016, the other owners of Kodiak imposed certain controls and procedures designed to prevent Divers from taking money from the company without permission from one or more of the other owners.  Despite these controls and procedures, in or about July 2016 to about May 2018, Divers devised and executed a scheme to defraud by opening bank accounts in the name of Kodiak on which he was the only signatory without the knowledge or consent of the other owners of Kodiak.  Divers admitted that he then caused an employee to instruct certain Kodiak customers to deposit funds owed to Kodiak into those accounts which were named as “Kodiak” accounts but as to which he was the sole authorized signatory.

According to the plea agreement, Divers took and used some of the diverted money to fund his lifestyle and not to benefit the company, including using $38,217.84 from his fraudulent scheme to purchase landscaping services for his home in August 2019.

In addition to the 12 months and one day prison term, Judge Tigar also ordered the defendant to pay restitution in an amount to be determined at a hearing on Jan. 7, 2025, and sentenced him to a three-year period of supervised release.  Defendant will begin serving the sentence on Jan. 10, 2025.

The announcement was made by United States Attorney Ismail J. Ramsey and IRS Criminal Investigation (IRS-CI) Oakland Field Office Acting Special Agent in Charge Michael Mosley.

Assistant U.S. Attorney Robert Rees and Special Assistant U.S. Attorney Cynthia Johnson are prosecuting the case with the assistance of Kay Konopaske.  The prosecution is the result of an investigation by the IRS-CI.
 

The Justice Department, together with the Federal Trade Commission (FTC), today announced that Lyft Inc. (Lyft) has agreed to resolve allegations that it made false and misleading statements about how much Lyft drivers would earn. The settlement includes an agreement to pay $2.1 million in civil penalties and a permanent injunction prohibiting such false and misleading earnings claims.

Lyft operates a mobile app ride-hailing platform that connects consumers seeking rides with those who provide rides with their own personal vehicles. Through marketing campaigns and advertisements, Lyft recruits drivers. After a driver is hired, Lyft sets the rates the driver charges and collects a portion of the fare for each ride. In a civil complaint filed in the U.S. District Court for the Northern District of California, the government alleges that, as early as 2021, Lyft made false and misleading claims in its advertising and marketing regarding potential earnings and incentives to be earned by drivers who signed up to drive for Lyft. Lyft allegedly continued these practices even after it received a Notice of Penalty Offenses in October 2021 that placed the company on notice that false and misleading earnings claims were unlawful.

The complaint alleges that Lyft disseminated advertisements promoting specific hourly amounts that drivers throughout the United States could earn. The company, however, did not disclose that the potential hourly amounts were based on the earnings of the top 20% of its drivers. The complaint also further alleges that Lyft also tried to induce drivers to offer more rides by promoting “earnings guarantees,” which guaranteed that drivers would be paid a set amount if they completed a specific number of rides in a certain time. These guarantees allegedly did not clearly disclose that drivers were paid only the difference between what they otherwise earned for the rides and Lyft’s advertised guaranteed amount, rather than receiving the full guaranteed amount in addition to their regular earnings for the rides.

In the stipulated order entered today by the federal district court, Lyft is required to pay a $2,100,000 civil penalty. The order also enjoins Lyft from making any misrepresentations regarding driver earnings and includes other monitoring and reporting provisions aimed at promoting Lyft’s compliance with the order.

“The Justice Department will vigorously enforce the law to stop companies from misleading Americans about their potential earnings in the gig economy,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “We will continue to work with the FTC to stop unfair and deceptive marketing practices.”

“Lyft drivers deserve accurate information about how much they will be paid for the work they do,” said Director Samuel Levine of the FTC’s Bureau of Consumer Protection. “Our settlement with Lyft bans exaggerated earnings claims and underscores the FTC’s commitment to ensuring gig workers are treated fairly.”

Trial Attorney Paulina Stamatelos and Assistant Director Zachary Dietert of the Civil Division’s Consumer Protection Branch, Assistant U.S. Attorney Ekta Dharia for the Northern District of California and Abdiel Lewis and Evan Rose of the FTC’s Bureau of Consumer Protection handled the matter.

For more information about the Consumer Protection Branch and its enforcement efforts, visit www.justice.gov/civil/consumer-protection-branch. For more information about the FTC, visit www.FTC.gov.

SAN FRANCISCO – The Justice Department, together with the Federal Trade Commission (FTC), today announced that Lyft Inc. (Lyft) has agreed to resolve allegations that it made false and misleading statements about how much Lyft drivers would earn. The settlement includes an agreement to pay $2.1 million in civil penalties and a permanent injunction prohibiting such false and misleading earnings claims.

Lyft operates a mobile app ride-hailing platform that connects consumers seeking rides with those who provide rides with their own personal vehicles. Through marketing campaigns and advertisements, Lyft recruits drivers. After a driver is hired, Lyft sets the rates the driver charges and collects a portion of the fare for each ride. In a civil complaint filed in the U.S. District Court for the Northern District of California, the government alleges that, as early as 2021, Lyft made false and misleading claims in its advertising and marketing regarding potential earnings and incentives to be earned by drivers who signed up to drive for Lyft. Lyft allegedly continued these practices even after it received a Notice of Penalty Offenses in October 2021 that placed the company on notice that false and misleading earnings claims were unlawful.

The complaint alleges that Lyft disseminated advertisements promoting specific hourly amounts that drivers throughout the United States could earn. The company, however, did not disclose that the potential hourly amounts were based on the earnings of the top 20% of its drivers. The complaint also further alleges that Lyft also tried to induce drivers to offer more rides by promoting “earnings guarantees,” which guaranteed that drivers would be paid a set amount if they completed a specific number of rides in a certain time. These guarantees allegedly did not clearly disclose that drivers were paid only the difference between what they otherwise earned for the rides and Lyft’s advertised guaranteed amount, rather than receiving the full guaranteed amount in addition to their regular earnings for the rides.

In the stipulated order entered today by the federal district court, Lyft is required to pay a $2,100,000 civil penalty. The order also enjoins Lyft from making any misrepresentations regarding driver earnings and includes other monitoring and reporting provisions aimed at promoting Lyft’s compliance with the order.

