Southern District of California

For Further Information, Contact: Assistant U. S. Attorneys Peter Ko (619) 546-7359 and Shane Harrigan (619) 546-6981

 

John T. Earnest of Rancho Penasquitos pleaded guilty in federal court today to a 113-count hate crimes indictment, admitting that he set fire to an Escondido mosque and opened fire in a Poway synagogue because he wanted to kill Muslims and Jews. The religiously- and racially-motivated attacks resulted in the murder of one person and the attempted murders of 53 others.

Earnest was indicted by a federal grand jury in May of 2019 on civil rights, hate crime, and firearm charges in connection with the murder of Lori Gilbert Kaye and the attempted murder of 53 others at the Chabad of Poway on April 27, and the March 24 arson of the Dar-ul-Arqam Mosque in Escondido.

“This nation stands with Lori Gilbert Kaye’s family and the survivors of these unspeakable acts of terror,” said Acting U.S. Attorney Randy S. Grossman. “We emphatically reject the defendant’s hate, racism and prejudice, and we hope the conclusion of this case brings some measure of comfort to all those affected by his heinous crimes.”

“The defendant entered a synagogue with the intent to kill all those inside because of his hatred for Jewish people, and days earlier used fire in an attempt to destroy another sacred house of worship because of his hatred for Muslims,” said Deputy Attorney General Lisa Monaco. “There is no place in American society for this type of hate-fueled violence. The Department of Justice will enforce hate crimes and anti-discrimination laws to the fullest extent of the law and will hold perpetrators accountable for these crimes, which inflict harm not only on individual victims, but on entire communities.”

“This guilty plea will hopefully bring closure and start the healing process to all those impacted by the defendant’s cowardly acts nearly two-and-a-half years ago,” said FBI Special Agent in Charge Suzanne Turner. “The FBI stands steadfast with all of our law enforcement partners throughout the county to root out and defeat hate; It has no place in a civilized society.” 

“The tragic shooting at the Chabad of Poway was shocking for our community,” said ATF Los Angeles Field Division Special Agent in Charge Monique Villegas. “Our condolences go out to the victims and their families who were affected by this horrific act. ATF remains committed to bringing individuals responsible for such acts to justice to ensure everyone can worship safely.”

According to the plea agreement and other court documents, after several weeks of planning, on the morning of April 27, 2019, Earnest drove to the Chabad of Poway synagogue, where members of the congregation were gathered for religious worship. Earnest entered the building armed with a Smith and Wesson M&P 15 assault rifle that was fully loaded with a 10-round magazine. He wore a chest rig which contained five additional magazines, each loaded with ten rounds of ammunition. Earnest opened fire, killing one person and injuring three other members of the congregation, including a then 8-year-old child. After Earnest emptied his initial magazine, several congregants rushed at Earnest. Earnest fled in his car and, shortly after, called 911 and confessed that he had “just shot up a synagogue.” Earnest was apprehended by local law enforcement who found the rifle and additional ammunition in his car.

Investigators found a manifesto written by Earnest and posted on the Internet shortly before the attack. In the manifesto, Earnest made many anti-Semitic and anti-Muslim statements, including “I can only kill so many Jews” and “I only wish I killed more.” Earnest wrote that he was inspired by the Tree of Life synagogue shooting in Pittsburgh, Pennsylvania, and the shootings at two mosques in New Zealand.

Earnest also admitted that on March 24, 2019, he attempted to set fire to the Dar-ul-Arqam mosque in Escondido, California because of his hatred of Muslims and the religious character of the building. Seven missionaries were asleep in the mosque, but no one was injured.

According to the terms of the plea agreement, the United States and Earnest will jointly recommend a sentence of life in prison plus 30 years.

The case is being prosecuted by Assistant U.S. Attorneys Shane Harrigan and Peter Ko, along with Deputy Chief Rose Gibson of the Civil Rights Division. The FBI, ATF and San Diego Sheriff’s Office conducted the investigation. Grossman thanked the prosecutors and law enforcement agencies for working hard to achieve justice in this case.
 

DEFENDANT                                               Case Number 19cr1850                                           

John T. Earnest                                               Age: 22           San Diego

SUMMARY OF CHARGES

Counts 1 - 54

Obstruction of Free Exercise of Religious Beliefs Resulting in Death and Bodily Injury; and Involving Attempt to Kill, Use of a Dangerous Weapon - 18 U.S.C. §§ 247(a)(2), 247(d)(1) and 247(d)(3)

Maximum penalty: Life in prison or death and $250,000 fine

 

Counts 55-108

Hate Crime Acts – 18 U.S.C. § 249(a)(1)(B)(i)(ii)

Maximum penalty: Life in prison and $250,000 fine

 

Count 109

Damage to Religious Real Property Involving Use of a Dangerous Weapon or Fire – 18 U.S.C. §§ 247(a)(1), 247 (d)(3) 

Maximum penalty: Twenty years in prison and $250,000 fine

 

Count 110

Using and Carrying a Firearm During and In Relation to a Crime of Violence, Resulting in Death – Title 18, U.S.C., Sec. and 924(c) and 924(j)

Maximum penalty: Life in prison or death and $250,000 fine

 

Counts 111-113

Using, Carrying, and Discharging a Firearm During and In Relation to a Crime of Violence – Title 18, U.S.C., Sec. and 924(c)

Maximum penalty: Life in prison and $250,000 fine, mandatory minimum 10 years in prison

 

AGENCIES

Federal Bureau of Investigation

San Diego County Sheriff’s Department

San Diego Police Department

Bureau of Alcohol, Tobacco, Firearms and Explosives

San Diego County District Attorney’s Office

Escondido Police Department

Director of Media Relations Kelly Thornton (619) 546-9726 or Kelly.Thornton@usdoj.gov

NEWS RELEASE SUMMARY – September 8, 2021

SAN DIEGO – Matthew Taylor Coleman of Santa Barbara was indicted by a federal grand jury today for taking his two young children to Rosarito, Mexico and killing them.

Coleman, 40, allegedly killed the 2-year-old boy and 10-month-old girl on August 9, 2021. The indictment filed today charges Coleman with two counts of foreign first-degree murder of United States nationals. By law, the charges are eligible for the death penalty. The Attorney General will decide whether to seek the death penalty at a later date.

“There are no words to describe the profound grief that envelops an entire community when a child is murdered,” said Acting U.S. Attorney Randy Grossman. “The Department of Justice is determined to achieve justice for these victims and their loved ones.”

“The murder of a child is difficult to understand under any circumstances,” said Kristi K. Johnson, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “I’m proud of the quick investigative efforts by FBI Agents, the Santa Barbara Police Department, U.S. Customs and Border Protection and our Mexican counterparts which led to the arrest of Mr. Coleman as he entered the United States, and I look forward to delivering justice for the young victims and their family.” 

Coleman previously was charged with the same crimes in a federal complaint filed in Los Angeles. Prosecutors intend to dismiss that complaint. Coleman is expected to make his initial court appearance on the indictment tomorrow in United States District Court in downtown Los Angeles. He will appear in United States District Court in San Diego, where the case will be prosecuted, at a date to be determined.

An affidavit in support of the criminal complaint outlined the investigation that started when Coleman’s wife contacted the Santa Barbara Police to report that her husband had left the couple’s residence in a Sprinter van, and she did not know where they had gone.

The next day, Coleman’s wife filed a missing persons report. Using a computer application, Coleman’s wife was able to determine that Coleman’s phone had been in Rosarito on Sunday afternoon, the affidavit states.

According to the affidavit, the same phone-locating service was used on Monday and showed that Coleman’s phone was near the San Ysidro Port of Entry at the U.S.-Mexico border, according to the affidavit. The FBI dispatched colleagues in San Diego to contact Coleman, who entered the United States in the Sprinter van without the children. When the children were not found, FBI agents contacted law enforcement officials in Rosarito and learned that Mexican authorities that morning had recovered the bodies of two children matching the description of Coleman’s children.

After further investigation, FBI agents took Coleman into custody at the San Ysidro Port of Entry.

The FBI, U.S. Customs and Border Protection and the Santa Barbara Police Department are investigating this matter. The Santa Barbara County District Attorney’s Office provided substantial assistance throughout the investigation.

The Department of Justice gratefully acknowledges the Government of Mexico, to include the Fiscalía General del Estado de Baja California, and the Secretaría de Seguridad Pública Municipal de Rosarito, for their extraordinary efforts, support, and cooperation during the investigation.

After reviewing the case, the United States determined that the most appropriate venue was in the Southern District of California. Assistant U.S. Attorney Peter Ko of the U.S. Attorney’s Office for the Southern District of California and Special Assistant U.S. Attorneys Kevin Butler, Joanna Curtis, and Billy Joe McLain of the U.S. Attorney’s Office for the Central District of California are prosecuting this case.

DEFENDANT                                               CASE NUMBER 21CR2627

Matthew Taylor Coleman                               Age: 40                       Santa Barbara, California

SUMMARY OF CHARGES

Title 18, United States Code, Section 1119 – Foreign First-Degree Murder of U.S. Nationals

Maximum Penalty – Death or life and a fine of up to $250,000

AGENCIES

The Federal Bureau of Investigation

United States Customs and Border Protection

Santa Barbara Police Department

*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.

SAN DIEGO – U.S. Marine Corps Colonel Enrico DeGuzman pleaded guilty to a bribery charge today, admitting that he accepted more than $67,000 in extravagant meals, drinks, entertainment and hotel stays in Hong Kong, Singapore, and Tokyo from foreign defense contractor Leonard Glenn Francis.

DeGuzman admitted that in return for this and other things of value, he corruptly used his official position to assist Francis, the owner and CEO of Singapore-based Glenn Defense Marine Asia, a ship husbanding company that serviced U.S. Navy ships in the Asia Pacific region.  DeGuzman admitted that he endeavored to influence Navy ships into ports serviced by GDMA; he shared confidential Navy information with Francis in order to help GDMA; and he helped with evaluating and indoctrinating potential new Navy members into Francis’s cabal.

In one instance, DeGuzman joined Francis and others for a $40,000 meal that featured foie gras terrine, duck leg confit, ox-tail soup, and roasted Chilean sea bass, paired with expensive wine and champagne, followed by digestifs, cigars and overnights at the Shangri La - all at Francis’s expense.

DeGuzman was one of nine members of the U.S. Navy’s Seventh Fleet indicted by a federal grand jury in March 2017 for conspiring with Francis and for receiving bribes.  DeGuzman is the second of the Seventh Fleet defendants to plead guilty. The trial of the remaining defendants was scheduled to begin November 1, 2021, but yesterday it was postponed until February 7, 2022.  The remaining defendants - who are accused of trading military secrets and substantial influence for sex parties with prostitutes and luxurious dinners and travel - include U.S. Navy Rear Admiral Bruce Loveless; Captains David Newland, James Dolan, Donald Hornbeck and David Lausman; Commander Stephen Shedd; and Commander Mario Herrera.

The overarching fraud and bribery case has resulted in federal criminal charges against 34 U.S. Navy officials, defense contractors and the GDMA corporation. So far, 27 of those have pleaded guilty, admitting collectively that they accepted millions of dollars in luxury travel and accommodations, meals, or services of prostitutes, among many other things of value, from Francis in exchange for helping GDMA win and maintain contracts and overbill the Navy by over $35 million.

DeGuzman served on the Seventh Fleet Staff as the Fleet Marine Officer from July 2004 to July 2007.  In this role, DeGuzman was responsible for coordinating the mission of the U.S. Marine Corps within the Seventh Fleet area of responsibility.  From July 2007 to January 1, 2011, DeGuzman served as the Assistant Chief of Staff of Operations for U.S. Marine Corps Forces, Pacific, and thereafter, DeGuzman served in a civilian capacity as the Deputy Chief of Staff of Operations for U.S. Marine Corps Forces, Pacific.

The U.S. Navy’s Seventh Fleet represents a vital piece of the United States military’s projection of power as well as American foreign policy and national security. The largest numbered fleet in the U.S. Navy, the Seventh Fleet is comprised of 60-70 ships, 200-300 aircraft and approximately 40,000 Sailors and Marines. The Seventh Fleet is responsible for U.S. Navy ships and subordinate commands that operate in the Western Pacific throughout Southeast Asia, Pacific Islands, Australia, and Russia and the Indian Ocean territories, as well ships and personnel from other U.S. Navy Fleets that enter the Seventh Fleet’s area of responsibility.

“With every extravagant meal, Enrico DeGuzman violated his duty to serve the United States with honor and integrity,” said Acting U.S. Attorney Randy Grossman. “Today those choices have caught up to him, and he has been held accountable.” Grossman commended the federal prosecutors and agents who diligently pursued this case.

“Mr. DeGuzman knowingly misused his position of trust as a senior U.S. Marine Corps officer to actively work with, and advocate for, a corrupt U.S. Navy contractor, while expecting and receiving lavish gifts in return, all at the expense of the U.S. Navy and the national security interests of the United States,” said Kelly P. Mayo, the Director of the Department of Defense Office of Inspector General, Defense Criminal Investigative Service (DCIS).   “As this case underscores, DCIS will work tirelessly with its partners to root out corruption within the Department of Defense and its components in order to maintain the trust, faith, and precious resources of the American taxpayer.”

“Colonel DeGuzman put his personal interests ahead of protecting the nation,” said NCIS Director Omar Lopez.  “NCIS and our law enforcement partners will continue to aggressively pursue any act of bribery and corruption involving Mr. Francis and GDMA or otherwise as these reprehensible acts diminish the operational readiness of the fleet and warfighter superiority of the USMC and U.S. Navy.”

According to his plea agreement, DeGuzman admitted to receiving the following bribes from Francis:

• On February 17, 2006, during the U.S.S. Blue Ridge's port visit to Hong Kong, DeGuzman and others dined and drank at Francis’s expense at the Petrus Restaurant at a cost of more than $20,000. To conceal and cover up their corrupt relationship, Francis created fraudulent receipts for the Petrus dinner that DeGuzman knew represented a small fraction of the actual cost of the dinner. While in Hong Kong, DeGuzman and others also stayed at the Shangri-La Hotel paid for, in part, by Francis.
• On March 9, 2006, during the U.S.S. Blue Ridge’s port visit to Singapore, DeGuzman and others dined with Francis at the Jaan Restaurant in Singapore. Prior to dinner, DeGuzman and others enjoyed entertainment and cocktails on the exclusive rooftop helipad. At dinner, enjoyed foie gras terrine, duck leg confit, ox-tail soup, and roasted Chilean sea bass, paired with expensive wine and champagne, followed by digestifs and cigars.  The estimated cost to Francis was $40,000.
• On September 9, 2006, DeGuzman and others dined at Francis's expense at the New York Grill in Tokyo, Japan, and stayed at Francis's expense at the Park Hyatt Hotel, all at a total cost to Francis of approximately $30,000.
• During the U.S.S. Blue Ridge's port visit to Singapore from about February 22-27, 2007, Francis paid for the hotel expenses for DeGuzman and others at the Shangri-La Hotel, Singapore at a total cost to Francis of approximately $50,000. As part of this port visit, DeGuzman and others dined with Francis at Francis's expense on multiple occasions, including at the Blu Restaurant within the Shangri-La Hotel, and at the Jaan Restaurant atop the Shangri-La Hotel.
• On March 24, 2007, DeGuzman and others attended a multi-course dinner hosted by Francis at the Oak Door in Tokyo, Japan, during which was served, at Francis's expense, foie gras, Lobster Thermidor, and Sendai Tenderloin, and for dessert, “Liberté Sauvage,” the winning cake of the 10th Coupe du Monde de la Patisserie 2007, followed by cognac and cigars. During the event, the attendees posed for a photograph wearing custom-made GDMA neckties.

 

In a moment of candor encapsulating these corrupt relationships, just before DeGuzman departed Seventh Fleet assignment, he warned Francis in an email dated July 7 2007, “[U]nfortunately, I don't think I'll be able to influence people [in my next assignment] like I did there at 7th Fleet.”

DEFENDANT                                                Case Number: 17-CR-0623-JLS                            

Enrico DeGuzman                                          Age: 63                     Las Vegas, Nevada

SUMMARY OF CHARGES

Bribery of a Public Official, in violation of 18 U.S.C. § 201(b)(2)

Maximum Penalty: Fifteen years in prison, $250,000 fine

INVESTIGATING AGENCIES

Defense Criminal Investigative Service

Naval Criminal Investigative Service

Defense Contract Audit Agency

 

Assistant U.S. Attorney Dylan M. Aste (619) 546-7621

NEWS RELEASE SUMMARY – September 2, 2021

SAN DIEGO – San Diego area pain clinic doctor Brenton Wynn, M.D., has paid $200,000 to resolve allegations that he illegally prescribed opioids and other dangerous drugs to his patients, according to a settlement agreement signed by Dr. Wynn and the United States.  The settlement stems from the United States’ continued efforts to combat the opioid epidemic on all fronts, including this investigation of whether Dr. Wynn illegally prescribed opioids to his patients in violation of the Controlled Substances Act.

The Controlled Substances Act provides that doctors may write prescriptions for opioids only for a legitimate medical purpose while acting in the usual course of their professional practice. The United States alleged that Dr. Wynn wrote opioid prescriptions to patients without a legitimate medical purpose and/or outside the usual course of his professional practice for more than five years.  Dr. Wynn wrote prescriptions for fentanyl, oxycodone, hydromorphone, methadone, oxymorphone, and morphine. 

The United States further alleged that Dr. Wynn prescribed at the same time a dangerous combination of opioids and benzodiazepines such as Xanax and Valium.  Of even more concern, Dr. Wynn allegedly prescribed to some patients a combination of at least one opioid, one benzodiazepine and one muscle relaxant such as Soma.  Drug abusers colloquially refer to the opioid, benzodiazepine, and muscle relaxant combination as the “Trinity” or “Holy Trinity” because of its rapid euphoric effects.  These drug combinations are known to significantly increase the risk of addiction, abuse, and overdose.

The investigation exemplifies the Department of Justice’s willingness to investigate doctors who may be overprescribing opioids while treating patients who suffer painful conditions.  Such doctors must still only prescribe opioids in accordance with recognized and accepted medical standards.  Indeed, public health experts have long warned health care providers that overdose risk is elevated in patients receiving medically prescribed opioids, particularly those receiving high dosages.  Doctors and other health care providers should carefully track the potency of opioids prescribed to patients by noting the Morphine Milligram Equivalent (MME, also commonly referred to as Morphine Equivalent Dose or MED) of prescribed opioids.  Among other things, tracking MMEs advances better practices for pain management by reinforcing the need for providers to consider alternatives to using high-dosage opioids to treat pain and to appropriately justify decisions to use opioids at dosages that place patients at high risk of addiction, abuse, and overdose.  Furthermore, prescribing high dosages increases the risk that patients will divert opioids.

Based on its investigation, the United States alleged that Dr. Wynn prescribed large quantities of opioids to his patients that reached high daily MME levels, often even exceeding 120 MME.  The United States further alleged that Dr. Wynn sometimes continued to prescribe dangerous opioids even when his patients’ urine drug test results showed that they were not taking the drugs Dr. Wynn prescribed. 

“Even in our climate of heightened awareness of the dangers of opioids, some doctors continue to overprescribe opioids,” said Acting U.S. Attorney Randy Grossman.  “This office will pursue those overprescribing doctors and bring them to justice.  And as we have consistently demonstrated, we will continue to use all available tools to combat the serious opioid epidemic.” Grossman commended Assistant U.S. Attorney Dylan Aste and the Drug Enforcement Administration for their work on the investigation.

The DEA has a pending administrative action against Dr. Wynn (Docket No. 20-10) to revoke his ability to prescribe opioids and other controlled substances.

“While the vast amount of medical professionals prescribe opioids legitimately and are meeting their patients’ standard of care, DEA will vigorously pursue information from the public about the doctors who are not,” said DEA Special Agent in Charge John W. Callery. “DEA will always protect the public from doctors who put their patients in harm’s way.”

To report a tip directly to a DEA representative regarding medical personnel writing suspicious opioid prescriptions and pharmacies dispensing large amounts of opioids, call (571) 324-6499, or visit the DEA’s website (https://www.deadiversion.usdoj.gov/) and click on “Report Illicit Pharmaceutical Activities.”

Assistant U.S. Attorney Dylan M. Aste of the U.S. Attorney’s Office for the Southern District of California handled this matter along with DEA investigators.

The claims resolved by this settlement are allegations only and there has been no determination of liability.

Assistant U. S. Attorneys Timothy Coughlin and Michael Kaplan (619) 546-6768/7927

NEWS RELEASE SUMMARY – September 1, 2021

SAN DIEGO – Kyle Anthony Shephard was sentenced in federal court today to 168 months in prison for supplying the fentanyl that led to the fatal overdose of a 25-year-old U.S. Marine corporal stationed at Camp Pendleton.

Shephard pleaded guilty in March, admitting that on the evening of January 27, 2017, he met with the Marine in Escondido and sold him four pills containing fentanyl that caused his death later that night or early the next morning. On January 28, 2017, the young man’s body was discovered on Camp Pendleton in his barracks room by fellow Marines who became concerned when he failed to respond to phone calls and knocks on his door.

The initial investigation was conducted by Naval Criminal Investigative Service (NCIS) agents, who continued to pursue leads for almost a year while the case remained unsolved. Shephard was arrested on December 13, 2017 by members of the San Diego Sheriff’s Department while executing a search warrant at a local casino. Found in Shephard’s hotel room were 1,362 pills containing fentanyl, thousands in cash, packaging material, and four cell phones. A co-conspirator arrested earlier in the evening admitted to law enforcement that she and Shephard were aware they were dealing one of the “deadliest drugs.”

The Marine’s mother attended the sentencing and asked a friend to read her prepared statement: “On January 29, 2017, we received the dreaded knock at the door, in the middle of the night.  The Marines came to inform us that (her son) was found unresponsive in his barracks. I now suffer with PTSD, and when I hear anyone at my door, it’s a trigger and I automatically panic with my heart dropping into the ground. I cannot put into words how (her son’s) death destroyed our family. Our family is forever changed. Nothing is, or will ever be, the same. I miss (my son) with every cell and fiber of my being. The pain is unimaginable and excruciating.”

The mother said that her son “joined the Marines when he was 21 years old. He wanted to serve our country. He chose the Marines because he wanted to take the toughest and most challenging route. His desire was to join the Infantry Division to be on the front lines.”

She noted that he “had a true passion for animals. He was signed up for a trip to Africa when he finished his tour with the Marines, to protect wildlife from poachers. He was only six months away from completing his four years. After Africa he wanted to go to Veterinary School.”

At today’s sentencing hearing, U.S. District Judge Cynthia A. Bashant said, “Drug traffickers never consider the impact of their actions on families. Drug traffickers destroy lives even when it doesn’t result in death.”  Judge Bashant noted that she wished a statement like the one made by the Marine’s mother could be made at every sentencing to make it clear the devastating impact drug trafficking has on families.   

Acting U.S. Attorney Randy Grossman said: “Another young life has been lost and a family destroyed because of fentanyl. Drug dealers who know their actions could have this outcome, and yet they peddle their poison anyway, must pay a stiff price. We will continue to aggressively pursue all those up the chain of distribution in these cases to ensure justice is served.” Grossman had high praise for prosecutors Timothy Coughlin and Michael Kaplan, as well as San Diego Sheriff’s Department detectives and NCIS agents who pursued this investigation and prosecution for more than four years.

For those who suffer from addiction, please know there is help. Call the Crisis line at 888-724-7240; it’s always open.

DEFENDANT                                               Case Number 18cr5574-BAS

Kyle Anthony Shephard                                 Age: 29                       Escondido, California

SUMMARY OF CHARGES

Conspiracy to Possess with Intent to Distribute a Controlled Substance -Fentanyl – Title 21 U.S.C. Section 841(a)(1) and 846

Maximum Penalties – Twenty years in prison,  at least four years of supervised release and $1 million fine.

INVESTIGATING AGENCIES

Naval Criminal Investigative Services

San Diego County Sheriff’s Department

Assistant U. S. Attorneys Daniel C. Silva, Mark W. Pletcher, Lisa Sanniti and Carl Brooker

NEWS RELEASE SUMMARY—September 1, 2021

SAN DIEGO—Glenn Arcaro of Los Angeles pleaded guilty today in federal court for his participation in a massive conspiracy involving BitConnect, a cryptocurrency investment scheme, which defrauded investors from the United States and abroad of over $2 billion. The BitConnect scheme is believed to be the largest cryptocurrency fraud ever charged criminally.

As admitted in documents entered today before U.S. Magistrate Judge Mitchell D. Dembin, Arcaro conspired with others to exploit investor interest in cryptocurrency by fraudulently marketing BitConnect’s proprietary coin offering and digital currency exchange as a lucrative investment. 

Arcaro further admitted that he and others conspired to mislead investors about BitConnect’s purported proprietary technology, known as the “BitConnect Trading Bot” and “Volatility Software,” as being able to generate substantial profits and guaranteed returns by using investors’ money to trade on the volatility of cryptocurrency exchange markets. In truth, BitConnect operated a textbook Ponzi scheme by paying earlier BitConnect investors with money from later investors. 

“Arcaro and his confidantes preyed on investor interest in cryptocurrency. As a result, a staggering number of individuals lost an enormous amount of money,” said Acting U.S. Attorney Randy S. Grossman of the Southern District of California. “The Department of Justice will continue to protect the investing public and scrutinize the burgeoning cryptocurrency industry. To those who would be the next in line to defraud the investing public, let this action by the Department of Justice stand as a stark cautionary tale. To the investing public, let this also serve as a cautionary tale to safeguard your money and invest it wisely.”

It was through the use of social media, Arcaro acknowledged in his plea agreement, that he and others made materially false and misleading statements, while concealing material facts, all to persuade investors that BitConnect was a lucrative investment. During the scheme, Arcaro posted videos that mocked those who questioned whether BitConnect had a Trading Bot and Volatility Software, doubted the true identity of BitConnect’s owner, and complained about losing their money in BitConnect.

According to the documents filed today, Arcaro sat atop a large network of promoters in North America, forming a pyramid scheme known as the BitConnect Referral Program. Arcaro earned as much as 15 percent of every investment into another part of the scheme—the BitConnect “Lending Program”—either from investors he recruited directly or those recruited by others beneath Arcaro in the pyramid.  Arcaro further received portions of all investments from a concealed “slush” fund.

“Arcaro has accepted responsibility for his actions of defrauding thousands of individuals worldwide to invest in BitConnect,” said Special Agent in Charge Eric Smith of the FBI’s Cleveland Field Office. “He lined his pockets with millions of dollars, money from victims that believed their funds were being invested into a new cryptocurrency with a high rate of return. Those choosing to engage in financial criminal deception should know the FBI will not stop until all fraudsters are identified and held accountable.”

“Arcaro capitalized on the emergence of cryptocurrency markets, enticing innocent investors worldwide to get in early by promising them guaranteed returns, and exploiting the internet and social media to reach a larger pool of victims with greater ease and speed,” said Special Agent in Charge Ryan L. Korner of the IRS Criminal Investigation’s (IRS-CI) Los Angeles Field Office. “To conceal and further their scheme, Arcaro and his accomplices circumvented reporting regulations by the SEC and FinCEN, U.S. agencies that were created to protect investors and safeguard our financial systems. IRS-CI will pursue and root out these scams to protect investors and bring these financial fraudsters to justice.”

Arcaro admitted that he earned no less than $24 million from the BitConnect fraud conspiracy, all of which, according to court documents, he must repay to investors.

Acting U.S. Attorney Randy S. Grossman thanked the FBI’s Cleveland Field Office, IRS Criminal Investigation and law enforcement partners in India, Slovenia, and around the world for their efforts now and in the future, who assisted, and continue assist on this investigation. Grossman also thanked Assistant U.S. Attorneys Daniel C. Silva, Mark W. Pletcher, Lisa Sanniti, and Carl Brooker and Trial Attorney Kevin Lowell of the Criminal Division’s Fraud Section who are handling this investigation. The Criminal Division’s Office of International Affairs provided significant assistance in this matter.

In a parallel action, the U.S. Securities and Exchange Commission today announced civil charges against Arcaro and 3 others in connection with the same conduct.

Sentencing is scheduled to occur on November 15, 2021 at 9:30 a.m. before U.S. District Judge Todd W. Robinson.

If you believe you are a victim of this fraud, please contact the FBI at bccinvestor@fbi.gov.

DEFENDANT                                               Case Number 21CR2542-TWR                               

Glenn Arcaro                                                  Los Angeles, CA                    Age: 44

SUMMARY OF CHARGES

Conspiracy to Commit Wire Fraud—Title 18, U.S.C., Section 1349

Criminal Forfeiture—Title 18, U.S.C., Section 982

Maximum penalty: Twenty years in prison, $250,000 fine or twice the gross gain or loss from the offense, whichever is greater; forfeiture and restitution

AGENCIES

FBI

IRS Criminal Investigation

*The charges and allegations contained in an indictment or information are merely accusations, and the defendants are considered innocent unless and until proven guilty.

Assistant U. S. Attorneys Larry Casper, Dylan Aste and Cindy Cipriani (619) 546-9608

NEWS RELEASE SUMMARY – August 31, 2021

SAN DIEGO -- On International Overdose Awareness Day, an annual commemoration designed to raise awareness of overdose prevention and reduce the stigma of drug-related deaths, Acting U.S. Attorney Randy Grossman again warned the San Diego community about the serious fentanyl crisis and advocated an “all of society” approach to countering overdoses.

“We are losing far too many lives to fentanyl, and the age of victims is getting younger, compounding the tragedy,” Grossman said.  “Just this past weekend, a San Diego teenager died due to a suspected fentanyl overdose from a counterfeit pill. The public needs to realize that there is no such thing as a ’safe’ street drug -- just one pill can kill.”

Grossman noted that the U.S. Attorney’s Office and the San Diego County District Attorney’s Office are working closely with the Medical Examiner’s Office and law enforcement partners on overdose cases to trace the origin of deadly drugs and build cases against suppliers. Under federal law, sellers and suppliers of drugs that cause death or serious bodily injury face a stiff penalty -- a 20-year mandatory minimum sentence.  The U.S. Attorney’s Office has charged approximately 30 defendants in fentanyl overdose death cases to date.

Grossman emphasized that “federal prosecutors are leaving no stone unturned to hold peddlers of fentanyl accountable. Tomorrow, Kyle Anthony Shephard will be sentenced for supplying the fentanyl that caused the fatal overdose of a 25-year-old United States Marine. On Friday, August 27, a federal jury returned a verdict -- the first in a mandatory minimum case involving counterfeit pills -- that will result in a 20-year sentence for Jahvaris Lamoun Springfield, who sold a 26-year-old veteran the fentanyl pills that resulted in his death.

