Southern District of California

Assistant U. S. Attorney Larry Casper (619) 546-6734

NEWS RELEASE SUMMARY – May 24, 2021

SAN DIEGO – Andrew Samuel Daniel Gossai was sentenced in federal court today to 226 months in prison for supplying the fentanyl that led to the fatal overdose of 45-year old Derrick Hotchkiss, a longtime rugby player for the San Diego Old Aztecs Rugby Football Club.

Gossai, the last of three defendants to plead guilty in the case, admitted to distributing the fentanyl that caused the death and to selling in excess of 400 grams of fentanyl.

At today’s sentencing hearing, U.S. District Judge Anthony J. Battaglia noted the “severe costs the crime has brought to the community” and that the defendant was “up the chain of distribution and had a long history of selling drugs.”  The defendant was “clearly aware of the risks” posed by fentanyl yet continued distributing the drug.

Gossai, who has a history of drug sales convictions dating back more than a decade, sold fentanyl despite recognizing the dangers associated with the drug. Upon his arrest, Gossai admitted to law enforcement that, despite his sales of fentanyl, he was “scared” by the drug. Upon executing a search warrant at Gossai’s residence, law enforcement seized fentanyl in powdered and pill form; a digital scale with powdered residue; drug paraphernalia; and other illicit narcotics.

“Fentanyl continues to plague our community, and tragic deaths such as that of Derrick Hotchkiss are increasing exponentially,” said Acting U.S. Attorney Randy S. Grossman. “We will continue to work with our law enforcement and community outreach partners to reverse this terrible trend.”

“Justice has finally been served in the death of Derrick Hotchkiss due of the hard work of the men and women on DEA's NTF Team 10 and our law enforcement partners,” said DEA Special Agent in Charge John W. Callery.  “This case is a stark reminder to people selling drugs: If the drugs you sell cause someone to die, we will bring you to justice.”

Previously, defendants Christopher Emison and Jeffrey Alden Blair were also sentenced in connection with Hotchkiss’ death to 168 and 188 months in custody respectively. According to the government’s sentencing papers, Gossai sold the fatal dose of fentanyl to Blair who made the purchase for both Emison and himself. In turn, Emison sold the fatal dose directly to Hotchkiss shortly before his overdose death.

Acting U.S. Attorney Grossman praised prosecutor Larry Casper as well as the agents from Narcotics Task Force Team 10, a multi-agency team housed by DEA that was created in July 2018 to address drug overdose deaths in San Diego, for their efforts on these cases. 

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

DEFENDANTS                                

Case Number 19cr3253-AJB

Andrew Samuel Daniel Gossai           Age: 33                       San Diego, California

Case Number 19cr3252-AJB                                                          

Jeffrey Alden Blair                             Age:  34                      San Diego, California

Christopher Glenn Emison                 Age: 33                       El Cajon, California

SUMMARY OF CHARGES

Andrew Samuel Daniel Gossai and Jeffrey Alden Blair:         

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

Maximum Penalties – Mandatory minimum of 10 years, and maximum of life in prison and $10 million fine.

Christopher Glenn Emison

Sentenced to 168-months on Distribution of Fentanyl – Title 21 U.S.C. Section 841(a)(1) and (b)(1)(C) with maximum penalties – mandatory minimum of five years and maximum of 40 years in prison and $5 million fine.

INVESTIGATING AGENCIES

Drug Enforcement Administration

Federal Bureau of Investigation

Department of Homeland Security

California Department of Healthcare Services

San Diego Police Department

(The above-listed agencies are represented on DEA NTF Team 10)

Assistant U. S. Attorney Alexandra F. Foster (619) 546-6735

NEWS RELEASE SUMMARY – May 24, 2021

SAN DIEGO – Kirill Victorovich Firsov, a Russian citizen, was sentenced to 30 months in custody for his role as the administrator of a website that catered to cyber criminals by virtually selling items such as stolen credit card information, other personal information and services to be used for criminal activity.

The now-defunct online platform DEER.IO started operations as of at least October 2013, and, as of Firsov’s arrest in March 2020, the platform hosted approximately 3,000 active shops with sales exceeding $17 million. Although Firsov maintained that the bulk of the sales on DEER.IO were Russian accounts, the parties agreed that the government could show that shop owners on the DEER.IO platform sold at least $1.2 million in U.S.-based stolen information, to include the gamer accounts identified in the plea agreement.

At sentencing, the prosecutor noted that Firsov built the DEER.IO platform in 2013 and maintained it for almost seven years. Further, the prosecutor asserted that Firsov knew DEER.IO was selling stolen and counterfeit accounts, because he built the platform, which included a number of icons for U.S.-based companies that anyone setting up a store on DEER.IO could click on to then sell stolen accounts from those U.S. companies. Also, DEER.IO was easily searchable, so anyone --including Firsov-- could search the platform for stolen U.S. accounts and information. Even though it sold stolen accounts, DEER.IO was not cloaked in secrecy and required no special password for access, because everything was run out of Russia, and American law enforcement could gain no foothold.

DEER.IO sold not only stolen accounts, like the gamer accounts identified in the plea agreement, but also Americans’ personal information, to include names, current addresses, telephone numbers and at times Social Security numbers. On March 4, 2020, the FBI purchased 1,100 gamer accounts, and on March 5, 2020, the FBI purchased the personal information for over 3,600 Americans. On March 7, 2020, Firsov was arrested by the FBI in New York City when he flew into JFK Airport from Moscow.

In sentencing Firsov to 30 months, U.S. District Judge Cynthia Bashant acknowledged that he had been incarcerated in the United States for 15 months, while the COVID-19 pandemic swept the world and, very specifically, the American jail system. She also recognized that Firsov had been incarcerated in the United States, far from his support system of family and friends in Russia.  Finally, she noted that once released, Firsov would likely be incarcerated as he underwent deportation proceedings back to Russia. Nonetheless, she noted that without Firsov’s involvement, there would be no DEER.IO, and that facilitated the sale of stolen property on a large scale. Balancing these factors, Judge Bashant sentenced Firsov to 30 months.

“This platform provided cybercriminals with easy access to the personal accounts and information of people around the world, including Americans,” said Acting U.S. Attorney Randy Grossman. “Stopping that flow of stolen information to criminals is critical to addressing the cybercrime threats facing our country, and we will prosecute those who are responsible.” Grossman commended the excellent work of Assistant U.S. Attorney Alexandra F. Foster and the FBI agents on this case.

“The FBI will pursue cyber-criminals across the globe,” said FBI Special Agent in Charge Suzanne Turner. “Today’s sentence sends a message – conducting criminal activity from outside the United States does not mean you are out of reach. The FBI will identify and pursue criminal actors in the cyber-sphere, regardless of where they operate, and work to bring them to justice in a United States court.”

If victimized in a cyber security incident, the FBI encourages companies to immediately contact the FBI.  Specialized cyber agents will work with companies to protect company information and the personal data of its customers. Please contact the FBI San Diego's cyber program by calling our field office at (858) 320-1800 or submitting tips at Internet Crime Complaint Center (IC3).

DEFENDANT                                            Case Number 20cr1182-BAS                                    

Kirill Victorovich Firsov                             Age:     30                             Moscow, Russia

SUMMARY OF CHARGE

Unauthorized Solicitation of Access Devices (18 U.S.C. § 1029(a)(6))

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

INVESTIGATING AGENCY

FBI

Assistant U. S. Attorney Charlotte E. Kaiser (619) 546-7282 

NEWS RELEASE SUMMARY – May 24, 2021

SAN DIEGO – The pilot of a boat that capsized during a drug and human smuggling event was sentenced in federal court today to 50 months in custody. 

Henrry Javier Garcia Valle pleaded guilty in September 2020 to Possession of Methamphetamine with Intent to Distribute on Board a Vessel, in violation of Title 46, United States Code, Section 70502(a)(1).

At the hearing, U.S. District Judge John Houston admonished the defendant: “Tell the other fishermen – ‘Don’t do it.’ . . . You are placing everyone in danger.  The smugglers don’t care.  Tell your friends don’t do this.”

“Maritime drug and human smugglers repeatedly engage in dangerous tactics to avoid law enforcement,” said Acting U.S. Attorney Randy Grossman. “In this event, 14 individuals including the defendant almost lost their lives due to the defendant’s conduct. We will continue to hold accountable those who engage in these dangerous tactics.” Grossman praised Assistant U.S. Attorney Charlotte Kaiser and law enforcement partners for their excellent work on this case.

“We’re encountering more smugglers who attempt to avoid detection by navigating their ill-equipped vessels farther out to sea,” said Cardell T. Morant, Special Agent in Charge of Homeland Security Investigations (HSI). “It cannot be overstated—dangerous smuggling operations like these could potentially result in lives lost at sea.”

“Smuggling attempts like these oftentimes lead to tragic consequences, which fortunately were avoided this time,” said Rear Adm. Brian Penoyer, Eleventh Coast Guard District commander. “Today, justice has been served, and the Coast Guard will continue to work with our maritime partners to bring these criminals to justice.”

According to the government’s sentencing memorandum, on July 25, 2020 at 11 p.m., air interdiction agents spotted a vessel using no navigational lights headed towards the United States from Mexico.  At approximately 3:58 a.m. on July 26, 2020, the U.S Coast Guard attempted to interdict the vessel containing 14 individuals, who later were determined to be non-citizens without legal status to be in the United States.  The location was approximately 7.5 miles west of Mission Bay.  Reports from law enforcement and information from fellow defendants indicated that the defendant gave chase for several minutes and then the boat stopped.  At that point, law enforcement saw certain individuals toss bags from the boat.  Three of the bags subsequently were recovered and contained approximately 37.2 kilograms of methamphetamine.  On further testing, the amount came to 35 kilograms of actual methamphetamine, and was deemed 100 percent pure. 

At the time the boat stopped, it began to take on water.  The occupants shifted and the boat began to capsize.  U.S. Coast Guard officials were able to rescue all 14 occupants including defendant and three co-defendants identified as crew members.  Two of those other codefendants – Faustino Dominguez Padilla and Ivan Ramirez Guzman - pleaded guilty to human smuggling and were sentenced to approximately 7.5 and 10 months in custody, respectively.  Another co-defendant – Joel Lopez Burgos – pleaded guilty to the same charge as defendant and will be sentenced in June 2021.

As part of his plea agreement, the defendant admitted that he was pilot or captain of the vessel that contained 14 occupants including himself, all of whom lacked lawful status to enter or remain in the United States, as well as the 37.2 kilograms of methamphetamine.  The defendant admitted that he conspired to bring the occupants and the drugs into the United States illegally.  He further admitted that the boat not only had no navigational lights on during the overnight journey but also that it had engine problems and that none of the defendants was wearing life vests.  He additionally recognized that the boat capsized after a pursuit.   

DEFENDANTS                                             Case Number 20CR2524-JAH                                        

Henrry Javier Garcia Valle                             Age: 38                                  Sinaloa, Mexico

Joel Lopez Burgos                                          Age: 35                       Sinaloa, Mexico

Faustino Dominguez-Padilla                          Age: 37                       Jalisco, Mexico

Ivan Ramirez Guzman                                    Age: 27                       Sinaloa, Mexico

SUMMARY OF CHARGES

For Defendants Henrry Javier Garcia Valle and Joel Lopez Burgos:

Possession of Methamphetamine with Intent to Distribute on Board a Vessel  – Title 46, United States Code, Section 70502(a)(1) –  Maximum penalty: Life in prison and $10 million fine.

For Defendants Faustino Dominguez-Padilla and Ivan Ramirez Guzman:

Attempted Bringing in Without Presentation and Aiding and Abetting – Title 8, U.S.C., Section 1324(a)(2)(B)(iii) and Title 18, United States Code, Section 2

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

AGENCIES

Homeland Security Investigations

U.S. Border Patrol

U.S. Coast Guard

Assistant U. S. Attorneys Stephen H. Wong (619) 546-9464 and Mikaela L. Weber (619) 546-9734

NEWS RELEASE SUMMARY – May 19, 2021

SAN DIEGO – Tony Davis pleaded guilty in federal court today, admitting that he supplied fentanyl that led to the fatal overdose of Jacqueline Galvan, a 41-year-old San Diego woman, on October 24, 2018.

According to his plea agreement, Davis agreed to sell more than 100 grams of what he knew to be heroin in the fall of 2018, and that on October 24, 2018 he distributed heroin and fentanyl to another street-level drug dealer who in turn distributed the drugs that caused Galvan’s death.

Davis further acknowledged selling more than 100 grams of heroin to the drug dealer who was, in turn, distributing those drugs to others. Davis pleaded guilty before U.S. Magistrate Judge Linda Lopez to Distribution of Heroin and Fentanyl and Conspiracy to Distribute Heroin and is scheduled to be sentenced on August 6, 2021 by U.S. District Judge Cathy Ann Bencivengo.

DEA Narcotic Task Force Team 10 led the investigation in this case. Team 10 is a specialty unit, with investigators from HSI, FBI, San Diego Police Department, CA Department of Health Care Services and the San Diego District Attorney’s Office, that investigates overdose deaths in San Diego.  Team 10 responds to the discovery of overdose victims and aggressively pursues criminal cases, up the distribution chain, against the dealers and their sources of supply.

“This case should put drug dealers and those who supply them on notice that every time we have an overdose death, law enforcement will come looking for you, because lives are at stake,” said Acting U.S. Attorney Randy Grossman. “We will not stop with the street-level dealers but will follow the supply chain as far up as necessary and will use every available criminal and civil tool to combat this deadly epidemic and stop these tragic losses.”

“This case is another example of how DEA and our law enforcement partners on Team 10 – the Overdose Response Team – are working together to put the people responsible for supplying deadly drugs in prison,” said DEA Special Agent in Charge John W. Callery.  “DEA will continue to aggressively pursue both street-level dealers and their suppliers and bring justice to the families who lost a loved one to a drug overdose.”

The United States Attorney’s Office is working closely with the San Diego County District Attorney’s Office, the National City Police Department, the Drug Enforcement Administration and other federal, state and local law enforcement partners to investigate and prosecute cases targeting those who supply drugs in fatal overdose cases.

Acting U.S. Attorney Randy Grossman praised prosecutors Stephen H. Wong and Mikaela L. Weber as well as DEA Team 10 investigators for their hard work on the case.

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 19-CR-0294-CAB

Tony Davis                                                    Age: 65         

SUMMARY OF CHARGES

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

Conspiracy to Distribute Heroin – Title 21, U.S.C., Section 841(a)(1) & 846

Penalties: Mandatory minimum five years in prison; maximum 40 years in prison

AGENCY

Drug Enforcement Administration 

 

Assistant U. S. Attorney Michelle L. Wasserman (619) 546-8431

NEWS RELEASE SUMMARY – May 17, 2021

SAN DIEGO – Jeffrey Fildey, founder and former CEO of San Diego startup GoFormz Inc., was sentenced in federal court today to 51 months in custody for embezzling more than $1.5 million from the company he co-founded.

According to court records, at the time of Fildey’s crime, GoFormz had had raised several rounds of outside funding and appeared to be a start-up success story. Fildey stole the funds despite earning a six-figure salary, and used the stolen funds to support a luxurious lifestyle, including the purchase of a $20,000 diamond ring, fancy vacations, an Audi, and recurring transfers to a woman with whom he was having an extramarital affair.  According to public records, GoFormz Inc., founded in 2012, is a San Diego company that provides online mobile forms.

According to Fildey’s plea agreement and court records, beginning on or before September 30, 2015, and continuing through August 12, 2017, Fildey used various methods to defraud GoFormz.  His deceptive ways included obtaining loans, supposedly on the company’s behalf, but then taking the funds for himself; putting personal expenditures on GoFormz credit cards which the company then paid for; obtaining cash advances for himself on GoFormz credit cards; and simply stealing money directly from the company’s bank account.

Fildey took out a total of three unauthorized loans on behalf of GoFormz, totaling approximately $600,000, and transferred the funds to his personal bank account shortly after the loaned funds were transferred to GoFormz.  In addition to the loans, Fildey withdrew over $700,000 in cash from the GoFormz bank account for his personal use and made over $2,600 in unauthorized purchases on the GoFormz corporate credit card. 

According to Court records, the company discovered Fildey’s deception when its payroll bounced in July 2017, and the company realized it had only approximately $9,000 in its bank account.  As a result of Fildey’s conduct, the company had to fire 12 of its 42 employees and its valuation plummeted.