“The Justice Department will vigorously enforce the law to stop companies from misleading Americans about their potential earnings in the gig economy,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “We will continue to work with the FTC to stop unfair and deceptive marketing practices.”

“Lyft drivers deserve accurate information about how much they will be paid for the work they do,” said Director Samuel Levine of the FTC’s Bureau of Consumer Protection. “Our settlement with Lyft bans exaggerated earnings claims and underscores the FTC’s commitment to ensuring gig workers are treated fairly.”

Trial Attorney Paulina Stamatelos and Assistant Director Zachary Dietert of the Civil Division’s Consumer Protection Branch, Assistant U.S. Attorney Ekta Dharia for the Northern District of California, and Abdiel Lewis and Evan Rose of the FTC’s Bureau of Consumer Protection handled the matter.

For more information about the Consumer Protection Branch and its enforcement efforts, visit www.justice.gov/civil/consumer-protection-branch. For more information about the FTC, visit www.FTC.gov.

Order by Magistrate Judge Peter H Kang
 

SAN FRANCISCO – A federal grand jury indicted Loel Amador and Eduardo Alvarez with racketeering (RICO) conspiracy and further alleged that a special sentencing factor applies against both defendants for their role in a 2023 murder.  The indictment also charged Alvarez with being a felon in possession of a firearm.

According to the indictment filed Oct. 16, 2024, and unsealed today, Amador, aka “Demon,” 28, and Alvarez, aka “Clumsy” aka “Lalo,” 36, both of San Francisco, allegedly conspired to conduct the affairs of a racketeering enterprise referred to as “the 19th Street/16th Street Sureños.”  The 19th Street/16th Street Sureños is described as a single, unified enterprise that resulted from the association of two gangs, one that claimed “territory” bounded by 19th Street to the south, 16th Street to the north, Folsom Street to the east, and Dolores Street to the west, and included Dolores Park and Franklin Square Park (also known as Bryant Park), and the other that claimed “territory” centered around 16th Street and Mission Street in San Francisco’s Mission District.  The gang allegedly engaged in, among other conduct, murder, narcotics distribution, assault, robbery, and other violent crimes in order to preserve and protect its power, territory, reputation, and profits.  The indictment further alleges that, on or about Oct. 7, 2023, Amador and Alvarez murdered a victim in territory claimed by the gang.  According to the indictment, on that same date, Alvarez, a convicted felon, possessed a Glock semiautomatic handgun.

This indictment marks the fourth case in the last 10 years in which members of the 19th Street/16th Street Sureños enterprise have been charged with federal racketeering offenses.

Amador was arrested in San Francisco from the custody of the San Francisco County Sheriff, and Alvarez was already in federal custody on a pending petition alleging a violation of supervised release conditions.  Alvarez made an initial appearance in federal court in San Francisco earlier this week, and Amador made his initial appearance today.  Amador and Alvarez are detained pending further proceedings before U.S. Magistrate Judge Peter H. Kang.

The announcement was made by First Assistant United States Attorney Patrick D. Robbins and Homeland Security Investigations (HSI) Special Agent in Charge Tatum King.

An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, defendants each face a maximum sentence of life imprisonment, and a fine of $250,000, plus restitution if appropriate, for each violation of 18 U.S.C. § 1962(d), racketeering conspiracy.  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.

The Organized Crime Strike Force section of the United States Attorney’s Office is prosecuting this case.  The prosecution is the result of a year-long investigation by HSI and the San Francisco Police Department.

Loel Amador Indictment
 

OAKLAND – Freddie Lee Davis III, who pleaded guilty to wire fraud and aggravated identity theft, was sentenced to 24 months and a day in federal prison.  The sentence was handed down on Oct. 24, 2024, by the Hon. Yvonne Gonzalez Rogers, United States District Judge.  Davis’ co-defendant, Sene Malepeai, also pleaded guilty to wire fraud and aggravated identity theft, and has yet to be sentenced.

Davis and Malepeai, both 27, were charged by criminal complaint on June 30, 2023.  Davis was remanded to federal custody on Aug. 31, 2023, and has remained in custody since then.  Both defendants were charged by superseding information on July 19, 2024, with one count of wire fraud and one count of aggravated identity theft.

The criminal complaint describes that on June 17, 2021, officers responded to a report of a robbery in the parking lot of a Costco in San Leandro. The victim of the robbery was an Asian female (identified in the complaint as “Q.D.”). The robbery took place in the store’s parking lot after the victim exited Costco. As she was walking to her vehicle, a car drove alongside Q.D. and an individual reached out of a window and grabbed hold of her purse from the moving car.  Q.D. held onto her purse and was dragged the width of several cars.  The car then sped away and Q.D. let go of her purse and fell to the ground, resulting in bodily injuries, including abrasions to her leg and swelling on her hand.  Several witnesses heard Q.D. scream, heard her body hit the asphalt, and saw a black Honda speed away from the incident.  Surveillance cameras revealed that the car had a license plate number registered to Davis.

On Aug. 1, 2024, Davis pleaded guilty to one count of wire fraud and one count of aggravated identity theft.  In Davis’ plea agreement, he acknowledged this robbery and admitted that he received some of the stolen items, including Q.D.’s MasterCard credit card.  Davis further admitted that days after the robbery, he knowingly and unlawfully possessed the credit card knowing it belonged to Q.D., and possessed it in relation to a violation of wire fraud.  In particular, he and co-defendant Malepeai used Q.D.’s credit card, while misrepresenting Malepeai as the lawful user of the credit card, to fraudulently purchase merchandise at a shoe store in San Leandro and make a number of other fraudulent purchases.

In addition to sentencing Davis to 24 months and a day in federal prison, Judge Gonzalez Rogers ordered him to pay restitution in an amount to be determined and to serve three years of supervised release to begin after his prison term is completed.  

“Community members should be able to live their lives without fear of being robbed and having items stolen from them used fraudulently,” said United States Attorney Ismail J. Ramsey.  “We will vigorously prosecute these crimes and make sure that defendants like Mr. Davis face serious consequences for their misconduct.”