“These overdose prosecutions seek to accomplish three goals: Deter the distribution of illegal drugs, send a clear message that traffickers of deadly poison will face serious repercussions, and provide a measure of closure and justice to those faced with devastating personal loss,” Grossman said.

Experts report that fentanyl is 50-100 times more powerful than morphine and so dangerous that in its purest form, even a very small amount can be deadly. San Diego County officials report that fentanyl overdose deaths surged during the pandemic and are expected to reach as high as 700 this year, a staggering increase over 2019, when 152 individuals died from fentanyl overdoses; in 2020, the 2019 number more than tripled to 461.

Grossman emphasized that, in the face of this crisis, “law enforcement is just one part of the solution.  We need an all of society approach.  As a community, we must consider ways that we can all play a role in furthering the public understanding that substance abuse disorder is a disease that warrants treatment, resources, and positive collective action.”

In addition to prosecuting opioid dealers and smugglers, the U.S. Attorney's Office raises awareness of harm reduction, prevention and education efforts, through Opioid Coordinators Larry Casper and Dylan Aste, and Outreach Director Cindy Cipriani, who Co-Chairs the San Diego Prescription Drug Abuse Task Force. The U.S. Attorney’s Office also coordinates a quarterly Fentanyl Working Group, which brings together more than 100 law enforcement officers to share trends and best practices to combat the fentanyl scourge in this district.

Finally, the U.S. Attorney’s Office co-sponsors a biannual summit that convenes hundreds of leaders to focus on sharing information, reducing stigma, facilitating treatment, and implementing innovative evidence-based harm reduction prevention strategies.  This year’s virtual Western States Opioid/Stimulant Summit, scheduled for November 4-5, 2021, will bring multiple disciplines together to address every aspect of the opioid crisis.  National Institute of Drug Abuse Executive Director Nora Vokow, M.D., and Acting ONDCP Director Regina LaBelle will be featured speakers, along with dozens of leaders from the prevention, public health, treatment and law enforcement communities.

Grossman urged those struggling with a substance use disorder and their family members to talk to a doctor or pharmacist about Naloxone, which can reverse an opioid overdose.

To learn how to assist a person who is overdosing, including how to administer Naloxone, please see:

https://www.sandiegorxabusetaskforce.org/naloxone.

To obtain information about treatment, see the resources at the PDATF Treatment website:

https://www.sandiegorxabusetaskforce.org/treatment.

Assistant U.S. Attorney Meghan E. Heesch (619) 546-9442    

SAN DIEGO – A Tijuana-based drug trafficker who used teens as drug couriers was sentenced in federal court today to seven years in prison and a $50,000 fine for his leadership role in coordinating the movement of large quantities of cocaine, heroin, fentanyl, and methamphetamine to San Diego from Mexico.

Osvaldo Medivil-Tamayo, 22, pleaded guilty in August 2020 to conspiracy to import and conspiracy to distribute federally controlled substances. In his plea agreement, Mendivil admitted he was “the leader of a drug distribution cell based in Tijuana” and that he used high school students as drug couriers to move drugs through San Diego ports of entry.

Mendivil also admitted that he “involved individuals less than 18 years of age in crossing drugs.” He admitted that he and his co-conspirators “specifically recruited high school students who crossed through the San Diego Ports of Entry daily. Mendivil knew that these individual[s] were minors as they hid narcotics on their persons, in backpacks, and in vehicles as they crossed into the United States.” According to court filings, Mendivil’s trafficking activities were captured on a wiretap on his Snapchat account. Mendivil’s own messages indicated his significant involvement in coordinating drug transportation loads. Mendivil sent and received numerous photographs and videos of narcotics on Snapchat, which DEA agents were able to review and collect as evidence.

Mendivil’s intercepted Snapchat messages also painted a picture of Mendivil knowingly using minors as drug couriers. Court filings highlight the specific conversations between Mendivil and his co-conspirators where Mendivil is provided with identification documents of would-be juvenile couriers, showing their ages. In one case, Mendivil received a photograph of a Chula Vista High School identification card and subsequently discussed the drop location for what agents believed to be several hundred pills.

According to his plea agreement, Mendivil worked as the transportation coordinator for several sources of supply of drugs and maintained a “cadre of couriers” to transport drugs across the U.S.-Mexico border in vehicles. Mendivil also paid others to recruit these couriers on his behalf. Mendivil admitted that the seizures of drugs attributed to his organization during the course of this investigation was approximately 150 kilograms total of heroin, fentanyl, cocaine and methamphetamine.

At his sentencing hearing, U.S. District Judge Cynthia Bashant noted Mendivil was “not only destroying lives with the drugs brought in but was destroying lives by getting other young people involved.”

“Our youth are being used by drug traffickers to smuggle dangerous drugs across the border,” said Acting U.S. Attorney Randy Grossman. “We are aggressively prosecuting the recruiters who exploit children. But the children also need to know that trying to sneak dangerous drugs under the noses of authorities is risky business. Don’t throw away your future.” Grossman praised prosecutor Meghan Heesch for her excellent work on this matter, and DEA and IRS agents for their innovative investigative strategies in this case.

“Drug cartels will do anything to get drugs into the United States so they can make their blood money - including putting our children in harm’s way,” said DEA Special Agent in Charge John W. Callery. “The DEA prioritizes investigations involving the exploitation of children and is involved in community outreach to educate parents and teenagers of the explicit dangers associated with smuggling drugs for cartels.”

Related cases 19CR2953-BAS and 20CR1454-BAS charged Mendivil’s co-conspirators, including his recruiters, stash house operators, and couriers.  Seven other co-conspirators with lesser roles than Mendivil have been convicted and sentenced for federal drug trafficking offenses.

DEFENDANT                                               Case Number 19-CR-2320-BAS                                          

Osvaldo Mendivil-Tamayo                            Age: 22                                   Tijuana, Mexico

SUMMARY OF CHARGES

Count 1: Conspiracy to Import Cocaine, Fentanyl, Heroin, and Methamphetamine – Title 21, U.S.C., Sections 952, 960, 963

Count 2: Conspiracy to Distribute Cocaine, Fentanyl, Heroin, and Methamphetamine – Title 21, U.S.C., Sections 841, 846

Maximum penalties as to both counts: Life in prison and $10 million fine

AGENCIES

Drug Enforcement Administration

Internal Revenue Service- Criminal Investigations

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. Attorneys Mark W. Pletcher (619) 546-9714, Michelle Wasserman (619) 546-8431, Valerie Chu (619) 546-6750, and David Chu (619) 546-8266

NEWS RELEASE SUMMARY – August 31, 2021

SAN DIEGO – Retired Chief Warrant Officer Robert Gorsuch admitted in federal court today that he received more than $45,000 in bribes from foreign defense contractor Leonard Francis, who plied him with stays at luxurious hotels plus meals, entertainment and other gifts in exchange for official acts that would help Francis’ ship husbanding business, including the disclosure of multiple classified ship schedules.

Gorsuch was one of nine members of the U.S. Navy’s Seventh Fleet indicted in March 2017 for participating in a conspiracy with Francis, the owner and CEO of Singapore-based Glenn Defense Marine Asia.

The U.S. Navy’s Seventh Fleet represents a vital piece of the United States military’s projection of power as well as American foreign policy and national security. The largest numbered fleet in the U.S. Navy, the Seventh Fleet is comprised of 60-70 ships, 200-300 aircraft and approximately 40,000 Sailors and Marines. The Seventh Fleet is responsible for U.S. Navy ships and subordinate commands that operate in the Western Pacific throughout Southeast Asia, Pacific Islands, Australia, and Russia and the Indian Ocean territories, as well ships and personnel from other U.S. Navy Fleets that enter the Seventh Fleet’s area of responsibility

Gorsuch is the first of the Seventh Fleet defendants to plead guilty. The remaining defendants, who are accused of trading military secrets and substantial influence for sex parties with prostitutes, extravagant dinners and luxury travel, are scheduled for trial on November 1, 2021. They include U.S. Navy Rear Admiral Bruce Loveless; Captains David Newland, James Dolan, Donald Hornbeck and David Lausman; Colonel Enrico DeGuzman; Lt. Commander Stephen Shedd; and Commander Mario Herrera.

This case has resulted in federal criminal charges against 34 Navy officials, defense contractors and the GDMA corporation. So far, 26 of those have pleaded guilty, admitting that they collectively accepted millions of dollars in luxury travel and accommodations, meals, or services of prostitutes from Francis in exchange for helping GDMA win and maintain contracts and overbill the Navy by over $35 million.

“Gorsuch essentially sold his honor for a few nights at the Shangri-La,” said Acting U.S. Attorney Randy Grossman. “Gorsuch sacrificed his integrity for so little and caused so much harm in the process. Today, Gorsuch has admitted his part in this scandal and will be held to account for his conduct.”

Gorsuch was a Chief Warrant Officer in the U.S. Navy, who, from January 2005 to March 2008, served as the Seventh Fleet’s Flag Administration Officer.  In this role, he provided administrative support to the Seventh Fleet Commander, department heads, and other senior officers of the Seventh Fleet staff.

According to his plea agreement, Gorsuch admitted to receiving the following bribes from Francis:

On or about February 8, 2007, Gorsuch and others attended a party at the Manila Hotel in Manila, Philippines, for which Francis paid expenses, which totaled approximately $15,000.

On or about February 11, 2007, Gorsuch and others stayed at Francis’s expense at the Shangri-La Hotel in Cebu, Philippines.

From March 1-5, 2007, Gorsuch stayed at Francis’s expense at the Shangri-La Hotel in Kuala Lumpur, Malaysia.   

On or about June 17, 2007, Gorsuch and others dined at Francis’s expense at Altitude Shangri-La in Sydney, Australia.           

On or about January 19, 2008, defendant and others stayed at Francis’s expense for two nights at the Ritz Carlton in Tokyo. 

According to admissions in his plea agreement, Gorsuch reciprocated by sending Francis disks containing classified ship schedules for the Navy’s Seventh Fleet. In an email to Francis on October 25, 2007, Gorsuch wrote: “By the way, the two disks … the yellow one is the latest with current C7F sked as briefed to the boss.  I will investigate on the dates for the ships you requested and get back to you shortly.” Two days later, Gorsuch, using the same email account, sent Francis an email describing the planned movements of the U.S.S. Tarawa and U.S.S. Hopper for December 17-21, 2007.  Likewise, on or about August 3, 2008, Francis emailed Gorsuch at the same email account to make a demand: “I need some [ship schedule] updates.  When shall I call you?”  Gorsuch responded: “Sked fluctuating a lot right now – should start to solidify next week.  Will drop you an e-mail when they are done chopping it up next week and we can talk.

“Mr. Gorsuch's guilty plea unequivocally memorializes his participation in the charged corruption scheme, wherein he and others sacrificed the honor of serving our great nation with distinction in return for personal gain,” said Kelly P. Mayo, the Director of the Department of Defense Office of Inspector General, Defense Criminal Investigative Service. “The comprehensive joint investigation that exposed Mr. Gorsuch's illegal activities is but one example of the lengths DCIS and its investigative partners will go to pursue justice for the Warfighter and defend the integrity of the men and women who truly exemplify service before self.”

“Mr. Gorsuch will be held fully accountable for accepting lavish gifts in exchange for, among other things, passing classified information to Mr. Francis and GDMA,” said NCIS Director Omar Lopez. “NCIS and our law enforcement partners remain committed to rooting out bribery and corruption wherever it exists and thwarting the potentially grave attendant consequences.”

DEFENDANT                                                                       Case Number: 17-CR-0623-JLS              

Chief Warrant Officer (Retired) Robert Gorsuch                   Age: 54                                 Mississippi

SUMMARY OF CHARGES

Bribery in violation of 18 U.S.C. § 201

Maximum Penalty: Fifteen years in prison, $250,000 fine

INVESTIGATING AGENCIES

Defense Criminal Investigative Service

Naval Criminal Investigative Service

Defense Contract Audit Agency

SAN DIEGO – Saad Ali Awan, a U.S. citizen living in El Centro, appeared in federal court today to face charges that he was part of a conspiracy to illegally transport three Chinese nationals into the U.S. from Mexico who were later found dead in the trunk of a smuggler’s BMW.

According to a federal complaint unsealed today, Awan placed help-wanted ads on Craigslist to recruit human smugglers. Neil Edwin Valera responded to one of those ads and as a result became the smuggler of the Chinese nationals who perished due to heat and asphyxiation in the trunk.

Valera was the first to be charged in this case; Awan is the second. Valera pleaded guilty and was sentenced to five years in prison in connection with the deaths. Awan was arrested yesterday at his home in El Centro. He was charged with Conspiracy to Encourage Aliens to Enter Resulting in Death and Bringing in Aliens without Presentation for Financial Gain.

According to the complaint charging Awan, agents and officers investigating the deaths of the Chinese nationals tracked cell phone and email activity to Awan and found that he was associated with at least 14 smuggling incidents that occurred in the Southern District of California from July 4, 2019 to July 11, 2020.

According to court documents, San Diego police received an emergency 911 call on August 11, 2019 from a person reporting a foul odor and blood dripping from a suspicious vehicle with Texas license plates parked near the 2100 block of Jaime Avenue in San Diego.

San Diego police officers discovered a 1999 silver BMW with a Texas license plate. The officers lifted the trunk and found what initially appeared to be two deceased Asian females. Homicide detectives found an additional victim, an Asian male, pressed up against the rear wall of the trunk. A witness said the car was first noticed two days earlier and no one was seen coming or going.

Video recordings show the same car crossing into the United States from Mexico on August 9, 2019, at the San Ysidro port of entry at 3:14 p.m. Valera was the registered owner of the vehicle. Valera was arrested soon after. According to the complaint charging Awan, Valera told federal agents during his post-arrest interview that he became a human smuggler after responding to a Craigslist ad.

That ad was later traced back to Awan. Valera ultimately agreed to smuggle an unknown number of Chinese women into the U.S. in the trunk of his BMW for $6,000. Valera’s cell phone records indicated he had hundreds of contacts that were traced back to Awan and another conspirator.

“Human smugglers do not act alone, and we will continue to prosecute offenders who participate at all levels of the criminal organizations responsible for these dangerous crimes,” said Acting U.S. Attorney Randy Grossman. “We are determined to prevent more tragic and senseless deaths.”  Grossman commended AUSA Michael Wheat and the agents who diligently investigated this case.

“This is a tragic event that could have been avoided if people were more aware of the dangers of being smuggled into the U.S. by criminal organizations that value profit over human life,” said Homeland Security Investigations (HSI) San Diego Acting Special Agent in Charge Chad Plantz. “HSI and its law enforcement partners will continue to arrest, prosecute and bring these unscrupulous smugglers and criminal organization to justice.

San Diego Sector Border Patrol's Chief Patrol Agent, Aaron Heitke affirms, "We are grateful for the tenacity, persistence, and hard work that our law enforcement partners have demonstrated over the past several months.  Their collaborative efforts with the United States Attorney's office have resulted in the arrest of Saad Ali Awan, who is alleged to be a prolific smuggler within our area of responsibility."

“We appreciate the opportunity to work jointly with our investigative partners to help bring individuals to justice, identifying and arresting those involved in this tragic case,” said Pete Flores, Director of Field Operations for U.S. Customs and Border Protection in San Diego.

Awan will next appear in federal court on August 31, 2021 for a detention hearing before U.S. Magistrate Judge Montenegro in El Centro.

DEFENDANT                                                Case Number: 21MJ3202-LL

Saad Ali Awan                                                Age: 23           El Centro, California

SUMMARY OF CHARGES

Conspiracy to Encourage Aliens to Enter Resulting in Death – Title 8, U.S.C., Section 1324(a)(1)(A)(iv)(v)(I)(II) and (B)(iv)

Maximum penalty: Death or life in prison and $250,000 fine

Bringing in Aliens without Presentation for Financial Gain – Title 8, U.S.C., Section 1324(a)(2)(B)(ii)

Maximum penalty: Mandatory minimum three years, up to 15 years in prison

INVESTIGATING AGENCIES

San Diego Police Department

U.S. Customs and Border Protection, Office of Field Operations

U.S. Customs and Border Protection, U.S. Border Patrol

Homeland Security Investigations

 

Note: Click to view the indictment.

A federal grand jury in San Diego has returned an indictment against eight defendants for their alleged roles in a federal racketeering conspiracy. The indictment alleges the defendants were members and associates of a criminal enterprise that defrauded elderly Americans by making them falsely believe that a grandchild (or other close relative) was in trouble and needed their help. The elderly victims each paid thousands to tens of thousands of dollars to the criminal organization in this scheme.  

The grand jury returned an indictment charging the defendants with conspiracy under the Racketeer Influenced and Corrupt Organizations (RICO) Act. Six defendants have been arrested – Timothy Ingram aka Bleezy, 29, of North Hollywood, California; Anajah Gifford, 23, of North Hollywood, California; Joaquin Lopez, 45, of Hollywood, Florida; Jack Owuor, 24, of Paramount, California; Tracy Glinton, 34, of Orlando, Florida; and Lyda Harris, 73, of Laveen, Arizona. Two additional defendants – Tracy Adrine Knowles, 29, and Adonis Alexis Butler Wong, 29, who each resided in Florida during the alleged offense – have also been charged.

“These defendants were part of a large network of individuals that systematically targeted elderly Americans by preying on their concern for loved ones," said Deputy Assistant Attorney General Arun Rao for the Justice Department’s Civil Division. "The Department of Justice is committed to prosecuting individuals who take part in such schemes that target vulnerable people. We are grateful to our partners at the U.S. Attorney’s Office in the Southern District of California and the FBI in advancing the Department’s efforts against organized elder fraud, and to the San Diego County District Attorney’s Office.”

“This scheme has left many elderly victims financially and emotionally devastated,” said Acting U.S. Attorney Randy Grossman for the Southern District of California. “It is unconscionable to target the elderly and exploit their love for their grandchildren. Elder fraud is a serious crime against some of our nation’s most vulnerable citizens. We are committed to combating all types of elder abuse in our community.”

“Elder Fraud is a massive and growing problem, as our county’s population gets older, with losses into the billions of dollars nationwide,” said Special Agent in Charge Suzanne Turner of the FBI’s San Diego Field Office. “The San Diego Elder Justice Task Force was set up to combine resources, experience, and capabilities to have a sophisticated and coordinated law enforcement response to fight this battle.”

According to the indictment, the defendants were members and associates of a network of individuals who, through extortion and fraud, induced elderly Americans across the United States to pay thousands to tens of thousands of dollars each to purportedly help their grandchild or other close family relatives. According to statements made by prosecutors in court, the defendants swindled more than $2 million from 70-plus elderly victims across the nation, with at least 10 in San Diego County. The perpetrators contacted elderly Americans by telephone and impersonated a grandchild, other close relative, or friend of the victim. They falsely convinced the victims that their relatives were in legal trouble and needed money to pay for bail, medical expenses for car accident victims, or to prevent additional charges from being filed. The defendants and their co-conspirators received money from victims via various means, including in-person pickup, mail, and wire transfer, and laundered the proceeds, including through cryptocurrency.

The case was investigated by the San Diego Elder Justice Task Force, which is a collaboration between the U.S. Attorney’s Office, the FBI, the District Attorney’s Office and all San Diego County law enforcement agencies. The Elder Justice Task Force was officially launched in February 2020 and is believed to be the first comprehensive local law enforcement effort for this purpose anywhere in the country.

A number of law enforcement agencies and offices across the country have investigated components of the scheme, including the FBI’s field offices in Cleveland, Dallas, Los Angeles, Miami, Orlando, and San Francisco; the Dallas Police Department; and police departments across several states, including the Jacksonville Police Department in Alabama; the Anaheim Police Department, Burbank Police Department, Carlsbad Police Department, Downey Police Department, El Cajon Police Department, Garden Grove Police Department, Huntington Beach Police Department, Nevada County Sheriff’s Office, Oceanside Police Department, Pasadena Police Department, Riverside County Sheriff’s Department, San Diego County Sheriff’s Department, San Diego Police Department, San Francisco Police Department, Santa Monica Police Department, and Ventura County Sheriff’s Office in California; the Dalton Police Department and Spalding County Police Department in Georgia; the Lee County Sheriff’s Department in North Carolina; the Akron Police Department, Cleveland Division of Police, and Sagamore Hills Police Department in Ohio; the Carmel Police Department in Indiana; the St. Joseph Sheriff and Troy Police Department in Michigan; the Fergus Falls Police Department in Minnesota; the New York State Police and Suffolk County Police Department in New York; and the Colleyville Police Department, City of Fair Oaks Ranch Police Department, Grand Prairie Police Department, and Richardson Police Department in Texas. The U.S. Attorneys’ Offices in the District of Arizona, Central District of California, Middle District of Florida, Western District of North Carolina, and Northern District of Ohio provided assistance in the investigation.

Trial Attorneys Lauren M. Elfner and Wei Xiang with the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorney Oleksandra Johnson of the Southern District of California are prosecuting the case.

The Consumer Protection Branch coordinates the department’s Transnational Elder Fraud Strike Force, working with U.S. Attorney’s Offices and law enforcement agencies to investigate and prosecute scams run by transnational criminal organizations, including mass mailing, telemarketing, and tech support scams. For more information about the Consumer Protection Branch, visit its website at http://www.justice.gov/civil/consumer-protection-branch

An indictment merely contains allegations, and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

Assistant U. S. Attorney Oleksandra “Sasha” Johnson (619) 546-9769   

NEWS RELEASE SUMMARY – August 25, 2021

SAN DIEGO – Eight people are charged in a federal grand jury indictment unsealed this week, accused of participating in a criminal enterprise that has stolen millions of dollars from elderly victims in San Diego County and around the nation.

Click here for indictment

According to statements made by prosecutors in court, the defendants swindled more than $2 million from 70-plus elderly victims across the nation, with at least 10 in San Diego County, by feeding them phony stories that their grandchildren were in terrible trouble and needed money fast.

“This scheme has left many elderly victims financially and emotionally devastated,” said Acting U.S. Attorney Randy Grossman. “It is unconscionable to target the elderly and exploit their love for their grandchildren. Elder fraud is a serious crime against some of our nation’s most vulnerable citizens. We are committed to combating all types of elder abuse in our community.”

“These defendants were part of a large network of individuals that systematically targeted elderly Americans by preying on their concern for loved ones. The Department of Justice is committed to prosecuting individuals who take part in such schemes that target vulnerable people,” said Deputy Assistant Attorney General Arun G. Rao for the Civil Division’s Consumer Protection Branch.  “We are grateful to our partners at the U.S. Attorney’s Office in the Southern District of California and the FBI in advancing the Department’s efforts against organized elder fraud, and to the San Diego County District Attorney’s Office.”

This is the first case investigated by the San Diego Elder Justice Task Force, which is a collaboration between the U.S. Attorney’s Office, the FBI, the District Attorney’s Office and all San Diego County law enforcement agencies. The Elder Justice Task Force was established in February 2020 and is believed to be the first comprehensive law enforcement effort for this purpose anywhere in the country.

“Elder Fraud is a massive and growing problem as our county’s population gets older, with losses into the billions of dollars nationwide,” said FBI Special Agent in Charge Suzanne Turner. “The San Diego Elder Justice Task Force was set up to combine resources, experience, and capabilities to have a sophisticated and coordinated law enforcement response to fight this battle.”

“This first-of-its-kind Elder Justice Task Force leverages the power of collaboration and innovation to effectively take down organized criminal rings that target the elderly in San Diego County and across the nation,” said Summer Stephan, the San Diego County District Attorney. “The Task Force shares key information, and actively works to connect those dots and reveal patterns that lead to successful prosecutions. We believe it will become a model for the rest of the nation on how to stop the billion-dollar criminal industry of elder fraud.”

“The level of law enforcement cooperation and coordination in the San Diego Region is unique and helps make all San Diego residents safer,” said El Cajon Police Chief Michael Moulton. I commend all the investigators involved in this case for their tenacity and determination in helping bring justice to these victims. The San Diego Elder Justice Task Force is a vital component to helping protect San Diego county’s seniors.”

As of today, six of eight defendants have been arrested. The defendants are charged with violating the racketeering statute known as RICO, the federal law designed to combat organized crime. This is believed to be the first time the RICO statute has been used in an elder fraud case. The indictment alleges that this organization was involved in extortion, fraud and money laundering – all hallmarks of organized crime.

The investigation began in San Diego with one victim and a small loss, and grew exponentially to include victims in El Cajon, Escondido, Carlsbad, Bonita, Santee, Coronado and across at least 15 states.

According to the indictment, scammers contacted elderly victims, usually by telephone, and impersonated a grandchild or someone else close to the victim. The scammer pretended to be in dire legal trouble because of an accident or arrest. He or she claimed to need money for bail, medical expenses, or legal fees.

The scheme involved multiple “actors” who played varying roles using a well-rehearsed script. One would play the beloved relative; another would pretend to be a lawyer; and still others would pose as bail agents or medical professionals. They provided victims with false case numbers, and they instructed the victims to lie to family, friends, and bank representatives about the reasons for the withdrawal or money transfer.

The grandparents were so fearful and desperate to help that they handed over tens of thousands of dollars in tremendous acts of selflessness. Once the victim was on board, other members of the criminal enterprise were dispatched to doorsteps to collect money.

According to the indictment, the scammers took elaborate steps to conceal their true identities from victims and law enforcement. They used false names. They rented residences to receive cash sent through the mail and commercial carriers. They used rental cars or ride share vehicles to pick up funds from victims. And once they received funds from the victims, the scammers quickly tried to hide it by transferring proceeds to other members of the criminal conspiracy, who converted fiat currency to cryptocurrency.

According to court documents, one defendant collected $33,000 from three different victims in a single day. Messages from his phone reveal that he was provided victims’ names and addresses and used a fake name to collect money from the victims. In a text exchange with a coconspirator, the defendant asked: “What's gon (sic) be my name” 

According to the indictment, one of the victims lived in Oceanside. She was 87 years old. She is identified in the indictment as “JD.”

JD received a phone call on May 11, 2020, from a woman claiming to be her granddaughter. The caller said she had been arrested following a car accident and needed $9,000 for bail. She then turned the phone over to her supposed lawyer, who warned JD not to discuss this with anyone or risk violating a court gag order. A courier went to JD’s address and picked up the cash.

The next day, a man purporting to be an accident specialist called JD and claimed that the other party in the vehicle collision had lost her baby as a result of the accident.  If JD did not provide another $42,000, her granddaughter would be charged with first degree manslaughter and spend 15-20 years in prison. JD sent a wire transfer in the amount of $42,000 to an account associated with the defendants.

The scammers didn’t stop there.

About a week later, yet another scammer called JD and advised her that she and her granddaughter had violated the gag order. If JD didn’t pay an additional $57,000, her granddaughter would go to jail. JD sent another wire transfer in the amount of $57,000 to an account associated with the defendants.

“I know some victims may be reluctant to come forward because they feel embarrassed that they fell for this hoax,” Grossman said. “But I want to assure victims that it is not your fault. You are one of many, many people who were deceived by a sophisticated criminal organization whose members concocted a number of plausible storylines and conspired together to trick you. These are unscrupulous manipulators who prey on the elderly. They are to blame, not you.”

For those who may be contacted in the future by scammers, please know that law enforcement is here to help. Please call your local law enforcement agency, sheriff, FBI or 911 if there is an emergency.

Grossman commended prosecutors Sasha Johnson from the Southern District of California, Lauren Elfner and Wei Xiang from the Department of Justice’s Consumer Protection Branch, the Justice Department’s Office of International Affairs, as well as agents from the FBI for their excellent work on this case. Grossman also acknowledged excellent work of the District Attorney’s Office and the multiple local law enforcement agencies in the San Diego Elder Justice Task Force that relentlessly investigated this case to pursue justice for the elderly victims.

DEFENDANTS                                            Case Number 21cr2216-CAB         

Tracy Adrine Knowles                                   29        Orlando, Florida

Fugitive                                                     

Adonis Alexis Butler Wong                           29        Pembroke Pines, Florida

Fugitive

Timothy Ingram, AKA Bleezy                       29        North Hollywood, California

In custody.  Arrested in Los Angeles on August 10, 2021. Judge denied bond.                                                                                              

Anajah Gifford                                               23        North Hollywood, California

In custody.  Arrested in Los Angeles on August 10, 2021. Judge denied bond.

Lyda Harris                                                     73        Laveen, Arizona

Arrested in Albania on a Provisional Arrest Warrant.  United States is seeking extradition.

Joaquin Lopez                                                 45        Hollywood, Florida

Arrested in Hollywood, Florida, on August 18, 2021. He will be released on bond.

Jack Owuor                                                     24        Paramount, California                                    

Arrested in Paramount, near Los Angeles, August 11, 2021.  Judge denied bond. 

Tracy Glinton                                                  34        Orlando, Florida

Arrested in Orlando, Florida on August 17, 2021. She is released on bond.

SUMMARY OF CHARGES

Title 18, U.S.C., Sec. 1962(d) – Conspiracy to Conduct or Participate in an Enterprise

Through a Pattern of Racketeering Activity

Maximum penalty: Twenty years in prison and a fine of not more than the greater of twice the amount of gain or loss associated with the offense or $250,000

AGENCIES

Department of Justice’s Consumer Protection Branch

San Diego Elder Justice Task Force, which includes:

San Diego FBI

San Diego County District Attorney’s Office

San Diego Police Department

San Diego Sheriff’s Department

Carlsbad Police Department

Oceanside Police Department

Escondido Police Department

Chula Vista Police Department

El Cajon Police Department

La Mesa Police Department

National City Police Department

Coronado Police Department

*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.

Assistant U. S. Attorneys Jimmy N. Rotstein (619) 546-8573, Colin M. McDonald (619) 546-9144, and Victor P. White (619) 546-8439

NEWS RELEASE SUMMARY – August 18, 2021

SAN DIEGO – Victor Alfonso Soto Aguilar and Jose Ramon Geraldo Romero pleaded guilty in federal court today in connection with their roles as operators of a panga boat that attempted to smuggle fourteen Mexican citizens into the United States in open ocean waters, ultimately resulting in the death of one passenger.

During a proceeding before U.S. Magistrate Judge Karen S. Crawford, Soto and Geraldo admitted that they piloted a panga boat loaded with 14 Mexican citizens from Mexico into the United States. As part of their guilty pleas, Soto and Romero admitted that the panga boat was loaded beyond capacity, which resulted in temporary engine failure that caused the boat to stall in open ocean waters in the middle of the night. They further admitted that when they arrived near Marine Street Beach in La Jolla, California, they stopped the boat approximately 80 yards from shore and instructed all 14 passengers to remove their life jackets and jump into the water without regard to whether any of them knew how to swim. They also assured many of the passengers that the water was shallow. One passenger, Rogelio Perez Gutierrez, jumped out of the boat, could not stay afloat, and drowned as a result of the smuggling attempt.