“Small business is the lifeblood of our community,” stated Acting U.S. Attorney Randy Grossman.  “In stealing from his business, Mr. Fildey stole from all those whose livelihoods depended upon the company.  Embezzlement and fraud will be prosecuted to the full extent of the law.”

“The defendant’s gross abuse of power is shocking on two fronts,” said FBI Special Agent in Charge Suzanne Turner. “As CEO, he lined his own pockets with more than $1.5 million at the expense of the company he was charged with leading. As an employee of the company, he put the livelihoods of his fellow employees and the future of the company in peril. Let this serve as another reminder - corporate greed has no place in society and those who pursue such a path will face consequences.”

Fildey admitted in his plea agreement that as a result of his fraud, GoFormz lost $1,544,147.  In addition to custody, Fildey was ordered to pay restitution of $1,345,897 and to forfeit $1,156,001. The defendant was immediately remanded into custody to begin serving his sentence.

DEFENDANT                                               Case Number             20cr1917-LAB          

Jeffrey Fildey                                                  Age: 56                       Las Vegas, NV

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 gross gain or loss from the offense, whichever is greater

AGENCY

Federal Bureau of Investigation

Assistant U.S. Attorney Kevin Mokhtari (619) 546-8402

NEWS RELEASE SUMMARY – May 13, 2021

SAN DIEGO – Five Brazilian nationals were charged today by criminal complaint with engaging in a nationwide conspiracy to establish fraudulent driver accounts with multiple internet- and app-based rideshare and food-delivery service companies, including by using identities stolen from the very customers of those same companies.

Four of the five defendants—Gustavo De Avila Moreira Farinha, Tatiane Pereira Arantes, Natalia Magalhaes Rocha and Leonardo Trulsen De Oliveira—were arrested early this morning by agents from Homeland Security Investigations and other state and federal agencies. A fifth defendant remains a fugitive.  The arrested defendants are due to make their initial appearance tomorrow morning before U.S. Magistrate Judge Jill L. Burkhardt.

According to the complaint, the alleged scheme involved obtaining images and information from victims’ driver’s license and Social Security numbers; creating accounts to drive for the rideshare and delivery companies using those stolen identification documents; using, renting and selling those accounts, including to people who might not otherwise qualify to drive for these companies; incurring IRS Form 1099s for victims’ whose identities were stolen; and using fake driver accounts to collect referral bonuses.  To date, agents have identified close to 100 victims in California and across the United States. 

As alleged in the complaint, this scheme began in approximately 2018, initially with rideshare companies.  In Spring 2020, with the COVID-19 pandemic in full swing and Californians in  lockdown, the conspirators shifted away from the rideshare companies, which saw a dramatic decrease in traffic, to food, grocery and other delivery companies, which saw a corresponding and precipitous increase in demand. 

During deliveries using these fraudulent accounts, including when verifying IDs, some of the conspirators used the fraudulent accounts to further perpetuate the scheme by stealing additional identities and thereafter creating additional fraudulent accounts in a perpetuating cycle of identity theft. 

“Identity theft is a special kind of misery for victims who often are forced into a years-long legal morass of confusion and frustration to reclaim their good names,” said Acting U.S. Attorney Randy Grossman. “Today’s arrests are the first strike back on behalf of those victims.” Grossman praised the extraordinary efforts of prosecutor Kevin Mokhtari and agents from Homeland Security Investigations to achieve justice in this case.

Cardell T. Morant, Special Agent in Charge for Homeland Security Investigations, San Diego, stated, “HSI San Diego remains dedicated to protecting our communities from technology-enabled consumer crime and identity theft.” Special Agent in Charge Morant further noted the assistance of local, regional, and federal partners on this investigation.

Anyone who may be a victim of this crime or who thinks they may have information that may be relevant to this investigation is asked to call HSI San Diego at (760) 901-1004.

This investigation is being handled by Assistant U.S. Attorney Kevin Mokhtari and, prior to his departure from the office, was initiated and investigated by former Assistant U.S. Attorney Francis A. DiGiacco.   

DEFENDANTS                                             Case Number 21MJ1891-JLB    

Gustavo De Avila Moreira Farinha               Age: 29                                       Brazil

Tatiane Pereira Arantes                               Age: 37                                      Brazil

Natalia Magalhaes Rocha                             Age: 29                                      Brazil

Leonardo Trulsen De Oliveira                       Age: 29                                      Brazil

Defendant 5 - Fugitive                                                                                   Brazil                                                                       

SUMMARY OF CHARGES

Count 1 - Conspiracy to Commit Wire Fraud – Title 18, U.S.C., 1349

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

Count 2 – Conspiracy to Launder Monetary Instruments – Title 18, U.S.C., 1956(a)(1)(A)(i), (b)(i), and 1956(h)

Maximum Penalty: Twenty years in prison, $500,000 fine or twice the value of the monetary instruments

Counts 3-17- Aggravated Identity Theft – Title 18, U.S.C., 1028A

Maximum Penalty: Mandatory minimum sentence of two years in prison, to run consecutively to the specified felony.

AGENCIES

Department of Homeland Security, Homeland Security Investigations

Director of Media Relations Kelly Thornton (619) 546-9726

NEWS RELEASE SUMMARY – May 12, 2021

SAN DIEGO – A federal grand jury indictment was unsealed in San Diego today against alleged Mexican drug cartel leader Jesus Gonzalez Penuelas in connection with suspected heroin and fentanyl trafficking. Penuelas was also the target of sanctions imposed today by the U.S. Department of the Treasury.

The indictment, returned on January 27, 2017, charges Gonzalez Penuelas with Conspiracy to Distribute Controlled Substances Intended for Importation, and Conspiracy to Import Controlled Substances. On January 30, 2017, the Clerk of the Court issued a sealed warrant for his arrest. Gonzalez Penuelas remains a fugitive.

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) identified Jesus Gonzalez Penuelas and the Gonzalez Penuelas Drug Trafficking Organization (Gonzalez Penuelas DTO) as Significant Foreign Narcotics Traffickers pursuant to the Foreign Narcotics Kingpin Designation Act (Kingpin Act).  Please see https://home.treasury.gov/news/press-releases/jy0172.

Gonzalez Penuelas is the alleged leader of the Gonzalez Penuelas DTO, which is one of the largest raw opium gum and heroin sources of supply in northern Mexico, and increasingly a major distributor of fentanyl. The Gonzalez Penuelas DTO operates primarily in Sinaloa and Sonora, Mexico, various ports of entry in the United States, as well as numerous U.S.-based distribution cells in California, Texas, Colorado, Washington, Utah, and Nevada. The upper echelons of the Gonzalez Penuelas DTO hierarchy consist of Jesus Gonzalez Penuelas’ family members. The Gonzalez Penuelas DTO cooperates with other DTOs within Mexico, to include acting as an enforcement arm for the various Mexican DTO’s trafficking routes and is aligned with Mexican drug traffickers Fausto Isidro Meza Flores and Rafael Caro Quintero. The Treasury Department’s Office of Foreign Asset Control designated Fausto Isidro Meza Flores in January 2013 for his role in narcotics trafficking. The President identified Rafael Caro Quintero as a significant foreign narcotics trafficker pursuant to the Kingpin Act in 2000.

“This indictment and the Treasury Department sanctions announced today show that the Department of Justice, together with our law enforcement partners, will aggressively investigate and prosecute the most significant cartels and kingpins who import illegal drugs into the United States,” said Acting U.S. Attorney Randy S. Grossman. Grossman praised Assistant U.S. Attorney Matthew J. Sutton, HSI and DEA agents and all law enforcement partners for their excellent work on this case.

“This important Kingpin designation is an example of the effectiveness of our local and national law enforcement partnerships to help bring justice to drug smuggling organizations who benefit the most from smuggling dangerous drugs across the border,” said Cardell T. Morant, Special Agent in Charge for Homeland Security Investigations in San Diego, CA.  “The nation’s opioid epidemic continues affect our local communities and our agents are working tirelessly with our partners to disrupt the flow of these and all illegal narcotics.”

“DEA and our law enforcement partners continue to target organizations that are fueling the American opioid epidemic,” said DEA Special Agent in Charge John W. Callery.  “The indictment and the Department of Treasury sanctions against Jesus Gonzalez Penuelas serve as a warning to others causing the deaths of Americans through drug trafficking: we will utilize every resource available to disrupt your drug trafficking organization and bring you to justice.”

The indictment in this case marks the conclusion of the initial phase of a multi-year OCDETF investigation. This joint Homeland Security Investigations (HSI) and Drug Enforcement Administration (DEA) investigation targeted the leadership elements, lieutenants, associates, and money launderers connected with the Rafael Caro-Quintero DTO and Beltran Leyva Organization.

Acting U.S. Attorney Grossman also praised the outstanding work of the federal team from HSI Calexico / DEA Imperial County in the culmination of this investigation. Acting U.S. Attorney Grossman also thanked Customs and Border Protection, the U.S. Marshals Service, 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.

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. Attorney Matthew J. Sutton.

DEFENDANT                                                                              Case Number: 17CR00217-CAB

Jesus Gonzalez Penuelas, aka Chuy Gonzalez                                   Age: 51           Sinaloa, Mexico

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; Term of custody including a mandatory minimum 10 years and up to life imprisonment, $10 million fine and 5 years supervised release.

Conspiracy to Import Controlled Substances, in violation of Title 21 U.S.C. §§ 952, 960 and 963. Term of custody including a mandatory minimum 10 years and up to life imprisonment, $10 million fine and 5 years supervised release.

AGENCIES

Homeland Security Investigations

Drug Enforcement Administration

Department of Homeland Security, Joint Task Force – Investigations

Customs and Border Protection, Office of Field Operations

United States Marshals Service

Department of Justice, Organized Crime Drug Enforcement Task Forces

Department of Justice, Office of Enforcement Operations

Department of Justice, Office of International Affairs

United States Attorney’s Office for the District of Colorado

United States Attorney’s Office for the District of Oregon

Department of Treasury, Office of Foreign Assets Control

Customs and Border Protection, Office of Border Patrol

Immigration and Customs Enforcement, Enforcement and Removal Operations

El Centro Police Department

Brawley Police Department

Imperial County District Attorney’s Office

Imperial Valley, Law Enforcement Coordination Center

*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.

Assistant U. S. Attorneys Matthew Brehm (619) 546-8983 and Joseph J. Orabona (619) 546-7951

NEWS RELEASE SUMMARY – May 11, 2021

SAN DIEGO – After a two-day jury trial, Zachary Alexander Karas of San Diego was found guilty of possessing incendiary devices known as Molotov cocktails at a protest that began on May 30, 2020 in La Mesa. After the jury returned a guilty verdict, Chief District Judge Dana M. Sabraw remanded Karas into custody. Sentencing is set for August 13, 2021, at 9 a.m. before Chief Judge Sabraw.

“No one should bring a Molotov cocktail to disrupt a protest,” said Acting U.S. Attorney Randy Grossman. “This was a serious crime that had potential to cause significant damage.” 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 verdict sends a message to those who utilize lawful, peaceful protests to disguise their criminal acts,” said FBI Special Agent in Charge Suzanne Turner. “Zachary Karas was in possession of a functioning incendiary device which, thankfully, was not used. Regardless, citizens have the right to peacefully assemble without threat of disruption, criminal activity, or violence. The FBI is committed to working with our law enforcement partners to protect those who are exercising their constitutional rights as well as protecting the safety of the community.”

“ATF is the Federal agency primarily responsible for administering and enforcing the federal laws pertaining to destructive devices, explosives, and arson,” said ATF Special Agent in Charge Monique Villegas. “ATF will use all its resources to ensure destructive devices (Molotov cocktails) are not being used in our communities. We are glad the jury delivered the guilty verdict sending a message to those who consider creating their own devices for criminal use.”

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 explained in the statement, “And I heard of the fires. So I came back out with the, yes, intention to start a fire, but I did not have a part in the fire.” Karas said he got the bottles from a Rite Aid parking lot and used 87 octane gasoline as the fuel. He claimed that he had acted alone.

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.

A special agent with the ATF inspected the Molotov cocktails and found them to be functioning incendiary 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

Kelly Thornton (619) 546-9726    

NEWS RELEASE SUMMARY – May 10, 2021

SAN DIEGO — In honor of National Police Week, Attorney General Merrick Garland and Acting U.S. Attorney Randy Grossman recognize the service and sacrifice of federal, state, local, and Tribal law enforcement. This year, the week is observed Sunday, May 9 through Saturday, May 15, 2021.

“This week is a time to honor our law enforcement officers who have made the ultimate sacrifice in service to our nation,” said Attorney General Garland. “I am constantly inspired by the extraordinary courage and dedication with which members of law enforcement act each day, putting their lives on the line to make our communities safer. To members of law enforcement and your families: we know that not a single day, nor a single week, is enough to recognize your service and sacrifice. On behalf of the entire Department of Justice, you have our unwavering support and eternal gratitude.”

“Our federal, state, local and tribal law enforcement officers in the Southern District of California face harrowing situations day after day, yet they keep coming back to protect and serve. Some have even given their lives to do so,” said Acting U.S. Attorney Grossman. “I am grateful beyond words to our law enforcement partners for their extraordinary dedication, and the sacrifices that they and their families have made for our communities.”

In 1962, President Kennedy issued the first proclamation for Peace Officers Memorial Day and National Police Week to remember and honor law enforcement officers for their service and sacrifices.  Peace Officers Memorial Day, which every year falls on May 15, specifically honors law enforcement officers killed or disabled in the line of duty.  

 Each year, during National Police Week, our nation celebrates the contributions of law enforcement from around the country, recognizing their hard work, dedication, loyalty, and commitment to keeping our communities safe. This year the COVID-19 pandemic has highlighted law enforcement officers’ courage and unwavering devotion to the communities that they have sworn to serve.

During the Roll Call of Heroes, a ceremony coordinated by the Fraternal Order of Police (FOP), more than 300 officers will be honored.  Based on data submitted to and analyzed by the National Law Enforcement Officer Memorial Fund (NLEOMF), of the law enforcement officers who died nationwide in the line of duty in 2020, nearly 60 percent succumbed to COVID-19.

Last year, the Southern District of California, which includes San Diego and Imperial counties, lost two officers who served with distinction and will be added to the memorial: Efren Coronel of El Centro Police Department, who contracted COVID in the line of duty, and Daniel G. Walters of the San Diego Police Department, who was lost during gunfire.

Additionally, according to statistics reported by the Federal Bureau of Investigation (FBI) through the Law Enforcement Officer Killed and Assaulted (LEOKA) Program, 46 law enforcement officers died as a result of felonious acts and 47 died in accidents in 2020.  LEOKA statistics can be found on FBI’s Crime Data Explorer website. 

 The names of the 394 fallen officers who have been added in 2020 to the wall at the National Law Enforcement Officer Memorial will be read on Thursday, May 13, 2021, during a Virtual Candlelight Vigil, which will be livestreamed to the public at 8 p.m. EDT. The Police Week in-person public events, originally scheduled for May, have been rescheduled due to ongoing COVID-19 concerns to October 13-17, 2021. An in-person Candlelight Vigil event is scheduled for October 14, 2021.

Those who wish to view the Virtual Candlelight Vigil on May 13, 2021, can watch on the NLEOMF YouTube channel found at https://www.youtube.com/user/TheNLEOMF. The FOP’s Roll Call of Heroes can be viewed at www.fop.net. To view the schedule of virtual Police Week events in May, please view NLEOMF’s Police Week Flyer.   

To learn more about National Police Week in-person events scheduled for October, please visit www.policeweek.org.

 

###

 

Two California men were each sentenced today to two years in prison for accepting bribes in return for a guarantee of a city permit to open a commercial cannabis dispensary.

According to the plea documents, former Calexico, California, City Councilman David Romero, 37, and Bruno Suarez-Soto, 29, a former commissioner on the city’s Economic Development and Financial Advisory Commission, accepted $35,000 in cash bribes from an undercover FBI Agent who they believed represented investors seeking to open a cannabis dispensary in Calexico. In return, Romero and Soto guaranteed the rapid issuance of a city permit for the dispensary and to revoke or hinder other applicants, if necessary, to ensure that the bribe payer’s application was successful. Both men also acknowledged that they had taken bribes from others in the past. Referring to this $35,000 payment, one of them told the undercover agent, “This isn’t our first rodeo.” 

According to admissions in the plea agreements and other documents filed in court, Romero and Soto accepted the $35,000 from the undercover FBI agent in two installments. At the conclusion of a meeting between the defendants and the undercover FBI agent on Jan. 9, 2020, with Romero looking on, the undercover agent handed Soto $17,500 in cash. The agent asked whether “we’re good,” and Romero responded, “Trust me.” On Jan. 30, 2020, Romero and Soto accepted the second installment of $17,500 in cash.