On Sept. 17, 2024, Davis’ co-defendant Malepeai also pleaded guilty to one count of wire fraud and one count of aggravated identity theft.  Malepeai admitted that, on the day of the robbery, she was a passenger in a vehicle with three other individuals.  As detailed in Malepeai’s plea agreement, earlier that day, the three other occupants of the vehicle had discussed “going to Chinatown to rob Asian women with purses or jewelry.”  They first drove to Chinatown to look for Asians with purses, then went to the parking lot of a retail store, and eventually ended up at a Costco in San Leandro.  Two of the occupants in the vehicle had previously stated that they “preferred robbing Asians because they thought they have more money, and because Asians are ‘easy targets’ who don’t fight back,” according to Malepeai’s plea agreement.  After the robbery, the three other occupants of the vehicle divided up the stolen goods from Q.D.’s purse, including cash, credit cards, a checkbook, and two cell phones, as Malepeai admitted.  Malepeai further admitted to using Q.D.’s credit card, while misrepresenting herself as the lawful user of the credit card, to fraudulently purchase merchandise at a shoe store in San Leandro and make a number of other fraudulent purchases.

Malepeai’s next hearing before Judge Gonzalez Rogers is set for Nov. 7, 2024.  

The mandatory minimum penalty for aggravated identity theft is two years in prison, and the maximum statutory penalty for wire fraud is 20 years in prison.  However, any sentence following a conviction is imposed by a court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.

The announcement was made by U.S. Attorney Ismail J. Ramsey and FBI Special Agent in Charge Robert Tripp.

Assistant United States Attorneys Eric Cheng and Molly Priedeman are prosecuting the case, with assistance from Mimi Lam. The prosecution is the result of an investigation by the FBI with assistance from the San Leandro Police Department.  
 

OAKLAND – The government of Honduras extradited Javier Marin-Gonzales, a Honduran national, to the United States this week to appear on charges stemming from his alleged involvement in the distribution of fentanyl in the San Francisco Bay Area. The extradition marks the fifth extradition of an alleged drug distributor from Honduras to the Northern District of California this year.

On Aug. 2, 2023, a federal grand jury indicted Marin-Gonzales, 25, at the time a resident of Oakland, in connection with the alleged distribution of fentanyl on three separate occasions.   The investigation in this case led to charges against multiple East Bay-based defendants who allegedly traveled into the Tenderloin neighborhood of San Francisco to engage in drug dealing.

According to court documents, at the time of the indictment, the Federal Bureau of Investigation (FBI) learned that Marin-Gonzales had traveled back to Honduras.  The Justice Department’s Office of International Affairs worked with Honduran authorities, the FBI, and the Drug Enforcement Administration (DEA) to secure the arrest and extradition of Marin-Gonzales. Marin-Gonzales arrived back in the United States on Oct. 23, 2024.  He appeared before U.S. Magistrate Judge Kandis A. Westmore today for arraignment on the indictment and further proceedings.  A detention hearing for Marin-Gonzales is scheduled for Oct. 30, 2024.

“We appreciate our law enforcement partners’ efforts, here and abroad, to bring to justice those who are charged with peddling deadly drugs in our communities,” said United States Attorney Ismail J. Ramsey.

“This arrest and extradition marks a significant step in our ongoing fight against the distribution of dangerous drugs like fentanyl,” said FBI Special Agent in Charge Robert Tripp. “By bringing Marin-Gonzales to face justice in the United States, we are sending a clear message: those who profit from the trafficking of deadly substances will be held accountable, no matter where they operate. The FBI remains committed to working with our domestic and international partners to disrupt drug networks that threaten the safety and well-being of our communities.”

“We remain steadfast in our commitment to hold accountable drug traffickers operating in the Tenderloin,” said DEA Special Agent in Charge Bob P. Beris. “The extradition of Marin-Gonzales is another example of how strong global partnerships keep our communities safe.”

The indictment charges Marin-Gonzales with the distribution of 40 grams or more of fentanyl, in violation of 21 U.S.C. §§ 841(a)(1), (b)(1)(B)(vi).

An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt.  If convicted, Defendant faces a maximum sentence of 40 years’ imprisonment, a fine of $5,000,000, a lifetime of supervised release, and a $100 special assessment.  However, any sentence following a conviction would be imposed by a court only after considerations of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.

The announcement was made by U.S. Attorney Ismail J. Ramsey, FBI Special Agent in Charge Robert Tripp, and DEA Special Agent in Charge Bob P. Beris.

This prosecution is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation.  OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.  Assistant U.S. Attorney Charles Bisesto is prosecuting the case with the assistance of Sara Slattery and Andy Ding.  The prosecution is the result of an investigation by the FBI SAFE Streets Task Force, DEA, and the Concord Police Department.
 

United States Attorney Ismail J. Ramsey announced today that Assistant United States Attorney (AUSA) Sarah Griswold will lead the efforts of his Office in connection with the Justice Department’s nationwide Election Day Program for the upcoming November 5, 2024, general election.  AUSA Griswold has been appointed to serve as the District Election Officer (DEO) for the Northern District of California, and in that capacity is responsible for overseeing the District’s handling of election day complaints of voting rights concerns, threats of violence to election officials or staff, and election fraud, in consultation with Justice Department Headquarters in Washington.

United States Attorney Ramsey said, “Every citizen must be able to vote without interference or discrimination and to have that vote counted in a fair and free election.  Similarly, election officials and staff must be able to serve without being subject to unlawful threats of violence.  The Department of Justice will always work tirelessly to protect the integrity of the election process.”

The Department of Justice has an important role in deterring and combatting discrimination and intimidation at the polls, threats of violence directed at election officials and poll workers, and election fraud.  The Department will address these violations wherever they occur.  The Department’s longstanding Election Day Program furthers these goals and also seeks to ensure public confidence in the electoral process by providing local points of contact within the Department for the public to report possible federal election law violations.