United States Border Patrol, the Coast Guard, and San Diego Lifeguards ultimately responded to this event and rescued a number of individuals who had jumped into the ocean at the direction of Soto and Romero. The other passengers on the panga boat were paying between $12,000 and $15,000 to be brought into the United States; they stated they feared for their lives throughout the ocean journey.

“Another life has been tragically lost as a result of smugglers’ reckless actions,” said Acting U.S. Attorney Randy Grossman. “Smugglers do not care about the safety of their human cargo. They care only about profits, and the U.S. Attorney’s office is committed to bringing them to justice for these callous crimes.” Grossman commended the excellent work of Assistant U.S. Attorneys Jimmy N. Rotstein, Colin M. McDonald and Victor P. White, and as well as the HSI agents, Coast Guard officers, Border Patrol agents, Customs and Border Protection officers and San Diego Lifeguards, for their efforts in connection with the case.

“What’s really alarming is the callousness of these smugglers and their blatant disregard for the safety of those aboard the vessel,” said HSI San Diego Acting Special Agent in Charge Chad Plantz.  “As seen in this case, the criminal networks who profit from these smuggling ventures prioritize profit over the well-being and livelihood of those who hire them.  HSI stays committed to working closely with our law enforcement partners and prosecutors to continue to disrupt these illegal smuggling operations and bring to justice, those who violate U.S. law.”

“Callous disregard for the safety of their passengers is a common trait among smugglers,” said Brandon Tucker, Deputy Director of Air Operations for U.S. Customs and Border Protection, Air and Marine Operations in San Diego.  “Their actions have consequences for the people they smuggle.  They put people in danger, and now, they themselves will face the consequences of their actions.”

“The Coast Guard’s primary concern is the safety of life at sea,” said Capt. Tim Barelli, Sector Commander, USCG Sector San Diego. “This case is just one example of the disregard for human life these smugglers have, and we urge people not to place their lives in the hands of smugglers who ultimately care only about the money they will receive.”

Soto and Romero are scheduled to be sentenced by U.S. District Judge John A. Houston on December 13, 2021 at 10:00 a.m.

DEFENDANTS                                             Case Number 21cr1665-JAH                           

Victor Alfonso Soto Aguilar                          Age: 37                                   Mexico

Jose Ramon Geraldo Romero                         Age: 24                                   Mexico

SUMMARY OF CHARGES

Attempted Bringing In at Other Than a Port of Entry Resulting In Death– Title 8, U.S.C., Sections 1324(a)(1)(A)(i), (v)(II), and (a)(1)(B)(iv)

Maximum penalty: Death or life in prison and $250,000 fine

Attempted Bringing In for Financial Gain – Title 8, U.S.C., Section 1324(a)(2)(B)(ii)

Maximum penalty: Fifteen years in prison and $250,000 fine; mandatory minimum of five years in custody

AGENCIES

Homeland Security Investigations

United States Coast Guard

San Diego Lifeguards

United States Border Patrol

Customs and Border Protection

The U.S. Attorney’s Office for the Southern District of California is part of Joint Task Force Alpha (JTFA), which was established by Attorney General Merrick B. Garland in June 2021 to marshal the investigative and prosecutorial resources of the Department of Justice, in partnership with the Department of Homeland Security (DHS), to enhance U.S. enforcement efforts against the most prolific and dangerous human smuggling and trafficking groups operating in Mexico and the Northern Triangle countries of Guatemala, El Salvador, and Honduras.  The Task Force focuses on disrupting and dismantling smuggling and trafficking networks that abuse, exploit, or endanger migrants, pose national security threats, and are involved in organized crime. JTFA consists of federal prosecutors and attorneys from U.S. Attorney’s Offices along the Southwest Border (District of Arizona, Southern District of California, Southern District of Texas, and Western District of Texas), from the Criminal Division and the Civil Rights Division, along with law enforcement agents and analysts from DHS’s Immigration and Customs Enforcement and Customs and Border Patrol.  The FBI and the Drug Enforcement Administration are also part of the Task Force.  

 

Assistant U. S. Attorneys Timothy F. Salel and Jonathan Shapiro 619-546-8225

NEWS RELEASE SUMMARY – August 16, 2021

SAN DIEGO – Grey Zamudio, a San Diego resident who has expressed racist and violent extremist sentiments on social media, was sentenced in federal court today to 24 months in custody for possessing a short barrel rifle and two silencers, none of which was registered as required by law. 

Zamudio pleaded guilty on December 1, 2020, to all three counts of possession of an unregistered rifle with a barrel of less than 16 inches and two unregistered silencers in violation of the National Firearms Registration and Transfer Act. 

As the government noted at Zamudio’s detention hearing in this matter, “There are really no legitimate uses for silencers, other than to kill people. They are not used in hunting. They are not used for recreation purposes.”

The government’s sentencing memorandum notes that the circumstances of Zamudio’s crimes underscore the danger that he continues to pose to the public. The memo said Zamudio is motivated by a violent ideology and appears eager to commit acts of violence against Black people, liberals and others. The FBI was alerted to Zamudio by a tipster who viewed his social media posts, which included statements about “the need for ‘vigilante militias’” and “to crush the liberal terrorists” and that Zamudio was “ready to die” for his beliefs. These statements, together with the allegation that Zamudio had multiple firearms, were apparently so alarming that they led the tipster to share this information with the FBI, which then led to further investigation, including court authorization to search Zamudio’s telephone.

“This defendant has demonstrated a very troubling violent ideology, an intent to harm people, a lack of remorse, and a willingness to illegally possess firearms,” said Acting U.S. Attorney Randy Grossman. “For these reasons, he continues to pose a threat to public safety.” Grossman commended the work of prosecutors Timothy F. Salel and Jonathan I. Shapiro as well as the Joint Terrorism Task Force, including FBI and ATF agents and San Diego Police Department detectives and officers who worked on this matter. Grossman also urged anyone with information about similar threats made on social media to report it to authorities.

According to the complaint, on August 1, 2020, agents executed federal court-authorized search warrants on Zamudio’s apartment and truck. During the search of the apartment, agents seized two silencers and the short barrel rifle. As the FBI executed the court-authorized search, the San Diego Police Department served Zamudio with a California State Gun Violence Restraining Order (“GVRO”) based on recent threats of violence in numerous social media posts by Zamudio. Pursuant to the GVRO, the San Diego Police Department (SDPD) seized another rifle (in addition to the short barrel rifle seized by the agents), two pistols, a large number of magazines, and several hundred to several thousand rounds of ammunition.

The sentencing memo said Zamudio’s text messages provide a window into his motivations and intentions. In one text dated June 5, 2020, Zamudio apparently boasted about getting ’to pull my Glock on a n**** (racial epithet) last Thurs...” On July 30, 2020, two days before his arrest in this matter, Zamudio posted a screenshot of a Tweet in which he stated, “They trying to dox me lol. I’m really hoping to get to kill someone finally.’” A couple of weeks earlier, on June 13, 2020, the Zamudio texted, “Tomorrow they gunna riot in la mesa again, wanna join the Patriots an smash on some BLM?”

The review of the Zamudio’s phone led to the prosecution of Cody Richard Griggers, now a former deputy sheriff in Georgia. Zamudio and Griggers exchanged messages on a Facebook group. In one exchange, Griggers indicated his desire to use his status as a law enforcement officer to get flashbangs and entry charges, and Zamudio responded, “’yeah I’ll pay big money for bang and boom . . . I’m ready to terrorize la.”

Violent ideology and illegal firearms are a dangerous combination. According to the sentencing memo, in a January 19, 2019, response to texts about how to improve the country, Zamudio wrote, “Assassinate the bad politians (sic), i feel as though we are protected under the Constitution to do so.”

“Mr. Zamudio's violent, threatening posts on social media led to serious concern for the safety of those who wished to exercise their first amendment right of peaceful protest, and I'm proud we were able to intervene so quickly,” said FBI Special Agent in Charge Suzanne Turner. “Thanks to a tip from the public, the San Diego FBI's Joint Terrorism Task Force mitigated the threat within 72 hours. The FBI and our law enforcement partners will use all available tools to detect and disrupt threats which put our communities in danger. This case demonstrates the importance of the public immediately reporting any suspicious activity or threats they encounter to enable law enforcement to act quickly.”

“This investigation is a great example of cooperation between law enforcement agencies to keep our communities safe,” said San Diego Police Chief David Nisleit. “I want to thank the officers, detectives, and agents who worked together on this case to prevent a potential act of gun violence.”

SUMMARY OF CHARGES                        Case Number 20CR2451

Grey Zamudio                                                 Age: 33

Title 26, United States Code, Sections 5861(d), 5845(a)(3), 5845(a)(7), and 5871 – Receipt and Possession of Firearms (One Short Barrel Rifle and Two Silencers) in Violation of the National Firearms

Registration and Transfer Act

Maximum Penalty: Ten years in prison, $250,000 fine

INVESTIGATING AGENCIES

Joint Terrorism Task Force

Federal Bureau of Investigation

Bureau of Alcohol, Tobacco, Firearms and Explosives

San Diego Police Department

 

Man Sentenced to 33 months in Prison for Possessing Molotov Cocktails at La Mesa Protest

NEWS RELEASE SUMMARY – August 13, 2021

SAN DIEGO – Zachary Alexander Karas was sentenced in federal court today to 33 months in prison for possessing incendiary devices known as Molotov cocktails at a protest that began on May 30, 2020, in La Mesa.

“This defendant’s conduct endangered the welfare and safety of officers and protesters,” said Acting U.S. Attorney Randy Grossman. “He knowingly and intentionally constructed and brought Molotov cocktails to a crowded and volatile situation with the intention of using them, and this sentence reflects the very serious nature of his offense.” Grossman commended prosecutors Matthew Brehm and Joseph Orabona, agents from the Bureau of Alcohol, Tobacco, Firearms and Explosives and the FBI, and investigators from the San Diego County Sheriff’s Department for their excellent work on this case.

“Today’s sentence should send a clear message to those who choose violence as a form of expression,” said FBI Special Agent in Charge Suzanne Turner. “The FBI is proud to work alongside our local, state, and federal partners on the Joint Terrorism Task Force to protect the right to peacefully assemble while keeping our communities safe.”

“The possession of the destructive devices known as Molotov cocktails has the potential to lead to violent crime,” said Los Angeles Field Division ATF Special Agent in Charge Monique Villegas. “Molotov cocktails can destroy lives and damage property. This prosecution and sentencing is a prime example of our commitment to the communities we serve to prevent individuals from possessing such destructive devices. Strong partnerships with our partner law enforcement agencies and the U.S. Attorney’s Office result in safer communities.” 

Karas was convicted by a federal jury on May 11, 2021 and was immediately taken into custody following the verdict.

According to evidence presented at trial, on May 31, 2020, at 2:00 a.m., hours after police had declared an unlawful assembly and given numerous dispersal orders, Karas was standing in the middle of the road at the intersection of Allison Avenue and Spring Street, blocking traffic as part of the protest in La Mesa.

At the time of the protest in La Mesa, several fires had been set, and those fires damaged buildings and  property. In fact, Karas was standing in the street in front of the Chase and Union banks that had been set ablaze. In the early morning hours of May 31, 2020, at approximately 2:00 a.m., officers gave orders to the crowd, including Karas, to disperse for an unlawful assembly. However, Karas and others refused, and Karas was arrested for refusing to leave his position in the middle of the street. After his arrest, officers discovered that Karas possessed two glass bottles with wicks that contained gasoline and two smoke bombs.

In video-recorded statements, after being read his Miranda rights, Karas stated that he made the Molotov cocktails and brought them to the La Mesa protest because he intended to use them to set fires, but claimed he ultimately did not cause any fires. Karas said he got the bottles from a Rite Aid parking lot and used 87 octane gasoline as the fuel.

A chemist with the ATF laboratory in Atlanta, Georgia, tested the liquid found inside Karas’ Molotov cocktails and confirmed it was gasoline. An explosives enforcement officer with the ATF received the chemist’s analysis, inspected the physical evidence, and found that the Molotov cocktails were functioning destructive devices.

DEFENDANT                                               Case Number 20CR1842-DMS                                           

Zachary Alexander Karas                               Age: 29                       San Diego, CA

SUMMARY OF CHARGES

Possession of an Unregistered Destructive Device – Title 26, U.S.C., Section 5861

Maximum penalty: Ten years in prison and $250,000 fine

AGENCIES

Bureau of Alcohol, Tobacco, Firearms and Explosives

Federal Bureau of Investigation

San Diego County Sheriff’s Department

Special Assistant U. S. Attorney Steven Lee (619) 546-8893

NEWS RELEASE SUMMARY – August 6, 2021

SAN DIEGO – Acting U.S. Attorney Randy Grossman announced federal drug charges today (August 6) against Defendant Carlos Gerardo Symonds Saavedra following the seizure of more than 2,500 kilograms of methamphetamine and 50 kilograms of fentanyl found in a commercial trailer at the Otay Mesa, California Cargo Port of Entry.

The Complaint alleges that on August 5, 2021, at approximately 5:24 p.m., Symonds Saavedra, a Mexican citizen, attempted to enter the U.S. as the driver and sole occupant of a 2008 International commercial truck, which was hauling a Strick trailer.  Defendant’s manifest reflected the load consisted of plastic parts.  According to the complaint, the secondary inspection reflected anomalies, determined upon testing to be illicit drugs, comingled with the commercial shipment of plastic parts. Defendant was allowed to exit the port of entry facility under visual surveillance.  The complaint states that when defendant arrived at a private commercial parking lot, he parked the trailer, placed the keys under the hood and walked away.  He was apprehended approximately 100 yards from the trailer and placed under arrest.

Further inspection of the trailer resulted in the discovery of: 400 packages of a substance that field-tested positive for methamphetamine, with an approximate weight of 2,507.58 kgs., as well as 52 kgs. of fentanyl. This is believed to be one of the largest methamphetamine seizures in the nation’s history.

“This is a significant accomplishment by our law enforcement partners,” said Acting U.S. Attorney Randy Grossman. “Due to stellar work by law enforcement agents, the government stopped more 5,500 pounds of deadly drugs from entering our country, furthering our fight against addiction and overdose deaths.” 

“Over the last several years, we’ve seen many drug overdoses and drug-related deaths throughout this country,” said HSI San Diego Special Agent in Charge Cardell T. Morant. “HSI and its law enforcement partners undoubtedly saved lives by preventing this massive drug shipment from entering our communities. While this drug seizure is significant, we know that these transnational criminal organizations will continue to illegally smuggle their illicit drugs across our border. HSI and its law enforcement partners will remain vigilant in our mission to prevent these drugs from crossing the border and entering our communities.”

“By working in unison with our law enforcement partners, DEA has prevented a significant quantity of deadly drugs from reaching Americans,” said DEA Special Agent in Charge John W. Callery.  “This seizure is a blow to the cartels; but a victory in the fight against methamphetamine and fentanyl overdose deaths plaguing our county. DEA remains committed to stopping the cartels who will undoubtedly continue trying to bring their deadly drugs into our country.”

DEFENDANT                                               Case Number 21MJ3189

Carlos Gerardo Symonds Saavedra                Residence: Mexico

SUMMARY OF CHARGES

Title 18, U.S.C., Sections 952 and 960

Importation of a controlled substance

Maximum penalty: Life in prison; and a mandatory minimum of 10 years; and a $10 million fine

AGENCIES

Homeland Security Investigations

Drug Enforcement Administration

U.S. Customs and Border Protection

*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty. 

Assistant U. S. Attorney Melanie K. Pierson (619) 546-7976    

NEWS RELEASE SUMMARY – August 10, 2021

SAN DIEGO – Mark Lee Morgan of Santa Ana, California, was sentenced in federal court Friday to 14 days in custody and ordered to pay a fine of $10,000 plus restitution of $1,360 for the cost of disposal of the pesticides, and to perform 120 hours of community service.

In pleading guilty, Morgan admitted that on November 19, 2020, he entered the United States from Mexico with 34 bottles of undeclared Mexican pesticides in his truck (DDVP 500U, containing the active ingredient of dichlorvos).  Morgan owns a feed store in Compton, California, and admitted to agents that he intended to take the products to his store to sell them. Morgan further admitted that he was aware that the pesticide he was smuggling was illegal to import and use in the United States, and that he had smuggled it in on previous occasions.

The pesticide in the formulation smuggled by the defendant is illegal in the United States.  Dichlorvos is lethal if ingested, absorbed through the skin, or inhaled. It is highly toxic to bees and birds, acutely toxic to fish and aquatic invertebrates, and can have chronic and long-lasting effects.

According to sentencing documents, DDVP 500U, the chemical smuggled by the defendant, is commonly found at locations where marijuana is illegally cultivated.  Exposure to these pesticides during eradication efforts has caused law enforcement officers to be hospitalized and has polluted soils and streams and killed wildlife.  Cannabis users are also at risk. In one study, the pesticide transfer rate into the blood stream of a cannabis smoker using a glass pipe was as high at 70 percent.

“The defendant was willing to risk the health of others and the environment for his own commercial profit,” said Acting U.S. Attorney Randy Grossman. “The U.S. Attorney’s Office is committed to keeping these dangerous chemicals out of the wrong hands.”

“These pesticides seized at our border are highly toxic and anyone attempting to smuggle them into the United States is not only committing a very serious crime, but also jeopardizing the health of those who are exposed to it,” said Cardell T. Morant, Special Agent in Charge of U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) San Diego. “HSI and our law enforcement partners will continue to work together to prevent smugglers from illegally importing dangerous substances into this country.”

“The defendant’s efforts to deceive law enforcement by smuggling these pesticides into the United States put people at risk” said Scot Adair, Special Agent in Charge of the EPA’s criminal enforcement program in California. “U.S. EPA and its partner agencies will continue to fight against illegal imports of pesticides that pose a threat to human health and the environment.”

DEFENDANT                                               Case Number 21cr0495-TWR                          

Mark Lee Morgan                                           Age: 68                                   Santa Ana, CA

SUMMARY OF CHARGES

Smuggling – Title 18, U.S.C., Section 545

Maximum penalty: Twenty years in prison and $250,000 fine

AGENCIES

Homeland Security Investigations

U.S. Environmental Protection Agency, Criminal Investigation Division

SAN DIEGO – Jason John Clipper, aka “Smokey,” a member of the East Side San Diego criminal street gang with ties to the Mexican Mafia prison gang, was sentenced today in federal court to 15 years in prison for unlawfully possessing a firearm, possessing methamphetamine and heroin with the intent to distribute, and possessing a firearm in furtherance of a drug trafficking offense.

Clipper was arrested on March 17, 2018, after San Diego County Probation officers found him in possession of approximately 20 grams of methamphetamine, 8 grams of heroin, and a loaded firearm. At the time of his arrest, Clipper was on Post Release Community Supervision (“PRCS”) for a previous narcotics and firearm conviction in the California Superior Court. In October 2019, Clipper proceeded to trial and was convicted on all charges.

While pronouncing the sentence today, U.S. District Court Judge John A. Houston commented that the “jury got it right” and that Clipper had been a “pox on the community” for the entirety of his adult life. Clipper’s 15-year prison sentence will be followed by four years of supervised release. Clipper was also ordered to forfeit the firearm and ammunition to the United States.

“Our office collaborates with state and local law enforcement partners to identify cases where federal enforcement is the most effective way to reduce gun crime,” said Acting U.S. Attorney Randy Grossman. “The sentence issued today accomplished the goals of DOJ’s Project Safe Neighborhoods (PSN) program, which is designed to take the most violent offenders off the streets.” Grossman commended the diligent work of Assistant U.S. Attorneys Andrew Haden and Kareem Salem and the federal and local law enforcement partners who assisted with this matter.

This case was prosecuted as part of the joint federal, state, and local Project Safe Neighborhoods (PSN) Program, the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.

SUMMARY OF CHARGES
Felon in Possession of a Firearm, in violation of Title 18, U.S.C. Section 922(g) Maximum Penalty: 10 years; 3 years supervised release

Possession of Methamphetamine with Intent to Distribute, in violation of Title 21, U.S.C. Section 841 (a)(1) Maximum Penalty, based on drug amounts: Up to 40 years in prison; 5 year mandatory minimum

Possession of Heroin with Intent to Distribute, in violation of Title 21, U.S.C. Section 841 (a)(1) Maximum Penalty, based on drug amounts: Up to 40 years in prison; 5 year mandatory minimum

Possession of firearm in furtherance of a crime of violence, in violation of Title 18, U.S.C. Section 924(c) Maximum Penalty: 60 months mandatory consecutive sentence

DEFENDANT                                            Case Numbers: 18CR2874-JAH

Jason John Clipper, age 43

INVESTIGATING AGENCIES

Bureau of Alcohol, Tobacco, Firearms, and Explosives

County of San Diego Sheriff’s Department

San Diego Police Department

San Diego District Attorney’s Office

For further informtion Contact:

Assistant U. S. Attorney Andrew J. Galvin (619) 546-9721

SAN DIEGO – Jason Harrington pleaded guilty today and admitted that he sold $1.1 million of forged art. Harrington sold artwork purportedly created by Richard Hambleton – a New York City artist who rose to fame in the 1980s and whose paintings routinely sell for hundreds of thousands of dollars.
In his plea agreement, Harrington admitted selling forged art to at least fifteen galleries and individuals between 2018 and 2020. The forged art included paintings of a black-silhouetted figure known as the Shadowman, which was a recurring motif in Hambleton’s works.

 

 

 

 

 

(Pictures of Harrington’s forgeries in progress, which featured Hambleton’s Shadowman.)

To make the forged art appear authentic, Harrington lied to prospective buyers regarding the provenance of the art. To support these false statements, Harrington provided prospective buyers with a fake letter purportedly signed by the individual who obtained the art and, on one occasion, instructed an individual to speak with a prospective buyer and falsely claim to have obtained the art from Hambleton. According to court records, Harrington altered images, using publicly available photographs of Hambleton, to make it appear that the individual who purportedly obtained the art knew Hambleton.
Harrington also admitted to attempting to sell at least one forged painting purporting to be from the noted portraitist Barkley Hendricks. According to court records, Harrington falsely claimed to the owner of an art gallery that he inherited the painting from his uncle. The art gallery, however, refused to purchase the painting after Hendricks’ widow viewed the painting and determined it was a forgery.

 

 

 

 

 

 

(A series of photographs obtained by law enforcement from Harrington’s files depict the forgery in progress.)

“Forged artwork harms investors, corrupts the integrity of the art market, and damages the historical-cultural record,” said Acting U.S. Attorney Randy Grossman. “This case reflects the federal government’s full commitment to effectively investigate and prosecute complex art fraud crimes.” Grossman commended the work of Assistant U.S. Attorney Andrew Galvin and the FBI agents who handled this matter.
“Mr. Harrington created multiple fake paintings, devised elaborate cover stories to authenticate them, targeted unsuspecting buyers, and sold over a million dollars of forged artwork,” said FBI Special Agent in Charge Suzanne Turner. “Fraudulent and forged artwork degrades the integrity and trust within the art community and today’s guilty plea should send a clear message - the FBI will aggressively pursue those who use fraud schemes to make a living, regardless of the type of instrument used to commit the fraud.”
As part of his plea, Harrington agreed to pay at least $1,124,001.22 in restitution. Harrington will appear for sentencing on October 22, 2021 at 9:00 a.m. before U.S. District Court Judge Janis L. Sammartino.

DEFENDANT    Case Number 21-CR-1184-JLS
Jason Harrington     Age: 38       Escondido, CA

SUMMARY OF CHARGES
Wire Fraud – Title 18, U.S.C., Section 1343
Maximum penalty: 20 years’ imprisonment and $250,000 fine

AGENCY
Federal Bureau of Investigation

For Further Information, Contact:

Assistant U. S. Attorney Joseph S. Green (619) 546-6955

 

SAN DIEGO – National Spine & Pain Center, LLC (“NSPC”), a physician management services organization headquartered in Rockville, Maryland, agreed this week to pay $5.1 million in restitution to Medicare as part of a criminal settlement for receiving payments in violation the Anti-Kickback Statute.

CLICK HERE for Non-Prosecution Agreement

As part of a non-prosecution agreement resolving criminal liability, NSPC admitted that the company and its affiliate Physical Medicine Associates, Ltd. (“PMA”) entered into an arrangement with Proove Biosciences, a defunct genetics testing company formerly based in Irvine, California, in which Proove unlawfully compensated physicians under the guise of a clinical research program.

The federal Anti-Kickback Statute provides for criminal penalties for whoever knowingly and willfully offers, pays, solicits, or receives remuneration to induce or reward the referral of business that is  reimbursable under any of the Federal health care programs, including Medicare. The statute covers the payers of kickbacks - those who offer or pay remuneration - as well as the recipients of kickbacks - those who solicit or receive remuneration.

NSPC admitted that certain NSPC and PMA physicians referred to the clinical research payments offered by Proove as being payments “per test” or “per patient,” and that as a part of the scheme physicians completed timesheets used by Proove to pay the physicians which overstated the time that the physicians spent conducting related clinical research. In some cases, the timesheets indicated that the physicians had performed certain tasks, which had, in fact, been performed by Proove’s own employees, resulting in payments from Proove to the physicians for tasks that they did not perform.

NSPC admitted that certain NSPC personnel communicated to Proove that the company would not offer Proove’s genetic tests at additional NSPC sites unless Proove was current on its payments to NSPC and PMA physicians. Conversely, Proove communicated to NSPC that Proove expected NSPC and PMA physicians to order a certain volume of tests from Proove. Proove’s genetic tests purportedly could determine a patient’s risk of abusing certain prescription opioids and how patients metabolized certain drugs.

PMA received a total of $1.1 million in payments from Proove. Medicare paid Proove approximately $4 million for claims submitted by Proove from referrals from NSPC and PMA physicians. 

“Referring patients based on expectation of personal profit corrupts the health care system by encouraging medical providers to make decisions based on their own financial gain rather than a patient’s best interests,” said David Leshner, Attorney for the United States. “Kickback payments also unfairly generate business for dishonest providers at the expense of those who do not engage in illegal conduct. This office is committed to holding perpetrators accountable for these fraudulent schemes.”  Leshner commended AUSA Joseph Green, the FBI and HHS-OIG for the diligent investigation and prosecution of this matter.

“The defendants bilked millions of dollars intended to fund services that promote and improve the health of Medicare beneficiaries, some of whom were their own patients,” stated Timothy DeFrancesca, Special Agent in Charge of the Department of Health and Human Services Office of Inspector General (HHS-OIG). “They prioritized their own enrichment above their duties as health care providers. HHS-OIG is dedicated to protecting Federal health care beneficiaries and programs, so our work includes the pursuit of providers who cheat both.”

“This week's restitution order sends a strong message to healthcare providers that choose to put personal gain over professional responsibility,” said FBI Special Agent in Charge Suzanne Turner. “The FBI is proud to work with our federal partners at HHS-OIG to root out these schemes which further diminish trust in the health care system.”

The non-prosecution agreement cited NSPC’s new ownership group, its voluntary termination of its relationship with Proove prior to the company’s knowledge of the criminal investigation, its continuing cooperation with investigators, and the adoption of a robust compliance program, as factors that supported the resolution of the criminal investigation with a non-prosecution agreement.

On June 9, 2021, nine individuals were charged in connection with the scheme in United States v. Brian Meshkin, et al., 21CR0112-JLS, United States District Court, Central District of California. The case is presently pending.

 

AGENCIES

Federal Bureau of Investigation

Department of Health and Human Services, Office of Inspector General

SAN DIEGO – Naval seaman Sergio Reinaldo Williams was arraigned today on an indictment charging him with cyberstalking a civilian woman. According to the indictment, in October 2020, Williams sent graphic sexual messages via social media to the victim and members of her family, posted sexual videos of her on Pornhub.com without her knowledge or consent, and sent screenshots of the Pornhub.com videos to the victim’s niece. Williams included the victim’s Instagram account and hometown in the videos he posted to Pornhub.com.  He also repeatedly threatened the victim, texting her “I'm always around and my eyes are everywhere” and, after she blocked him on social media, “U want it to be over with and this fade away, unblock me and video me. . . . it will only get worse if u don’t.”

“The indictment alleges a disturbing campaign of revenge, harassment and intimidation,” stated Acting United States Randy Grossman.  “This Office is committed to protecting victims of cyberstalking and holding perpetrators accountable for malicious internet activity.”  Grossman commended Assistant U.S. Attorney Sabrina Fève and the Naval Criminal Investigative Service (NCIS) and DOJ teams that diligently pursued this matter.

“NCIS takes seriously any instances of cyberstalking, harassment or intimidation against or by any Department of the Navy service member,” said Joshua Flowers, Special Agent in Charge of the NCIS Southwest Field Office. “We will work aggressively with our law enforcement partners to stop the behavior and pursue those responsible.”

Williams is scheduled to appear before U.S. Magistrate Judge Linda Lopez on Friday, August 6, 2021 at 10:30 a.m. for a detention hearing.

This case was investigated by the Naval Criminal Investigative Service with assistance provided by the Department of Justice’s Computer Crime and Intellectual Property Section.

Those who have experienced cyberstalking by an active duty service member are urged to contact the following anonymous tip lines: https://www.ncis.navy.mil/Resources/NCIS-Tips/ (Navy and Marines), https://www.cid.army.mil/report-a-crime.html (Army), and https://www.osi.af.mil/Submit-a-Tip/ (Air Force), or call the Department of Defense Hotline at (800) 424-9098. Victims of cyberstalking by non-active duty members should contact local law enforcement or the FBI field office.

DEFENDANTS                                              Case Number 21cr2192-BAS                                             

Sergio Reinaldo Williams                             Age: 36                                   Coronado, CA

SUMMARY OF CHARGES

Cyberstalking – Title 18, U.S.C., Section 2261A(2)(B)

Maximum penalty: 5 years’ imprisonment and $250,000 fine

AGENCY

Naval Criminal Investigative Service

*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty. 

SAN DIEGO – Three more men pleaded guilty today to engaging in a years-long, nation-wide fraud conspiracy that stole victims’ financial information from ATMs and gas pumps in San Diego and across the country, and then used the stolen information to make fake credit and debit cards. All told, six defendants have now admitted to participating in that conspiracy, and in a related money laundering conspiracy, that netted over a million dollars in ill-gotten gains.