In addition to being a councilman, Romero served as Calexico’s Mayor Pro Tem, meaning he was set to become Mayor in July 2020. Soto recently resigned from the city commission responsible for promoting business and community growth and coordinating with prospective developers to help them invest in the city of Calexico. Romero resigned his position with the city in connection with his plea agreement, effective June 8, 2020. 

In addition to the prison sentence, Romero and Soto were ordered to pay forfeiture in the amount of $17,500.

Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division; Acting U.S. Attorney Randy Grossman for the Southern District of California; and Special Agent in Charge Suzanne Turner of the FBI’s San Diego Field Office made the announcement.

The FBI investigated the case.

Trial Attorney Joshua Rothstein of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Nicholas Pilchak of the Southern District of California prosecuted the case.

Assistant U. S. Attorney Nicholas Pilchak (619) 546-9709

NEWS RELEASE SUMMARY – May 5, 2021

SAN DIEGO – Former Calexico City Councilman and Mayor Pro Tem David Romero, along with Bruno Suarez-Soto, a former commissioner on the city’s Economic Development and Financial Advisory Commission, were each sentenced to two years in prison today for taking bribes in exchange for “guaranteeing” a City permit for a cannabis business.

In pronouncing sentence, U.S. District Judge Cathy Ann Bencivengo observed that public officials should not “take positions of power to line their own pockets” and that the pair’s conduct “taints how we hope to believe democracy works.”

Romero and Suarez-Soto, both Calexico residents, previously pleaded guilty on June 11, 2020 to conspiracy to commit federal program bribery.  Per their plea agreements, Romero and Suarez-Soto accepted $35,000 in cash bribes from an undercover FBI agent whom they believed represented investors seeking to open a cannabis dispensary in Calexico. In return, Romero and Suarez-Soto promised to “guarantee” the rapid issuance of a city permit for the dispensary, and to revoke or hinder other applicants if necessary to ensure that the bribe payer’s application was successful.  Moreover, both men admitted they had taken other bribes in the past.  In fact, referring to this corrupt arrangement, Suarez-Soto told an undercover agent that “This isn’t our first rodeo.”

Romero previously served as Calexico’s Mayor Pro Tem, meaning he was set to become Mayor in July 2020. Suarez-Soto was appointed to the City commission responsible for promoting business and community growth and coordinating with prospective developers to help them invest in the City of Calexico.  Both men resigned their positions with the City in June 2020 as part of their plea agreements.

“Public office is a public trust,” said Acting U.S. Attorney Randy Grossman. “Anyone who violates that trust by selling the government’s business to satisfy their own greed should face a reckoning. Citizens of this district deserve no less.”

“The FBI, to include our Imperial County Resident Agency, remains committed to investigating all levels of public corruption, including those engaged in pay-to-play and bribery schemes,” said FBI Special Agent in Charge Suzanne Turner. “This case is one example of how the FBI will bring to justice those who use their positions of power to harm our communities and diminish public trust.”

According to court documents and their plea agreements, Romero and Suarez-Soto met with the undercover FBI agent three times in December 2019 and January 2020.  They demanded a $35,000 bribe at their first meeting on December 19, 2019.  In return, Suarez-Soto told the agent that his application would be “guaranteed” once the payment was made. He assured the undercover that he and Romero wouldn’t “disappear” after the payment, and Romero explained “I can’t [disappear].  I’m Mayor Pro Tem.  In July, I’ll be Mayor.  If anything, I ran based on this platform—which is cannabis.”

When the undercover agent asked whether his payment would get his application to the front of the line of other applicants, per court filings, Suarez-Soto answered, “Hell yeah,” and Romero told him he “didn’t want to say it in front of everybody, but it will.”  Romero added that he could revoke permits from other applicants if he wanted, to ensure that the undercover agent’s submission would succeed.  Romero did demand that the undercover agent pay the bribe up front, however, because he complained that he had “burn[ed] favors” and “pull[ed] strings” for other parties before who refused to pay after the favors were rendered. 

At the second meeting, on January 9, 2020, Suarez-Soto told the undercover agent that having Romero on board would help the agent cut through the “bullshit [red] tape” at City Hall, according to court filings.  When the undercover agent sought to clarify what would happen with his application, Romero told him that “the people who have to approve your license” were Romero’s “best friends at the entire City Hall.”  When the undercover asked whether Romero’s “best friends” had already signed off on the plan, Romero responded “F*ck, yeah!” and laughed. When the undercover agent handed Suarez-Soto two envelopes totaling $17,500 in cash in the parking lot with Romero looking on, per court documents, he asked the men whether “we’re good.”  Romero responded, “Trust me.” 

Both defendants admitted in their plea agreements that they accepted a second round of cash payments totaling $17,500 in a restaurant parking lot on January 30, 2020 as part of the scheme. They also acknowledged that they accepted both payments intending to be influenced in the performance of their duties on behalf of the City of Calexico, and that the $35,000 collective bribe was not the first they had accepted as part of their scheme. 

As set out in court records, both defendants were interviewed by the FBI following the second cash payment, and both were warned it was a crime to make false statements.  Nevertheless, each defendant lied repeatedly to the interviewing agents, attempting to distance themselves from the corruption that had just taken place. 

Acting U.S. Attorney Grossman praised Assistant U.S. Attorney Nicholas Pilchak and prosecutors Ryan Crosswell and Joshua Rothstein of DOJ’s Public Integrity Section, and FBI agents for working hard to achieve the outcome in this case.

DEFENDANTS                                 Case Number 20cr1215-CAB                                               

David Romero                                    Age: 37                                   Residence: Calexico, CA

Bruno Suarez-Soto                             Age: 29                                   Residence: Calexico, CA

SUMMARY OF CHARGES

Conspiracy to Commit Federal Program Bribery, in violation of Title 18, United States Code, Sections

371 and 666(a)(1)(B)

Maximum Penalty: Five years in prison; $250,000 fine.

AGENCY

Federal Bureau of Investigation

Assistant U.S. Attorneys Daniel C. Silva and Michael A. Deshong (619) 546-9713

NEWS RELEASE SUMMARY – May 4, 2021

SAN DIEGO ­– Marco A. Gonzalez, a local business owner of MRK Casa de Cambio, pleaded guilty in federal court today to violating laws and regulations designed to prevent money laundering by customers of his currency exchange business.

Special Agents from Homeland Security Investigations (“HSI”) led the investigation into millions of dollars of transactions at MRK Casa de Cambio from approximately 2015 to 2020.

As admitted in the plea agreement entered today before U.S. Magistrate Judge William V. Gallo, Gonzalez knew of, and intentionally failed to adhere to, the anti-money laundering (“AML”) laws and regulations imposed on currency exchange businesses like MRK Casa de Cambio. As with any U.S. financial institution, casas de cambio, currency exchanges houses, and other “money services businesses” must comply with the United States Bank Secrecy Act, found at Title 31, United States Code and Title 31, Code of Federal Regulations, which requires these businesses to assist U.S. government agencies in detecting and preventing money laundering and other financial crimes.

Chief among the violations to which Gonzalez admitted in his plea agreement were: failing to disclose MRK Casa de Cambio’s Mexico-based offices and branches with the Secretary of the Treasury; reporting false and materially incomplete information in connection with the registration of MRK Casa de Cambio; filing false or materially misleading (if filed at all) reports of currency transactions exceeding $10,000 and reports of suspicious activity.

Acting U.S. Attorney Randy S. Grossman said, “The gatekeepers of the United States financial system must be steadfast in the fight against international money laundering. The U.S. Attorney’s Office will continue to demand the highest standards of anti-money laundering compliance by all financial institutions—whether a global financial conglomerate, or a single-office currency exchange house. I commend the diligence of the Homeland Security Investigations special agents for their commitment to prosecuting these crimes.” Grossman also praised prosecutors Daniel Silva and Michael A. Deshong for their excellent work on this case.

As a result of these intentional failures, among others, Gonzalez admitted in his plea agreement that he caused MRK Casa de Cambio to engage in cash transactions without applying adequate scrutiny to the source, purpose, ownership, or destination of the funds, or otherwise whether they were relevant to a possible violation of law or regulation. In doing so, Gonzalez acknowledged that he failed to adhere to best practices for all financial institutions; but, more specifically for a money services business like MRK Casa De Cambio, Gonzalez failed to develop and maintain an AML program that was commensurate with the risks posed by the location, size, nature, and volume of the financial services provided by his money services business.

Cardell T. Morant, Special Agent in Charge for Homeland Security Investigations, San Diego, also stated, “Communities along the Southwest border are particularly vulnerable to money laundering, and HSI is committed to protecting our communities by investigating the financial networks and third-party money launderers that facilitate introduction of the illicit proceeds into the U.S. financial system. This guilty plea, by the owner of a money service business in San Ysidro, sends a strong signal to financial institutions and especially money service businesses to remain vigilant in their anti-money laundering duties.”

Special Agent in Charge Morant further noted the assistance of local, regional, and federal partners on this investigation, including: San Diego County Sheriff’s Department, U.S. Customs and Border Protection, IRS Criminal Investigation, and Drug Enforcement Administration. 

Sentencing is scheduled to occur on August 2, 2021 before U.S. District Judge Todd W. Robinson.

DEFENDANT                                               Case Number 21-CR-1319-TWR                                        

Marco A. Gonzalez                                        San Diego, CA                        Age: 47

SUMMARY OF CHARGES*

Willful Violations of the Bank Secrecy Act – Title 31, U.S.C., Sections 5318 / 5322

Maximum penalty: Five years in prison, forfeiture, and $500,000 fine

AGENCIES

Homeland Security Investigations

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

Director of Media Relations Kelly Thornton (619) 546-9726

NEWS RELEASE SUMMARY – April 30, 2021

SAN DIEGO – Sinaloa Cartel leader Ismael Zambada-Imperial, aka “Mayito Gordo,” pleaded guilty in federal court today to drug trafficking charges following his extradition to the Southern District of California in December 2019. He also agreed to forfeit $5 million in drug trafficking proceeds.

Zambada-Imperial pleaded guilty to all charges in a superseding indictment returned by a federal grand jury in San Diego on July 25, 2014. The indictment also charges his father, the alleged leader of the cartel, Ismael Zambada-Garcia, known as “El Mayo;” as well as another son of El Mayo, Ismael Zambada-Sicairos, known as “Mayito Flaco;” and Ivan Archivaldo Guzman-Salazar, known as “Chapito,” whose father Joaquín “El Chapo” Guzmán Loera was the former leader of the Sinaloa Cartel along with Mayo. Zambada-Imperial was arrested by Mexican authorities in November 2014. Zambada-Garcia, Zambada-Sicairos, and Guzman-Salazar remain fugitives.

In a proceeding today before U.S. District Judge Dana M. Sabraw, Zambada-Imperial accepted responsibility for his role as a leader within the Sinaloa Cartel, acknowledging that he organized the transportation and distribution of thousands of kilograms of controlled substances, including cocaine, heroin, and marijuana for importation from Mexico into the United States. Zambada-Imperial also admitted to directing acts of violence for the purpose of promoting the Sinaloa Cartel’s narcotics trafficking activities. A sentencing hearing is scheduled for April 29, 2022 at 2 p.m. before Judge Sabraw.

“Zambada-Imperial’s guilty plea today sends a message to other drug kingpins operating in Mexico. There is no place to hide because our law enforcement partners will find you and work tirelessly to bring you to justice in the United States,” said Acting U.S. Attorney Randy S. Grossman. “Our investigation and prosecution of other high-level Sinaloa Cartel members is continuing and is having a significant impact on the global operations of the cartel.” Grossman praised Assistant U.S. Attorney Matthew J. Sutton, DEA agents and all law enforcement partners for their excellent work on this case.

“Because of the dedication and determination of the DEA and our law enforcement partners, today we are one step closer towards dismantling the violent Sinaloa Cartel with the guilty plea of a Sinaloa Cartel leader,” said DEA Special Agent in Charge John W. Callery. “The DEA remains confident that we will capture the remaining fugitives of this investigation and bring them to justice, along with many additional members of the Sinaloa Cartel.  If the public has any information on the whereabouts of these fugitives or information on the Sinaloa cartel, we urge you to contact the DEA at (858) 616-4100.”

The Southern District of California prosecution in this case is part of a multi-year investigation that, in total, has resulted in charges against over 125 people and has had a significant impact on the worldwide operations of the Sinaloa Cartel. This investigation has also offered one of the most comprehensive views to date of the inner workings of one of the world’s most prolific, violent and powerful drug cartels. Cartel members and associates were targeted in this massive investigation involving multiple countries, numerous law enforcement agencies around the United States, a number of federal districts and over 250 court-authorized wiretaps in this district alone.

This case began in late 2011 as an investigation of what was at first believed to be a small-scale drug distribution cell in National City and Chula Vista. It became evident that the drugs were being supplied by the Sinaloa Cartel, and the case evolved into a massive multi-national, multi-state probe that resulted in scores of arrests and seizures of 1,397 kilograms of methamphetamine, 2,214 kilograms of cocaine, 17.2 tons of marijuana, 95.84 kilograms of heroin, and $27,892,706 in narcotics proceeds.

This prosecution is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) Strike Force Initiative, which provides for the establishment of permanent multi-agency task force teams that work side-by-side in the same location.  This co-located model enables agents from different agencies to collaborate on intelligence-driven, multi-jurisdictional operations to disrupt and dismantle the most significant drug traffickers, money launderers, gangs, and transnational criminal organizations. 

The government’s case is being prosecuted by Assistant U.S. Attorney Matthew J. Sutton.

DEFENDANT                                                                                Case Number: 14CR00658-DMS

Ismael Zambada-Imperial, aka Mayito Gordo                               Age: 35                         Culiacan, Mexico

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; Term of custody including a mandatory minimum 10 years and up to life imprisonment, $10 million fine and five years supervised release.

Conspiracy to Import Controlled Substances, in violation of Title 21 U.S.C. §§ 952, 960 and 963. Term of custody including a mandatory minimum 10 years and up to life imprisonment, $10 million fine and five years supervised release.

AGENCIES

Drug Enforcement Administration

Customs and Border Protection Office of Field Operations

Customs and Border Protection Office of Border Patrol

Internal Revenue Service

Homeland Security Investigations

Department of Justice, Organized Crime Drug Enforcement Task Forces

Department of Justice, Office of Enforcement Operations

Department of Justice, Office of International Affairs

United States Attorney’s Office, Northern District of Illinois

Department of Treasury, Office of Foreign Asset Control

Oceanside Police Department

San Bernardino County Sheriff’s Department

National City Police Department

Chula Vista Police Department

San Diego Police Department

San Diego County District Attorney’s Office

San Diego Law Enforcement Coordination Center

Interpol                  

Assistant U. S. Attorneys Joseph Purcell (619) 546-7643 and Paul Starita (619) 546-7701

NEWS RELEASE SUMMARY – April 29, 2021

SAN DIEGO – Tungsten Heavy Powder, Inc. (THP) has agreed to pay $5,641,114 to resolve allegations that it violated the False Claims Act by falsely certifying that it sourced product materials in the United States for items it  manufactured under a contract with the government of Israel that was funded by the U.S. Defense Security Cooperation Agreement Agency (DSCA). THP is a San Diego-based company that manufactures and supplies tungsten products, including those used in U.S. military applications and munitions. THP provided weapons systems manufacturing articles and services to United States Department of Defense agencies and to the Government of Israel.

The United States contended that THP knowingly submitted false certifications to the United States regarding the origin and manufacture of defense articles procured by the government of Israel that were financed with United States’ grant funds paid by the Foreign Military Financing (FMF) program through the DSCA. Specifically, it is alleged that THP submitted false certifications pertaining to seven government of Israel purchase orders. With respect to these procurements, the United States alleged that THP falsely certified that tungsten that was actually sourced in China had been sourced, instead, in the United States. The United States contended that THP also falsely certified that manufacturing occurred in the United States, when in fact THP contracted with a Mexican maquiladora.

In order to promote American manufacturing, grant funds for foreign procurements are only available when the materials are sourced and manufactured in the United States by domestic companies.

“As always, we are committed to preserving the integrity of the government contracting process and to ensuring that funds fraudulently obtained are returned to the public fisc,” said Randy S. Grossman, Acting United States Attorney for the Southern District of California. Grossman praised Assistant U.S. Attorneys Paul Starita and Joseph Purcell for their excellent work on this case.