Federal law protects against such crimes as threatening violence against election officials or staff, intimidating or bribing voters, buying and selling votes, impersonating voters, altering vote tallies, stuffing ballot boxes, and marking ballots for voters against their wishes or without their input.  It also contains special protections for the rights of voters, and provides that they can vote free from interference, including intimidation, and other acts designed to prevent or discourage people from voting or voting for the candidate of their choice.  The Voting Rights Act protects the right of voters to mark their own ballot or to be assisted by a person of their choice (where voters need assistance because of disability or inability to read or write in English).

United States Attorney Ramsey stated that: “The franchise is the cornerstone of American democracy.  We all must ensure that those who are entitled to the franchise can exercise it if they choose, and that those who seek to corrupt it are brought to justice.  In order to respond to complaints of voting rights concerns and election fraud during the upcoming election, and to ensure that such complaints are directed to the appropriate authorities, AUSA/DEO Griswold will be on duty in this District while the polls are open, with the assistance of AUSA Kimberly Hopkins and AUSA Katherine Lloyd-Lovett.  They can be reached by the public at the following telephone numbers: AUSA Griswold, (408) 535-5060; AUSA Hopkins, (415) 436-6991; AUSA Lloyd-Lovett, (510) 637-3932.”

In addition, the FBI will have special agents available in each field office and resident agency throughout the country to receive allegations of election fraud and other election abuses on election day.  The local FBI field office can be reached by the public at (415) 553-7400.

Complaints about possible violations of the federal voting rights laws can be made directly to the Civil Rights Division in Washington, DC by complaint form at https://civilrights.justice.gov/ or by phone at (800) 253-3931.

United States Attorney Ramsey said, “Ensuring free and fair elections depends in large part on the assistance of the American electorate.  It is important that those who have specific information about voting rights concerns or election fraud make that information available to the Department of Justice.”

Please note, however, in the case of a crime of violence or intimidation, please call 911 immediately and before contacting federal authorities.  State and local police have primary jurisdiction over polling places, and almost always have faster reaction capacity in an emergency.
 

OAKLAND – A federal grand jury indicted Oluwatobi Otukelu and Evan Edwards on charges of conspiracy and causing damage to a computer in connection with an alleged scheme to steal wages earned by workers of a delivery service, announced United States Attorney Ismail J. Ramsey and Federal Bureau of Investigation (FBI) Special Agent in Charge Robert K. Tripp.  Defendant Otukelu made his first appearance in Oakland to face the charges after having previously appeared with Defendant Edwards in federal court in Houston, Tex.

According to the indictment, Otukelu, 25, and Edwards, 24, both of Houston, conspired to carry out a scheme to defraud DoorDash, Inc. (DoorDash) by fraudulently obtaining wages of independent contractors, called “Dashers,” who made deliveries for the delivery service.  As part of this scheme, the co-conspirators allegedly obtained the personal identifying information of Dasher victims; falsely impersonated the Dasher victims to DoorDash support; took over Dashers’ existing online accounts; created new, unauthorized accounts using Dashers’ personal information; and directed payments of Dasher wages from DoorDash to accounts controlled by Otukelu and Edwards. The indictment further alleges that the defendants used the stolen funds to pay for and attempt to pay for goods and services, including vehicles, airline tickets, cosmetic procedures, and personal training. The indictment alleges that Otukelu and Edwards stole the DoorDash wages of at least 138 individual Dashers, amounting to over $1 million.

Otukelu and Edwards were arrested in Houston on Sept. 26, 2024, and made their initial appearances in Houston the same day. Defendant Otukelu was ordered detained pending trial. Defendant Edwards was released on a $25,000 bond. Otukelu’s next scheduled appearance is at 10:30 a.m. on Oct. 22, 2024, for status regarding detention before the Hon. Kandis A. Westmore, U.S. Magistrate Judge. Edwards’ initial appearance in this District has not yet been scheduled.

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 the following maximum penalties:

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

Assistant U.S. Attorney Michelle J. Kane is prosecuting the case with the assistance of Kathy Tat. The prosecution is the result of an investigation by the FBI.

Oluwatobi Emmanuel Otukelu Indictment
 

SAN FRANCISCO – Lin Chen pleaded guilty in federal court today to illegally exporting U.S. technology to a prohibited end user in China, in violation of the International Emergency Economic Powers Act (IEEPA) and the Export Administration Regulations (EAR). The plea was accepted by the Hon. William Alsup, Senior U.S. District Judge.

In pleading guilty, Chen, 65, a citizen of the People’s Republic of China (PRC), admitted to acting on behalf of Jiangsu Hantang International Trade Group Corp., Ltd. (JHI), a company headquartered in Nanjing, PRC, to procure a wafer cutting machine on behalf of Chengdu GaStone Technology Co., Ltd. (GaStone), an entity located in Chengdu, PRC.  Chen admitted to knowing that GaStone was designated on the U.S. Department of Commerce’s Entity List on Aug. 1, 2014.  Federal regulations restrict the export of certain items to companies, research institutions, and other entities identified on the Department of Commerce’s Entity List. Under applicable Department of Commerce regulations, wafer cutting machines, which are used to cut thin semiconductors used in electronics (also known as silicon wafers), require a license for export to end-users such as GaStone.

According to the plea agreement, by no later than Dec. 4, 2015, Chen knew that GaStone was prohibited from receiving restricted exports without a license, including a DTX-150 Scribe and Break Machine, a machine for processing silicon wafer microchips.  On approximately Dec. 10, 2015, Chen worked with a co-defendant to arrange the sale of a DTX-150 to GaStone by shipping it to the PRC in the name of JHI without an export license from Commerce. Chen used JHI’s status as an intermediary to conceal GaStone as the true end-user of the technology.

A federal grand jury indicted Chen on Dec. 1, 2020, charging him with conspiracy to violate IEEPA; submitting false electronic export information; smuggling; and IEEPA violations.  Under the plea agreement, Chen pleaded guilty to count four, causing an unlawful export in violation of IEEPA.  Defendant currently is released on bond.

Chen’s sentencing hearing is scheduled for January 28, 2025, before the Judge Alsup.  The maximum statutory penalty for an IEEPA violation is up to 20 years in prison and a $1 million fine.  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.