In sentencing one of the coconspirators on April 21, 2021, the Honorable Michael M. Anello observed that the conspiracy constituted “a very, very serious and longstanding criminal enterprise.”

One defendant, Arsen Galstyan, pleaded guilty to engaging a conspiracy to commit access device fraud: essentially, using fake debit and credit cards. The remaining two defendants—brothers Davit and Vahram Simonyan—admitted to participating in a money laundering conspiracy that laundered the proceeds of access device fraud and other crimes.

In their plea agreements, the defendants admitted that their scheme inflicted actual and intended losses of at least $1.2 million. The Simonyan brothers each admitted to obtaining over $642,000 in stolen money over the course of the conspiracy, which stretched from 2017 to 2020. They also acknowledged structuring their withdrawals from the banks to avoid bank reporting requirements. For example, in one month alone, the Simonyan brothers allegedly withdrew $91,500 in cash from a single bank account. Davit Simonyan admitted that he and a co-conspirator possessed 75 fake debit and credit cards on just a single day in 2018.

Davit Simonyan also staged a phony car accident in order to commit insurance fraud, according to his plea agreement. He planned an accident involving cars insured by two of his codefendants, including Arsen Galstyan, who also pleaded guilty today. Then Simonyan had one of the damaged vehicles repaired at a collision shop owned by an unindicted co-conspirator who kicked back thousands of dollars in payment from the insurance company to Simonyan and his brother as part of their money laundering scheme. Davit Simonyan admitted that by staging a car accident, his conduct involved the reckless risk of a serious bodily injury.

The indictment alleges that the coconspirators worked together to steal unwitting victims’ credit and debit card information by using skimming devices installed in common points of sale such as gas pumps and ATMs. With the stolen information in hand, the conspirators made a host of unauthorized cards that they then used to buy postal money orders and make withdrawals from victims’ accounts.

“People should be able to use a gas pump or an ATM without fear that a criminal will steal their identities and their savings,” said Acting U.S. Attorney Randy Grossman. “This office will ensure that identity thieves, fraudsters and money launderers are held accountable for victimizing our community.” Grossman commended Assistant U.S. Attorney Nicholas Pilchak and the federal agents who diligently pursued this matter.

“Members of the public should remain vigilant as skimming crimes continue to be prevalent,” said Brian Lewin, Special Agent in Charge of the U.S. Secret Service San Diego field office. “The Secret Service is proud to work with our law enforcement and public safety partners to prevent future crimes like this.”

“The U.S. Postal Inspection remains unwavering in its mission to arrest those who intend to utilize the Postal Service as part of a criminal enterprise,” noted Carroll Harris, Inspector in Charge of the Los Angeles Division. “The customers of the Postal Service can be assured the Post Office still remains a safe and secure location to conduct business.”

On April 21, 2021, co-defendant Arsen Minasyan was sentenced by the Honorable Michael M. Anello to 37 months in custody. He was ordered to forfeit $75,145.90 and to pay restitution to victims in the amount of $109,834.14.

The remaining defendant, Gor Plavchyan, is scheduled to be in court next for a change of plea on Friday, August 6, 2021.

The defendants who pleaded guilty today will appear for sentencing on November 3, 2021 at 9:30 a.m. before U.S. District Court Judge Michael Anello.

Anyone who believes that they may be a victim of this offense can visit the U.S. Department of Justice’s large case website for more information: www.justice.gov/largecases.

DEFENDANTS  Age  Case Number 20cr314-MMA

1. Davit Simonyan       30       Residence: Glendale, California
2. Vahram Simonyan   34       Residence: Glendale, California
3. Arsen Minasyan      34       Residence: Terminal Island FCI
4. Gor Plavchyan         26      Residence: Winnetka, California
5. Arsen Galstyan       40       Residence: Glendale, California
6. Mukuch Mkrtchyan 32       Residence: Fair Oaks, California
7. Smbat Shahinyan    41       Residence: Glendale, California

SUMMARY OF CHARGES

Conspiracy to Launder Monetary Instruments, in violation of Title 18, United States Code, Section 1956(h) (Defendants 1 through 3 only)
Maximum Penalty: twenty years in prison; fine of $500,000 or twice the value of the property involved

Conspiracy to Possess Fifteen or More Unauthorized Access Devices, in violation of Title 18, United States Code, Sections 1029(b)(2), 1029(a)(3), and 1029(c)(1)(A)(i) (Defendants 1 and 3–7 only)
Maximum Penalty: five years in prison; fine of $250,000 or twice the gross gain or loss

INVESTIGATING AGENCIES
United States Secret Service
U.S. Postal Inspection Service

*The charges and allegations contained in an indictment are merely accusations. The defendants are considered innocent unless and until proven guilty

SAN DIEGO – A federal jury today convicted Andrew Hackett, a Canadian citizen who previously resided in Toronto, Canada, of participating in a securities fraud pump-and-dump scheme surrounding the publicly-traded stock of a small company.

The jury found that Hackett committed securities fraud, and conspired to commit securities fraud, by engaging in a scheme to manipulate the market for Arias Intel Corp stock. According to the evidence presented at trial, Hackett’s scheme included efforts to artificially inflate the price of Arias Intel’s stock by controlling the majority of the company’s free-trading shares through concealed offshore and other nominee accounts, coordinating the company’s press releases with the issuance of penny stock newsletters, and using high-pressure call rooms targeting innocent investors. Hackett and his co-conspirators also engaged in manipulative trading to create the appearance that Arias Intel stock traded at higher prices and with greater volume than was actually the case.

The FBI investigated this case through a combination of forensic analysis and sophisticated covert techniques, including the use of an undercover agent and an informant, both of whom gathered evidence through recorded phone conversations and captured email and text messages.

Hackett was one of several defendants charged here. His co-conspirators, Kuldeep Sidhu of Vancouver, British Columbia, Annetta Budhu of New York, New York, and Kevin Gillespie of Tampa, Florida all pleaded guilty in connection with the scheme.

“In addition to victimizing innocent investors, pump and dump schemes weaken the integrity of securities markets and alter the level playing field consumers expect when making investment decisions,” said Acting U.S. Attorney Randy S. Grossman. “As this verdict demonstrates, those who engage in pump-and-dump and similar market manipulation schemes will face serious consequences.” Grossman commended the work of Assistant U.S. Attorneys Aaron P. Arnzen and Andrew J. Galvin and the FBI agents who diligently pursued this matter.

“Securities fraud is a serious crime which impacts our citizens and our financial markets. The FBI is committed to aggressively investigating these complex crimes with considerable resources and sophisticated techniques,” stated FBI San Diego Special Agent in Charge Suzanne Turner. “The criminal enterprise behind this scam attempted to commit wholesale fraud using boiler rooms to victimize ‘mom and pop’ investors, including some of our elderly citizens. The hard work of our agents certainly limited the number of victims and losses in this case.”

Hackett will be sentenced for his crimes on October 25, 2021.

DEFENDANT                                                                         Case Number 18cr3072-TWR

Andrew Hackett                          Age: 32                    Toronto, Canada

SUMMARY OF CHARGES

Securities Fraud – Title 15, U.S.C., Section 78(j)
Conspiracy to Commit Securities Fraud – Title 18., U.S.C., Section 371
Maximum Penalty: 20 years

AGENCY

Federal Bureau of Investigation

Assistant U. S. Attorneys Michael A. Deshong, Daniel C. Silva, and Carl Brooker (619) 546-9290

NEWS RELEASE SUMMARY—July 29, 2021

SAN DIEGO—GPOMCT Grupo Empresarial S.A. de C.V., an international, Mexico-based wholesale currency dealer and currency exchange business, pleaded guilty in federal court today to unlawfully operating in the United States. Through its subsidiaries, GPOMCT controls more than 40 locations in Mexico that handle an average of over $1 million in U.S. currency daily.

Special Agents from Homeland Security Investigations (HSI) led the investigation into hundreds of transactions that involved GPOMCT importing large volumes of U.S. dollars into the United States between 2019 and 2021. Agents from Federal Deposit Insurance Corporation Office of Inspector General assisted HSI in its investigation.

As admitted in the plea agreement entered today before U.S. Magistrate Judge Michael S. Berg, GPOMCT imported shipments of currency from Mexico into the United States for the purposes of selling Mexican pesos to a currency exchange located in San Ysidro, California, identified only as “MSB 1” in the plea agreement. Between September 2019 and September 2020, GPOMCT imported approximately 195 shipments of currency—each worth between $90,000 and $100,000 in U.S. dollars—and delivered them to MSB 1 in San Ysidro. GPOMCT used the services of an armored car company to collect currency from MSB 1 as payment and deliver it to a third-party intermediary in Miami, Florida.

By offering a variety of services as a wholesale currency dealer, GPOMCT admitted that it operated as an unlicensed money transmitting business in the United States and agreed to criminally forfeit $1.1 million as property involved in its unlawful operations. By failing to register as a money transmitting business, GPOMCT did not file currency and transactional reports with the Department of the Treasury, as required by the Bank Secrecy Act, nor did it subject itself to inspection by the Department of Treasury for compliance with these financial laws and regulations.

Acting U.S. Attorney Randy S. Grossman said, “Financial laws and regulations are not a suggestion. They are significant tools to combat international money laundering, tax evasion, and other crimes. Financial institutions that operate in the United States of America should learn from the crimes committed by GPOMCT. This office will continue to demand the highest level of compliance from financial institutions in the Southern District of California.” Grossman praised prosecutors Michael Deshong, Daniel Silva, and Carl Brooker as well as agents from Homeland Security Investigations and Federal Deposit Insurance Corporation for their excellent work on this case.

During the course of the investigation, agents also learned that GPOMCT used the services of an armored car company—and the armored car company’s Mexican affiliate—to import U.S. dollars into the United States and deliver them to third parties around the United States on hundreds of occasions between January 2019 and February 2021. These third parties would convert the U.S. dollars to Mexican pesos and electronically transmit the funds back to GPOMCT in Mexico, thereby completing the wholesale currency cycle.

GPOMCT has since registered as a money services business, or MSB, and acknowledged that it is now expected to comply with all U.S. statutes and regulations, including anti-money laundering requirements.  

Cardell T. Morant, Special Agent in Charge for Homeland Security Investigations, San Diego, stated, “HSI is committed to protecting the integrity of the U.S. financial system by holding Money Service Businesses  accountable for the registration and reporting requirements necessary to ensure transparency. Companies or individuals that import, transport, or transfer large amounts of currency without complying with reporting requirements create opportunities for criminal organizations to introduce their profits into the financial system without scrutiny. This guilty plea should send a strong signal to MSBs to remain vigilant in their anti-money laundering duties.”

“This guilty plea holds GPOMCT responsible for failing to comply with requirements established under anti-money laundering laws,” said Special Agent in Charge Jeffrey D. Pittano of the Federal Deposit Insurance Corporation Office of Inspector General (FDIC OIG). “The FDIC OIG is committed to working with our law enforcement partners to investigate those who fail to adhere to laws and regulations that are designed to detect and prevent financial crimes.”

Sentencing is scheduled to occur on October 15, 2021 before U.S. District Judge Janis L. Sammartino.

DEFENDANTS                                             Case Number 21cr2120-JLS                            

GPOMCT Grupo Empresarial S.A. de C.V.

SUMMARY OF CHARGES

Operating an Unlicensed Money Transmitting Business—Title 18, U.S.C., Section 1960

Criminal Forfeiture—Title 18, U.S.C., Section 982

Maximum penalty: $500,000 fine or twice the gross gain or loss from the offense, whichever is greater; criminal forfeiture

AGENCY

Homeland Security Investigations

Federal Deposit Insurance Corporation

Assistant U. S. Attorneys Michelle L. Wasserman (619) 546-8431 and Valerie Chu (619) 546-6750

NEWS RELEASE SUMMARY – July 29, 2021

SAN DIEGO – Jason Ellis of Poway pleaded guilty in federal court today to filing a false tax return as part of a years’ long tax-evasion scheme with former Chabad of Poway Rabbi Yisroel Goldstein. 

Until around 2018, Rabbi Goldstein was the director and head rabbi at Chabad of Poway, a tax-exempt religious organization.  Goldstein also operated several non-profit entities affiliated with the Chabad, including the Friendship Circle of San Diego.  Beginning in 2008, at Rabbi Goldstein’s request, Ellis, who was at the time an employee of Qualcomm, made a $1,000 donation to Friendship Circle.  Ellis then requested that Qualcomm match that donation through the company’s corporate matching program.  Unbeknownst to Qualcomm, Goldstein met with Ellis in person and returned the entirety of his $1,000 to him in cash, and kept the falsely matched Qualcomm donation.  Ellis repeated this scheme in the same way every year through 2017.

In 2016, Ellis was promoted to the position of Director at Qualcomm, which meant that the company would match up to $5,000 in charitable donations. In 2016 and 2017, Ellis met with Goldstein and gave him a check for $5,000 for Friendship Circle and secured a $5,000 matching donation from Qualcomm.  In each of those years Goldstein gave Ellis $5,000 back in cash.  Between 2008 and 2017, Ellis made a total of 10 fraudulent charitable donations to Friendship Circle, each of which was matched by Qualcomm.  Qualcomm matched a total of $18,000 in fraudulent donations by Ellis.

According to Ellis’ plea agreement, in 2018, Goldstein sent a message to Ellis through another individual reminding Ellis to make his donation. Ellis thought that it was strange that Goldstein was communicating through an intermediary, and became suspicious that something was wrong.  That year Ellis made his annual $5,000 donation to Friendship Circle, but did not get any cash back from Goldstein.  However, in 2019, a year in which Ellis did not make a donation to Friendship Circle, Ellis received in the mail an unexpected donation receipt for $5,000 from Friendship Circle, signed by the director of the organization, thanking Ellis for his tax-deductible donation.  Ellis used this fraudulent donation receipt to falsely claim a $5,000 tax deductible donation on his 2019 tax returns, even though he knew he was not entitled to the deduction because he had not donated $5,000 to Friendship Circle in 2019.

Between 2015-2019 Ellis also falsely claimed his children’s preschool tuition at the Chabad as a charitable deduction on his taxes. During that time period Ellis wrote eight checks to Chabad of Poway, totaling $55,600 for his children’s preschool tuition.  Ellis then falsely reported to the IRS that he had made tax deductible donations to charity despite knowing that these were in fact tuition payments and therefore not tax-deductible donations.

Through these various schemes Ellis evaded over $27,000 in taxes.

In July 2020, Rabbi Goldstein pleaded guilty “Mr. Ellis victimized not only honest U.S. taxpayers, but also a local corporation trying to improve our community through a charitable corporate-matching program,” said Acting U.S. Attorney Randy S. Grossman. “Giving phony donations as a way to avoid paying taxes is not only unscrupulous and deceitful – it’s a crime. Tax cheats who game the system will be held to account for their conduct.” to fraud charges, admitting that he participated in a complex, years-long, multi-million-dollar tax-evasion scheme and other financial deceptions involving theft of public money.  Rabbi Goldstein’s plea agreement outlined the tax evasion scheme with Ellis.

Ellis is the ninth individual to plead guilty to crimes discovered in this investigation. Two additional individuals have agreed to deferred prosecution agreements as a result of the investigation.  Rabbi Goldstein has agreed to cooperate with the ongoing investigation. He is scheduled to be sentenced by U.S. District Judge Cynthia Bashant on October 26, 2021.

Grossman praised prosecutors Michelle Wasserman and Valerie Chu and FBI and IRS agents for their excellent work on this case.

“In conspiring with Rabbi Goldstein in multiple tax evasion schemes, Jason Ellis showed a blatant disregard for our laws; laws designed to promote charitable giving and provide incentives for hard working Americans,” said FBI Special Agent in Charge Suzanne Turner.  “What Jason Ellis chose to do in taking advantage of his own employer and the tax system worked to degrade our collective trust in these laws.  The FBI is committed to finding and bringing to justice those who would abuse a system which encourages giving to non-profit organizations designed to help others.”

“For over ten years, Mr. Ellis participated in an illegal scheme that not only defrauded his employer but also stole tens of thousands of dollars from the United States,” said Ryan L. Korner, Special Agent in Charge of IRS Criminal Investigation’s Los Angeles Field Office. “Mr. Ellis’s lies and exploitation of charitable giving programs offered by both Qualcomm and the IRS is made more egregious by the length of his involvement. IRS Criminal Investigation, in partnership with its law enforcement partners, is resolute in bringing these thieves to justice.”

Jason Ellis is next scheduled to appear at a sentencing hearing on October 25, 2021 at 9:00 a.m. before Judge Cynthia Ann Bashant.

SUMMARY OF CHARGES                        Case Number 21-CR-2200-BAS

Jason Ellis                                                      Age: 42           Poway, CA

Filing False Tax Return, in violation of Title 26, U.S.C. §7206(1)

Maximum Penalty: Three years in prison

PREVIOUSLY CHARGED DEFENDANTS AND SUMMARY OF CHARGES                     

Yisroel Goldstein, Case Number 20CR1916-BAS             Age: 58            Poway

Conspiracy to Defraud the United States and Commit Wire Fraud, in violation of Title 18, USC 371

Maximum Penalty: Five years in prison

Alexander Avergoon, Case Number 19CR2955-BAS       Age: 44            San Diego                  

Wire Fraud, in violation of Title 18, USC 1343

Maximum Penalty: Twenty years in prison

Aggravated Identity Theft, in violation of Title 18, USC 1028A

Maximum Penalty: Two years minimum consecutive term in prison

Money Laundering, in violation of Title 18, USC 1956(a)(1)(B)(i)

Maximum Penalty: Twenty years in prison

Bruce Baker, Case Number 20CR1912-BAS                     Age: 74            La Jolla

Conspiracy to Defraud the United States and file false tax returns, in violation of Title 18, USC 371

Maximum Penalty: Five years in prison

Bijan Moossazadeh, Case Number 20CR1893-BAS          Age: 63            San Diego

Filing a False Tax Return, in violation of Title 26, USC 7206(1)

Maximum Penalty: Three years in prison

Yousef Shemirani, Case Number 20CR1895-BAS            Age: 74            Poway

Filing a False Tax Return, in violation of Title 26, USC 7206(1)

Maximum Penalty: Three years in prison

Boris Shkoller, Case Number 20CR1913-BAS                  Age: 83            Del Mar

Filing a False Tax Return, in violation of Title 26, USC 7206(1)

Maximum Penalty: Three years in prison

Mendel Goldstein, Case Number 20CR2772-BAS             Age: 63            Brooklyn, NY

Conspiracy to Defraud the United States and Commit Wire Fraud, in violation of Title 18, USC 371

Maximum Penalty: Five years in prison

Stuart Weinstock, Case Number 21CR0042-BAS             Age:    64            Escondido, CA

Filing False Tax Return, in violation of Title 26, U.S.C. §7206(1)

Maximum Penalty: Three years in prison

Rotem Cooper, Case Number 20CR3968-BAS                  Age:    54            San Diego      

Deferred Prosecution Agreement

Conspiracy to Commit Wire Fraud, in violation of Title 18, USC 371

Igor Shtilkind, Case Number 20CR3955-BAS                   Age:    55            San Diego

Deferred Prosecution Agreement

Conspiracy to Commit Wire Fraud, in violation of Title 18, USC 371

INVESTIGATING AGENCIES

Federal Bureau of Investigation

Internal Revenue Service

 

Assistant U. S. Attorney Joseph Orabona (619) 546-7951

NEWS RELEASE SUMMARY – July 26, 2021

SAN DIEGO, CA – Jonathan Devon Price, aka “Lil’ Ty,” a North Park street gang member previously convicted of Racketeering Conspiracy, was sentenced in federal court today by Senior U.S. District Court Judge John A. Houston to 142 months in prison for committing the new crime of sex trafficking of children, and 24 months in prison for violating the conditions of supervised release in his racketeering case.

In December 2013, Price was charged with racketeering conspiracy, known as RICO, involving sex trafficking in San Diego and elsewhere. In October 2015, Price pleaded guilty to RICO by admitting his active role in the conspiracy that involved transporting adult females in San Diego and elsewhere for the purposes of prostitution. Price was later sentenced by Judge Houston to more than two years in prison and three years of supervised release. 

Between 2016 and 2019, Price violated his supervised release on multiple occasions and was returned to prison. He was released from prison on his last violation on August 30, 2019. 

While on federal supervision, Price was arrested on November 26, 2019 for once again engaging in sex trafficking. He was first transferred to state court for a matter involving the battery of one of his trafficking victims.  After his battery conviction in state court in January 2020, he was transferred to federal court and arraigned on sex trafficking charges in February 2020.  Price was ordered detained and has been in custody since his arrest in November 2019. 

On October 13, 2020, Price appeared before U.S. Magistrate Judge Michael S. Berg and entered a guilty plea to the charge of sex trafficking of children.  In his plea, Price admitted that in November 2019, he knowingly transported, provided, maintained, and obtained a 17-year-old minor female for the purpose of her engaging in commercial sex acts in San Diego County.  Price also admitted he caused online ads to be posted offering the minor female for commercial sex.  In addition, Price admitted that between about June 2018 and November 2019, he knowingly transported, provided, maintained, and obtained an adult female for the purpose of her engaging in commercial sex acts.  During this time, Price used fraud, force, and coercion against the adult female in order to cause her to engage in commercial sex acts. 

As part of his plea agreement, Price admitted that by committing the crime of sex trafficking of children in November 2019 he violated his supervised release conditions pending in his RICO case.  For violating his supervised release, Price was sentenced to 24 months in prison, with 12 months to run consecutive and 12 months to run concurrent to the new prison sentence of 142 months for sex trafficking of children.

“Exploiting girls and women through sex trafficking is a despicable crime that has a long-lasting and devastating impact on the victims’ lives and futures,” said Acting U.S. Attorney Randy S. Grossman. “Our office will continue to work with law enforcement partners to end the abuse and ensure traffickers are held accountable for the damage they cause.” Grossman praised prosecutor Joseph Orabona and members of the San Diego Human Trafficking Task Force for their excellent work on this case.

“Today, the defendant was sentenced for his crimes of sexual exploitation of multiple victims to include a minor,” said FBI Special Agent in Charge Suzanne Turner. “The FBI is proud to work alongside our partners on the San Diego Human Trafficking Task Force to pursue cases such as these. I hope today’s proceedings bring a sense of justice to the victims as they move forward in their lives.”

DEFENDANT                                               Case Numbers: 20CR0852-JAH, 13CR4510-JAH

Jonathan Devon Price, aka Lil’ Ty                 Age: 30           San Diego, CA

SUMMARY OF CHARGES

Sex Trafficking of a Minor, in violation of Title 18, United States Code, Section 1591

Maximum Penalties: Ten-year mandatory minimum and a maximum of life in prison; mandatory Sex Offender Registration; a maximum term of supervised release of life; mandatory restitution to the victims.

INVESTIGATING AGENCIES

San Diego Human Trafficking Task Force, which consists of:

• Federal Bureau of Investigation
• California Department of Justice
• California Department of Corrections & Rehabilitation – Parole
• California Highway Patrol
• ICE/Homeland Security Investigations
• National City Police Department
• San Diego City Attorney’s Office
• San Diego County District Attorney’s Office
• San Diego County Probation Department
• San Diego County Sheriff’s Department
• San Diego Police Department
• The United States Attorney’s Office, Southern District of California

 

 

For Further Information, Contact:

Assistant U. S. Attorneys Stephen Wong (619-546-9464), Larry Casper (619-546-6734), Alicia Williams (619-546-8917) and Courtney Strange (760-355-2216)

 

San Diego County residents were charged in two separate indictments with Conspiracy to Commit Wire Fraud involving fraudulent Pandemic Unemployment Insurance claims.

CLICK HERE for Notice of Related Case

As part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act of 2020, Congress provided new unemployment benefits for those affected by the COVID-19 Pandemic who would not otherwise qualify for unemployment insurance. In California, the Employment Development Department (EDD) administers unemployment insurance benefits.

In case number 21-CR-2154-CAB, Defendants Matthew Lombardo, Konrad Piekos, Ryan Genetti, and Dobrila Milosavljevic were charged with conspiracy to commit wire fraud. Defendants Lombardo, Piekos, and Genetti were also charged with Aggravated Identity Theft. In addition, Defendant Lombardo was charged with unauthorized disclosure of health information, a felony.

According to the affidavit filed in support of the criminal complaint related to case number 21-CR-2154-CAB, Defendant Lombardo, while employed by a local hospital, stole confidential patient files, and provided them to co-defendants Piekos, Genetti, and Milosavljevic, to submit to EDD for Pandemic Unemployment Insurance benefits.  

CLICK HERE for unsealed complaint

In case number 21-CR-2153-CAB, Defendants Lindsay Renee Henning, Garrett Carl Tuggle, Salvatore Compilati, and Ryan David Genetti, were charged with conspiracy to commit wire fraud. Defendants Henning and Tuggle were also charged with aggravated identity theft, and Defendants Henning, Tuggle, and Juan Landon were also charged with conspiracy to distribute MDMA and LSD. Defendant Tuggle was also charged with possessing methamphetamine, cocaine, and heroin with intent to distribute.  

According to the affidavit filed in support of the criminal complaint related to case number 21-CR-2153-CAB, the wire fraud conspiracy involved over 108 separate claims that together paid out $1,615,000. The affidavit also describes how defendants conspired to distribute controlled substances.  

CLICK HERE for unsealed complaint

The charges are the product of investigations jointly undertaken by the Drug Enforcement Administration (DEA), the U.S. Department of Labor, Office of Investigations (DOL-OI), the San Diego Sheriff’s Department (SDSD), the California Employment Development Department Office of Investigations (EDD OI), United States Postal Inspection Service (USPIS), and Homeland Security Investigations (HSI). Investigators initiated investigations in both cases after traffic stops led to the discovery of contraband and text messages on cellular phones laying out the schemes. The text messages were corroborated through court-authorized searches of phones and residences and by a detailed analysis of EDD databases.

All defendants except for Juan Landon have made their initial appearance in federal court.

"Pandemic unemployment insurance programs are a critical part of our safety net designed to support hardworking citizens who are suffering during an unprecedented economic downturn. Our office and our law enforcement partners will investigate and prosecute individuals who attempt to steal from these programs designed to assist deserving recipients," said Acting U.S. Attorney Randy Grossman. Grossman commended AUSAs Wong, Casper, Williams, and Strange and the law enforcement agents who investigated these matters.

If you think you are a victim of COVID-19 fraud, immediately report it the FBI (visit ic3.gov, tips.fbi.gov, or call 1-800-CALL-FBI or the San Diego FBI at 858-320-1800.

In addition, the public is urged to report suspected fraud schemes related to COVID-19 by calling the National Center for Disaster Fraud (NCDF) hotline (1-866-720-5721) or by e-mailing the NCDF at disaster@leo.gov.

Case Number : 21-CR-2154-CAB

DEFENDANTS

Konrad Piekos Age: 43, Vista, CA

Matthew George Lombardo Age: 52, San Diego, CA

Ryan David Genetti Age: 38 Vista, CA

Dobrila "Bebe" Milosavljevic Age: 40 Vista, CA
 

SUMMARY OF CHARGES

Count 1: Title 18, United States Code, section 1349 (conspiracy to commit wire fraud)

Maximum penalty: 20 years in prison; fine; penalty assessment

Counts 2 and 3: Title 18, United States Code, section 1028A; (aggravated identity theft)

Maximum penalty: 2 year mandatory minimum term of imprisonment, consecutive to any term of imprisonment imposed for Count 1.

Count 4: Title 42, United States Code, section 1320d-9(b)(3); (wrongful disclosure of individually identifiable health information)

Maximum penalty: 10 years in prison; fine; penalty assessment
 

AGENCIES

U.S. Drug Enforcement Administration (DEA)

U.S. Department of Labor, Office of the Investigations (DOL-OI)

California Employment Development Department Office of Investigations (EDD-OIG)

California Department of Corrections and Rehabilitation-Investigative Services Unit (CDCR-ISU)

United States Postal Inspection Service (USPIS)

Homeland Security Investigations (HSI).

 

Case Number : 21-CR-2153-CAB

DEFENDANTS

Lindsay Renee Henning Age: 37 La Mesa, CA

Garret Carl Tuggle Age: 35 San Diego, CA

Salvatore Compilati Age: 39 La Mesa, CA

Ryan David Genetti Age: 38 Vista, CA

Juan Landon Age: 27 Mesa, AZ
 

SUMMARY OF CHARGES

Counts 1 and 2: Title 21, United States Code, sections 841 and 846 (conspiracy to distribute MDMA and conspiracy to distribute LSD)

Maximum penalty: mandatory minimum 5 years and up to 40 years in prison; fine; penalty assessment

Count 3: Title 18, United States Code, section 1349 (conspiracy to commit wire fraud)

Maximum penalty: 20 years in prison; fine; penalty assessment

Count 4: Title 18, United States Code, section 1028A; (aggravated identity theft)

Maximum penalty: 2 year mandatory minimum term of imprisonment, consecutive to any term of imprisonment imposed for Count 1.

Counts 5 - 7: Title 21, United States Code, section 841 (possession with intent to distribute methamphetamine, cocaine, and heroin)

Maximum penalties:

Count 5 (more than 500 grams of a mixture containing methamphetamine) mandatory minimum 10 years and up to life in prison; fine; penalty assessment

Count 6 (cocaine) up to 20 years in prison and up to life in prison; fine; penalty assessment

Count 7 (heroin) up to 20 years in prison and up to life in prison; fine; penalty assessment

AGENCIES

U.S. Drug Enforcement Administration (DEA)

San Diego Sheriff’s Department (SDSD)

U.S. Department of Labor, Office of Investigations (DOL-OI)

California Employment Development Department Office of Investigations (EDD-OIG)

California Department of Corrections and Rehabilitation-Investigative Services Unit (CDCR-ISU)

United States Postal Inspection Service (USPIS)

Homeland Security Investigations (HSI).

 

*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.

 

NEWS RELEASE SUMMARY – July 21, 2021

SAN DIEGO – Derick Jonathan Cameron of Vancouver, Washington pleaded guilty in federal court today to wire fraud, admitting that while employed as the Financial Controller for San Diego-based RAL Investment Corporation, he embezzled more than $400,000. 

In a hearing before U.S. Magistrate Judge Jill L. Burkhardt, Cameron admitted he abused his access to the company’s accounting software and issued more than 200 unauthorized checks to himself using the electronic signature of the company’s CFO and deposited them into his personal bank account. He then concealed the payments by manipulating the company’s accounting records to make it appear that each check was issued to a legitimate third-party vendor for a business expense.  The company discovered Cameron’s fraudulent activity in April 2018, fired Cameron, and reported the conduct to law enforcement when Cameron was unable to make his promised repayments on schedule.