Defense Criminal Investigative Service (DCIS) Special Agent in Charge Bryan Denny, Western Field Office, stated “The DCIS is committed to working with our law enforcement partners and the Department of Justice to combat those who attempt to take advantage of the military’s procurement system. Each instance of fraud or corruption has the potential to harm the military’s mission or those who serve, and needlessly wastes taxpayer money.”

The False Claims Act allegations being resolved were originally brought in a lawsuit filed by a former employee of THP, Gregory Caputo, and Global Tungsten & Powders Corporation under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private citizens with knowledge of fraud against the government to bring suit on behalf of the government and to share in any recovery. Mr. Caputo and Global Tungsten & Powders Corporation will receive seventeen percent of the settlement proceeds.

This case is captioned United States, ex rel. Gregory Caputo and Global Tungsten & Powders Corporation v. Tungsten Heavy Powder, Inc., d/b/a Tungsten Heavy Powder & Parts, Inc., Case No. 18-cv-2352-W (WVG). This matter was investigated by Assistant U.S. Attorneys Joseph Purcell and Paul Starita of the Affirmative Civil Enforcement Unit of the U.S. Attorney’s Office, in coordination with Special Agents of the Defense Criminal Investigative Service and U.S. Army Criminal Investigation Division Command, and personnel from the Defense Security Cooperation Agency.

Defendant

Tungsten Heavy Powder, Inc.                                                            San Diego, CA

Agencies

Defense Criminal Investigative Service

U.S. Army Criminal Investigation Division Command

Defense Security Cooperation Agency

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

NEWS RELEASE SUMMARY – April 28, 2021

SAN DIEGO – Saul Flores Banuelos of Apple Valley, California, was sentenced yesterday to 60 days in custody and ordered to pay $1,200 restitution for smuggling illegal pesticides across the border on April 21, 2020. The order of restitution was to cover the cost of disposal of the pesticides.  

In pleading guilty in September of 2020, Flores Banuelos admitted that he entered the United States at the San Ysidro Port of Entry driving a GMC Yukon. After he advised the primary inspector he was not bringing anything from Mexico, inspectors found eight one-liter bottles of the Mexican pesticide  Qufuran, three bottles of alcohol and four kilograms of various medications that had not been declared. According to sentencing documents, a subsequent search of Flores Banuelos’s vehicle uncovered receipts for two previous purchases approximately six months earlier of 15 bottles of Qufuran.

The pesticides imported by Flores Banuelos were labeled in Spanish and did not bear any EPA registration number, as required by law for pesticides intended for use in the United States.  Pesticides with the active ingredient found in the Qufuran imported by Flores Banuelos may not be legally imported, sold, or distributed in the United States.  In addition, the lawful importation of pesticides requires a Notice of Arrival to be provided to U.S. Customs pursuant to 19 CFR § 12.112.  Flores Banuelos provided no such Notice of Arrival for the pesticides in question.

According to the Environmental Protection Agency, the pesticides involved were acutely toxic. Carbofuran, the active ingredient in Qufuran, is classified by EPA as Toxicity Category I, the highest toxicity category, based upon its lethal potency from absorption by ingestion, contact with skin, and inhalation.  The use of these chemicals pose a danger to humans and wildlife that might come in contact with them, as well as cannabis users who ingest products treated with them.  Moreover, these chemicals are known to have injured law enforcement officers engaged in the eradication of illegal marijuana cultivation sites in California.

“Illegal pesticides are extremely toxic and harmful,” said Acting U.S. Attorney Randy Grossman. “We will continue to enforce smuggling laws to protect people, animals and the environment from these harmful chemicals.” Grossman praised Assistant U.S. Attorney Melanie Pierson, DOJ trial attorney Stephen Da Ponte and agents from Homeland Security Investigations and U.S. Environmental Protection Agency, Criminal Investigation Division for their excellent work on this case.

“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.”

“Illegal pesticides contain very dangerous and toxic chemicals, and their use jeopardizes public safety, pollutes the environment, and puts people’s health at risk,” said Cardell T. Morant, Special Agent in Charge of Homeland Security Investigations (HSI).  “These unregistered substances can be very harmful, and HSI and our partners at EPA-Criminal Investigation Division,  the California Department of Toxic Substances Control, 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.”

Flores Banuelos was ordered to begin serving his sentence on July 26, 2021.

This case is being prosecuted by Assistant U. S. Attorney Melanie K. Pierson and Department of Justice Trial Attorney Stephen Da Ponte.

DEFENDANT                                               Case Number 20cr2179-JLS                            

Saul Flores Banuelos                                      Age: 56                                   Apple Valley, 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

Assistant U. S. Attorney Timothy D. Coughlin (619) 546-6768

NEWS RELEASE SUMMARY – April 22, 2021

SAN DIEGO – Vicente Villegas of Riverside appeared in federal court today in connection with charges that he fled a U.S. Border Patrol checkpoint at high speed during a smuggling incident in which he was allegedly driving a recreational vehicle with undocumented immigrants aboard.

At today’s hearing, Villegas was ordered by U.S. Magistrate Judge Sheri Pym to remain in custody without bond on grounds that he is a flight risk and a danger to the community.

According to the complaint, in the early morning hours of December 12, 2020, Border Patrol agents observed a large group of undocumented immigrants cross the U.S.-Mexican border in an area known to agents as “Second Breaks.” The agents saw the group of about 40 people climb into the RV.

Border Patrol agents attempted to conduct a traffic stop on the RV near Old Highway 80 and Highway 94. According to the complaint, Villegas failed to yield to a Border Patrol vehicle displaying lights and sirens and accelerated to 70 miles per hour as he merged onto westbound Interstate 8. Agents on duty at the Border Patrol Checkpoint located in Pine Valley, California were notified of the ongoing pursuit and received authorization to use a spike strip to stop the RV at the Checkpoint. 

As the RV approached the Checkpoint, the agent on duty deployed the spike strip, and the RV swerved from the primary traffic lanes, drove around the primary position and through the dirt parking lot. Villegas drove back onto the Interstate at the west end of the Checkpoint, effectively evading all spike positions. Pursuing agents followed the RV for two and half hours as it continued west on Interstate 8, west on State Route 52, and north on Interstate 15. At approximately, 5:19 a.m. Border Patrol agents terminated the pursuit of the RV.

Agents were later able to trace the RV to Villegas, the complaint said. The agents were able to retrieve from cell phones what are believed to be photos and videos taken by Villegas during the pursuit.

The complaint said the RV had been purchased by Villegas and another person on December 2, 2020 for $13,000. Villegas provided his California Identification Card as a form of identification for the sale. The previous RV owner observed Villegas drive the RV away from his home.

“Smugglers think nothing of putting their passengers in grave danger in order to escape law enforcement and make money,” said Acting U.S. Attorney Grossman. “We are determined to preserve public safety and achieve justice.” Grossman praised prosecutor Tim Coughlin and U.S. Border Patrol agents who tracked down this defendant through dogged investigation.

“The actions taken by the driver of the RV in this incident endangered not only the lives of the migrants being smuggled, but also the general public and our agents,” said San Diego Sector Border Patrol Chief Aaron M. Heitke, “I am proud of the dedication and persistence of our agents. This arrest is a direct result of their efforts.”

This case is being prosecuted by Assistant U. S. Attorney Timothy D. Coughlin.

DEFENDANT                                               Case Number 21mj1273-MDD                                

Vicente Villegas                                                         Age: 20                                   Riverside, CA

SUMMARY OF CHARGES

High Speed Flight from an Immigration Checkpoint – Title 18, U.S.C., Section 758

Maximum penalty: Five years of imprisonment and $250,000 fine

AGENCY

United States Border Patrol, San Diego Sector Intelligence Unit

*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 Matthew Brehm (619) 546-8983

NEWS RELEASE SUMMARY – April 19, 2021

SAN DIEGO – Steven Edwards Moncrief, a Temecula resident and former president of the Riverside chapter of the Peckerwoods Motorcycle Club, was sentenced in federal court today to 180 months in prison for participating in a conspiracy to distribute methamphetamine.

According to the government’s sentencing memorandum, Moncrief displayed symbols of hate on his clothing, motorcycle and in his home, including banners and stickers that said “Support Your Local White Boy” and “White Pride Worldwide,” and patches featuring Nazi SS Bolts - sentiments that are shared by the club.

“The trafficking of narcotics in our community to support a hateful ideology will not be tolerated,” said Acting U.S. Attorney Randy Grossman. “This conviction demonstrates that we will pursue our investigations past the foot soldiers of trafficking conspiracies to those who organize and manage the enterprises.”

Moncrief pleaded guilty in October of 2020. According to search warrants executed in this case, starting in December 2017, the FBI, working in conjunction with the San Diego County Sheriff's Department, started an operation to investigate methamphetamine distribution by multiple individuals in the San Diego area. The investigation included the use of court-authorized intercepts on cellular phones used by participants in the methamphetamine distribution conspiracy.

In his plea agreement, Moncrief admitted that, beginning in 2018, he conspired with others to distribute methamphetamine to individuals within the Southern District of California and beyond. Specifically, Moncrief obtained methamphetamine from other co-conspirators and sold it for a profit.

Moncrief admitted that he purchased 10 pounds of methamphetamine in July 2018 and that investigators thereafter located approximately 10 pounds of methamphetamine, three firearms, a large amount of U.S. currency, scales, and packaging material in a safe in the garage of his residence.

“Today’s sentence sends a message to those who choose to poison our streets through their life of crime,” said FBI Special Agent in Charge Suzanne Turner. “The San Diego FBI, along with our partners on the North County Regional Gang Task Force, are committed to keeping our communities safe, flushing out the leadership in these criminal organizations, and holding them accountable for their conspiratorial actions.”

According to the sentencing memorandum, the Peckerwoods Motorcycle Club was founded in early 2005 in East San Diego County and has chapters in California, Arizona, and Nevada. The organization of the Peckerwoods Motorcycle Club is similar to larger motorcycle clubs, including the Hells Angels MC and Mongols MC. Their structure consists of a president, vice president, sergeant at arms, secretary, treasurer, road captain, prospects, and hang-arounds.

The sentencing memorandum notes that, in response to the Hollister, California riot in 1949, the American Motorcycle Association stated that 99 percent of motorcyclists are law-abiding citizens, implying that “1%” of motorcyclists are outlaws. Some motorcycle clubs, including the Peckerwoods Motorcycle Club, wear a “1%” diamond patch to openly show their outlaw mentality. The “1%” diamond patch is only worn by dominant clubs, or by clubs that were awarded the patch from a dominant club by proving themselves as an outlaw and support club. The Peckerwoods Motorcycle Club were awarded or “blessed” with their diamond patch by the Hells Angles MC.

The sentencing memorandum states that Peckerwoods Motorcycle Club members have been convicted of multiple crimes including drug and weapons trafficking, possession of stolen property, and assault. Their current club president has pleaded guilty to a racially motivated assault that left an African-American man paralyzed. Members often display symbols of hate on their vests, or “cuts,” including Nazi SS Bolts and Swastikas.

Moncrief was one of 11 defendants charged with conspiring to distribute methamphetamine in an investigation led by the North County Regional Gang Task Force. The continuing investigation resulted in indictments against another 27 defendants in 2019 based on sales of methamphetamine and heroin. To date, 26 defendants have been arrested and pleaded guilty.

Grossman praised federal prosecutor Matthew Brehm, FBI agents and Sheriff’s detectives as well as the North County Regional Gang Task Force for their dedicated efforts in this investigation and prosecution.

On July 26, 2018, investigators executed a search warrant at Moncrief’s residence at Tanager Circle in Temecula, California, and located, among other items, approximately 10 pounds of methamphetamine, three handgun firearms (.40 Smith and Wesson, American Tactical “Fatboy,” and Ruger 9 mm), a large amount of U.S. currency, scales, and packaging material in a safe in the garage. The photographs above are a business card that was seized along with Moncrief’s drivers license during the execution of a search warrant at Moncrief’s residence. The business card, using Moncrief’s moniker “Scooter,” names him as president of the “Woodsside” Chapter and utilizes a handwritten Nazi Germany Schutzstaffel (SS) symbol (also known as SS Bolts) in place of S’s in “Woodsside.”

DEFENDANT                                               Case Number 18cr5317-AJB                                        

Stephen Edward Moncrief                              Age: 59                                   Temecula, CA

SUMMARY OF CHARGES

Conspiracy to Distribute Methamphetamine – Title 21, U.S.C., Sections 841(a)(1) and 846

Maximum penalty: life in prison; and a mandatory minimum 10 years in prison; and a $10 million fine.

AGENCIES

North County Regional Gang Task Force members:

FBI

San Diego County Sheriff’s Department

Escondido Police Department

Oceanside Police Department

Carlsbad Police Department

California Highway Patrol

California Department of Corrections and Rehabilitation

Homeland Security Investigations

Bureau of Alcohol, Tobacco, Firearms, and Explosives

California National Guard

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

[1] “Created by former Alabama Klan boss and long-time white supremacist Don Black in 1995, Stormfront was the first major hate site on the Internet. Claiming more than 300,000 registered members as of May 2015 (though far fewer remain active), the site has been a very popular online forum for white nationalists and other racial extremists.” See https://www.splcenter.org/fighting-hate/extremist-files/group/stormfront.

NEWS RELEASE SUMMARY – April 16, 2021

SAN DIEGO – Valorie Moser, former bookkeeper for the adult website GirlsDoPorn, pleaded guilty in federal court today to conspiring with the operators of the website to fraudulently coerce young women to appear in sex videos.

Moser, who worked for GirlsDoPorn (GDP) from 2015 to 2018, pleaded guilty before U.S. Magistrate Linda Lopez to Conspiracy to Commit Sex Trafficking by Force, Fraud and Coercion. Moser, the third of six defendants to plead guilty, admitted that she served as GDP’s bookkeeper, made travel arrangements for models, provided transportation for approximately 100 models once they arrived in San Diego, and performed miscellaneous other tasks. Moser reported her accounting activities to co-defendant Matthew Wolfe, and her interactions with the models to co-defendant Michael Pratt and others.

Moser admitted she knew that GDP produced pornographic videos for publication and dissemination on the internet, and that the young women being recruited to star in these pornographic videos had been provided false assurances that the videos would not be published on the internet. For example, Moser overheard Pratt, using the alias “Mark,” telling prospective models that the video footage would only be distributed on DVDs in Australia, and that the models would remain anonymous, statements that Moser knew to be false.

Further, Pratt instructed Moser not to tell the women the truth about their video’s distribution as she drove the young women to and from the video shoots. Moser was to tell the women that she was just an Uber driver. Later, Pratt told Moser to tell the women that she was bound by a non-disclosure agreement and could not discuss it.

After the videos were posted on-line and widely available, many women contacted Moser to ask that their videos be taken down. Pratt, Wolfe and co-defendant Ruben Garcia all told Moser to block any calls from these women.

Moser also attempted to recruit potential models. Pratt gave her a list of names and numbers and showed her how to use a spoof program to conceal her actual phone number when making calls. Moser was aware that Pratt had a grading system for young women, and that she would get paid more if Pratt found the recruited women attractive. Pratt instructed Moser to tell all prospective models the same lie - that the videos would be released solely on DVD in Australia. Moser knew this to be false. Moser never actually recruited anyone and therefore never made these promises.

“This defendant was a willing participant in a scheme that has traumatized many victims,” said Acting U.S. Attorney Randy Grossman. “We will continue to seek justice for these women, and to prevent others from becoming ensnared by sex traffickers.” Grossman commended the excellent work of Assistant U.S. Attorneys Joseph Green and Alexandra F. Foster, as well as FBI agents and members of the San Diego Human Trafficking Task Force, for their continuing effort to investigate and prosecute this important case.

“Valorie Moser’s guilty plea closes yet another chapter in this deplorable crime ring,” said FBI Special Agent in Charge Suzanne Turner. “The defendant used lies and deceit to help facilitate this sex trafficking conspiracy.”

Moser is scheduled to be sentenced by U.S. District Judge Janis L. Sammartino on July 2, 2021, at 9:00 a.m. The next hearing in the ongoing case is May 7, 2021 at 2:00 p.m., also before Judge Sammartino.

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 $10,000 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.

For further information, please see:

- Wanted Poster: https://www.fbi.gov/wanted/additional/michael-james-pratt

- Press Release:  https://www.fbi.gov/contact-us/field-offices/sandiego/news/press-releases/fbi-seeks-public-assistance-in-locating-sex-trafficking-suspect

DEFENDANT                                              Case Number 19cr4488-JLS

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.