United States Attorney Ismail J. Ramsey, Federal Bureau of Investigation (FBI) Special Agent in Charge Robert K. Tripp, Homeland Security Investigations (HSI) Special Agent in Charge Tatum King, and Brent Burmester, U.S. Department of Commerce, Bureau of Industry and Security (BIS) Special Agent in Charge, San Jose Field Office, made the announcement today.

Assistant U.S. Attorney Colin Sampson and Brett Reynolds of the National Security Division’s Counterintelligence and Export Control Section are prosecuting the case with the assistance of Claudia Hyslop and Nina Burney.  The prosecution is the result of an investigation by FBI, HSI, and BIS.
 

SAN FRANCISCO – A federal grand jury indicted Dongquan “Derek” Jin and Yimin “Kelly” Lu with aiding and abetting false statements on asylum applications, announced United States Attorney Ismail J. Ramsey, U.S. Department of State Diplomatic Security Service (DSS) San Francisco Field Office Special Agent in Charge William Chang, and Homeland Security Investigations (HSI) San Francisco Special Agent in Charge Tatum King.  

According to an indictment filed Aug. 20, 2024, and unsealed Sept. 19, 2024, Jin and Lu operated Gospel Immigration Service, Inc., a Newark, Calif., corporation that held itself out as providing individuals with assistance in applying for immigration documents and benefits, including asylum.  

The indictment alleges that Jin and Lu were listed as the application preparers on more than 200 asylum applications submitted to U.S. Citizenship and Immigration Services (USCIS) between 2013 and 2024.  Jin and Lu allegedly provided their clients with sample personal statements describing persecution for use in the clients’ own asylum applications.  According to the indictment, it was Jin’s and Lu’s practice to review and edit clients’ personal statements and, in doing so, Jin and Lu would include false and embellished details they believed would increase the clients’ chances of being granted asylum.  

The indictment further alleges that, before their clients had their asylum interviews with USCIS, Jin and Lu would instruct their clients to memorize false details in their applications and would also facilitate interview training sessions to increase the odds of a favorable determination.  Jin and Lu charged clients at least $5,000 for their assistance and would pressure clients for bonuses, or “red envelopes,” once their clients’ applications were approved.  

Defendants are next scheduled to appear in federal court on Oct. 16, 2024, before the Hon. Charles R. Breyer, Senior U.S. District Judge.  

An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt.  If convicted, Jin and Lu each face a maximum sentence of 10 years’ imprisonment and a fine of $250,000.  However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.

Assistant United States Attorneys Jared S. Buszin and E. Wistar Wilson are prosecuting the case, with assistance from Tina Rosenbaum.  The prosecution is the result of an investigation led by the U.S. Treasury Inspector General for Tax Administration and DSS representatives to the Document and Benefit Fraud Task Force (DBFTF), overseen by HSI.  The DBFTF is a multi-agency task force that coordinates investigations into fraudulent benefit and immigration documents.  USCIS’s Office of Fraud Detection and National Security provided significant assistance with the investigation.

Dongquan Derek Jin Indictment
 

SAN JOSE - A federal grand jury indicted four defendants in an alleged scheme to defraud a San Francisco-based delivery company.

All four defendants were arrested on Oct. 4, 2024.  Defendants Sayee Chaitanya Reddy Devagiri, 30, and Manaswi Mandadapu, 29, were arrested in Newport Beach, Calif., made their initial appearances in Santa Ana, and were released on bond.  Defendant Matheus Duarte, 29, was arrested in Mountain House, Calif., made his initial appearance in San Jose, and was released on bond.  Defendant Hari Vamsi Anne, 30, was arrested in Cypress, Tex., made his initial appearance in Houston, and was detained pending further proceedings.

Each defendant is charged with a single count of conspiracy to commit wire fraud.  According to the indictment filed Aug. 7, 2024, and unsealed Oct. 4, 2024, from November 2020 to February 2021, the defendants allegedly worked together to cause the victim company (“Entity One”) to pay for deliveries that never occurred.  Entity One’s business includes providing delivery services to customers in response to orders placed using the company’s platform.  Drivers fulfill those orders by collecting the ordered items from restaurants and other merchants and delivering them to customers.  In furtherance of the scheme, defendants allegedly created fraudulent customer accounts and driver accounts on Entity One’s platform and used the fictitious customer accounts to place orders for delivery.  As alleged in the indictment, using insider access to Entity One’s computer systems, defendants assigned those orders to fraudulent driver accounts, then manipulated Entity One’s computer systems to cause Entity One to pay the fraudulent driver accounts as if individual orders had been delivered hundreds of times.  The scheme allegedly resulted in fraudulent payments exceeding $2,500,000.

The indictment alleges that the defendants gained access to Entity One’s computer systems using credentials belonging to an employee of Entity One identified as “Individual One.”  Individual One is Tyler Thomas Bottenhorn, a resident of Solano County, Calif., who was briefly employed by Entity One in 2020.  Bottenhorn was not charged in the indictment unsealed on Oct. 4, but he was separately charged by indictment with conspiracy to commit wire fraud in a federal criminal case filed Sept. 29, 2022, and unsealed Oct. 7, 2024.  Bottenhorn pleaded guilty on Nov. 7, 2023, and admitted to being involved in the scheme to defraud Entity One.

An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, each defendant faces a maximum sentence of 20 years in prison, and a fine of $250,000, plus restitution if appropriate.  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.

The announcement was made by U.S. Attorney Ismail J. Ramsey and Federal Bureau of Investigation (FBI) Special Agent in Charge Robert K. Tripp.

This case is being prosecuted by Assistant U.S. Attorneys Michael G. Pitman and Jeffrey D. Nedrow with assistance from Sahib Kaur.  The prosecution is the result of an investigation by the FBI.

Sayee Chaitanya Reddy Devagiri Indictment
 

SAN FRANCISCO – Christian Quintanilla, a/k/a “Casper,” was sentenced to 63 months in prison for illegally possessing 11 rounds of unfired ammunition near 16th Street and Mission Street in the Mission District of San Francisco, announced First Assistant United States Attorney Patrick D. Robbins and Homeland Security Investigations (HSI) Special Agent in Charge Tatum King.  The sentence was handed down by the Hon. Richard Seeborg, Chief United States District Judge.      