"The impact of fraud on small businesses can be devastating,” said Acting U.S. Attorney Randy Grossman. “This defendant abused his position of trust to enrich himself, and he has been held to account for his crime.”  Grossman praised Assistant U.S. Attorney Rebecca Kanter and the FBI case agents for their work handling this case.

“Mr. Cameron treated his job as Financial Controller as his own private expense account thinking he deserved more money,” said FBI Special Agent in Charge Suzanne Turner. “His actions put the livelihood of the business in danger and hopefully today’s guilty plea brings a sense of justice and closure to the victim in this case.”  

Cameron is scheduled to be sentenced on October 18, 2021 at 9:30 a.m. before U.S. District Judge Todd W. Robinson.

DEFENDANT                                            Case Number 21cr2128-TWR                                

Derick Jonathan Cameron                                          Age: 37                       Vancouver, Washington

SUMMARY OF CHARGES

Wire Fraud – Title 18, U.S.C., Section 1343

Maximum penalty: Twenty years in prison and $250,000 fine, or twice the gain/loss, whichever is greater

AGENCY

Federal Bureau of Investigation

Assistant U. S. Attorney Fred Sheppard (619) 546-8237 

SAN DIEGO – A federal grand jury returned an indictment charging four nationals and residents of the People’s Republic of China with a campaign to hack into the computer systems of dozens of victim companies, universities, and government entities in the United States and abroad between 2011 and 2018.

Click to see the INDICTMENT

The indictment, which was returned in May and unsealed on Friday, alleges that much of the conspiracy’s theft was focused on information that was of significant economic benefit to China’s companies and commercial sectors, including information that would allow the circumvention of lengthy and resource-intensive research and development processes. The defendants and conspirators at the Hainan State Security Department (HSSD) sought to obfuscate the Chinese government’s role in such theft by establishing a front company, Hainan Xiandun Technology Development Co., Ltd. (“海南仙盾”) (Hainan Xiandun), since disbanded, to operate out of Haikou City, Hainan Province.

The two-count indictment alleges that Ding Xiaoyang (丁晓阳), Cheng Qingmin  (程庆民), and Zhu Yunmin (朱允敏), were HSSD officers responsible for coordinating, facilitating, and managing computer hackers and linguists at Hainan Xiandun and other Ministry of State Security (MSS) front companies to conduct hacking for the benefit of China and its state-owned and sponsored instrumentalities.  The indictment alleges that Wu Shurong (吴淑荣), was a computer hacker who, as part of his job duties at Hainan Xiandun, created malware, hacked into computer systems operated by foreign governments, companies, and universities, and supervised other Hainan Xiandun hackers.   

The conspiracy’s hacking campaign targeted victims in the United States, Austria, Cambodia, Canada, Germany, Indonesia, Malaysia, Norway, Saudi Arabia, South Africa, Switzerland, and the United Kingdom. Targeted industries included, among others, aviation, defense, education, government, healthcare, biopharmaceutical, and maritime. Stolen trade secrets and confidential business information included, among other things, sensitive technologies used for submersibles and autonomous vehicles, specialty chemical formulas, commercial aircraft servicing, proprietary genetic-sequencing technology and data, and foreign information to support China’s efforts to secure contracts for state-owned enterprises within the targeted country (e.g., large-scale high-speed railway development projects). At research institutes and universities, the conspiracy targeted infectious disease research related to Ebola, MERS, HIV/AIDS, Marburg, and Tularemia. 

As alleged, the charged MSS officers coordinated with staff and professors at various universities in Hainan and elsewhere in China to further the conspiracy’s goals. Not only did such universities assist the MSS in identifying and recruiting hackers and linguists to penetrate and steal from the computer networks of targeted entities, including peers at many foreign universities, but personnel at one identified Hainan-based university also helped support and manage Hainan Xiandun as a front company, including through payroll, benefits, and a mailing address.

Lead defendant Ding Xiaoyang accepts an award for young leaders from China’s Ministry of State Security in May 2018 while he and other MSS intelligence officers were allegedly hacking and stealing sensitive intellectual property from around the world.

 

“These criminal charges once again highlight China continues to use cyber-enabled attacks to steal what other countries make, in flagrant disregard of its bilateral and multilateral commitments,” said Deputy Attorney General Lisa O. Monaco. “The breadth and duration of China’s hacking campaigns, including these efforts targeting a dozen countries across sectors ranging from healthcare and biomedical research to aviation and defense, remind us that no country or industry is safe. Today’s international condemnation shows that they world wants fair rules, where countries invest in innovation, not theft.”

“This indictment alleges a worldwide hacking and economic espionage campaign led by the government of China,” said Acting U.S. Attorney Randy Grossman. “The defendants include foreign intelligence officials who orchestrated the alleged offenses, and the indictment demonstrates how China’s government made a deliberate choice to cheat and steal instead of innovate. These offenses threaten our economy and national security, and this prosecution reflects the Department of Justice’s commitment and ability to hold individuals and nations accountable for stealing the ideas and intellectual achievements of our nation’s best and brightest people.”

“The FBI alongside our federal and international partners, remains committed to imposing risk and consequences on these malicious cyber actors here in the U.S. and abroad,” said Deputy Director Paul M. Abbate of the FBI. “We will not allow the Chinese government to continue to use these tactics to obtain unfair economic advantage for its companies and commercial sectors through criminal intrusion and theft. With these types of actions, the Chinese government continues to undercut its own claims of being a trusted and effective partner in the international community.”

“The FBI’s San Diego field office is committed to protecting the people of the United States and the community of San Diego, to include our universities, health care systems, research institutes, and defense contractors,” said Special Agent in Charge Suzanne Turner of the FBI’s San Diego Field Office. “The charges outlined today demonstrate China’s continued, persistent computer intrusion efforts, which will not be tolerated here or abroad. We stand steadfast with our law enforcement partners in the United States and around the world and will continue to hold accountable those who commit economic espionage and theft of intellectual property.” 

The defendants’ activity had been previously identified by private sector security researchers, who have referred to the group as Advanced Persistent Threat (APT) 40, BRONZE, MOHAWK, FEVERDREAM, G0065, Gadolinium, GreenCrash, Hellsing, Kryptonite Panda, Leviathan, Mudcarp, Periscope, Temp.Periscope, and Temp.Jumper.

According to the indictment, to gain initial access to victim networks, the conspiracy sent fraudulent spearphishing emails, that were buttressed by fictitious online profiles and contained links to doppleganger domain names, which were created to mimic or resemble the domains of legitimate companies.  In some instances, the conspiracy used hijacked credentials, and the access they provided, to launch spearphishing campaigns against other users within the same victim entity or at other targeted entities.  The conspiracy also used multiple and evolving sets of sophisticated malware, including both-publicly available and customized malware to obtain, expand, and maintain unauthorized access to victim computers and networks.  The conspiracy’s malware included those identified by security researchers as BADFLICK aka GreenCrash; PHOTO, aka Derusbi, MURKYTOP aka mt.exe; and HOMEFRY aka dp.dll.  Such malware allowed for initial and continued intrusions into victim systems, lateral movement within a system, and theft of credentials, including administrator passwords. 

The conspiracy often used anonymizer services, such as The Onion Router (TOR), to access malware on victim networks and manage their hacking infrastructure, including servers, domains, and email accounts.  The conspiracy further attempted to obscure its hacking activities through other third-party services.  For example, the conspiracy used GitHub to both store malware and stolen data, which was concealed using steganography. The conspiracy also used Dropbox Application Programming Interface (API) keys in commands to upload stolen data directly to conspiracy-controlled Dropbox accounts to make it appear to network defenders that such data exfiltration was an employee’s legitimate use of the Dropbox service.

Coinciding with today’s announcement, to enhance private sector network defense efforts against the conspirators, the FBI and the Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency (CISA) released a Joint Cybersecurity Advisory Joint Cybersecurity Advisory containing these and further technical details, indicators of compromise, and mitigation measures.

The defendants are each charged with one count of conspiracy to commit computer fraud, which carries a maximum sentence of five years in prison, and one count of conspiracy to commit economic espionage, which carries a maximum sentence of 15 years in prison.  The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencings of the defendants will be determined by the assigned judge.

The investigation was conducted jointly by the U.S. Attorney’s Office for the Southern District of California, the National Security Division’s Counterintelligence and Export Controls Section, and the FBI’s San Diego Field Office.  The FBI’s Cyber Division, Cyber Assistant Legal Attachés and Legal Attachés in countries around the world provided essential support.  Numerous victims cooperated and provided valuable assistance in the investigation.

Assistant U.S. Attorneys Fred Sheppard and Sabrina Feve of the Southern District of California and Trial Attorney Matthew McKenzie of the National Security Division’s Counterintelligence and Export Control Section are prosecuting this case.  

The details contained in the charging document are allegations.  The defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

DEFENDANTS                                            Case Number 21cr1622                                           

Ding Xiaoyang                                                Age: 35                       Henan Province

aka Ding Hao

aka Manager Chen

Cheng Qingmin                                               Age Unknown            Unknown

aka Manager Cheng

Zhu Yunmin                                                    Age: 37                       Hainan Province

aka Zhu Rong,

Wu Shurong                                                    Age: 39                       Hainan Province

aka goodperson,         

aka ha0r3n,

aka Shi Lei

SUMMARY OF CHARGES

Conspiracy to Damage Protected Computers – Title 18, U.S.C., Secs. 371, 1030(a)(2)(B) and

(C), 1030(c)(2)(B)(i) and (iii), 1030(a)(5)(A), and 1030(c)(4)(B)(i)

Maximum penalty: Five years in prison and $250,000 fine

Conspiracy to Commit Economic Espionage – Title 18, U.S.C., Sec. 1831 ( 5)

Maximum penalty: Fifteen years in prison and $5 million fine

Criminal Forfeiture – Title 18, U.S.C., Sec. 982(a)(l) and (b)(l)

AGENCY

Federal Bureau of Investigation

*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.

A federal grand jury in San Diego, California, returned an indictment in May charging four nationals and residents of the People’s Republic of China with a campaign to hack into the computer systems of dozens of victim companies, universities and government entities in the United States and abroad between 2011 and 2018. The indictment, which was unsealed on Friday, alleges that much of the conspiracy’s theft was focused on information that was of significant economic benefit to China’s companies and commercial sectors, including information that would allow the circumvention of lengthy and resource-intensive research and development processes. The defendants and their Hainan State Security Department (HSSD) conspirators sought to obfuscate the Chinese government’s role in such theft by establishing a front company, Hainan Xiandun Technology Development Co., Ltd. (海南仙盾) (Hainan Xiandun), since disbanded, to operate out of Haikou, Hainan Province.

The two-count indictment alleges that Ding Xiaoyang (丁晓阳), Cheng Qingmin (程庆民) and Zhu Yunmin (朱允敏), were HSSD officers responsible for coordinating, facilitating and managing computer hackers and linguists at Hainan Xiandun and other MSS front companies to conduct hacking for the benefit of China and its state-owned and sponsored instrumentalities. The indictment alleges that Wu Shurong (吴淑荣) was a computer hacker who, as part of his job duties at Hainan Xiandun, created malware, hacked into computer systems operated by foreign governments, companies and universities, and supervised other Hainan Xiandun hackers.

The conspiracy’s hacking campaign targeted victims in the United States, Austria, Cambodia, Canada, Germany, Indonesia, Malaysia, Norway, Saudi Arabia, South Africa, Switzerland and the United Kingdom. Targeted industries included, among others, aviation, defense, education, government, health care, biopharmaceutical and maritime. Stolen trade secrets and confidential business information included, among other things, sensitive technologies used for submersibles and autonomous vehicles, specialty chemical formulas, commercial aircraft servicing, proprietary genetic-sequencing technology and data, and foreign information to support China’s efforts to secure contracts for state-owned enterprises within the targeted country (e.g., large-scale high-speed railway development projects). At research institutes and universities, the conspiracy targeted infectious-disease research related to Ebola, MERS, HIV/AIDS, Marburg and tularemia.

As alleged, the charged MSS officers coordinated with staff and professors at various universities in Hainan and elsewhere in China to further the conspiracy’s goals. Not only did such universities assist the MSS in identifying and recruiting hackers and linguists to penetrate and steal from the computer networks of targeted entities, including peers at many foreign universities, but personnel at one identified Hainan-based university also helped support and manage Hainan Xiandun as a front company, including through payroll, benefits and a mailing address.

“These criminal charges once again highlight that China continues to use cyber-enabled attacks to steal what other countries make, in flagrant disregard of its bilateral and multilateral commitments,” said Deputy Attorney General Lisa O. Monaco. “The breadth and duration of China’s hacking campaigns, including these efforts targeting a dozen countries across sectors ranging from healthcare and biomedical research to aviation and defense, remind us that no country or industry is safe. Today’s international condemnation shows that the world wants fair rules, where countries invest in innovation, not theft.”

“The FBI, alongside our federal and international partners, remains committed to imposing risk and consequences on these malicious cyber actors here in the U.S. and abroad,” said Deputy Director Paul M. Abbate of the FBI. “We will not allow the Chinese government to continue to use these tactics to obtain unfair economic advantage for its companies and commercial sectors through criminal intrusion and theft. With these types of actions, the Chinese government continues to undercut its own claims of being a trusted and effective partner in the international community.”

“This indictment alleges a worldwide hacking and economic espionage campaign led by the government of China,” said Acting U.S. Attorney Randy Grossman for the Southern District of California. “The defendants include foreign intelligence officials who orchestrated the alleged offenses, and the indictment demonstrates how China’s government made a deliberate choice to cheat and steal instead of innovate. These offenses threaten our economy and national security, and this prosecution reflects the Department of Justice’s commitment and ability to hold individuals and nations accountable for stealing the ideas and intellectual achievements of our nation’s best and brightest people.”

“The FBI’s San Diego Field Office is committed to protecting the people of the United States and the community of San Diego, to include our universities, health care systems, research institutes, and defense contractors,” said Special Agent in Charge Suzanne Turner of the FBI’s San Diego Field Office. “The charges outlined today demonstrate China’s continued, persistent computer intrusion efforts, which will not be tolerated here or abroad. We stand steadfast with our law enforcement partners in the United States and around the world and will continue to hold accountable those who commit economic espionage and theft of intellectual property.” 

The defendants’ activity had been previously identified by private sector security researchers, who have referred to the group as Advanced Persistent Threat (APT) 40, BRONZE, MOHAWK, FEVERDREAM, G0065, Gadolinium, GreenCrash, Hellsing, Kryptonite Panda, Leviathan, Mudcarp, Periscope, Temp.Periscope and Temp.Jumper.

According to the indictment, to gain initial access to victim networks, the conspiracy sent fraudulent spearphishing emails, that were buttressed by fictitious online profiles and contained links to doppelgänger domain names, which were created to mimic or resemble the domains of legitimate companies. In some instances, the conspiracy used hijacked credentials, and the access they provided, to launch spearphishing campaigns against other users within the same victim entity or at other targeted entities. The conspiracy also used multiple and evolving sets of sophisticated malware, including both publicly available and customized malware, to obtain, expand and maintain unauthorized access to victim computers and networks. The conspiracy’s malware included those identified by security researchers as BADFLICK, aka GreenCrash; PHOTO, aka Derusbi; MURKYTOP, aka mt.exe; and HOMEFRY, aka dp.dll. Such malware allowed for initial and continued intrusions into victim systems, lateral movement within a system, and theft of credentials, including administrator passwords.

The conspiracy often used anonymizer services, such as The Onion Router (TOR), to access malware on victim networks and manage their hacking infrastructure, including servers, domains and email accounts. The conspiracy further attempted to obscure its hacking activities through other third-party services. For example, the conspiracy used GitHub to both store malware and stolen data, which was concealed using steganography. The conspiracy also used Dropbox Application Programming Interface (API) keys in commands to upload stolen data directly to conspiracy-controlled Dropbox accounts to make it appear to network defenders that such data exfiltration was an employee’s legitimate use of the Dropbox service.

Coinciding with today’s announcement, to enhance private sector network defense efforts against the conspirators, the FBI and the Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency (CISA) released a Joint Cybersecurity Advisory containing these and further technical details, indicators of compromise and mitigation measures.

The defendants are each charged with one count of conspiracy to commit computer fraud, which carries a maximum sentence of five years in prison, and one count of conspiracy to commit economic espionage, which carries a maximum sentence of 15 years in prison. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencings of the defendants will be determined by the assigned judge.

The investigation was conducted jointly by the U.S. Attorney’s Office for the Southern District of California, the National Security Division’s Counterintelligence and Export Controls Section, and the FBI’s San Diego Field Office. The FBI’s Cyber Division, Cyber Assistant Legal Attachés and Legal Attachés in countries around the world provided essential support. Numerous victims cooperated and provided valuable assistance in the investigation.

Assistant U.S. Attorneys Fred Sheppard and Sabrina Feve of the Southern District of California and Trial Attorney Matthew McKenzie of the National Security Division’s Counterintelligence and Export Control Section are prosecuting this case.

The details contained in the charging document are allegations. The defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

Assistant U. S. Attorneys Nicholas Pilchak (619) 546-9709 and Jaclyn Stahl (619) 546-8456 

NEWS RELEASE SUMMARY – July 16, 2021

SAN DIEGO – Jennings Ryan Staley, a physician who attempted to profit from the pandemic by marketing a “miracle cure” for COVID-19, pleaded guilty in federal court today, admitting that he tried to smuggle hydroxychloroquine into the United States to sell in his coronavirus “treatment kits.”

Staley, the former operator of Skinny Beach Med Spas in and around San Diego, also admitted in his plea agreement that he abused his position of trust as a physician in making the extreme claims, and that he lied to the FBI when confronted about it.

The doctor pleaded guilty to one count of importation contrary to law, admitting that he worked with a Chinese supplier to try to smuggle into the United States a barrel that he believed contained over 26 pounds of hydroxychloroquine powder by mislabeling it as “yam extract.”  Staley admitted that he intended to sell the hydroxychloroquine powder in capsules as part of his 2020 business venture selling the COVID-19 “treatment kits.”

In his plea agreement, Staley also admitted that he wrote a prescription for hydroxychloroquine for one of his employees and then misused the employee’s name and personal identifying information and answered questions as though he were the employee to fill the prescription, all without the employee’s knowledge or consent. Staley agreed that he engaged in this conduct in order to obtain more of the drug for his enterprise. 

In late March and early April 2020, Staley marketed and sold his treatment kits to Skinny Beach customers.  According to the plea agreement, he described his products—which included hydroxychloroquine—as a “one hundred percent” cure, a “magic bullet,” an “amazing weapon,” and “almost too good to be true,” and stated that the products would provide at least six weeks of immunity. Staley admitted that these statements were material to his potential customers, and that as a doctor he abused a position of public trust. An undercover agent purchased six of Staley’s treatment packs for $4,000. 

Staley also admitted that he willfully impeded and sought to obstruct the federal investigation into his conduct by lying to federal agents.  Specifically, he falsely denied ever claiming that his treatment packages were a “one hundred percent effective cure,” adding “that would be foolish.”  Staley likewise falsely claimed that his medical practice would “absolutely” get all relevant information about each family member when sending out medications for a family treatment pack, when just a week earlier, he had dispensed a “family pack” of hydroxychloroquine, chloroquine, generic Viagra, Xanax, and azithromycin to the undercover agent without collecting any medical information from the agent or his five supposed family members.

“While healthcare workers around the world selflessly labored on the frontlines of an international pandemic, this doctor used his position of trust to cash in on COVID-19 fears,” said Acting U.S. Attorney Randy Grossman. “We are committed to protecting the American people from such scams and holding the scammers accountable.” Grossman commended the federal agents from FBI and FDA-OCI, and Assistant U.S. Attorneys Nicholas Pilchak and Jaclyn Stahl, who worked hard pursuing justice in this case.  He also commended U.S. Customs and Border Protection for its assistance with the investigation. 

“Dr. Staley offered a 'magic bullet' - a guaranteed cure for COVID-19 to people gripped in fear during a global pandemic,” said FBI Special Agent in Charge Suzanne Turner. “Today, Dr. Staley admitted it was all a lie as part of a scam to make a quick buck. The FBI will continue to vigorously pursue doctors who abuse their professions to defraud innocent victims with gimmicks of false hope and promises.”

“The FDA continues to work with its law enforcement partners to protect the public health by identifying, investigating and bringing to justice those who attempt to profit from the pandemic by offering and distributing COVID-19 treatments with unproven ‘miracle cure’ claims to American consumers,” said Special Agent in Charge Lisa L. Malinowski, FDA Office of Criminal Investigations Los Angeles Field Office.

Staley’s next court date is October 8, 2021 before U.S. District Judge Gonzalo Curiel.

On May 17, 2021, Attorney General Merrick Garland established the COVID-19 Fraud Enforcement Task Force, led by the Deputy Attorney General, to bring together the full resources of the federal government to bolster fraud enforcement efforts.

If you think you are a victim of COVID-19 fraud, immediately report it to the FBI (visit ic3.gov, tips.fbi.gov, or call 1-800-CALL-FBI or the San Diego FBI at 858-320-1800). The public is also urged to report suspected fraud schemes related to COVID-19 by calling the National Center for Disaster Fraud (NCDF) hotline (1-866-720-5721) or by e-mailing the NCDF at disaster@leo.gov.

DEFENDANT                                               Case Number 20cr1227-GPC                                       

Jennings Ryan Staley, M.D.                           Age: 46                       Residence: San Diego, CA

SUMMARY OF CHARGES

Importation Contrary to Law, in violation of Title 18, United States Code, Section 545

Maximum Penalty: Twenty years in prison; fine; special assessment

AGENCIES

Federal Bureau of Investigation

U.S. Food and Drug Administration, Office of Criminal Investigations

U.S. Customs and Border Protection

Assistant U. S. Attorney Melanie K. Pierson (619) 546-7976  

NEWS RELEASE SUMMARY – July 9, 2021

SAN DIEGO – A San Diego-based effort to block the smuggling of dangerous Mexican pesticides into the United States has resulted in the prosecution of more than 50 defendants for environmental crimes and the seizure of nearly 1,000 containers of illegal Mexican pesticides so far.

The Border Pesticide Initiative group was formed at the end of 2019 and includes the U.S. Attorney’s Office; the U.S. Department of Justice, Environmental Crimes Section; the U.S. Environmental Protection Agency (EPA); Homeland Security Investigations; the California Department of Toxic Substances Control; and the San Diego City Attorney’s Office.

The initiative began in response to complaints that law enforcement officers were being injured during the eradication of illegal marijuana cultivation sites on public lands by exposure to powerful Mexican pesticides not permitted in the United States.

Of the more than 50 defendants who have been charged federally, 14 were convicted of felonies and 26 were convicted of misdemeanors. The defendants have been ordered to pay more than $60,000 in restitution to cover the cost of disposing of the pesticides.  Eight cases have also been filed by the San Diego City Attorney’s Office under California law for possession of pesticides found at the border.

The pesticides imported by these defendants were labeled in Spanish and did not bear any registration number showing that the products were approved by the EPA, as required by law for pesticides intended for use in the United States.  The lawful importation of pesticides requires a Notice of Arrival to be filed in advance with the EPA to allow for inspection, which none of the defendants provided.

The pesticides most frequently encountered in these cases are those containing the active ingredients of carborfuran and methamidophos, which are cancelled pesticides not permitted to be sold or distributed in the United States.  Carbofuran, sold in Mexico under the trade names Furadan and Qufuran, is classified by the EPA as Toxicity Category I, the highest toxicity category, based upon its lethal potency from absorption by ingestion, contact with skin, and inhalation, and has been cancelled in the United States since  2011. 

Methamidophos, sold in Mexico under the trade names Metaldane 600, Tamaron or Monitor, is one of the most acutely toxic organophosphate pesticides and is similar to a class of chemicals that were originally manufactured as chemical warfare nerve agents.  Methamidophos was cancelled in the United States in 2009.  The application of these chemicals on public lands has been documented to pollute streams and soils and kill wildlife.  Moreover, cannabis users are also at risk from exposure to pesticide residues. During the smoking of cannabis, pesticides are transferred directly into the blood stream, increasing the potential for exposure.[1] In one study, the pesticide transfer rate of carbofuran into cannabis smoke from glass pipes was as high as 70 percent of the initial concentration in the plant. 

Two of the felony convictions noted above were the result of verdicts rendered by trial juries.  On July 9, 2021, Veronica Perez of Hemet, California, was sentenced to 60 days in following a guilty verdict by a federal jury in San Diego in November 2020 related to the charge of smuggling unregistered pesticides into the United States. Perez concealed twenty containers of zinc phosphide (sold under the Mexican trade name Fosfuro de Zinc) in her purse and failed to declare the items at the border when she attempted to cross into the United States from Mexico on July 11, 2019. Consumption of a single zinc phosphide pellet can be lethal to a small bird or mammal.[2] Ingestion of seven drops to one teaspoon of zinc phosphide would likely kill a 150-pound person.[3] Perez also had Qufuran and Metaldane in her vehicle.

On May 26, 2021, Selene Elizabeth Barraza of Visalia, California, was convicted by a federal jury in San Diego of smuggling 25 containers of illegal Mexican pesticides and fertilizer, including Metaldane, and Furadan, into the United States from Mexico. On February 26, 2020, Barraza failed to declare the pesticide containers when she attempted to enter the United States with the pesticides concealed under the middle row seats in her vehicle. Barraza is scheduled to be sentenced on August 20, 2021.

On June 18, 2021, Felix Gutierrez Valencia was sentenced to 90 days in custody, ordered to pay a fine of $2,500 and restitution of $8,807 for the cost of disposal of the pesticides he smuggled, and also ordered to perform 100 hours of community service during his three years of supervised release. Gutierrez had smuggled 48 containers of various pesticides, including Furadan, Monitor and Rodentox (which contains zinc phosphide).  Gutierrez had concealed some of the pesticides in cereal boxes and boxes of cookies.  While his case was pending, Gutierrez offered another individual $40/bottle to smuggle pesticides.  That person was caught at the border with another 38 containers of pesticides, including Furadan.

On March 26, 2021, Beatriz Santillan was sentenced to 70 days in prison and ordered to pay $20,079 restitution after pleading guilty to smuggling 56 containers of seven different types of illegal Mexican pesticides, including Qufuran, Metaldane and zinc phosphide (under the Mexican trade name Rodentox) into the United States from Mexico. Santillan was in possession of receipts showing three prior purchases of similar pesticides, and a search of her phone revealed chats with associates regarding the tending and cultivation of marijuana plants, including the use of the pesticides.

On April 27, 2021, Saul Flores Banuelos was sentenced to 60 days in prison and $1,200 restitution after pleading guilty to smuggling Qufuran, alcohol and medications into the United States from Mexico.

“All of these law enforcement agencies have come together to protect people, wildlife and the environment from extremely dangerous pesticides, and the result has been an overwhelming success,” said Acting U.S. Attorney Randy Grossman. “But this effort has also been a sobering reminder that trafficking in pesticides is a prolific problem. Those who commit these crimes care about profit, not people, so this ongoing enforcement action should force them to rethink their priorities.” Grossman commended the exemplary work of prosecutor Melanie Pierson, who specializes in cases related to environmental protection, and Environment and Natural Resources Division Trial Attorney Stephen Da Ponte, as well as the federal and state agencies participating in the initiative, including the U.S. Environmental Protection Agency (EPA); Homeland Security Investigations (HSI); the California Department of Toxic Substances Control; the U.S. Department of Justice, Environmental Crimes Section; and the San Diego City Attorney’s Office.

“This initiative demonstrates our commitment to protecting public lands, human health, and the environment through continued enforcement of the laws regulating the importation, sale, and distribution of dangerous pesticides,” said Jean E. Williams, Acting Assistant Attorney General for the Environment and Natural Resources Division. “The Department of Justice will continue to work closely with our federal agency and state partners to ensure that those who import and use these prohibited chemicals are held fully accountable for their crimes.”

“The significant number of individuals arrested throughout this multi-agency initiative highlights the pervasiveness and dangers of illegal substances being smuggled across the U.S.-Mexico border,” said Cardell T. Morant, Special Agent in Charge of HSI San Diego. “The chemicals banned from importation into the U.S. are highly toxic and hazardous to humans, wildlife and the environment. These smugglers often use the banned chemicals for cultivating cannabis. What’s most disturbing is that some of the chemicals can be transferred directly into the bloodstream of cannabis users, so it’s important that HSI and all the partner agencies participating in this initiative continue to prevent these toxic chemicals from being smuggled into the U.S.”

“The results of these recent prosecutions clearly demonstrate that individuals intentionally violating pesticide and smuggling laws will be held responsible for their crimes.” said Scot Adair, Special Agent in Charge of the EPA’s criminal enforcement program in California. “EPA will continue to work diligently on the Border Pesticide Initiative with our law enforcement partners. We are committed to holding responsible parties accountable for actions that put entire communities at risk.”

 “This is an example of what can be accomplished when multiple agencies work together for a common goal to protect human health and the environment,” said Hansen Pang, Chief Investigator for the Office of Criminal Investigations of the California Department of Toxic Substances Control.

“Protecting our region from environmental toxins is an office priority,” San Diego City Attorney Mara W. Elliott said. “As part of the Border Pesticide Initiative, the City Attorney’s Office works closely with the U.S. Attorney and other law enforcement agencies to protect Californians from exposure to lethal chemicals and hold accountable those who illegally traffic these dangerous substances.”

DEFENDANTS                                                                                             Case Numbers                      

Veronica Perez                       Age: 40                       Hemet, CA                  20cr0869-DMS

Selene Barraza                        Age: 34                       Visalia, CA                 20cr1442-DMS

Beatriz Santillan                     Age: 29                       Menifee, CA               20cr2178-GPC

Saul Flores Banuelos              Age: 56                       Apple Valley, CA       20cr2179-JLS

Felix Gutierrez Valencia        Age: 40                       Perris, CA                   20cr2058-JLS

SUMMARY OF CHARGES

Smuggling – Title 18, U.S.C., Section 545

Maximum penalty: Twenty years in prison and $250,000 fine

AGENCIES

Homeland Security Investigations; U.S. Environmental Protection Agency, Criminal Investigation Division; California Department of Toxic Substances Control, Office of Criminal Investigations

 

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[1] Leung, M.C.K., M.H. Silva, A.J. Palumbo, P.N. Lohstroh, S.E. Koshlukova, S.F. DuTeaux. 2019.  Adverse outcome pathway of developmental neurotoxicity resulting from prenatal exposures to cannabis contaminated with organophosphate pesticide residues. Reproductive Toxicology. 85: 12-18. 