Maximum Penalty: Five years in prison, $250,000 fine, a special assessment of $100.

CO-DEFENDANTS

Michael James Pratt Age: 36 Fugitive

Matthew Isaac Wolfe Age 37 San Diego, CA

Ruben Andre Garcia Age: 31 San Diego, CA**

** Pleaded guilty to Counts 1 and 7

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

Amberlyn Dee Nored Age: 27 San Diego, CA

SUMMARY OF CHARGES

Count 1 (charging all defendants)

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

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)

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

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

Federal Bureau of Investigation – San Diego Field Office

San Diego Human Trafficking Task Force

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: Assistant U. S. Attorneys A. Dale Blankenship (619) 546-6705, Matthew Brehm (619) 546-8983

SAN DIEGO – A federal grand jury has indicted 47 people who are allegedly associated with illegal gambling establishments that are closely tied to gangs, drugs and violence in San Diego neighborhoods.

 

UNSEALED SEARCH WARRANT

Early this morning, more than 450 members of the FBI Violent Crimes Task Force - Gang Group, the San Diego Police Department and many other law enforcement agencies made 35 arrests and searched 24 locations, mostly illegal gambling dens in East San Diego neighborhoods. In all, 44 firearms, more than 12 pounds of methamphetamine, $263,000 in cash, and 640 gambling machines were seized during the two-year investigation. Of the 35 people arrested, 15 are part of the indicted group, and the others were arrests for state offenses. Three of the indicted individuals were already in custody prior to the takedown.

The defendants are charged with conspiracy, operating illegal gambling businesses, maintaining drug involved premises, possession of methamphetamine with intent to distribute, distribution of methamphetamine, importation of methamphetamine, felon in possession of firearm and felon in possession of ammunition. The gambling dens continued to operate during the pandemic.

“We have taken down the illegal gambling dens, and we have lifted a weight off our neighborhoods,” said Acting U.S. Attorney Randy Grossman. “As a result of the collaboration of federal, state and local law enforcement officials, law-abiding citizens who live in these neighborhoods will be safer without these magnets for crime in their midst.  I am particularly grateful to FBI Special Agent in Charge Suzanne Turner, SDPD Chief David Nisleit, and District Attorney Summer Stephan for their work on this investigation and their dedication to keeping our community safe.”

“These gambling dens were not only host to illegal gambling, but a hub for a variety of other criminal activity to include drug trafficking and unlawful possession of firearms,” said FBI Special Agent in Charge Suzanne Turner. “This serves as another example of what happens when you bring together dedicated law enforcement professionals using a comprehensive approach to detect, disrupt, and dismantle these criminal operations.”

“Numerous crimes have been linked to the illegal gambling operations,” said SDPD Chief David Nisleit. “The investigative work led by the Violent Crimes Task Force and the arrests made have created a safer environment for all of our communities.”

“This joint operation is a prime example of what can be accomplished when law enforcement works together to respond to community concerns over increased crime in their neighborhoods,” said San Diego County District Attorney Summer Stephan. “Our DA team worked tirelessly with the Violent Crimes Task Force and the U.S. Attorney’s Office assisting with critical search warrants during the course of this operation.”

Those arrested today include the owners of the businesses and employees who acted as doormen, security and bankers; those who audit the machines; and those who collect the money. Also arrested were alleged drug dealers who operated within the dens.

The indictments allege that illegal gambling dens were often located inside small businesses or inside houses, apartments, and outbuildings in residential neighborhoods predominantly in City Heights, in the East San Diego area.  According to court records, it is common for gambling den owners to pay rent in cash to the owners of these properties and, in some cases, a percentage of the profits to cast a blind eye to all the foot traffic.

These establishments are equipped with electronic gambling machines which are programmed with several games of chance such as poker, blackjack, keno, jacks or better, and slot games. Most locations of these establishments are open 24 hours a day, seven days a week. The indictments allege that many of these gambling locations were taking in thousands of dollars a day.

The main draw to illegal gambling establishments is methamphetamine use and sales, according to the indictments. It’s rare to have a patron who does not use or sell methamphetamine inside these locations. The people selling drugs inside may be employees or independent drug dealers. According to court records, it is common for employees to hand out small amounts of methamphetamine and “comp” customers to keep them playing and coming back for more.

Grossman praised federal prosecutors Dale Blankenship and Matthew Brehm as well as the Deputy District Attorneys, FBI Special Agents, San Diego Police Department detectives and officers and other state, federal and local law enforcement agencies who worked so hard on this investigation.

*Denotes fugitives

DEFENDANTS     

21CR1109-H INDICTMENT                                       

Case Number 21CR1109-H

Name

Age

Hometown

LONG NGOC TRAN (1),

   aka “Long Tu,”

41

San Diego

*TUNG THANH NGUYEN (2),

   aka “Ang,”

51

San Diego

THANH LAN THI NGUYEN (3),

   aka “Lan,”

42

San Diego

DENNIS MICHAEL DIBLASI (4),

   aka “Drago,”

47

San Diego

*WAYNE JONATHAN CLAYTON Jr. (5),

   aka “G-Wayne,”

50

San Diego

*YVONNE MICHELLE AGUILAR (6),

   aka “Michelle,”

41

San Diego

*ROBERT JAMES WRIGHT (7),

38

San Diego

TAM ONH ONG (8),

   aka “Fireball,”

43

San Diego

*SAENGAMPHAY M. PHOMMASANE (9)

   aka “Melinda,”

38

San Diego

*KAREN RENE ANN PRANGSAMPHAN- PORTER (10),

   aka “KK,”

31

Arizona

*JESSICA CASTILLO (11),

   aka “Green Eyes,”

39

San Diego

 

SUMMARY OF CHARGES

Conspiracy (Title 18, U.S.C., Sec. 371 – Conspiracy)

Illegal Gambling Business (Title 18, U.S.C., Sec. 1955)

Maintaining a Drug-Involved Premises (Title 21, U.S.C., Sec. 856(a)(1))

Distribution of Methamphetamine (Title 21, U.S.C., Sec. 841(a)(1))

 

Maximum Penalties: For Conspiracy Charge: Five years’ imprisonment and a $250,000 fine.

Maximum Penalties: For Illegal Gambling Business Charge: Five years’ imprisonment and a $250,000 fine.

Maximum Penalties: For Maintaining Drug Involved Premises Charges: Five years’ imprisonment and a $500,000 fine.

Maximum Penalties: For Distribution of Methamphetamine Charges: Life in prison with a mandatory minimum sentence of 10 years and a $10 million fine.

 

Case Number 21CR1111-H

21CR1111-H INDICTMENT

Name

Age

Hometown

*TRI MINH VO, (1),

37

San Diego

TIEN HONG HONG LE (2),

   aka “Mr. Le,”

58

Phoenix, AZ

DONG VAN NGUYEN (3),

43

San Diego

*DANG VAN NGUYEN (4),

53

San Diego

*MICHELLE SALVADORE EDWARDS (5),

48

San Ysidro

*KHANG DINH NGUYEN (6),

   aka “K-Y,”

45

San Diego

*LEETRI DANG (7),

36

San Diego

*KE VAN TRAN (8),

   aka “Kevin,”

57

San Diego

*KIARA PORSHA EASLEY (9),

28

San Diego

TO VAN LAI (10),

   aka “Took,”

42

San Diego

CU VAN HUYN (11),

   aka “Cucu,”

39

San Diego

*DAPHNE NICOLE RIVERA (12),

45

El Cajon

*WILLIAM VANNA BOUNSAVATH (13)

  aka “Ray Ray,”

34

San Diego

*ALMA SOCORRO SILVA (14),

48

San Diego

TONY NGUYEN (15)

   aka “Lucky,”

40

San Diego

 

SUMMARY OF CHARGES

Conspiracy (Title 18, U.S.C., Sec. 371 – Conspiracy)

Illegal Gambling Business (Title 18, U.S.C., Sec. 1955)

Maintaining a Drug-Involved Premises (Title 21, U.S.C., Sec. 856(a)(1))

Distribution of Methamphetamine (Title 21, U.S.C., Sec. 841(a)(1))

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

 

Maximum Penalties: For Conspiracy Charge: Five years’ imprisonment and a $250,000 fine.

Maximum Penalties: For Illegal Gambling Business Charge: Five years’ imprisonment and a $250,000 fine.

Maximum Penalties: For Maintaining Drug Involved Premises Charges: Five years imprisonment and a $500,000 fine.

Maximum Penalties: For Possession with Intent to Distribute and Distribution of Methamphetamine Charges: Life in prison with a mandatory minimum sentence of 10 years and a $10 million fine.

 

Case Number 21CR1110-H

21CR1110-H INDICTMENT

Name

 

Age

Hometown

*JIMMY HUI BANH (1),

43

San Diego

JOSE ANTONIO TORRESDAY (2),

   aka “Pepe,”

29

San Diego

TINA SENKET (3),

33

San Diego

JIMMY LU (4),

  aka “Nam Van Lu,”

  aka “Nam Thao,”

54

San Diego

*ARCADIO MAMURI CRUZ (5),

  aka “Bangsta,”

  aka “Archie,”

36

San Diego

*MARK ANONAS ARCELAO (6),

   aka “Lil Tipsy,”

28

Jacksonville, Florida

 

SUMMARY OF CHARGES

Conspiracy (Title 18, U.S.C., Sec. 371 – Conspiracy)

Illegal Gambling Business (Title 18, U.S.C., Sec. 1955)

Maintaining a Drug-Involved Premises (Title 21, U.S.C., Sec. 856(a)(1))

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

and 924(a)(2))

 

Maximum Penalties: For Conspiracy Charge: Five years’ imprisonment and a $250,000 fine.

Maximum Penalties: For Illegal Gambling Business Charge: Five years’ imprisonment and a $250,000 fine.

Maximum Penalties: For Maintaining Drug Involved Premises Charges: Five years’ imprisonment and a $500,000 fine.

Maximum Penalties: For Felon in Possession of Firearm Charges: Ten years’ imprisonment and a $250,000 fine.

 

 

Case Number 21CR1112-H

21CR1112-H INDICTMENT

Name

 

Age

Hometown

*LE THI LE (1),

   aka “Chi Le,”

70

San Diego

PHOUNG THANH BUI (2)

45

San Diego

 

SUMMARY OF CHARGES

Conspiracy (Title 18, U.S.C., Sec. 371 – Conspiracy)

Illegal Gambling Business (Title 18, U.S.C., Sec. 1955)

Maintaining a Drug-Involved Premises (Title 21, U.S.C., Sec. 856(a)(1))

Distribution of Methamphetamine (Title 21, U.S.C., Sec. 841(a)(1))

 

Maximum Penalties: For Conspiracy Charge: Five years’ imprisonment and a $250,000 fine.

Maximum Penalties: For Illegal Gambling Business Charge: Five years’ imprisonment and a $250,000 fine.

Maximum Penalties: For Maintaining Drug Involved Premises Charges: Five years’ imprisonment and a $500,000 fine.

Maximum Penalties: For Distribution of Methamphetamine Charges: Forty years’ imprisonment with a mandatory minimum sentence of five years and a $5 million fine.

 

Case Number 21CR1116-H

 

Name

 

Age

Hometown

*MARTA LIDIA GUTIERREZ

27

San Diego

 

SUMMARY OF CHARGES

Importation of Methamphetamine (Title 21, U.S.C., Secs. 952 & 960)

Maximum Penalties: Importation of Methamphetamine Charges: Life in prison with a mandatory minimum sentence of 10 years and a $10 million fine.

 

Case Number 21CR1114-H

Name

 

Age

Hometown

*ENRIQUE SAMUEL DUENAS,

    aka “Kiki,”

28

San Diego

 

SUMMARY OF CHARGES

Distribution of Methamphetamine (Title 21, U.S.C., Sec. 841(a)(1))

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

and 924(a)(2))

Importation of Methamphetamine (Title 21, U.S.C., Secs. 952 & 960)

 

Maximum Penalties: For Distribution of Methamphetamine Charges: Forty years’ imprisonment with a mandatory minimum sentence of five years and a $5 million fine.

Maximum Penalties: For Felon in Possession of Firearm Charges: Ten years’ imprisonment and a $250,000 fine.

Maximum Penalties: Importation of Methamphetamine Charges: life in prison with a mandatory minimum sentence of 10 years and a $10 million fine.

 

 

Case Number 21CR1124-H

Name

 

Age

Hometown

*CESAR ALONZO VALLADOLID,

    aka “Playboy,”

36

San Diego

 

SUMMARY OF CHARGES

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

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

and 924(a)(2))

Importation of Methamphetamine (Title 21, U.S.C., Secs. 952 & 960)

 

Maximum Penalties: For Possession with Intent to Distribute Methamphetamine Charges: Life in prison with a mandatory minimum sentence of 10 years and a $10 million fine.

Maximum Penalties: For Felon in Possession of Firearm Charges: Ten years’ imprisonment and a $250,000 fine.

Maximum Penalties: Importation of Methamphetamine Charges: Forty years’ imprisonment with a mandatory minimum sentence of five years and a $5 million fine.

 

Case Number 21CR1113-H

Name

 

Age

Hometown

ARTHUR MARCELINO CASTILLO

40

San Diego

 

SUMMARY OF CHARGES

Distribution of Methamphetamine (Title 21, U.S.C., Sec. 841(a)(1))

Maximum Penalties: For Distribution of Methamphetamine Charge: life in prison with a mandatory minimum sentence of 10 years and a $10 million fine.

 

Case Number 21CR1117-H

Name

 

Age

Hometown

*KEOUDONE INTHAVONG

47

San Diego

 

SUMMARY OF CHARGES

Possession with Intent to Distribute/Distribution of Methamphetamine (Title 21, U.S.C., Sec. 841(a)(1))

Maximum Penalties: For Possession with Intent to Distribute and Distribution of Methamphetamine Charges: Forty years’ imprisonment with a mandatory minimum sentence of five years and a $5 million fine.

 

Case Number 21CR1123-H

Name

 

Age

Hometown

*WILLIAM HENRY SCOVALL,

  aka “Cap,”

24

San Diego

 

SUMMARY OF CHARGES

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

and 924(a)(2))

Maximum Penalties: For Felon in Possession of Firearm Charge: Ten years’ imprisonment and a $250,000 fine.

 

Case Number 21CR1115-H

Name

 

Age

Hometown

*JULIUS GREENOGE

39

San Diego

 

SUMMARY OF CHARGES

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

and 924(a)(2))

Maximum Penalties: For Felon in Possession of Firearm Charge: 10 years’ imprisonment and a $250,000 fine.

 

Case Number 21CR1119-H

Name

 

Age

Hometown

*PHINATH PETER KHVANN,

  aka “Peanut,”

44

San Diego

 

SUMMARY OF CHARGES

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

and 924(a)(2))

Maximum Penalties: For Felon in Possession of Firearm Charge: Ten years’ imprisonment and a $250,000 fine.

 

 

Case Number 21CR1118-H

Name

 

Age

Hometown

*PHONETHIP PETE INTHAVONG

50

San Diego

 

SUMMARY OF CHARGES

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

Maximum Penalties: For Possession with Intent to Distribute Charge: Forty years’ imprisonment with a mandatory minimum sentence of five years and a $5 million fine.

 

Case Number 21CR1121-H

Name

 

Age

Hometown

DAVID LIBANAN OPHEIM,

    aka “Casper,”

46

San Diego

 

SUMMARY OF CHARGES

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

Maximum Penalties: For Possession with Intent to Distribute Charge: 40 years’ imprisonment with a mandatory minimum sentence of 5 years and a $5 million fine.

 

Case Number 21CR1120-H

Name

 

Age

Hometown

THANH NGUYEN,

    aka “Poway,”

46

Poway

 

SUMMARY OF CHARGES

Felon in Possession of a Firearms and Ammunition (18, U.S.C., Secs. 922(g)(1)

and 924(a)(2))

Maximum Penalties: For Felon in Possession of Firearm and Ammunition Charges:  years’ imprisonment and a $250,000 fine.

 

Case Number 21CR1122-H

Name

 

Age

Hometown

SEAN MICHAEL RIED (1)

33

San Diego

TUNG NGOC NGUYEN (2)

24

San Diego

 

SUMMARY OF CHARGES

Distribution of Methamphetamine (Title 21, U.S.C., Sec. 841(a)(1))

Maximum Penalties: For Distribution of Methamphetamine Charge: Forty years’ imprisonment with a mandatory minimum sentence of five years and a $5 million fine.