Quintanilla, 24, of San Pablo, pleaded guilty to the unlawful ammunition possession charge on Mar. 19, 2024.  Quintanilla had previously admitted in a plea agreement to being a member of the MS-13 20th Street clique.  According to court documents, Quintanilla had been sentenced to 36 months’ imprisonment for his participation in two MS-13 gang-related assaults in San Francisco and was therefore prohibited from carrying either a firearm or ammunition.  Nevertheless, as described in court documents, Quintanilla was a passenger in a car with other MS-13 associates that led California Highway Patrol officers on a high-speed chase on June 17, 2023, after which officers located a handgun with a loaded magazine and a round in the chamber in the car.  Quintanilla’s involvement in this incident violated the terms of his federal supervised release, which led to the issuance of an arrest warrant.  On Sept. 7, 2023, San Francisco Police Department officers encountered Quintanilla near 16th Street and Mission Street in San Francisco.  When officers arrested Quintanilla, they found a 9mm Polymer 80 pistol (a “ghost gun”) with an extended magazine containing 11 unfired cartridges of 9mm ammunition.    

On Oct. 25, 2023, a federal grand jury indicted Quintanilla, charging him with one count of being a felon in possession of ammunition, in violation of 18 U.S.C. § 922(g)(1).  

In addition to the 63-month prison term, Chief Judge Seeborg ordered Quintanilla to serve three years of supervised release to begin after his prison term is completed.  Chief Judge Seeborg also found that Quintanilla’s possession of the weapon and ammunition violated the terms of his release relating to his August 2021 conviction and revoked his release, imposing a sentence of 24 months’ imprisonment to run concurrently with the 63-month term.

Assistant U.S. Attorneys Aseem Padukone and Andrew Scoble prosecuted the case, with the assistance of Kevin Costello and Yenni Weinberg.  The prosecution is the result of an investigation by HSI.
 

OAKLAND – Christian Grajeda-Varela, a Honduran national who pleaded guilty to fentanyl trafficking and money laundering, was sentenced to 46 months in federal prison.  The sentence was handed down by the Hon. Haywood S. Gilliam, Jr., United States District Judge.

Grajeda-Varela, 25, was charged by indictment on Aug. 2, 2023, and superseding information on July 15, 2024.  He pleaded guilty on July 17, 2024 to distribution of 40 grams or more of fentanyl and to conspiracy to launder monetary instruments.

In his plea agreement, Grajeda-Varela admitted that he sold roughly 1.5 pounds of fentanyl in July 2023 to a drug dealer in the Tenderloin neighborhood of San Francisco.  Upon a search of his Oakland residence, federal agents found 109 grams of fentanyl, over six pounds of mannitol (a common mixing agent used to cut or dilute fentanyl), cocaine base, cocaine, and heroin.  Agents also found a kilogram press, cutting boards, and tools to cut drugs, supplies that Grajeda-Varela admitted using to dilute and assist with the distribution of drugs.

As described in court documents, multiple WhatsApp messages were found on Grajeda-Varela’s phone containing international wire transfer receipts sent from America Latina, a money service business in Oakland.  Grajeda-Varela admitted that, between March and August 2022, he agreed with someone he suspected was involved in the drug trade to commit money laundering by bringing large amounts of cash to America Latina.  Specifically, Grajeda-Varela brought over $235,000 in cash to America Latina for the business to wire to recipients in Mexico and Honduras in the form of roughly 125 international wires.  According to the plea agreement, each of these international wires was structured and transmitted in an amount below $3,000 to avoid mandatory customer information reporting requirements under federal law.

Grajeda-Varela admitted that he exchanged WhatsApp messages with a woman named “Griselda” who generally accepted the bulk cash he brought in and conducted the international wires for him at America Latina, and that receipts for wires America Latina sent between March and August 2022 were found on his phone as well as on the phone of Griselda Cancelada Liceaga, who owned America Latina.

Grajeda-Varela further admitted that he knew that the owners of America Latina were structuring the bulk cash into wires of less than $3,000 each that were sent under the names of uninvolved persons to make it appear that each wire was an unrelated family/friend remittance.

In a separately charged case, Griselda Cancelada Liceaga, 45, of Oakland, was sentenced to 16 months in federal prison.  Liceaga’s sentence was handed down by the Hon. Jeffrey S. White, Senior United States District Judge.

Liceaga was charged by criminal complaint on Aug. 30, 2022, and pleaded guilty to money laundering conspiracy on May 28, 2024.  According to her plea agreement, while at her money service business America Latina, Liceaga sent multiple international wire receipts via WhatsApp between March and August 2022 to an individual arrested and prosecuted for drug trafficking.  She further admitted to using the names of unrelated persons as the wire senders and did so with the intent to evade the $3,000 transaction reporting requirement under federal law.

According to her plea agreement, Liceaga was familiar with the reporting requirement because she had received anti-money laundering training from the national wire service companies whose wire services she used.  Liceaga further admitted that prior to opening America Latina, she had worked at another Oakland money service business, Rincon Musical, where she and her co-workers agreed to structure large cash amounts into wire transactions that were each less than $3,000 that they sent out under the names of unrelated persons.

“We are committed to working with our law enforcement partners to use all tools at our disposal to combat the drug trade in the Northern District of California and beyond,” said United States Attorney Ismail J. Ramsey. “Along with drug traffickers, individuals who engage in and enable the laundering of drug proceeds will be held accountable.”

“Dismantling the profitability of deadly drug trafficking in our communities makes our streets safer and is a core capability of IRS-CI Special Agents. These sentencings highlight the effectiveness of Organized Crime Drug Enforcement Task Force investigations and the relentlessness in which we pursue those perpetuating the lethal drug epidemic,” said IRS Criminal Investigation (IRS-CI) Oakland Field Office Acting Special Agent in Charge Michael Mosley. “Our Special Agents follow the money. When the money leads us to transnational criminal organizations, we build cases that take those criminals off the streets and puts them behind bars.”