[2] EPA. 2004. Potential Risks of Nine Rodenticides to Birds and Nontarget Mammals: A Comparative Approach; Office of Prevention, Pesticides, and Toxic Substances, Office of Pesticide Programs, U.S. Government Printing Office: Washington, DC, 2004.

[3] NOAA CAMEO Chemicals, version 2.7.1 rev 1. Zinc Phosphide Chemical Datasheet. National Ocean Service, Office of Response and Restoration.

Assistant U. S. Attorneys Michael A. Deshong and Adam Gordon (619) 546-9290    

NEWS RELEASE SUMMARY—July 8, 2021

SAN DIEGO—Olatunde James Temitope Akintonde of El Cajon pleaded guilty in federal court today, admitting that he sold fentanyl-laced pills that caused the death of a nineteen-year-old Santee man, identified in court records as S.J.G., in March of 2019.

According to his plea agreement, Akintonde admitted that he sent messages to S.J.G. through social media on February 28, 2019, to coordinate the sale of what the victim believed to be oxycodone pills. Later that evening, Akintonde delivered two counterfeit oxycodone pills laced with fentanyl to S.J.G. After the meeting, Akintonde sent additional messages to S.J.G. through social media warning that he should only take one of the pills because they were “strong.” Akintonde further admitted in his plea agreement that the pills he gave to S.J.G. caused his death. According to other filings in the case, S.J.G. died in his home sometime in the evening of February 28, 2019 or the early morning hours of March 1, 2019.

“The epidemic of counterfeit fentanyl-laced pills poisoning our community has raised the stakes of drug dealing considerably,” said Acting U.S. Attorney Randy Grossman. “Dealers who ignore these risks and carry on with their deadly trade will be pursued and prosecuted.” Grossman praised prosecutors Michael Deshong and Adam Gordon as well as the Drug Enforcement Administration’s Narcotics Task Force Team 10, officials from the San Diego Sheriff’s Department and the San Diego County District Attorney’s Office for their excellent work on this case.

“As fentanyl-related overdose deaths continue to rise at an alarming rate in San Diego County and throughout the United States, DEA is determined to track down these drug dealers and bring them to justice,” said DEA Special Agent in Charge John W. Callery.

Akintonde is scheduled to be sentenced on September 24, 2021 at 10 a.m. before U.S. District Judge Janis L. Sammartino.

This case is the result of ongoing efforts by the U.S. Attorney’s Office, the San Diego County District Attorney’s Office and the Drug Enforcement Administration to investigate and prosecute the distribution of dangerous illegal drugs—fentanyl, in particular—that result in overdose deaths. The Drug Enforcement Administration created Narcotics Task Force Team 10 as a response to the increase in overdose deaths in San Diego County. Agents from Team 10 contributed to the investigation into S.J.G.’s death.

DEFENDANTS                                             Case Number 21cr1178-JLS                                        

Olatunde James Temitope Akintonde            Age: 23                       El Cajon, CA

SUMMARY OF CHARGES

Distribution of Fentanyl – Title 18, United States Code, Section 841(a)(1)

Maximum penalty: Twenty years in prison

AGENCY

Drug Enforcement Administration

San Diego Sheriff’s Department

San Diego County District Attorney’s Office

For more information contact:

Assistant U. S. Attorney Matthew J. Sutton (619) 546-8941, Special Assistant U.S. Attorney Nicole Bredariol (619) 546-8419, and Assistant U. S. Attorney Amy B. Wang (619) 546-6968

Click

HERE for the indictment
Click HERE for the search warrant

SAN DIEGO – An indictment was unsealed today in federal court charging 60 members of a San Diego-based international methamphetamine distribution network tied to the Sinaloa Cartel with drug trafficking, money laundering and firearms offenses.

During the last month, hundreds of federal, state, and local law enforcement agents and officers have arrested dozens of defendants and searched multiple locations throughout San Diego County and in five states. As of today, 44 of the 60 defendants are either in federal or state custody, and the search continues for 16 defendants. In addition to these arrests, law enforcement has seized more than 220 pounds of methamphetamine and other illegal drugs; 90 firearms; and more than $250,000 in cash. Law enforcement officials are also seeking the forfeit of residences, high-end vehicles, and bulk cash belonging to these defendants.

According to the indictment and other publicly filed documents, over the last several years, this complex San Diego-based network obtained thousands of kilograms of methamphetamine from the Sinaloa Cartel to smuggle across the international border concealed in hidden compartments in passenger cars and motorcycles. The defendants then used these cars and motorcycles, along with trains, commercial airlines, the U.S. Mail, and commercial delivery services like FedEx and UPS to distribute that methamphetamine to dozens of sub-distributors located throughout San Diego County, the United States, and the world, including Hawaii, Arizona, Texas, Kansas, Iowa, Indiana, Michigan, Minnesota, Missouri, Connecticut, New York, New Jersey, Massachusetts, Kentucky, as well as Australia and New Zealand.

In return, tens of thousands of dollars in narcotics proceeds were returned to the network’s leaders via shipments of bulk cash, structured cash deposits into bank accounts, and money transfer systems like MoneyGram, Western Union, PayPal, Zelle, Venmo, and Cash App. And to protect their illegal operations, the defendants allegedly possessed dozens of firearms and used encrypted communication providers to communicate with each other. This drug trafficking and money laundering continued unabated throughout the COVID-19 global pandemic.

Despite their sophisticated efforts, law enforcement successfully penetrated this network with a variety of investigative techniques, including physical surveillance, obtaining phone records and financial documents, undercover agents, search warrants, as well as a six-month federal wiretap to intercept the communications and track the locations of the defendants.

Today we have dealt a serious blow to this San Diego-based international drug trafficking network with ties to the Sinaloa Cartel,” said Acting U.S. Attorney Randy Grossman. “The intersection of drug dealing and gun possession inevitably leads to violence in our communities. By dismantling this network, the Department of Justice reaffirms its unwavering commitment to reducing violent crime and building a San Diego where all our citizens are safe.”

“DEA is enhancing its efforts to disrupt, dismantle and destroy the most violent drug trafficking organizations across the country under Operation Crystal Shield,” said DEA Special Agent in Charge John W. Callery. “By dismantling this sophisticated drug trafficking network, DEA and our law enforcement partners have prevented significant quantities of methamphetamine and numerous firearms from making their way to the streets of San Diego and other neighborhoods throughout the United States.  Drug trafficking is a violent crime, that impacts the safety and security of our communities – and the drug and firearm seizures made in this investigation are testament to that.”

“The primary motivation of drug traffickers is greed,” said Ryan L. Korner, Special Agent in Charge for IRS-Criminal Investigation’s Los Angeles Field Office.  “IRS-CI will continue to work tirelessly alongside our partner agencies to stop the flow of narcotics and narcotics proceeds that are killing innocent Americans, and to ensure that crime doesn’t pay—that those individuals, like the 60 defendants indicted and arrested in this case, are brought to justice.”

“The U.S. Postal Inspection Service is committed to preserving the integrity of the mail by ridding the mail of involvement in drug trafficking,” said US Postal Inspection Service Acting Inspector in Charge Eric Shen of the Los Angeles Division. “This operation clearly shows that by combining our strengths and resources with all the involved agencies which include, federal, state and local law enforcement agencies we can disrupt their drug trafficking organizations to protect our communities.”

Acting U.S. Attorney Grossman also praised federal, state, and local law enforcement for the coordinated team effort in the culmination of this investigation. This case was led by the Drug Enforcement Administration’s Narcotics Task Force (NTF), the Internal Revenue Service - Criminal Investigation, and the United States Postal Inspection Service. The NTF is a DEA-led task force comprised of federal and local law enforcement from the DEA, San Diego County Sheriff’s Department, the San Diego Police Department, the Escondido Police Department, the United States Border Patrol, and the San Diego County Probation Office. Agents and officers from the United States Marshals Service, Homeland Security Investigations, Customs and Border Protection, the Bureau of Alcohol, Tobacco, Firearms & Explosives, and the Federal Bureau of Prisons, also provided vital assistance for the investigation. Attorneys from the Department of Justice, Office of Enforcement Operations, Electronic Surveillance Unit, likewise provided critical work as part of the investigative team.

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. Attorneys Matthew J. Sutton, Nicole Bredariol, and Amy B. Wang of the U.S. Attorney’s Office for the Southern District of California are prosecuting the case, with assistance from Paralegal Specialists Kathleen Jordano and Leticia Adams.

 

An indictment is not evidence of guilt. The defendants are presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

 

DEFENDANTS                                            Case Number 21cr1559-H                           

(D1) Reyes Espinoza                                      Age: 35                                   San Ysidro, CA

(D2) David Villegas                                        Age: 49                                   San Diego, CA

(D3) John Bomenka                                        Age: 54                                   San Diego, CA

(D4) Dennis Jones                                          Age: 49                                   San Diego, CA

(D5) Darren Mosier                                        Age: 59                                   San Diego, CA

(D6) Frank Tucker                                          Age: 63                                   San Diego, CA

(D7) Charles Miller                                         Age: 52                                   San Diego, CA

*(D8) Carlos Espinoza                                    Age: 28                                   Tijuana, MX

(D9) Mario Espinoza                                      Age: 20                                   Tijuana, MX

(D10) Jaron Hillyer                                         Age: 30                                   San Diego, CA

(D11) Kristina Brown                                     Age: 32                                   San Diego, CA

(D12) Danny Miller                                        Age: 52                                   San Diego, CA

(D13) Shawn Morrill                                       Age: 49                                   San Diego, CA

*(D14) Hilleal Grant                                      Age: 51                                   San Diego, CA

*(D15) Lewis Rich                                         Age: 59                                   San Diego, CA

(D16) Cameron Graff                                     Age: 29                                   San Diego, CA

*(D17) Terry Haith                                         Age: 60                                   San Diego, CA

(D18) Tansy Steinhauer                                  Age: 51                                   San Diego, CA

*(D19) Jessica Pomeroy                                 Age: 30                                   San Diego, CA

*(D20) Shadow Segura                                   Age: 23                                   Houston, TX

(D21) Jasmine Lucas                                      Age: 50                                   San Diego, CA

(D22) Philip Abbas                                         Age: 42                                   San Diego, CA

*(D23) Peter Fuller                                         Age: 63                                   San Diego, CA

(D24) Eduardo Osuna                                     Age: 41                                   San Diego, CA

(D25) Frank Carrillo                                       Age: 45                                   San Diego, CA

(D26) Stephen Myrick                                    Age: 45                                   San Diego, CA

(D27) Gloria Sandoval                                   Age: 40                                   San Diego, CA

*(D28) Ashley Hilton                                     Age: 42                                   Houston, TX

(D29) Joseph Occhiogrosso                            Age: 44                                   Brooklyn, NY

(D30) Gary Beasley                                        Age: 39                                   San Diego, CA

*(D31) Arnulfo Rodriguez                             Age: 38                                   San Diego, CA

(D32) Alexandro Larios-Flores                       Age: 24                                   San Diego, CA

*(D33) Jose Vargas                                        Age: 31                                   San Diego, CA

(D34) Michael Nagle                                      Age: 50                                   San Diego, CA

*(D35) Raymond Sterling                               Age: 51                                   San Diego, CA

(D36) Terry Tyler                                           Age: 49                                   San Diego, CA

(D37) Victor Yamasaki                                   Age: 59                                   San Diego, CA

(D38) Chris Paschke                                       Age: 57                                   San Diego, CA

(D39) Charles Gerardi                                                Age: 57                                   Houston, TX

(D40) Christian Lopez-Villegas                      Age: 34                                   San Ysidro, CA

(D41) David Santa Maria                                Age: 49                                   San Diego, CA

(D42) Melvin Johnson                                    Age: 44                                   San Diego, CA

(D43) Daniel Babuata                                     Age: 34                                   San Diego, CA

*(D44) Garrett Steele                                     Age: 40                                   San Diego, CA

(D45) Vien Trinh                                            Age: 62                                   San Diego, CA

*(D46) Troy Prater                                         Age: 46                                   San Diego, CA

*(D47) Sharon Landhan                                 Age: 44                                   San Diego, CA

(D48) Gabriel Askay                                      Age: 44                                   San Diego, CA

(D49) Patrick Lane                                         Age: 57                                   San Diego, CA

(D50) Kevin Tobin                                          Age: 65                                   San Diego, CA

(D51) James Ellerbe                                        Age: 68                                   San Diego, CA

(D52) Hope Stoneking                                    Age: 35                                   San Diego, CA

(D53) Tasha Almanza                                     Age: 42                                   San Diego, CA

*(D54) Jason Ferguson                                   Age: 48                                   San Diego, CA

(D55) Kelle Ferguson                                     Age: 52                                   San Diego, CA

*(D56) Roger Desroche                                  Age: 74                                   San Diego, CA

(D57) Steven Brandt                                      Age: 57                                   San Diego, CA

(D58) Esteban Gastelum-Sanchez                  Age: 42                                   San Diego, CA

(D59) Tara Scroggins                                     Age: 45                                   San Diego, CA

(D60) Debbie Hill                                           Age: 59                                   San Diego, CA

 

*Fugitives

 

SUMMARY OF CHARGES

 

Conspiracy to Distribute Methamphetamine (21 U.S.C. §§ 841(a)(1) and 846)

Conspiracy to Launder Monetary Instruments (18 U.S.C. §§ 1956(a)(1) and (h))

Possession with Intent to Distribute Methamphetamine (21 U.S.C., § 841(a)(1))

Importation of Methamphetamine (21 U.S.C. §§ 952 and 960)

Felon in Possession of a Firearm (18 U.S.C. § 922(g)(1)

 

Maximum Penalties: For the drug charges, term of custody including a mandatory minimum 10 years and up to life imprisonment, $10 million fine and a lifetime of supervised release. For money laundering charges, term of custody up to 20 years’ imprisonment, a fine of $500,000 or twice the value of the monetary instrument or funds involved, and three years of supervised release. For the firearms charges, term of custody up to 10 years imprisonment, and a $250,000 fine.

 

AGENCIES

 

Drug Enforcement Administration, Narcotics Task Force

Internal Revenue Service - Criminal Investigation

United States Postal Inspection Service

San Diego County Sheriff’s Department

San Diego Police Department

Escondido Police Department

United States Border Patrol

San Diego County Probation Office

United States Marshals Service

Homeland Security Investigations

Bureau of Alcohol, Tobacco, Firearms & Explosives

Federal Bureau of Prisons

San Diego County District Attorney’s Office

Department of Justice, Organized Crime Drug Enforcement Task Forces

Department of Justice, Office of Enforcement Operations, Electronic Surveillance Unit

U.S. Attorney’s Office for the District of Massachusetts

U.S. Attorney’s Office for the Southern District of New York

U.S. Attorney’s Office for the Eastern District of Kentucky

U.S. Attorney’s Office for the Western District of Texas

U.S. Attorney’s Office for the Central District of California

U.S. Attorney’s Office for the District of Minnesota

U.S. Attorney’s Office for the Northern District of Iowa

U.S. Attorney’s Office for the Western District of Michigan

U.S. Attorney’s Office for the Eastern District of Michigan

Assistant U. S. Attorney Vivian Sapthavee (619) 546-7696  

NEWS RELEASE SUMMARY – June 28, 2021

SAN DIEGO – Theodore Bennett was sentenced in federal court today to 18 months in custody for mail theft and possession of stolen mail.

Bennett pleaded guilty in December 2020, admitting that on four different occasions in the summer of 2020, he pried open at least 94 post office boxes with a flathead screwdriver and prybar at post offices in San Diego and Imperial Counties. According to his plea agreement, he stole dozens of pieces of mail containing credit cards plus $6,500 in checks that belonged to individuals, business, and non-profit organizations and included Economic Impact Payments (stimulus checks) issued by the U.S. Department of Treasury.

At the time of his arrest, law enforcement agents discovered hundreds of pieces of stolen mail in Bennett’s possession, including the stolen stimulus checks.  Bennett was eventually linked to at least three Post Office break-ins in the Southern District of California.

“Every American has the right to receive every piece of mail sent to them,” said Acting U.S. Attorney Randy Grossman. “When mail is stolen, particularly envelopes containing desperately-needed income during a pandemic, the impact on victims can be devastating. When you see someone raiding a mailbox or notice suspicious activity involving the mail, please immediately report this to the U.S. Postal Inspection Service and local law enforcement. Our office will vigorously investigate and prosecute these matters with our law enforcement partners.

Grossman commended Assistant U.S. Attorney Vivian Sapthavee and former Assistant U.S. Attorney Nicholas Hernandez, as well as the law enforcement officers in multiple agencies who investigated this case.

“Postal inspectors work aggressively to combat mail theft,” said Eric Shen, Acting Inspector in Charge of the Los Angeles Division. “In collaboration with U.S. Border Patrol Agents and the Treasury Inspector General for Tax Administration, we were able to prevent countless others from being victimized by this individual, who could have caused even more financial damage and personal inconvenience.”

DEFENDANT                                               Case Number             20-CR-2650-AJB      

Theodore Bennett                                           Age:    33                    Residence: Imperial County, CA

SUMMARY OF CHARGES

Mail Theft, 18 U.S.C. §1708 (Three Counts)

Possession of Stolen Mail, 18 U.S.C. §1708 (One Count)

Maximum Penalty: Five years in prison (per count); supervised release

AGENCY

U.S. Postal Inspection Service

U.S. Border Patrol

U.S. Dept. of Treasury

Assistant U. S. Attorney Michael A. Deshong (619) 546-9290  

NEWS RELEASE SUMMARY – June 25, 2021

SAN DIEGO – Pacific Beach resident Maya Kol was sentenced in federal court today to 15 years in prison for selling fentanyl powder that caused the death of one man and sent another to the hospital over Labor Day weekend in September 2018. Two other men—including the source of Kol’s fentanyl—also fatally overdosed that weekend from the same batch of fentanyl powder, which was misrepresented as cocaine when it was sold to users, including the victims.

Kol, a Cambodian national living illegally in San Diego, previously admitted that he purchased the fentanyl powder believing it to be cocaine.  However, after he sampled the powder he noticed it tasted different and then became woozy and nearly lost his balance from the effects of it. Despite his own troubling experience with the powder, Kol sold the powder to others and told them it was cocaine. 

According to his plea agreement, on September 7, 2018, Kol met three individuals, identified in court records as J.E., J.H., and L.S., and delivered to them one-half gram of fentanyl powder which he represented as cocaine.  Several hours later, L.S. contacted Kol asking for help.  Kol arrived to L.S. and J.H.’s apartment and foundJ.E. and J.H. non-responsive.  When Kol realized authorities would be coming to the scene, he went back to his home and flushed his remaining fentanyl powder down the toilet. 

J.E. died from the fentanyl powder Kol sold to him. J.H. survived the ordeal after first responders administered Narcan, a drug prescribed to treat an opioid overdose in an emergency situation, and rushed him to the hospital.  L.S. was admitted to the hospital the following day for lingering symptoms.  A subsequent search of Kol’s residence uncovered more than $5,000 in cash, scales, materials for operating a butane honey oil laboratory, and other indications of drug sales.

J.E. was 47 years old and is survived by his wife.  Hiss death was one of three overdose deaths that occurred in Pacific Beach over Labor Day weekend in 2018, including the individual who sold the fentanyl powder to Kol. Kol is not charged with the other deaths.    

“Many people are dying because of dealers like Kol, who know the extreme danger of what they are doing but do it anyway,” said Acting U.S. Attorney Randy Grossman. “Dealers do not care about their customers. They care about money. As this case tragically shows, illegal drugs laced with fentanyl are deadly.” Grossman praised prosecutor Michael Deshong and law enforcement partners for their excellent work on this case.    

“The DEA is increasingly seeing fentanyl in drugs purported to be other street drugs, such as cocaine in this case, and these drugs are likely to cause you to overdose,” said DEA Special Agent in Charge John W. Callery.  “We don’t want to investigate your death.  Your life matters.  Help with addiction is available by calling the San Diego County’s Access and Crisis line at (888) 724-7240.”

This case is the result of ongoing efforts by the U.S. Attorney’s Office, the San Diego County District Attorney’s Office, and multiple law enforcement agencies to investigate and prosecute the distribution of dangerous illegal drugs that result in overdose deaths.

Fentanyl-related deaths are rapidly climbing to unprecedented levels. The San Diego County Medical Examiner’s Office has predicted a 50 percent increase in deaths from 2020 to 2021. Fentanyl-related deaths more than doubled during the previous two years.

In July 2018, Narcotics Task Force Team 10 was created to address drug overdose deaths in San Diego County.  Team 10 led the investigation into the cluster of fentanyl drug overdoses in Pacific Beach in September 2018. 

DEFENDANTS                                             Case Number 19cr1277-CAB   

Maya Kol                                                        Age: 42                       Pacific Beach, CA

SUMMARY OF CHARGES

Distribution of Fentanyl – Title 21, U.S.C., Section 841(a)(1)

Maximum Penalty: Twenty years in prison

AGENCIES

Drug Enforcement Administration

San Diego Police Department

Homeland Security Investigations

California Department of Health Care Services

Federal Bureau of Investigation

San Diego County District Attorney’s Office

 

Assistant U. S. Attorney Melanie K. Pierson (619) 546-7976    

NEWS RELEASE SUMMARY – June 18, 2021

SAN DIEGO –Felix Gutierrez Valencia of Perris, California, was sentenced in federal court today to 90 days in custody for attempting to smuggle pesticides into the United States.  In addition, Gutierrez was ordered to pay a fine of $2,500 and restitution of $8,807 for the cost of disposal of the pesticides, and perform 100 hours of community service during three years of supervised release. 

In pleading guilty, Gutierrez admitted that, on April 16, 2020, he entered the United States at the Otay Mesa Port of Entry, where 48 containers of undeclared Mexican pesticides were discovered in his truck.  Gutierrez had concealed some of the containers of pesticides in cereal and cookie boxes.  The pesticides included Furadan, Monitor, Bayfolan, Biomec, Ridomil Gold, Kanemite and Rodentox.  Gutierrez later acknowledged that, after his arrest in April, he offered to pay another individual to smuggle pesticides into the United States. However, that person was also caught at the border with 37 containers of Furadan, Biomec, Biozyme and Tetrasan.

Two of the pesticides smuggled by Gutierrez contain active ingredients that are cancelled in the United States, and thus are not permitted to be imported or sold. Furadan contains the cancelled pesticide carbofuran, which is a highly toxic insecticide that affects the central nervous systems by the same mechanism as chemical warfare nerve agents. It is highly toxic to birds, fish and mammals and is classified by the EPA as Toxicity Category I, the highest category, based upon its lethal potency. Monitor contains the cancelled pesticide methamidophos, which is one of the most acutely toxic organophosphate pesticides, also related to chemical warfare nerve agents. Rodentox contains zinc phosphide, an extremely toxic rodenticide.  Ingestion of 7 drops to one teaspoons of zinc phosphide would likely kill a 150-pound person.

According to the sentencing documents, all of the chemicals smuggled by the defendant are commonly found at locations where marijuana is illegally cultivated.  Exposure to these pesticides during eradication efforts has cause law enforcement officers to be hospitalized, has polluted soils and streams, and has killed wildlife.  Cannabis users are also at risk,  In one study, the pesticide transfer rate into the blood stream of a cannabis smoker using a glass pipe was as high as 70 percent.

“Trafficking in illegal pesticides is big business, and we are aggressively prosecuting many of these smuggling cases in order to protect the public,” said Acting U.S. Attorney Randy Grossman. “The toxic chemicals are extremely dangerous, with the power to poison people, wildlife, water sources and soil.  Smugglers like this defendant are attempting to sneak banned pesticides across the border as if they are illicit narcotics, and they are getting caught and going to prison. That’s how serious these offenses are.” Grossman praised Assistant U.S. Attorney Melanie Pierson for her excellent work prosecuting environmental crimes, and he also commended agents from Homeland Security Investigations and the U.S. Environmental Protection Agency, Criminal Investigation Division.    

“There’s a reason the federal government prohibits the importation of certain types of pesticides,” said Cardell T. Morant, Special Agent in Charge of U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) San Diego. “Some of the chemicals may be toxic and exposure can be dangerous or fatal to both humans and wildlife. This individual not only disregarded the hazards associated with improperly handling these types of chemicals, he attempted to smuggle the chemicals into the U.S., which is a very serious crime. HSI and its partner organizations will continue to pursue, arrest, and bring to justice, anyone who tries to smuggle these highly toxic chemicals into the U.S.”

“The pesticides involved in this case pose serious public health and environmental dangers,” said Special Agent in Charge Scot Adair of EPA’s Criminal Investigation Division in California. “The sentence in this case demonstrates that individuals who intentionally violate smuggling and environmental protection laws will be held responsible for their crimes.”

DEFENDANT                                               Case Number 20cr2058-JLS                            

Felix Gutierrez Valencia                                Age: 40                                   Perris, CA

SUMMARY OF CHARGES

Smuggling – Title 18, U.S.C., Section 545

Maximum penalty: Twenty years in prison and $250,000 fine

AGENCY

Homeland Security Investigations

U.S. Environmental Protection Agency, Criminal Investigation Division

Assistant U. S. Attorneys Joseph Green (619) 546-6955 and Alexandra F. Foster (619) 546-6735

NEWS RELEASE SUMMARY – November 23, 2020

SAN DIEGO – Adult film performer and producer Ruben Andre Garcia was sentenced in federal court today to 20 years in prison for conspiring with the owners of the adult websites GirlsDoPorn (GDP) and GirlsDoToys (GDT) to recruit young women to appear in sex videos for adult websites using force, fraud, and coercion.

From approximately 2013 to 2017, Garcia worked as a recruiter, producer, and actor for the GDP and GDT websites, which grossed millions of dollars during this time. Garcia pleaded guilty in December 2020, admitting that as part of a premeditated scheme, Garcia recruited victims to appear in sex videos for the websites by promising them that these videos would never be posted online, that the videos would never be released in the United States, and that no one who knew the women would ever find out about the videos. Throughout the scheme, Garcia knew these representations were false.  Garcia knew the videos were being posted on the fee-based websites, GDP and GDT, and excerpts were posted on free pornographic sites such as Pornhub.com, one of the most frequently viewed websites in the world receiving millions of views, to drive paying viewers to GDP and GDT.

Garcia admitted that he and co-defendant Michael Pratt were the lead recruiters for GDP and GDT.  Their target market was 18 to 20-year-old women. Garcia and Pratt created Craigslist advertisements, along with fake websites and email addresses consistent with the websites to cause their victims to believe that they were applying to work asclothed models. Only after the victims responded to the advertisements would Garcia and Pratt disclose that they were actually seeking women for pornographic video shoots. 

When victims expressed hesitation, Garcia directed other young women to contact the victims and falsely reassure them that the videos would not be posted online and that none of the victims’ friends, families, colleagues or classmates would find out. Young women were selected as references, because Garcia, Pratt and Matthew Wolfe believed the victims were more likely to believe other young women over Garcia or Pratt.  The references were paid a fee for each victim they attempted to recruit, with additional compensation for victims who agreed to film a video.   

Garcia and other members of the conspiracy took active steps to ensure the victims did not find out that he and the other members of the conspiracy operated GDP and GDT. Garcia knew that most of the young women they were recruiting would have never agreed to appear in a video if they knew that videos of their explicit sexual activity would be posted on the internet and marketed to their friends and family. 

Most of the videos created as a part of the conspiracy were shot at hotels or short-term rental units in the San Diego area. If one of the victims agreed to act in the pornographic video, Garcia and his co-conspirators promptly booked flights to San Diego within a day or two to limit the chances that the victim would change her mind.  After the victim arrived at the hotel or short-term rental unit, Garcia would continue to falsely assure them that the videos would not be posted online and that no one who knew the victims would see - or even know about - the videos. Victims were told that the contracts they were presented with simply said what the victims had already been told, including that the videos would not be posted online. Nowhere on the contract could the reader find a reference to “girlsdoporn,” “girlsdotoys” or pornography at all. The companies were instead identified with innocuous names, such as Bubblegum Casting. Victims were not provided a copy of the contracts that they signed. 

Before some of the video shoots, victims were offered alcohol or marijuana.  Victims who consumed alcohol or smoked marijuana were directed to make a recorded statement saying that they were not under the influence of any drugs or alcohol, even though they had just smoked marijuana or drank alcohol.

As a part of the conspiracy, Garcia and others would at times coerce victims into completing the videos once they were underway. Garcia and other co-conspirators threatened to sue the victims, cancel flights home, and post the videos online, if the victims did not complete the sex videos.  Hotel room doors were at times blocked by camera and recording equipment, and the victims felt powerless and unable to leave.

Victims were also misled about how long the video shoots lasted. Most were told the video production would take around 30 minutes, when in reality, they typically lasted for several hours.  The sex for the video shoots was rough and caused many victims pain, and in some cases bleeding.  Some victims asked to stop filming.  In response, Garcia and others told the victims that they had to continue and finish the videos. Victims were also often paid significantly less than originally promised with Garcia and others would citing a tattoo, a mole, or some other perceived “imperfection” to pay the victim less.

Once the videos were posted online many victims contacted Garcia and his co-conspirators seeking to get their videos taken off the websites. The victims’ calls were blocked or ignored.

“This defendant lured one victim after another with fake modeling ads, false promises and deceptive front companies, ultimately devolving to threats to coerce these women into making sex videos,” said Acting U.S. Attorney Randy Grossman.  “Even when victims told Garcia how the scheme had devastated their lives, he showed no regard for their well-being. The crime was utterly callous in nature and there is no excuse or justification for his conduct, which was driven purely by greed. The harm inflicted by this defendant will last a lifetime for his victims. Hopefully today’s sentence will offer them a sense of justice.” Grossman praised prosecutors Joseph Green, Alexandra Foster and Sabrina Feve; FBI Special Agents; and the U.S. Attorney’s Office Victim Witness Unit for their excellent work on this case.

“Ruben Garcia chose to exploit and deceive these young women for his personal satisfaction and financial gain and today he was held accountable for those decisions,” said FBI Special Agent in Charge Suzanne Turner. “Today's sentence is the first in this case, however it is definitely not the last. I hope this sentence serves as a start to the healing process and brings some sense of justice for these young women, each with their whole life ahead of them.”

The next hearing in the ongoing case is June 25, 2020, at 2 p.m.

Any additional victims of the alleged crime are encouraged to call the San Diego FBI at 858-320-1800.

The FBI is offering a reward of up to $50,000 for information leading to the arrest of Michael James Pratt. Individuals with information about Pratt should contact their local FBI office or the nearest American Embassy or Consulate.