 

AGENCIES

 

Members on the Violent Crimes Task Force

FBI

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

 

Additional partner agencies participating in the takedown.

Drug Enforcement Administration

Bureau of Alcohol, Tobacco, Firearms and Explosives

U.S. Marshals Service

California Bureau of Gambling Control

San Diego City Attorney’s Office

 

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

 

This effort is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation.  OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach.  Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.

Assistant U. S. Attorney Christopher P. Tenorio (619) 546-8413

NEWS RELEASE SUMMARY – April 14, 2021

SAN DIEGO – U.S. Customs and Border Protection Officer Marcos Valenzuela is charged in an indictment unsealed today with using unreasonable force on an individual who had applied for admission to the United States from Mexico.

According to the indictment, Valenzuela encountered the individual, identified only as “J.L.,” on August 16, 2019, while Valenzuela was on duty at the Calexico West Port of Entry. During the course of the inspection, Valenzuela allegedly deprived the individual of the Constitutional right not to be subjected to unreasonable force. The indictment also alleges that Valenzuela’s actions resulted in bodily injury to the person seeking admission into the U.S.

“The protection of the civil rights of all persons entering the United States remains a high priority of the Justice Department, and our office in particular,” said Acting U.S. Attorney Grossman. “All allegations of excessive force by law enforcement officers are investigated thoroughly and carefully reviewed to ensure public confidence in our commitment to redressing violations of Constitutional rights.” Grossman praised prosecutor Chris Tenorio and agents from the FBI and U.S. Customs and Border Protection, Office of Professional Responsibility for their excellent work on this case.

“No one is above the law and this indictment should assure the public that the FBI is committed to rooting out any public servant who violates their oath – regardless of where they work,” said FBI Special Agent in Charge Suzanne Turner. “Actions such as the ones alleged in this case violate an officer’s oath, the public's trust, and damage law enforcement's reputation. I want to thank Customs and Border Protection’s Office of Professional Responsibility for their collaboration and partnership in bringing this case to fruition.”

Customs and Border Protection (CBP), Office of Professional Responsibility (OPR) Special Agent in Charge Elizabeth Cervantes stated, “All CBP employees are required and expected to abide by all laws they enforce.  CBP stresses professionalism, honor, and integrity in every aspect of its mission and CBP OPR is fully committed to investigating all allegations of misconduct while supporting the men and women who proudly uphold their duties to serve and protect.”

The defendant was arraigned on the Indictment before U.S.  Magistrate Judge Ruth Bermudez Montenegro. He is scheduled to appear before U.S. District Court Judge Janis L. Sammartino on May 21, 2021 at 1:30 p.m., for a motion hearing. This case is being prosecuted by Assistant U. S. Attorney Christopher P. Tenorio.

DEFENDANT                                               Case Number 21cr1056-JLS                            

Marcos Valenzuela                                         Age: 29                                   El Centro, CA

SUMMARY OF CHARGES

Deprivation of Rights under Color of Law – Title 18, U.S.C., Section 242

Maximum penalty: Ten years of imprisonment and $250,000 fine

AGENCIES

U.S. Customs and Border Protection, Office of Professional Responsibility

Federal Bureau of Investigation

 

Assistant U. S. Attorneys Michelle L. Wasserman (619) 546-8431 and Carling Donovan (619) 546-4343   

NEWS RELEASE SUMMARY – April 13, 2021

SAN DIEGO – Liberty Gutierrez pleaded guilty today to conspiring to launder the proceeds of a bribery scheme involving a former employee of the Naval Information Warfare Center in San Diego, California, and various defense contractors.

According to Gutierrez’s plea agreement, the Naval Information Warfare Center employee, identified in court documents as “Individual-1,” solicited and accepted things of value from various defense contractors, including three defense contractors identified in her plea agreement as Contractor-1, Contractor-2, and Contractor-3. 

Among these gifts were jobs for friends and family, tickets to premier sporting events, and expensive dinners.  Gutierrez further admitted that Individual-1 solicited jobs for Gutierrez from these contractors.  Although Gutierrez was employed full-time at a real estate and mortgage company in San Diego from April 2015 to February 2021, Individual-1 nonetheless obtained “full-time” jobs for Gutierrez at Contractor-1 from approximately October 2015 to September 2018; Contractor-2 from approximately April 2017 to July 2019; and Contractor-3 from approximately October 2018 to December 2019. 

As part of her plea agreement, Gutierrez admitted to doing only minimal work at each of these jobs, and then falsely billing her time as if she were working full time on a government contract. Each of the contractors then passed along Gutierrez’s fraudulent labor charges to the United States Government for payment.  Gutierrez further admitted that she agreed to give Individual-1 half of her salary from Contractor-2, or approximately $2,000 every month, in cash, some of which Individual-1 stashed in his golf bag.  In total, Gutierrez kicked back over $60,000 in cash to Individual-1 under this arrangement.  As part of the conspiracy, Individual-1 additionally secured a job for his wife at Contractor-1 in approximately January 2017.

As alleged in the Information, in exchange for these and other gifts, Individual-1, who was certified as a Contracting Officer Representative as part of his job at Naval Information Warfare Center, used his position to steer millions of dollars of contracts to his favored contractors.  For example, Individual-1 ensured that Contractor-1 was awarded a $3 million “Other Transaction Authority,” a federal procurement vehicle, at the same time he was soliciting a job for Gutierrez from Contractor-1.

Similarly, Individual-1 ensured that Contractor-2 was awarded a $300 million ceiling task order, while working with an executive vice-president at Contractor-2 to create the “job” for Gutierrez at the company.  After Gutierrez was employed by Contractor-1, Contractor-2, and Contractor-3, Individual-1 continued to ensure that the companies received lucrative Department of Defense contracts and subcontracts.  As further alleged in the Information, Individual-1 knew that Gutierrez’s labor charges for each of the contractors was false, but nonetheless approved invoices containing the fraudulent charges.

Gutierrez admitted that as part of the conspiracy she received $593,210.09 in salary payments from Contractor-1, Contractor-2, and Contractor-3, which were intended to promote the bribery scheme and conceal and disguise the nature, source, and ownership of the proceeds of the bribery.

“Bribery and public corruption have no place in government contracting, and will be aggressively investigated and prosecuted,” said Acting United States Attorney Randy S. Grossman. Grossman praised federal prosecutors Michelle Wasserman and Carling Donovan, as well as agents and investigators from Defense Criminal Investigative Service, Naval Criminal Investigative Service, Small Business Administration – Office of Inspector General, Internal Revenue Service Criminal Investigation, Department of Health and Human Services – Office of Inspector General, Naval Audit Service and Defense Contract Audit Agency for their outstanding work on this case.

Defense Criminal Investigative Service (DCIS) Special Agent in Charge Bryan Denny, Western Field Office, stated “This case offers an especially egregious example of corruption and the abuse of a position of public trust.  The DCIS is committed to working with our law enforcement partners and the Department of Justice to ensure that all such crimes are discovered and fully prosecuted.”

“This should serve as a warning that those who seek to defraud the Department of the Navy will always be uncovered and brought to justice,” said NCIS Economic Crimes Field Office Special Agent in Charge Eric Maddox. “Ms. Gutierrez’s deliberate actions to perpetuate this scheme by accepting hundreds of thousands of dollars meant to support Department of Defense contracts wasted American taxpayer money, damaged the integrity of the procurement process, and squandered valuable investigative resources that could have been directed elsewhere. NCIS and our investigative partners remain committed to rooting out fraud that threatens the readiness of the warfighter.”

“Conspiring to fraudulently use government programs for personal gain will not be tolerated,” said SBA OIG’s Western Region Special Agent in Charge Weston King.  “OIG will aggressively root out fraud to protect the integrity of these programs. I want to thank the U.S. Attorney’s Office and our law enforcement partners for their dedication and commitment to seeing justice served.”

Derrick Franklin, Special Agent in Charge, U.S. Department of Health and Human Services, Office of Inspector General, Office of Investigations, Special Investigations Branch, stated, “We will continue to support our law enforcement partners in this investigation to preserve the integrity of government contracts.”

“Ms. Gutierrez and her co-conspirators exploited illegal avenues to benefit themselves with taxpayer dollars meant for military programs,” said IRS Criminal Investigation, Special Agent in Charge Ryan L. Korner. “They cheated honest, hardworking contractors out of jobs with their corruption. Our special agents will use their financial expertise to trace the proceeds of bribery back to these criminals, and we are proud to work alongside our law enforcement partners in that effort.”

If you have information regarding fraud, waste, or abuse relating to Department of Defense personnel or operations, please contact the DoD Hotline at 800-424-9098.

DEFENDANT                                               Case Number

Liberty Gutierrez                                            Age: 61                                   San Diego, CA

SUMMARY OF CHARGES

Conspiracy to Commit Money Laundering – Title 18, U.S.C., Section 1956(h)

Maximum penalty: Twenty years in prison and $500,000 fine or twice the value of the property involved in the transaction, whichever is greater

AGENCY

Defense Criminal Investigative Service

Naval Criminal Investigative Service

Small Business Administration – Office of Inspector General

Internal Revenue Service Criminal Investigation

Department of Health and Human Services – Office of Inspector General

Naval Audit Service

Defense Contract Audit Agency

 

Assistant U. S. Attorney Valerie H. Chu (619) 546-6750

NEWS RELEASE SUMMARY – April 13, 2021

SAN DIEGO - Irvine resident Joserodel Zavala Candelario was sentenced in federal court yesterday to 36 months in federal custody for his participation in two huge health care fraud schemes, and for concealing income he received from those multi-million dollar schemes.

According to court documents, Candelario was a chiropractor licensed by the State of California Board of Chiropractic Examiners. He was the owner of Candelario Chiropractic, a Professional Corporation, and R.I.S.E. Medical Center, a Professional Corporation, dba R.I.S.E. Wellness Center ("RISE Wellness"), which operated at multiple locations in the Southern District of California, including at 5030 Bonita Road, Suite B, in Bonita and at 3231 Waring Road, Suite N, in Oceanside. 

On January 21, 2020, the defendant pleaded guilty to a three-count superseding information, charging Conspiracy in violation of 18 U.S.C. § 371, Conspiracy to Commit Health Care Fraud in violation of 18 U.S.C. § 1349, and False Statement on Tax Return in violation of 26 U.S.C. § 7206(1).  Separately, the defendant has been charged and has pleaded guilty in San Diego Superior Court case SCD281328 to Concealing an Event Affecting an Insurance Claim, in a violation of California Penal Code 550(b)(3).

The government’s sentencing papers reflect that, between approximately 2012 and July 2016, Candelario carried out a scheme to defraud Medicare and TRICARE out of millions of dollars by using physical therapy codes to bill for supposed physical therapy services performed on patients by individuals who were not licensed to provide physical therapy, including chiropractors, massage therapists, physical therapy aides, and an acupuncturist.  As a result, patients who thought they were receiving medical treatment were instead receiving substandard care, all so Candelario could bill Medicare and TRICARE. 

Candelario and his co-conspirators told patients that RISE Wellness offered an “integrated” approach to wellness, to convince patients to accept physical therapy, acupuncture, chiropractic, and diagnostic services at RISE Wellness, in order to fraudulently bill for non-covered services provided by unauthorized individuals, and collect as much money as possible from health care benefit programs. 

Candelario specifically targeted TRICARE beneficiaries as patients, despite knowing that TRICARE did not cover many of the services rendered by providers at RISE Wellness. The main page for RISE Wellness’s website made this goal plain.  It featured a photograph of an individual in a military uniform, saluting, with the message, “Supporting spinal health . . . You’ve only got one spine. Take great care of it with supportive chiropractic care,” even though TRICARE, the DoD health care program for uniformed service members, did not cover chiropractic treatment.

Once patients came in the door, the defendant pushed his staff to conduct diagnostic tests on every patient, regardless of medical necessity, to increase billing and payment, and he also demanded that staff meet quotas for the minimum number of diagnostic tests, and recommendations for durable medical equipment, or DME, massages and other services, regardless of whether specific patients needed the items and services. He also imposed quotas for the minimum number of patients with specific types of insurance coverage at RISE Wellness, e.g., “60 Tricare patients per day,” regardless of whether those patients needed treatments.

For example, on June 6, 2014, Candelario instructed a staff member, “I need you to do 5 axonii [diagnostic tests] a day no matter what for now on.”  The following month, on July 7, 2014, Candelario texted, “OK team you are receiving 2 new diagnostic testing devices this month. I need 20 patients to be tested on each one this month no matter What [sic].”

Defendant then, knowing that TRICARE and Medicare did not pay for chiropractic, acupuncture, massages, and other services, mischaracterized those services as physical therapy in bills submitted to TRICARE and Medicare. 

To increase billing and payment, the defendant pushed the schedulers to cram in as many as 50 patients per day for each provider.  He complained when staff fell short of this goal, noting, on June 11, 2015, certain “front desk issues” including:  “No[one] has called any patients to fill empty slots in provider schedules or grab patients in lobbies to put into provider schedules.”

Candelario fired or marginalized staff who disagreed with his efforts to prescribe, recommend, provide, or bill in a manner primarily intended to increase the billing and payment to RISE Wellness, and contrary to Medicare and Tricare rules and the medical need of the patients. On October 1, 2015, Candelario instructed that the chiropractors were “not allowed to treat” patients unless they first prescribed X-rays and three other diagnostic tests, plus DME. Eventually, on October 19, 2015, Candelario informed a co-conspirator, “I am finding it very difficult what needs we have [to retain the PA] moving forward.”  About a week later, the PA was fired.

If a patient failed to show up for an appointment, Candelario directed staff to bill the health care benefit program for the visit, even though no visit had occurred and no service had been provided.  For example, on March 9, 2015, Candelario wrote, about late reimbursements, that “the only solution is to start billing the missed appointments like i asked following the system.”

It was part of the scheme that, using the mean and manners described above, and others, the co-conspirators submitted and caused to be submitted at least $7,260,327.20 in false and fraudulent bills to TRICARE and Medicare. Of those fraudulent bills, TRICARE paid a total of $3,450,596.43 and Medicare paid $37,843.04. 

In addition, between March 2012 and November 2015, Candelario carried on an unlawful cross-referral scheme, in which he would receive new Workers’ Compensation (“WC”) patients for RISE Wellness.  In return for new patients, Candelario agreed to meet a quota for the “value” of ancillary services and DME he was expected to prescribe for each patient sent to him by co-conspirators, with a “value” -- such as $30-$50 per MRI referral -- set by those conspirators.  As part of the scheme, Candelario, who could function as a WC primary care provider, dictated the same treatment plan for all WC patients, regardless of their individual medical needs, so he could fraudulently bill WC insurers.   The defendant admitted that he violated his duty of honest services to his patients.  He received approximately 529 new WC patients as a result of the scheme, and he submitted approximately $6,605,364 in bills to insurers for services rendered to those patients. Of those billed amounts, he was paid $771,000 by WC insurers

In addition to fleecing taxpayer-funded government programs out of millions of dollars, Candelario failed to pay his fair share of taxes on the funds he fraudulently took, resulting in $505,000 in tax losses just for tax year 2013. 

Judge Bashant credited the rehabilitative efforts the defendant has made since his conviction to improve his circumstances.  Statements in sentencing papers and in court reflect that the defendant has been teaching as an adjunct instructor at West Coast University, Canyon College, Santa Ana College, Orange Coast College, and National University, in such topics as human anatomy, human physiology, biology, Medical Ethics and Medical Billing. But in aggravation, the Court noted that Candelario “put profits over the medical needs of patients,” which warranted punishment. 

“With so many health care systems and personnel strained due to the pandemic, we cannot afford the financial and physical costs of fraud,” Acting U.S. Attorney Randy Grossman noted. “Doctors are especially culpable as they are violating the sacred trust they should have with their patients. We are working hard every day to protect patients, taxpayers and ratepayers who are being exploited by those members of the medical community who prefer purchasing power over principle.”  Mr. Grossman commended the work of AUSAs Valerie H. Chu and Michelle Wasserman, forensic auditor Robbin Ganicliffe, and paralegal Joan Carter, and the case agents from the FBI, DCIS, and IRS-CI.

“With this sentence, the defendant has now been held accountable for the years of lies and deceit in defrauding our healthcare system,” said FBI Special Agent in Charge Suzanne Turner. “Let this sentence serve as a warning to those who intentionally try to line their pockets through fraud schemes rather than provide the honest service and care people deserve.” 