“This decisive action, taken in collaboration with our law enforcement partners, disrupts the flow of dangerous drugs and eliminates the financial networks that make this crime possible,” said Federal Bureau of Investigation (FBI) Special Agent in Charge Robert Tripp.  “Those who choose to profit from poisoning our communities and endanger public safety will be held accountable. We remain resolute in our mission to dismantle these threats and ensure that justice is served.”

“The cartels would be out of business without drug distributors and money launderers. Christian Grajeda-Varela and Griselda Cancelada Liceaga blatantly violated the law to line their pockets with ill-gotten gains,” said Drug Enforcement Administration (DEA) Special Agent in Charge Bob P. Beris. “We will be relentless in our pursuit of those who put poison in our community and skirt the law by structuring payments of drug proceeds.”

The announcements were made by United States Attorney Ismail J. Ramsey, IRS-CI Oakland Field Office Acting Special Agent in Charge Michael Mosley, FBI Special Agent in Charge Robert Tripp, and DEA Special Agent in Charge Bob P. Beris.

These prosecutions are part of Organized Crime Drug Enforcement Task Force (OCDETF) investigations. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.

Assistant United States Attorneys Charles Bisesto and Daniel Pastor prosecuted these cases with assistance from Amanda Martinez and Andy Ding. The prosecution of Grajeda-Varela is the result of an investigation by the FBI and IRS-CI with assistance from the DEA and the Concord Police Department.  The prosecution of Cancelada Liceaga is the result of an investigation by IRS-CI and DEA with assistance from the Oakland Police Department.
 

SAN FRANCISCO – A federal grand jury has indicted Jessica Engle on charges that she embezzled from an Indian tribal organization and stole funds from a program receiving federal funds.

Engle, 42, of Gold Hill, Ore., was arrested on Oct. 2, 2024, and made an initial appearance in federal district court in Medford, Ore., that same day.  Engle is scheduled to appear before a magistrate judge in San Francisco on Oct. 16, 2024, to face the charges.

According to an indictment filed Sept. 25, 2024, and unsealed Oct. 3, 2024, Engle served as the Chief Executive Officer of the Yurok Telecommunications Corporation, a wholly owned subsidiary of the Yurok Tribe.  Between July 2021 and May 2022, Engle allegedly embezzled approximately $579,574 from the Yurok Tribe.  In the year preceding Engle’s alleged theft, the Yurok Tribe received over $10,000 in funding from the federal government.

The indictment charges Engle with one count of embezzlement from an Indian tribal organization, in violation of 18 U.S.C. § 1163, and one count of theft from programs receiving federal funds, in violation of 18 U.S.C. § 666.

An indictment merely alleges that crimes have been committed and all defendants are presumed innocent until proven guilty beyond a reasonable doubt.  If convicted, Engle faces a maximum statutory penalty of five years in prison for a violation of 18 U.S.C. § 1163 and 10 years in prison for a violation of 18 U.S.C. § 666, and a fine of $250,000 or twice the value of the property involved in the transactions per count.  However, any sentence following conviction would be imposed by the Court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.

The announcement was made by United States Attorney Ismail J. Ramsey and Federal Bureau of Investigation (FBI) Special Agent in Charge Robert Tripp.

Assistant U.S. Attorney Josiah Bournes is prosecuting this case with the assistance of Soana Katoa.  This prosecution is the result of an investigation by the FBI.  The U.S. Attorney’s Office and the FBI appreciate the assistance of the Yurok Tribal Police.
 

Jessica Engle Indictment

WASHINGTON – The Justice Department announced today the unsealing of a warrant authorizing the seizure of 41 internet domains used by Russian intelligence agents and their proxies to commit computer fraud and abuse in the United States. As an example of the Department’s commitment to public-private operational collaboration to disrupt such adversaries’ malicious cyber activities, as set forth in the National Cybersecurity Strategy, the Department acted concurrently with a Microsoft civil action to restrain 66 internet domains used by the same actors.

“Today’s seizure of 41 internet domains reflects the Justice Department’s cyber strategy in action – using all tools to disrupt and deter malicious, state-sponsored cyber actors,” said Deputy Attorney General Lisa Monaco. “The Russian government ran this scheme to steal Americans’ sensitive information, using seemingly legitimate email accounts to trick victims into revealing account credentials. With the continued support of our private sector partners, we will be relentless in exposing Russian actors and cybercriminals and depriving them of the tools of their illicit trade.”

“This seizure is part of a coordinated response with our private sector partners to dismantle the infrastructure that cyber espionage actors use to attack U.S. and international targets,” said U.S. Attorney Ismail J. Ramsey for the Northern District of California. “We thank all of our private-sector partners for their diligence in analyzing, publicizing, and combating the threat posed by these illicit state-coordinated actions in the Northern District of California, across the United States, and around the world.”

“This disruption exemplifies our ongoing efforts to expel Russian intelligence agents from the online infrastructure they have used to target individuals, businesses, and governments around the world,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division. “Working closely with private-sector partners such as Microsoft, the National Security Division uses the full reach of our authorities to confront the cyber-enabled threats of tomorrow from Russia and other adversaries.”

“Working in close collaboration with public and private sector partners—in this case through the execution of domain seizures — we remain in prime position to counter and defeat a broad range of cyber threats posed by adversaries,” said FBI Deputy Director Paul Abbate. “Our efforts to prevent the theft of information by state-sponsored criminal actors are relentless, and we will continue our work in this arena with partners who share our common goals.”

“This case underscores the importance of the FBI’s enduring partnerships with private sector companies, which allow for rapid information sharing and coordinated action. With these seizures, we’ve disrupted a sophisticated cyber threat aimed at compromising sensitive government intelligence and stealing valuable information,” said FBI Special Agent in Charge Robert Tripp. “Today’s success highlights the power of collaboration in safeguarding the United States against state-sponsored cybercrime.”

According to the partially unsealed affidavit filed in support of the government’s seizure warrant, the seized domains were used by hackers belonging to, or criminal proxies working for, the “Callisto Group,” an operational unit within Center 18 of the Russian Federal Security Service (the FSB), to commit violations of unauthorized access to a computer to obtain information from a department or agency of the United States, unauthorized access to a computer to obtain information from a protected computer, and causing damage to a protected computer. Callisto Group hackers used the seized domains in an ongoing and sophisticated spear-phishing campaign with the goal of gaining unauthorized access to, and steal valuable information from, the computers and email accounts of U.S. government and other victims.