DEFENDANTS                                            Case Number 19cr4488-JLS

Ruben Andre Garcia                                       Age:    31                    San Diego, CA

*Pleaded guilty to Counts 1 and 7, Conspiracy to Commit Sex Trafficking by Force, Fraud and Coercion.

DEFENDANTS                                            Case Number 19cr4488-JLS                                    

Michael James Pratt                                       Age:     36                             Fugitive

Matthew Isaac Wolfe                                      Age     37                             San Diego, CA (pending trial)

Theodore Gyi                                                 Age:     42                             Rancho Aliso, CA (Pleaded guilty to Superseding Information charging Conspiracy to Commit Sex Trafficking by Force, Fraud and Coercion, in violation of 18 U.S.C. § 371)

Valorie Moser                                                 Age:    38                    San Diego, CA (Pleaded guilty to a Superseding Information charging Conspiracy to Commit Sex Trafficking by Force, Fraud and Coercion, in violation of 18 U.S.C. § 371)

Amberlyn Dee Nored                                     Age:    27                    San Diego, CA (pending trial)

SUMMARY OF CHARGES

Count 1 (charging all defendants)

Conspiracy to Commit Sex Trafficking by Force, Fraud and Coercion, 18 U.S.C. § 1591(a) and (b)(1)

Maximum Penalty:  Life in prison, $250,000 fine, and a special assessment of $5,000 under 18 U.S.C. § 3014.

Count 2 (Pratt)

Production of Child Pornography, 18 U.S.C. § 2251(a) and (e)

Minimum penalty: Fifteen years in prison; Maximum penalty: 30 years in custody, $250,000 fine, and a special assessment of $5,000 under 18 U.S.C. § 3014.

Count 3 (Pratt)

Sex Trafficking of a Minor by Force, Fraud and Coercion, 18 U.S.C. § 1591(a)(1) and (2)

Minimum penalty: Fifteen years in prison; Maximum penalty: life in custody, $250,000 fine, and a special assessment of $5,000 under 18 U.S.C. § 3014.

Counts 4 (Pratt, Wolfe, Garcia), 5 (Pratt, Garcia), 6 (Pratt, Wolfe, Garcia), 7 (Pratt, Garcia, Gyi), 8 (Pratt, Garcia, Gyi)

Conspiracy to Commit Sex Trafficking by Force, Fraud and Coercion, 18 U.S.C. § 1594

Minimum penalty: Fifteen years in prison; Maximum penalty: life in custody, $250,000 fine, and a special assessment of $5,000 under 18 U.S.C. § 3014.

INVESTIGATING AGENCY

FBI

*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.

Assistant U. S. Attorneys Michelle L. Wasserman (619) 546-8431 and Valerie H. Chu (619) 546-6750

NEWS RELEASE SUMMARY – June 14, 2021

SAN DIEGO –Stuart Weinstock, an Escondido businessman and former owner of Salsa Market in Vista, was sentenced in federal court today to eight months in custody for evading over $180,000 in taxes as part of an eight-year tax-evasion scheme with former Chabad of Poway Rabbi Yisroel Goldstein.

At today’s hearing, U.S. District Judge Cynthia A. Bashant told the defendant: “It’s important to send the message: ‘You commit tax fraud, you go to jail.’” 

Until around 2018, Rabbi Goldstein was the director and head rabbi at Chabad of Poway, a tax-exempt religious organization. Weinstock pleaded guilty in February 2021, admitting that starting in approximately 2010, he met monthly with Goldstein to give him purported donation checks for the Chabad, generally about $8,000 a month.  Goldstein would then funnel back 75 percent of the funds, or generally about $6,000 to Weinstock, keeping the remaining 25 percent of the funds for himself.

Between 2010 and 2018, Weinstock gave over $870,000 in fraudulent donations to the Chabad, of which over $650,000 was funneled back to him in cash.  Although Weinstock knew that he had received back, in cash, the vast majority of his donations, he nonetheless falsely claimed on his tax returns that the checks to the Chabad were either tax-deductible charitable contributions or legitimate business expenses.

In July 2020, Rabbi Goldstein pleaded guilty to fraud charges, admitting that he participated in a complex, years-long, multi-million dollar tax evasion scheme and other financial deceptions involving theft of public money.  Rabbi Goldstein’s plea agreement outlined the tax evasion scheme with Weinstock.

“Stuart Weinstock has cheated the system and evaded paying his fair share of taxes,” said Acting U.S. Attorney Randy S. Grossman. “Those who cheat the system by exploiting the tax-exempt status of non-profits and religious organizations will be held to account for their conduct.” Grossman praised prosecutors Michelle Wasserman and Valerie Chu and FBI and IRS agents for their excellent work on this case.

“For nearly nine years, Mr. Weinstock, a successful business man, funneled hundreds-of-thousands of dollars, veiled as donations, through Chabad of Poway’s tax-exempt status to skirt paying his fair share,” said IRS Criminal Investigation Special Agent in Charge, Ryan L. Korner. “When you get an envelope of cash in exchange for your ‘donation’, it is neither charitable giving nor a legitimate business expense; it is fraud. Today’s sentencing of the 10th defendant to plead guilty in this widespread tax evasion scheme sends a clear message – the IRS will pursue and seek punishment for tax cheats who exploit religious organizations to enrich themselves.”

“The FBI and our law enforcement partners continue to pursue those who use fraudulent charitable contributions to shield their tax obligations,” said FBI Special Agent in Charge Suzanne Turner. “What Mr. Weinstock was doing was illegal – and he knew it – however he continued to do it for years to line his own pockets and avoid paying taxes. These crimes shake the confidence of potential donors and adversely affect legitimate charities who rely on those donations to survive and it will not be tolerated.”

SUMMARY OF CHARGES                        Case Number 21CR0042-BAS

Stuart Weinstock                                          Age: 64            Escondido, CA

Filing a False Tax Return, in violation of Title 26, USC 7206(1)

Maximum Penalty: Three years in prison

PREVIOUSLY CHARGED DEFENDANTS AND SUMMARY OF CHARGES                     

Yisroel Goldstein, Case Number 20CR1916-BAS             Age: 58            Poway

Conspiracy to Defraud the United States and Commit Wire Fraud, in violation of Title 18, USC 371

Maximum Penalty: Five years in prison

Alexander Avergoon, Case Number 19CR2955-BAS       Age: 44            San Diego                  

Wire Fraud, in violation of Title 18, USC 1343

Maximum Penalty: Twenty years in prison

Aggravated Identity Theft, in violation of Title 18, USC 1028A

Maximum Penalty: Two years minimum consecutive term in prison

Money Laundering, in violation of Title 18, USC 1956(a)(1)(B)(i)

Maximum Penalty: Twenty years in prison

Bijan Moossazadeh, Case Number 20CR1893-BAS          Age: 63            San Diego

Filing a False Tax Return, in violation of Title 26, USC 7206(1)

Maximum Penalty: Three years in prison

Yousef Shemirani, Case Number 20CR1895-BAS            Age: 74            Poway

Filing a False Tax Return, in violation of Title 26, USC 7206(1)

Maximum Penalty: Three years in prison

Boris Shkoller, Case Number 20CR1913-BAS                  Age: 83            Del Mar

Filing a False Tax Return, in violation of Title 26, USC 7206(1)

Maximum Penalty: Three years in prison

Mendel Goldstein, Case Number 20CR2772-BAS             Age: 63            Brooklyn, NY

Conspiracy to Defraud the United States and Commit Wire Fraud, in violation of Title 18, USC 371

Maximum Penalty: Five years in prison

Bruce Baker, Case Number 20CR1912-BAS                     Age: 75            San Diego

Conspiracy to Defraud the United States and File False Tax Returns, in violation of Title 18, U.S.C. §371

Maximum Penalty: Five years in prison

Rotem Cooper, Case Number 20CR3968-BAS                  Age:    54            San Diego      

Deferred Prosecution Agreement

Conspiracy to Commit Wire Fraud, in violation of Title 18, USC 371

Igor Shtilkind, Case Number 20CR3955-BAS                   Age:    55            San Diego

Deferred Prosecution Agreement

Conspiracy to Commit Wire Fraud, in violation of Title 18, USC 371

INVESTIGATING AGENCIES

Federal Bureau of Investigation

Internal Revenue Service

NEWS RELEASE SUMMARY – June 14, 2021

SAN DIEGO – A superseding indictment and arrest warrants were unsealed recently in federal court against alleged Mexican drug cartel enforcement leaders in connection with their alleged violent support of heroin and methamphetamine trafficking.

The superseding indictment, returned on March 6, 2020, plus a related indictment returned on March 16, 2021, collectively charge Edgar Herrera Pardo, aka Caiman; Carlos Lorenzo Hinojosa Guerrero, aka Cabo 96; Edgar Perez Villa, aka Cabo 89; and Israel Alejandro Vazquez-Vazquez, aka Cabo 50, among others, with Conspiracy to Distribute Controlled Substances Intended for Importation, and Conspiracy to Import Controlled Substances.

According to court filings filed  by the government, Caiman, Cabo 96, Cabo 89 and Cabo 50 were leaders of a violent group of cartel enforcers, known as Los Cabos, who operated in Baja California to secure control of the region for Cártel de Jalisco Nueva Generación, commonly known as CJNG. Los Cabos allegedly employed rampant violence to ensure that CJNG maintained the ability to traffic drugs through Tijuana, Mexico, and into the United States through San Diego Indeed, in one approximately 6.5-month period of judicially-authorized interceptions of a group chat operated by leaders of Los Cabos, these individuals planned over 150 murders, the majority of which took place in Tijuana, according to the filings. Los Cabos’s bloody reign of terror included the murder of two teenaged United States citizens in Tijuana in November 2018, the government alleges. These teenagers were residents of Chula Vista. The government also alleges that Los Cabos targeted law enforcement in Tijuana, killing at least three police officers.

Los Cabos allegedly engaged in this violence in support of CJNG, one of the most dangerous transnational criminal organizations in the world.  The cartel has its hands in trafficking multiple deadly substances. It is responsible for moving tons of cocaine, methamphetamine, and fentanyl-laced heroin into the United States.  CJNG is also a prolific methamphetamine producer and chemical importer, using precursors procured from China and India. CJNG is one of the most powerful Mexican cartels operating within the United States. 

At the same time, CJNG has contributed to a catastrophic trail of human and physical destruction in Mexico.  It is the most well-armed cartel in Mexico.  Its members willingly confront rival cartels and even the security forces of the Mexican government.  CJNG is responsible for grisly acts of violence and loss of life. 

“For too long, powerful cartels have visited unspeakable violence on Tijuana, a city that is right next door to San Diego,” said Acting U.S. Attorney Randy S. Grossman. “We will continue our campaign to end the cartels’ reign of terror and stop the flow of drugs across the border by prosecuting the highest-ranking leaders and enforcers.”

Grossman praised federal prosecutors, agents with the Drug Enforcement Administration and Homeland Security Investigations and detectives with the San Diego Sheriff’s Department for their excellent work on this case. In addition, Grossman thanked the Mexican Fiscalía General de la República, which provided significant assistance to this investigation.

“Drug cartels like Cártel de Jalisco Nueva Generación, also known as CJNG, continue to flood our communities with heroin and methamphetamine,” said DEA Special Agent in Charge John W. Callery.  “These cartels not only perpetrate violence and murders that effect our neighbors south of the border, but their drugs cause death and destruction in our own communities.  The superseding indictments and arrest warrants against violent CJNG members are testament that DEA and our law enforcement partners will continue to work vigorously to identify and arrest members of these drug cartels.”

This case is the result of ongoing efforts by the Organized Crime Drug Enforcement Task Force (OCDETF), a partnership that brings together the combined expertise and unique abilities of federal, state and local law enforcement agencies. The principal mission of the OCDETF program is to identify, disrupt, dismantle and prosecute high-level members of drug trafficking, weapons trafficking and money laundering organizations and enterprises.

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.

DEFENDANTS                                                                                          

Case Number: 19CR1274-BAS

Edgar Herrera Pardo, aka Caiman

Carlos Lorenzo Hinojosa Guerrero, aka Cabo 96, aka C96

Edgar Perez Villa, aka Cabo 89, aka Nier                                                                                          

Case Number: 21CR0861-BAS

Israel Alejandro Vazquez-Vazquez, aka Cabo 50                                             

SUMMARY OF CHARGES

Conspiracy to Distribute Controlled Substances for Purpose of Unlawful Importation, in violation of Title 21 U.S.C. §§ 959, 960 and 963;

Maximum Sentence: Mandatory minimum ten years and up to life imprisonment, $10 million fine

Conspiracy to Distribute Controlled Substances, in violation of Title 21 U.S.C. §§ 841(a)(1) and 846.

Maximum Sentence: Mandatory minimum ten years and up to life imprisonment, $10 million fine

AGENCIES

Drug Enforcement Administration

Homeland Security Investigations

Department of Justice, Organized Crime Drug Enforcement Task Force

Department of Justice, Office of Enforcement Operations

Department of Justice, Office of International Affairs

San Diego Sheriff’s Department

*An indictment or complaint is not evidence that the defendant committed the crimes charged. The defendant is presumed innocent until the Government meets its burden in court of proving guilt beyond a reasonable doubt.

For Further Information, Contact:

Media Relations Director Kelly Thornton (619) 546-9726

SAN DIEGO – A wave of hundreds of arrests that began in Australia and stretched across Europe culminated today with the unsealing of a federal grand jury indictment in San Diego charging 17 foreign nationals with distributing thousands of encrypted communication devices to criminal syndicates.

The 500-plus arrests that took place during a worldwide two-day takedown were possible because of a San Diego-based investigation like no other. For the first time, the FBI operated its own encrypted device company, called “ANOM,” which was promoted by criminal groups worldwide. These criminals sold more than 12,000 ANOM encrypted devices and services to more than 300 criminal syndicates operating in more than 100 countries, including Italian organized crime, Outlaw Motorcycle Gangs, and various international drug trafficking organizations, according to court records.

SEARCH WARRANT - Operation Trojan Shield

INDICTMENT - Operation Trojan Shield

During the course of the investigation, while ANOM’s criminal users unknowingly promoted and communicated on a system operated lawfully by the FBI, agents catalogued more than 27 million messages between users around the world who had their criminal discussions reviewed, recorded, and translated by the FBI, until the platform was taken down yesterday.

The users, believing their ANOM devices were protected from law enforcement by the shield of impenetrable encryption, openly discussed narcotics concealment methods, shipments of narcotics, money laundering, and in some groups—violent threats, the indictment said. Some users negotiated drug deals via these encrypted messages and sent pictures of drugs, in one instance hundreds of kilograms of cocaine concealed in shipments of pineapples and bananas, and in another instance, in cans of tuna, in order to evade law enforcement.

The indictment charges 17 alleged distributors of the FBI’s devices and platform. They are charged with conspiring to violate the Racketeer Influenced and Corrupt Organizations Act (RICO), pertaining to their alleged involvement in marketing and distributing thousands of encrypted communication devices to transnational criminal organizations worldwide.

During the last 24 to 48 hours, in addition to the more than 500 arrests around the world, authorities searched more than 700 locations deploying more than 9,000 law enforcement officers worldwide and seized multi-ton quantities of illicit drugs.

CLICK HERE - Video Messages from International Partners

Grand totals for the entire investigation include 800 arrests; and seizures of more than 8 tons of cocaine; 22 tons of marijuana; 2 tons of methamphetamine/amphetamine; six tons of precursor chemicals; 250 firearms; and more than $48 million in various worldwide currencies. Dozens of public corruption cases have been initiated over the course of the investigation. And, during the course of the investigation, more than 50 clandestine drug labs have been dismantled. One of the labs hit yesterday was one of the largest clandestine labs in German history.

“This was an unprecedented operation in terms of its massive scale, innovative strategy and technological and investigative achievement,” said Acting U.S. Attorney Randy Grossman. “Hardened encrypted devices usually provide an impenetrable shield against law enforcement surveillance and detection. The supreme irony here is that the very devices that these criminals were using to hide from law enforcement were actually beacons for law enforcement. We aim to shatter any confidence in the hardened encrypted device industry with our indictment and announcement that this platform was run by the FBI.”

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

“Today marks the culmination of more than five years of innovative and complex investigative work strategically aimed to disrupt the encrypted communications space that caters to the criminal element,” said Suzanne Turner, Special Agent in Charge of the Federal Bureau of Investigation (FBI) - San Diego Field Office.  “The FBI has brought together a network of dedicated international law enforcement partners who are steadfast in combating the global threat of organized crime. The immense and unprecedented success of Operation Trojan Shield should be a warning to international criminal organizations  – your criminal communications may not be secure; and you can count on law enforcement worldwide working together to combat dangerous crime that crosses international borders.”

“Operation Trojan Shield is a perfect example of an OCDETF case - an investigation driven by intelligence and maximizing the strengths of partner law enforcement agencies in coordinated efforts to dismantle command and control elements of criminal networks,” said OCDETF Director Adam W. Cohen.  “Coordination is the cornerstone of the OCDETF program, and the impressiveness of the combined efforts of the U.S. Attorney’s Office, FBI, and our foreign partners cannot be overstated.  This effort has created lasting disruptive impacts to these transnational criminal organizations.”

“The AFP and FBI have been working together on a world-first operation to bring to justice the organised crime gangs flooding our communities with drugs, guns and violence,” said AFP Commissioner Reece Kershaw APM. “The FBI provided an encrypted communications platform while the AFP deployed the technical capability which helped unmask some of the biggest criminals in the world. This week the AFP and our state police partners will execute hundreds of warrants and we expect to arrest hundreds of offenders linked to the platform. This is the culmination of hard work, perseverance and an invaluable, trusted relationship with the FBI.

We thank the FBI for their long and integral partnership with the AFP.”

Europol’s Deputy Executive Director Jean-Philippe Lecouffe: “This operation is an exceptional success by the authorities in the United States, Sweden, the Netherlands, Australia, New Zealand and the other European members of the Operational Task Force. Europol coordinated the international law enforcement community, enriched the information picture and brought criminal intelligence into ongoing operations to target organised crime and drug trafficking organisations, wherever they are and however they choose to communicate. I am very satisfied to see Europol supporting this operation and strengthen law enforcement partnerships by emphasizing the multi-agency aspect of the case.”

 

 

 

 

 

 

 

 

 

 

 

 

 

“I am exceptionally proud of our New Zealand Police staff who supported Operation Trojan Shield,” said New Zealand Police Commissioner Andrew Coster. “This operation will have an unprecedented impact on organised crime syndicates across the globe. We value our strong relationship with the FBI, AFP and Europol and it is through these partnerships and the unrelenting efforts by law enforcement agencies from multiple countries that this operation has seen such incredible success This is a fantastic result and reiterates the importance of our transnational partnerships with law enforcement agencies across the globe in our common ongoing efforts to dismantle organised crime groups and the enormous harm they cause to our communities.”

“This remarkably successful operation demonstrates what can be accomplished when law enforcement agencies throughout the world work together,” said DEA Los Angeles Division Special Agent in Charge Bill Bodner. “Through strong relationships with our partners in more than 67 countries, professionals throughout the DEA, including experts in the Los Angeles Division, supported this unprecedented collaboration and our own mission to disrupt and dismantle the criminal organizations that profit from the distribution of illegal drugs.”

According to the San Diego indictment, ANOM’s administrators, distributors, and agents described the platform to potential users as “designed by criminals for criminals” and targeted the sale of ANOM to individuals that they knew participated in illegal activities. 

All defendants are foreign nationals located outside of the U.S. In total, eight of the indicted defendants were taken into custody last night.  Authorities are continuing to search for the remaining nine defendants.

The indictment alleges the defendants knew the devices they distributed were being used exclusively by criminals to coordinate drug trafficking and money laundering, including in the U.S. The defendants personally fielded “wipe requests” from users when devices fell into the hands of law enforcement.

The FBI’s review of ANOM users’ communications worked like a blind carbon copy function in an email. A copy of every message being sent from each device was sent to a server in a third-party country where the messages were collected and stored. The data was then provided to the FBI on a regular basis pursuant to an international cooperation agreement. Communications such as text messages, photos, audio messages, and other digital information were reviewed by the FBI for criminal activity and disseminated to partner law enforcement agencies in other countries. Each user was using ANOM for a criminal purpose. Those countries have built their own cases against ANOM users, many of whom were arrested in takedowns in Europe, Australia and New Zealand over the last several days.

Intelligence derived from the FBI’s communications platform presented opportunities to disrupt major drug trafficking, money laundering, and other criminal activity while the platform was active. For example, over 150 unique threats to human life were mitigated.

This operation was led by the FBI and coordinated with the U.S. Drug Enforcement Administration, the U.S. Marshals Service, Australian Federal Police, Swedish Police Authority, National Police of the Netherlands, Lithuanian Criminal Police Bureau, Europol, and numerous other law enforcement partners from over a dozen other countries.

This investigation began after Canada-based encrypted device company Phantom Secure was dismantled by the FBI in 2018 through a San Diego-based federal RICO indictment and court-authorized seizure of the Phantom Secure platform, forcing many criminals to seek other secret communication methods to avoid law enforcement detection. The FBI—along with substantial contributions by the Australian Federal Police—filled that void with ANOM.

When the FBI and the San Diego U.S. Attorney’s Office dismantled Sky Global in March 2021, the demand for ANOM devices grew exponentially as criminal users sought a new brand of hardened encryption device to plot their drug trafficking and money laundering transactions and to evade law enforcement.  Demand for ANOM from criminal groups also increased after European investigators announced the dismantlement of the EncroChat platform in July 2020. The ANOM platform - unlike Phantom Secure, EncroChat, and Sky Global - was exploited by the FBI from the very beginning of ANOM’s existence and was not an infiltration of an existing popular encrypted communications company.

In October 2018, Phantom Secure’s CEO pleaded guilty to a RICO conspiracy in the Southern District of California.  He was sentenced to nine years in prison and ordered to forfeit $80 million in proceeds from the sale of Phantom devices.

For further information, please see https://www.justice.gov/usao-sdca/pr/chief-executive-communications-company-sentenced-prison-providing-encryption-services and https://www.justice.gov/usao-sdca/pr/sky-global-executive-and-associate-indicted-providing-encrypted-communication-devices.

Operation Trojan Shield is 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. Attorneys Meghan E. Heesch, Joshua C. Mellor, Shauna Prewitt, and Mikaela Weber of the U.S. Attorney’s Office for the Southern District of California are prosecuting the case, with assistance from Paralegal Specialist Tracie Jarvis.  Former Assistant U.S. Attorney Andrew P. Young made invaluable contributions during his tenure on the case team. 

Acting U.S. Attorney Grossman praised federal prosecutors and FBI agents and international law enforcement partners for their relentless pursuit of justice in this extraordinary case. Additionally, Acting U.S. Attorney Grossman thanked the coordinated efforts of the Department of Justice’s Office of International Affairs which facilitated many international components of this complex investigation.

The charges and allegations contained in an indictment are merely accusations, and the defendants are considered innocent unless and until proven guilty.

DEFENDANTS  21-CR-1623-JLS COUNTRY *Joseph Hakan Ayik (1)   Domenico Catanzariti (2) Australia *Maximilian Rivkin (3)   Abdelhakim Aharchaou (4) The Netherlands *Seyyed Hossein Hosseini (5)   Alexander Dmitrienko (6)  Spain *Baris Tukel (7)        *Erkan Yusef Dogan (8)       *Shane Geoffrey May (9)       Aurangzeb Ayub (10)  The Netherlands James Thomas Flood (11)   Spain *Srdjan Todorovic aka Dr. Djek (12)       *Shane Ngakuru (13)       Edwin Harmendra Kumar (14)   Australia Omar Malik (15)   The Netherlands Miwand Zakhimi (16)    The Netherlands *Osemah Elhassen (17)   *Fugitive  

                                     

SUMMARY OF CHARGES

Conspiracy to Conduct Enterprise Affairs Through Pattern of Racketeering Activity (RICO Conspiracy), in violation of 18 U.S.C. § 1962(d)

Maximum Penalty: Twenty years in prion

AGENCIES

Federal Bureau of Investigation

Drug Enforcement Administration

United States Marshals Service

Department of Justice, Office of International Affairs

Australian Federal Police

Swedish Police Authority

Lithuanian Criminal Police Bureau

National Police of the Netherlands

EUROPOL

 

For further information, please see

https://www.europol.europa.eu/newsroom/news/800-criminals-arrested-in-biggest-ever-law-enforcement-operation-against-encrypted-communication

https://www.afp.gov.au/news-media/media-releases/afp-led-operation-ironside-smashes-organised-crime

Assistant U.S. Attorneys Daniel Silva (619) 546-9713 and Mark W. Pletcher (619) 546-9714

NEWS RELEASE SUMMARY – June 3, 2021

SAN DIEGO ­–Lei Zhang of Las Vegas, Nevada, was sentenced in federal court yesterday to 15 months in prison and the forfeiture of $150,000 for operating an unlicensed money transmitting business.

Zhang is believed to be the first individual in the United States sentenced for his role in developing a new form of unlawful underground financial institution that transfers money between the United States and China, thereby circumventing domestic and foreign laws regarding monetary transfers and reporting, including United States anti-money laundering scrutiny and Chinese capital flight controls.

As set forth in court documents, Zhang would collect U.S. dollars (in cash) from various third-parties in the United States and deliver that cash to a customer, typically a high-roller gambler from China who could not readily access cash in the United States due to capital controls that limit to $50,000 per year the amount of Chinese currency an individual can convert to foreign currency. Upon receipt of the U.S. dollars, the gambler would transfer the equivalent value of Chinese yuan (using a banking app) from the customer’s Chinese bank account to a Chinese bank account designated by defendant Zhang. For facilitating these transactions, Zhang was paid a commission based on the monetary value illegally transferred. 

Zhang further admitted that he was regularly introduced to customers by casino hosts, who sought to increase the gambling play of the casino’s customers.  By connecting cash-starved gamblers in the United States with Zhang’s illicit money transmitting businesses, the casinos increased the domestic cash play of their China-based high-roller customers.  All a gambler needed was a mobile device with remote access to a China-based bank account.  As a result, Zhang managed to transmit and convert electronic funds in China into hard currency in the United States, all while circumventing the obstacles imposed both by China’s capital controls and the anti-money laundering scrutiny imposed on all United States financial institutions. For their efforts, the casino hosts often received a cut of Zhang’s commission.  

“The groundbreaking work by these investigative agents in identifying and ferreting out this new form of illicit money transmittal cannot be overstated,” noted Acting U.S. Attorney Randy Grossman.  “Prosecuting global money laundering is a priority for the U.S. Attorney’s Office.”

Special Agents from Homeland Security Investigations, IRS Criminal Investigation Las Vegas Financial Crimes Task Force, and the Drug Enforcement Administration led the investigation into Zhang’s operations.  

DEFENDANT                                               Case Number 20-CR-370-WQH                             

Lei Zhang                                                        Las Vegas, NV             Age: 41

SUMMARY OF CHARGES

Operation of Unlicensed Money Transmitting Business – Title 18, U.S.C., Section 1960

Maximum penalty: Five years in prison and $250,000 fine

AGENCIES

Homeland Security Investigations

IRS Criminal Investigation Las Vegas Financial Crimes Task Force

Drug Enforcement Administration

Assistant U. S. Attorney Leslie Gardner (619) 546-7603    

NEWS RELEASE SUMMARY – June 3, 2021

SAN DIEGO – The Justice Department today announced it has reached an agreement with landlord Larry Nelson to resolve a Fair Housing Act lawsuit alleging that he sexually harassed female tenants while owning and managing San Diego area rental properties.

Under the consent order entered by the United States District Court for the Southern District of California, Nelson must pay at least $230,000: $205,000 in damages to tenants harmed by his harassment and a $25,000 civil penalty to the United States.  A judgment for an additional $350,000 also was entered against Nelson in favor of the United States but is suspended based on sworn disclosure statements reflecting Nelson’s financial situation.  Any misrepresentation or omission by Nelson on those disclosure statements will trigger collection of the suspended judgment.  Nelson also is prohibited from being involved in property management of rental units in the future and must hire an independent professional property manager.  He also must implement a nondiscrimination policy and complaint procedure, and must release judgments obtained against victims whom he wrongfully evicted.  

The United States’ lawsuit alleged that Nelson’s harassment spanned a period of nearly two decades. The allegations included that Nelson, among other things, engaged in unwelcome sexual touching, offered to reduce monthly rental payments in exchange for sex, made unwelcome sexual comments and advances, made intrusive and unannounced visits to female tenants’ homes to further his sexual advances, and evicted or threatened to evict female tenants who objected to or refused his sexual advance.

“A person’s home should be a refuge, a place where an individual can feel secure and protected,” said Pamela Karlan, Principal Deputy Assistant Attorney General for the Civil Rights Division.  “Sexual harassment in housing often destroys that sense of safety and security and leaves victims afraid in their own homes.  The Justice Department will not tolerate landlords who abuse their power by sexually harassing their tenants, and will continue vigorously to pursue allegations of sexual harassment.”

“Abusive landlords in San Diego and Imperial counties should be on notice that protecting the civil rights of citizens in our district is a top priority, and we do not tolerate discrimination and harassment in housing,” said Acting U.S. Attorney for the Southern District of California Randy S. Grossman.  “Holding a key to someone’s property is a position of trust, not a license to engage in illegal sexual harassment and sexual demands.”

This case was jointly litigated by attorneys in the Civil Rights Division and the Civil Division of the United States Attorney’s Office for the Southern District of California.  The Justice Department’s Sexual Harassment in Housing Initiative is led by the Civil Rights Division, in coordination with U.S. Attorney’s Offices across the country.  The goal of the Department’s Initiative is to address and raise awareness about sexual harassment by landlords, property managers, maintenance workers, loan officers, or other people who have control over housing.  Since launching the Initiative in October 2017, the Department of Justice has filed 21 lawsuits alleging sexual harassment in housing and recovered over $3.5 million for victims of such harassment. 

The Justice Department’s Civil Rights Division enforces the Fair Housing Act, which prohibits discrimination in housing based on race, color, religion, national origin, sex, disability, and familial status.  More information about the Civil Rights Division and the laws it enforces is available at http://www.justice.gov/crt.  Individuals may report sexual harassment or other forms of housing discrimination by calling the Justice Department’s Housing Discrimination Tip Line at 1-800-896-7743, e-mailing the Justice Department at fairhousing@usdoj.gov, or submitting a report online.  Individuals may also report such discrimination by contacting HUD at 1-800-669-9777 or by filing a complaint online.   