The defendant requested a delay of the self-surrender date until after grades are due to be submitted for the current school term he is teaching.  The defendant is scheduled to self surrender on or before July 14 at noon.  A hearing to address forfeiture and restitution will be held on May 19 at 2 p.m.  The United States is seeking restitution of $3,450,596.43 to TRICARE, $37,843.04 to Medicare, and a personal money judgment of $1,300,899.63. 

DEFENDANT                                               Case Number 18CR3057-BAS, 18CR3058-BAS                

Joserodel Zavala Candelario                          Age: 48                                   Irvine, CA

SUMMARY OF CHARGES

Conspiracy – Title 18, U.S.C., Section 371

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

Conspiracy to Commit Health Care Fraud – Title 18, U.S.C., Section 1349

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

Subscribing to a False Tax Return - 26 U.S.C. §7203(1)

Maximum penalty: Three years’ imprisonment and $100,000 fine

AGENCIES

Federal Bureau of Investigation

Defense Criminal Investigative Service

Internal Revenue Service – Criminal Investigations

California Department of Insurance

Assistant U.S. Attorney Daniel C. Silva (619) 546-9713

NEWS RELEASE SUMMARY – April 13, 2021

SAN DIEGO ­– Cuong H. Nguyen pleaded guilty in federal court today to conspiring to engage in a wide-ranging postage counterfeiting, forging, and tampering scheme that, over the course of multiple years and more than 160,000 packages, deprived the U.S. Postal Service of approximately $5 million of postage due and owing.   

Special Agents from U.S. Postal Inspection Service, IRS Criminal Investigation, and the Financial Investigations and Border Crimes Task Force (the “FIBC” - a multiagency Task Force based in San Diego and Imperial Counties, and funded by the Treasury Executive Office of Asset Forfeiture) led the investigation.

As admitted in the plea agreement entered today before U.S. Magistrate Judge Allison H. Goddard, Cuong digitally altered, counterfeited, forged, and tampered with various “postage evidencing systems”—i.e., postage meters. These postage meters are intended to expedite the delivery and shipment of USPS packages by allowing mailers to purchase and affix postage labels in advance of depositing them into the mail. Nguyen primarily used the postage evidencing system known as Click-N-Ship® when sending packages of beverages and food products from his businesses in San Diego.

As stated in his plea agreement, Cuong admitted that he misrepresented information appearing on postage labels attached to packages in several ways—including misstating the weight, size, destination, and origin of the packages—that were intended to, and in fact did deceive, the USPS as to the underpayment of postage. Accordingly, when the USPS received the packages with labels that Nguyen and others had altered, forged, and counterfeited, they paid much less to the USPS than was owed, but the packages—approximately 162,221 between 2015 and 2019—were delivered anyway.

“Those who defraud the Postal Service are effectively stealing from the U.S. Treasury and the nation’s taxpayers,” said Acting U.S. Attorney Randy S. Grossman.  “We are committed to vigorously investigating and prosecuting these profiteers.”  U.S. Attorney Grossman commended Assistant U.S. Attorney Danny Silva and the U.S. Postal Inspection Service and IRS-Criminal Investigation agents who unraveled this complex, digital crime.

As a result of the conspiracy, Nguyen acknowledged that the underpayment of postage to the USPS was approximately $5,127,712.88, resulting in net profits to Nguyen, his businesses, and others of $862,374.00.

“Postal Inspectors protect the U.S. mail from criminal misuse in a variety of ways, including efforts to root out postage fraud,” stated Inspector in Charge Melisa Llosa of the U.S. Postal Inspection Service Los Angeles Division. “Scammers who selfishly deprive the USPS of revenue place an undue strain on America’s most trusted service. I would like to thank our law enforcement partners, the U.S. Attorney’s Office for the Southern District of California, IRS Criminal Investigation, and the Financial Investigations and Border Crimes Task Force for their assistance in a successful resolution.”

“IRS Criminal Investigation is proud to have worked alongside our law enforcement partners at the USPIS Inspection Service and the FIBC to crack this complex web of digital crime and theft,” said IRS-CI L.A. Field Office Special Agent in Charge Ryan L. Korner. “No matter the venue, stealing money from the U.S. government is stealing money from American taxpayers. Our talented team of special agents and professional staff will continue to work tirelessly to overcome all challenges, including the current pandemic, to ensure that financial crimes will never pay.”

Sentencing is scheduled to occur on July 12, 2021 at 9 a.m. As part of his agreement to plead guilty, Nguyen agreed to forfeit $862,374.00 to the United States, as profits, proceeds, and property obtained directly or indirectly, as the result of the postage fraud conspiracy.

DEFENDANT                                               Case Numbers 21-CR-1131-BAS                                          

Cuong H. Nguyen                                           San Diego, CA                        Age: 37

SUMMARY OF CHARGES

Criminal Conspiracy – Title 18, U.S.C., Section 371

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

AGENCIES

United States Postal Inspection Service

IRS Criminal Investigation—Financial Investigations and Border Crimes Task Force

*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. Attorney Larry Casper (619) 546-6734

NEWS RELEASE SUMMARY – April 12, 2021

SAN DIEGO – Jeffrey Alden Blair was sentenced today by U.S. District Judge Anthony J. Battaglia to 188-months in prison for supplying the fentanyl that led to the fatal overdose of 45-year old Derrick Hotchkiss, a long-time rugby player for the San Diego Old Aztecs Rugby Football Club. Through his plea agreement, Blair admitted that the fentanyl he dealt caused Hotchkiss’ death and that he knowingly sold in excess of 400 grams of fentanyl.

Upon arrest, Blair told law enforcement that he understood that fentanyl could cause death and was “no joke.” Blair was arrested in an open storage unit in which agents located more than 500 grams of fentanyl and other drugs and drug-related items.

“Recidivist drug dealers who supply this poison in our community while recognizing the potentially lethal consequences must be held accountable,” said Acting U.S. Attorney Randy S. Grossman. “We will continue to aggressively pursue fentanyl traffickers in overdose cases to ensure justice is fully served.”

“This defendant dealt in more than drugs. He dealt in death,” said Special Agent in Charge of the San Diego DEA John W. Callery. “This sentencing should serve as a warning to other death dealers that we will continue to investigate fentanyl overdose deaths and those dealers who knowingly provide these poisons in San Diego and Imperial County.”

Previously, defendant Christopher Emison was also sentenced in connection with Hotchkiss’ death to 168-months in custody. In a related case, defendant Andrew Gossai will be sentenced on April 26, 2021. According to the Government’s sentencing papers, Gossai sold the fatal dose of fentanyl to Blair who made the purchase for both Emison and himself. In turn, Emison sold the fatal dose to Hotchkiss shortly before his overdose death.

Acting U.S. Attorney Randy Grossman praised prosecutor Larry Casper as well as the agents from Narcotics Task Force Team 10, a multi-agency team housed by DEA that was created in July 2018 to address drug overdose deaths in San Diego, for their efforts on these cases. 

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

DEFENDANTS                                

Case Number 19cr3252-AJB                                                          

Jeffrey Alden Blair                             Age:  34                      San Diego, California

Christopher Glenn Emison                 Age: 33                       El Cajon, California

Case Number 19cr3253-AJB

Andrew Samuel Daniel Gossai           Age: 33                       San Diego, California

SUMMARY OF CHARGES

Andrew Samuel Daniel Gossai and Jeffrey Alden Blair:

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

Maximum Penalties – Mandatory minimum of ten years, and maximum of life in prison and $10 million fine.

Christopher Glenn Emison

Sentenced to 168-months on Distribution of Fentanyl – Title 21 U.S.C. Section 841(a)(1) and (b)(1)(C) with maximum penalties – mandatory minimum of five years and maximum of 40 years in prison and $5 million fine.

INVESTIGATING AGENCIES

Drug Enforcement Administration

Federal Bureau of Investigation

Department of Homeland Security

California Department of Healthcare Services

San Diego Police Department

(The above-listed agencies are represented on DEA NTF Team 10)

 

NEWS RELEASE SUMMARY – April 2, 2021

SAN DIEGO – Two brothers from Chihuahua, Mexico, were sentenced in federal court today to 66 months in prison and a $500 special assessment 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 the young women - Juana Santos Arce (age 35), Margarita Santos Arce (age 32) and Paula Santos Arce (age 29) of Oaxaca, Mexico. 

Cecilio and Ricardo Rios-Quinones pleaded guilty in August 2020 to Transportation of Aliens Resulting in Death, Bringing in Aliens for Financial Gain and Conspiracy.

Calling this one of the worst human smuggling scenarios she has seen in 15 years as a judge, U.S. District Judge Cathy Ann Bencivengo stated that “three women froze to death because defendants sought to benefit from their need to come here.  It is tragic that someone wants to come here to work and dies, but it is more tragic that there are people who benefit from this, who treat them like cargo.”

Judge Bencivengo found it significant that when events turned horrific, defendants did not immediately seek help and turn around.  She recognized the presence at the sentencing hearing of several agents who engaged in the rescue operation, noting that they put their own lives at risk only to find two women dead and one barely alive, and despite their best efforts they could not get off the mountain in time to save her.

“The smugglers with whom individuals entrust their lives care only about money and not safety,” said Acting U.S. Attorney Randy Grossman. “We pledge to fervently seek justice for victims following these calamities, but we cannot bring back those who were lost or end the suffering of grieving families.  I implore others not to entrust their lives or the lives of their loved ones to these smugglers.”  Grossman praised the efforts of Assistant U.S. Attorney Charlotte Kaiser, Homeland Security Investigations and U.S. Border Patrol in prosecuting this case as well as all the agents and first responders who worked tirelessly and at risk to themselves to locate and rescue the sisters. 

“Human smugglers prey on the desperation of people hoping for a better life in the United States,” said Cardell T. Morant, special agent in charge of HSI San Diego. “This case exemplifies the ruthlessness of smugglers, and should serve as a warning to people considering putting their lives in their hands. HSI will continue to work tirelessly to hold unscrupulous smugglers accountable and bring them to justice.”

“We are pleased that justice was served and that these criminals will be placed behind bars,” stated United States Border Patrol San Diego Sector Chief Patrol Agent Aaron Heitke. “May this sentencing serve as a strong message to others contemplating smuggling that this activity will not be tolerated.”

According to the government’s sentencing memorandum, the women occasionally came to the U.S. for work. According to family members, Paula, the youngest of the three sisters, was married and had an 18-month-old daughter at the time of her death.

As part of their plea agreements, the defendants admitted that they conspired with others to serve as foot guides in order to smuggle individuals illegally into the United States, and that they were ill-prepared when they guided the three sisters through a remote, mountainous region during a snow storm.

According to the plea agreements, the defendants guided the three sisters  across the border from Mexico through the boundary fence in a remote area within the Southern District of California. They encountered cold, windy and rainy weather. It then began to snow. They lacked proper clothing, shoes, shelter, and other food and equipment to remain or hike in this cold, remote, mountainous environment.

According to reports, agents from the Border Patrol, Search, Trauma and Rescue (BORSTAR) unit initiated a rescue operation due to a distress call in the Boulevard Border Patrol Station’s area of operation on February 10, 2020, at approximately 1:50 p.m. The call concerned five individuals who were lost and experiencing hypothermia. BORSTAR agents initially encountered the two defendants in a snowy area approximately 20.5 miles east of the Tecate, California port of entry, more than 12 miles north of the border. The defendants pointed agents to the direction of the three sisters.  Agents subsequently found the three sisters lying on the ground on a ridge.

Two of the sisters were already dead.  The third sister was responsive but suffering from severe hypothermia. She later died despite gallant efforts of members of BORSTAR, Border Patrol Agents from the Campo/Boulevard area and the City of San Diego Fire & Rescue Department, who placed their own lives at risk while trying to keep the distressed sister alive as temperatures dropped and winds accelerated. Autopsies confirmed the three sisters died due to environmental hypothermia.

DEFENDANTS                                               Case Number 20cr0868-CAB                                        

Cecilio Rios-Quinones                                   Age: 38                        Chihuahua, Mexico

Ricardo Rios-Quinones                                   Age: 23                       Chihuahua, Mexico

SUMMARY OF CHARGES

Transportation of Aliens Resulting in Death – Title 8, U.S.C., Section 1324(a)(1)(A)(i) and (B)(iv)

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

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

Maximum penalty: Three years mandatory minimum, 10 years maximum, and $250,000 fine.

Conspiracy – Title 18, U.S.C., Section 371

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

AGENCIES

Homeland Security Investigations

U.S. Border Patrol, Intelligence Unit

Assistant U. S. Attorney Aaron P. Arnzen (619) 546-8384 and Andrew J. Galvin (619) 546-9721

NEWS RELEASE SUMMARY – March 31, 2021

SAN DIEGO – Gina Champion-Cain, a long-time San Diego business leader, restauranteur, and real estate magnate, was sentenced in federal court today to 15 years in prison for masterminding a massive, years-long Ponzi scheme and obstructing justice by hiding and destroying evidence from federal investigators. 

When she pleaded guilty on July 22, 2020, Champion-Cain admitted that she raised more than $350 million from investors by promising to use their money to make loans to business owners who were attempting to acquire California liquor licenses. The investors were unaware, however, that Champion-Cain was not keeping her promise. 

According to court records, Champion-Cain and her co-conspirators instead used funds from new investors to pay back others whose investments would soon be redeemed, and embezzled funds to support her other businesses and her lifestyle.  Champion-Cain and her co-conspirators kept the scheme going by, among other things, fabricating documents, forging signatures, and telling investors lies through fake email accounts so that when investors attempted to double-check on their investments with third parties, they were often really communicating with the defendant or her employees. 

In handing down the sentence, U.S. District Judge Larry Alan Burns told the defendant that her scheme demonstrated “tremendous callousness” and “extreme avarice” in committing a “monumental crime.”

“This is a fitting sentence for a defendant who caused significant harm to hundreds of victims,” said Acting U.S. Attorney Randy Grossman. “This Ponzi scheme cost investors hundreds of millions of dollars while the defendant lived in luxury. We will continue our aggressive efforts to prosecute those who swindle, deceive and bring financial devastation to victims.”

“For years, Gina Champion-Cain used her status in the community to lie, cheat, and steal more than a staggering $350 million dollars - all from investors who trusted her with their hard-earned money and, in many instances, their life's savings,” said FBI Special Agent in Charge Suzanne Turner. “While the victims have suffered significantly from the defendant's betrayal, we hope today's sentence will bring some closure as they see Champion-Cain being held accountable for the damage she has caused. Let this serve as a warning that the FBI is dedicated to protecting the community from criminals, like Champion-Cain, who commit investment fraud.”

Crispin Torres, the former Chief Financial Officer of one of Champion-Cain’s companies, was sentenced on March 23, 2021 to four years in prison for using funds received from investors to prop up Champion-Cain’s other businesses.

Throughout her scheme, Champion-Cain made agreed-upon payments to her investors so that they would continue to believe that the supposed investment program was legitimate, according to court filings.  This, in turn, helped her perpetuate the scheme and recruit more victims. Champion-Cain also stole tens of millions of dollars of investor funds to keep her other businesses afloat and enrich herself.  Because many of Champion-Cain’s restaurant and retail businesses were failing or had negative cash flow, they needed funds to meet expenses. Time after time, Champion-Cain and Torres worked together to steal millions of dollars of investor funds to cover the shortfall. Champion-Cain also spent millions of investor dollars to pay for her own salary, box seats at professional baseball and football games, credit card bills, automobiles, jewelry, and other personal luxuries.

Champion-Cain’s plea agreement also describes her efforts to obstruct federal investigations into the scheme.  Beginning in July 2019, after learning of investigations being conducted by federal agencies, she instructed her employees to destroy emails; not produce electronic calendar, messaging, and trash files; alter accounting records to hide the fact that investor funds were used to pay her personal expenses; and shred paper records.  Champion-Cain even attempted to solicit an investment of $150 million in the hopes that she could use the funds to hide her scheme.  Despite her efforts, investigators were able to recover a significant volume of the evidence Champion-Cain attempted to destroy.