In conjunction, Microsoft announced the filing of a civil action to seize 66 internet domains also used by Callisto Group actors. Microsoft Threat Intelligence tracks this group as “Star Blizzard” (formerly SEABORGIUM, also known as COLDRIVER). Between January 2023 and August 2024, Microsoft observed Star Blizzard target over 30 civil society entities and organizations – journalists, think tanks, and nongovernmental organizations (NGOs) – by deploying spear-phishing campaigns to exfiltrate sensitive information and interfere in their activities.

The government’s affidavit alleges the Callisto Group actors targeted, among others, United States-based companies, former employees of the United States Intelligence Community, former and current Department of Defense and Department of State employees, United States military defense contractors, and staff at the Department of Energy. In December 2023, the Department announced charges against two Callisto-affiliated actors, Ruslan Aleksandrovich Peretyatko (Перетятько Руслан Александрович), an officer in FSB Center 18, and Andrey Stanislavovich Korinets (Коринец Андрей Станиславович). The indictment charged the defendants with a campaign to hack into computer networks in the United States, the United Kingdom, other North Atlantic Treaty Organization member countries, and Ukraine, all on behalf of the Russian government.

The FBI San Francisco Field Office is investigating the case.

The U.S. Attorney’s Office for the Northern District of California and the Justice Department’s National Security Cyber Section of the National Security Division are prosecuting the case.

The case is docketed at Application by the United States for a Seizure Warrant for 41 Domain Names For Investigation of 18 U.S.C. § 1956(a)(2)(A) and Other Offenses, No. 4-24-71375 (N.D. Cal. Sept. 16, 2024).

An affidavit in support of a seizure warrant and an indictment are merely allegations. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
 

The Justice Department announced today the unsealing of a warrant authorizing the seizure of 41 internet domains used by Russian intelligence agents and their proxies to commit computer fraud and abuse in the United States. As an example of the Department’s commitment to public-private operational collaboration to disrupt such adversaries’ malicious cyber activities, as set forth in the National Cybersecurity Strategy, the Department acted concurrently with a Microsoft civil action to restrain 66 internet domains used by the same actors.

“Today’s seizure of 41 internet domains reflects the Justice Department’s cyber strategy in action – using all tools to disrupt and deter malicious, state-sponsored cyber actors,” said Deputy Attorney General Lisa Monaco. “The Russian government ran this scheme to steal Americans’ sensitive information, using seemingly legitimate email accounts to trick victims into revealing account credentials. With the continued support of our private sector partners, we will be relentless in exposing Russian actors and cybercriminals and depriving them of the tools of their illicit trade.”

“This disruption exemplifies our ongoing efforts to expel Russian intelligence agents from the online infrastructure they have used to target individuals, businesses, and governments around the world,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division. “Working closely with private-sector partners such as Microsoft, the National Security Division uses the full reach of our authorities to confront the cyber-enabled threats of tomorrow from Russia and other adversaries.”

"Working in close collaboration with public and private sector partners—in this case through the execution of domain seizures — we remain in prime position to counter and defeat a broad range of cyber threats posed by adversaries,” said FBI Deputy Director Paul Abbate. “Our efforts to prevent the theft of information by state-sponsored criminal actors are relentless, and we will continue our work in this arena with partners who share our common goals.”

“This seizure is part of a coordinated response with our private sector partners to dismantle the infrastructure that cyber espionage actors use to attack U.S. and international targets,” said U.S. Attorney Ismail J. Ramsey for the Northern District of California. “We thank all of our private-sector partners for their diligence in analyzing, publicizing, and combating the threat posed by these illicit state-coordinated actions in the Northern District of California, across the United States, and around the world.”

The domain names are identified below:

According to the partially unsealed affidavit filed in support of the government’s seizure warrant, the seized domains were used by hackers belonging to, or criminal proxies working for, the “Callisto Group,” an operational unit within Center 18 of the Russian Federal Security Service (the FSB), to commit violations of unauthorized access to a computer to obtain information from a department or agency of the United States, unauthorized access to a computer to obtain information from a protected computer, and causing damage to a protected computer. Callisto Group hackers used the seized domains in an ongoing and sophisticated spear-phishing campaign with the goal of gaining unauthorized access to, and steal valuable information from, the computers and email accounts of U.S. government and other victims.

In conjunction, Microsoft announced the filing of a civil action to seize 66 internet domains also used by Callisto Group actors. Microsoft Threat Intelligence tracks this group as “Star Blizzard” (formerly SEABORGIUM, also known as COLDRIVER). Between January 2023 and August 2024, Microsoft observed Star Blizzard target over 30 civil society entities and organizations – journalists, think tanks, and nongovernmental organizations (NGOs) – by deploying spear-phishing campaigns to exfiltrate sensitive information and interfere in their activities.

The government’s affidavit alleges the Callisto Group actors targeted, among others, U.S.-based companies, former employees of the U.S. Intelligence Community, former and current Department of Defense and Department of State employees, U.S. military defense contractors, and staff at the Department of Energy. In December 2023, the Department announced charges against two Callisto-affiliated actors, Ruslan Aleksandrovich Peretyatko (Перетятько Руслан Александрович), an officer in FSB Center 18, and Andrey Stanislavovich Korinets (Коринец Андрей Станиславович). The indictment charged the defendants with a campaign to hack into computer networks in the United States, the United Kingdom, other North Atlantic Treaty Organization member countries, and Ukraine, all on behalf of the Russian government.

The FBI San Francisco Field Office is investigating the case.

The U.S. Attorney’s Office for the Northern District of California and the Justice Department’s National Security Cyber Section of the National Security Division are prosecuting the case.

The case is docketed at Application by the United States for a Seizure Warrant for 41 Domain Names For Investigation of 18 U.S.C. § 1956(a)(2)(A) and Other Offenses, No. 4-24-71375 (N.D. Cal. Sept. 16, 2024).

An affidavit in support of a seizure warrant and an indictment are merely allegations. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.