###

 

Assistant U. S. Attorney Melanie K. Pierson (619) 546-7976    

NEWS RELEASE SUMMARY – June 3, 2021

SAN DIEGO – WellgreensCA, Inc., a San Diego company engaged in extracting oils from cannabis, along with the owner and a manager, pleaded guilty in federal court today to offenses related to the dumping of hazardous waste in San Diego County in early 2018.

In pleading guilty, WellgreensCA, Inc. and owner Lunar Loussia admitted that, as a company engaged in the business of extracting oils from cannabis, Wellgreens generated various wastes, including 55-gallon drums of waste ethanol. The waste ethanol generated by Wellgreens was a federally-regulated hazardous waste that exhibited the characteristic of ignitability, because it had a flashpoint of less than 140 degrees Fahrenheit.

Loussia admitted that he agreed with R.U., a contractor, and others to dispose of the drums of waste ethanol generated by Wellgreens, knowing that the ethanol in the drums given to R.U. for disposal was a waste that had the potential or substantial potential to be harmful to others or to the environment.

The defendants acknowledged that as a large-quantity generator of hazardous waste, Wellgreens was required to transport all hazardous waste, including the waste ethanol, from their site accompanied by a uniform hazardous waste manifest.  Loussia admitted that on February 7, 2018,  he caused R.U. to pick up three full drums of waste ethanol for disposal from the Wellgreens facility on Trade Street, knowing that no hazardous waste manifest was prepared or provided to R.U., as required by law, to track the shipment.  The defendants acknowledged that R.U. disposed of the drums of waste ethanol behind a business located at 1350 Hill Street in El Cajon.  

Nadia Malloian further admitted that on May 17, 2018, employees of Wellgreens caused R.U. to pick up four full 55-gallon drums of waste ethanol from the Wellgreens facility on Trade Street for disposal. Those employees were aware at the time that no uniform hazardous waste manifest was prepared or provided to R.U. to accompany the waste ethanol during transportation.

The drums transported by R.U. from Wellgreens were abandoned at 1201 Avocado Avenue in El Cajon, near a Vons supermarket, along with paperwork associated with Wellgreens, including laboratory reports.  An employee of Vons contacted the El Cajon police, and the San Diego County Department of Environmental Health Services (DEH).  Both agencies responded and DEH conducted sampling and took photographs. The employee of Vons also contacted the laboratory named on the paperwork to attempt to learn the identity of the owner of the drums, sending photographs of the drums and associated paperwork in an email.

The laboratory forwarded the message from the employee at Vons to defendant Malloian on May 22, 2018.  Malloian admitted that on May 23, 2018, after learning that agents of WellgreensCA, Inc. had knowingly transported the drums of waste ethanol to the location on Avocado Avenue in El Cajon without a manifest, as required by law, she assisted them with the specific purpose of hindering their apprehension by helping to arrange the removal of the drums from the location on Avocado Avenue in El Cajon. 

As part of the plea agreement, the company agreed to pay a $45,000 fine and restitution of $26,482 for the costs of emergency response and restoration of the sites where the hazardous waste was abandoned.

“Crimes against the environment are crimes against all of us,” said Acting U.S. Attorney Randy Grossman. “We will not allow our communities to become dumping grounds for harmful chemicals because companies refuse to follow the rules.” Grossman praised prosecutor Melanie Pierson for her dogged commitment to protect the environment and EPA investigators for their hard work on this case and others like it.

“The defendants knowingly ignored legal requirements for the proper transportation and disposal of hazardous waste, putting local communities in the San Diego area at risk,” said Special Agent in Charge Scot Adair of EPA’s criminal enforcement program in California. “This case demonstrates that EPA will hold accountable those who intentionally violate laws that endanger human health.”

The defendants are scheduled to be sentenced on August 3, 2021, at 9:00 a.m. before U.S. District Judge William Q. Hayes.

DEFENDANTS 

WellgreensCA Inc.         Date of Incorporation: 2016           San Diego, California

Lunar Loussia             Age: 39                                               El Cajon, California

Nadia Malloian           Age: 48                                               El Cajon, California

SUMMARY OF CHARGES, Criminal Case No. 19cr2439-WQH

WellgreensCA and Lunar Loussia

Transportation of Hazardous Waste Without a Manifest, 42 U.S.C. §6928(d)(5)

Maximum Penalty: Two years in prison, fine of greater of $250,000 ($500,000 for the corporation) or $50,000 per day of violation

Nadia Malloian

Accessory After the Fact to Transportation of Hazardous Waste Without a Manifest, 18 U.S.C. §3 and 42 U.S.C. §6928(d)(5)

Maximum Penalty: One year in custody, fine of greater of $50,000 or $25,000 per day of violation

AGENCIES

U.S. Environmental Protection Agency, Criminal Investigation Division

Assistant U. S. Attorney Daniel Zipp (619) 546-8463    

NEWS RELEASE SUMMARY – June 3, 2021

SAN DIEGO – Juan Manuel Alvarez-Inzunza, alleged top money launderer for the Sinaloa Cartel, was arraigned in federal court today following his extradition to the United States from Mexico yesterday.

On March 6, 2015, a federal grand jury sitting in the Southern District of California returned an indictment charging Alvarez-Inzunza with conspiracy to launder monetary instruments and conspiracy to import and distribute cocaine and methamphetamine. Alvarez-Inzunza was previously designated under the Foreign Narcotics Kingpin Designation Act for his role in providing money laundering services to top cartel leaders including Joaquin “El Chapo” Guzman Loera.

Alvarez-Inzunza was arrested by Mexican law enforcement officers in March 2016, at the request of the United States. Since his arrest in Mexico, Alvarez-Inzunza has remained in custody pending extradition to the United States. He was flown by the United States Marshals Service from Mexico City to San Diego on June 2, 2021. He is scheduled to be arraigned on Thursday, June 3, 2021, before U.S. Magistrate Linda Lopez.

Acting U.S. Attorney Randy Grossman stated, “Today is a reminder that international drug kingpins and money launderers who profit by shipping narcotics into our community are not safe from prosecution. We will work with our international partners to bring them to justice wherever they reside.”

Acting U.S. Attorney Grossman praised the outstanding work of Assistant U.S. Attorney Daniel Zipp, Homeland Security Investigations and the U.S. Department of Justice’s Office of Enforcement Operations and the Office of International Affairs, and the Department of Treasury’s Office of Foreign Assets Control for their ongoing assistance in this investigation.

“Juan Manuel Alvarez-Inzunza is responsible for moving millions of dollars in illicit drug proceeds from the United States into Mexico,” said Cardell T. Morant, Special Agent in Charge for HSI San Diego. “We stand dedicated and united with our law enforcement partners to continue dismantling these organizations; ensuring they can no longer hide from the authorities and that they will ultimately be brought to justice.”

This case is also the result of the ongoing efforts by the Organized Crime Drug Enforcement Task Force (OCDETF), a partnership that brings together the combined expertise and unique abilities of federal, state and local law enforcement agencies. The principal mission of the OCDETF program is to identify, disrupt, dismantle and prosecute high level members of drug trafficking, weapons trafficking and money laundering organizations and enterprises.   

DEFENDANT                                                                       14-CR-2253-DMS

Juan Manuel Alvarez-Inzunza

Age: 39

Hometown: Culiacan, Sinaloa, Mexico              

SUMMARY OF CHARGES

• Conspiracy to Launder Monetary Instruments (18 U.S.C. 1956(h))
• Conspiracy to Distribute Cocaine Intended for Importation ( 21 U.S.C. 959, 960, 963)
• Conspiracy to Import Cocaine and Methamphetamine (21 U.S.C. 952 and 960)
• Conspiracy to Distribute Cocaine and Methamphetamine (21 U.S.C. §841(a)(1) and 846)

AGENCIES

Homeland Security Investigations

Department of Treasury, Office of Foreign Assets Control

Department of Justice, Organized Crime Drug Enforcement Task Forces

Department of Justice, Office of International Affairs

*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.

Media Relations Director Kelly Thornton (619) 546-9726 

NEWS RELEASE SUMMARY – June 2, 2021

SAN DIEGO – Following a wave of smuggling-related deaths in the region, San Diego’s top federal law enforcement officials made an emotional plea to migrants contemplating an illegal journey across the border:  Don’t risk your life.

In less than a three-week span, four lives were lost and dozens of people had to be rescued from rough seas and hospitalized after multiple maritime smuggling events went terribly wrong. 

“We are appealing to every person who is considering a desperate, perilous journey into the United States, whether in a boat, on foot, or crammed in the trunk of a car,” said Acting U.S. Attorney Randy Grossman. “Don’t do it. Do not put your life in the hands of smugglers. These people do not care about you. They will jam way too many people on a boat or in a car, just to make more money. They will direct you to hike in remote areas in dangerous weather conditions without adequate food, water or clothes. Smugglers care nothing for their customers. They care only about maximum profit.”

There were 25 migrant deaths in border areas in San Diego and Imperial counties from October through April, compared to 29 in all of FY 2020.

“Crossing the border illegally is extremely dangerous.  Regardless of the crossing method, your life is at risk when placed in the hands of ruthless smugglers,” said U.S. Border Patrol San Diego Sector Acting Deputy Chief Patrol Agent Scott Garrett. “Smugglers will abandon their victims at the first sign of trouble, viewing them only as an expendable commodity.”

In the last three months, a number of people have been charged, entered guilty pleas, or received sentences in connection with smuggling deaths:

On Friday, May 28, a federal grand jury returned an indictment against Antonio Hurtado, the alleged captain of the boat that ran aground off Point Loma on May 2. In that incident, three people drowned and 30 were rescued in a heroic effort by U.S. Coast Guard, San Diego Lifeguards, and Border Patrol.  Hurtado was charged with Attempted Bringing in Aliens Resulting in Death and other crimes. Many of the survivors who were interviewed by authorities said they had paid between $15,000 and $18,500 to be smuggled into the United States on the vessel.

In another case, today an indictment was returned charging Victor Alfonso Soto Aguilar and Jose Ramon Geraldo Romero with the same crime - Bringing in Aliens Resulting in Death. On May 20, one person died and other individuals were rescued in another maritime smuggling event.  In predawn darkness, United States Border Patrol agents spotted numerous individuals in the ocean near La Jolla. A panga boat was also seen in the vicinity traveling further north. Border Patrol saw that the individuals in the ocean were in serious distress and desperately needed assistance. Lifeguards immediately responded and rescued eight people from the water. The panga then eventually came into shore near the Children’s Pool. A submerged victim was found nearby and did not survive. The migrants rescued from the water admitted that they were paying between $12,000 and $15,000 to be smuggled into the United States.

The tragedies are not limited to the ocean. Yesterday, Leobardo Soto-Toledo pleaded guilty to immigration crimes in January of this year involving a group of 14 migrants entering the United States through an underground drainage pipe during heavy rains. One man drowned and a woman was found floating unconscious; she was resuscitated by a Border Patrol Agent and treated at a hospital.                                                                                                                                                                                                                                   

In April, two brothers from Chihuahua, Mexico, were sentenced in federal court to 5 1/2 years in prison for smuggling three sisters across treacherous terrain along the U.S.-Mexico border in an ill-fated trek that resulted in the tragic deaths of all threeyoung women. One of those sisters was the mother of a young child.

In March,  Neil Edwin Valera, a U.S. citizen who resided in Tijuana, was sentenced to five years in prison in connection with the deaths of three Chinese migrants, including a mother and her 15-year-old son, who were found in the trunk of Valera’s BMW.

Also in March, Jose Cruz Noguez of Mexicali, Mexico, was indicted by a federal grand jury on immigration charges related to a March 2, 2021 smuggling event that led to the deaths of 13 Mexican and Guatemalan nationals in a crash of an overloaded vehicle near Holtville, California. That case is pending.

Grossman praised the prosecutors on these cases for their excellent work, and he thanked U.S. Border Patrol, Customs and Border Protection, Homeland Security Investigations and the Coast Guard, as well as the San Diego Lifeguards. “You put your own lives on the line to rescue migrants in distress whether in the desert, the mountains or the ocean.  You are heroes and we are all grateful for your efforts to protect everyone in our community irrespective of their immigration status.”

*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.

For Further Information, Contact: Cindy Cipriani 619-546-9608

 

SAN DIEGO – During the month of May, the United States Attorney’s Office for the Southern District of California (SDCA) joined in commemorating Asian American and Pacific Islander Heritage Month. “Asian Americans and Pacific Islanders are an important part of our country, our community, and our office,” said Acting U.S. Attorney Randy S. Grossman. “They contribute to all aspects of our society and have a strong tradition of leadership, strength, and courage.”

In recognition of AAPI Heritage Month, SDCA presented a public webinar titled “Understanding AAPI Discrimination in Our Past and Present to Reclaim our Future,” which was co-sponsored by the Pan-Asian Lawyers San of Diego and the Federal Bar Association, San Diego Chapter. The webinar recognized that anti-Asian hate incidents have risen recently and are likely severely underreported. To report a suspected hate crime or incident, call or visit one of the attached resources.

“This last year we have seen a significant rise in anti-Asian hate incidents across the country, including in our community. Hate crimes and acts of bigotry and xenophobia are disgraceful and have no place in the Southern District of California,” said Acting U.S. Attorney Grossman. “My office condemns such acts of violence and remains committed to ensuring that the AAPI community is protected by holding accountable perpetrators of crimes fueled by hate, and our federal, state and local law enforcement partners hold the same commitment.” Acting U.S. Attorney Grossman thanked SDCA’s AAPI Special Emphasis Program Managers Connie Wu, Brandon Kimura, and Janaki Chopra, who organized AAPI Heritage Month events with SDCA Diversity Management Committee members Amy Wang, David Chu, and Kim-Thoa Hoang.

 

Download the

Report Contacts for AAPI hate incidents

 

Assistant U. S. Attorney Melanie K. Pierson (619) 546-7976

NEWS RELEASE SUMMARY – May 27, 2021

SAN DIEGO – Selene Barraza of Visalia, California, was convicted by a federal jury yesterday of smuggling illegal pesticides into the United States from Mexico.

The jury found that Barraza smuggled 25 containers of pesticides and fertilizer concealed under the seats of her vehicle into the United States at the San Ysidro Port of Entry on February 26, 2020. The pesticides included 12 bottles of Metaldane and six bottles of Furadan. The active ingredient of Metaldane is methamidophos, and the active ingredient of Furdan is carbofuran. Both methamidophos and carbofuran are cancelled pesticides, which may not be legally imported, sold, distributed or applied in the United States.

According to trial testimony, Barraza purchased the pesticides at a store in Tijuana, where she was told that it was illegal to cross them into the United States but that if the pesticides were discovered, they would simply be seized.  The amount of Metaldane alone purchased by Barraza would have lasted 100 to 200 years if applied to her property, according to the directions on the label.  Barraza told agents she intended to use the pesticides and resell them. Barraza is scheduled to be sentenced before U.S. District Judge Dana M. Sabraw on August 20, 2021.

“These chemicals are banned in the United States because they are toxic and dangerous,” said Acting U.S. Attorney Randy Grossman. “This verdict is an important reminder that there are serious consequences for those who attempt to smuggle illegal pesticides into the U.S. with no regard for public safety.” Grossman praised Assistant U.S. Attorney Melanie Pierson, Department of Justice Trial Attorney Stephen Da Ponte and agents with Homeland Security Investigations and the U.S. Environmental Protection Agency, Criminal Investigation Division for their excellent work to protect the public.

“The jury’s verdict sends a clear message to individuals that knowingly put people at risk” said Scot Adair, the Special Agent in Charge of EPA’s criminal enforcement program in California. “With our partner agencies, EPA’s job is to protect the American people from highly toxic pesticides like the ones illegally smuggled into this country by the defendant.”

“The jury’s verdict confirms the seriousness of preventing these toxic chemicals from polluting the environment and putting people’s health at risk,” said Cardell T. Morant, Special Agent in Charge of Homeland Security Investigations (HSI).  “HSI and our partners at Environmental Protection Agency – Criminal Investigation Division, U.S. Customs and Border Protection, and the U.S. Attorney’s Office are committed to working together to stop these deadly pesticides from entering the United States.”

This case was prosecuted by Assistant U.S. Attorney Melanie Pierson and DOJ Trial Attorney Stephen DaPonte.

DEFENDANT                                              

Case Number 20cr1442-DMS

Selene Barraza                                                Age: 34                                   Visalia, CA

SUMMARY OF CHARGES

Smuggling – Title 18, U.S.C., Section 545

Maximum penalty: 20 years of imprisonment and $250,000 fine

AGENCIES

Homeland Security Investigations

U.S. Environmental Protection Agency, Criminal Investigation Division

Assistant U. S. Attorneys Matthew J. Sutton (619) 546-8941 and Adam Gordon (619) 546-6720

NEWS RELEASE SUMMARY – May 27, 2021

SAN DIEGO – Eleven federal indictments unsealed in San Diego today charge twenty-three documented gang members and associates with heroin, methamphetamine and firearms trafficking. The crackdown announced today is the latest in a series of efforts by the Department of Justice to turn the tide of the opioid epidemic and reduce the inevitable violent crime that accompanies widespread drug trafficking.

As of today at 1 p.m., 17 of the 23 defendants are either in federal or state custody. Twelve were arrested this week, including nine this morning; the rest were already in custody. Authorities are continuing to search for six defendants. Many of the defendants are scheduled to be arraigned before U.S. Magistrate Judge Michael Berg at 2 p.m. today and tomorrow.

This yearlong investigation involved federal wiretaps, dozens of undercover drug and gun buys and extensive surveillance. Many of the defendants are documented members or associates of violent South Bay street gangs operating out of National City, San Ysidro, and elsewhere. Many of these gang have long-standing ties to the Mexican Mafia. In total, authorities seized 2.1 kilograms of methamphetamine, 160 grams of heroin, and nine firearms tied to these defendants during the investigation.

“Gangs, drugs, and illegal firearms are infesting many of our neighborhoods and creating a violent culture that is unsafe for residents,” said Acting U.S. Attorney Randy S. Grossman. “This prosecution underscores that coordinated criminal activity will be met with a coordinated and focused law enforcement response by the U.S. Attorney’s Office and our law enforcement partners at the federal, state, and local level. We are committed to dismantling violent gangs and holding their members accountable for criminal conduct.”

“The FBI is proud to work alongside our local, state, and federal partners on the Violent Crimes Task Force to address the gang problem and rid our streets of the overflow of drugs and guns which continue to plague our communities,” said FBI Special Agent in Charge Suzanne Turner. “Today’s enforcement action is another example of why the Task Force was established – to be a force multiplier and combine short term, street level enforcement activity with long term, sophisticated techniques to root out and prosecute the entire criminal enterprise.”

“I would like to recognize the cooperation between all agencies who took part in this operation,” said San Diego Police Chief David Nisleit. “These collaborative efforts continue to make our communities safe.”

Acting U.S. Attorney Grossman praised the coordinated federal and state team effort in the culmination of this investigation. Agents and officers from the FBI Violent Crimes Task Force-Gang Group, San Diego Police Department, San Diego Sherriff’s Department, National City Police Department, Chula Vista Police Department, the Federal Bureau of Prisons, San Diego County Probation and the San Diego County District Attorney’s Office collaborated on this investigation. Attorneys from the Department of Justice, Office of Enforcement Operations, Electronic Surveillance Unit, also provided critical assistance to the investigation. Grossman also praised Assistant U.S. Attorneys Matthew J. Sutton and Adam Gordon for their excellent work on this case.

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.

The government’s case is being prosecuted by Assistant U.S. Attorneys Matthew J. Sutton and Adam Gordon.

DEFENDANTS                                                                              Case Number: 21CR1404-DMS

Name

Age

Hometown

Jose Garcia (1),

   aka “Little Man”

38

San Diego

Hector Esquivel (2),

   aka “Kracks”

31

San Diego

Paul Godoy (3),

   aka “Loco”

40

San Diego

Laura Mejia (4)

23

San Diego

SUMMARY OF CHARGES

Conspiracy to Distribute Methamphetamine, in violation of Title 21, U.S.C., Secs. 841(a)(1) and 846;

Distribution of Methamphetamine, in violation of Title 21, U.S.C., Sec. 841(a)(1);

Felon in Possession of a Firearm, in violation of Title 18, U.S.C., Secs. 922(g)(1) and 924(a)(2).

Maximum Penalties: For the drug charges: Life in prison with a mandatory minimum sentence of 10 years and a $10 million fine. For firearms charges: Ten years in prison and a $250,000 fine.

DEFENDANTS                                                                              Case Number: 21CR1405-DMS

Name

Age

Hometown

*Alexa Allen (1)

29

San Diego

*Yuliana Guillen (2)

43

San Diego

SUMMARY OF CHARGES

Distribution of Methamphetamine, in violation of Title 21, U.S.C., Sec. 841(a)(1).

Maximum Penalties: For the drug charges: Life in prison with a mandatory minimum sentence of 10 years and a $10 million fine.

DEFENDANT                                                                                Case Number: 21CR1406-DMS

Name

Age

Hometown

Fernando Banuelos (1),

   aka “Puma”

39

San Diego

SUMMARY OF CHARGES

Distribution of Methamphetamine, in violation of Title 21, U.S.C., Sec. 841(a)(1);

Maximum Penalties: For the drug charges: Life in prison with a mandatory minimum sentence of 10 years and a $10 million fine.

DEFENDANT                                                                                Case Number: 21CR1407-DMS

Name

Age

Hometown

Victor Cantero (1),

   aka “Scooby”

44

San Diego

SUMMARY OF CHARGES

Distribution of Methamphetamine, in violation of Title 21, U.S.C., Sec. 841(a)(1);

Maximum Penalties: For the drug charges: Life in prison with a mandatory minimum sentence of 10 years and a $10 million fine.

DEFENDANTS                                                                              Case Number: 21CR1408-DMS

Name

Age

Hometown

Rodolfo Estrada (1)

27

San Diego

*Alberto Flores (2)

40

San Diego

SUMMARY OF CHARGES

Felon in Possession of a Firearm, in violation of Title 18, U.S.C., Secs. 922(g)(1) and 924(a)(2);

Maximum Penalties: For firearms charges: 10 years in prison and a $250,000 fine.

DEFENDANTS                                                                              Case Number: 21CR1409-DMS

Name

Age

Hometown

Andres Rodriguez (1),

   aka “Dragon”

33

San Diego

Omar Solis (2),

   aka “Lazy”

26

San Diego

SUMMARY OF CHARGES

Distribution of Methamphetamine, in violation of Title 21, U.S.C., Sec. 841(a)(1);

Maximum Penalties: For the drug charges: Life in prison with a mandatory minimum sentence of 10 years and a $10 million fine.

DEFENDANT                                                                                Case Number: 21CR1410-DMS

Name

Age

Hometown

*Daniel Rodriguez (1),

   aka “Flea”

36

San Diego

SUMMARY OF CHARGES

Felon in Possession of a Firearm, in violation of Title 18, U.S.C., Secs. 922(g)(1) and 924(a)(2);

Maximum Penalties: For firearms charges: Ten years in prison, and a $250,000 fine.

DEFENDANTS                                                                              Case Number: 21CR1411-DMS

Name

Age

Hometown

Lucy Simmons (1)

47

San Diego

Jesse Gonzales (2)

40

San Diego

SUMMARY OF CHARGES

Distribution of Methamphetamine, in violation of Title 21, U.S.C., Sec. 841(a)(1);

Maximum Penalties: For the drug charges: Life in prison with a mandatory minimum sentence of 10 years and a $10 million fine.

DEFENDANT                                                                                Case Number: 21CR1412-DMS

Name

Age

Hometown

Alexander Sotelo (1),

   aka “Venom”

30

San Diego

SUMMARY OF CHARGES

Felon in Possession of a Firearm, in violation of Title 18, U.S.C., Secs. 922(g)(1) and 924(a)(2);

Maximum Penalties: For firearms charges: Ten years in prison, and a $250,000 fine.

DEFENDANTS                                                                              Case Number: 21CR1413-DMS

Name

Age

Hometown

Gilberto Tovar (1)

32

San Diego

*Sandra Gonzalez (2)

55

San Diego

SUMMARY OF CHARGES

Distribution of Methamphetamine, in violation of Title 21, U.S.C., Sec. 841(a)(1);

Maximum Penalties: For the drug charges: Life in prison with a mandatory minimum sentence of 10 years and a $10 million fine.

DEFENDANTS                                                                              Case Number: 21CR1414-DMS

Name

Age

Hometown

Carlos Teran (1),

   aka “Tadow”

42

San Diego

*Andrew Diangelo (2),

   aka “Cowboy”

37

San Diego

Luis Quintana (3),

   aka “Maniac”

37

San Diego

Sylvia Freeman (4)

60

San Diego

Joe Franco (5)

44

San Diego

*Fugitives

SUMMARY OF CHARGES

Conspiracy to Distribute Controlled Substance, in violation of Title 21, U.S.C., Secs. 841(a)(1) and 846;

Conspiracy to Import Heroin, in violation of Title 21, U.S.C., Secs. 952, 960 and 963;

Felon in Possession of a Firearm, in violation of Title 18, U.S.C., Secs. 922(g)(1) and 924(a)(2);

Possession with Intent to Distribute Heroin, in violation of Title 21, U.S.C., Sec. 841(a)(1);

Importation of Heroin, in violation of Title 21, U.S.C., Secs. 952 and 960;

Maximum Penalties: For the drug charges: Life in prison with a mandatory minimum sentence of 10 years and a $10 million fine. For firearms charges: Ten years in prison, and a $250,000 fine.

The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.

AGENCIES

Federal Bureau of Investigation

San Diego Police Department

San Diego Sheriff’s Department

Internal Revenue Service

Homeland Security Investigations

National City Police Department

Chula Vista Police Department

Federal Bureau of Prisons

California Department of Corrections and Rehabilitation

San Diego County Probation

San Diego County District Attorney’s Office

Assistant U. S. Attorney Melanie K. Pierson (619) 546-7976    

NEWS RELEASE SUMMARY – May 25, 2021

SAN DIEGO – A San Diego firm and its owner pleaded guilty in federal court today to charges relating to the unlawful importation, sale and mailing of an unregistered pesticide product from Japan marketed as a killer of airborne viruses such as COVID-19.

The product, known as EcoAirDoctor, was a small badge represented to emit a gas that would kill viruses within a certain distance.  Such products are required to be registered as pesticides in the United States; no such registration was obtained.

Samir Haj, owner of EcoShield, LLC, admitted that he negotiated an agreement on behalf of the company with a foreign exporter that allowed him to import the product for a cost of $6.25 per unit. When he imported 125,000 units into the United States on June 10, 2019, he falsely declared the value to be approximately $2.07 per unit, resulting in an underpayment of Customs duty of $33,919.

The product was falsely described as an air purifier rather than a pesticide. The defendants shipped the product to individuals who purchased from their website via U.S. Mail, including a shipment to an undercover mailbox in Arizona in May of 2020. The product, as noted on the label, contains sodium chlorite, which is an item declared to be unmailable under U.S. Postal rules and regulations.  Sodium chlorite was deemed unmailable because of its propensity to cause a fire or explosion.

As part of the plea agreements, the defendants agreed to forfeit $427,689, the proceeds from the sale of the illegal product, and to pay restitution of $86,754 for the unpaid duty and the cost of disposing of the product that was not sold.  In addition, the company agreed to pay a fine of $42,000, for a total financial penalty of $556,443.

“This defendant took advantage of COVID-19 fears to market an illegal product,” said Acting U.S. Attorney Randy Grossman. “We are aggressively pursuing opportunists who exploit the pandemic to make money.” Grossman praised Assistant U.S. Attorney Melanie Pierson; trial attorney Stephen DaPonte of the Department of Justice’s Environmental Crimes Section; and agents with the U.S. Environmental Protection Agency, Criminal Investigations Division; Homeland Security Investigations; and the U.S. Postal Inspection Service for their exceptional work on this case.

“Profiting from the illegal import, sale, and shipment of an unregistered, untested, and potentially dangerous pesticide, especially at a time when the public had legitimate safety concerns about the transmission of COVID-19, is egregious criminal conduct that must be stopped,” said Acting Assistant Attorney General Jean Williams of the Justice Department’s Environment and Natural Resources Division. “We will work with our partners at U.S. Attorneys’ Offices and law enforcement agencies in prosecuting such conduct to the fullest extent of the law.”

“Unregistered pesticide products pose serious public health dangers,” said Special Agent in Charge Scot Adair of EPA’s criminal enforcement program in California. “Today’s guilty plea demonstrates that EPA and our law enforcement partners are committed to protecting the American people from products that make fraudulent – and potentially harmful - COVID-19 protection claims.”

“Whenever someone uses the U.S. Mail to send dangerous, illegal or improper items, Postal Inspectors will find them and bring them to justice,” said Eric Shen, Acting Postal Inspector in Charge, Los Angeles Division of the U.S. Postal Inspection Service. “We remain committed to keeping the mail safe for our customers and our employees.”

“This individual violated several federal laws and jeopardized public safety by marketing and selling an unproven device,” said Cardell T. Morant, Special Agent in Charge of Homeland Security Investigations (HSI). “It’s despicable that he preyed upon people’s fear of COVID-19 to turn a profit. HSI will continue to work with our partners at Environmental Protection Agency -Criminal Investigation Division, California Department of Toxic Substances Control, U.S. Postal Inspection Service, Customs and Border Protection, and the U.S. Attorney’s Office to ensure public safety during this pandemic.”

Sentencing is scheduled for August 13, 2021 at 9 a.m. Before U.S. District Judge Janis L. Sammartino.

DEFENDANTS                                             Case Number 21cr1463

EcoShield, LLC                                              Formed: July 2018                  San Diego, California

Samir Haj                                                        Age: 46                                   San Diego, California

SUMMARY OF CHARGES

For Eco Shield LLC

Entry of Goods Falsely Classified – Title 18, U.S.C., Section 541

Maximum penalty: Five years of probation and $500,000 fine or twice the amount of gross gain or loss, restitution to victims, forfeiture of proceeds

For Samir Haj

Entry of Goods Falsely Classified – Title 18, U.S.C., Section 541

Maximum penalty: Two years in custody and $250,000 fine, restitution to victims, forfeiture of proceeds

Nonmailable Injurious Articles – Title 18, U.S.C., Section 1716(j)(1)

Maximum penalty: One year in custody and $100,000 fine

Distribution or Sale of Unregistered Pesticides – Title 7, U.S.C., Sections 136j(a)(1)(A) and 136l(b)(1)(B)

Maximum penalty: One year in custody and $100,000 fine

AGENCIES

U.S. Environmental Protection Agency, Criminal Investigations Division

Homeland Security Investigations

U.S. Postal Inspection Service