Grossman praised the lead prosecutors on the case, Assistant U.S. Attorneys Aaron Arnzen and Andrew Galvin, as well as investigators and attorneys from the Federal Bureau of Investigation and the Securities and Exchange Commission, for their excellent work on this case

DEFENDANTS                                            

Case Number 20CR2115-LAB                                           

Gina Champion-Cain                                     Age: 57                                   San Diego, CA

Case Number 20CR2114-LAB

Crispin Torres                                                 Age: 53                                   National City, CA

SUMMARY OF CHARGES

Securities Fraud, Title 15, U.S.C. Sections 77q and 77x (Champion-Cain)

Obstruction of Justice, Title 18, U.S.C. Section 1505 (Champion-Cain)

Conspiracy, Title 18, U.S.C. Section 371 (Champion-Cain and Torres)

AGENCY

Federal Bureau of Investigation

 

Assistant U. S. Attorneys Timothy Coughlin (619) 546-6768, Victor White (619) 546-8439, Blair Perez (619) 546-7963, Shauna Prewitt (619) 546-7937, Patrick Swan (619) 546-8450

NEWS RELEASE SUMMARY – March 30, 2021

EL CENTRO – Jose Cruz Noguez of Mexicali, Mexico, was charged in federal court today with coordinating the 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.

Cruz, a legal permanent resident of the United States who has spent time in San Jose, California, was taken into custody last night as he crossed into the U.S. from Mexico at the Calexico Port of Entry. He made his first appearance in federal court in El Centro today before U.S. Magistrate Judge Ruth Bermudez Montenegro.

Cruz was charged with Conspiracy to Bring Aliens to the United States Outside a Port of Entry Causing Serious Bodily Injury/Placing a Life in Jeopardy, and Bringing in Aliens Without Presentation for Financial Gain. Judge Montenegro ordered that Cruz remain in custody and scheduled a detention hearing for Monday, April 5, 2021 at 9 a.m.

“These smuggling networks seek maximum profit by moving as many people as possible across the border with zero regard for their safety and well-being,” said Acting U.S. Attorney Randy Grossman. “Cramming dozens of people into eight-passenger vehicles and driving recklessly to avoid detection shows an utter disregard for human life. We will find and prosecute smugglers who use these methods and cause such tragic and avoidable deaths.” Grossman commended Assistant U. S. Attorneys Timothy Coughlin, Victor White, Shauna Prewitt, Patrick Swan and Blair Perez and agents from Homeland Security Investigations and the U.S. Border Patrol, El Centro Sector Intelligence Unit, for their excellent work on this case.

“Homeland Security Investigations (HSI) remains steadfast in our commitment to pursue members of human smuggling networks such as the network that caused the tragic deaths in the March 2 smuggling incident,” said Cardell T. Morant, special agent in charge for HSI San Diego. “Our investigative efforts have led to the arrest of an individual who allegedly put those lives in danger, and this brings us another step closer to providing closure for the families. We will continue to work collaboratively with our law enforcement partners to bring the perpetrators of this heinous crime to justice.” HSI’s tip line in the Calexico area is (760) 335-5343. 

“Thirteen individuals lost their lives on March 2nd due to unscrupulous human smugglers,” said El Centro Sector Border Patrol Chief Patrol Agent Gregory K. Bovino. “The U.S. Attorney’s Office, Homeland Security Investigations and the U.S. Border Patrol will stop at nothing to find, arrest, and prosecute smuggling organizations and this case is evidence of that.”

Cruz came to the attention of law enforcement when he was identified by another suspected smuggler who claimed to be an associate of Cruz. The associate was arrested at the Campo Border Patrol Station for an unrelated smuggling event on March 15, two weeks after the fatal crash. The associate pointed the finger at Cruz, telling authorities he had worked for Cruz in the past, and had been recruited by Cruz to be the driver of the ill-fated vehicle from that tragic day. Cruz had offered him $1,000 per passenger, but he declined, the complaint said.

According to the complaint, the events of March 2 unfolded like this:

At approximately 5:56 a.m., Border Patrol Agents from the El Centro Border Patrol Station received a report from the California Highway Patrol of more than a dozen individuals running away from a burning GMC Yukon SUV and into the desert in Holtville, California. Border Patrol Agents were asked to respond to this suspected human smuggling event. At approximately 6:10 a.m., Border Patrol Agents responded to the area and extinguished the fire. Border Patrol Agents also followed foot tracks into the desert and apprehended 19 individuals hiding in the surrounding brush.

Separately, at approximately 6:05 a.m., a Remote Video Surveillance System (RVSS) operator at the Calexico Border Patrol Station spotted multiple vehicles and approximately 20 individuals gathered in a remote area just south of the United States/Mexico border. He also noticed that the border fence in the area had been breached and an approximately 10-foot section of it had been removed and was laying on the ground in Mexico. Border Patrol Agents then reviewed video footage from the area and discovered that two vehicles had crossed through the fence at approximately 5:23 a.m.: the GMC Yukon SUV and a Ford Expedition.      

At 7:05 a.m., Border Patrol Agents at the Calexico Border Patrol Station received a request from the Calexico Police Department to assist with a mass-casualty vehicle crash in Holtville, California. Border Patrol Agents responding to the crash identified one of the vehicles involved as the Ford Expedition that recently had breached the border fence. A total of 25 individuals had been in the Ford Expedition at the time of the crash. Subsequent inspection of the Ford Expedition revealed that all but the driver and front passenger seats had been removed, presumably to fit that large number of people.

Despite the best efforts of law enforcement and medical personnel, 12 individuals – including the suspected driver – died at the scene of the crash. Another individual died on the way to the hospital. The surviving 12 individuals were transported to various hospitals far and wide, including in San Diego.  Many of the survivors were diagnosed with serious injuries.

According to the complaint, on March 26, 2021, the suspected smuggler who claimed to be an associate of Cruz participated in a secretly recorded conversation with Cruz. During the recorded call, Cruz confirmed his involvement in the March 2, 2021, event, including that his other associates cut the border fence; that the vehicles were fully loaded; and that he collected money for the event. Further, Cruz stated there were 60 “Pollos” – his term for customers – in the two vehicles and the driver was going to make $28,000. 

The associate told authorities he had grown up in Mexicali, Mexico and had known Cruz for several years.  He said that he illegally entered the United States six months ago and started working for Cruz, who he described as a coordinator. He said Cruz paid him to drive individuals who are in the United States illegally from El Centro, California to Los Angeles, California. He said Cruz required him to harbor an individual who was illegally in the United States at his home in El Centro, California. In addition, the associate said Cruz required that he scout areas near El Centro, California where Cruz had groups of people illegally enter the United States. According to the associate, Cruz oversees the transportation of individuals who are in the United States illegally to stash houses; collects smuggling payments from family members or sponsors; recruits drivers; and scouts for the presence of law enforcement.  

The associate stated that two weeks prior to the March 2, 2021, smuggling event, Cruz attempted to recruit him to drive one of the smuggling vehicles north from Mexico into the United States through a section of the fence that Cruz said would be breached. Cruz told his associate there would be up to 20 people in the vehicle and that the associate would be paid $1,000 per person for the job. According to the complaint, Cruz also told the associate that Cruz would oversee the smuggling event and would arrange for the vehicles that crossed to go to a stash house in Holtville, California. The associate claimed he declined Cruz’s offer.

Federal officials wish to thank the Mexican and Guatemalan consulates for their assistance in notifying family members of those individuals who died in the crash and in identifying and contacting family members of those hospitalized as a result of this tragedy.

At the hearing, Cruz was advised of the charges pending against him. The matter was set for a preliminary hearing on April 13, 2021 at 9 a.m. and arraignment on April 27, 2021 at 9:00 a.m. before Judge Montenegro.  The Court appointed Federal Defenders as defense counsel in this case.

DEFENDANT                                               Case Number 21MJ8250                                         

Jose Cruz Noguez                                           Age 47             Mexicali, Mexico

SUMMARY OF CHARGES

Conspiracy to Bring Aliens to the United States Outside a Port of Entry Causing Serious Bodily Injury/Placing a Life in Jeopardy –Title 8, U.S.C., Secs. 1324(a)(1)(A)(i), (v)(I), and (B)(iii)

Maximum Penalty: Twenty years in prison.

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

Maximum Penalty: For a first or second violation, not less than three years or more than 10 years in custody; for a third violation, not less than five years or more than 15 years of custody.

INVESTIGATING AGENCIES

Homeland Security Investigations

United States Border Patrol, El Centro Sector Intelligence Unit

*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 – March 26, 2021

SAN DIEGO – Beatriz Santillan of Menifee, California, was sentenced to 70 days in prison today and ordered to pay $20,079 restitution, following her plea of guilty to the charge of smuggling involving illegal pesticides on March 26, 2020. The restitution order is to cover the cost of disposal of the pesticides.

In pleading guilty in July of 2020, Santillan admitted that she entered the United States at the Otay Mesa Port of Entry driving a Toyota Camry. Santillan twice advised the primary inspector she was not bringing anything from Mexico. The inspector, however, found 56 containers of illegal Mexican pesticides in the vehicle, including three liters of Qufuran, five liters of Bayfolan, two liters of Metaldane, two liters of Biomec, one container of Ridomil Gold, 16 containers of Fosfuro de Zinc and 27 containers of Rodentox.

According to sentencing documents, a subsequent search of Santillan’s phone revealed photographs and videos of marijuana plants, both outside and in greenhouses, beginning August 10, 2019, and ending two days before her stop at the border. Phone chats between Santillan and an associate disclosed discussions about caring for marijuana plants and the use of the pesticides for growing marijuana, and included photos of pesticides and marijuana plants. The sentencing documents also noted that receipts for the purchase of pesticides in Mexico on three separate occasions, a medical marijuana prescription for an associate, and records of the purchase of items used for growing plants were found in Santillan’s car, along with records of the transfer of over $4,000 in the three months before her stop at the border.

The pesticides imported by Santillan were labeled in Spanish and did not bear any EPA registration number, as required by law for pesticides intended for use in the United States. Pesticides with the active ingredients found in the Qufuran and Metaldane imported by Santillan are cancelled pesticides in the United States, and may not be legally imported, sold, or distributed in the United States. Pesticides with the active ingredients found in Biomec, Fosfuro de Zinc and Rodentox are restricted use pesticides and may be purchased and applied only by certified pesticide applicators. Santillan holds no such certificate. Moreover, the lawful importation of pesticides requires a Notice of Arrival to be provided to U.S. Customs, and Santillan provided no such Notice of Arrival for the pesticides in question.

According to the Environmental Protection Agency, the pesticides involved are acutely toxic. The active ingredient in Metaldane is methamidophos, which has been cancelled in the United States since 2009. Methamidophos 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. Carbofuran, the active ingredient in 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. Zinc phosphide, the active ingredient in Fosfuro de Zinc and Rodentox, is extremely toxic, and the ingestion of small amounts can cause death in animals and humans. Ingestion of 7 drops to 1 teaspoon of zinc phosphide would likely kill a 150-pound person. After it is ingested, the zinc phosphide reacts with acid in the stomach, producing phosphine gas, which blocks cells from making energy, killing the cells. Phosphine gas can also be produced in the stomach if zinc phosphide dust is inhaled and swallowed after clearing from the lungs. The use of these chemicals poses a danger to humans and wildlife that might come in contact with them, as well as cannabis users who ingest products treated with them. Moreover, these chemicals are known to have injured law enforcement officers engaged in the eradication of illegal marijuana cultivation sites in California.

"The illegal importation and use of cancelled and restricted pesticides, like the ones this defendant was smuggling into the United States, pose a serious health threat to anyone that comes into contact with them. They also threaten wildlife in the areas where they are being illegally used. The Department of Justice remains committed to working with Homeland Security Investigations and the Environmental Protection Agency to ensure that those who smuggle these dangerous chemicals into the United States are held accountable under the law for their crimes," said Jean E. Williams, Acting Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice.

"The highly toxic chemicals that the defendant smuggled across the border pose a significant danger to unknowing consumers, law enforcement, wildlife and the environment in California," said Acting United States Attorney Randy S. Grossman. "The illegal importation, distribution, and application of such dangerous chemicals will not be tolerated."

"Illegal pesticides contain very dangerous and toxic chemicals, and their use jeopardizes public safety, pollutes the environment, and puts people’s health at risk," said Cardell T. Morant, Special Agent in Charge of Homeland Security Investigations (HSI). "These unregistered substances can be very harmful, and HSI and our partners at the Environmental Protection Agency, California Department of Toxic Substances Control, 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."

"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."

Santillan was ordered to surrender to begin serving her sentence on June 16, 2021.

DEFENDANT                                                                     Case Number 20cr2178-GPC

Beatriz Santillan Age: 29 Menifee, CA

SUMMARY OF CHARGES

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

Maximum penalty: 20 years’ imprisonment and $250,000 fine

AGENCY

Homeland Security Investigations; U.S. Environmental Protection Agency, Criminal Investigation Division

SAN DIEGO – U.S. Postal Service employee Esteban Sanchez was sentenced in federal court today to time served and ordered to pay $20,153.23 in restitution for stealing money orders from 21 post office customers.

Sanchez pleaded guilty on November 3, 2020 to Theft of Mail by Postal Employee. The stolen money was often needed to pay the customers’ rent and other essentials.

The defendant was a clerk at the Encanto, Southeastern and Andrew Jackson post offices in San Diego. Beginning in February 2019 and continuing through May 2019, Sanchez stole approximately 31 money orders from customers who purchased them from him at the Encanto and Southeastern Offices.

The customers put the money orders in envelopes and provided them to Sanchez for him to mail. Instead of mailing the money orders, Sanchez set them aside and after the customers left, he cashed the money orders and pocketed the money.

In April and May 2019, two customers filed complaints at the post office stations where Sanchez worked. The customers reported that the money orders that they’d purchased and mailed were never delivered to the intended recipients. Agents for the U.S. Postal Service, Office of Inspector General (USPS OIG) conducted an investigation and data analysis and determined that Sanchez cashed at least 31 money orders, from 21 different customers, totaling $20,153.23. Some of the thefts were captured on video surveillance from inside the Post Office.

All of the victims of Sanchez’s thefts have been reimbursed by the United States Postal Service.

"Customers trust the post office with important business, and we are going to keep it that way," said Acting U.S. Attorney Randy Grossman. "In the rare case where a postal employee is unworthy of that trust, we will step in and make it right." Grossman praised prosecutor Andrew Sherwood and U.S. Postal Service investigators for their excellent work on this case.

"The majority of Postal Service employees are hardworking and honest people. On the rare occasion that an employee betrays that trust, the U.S. Postal Service Office of Inspector General will aggressively pursue the actions and allegations of theft. I want to stress that we are committed to preserving the integrity of the U.S. Mail and U.S. Postal Service resources," said Special Agent in Charge Brian Washington, with the U.S. Postal Service Office of Inspector General.

To report fraud, waste, and misconduct to the U.S. Postal Service Office of Inspector General, please visit www.uspsoig.gov/hotline or send your complaint to ATTN: HOTLINE, USPS OIG, 1735 North Lynn Street, Arlington, VA 22209-2020.

DEFENDANT Criminal Case No. 21-CR-02453-GPC

Esteban Sanchez Age: 26 San Diego, CA

SUMMARY OF CHARGE

Theft of Mail by Postal Employee (Felony) – Title 18, U.S.C., Section 1709

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

INVESTIGATING AGENCY

United States Postal Service, Office of Inspector General

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

NEWS RELEASE SUMMARY – March 22, 2021

SAN DIEGO – A local business owner was sentenced in federal court today on charges of bank fraud and tax evasion. David Daughtrey, 60, of El Cajon, was sentenced by U.S. District Judge Larry A. Burns to 18 months in custody and ordered to pay restitution of $1,519,590.63. 

In July 2020, Daughtrey pleaded guilty to one count of conspiracy to commit bank fraud and tax fraud, and one count of filing a false tax return. Daughtrey’s illegal conduct spanned for a decade, from 2006 until 2016. For several years, Daughtrey evaded income tax by under-reporting his income and orchestrated an illegal scheme to fraudulently obtain a mortgage for his $1.8 million residence using a third party.  The total tax loss to the United States in this case was $1,053,989.63. 

“The defendant abused our tax and banking systems for his own financial benefit, and the victims of that crime are ethical taxpayers and bank customers,” said Acting U.S. Attorney Randy Grossman. “Today’s sentence will hopefully remind others that there is a high price to pay for such deception.” Grossman thanked prosecutor Oleksandra Johnson and agents from the IRS and FBI for their excellent work on this case.

“While Mr. Daughtrey achieved business success, he failed in his obligations as an American by lying to our banks and cheating the government,” said Special Agent in Charge Ryan L. Korner, IRS Criminal Investigation. “Today’s sentencing shows that we will hold accountable those who deceive and exploit our people and financial institutions because of their greed.”

“The FBI and our partners at the IRS uncovered David Daughtrey's mortgage fraud and tax evasion scheme using our team's financial and fraud expertise,” said FBI Special Agent in Charge Suzanne Turner.  “Today's sentencing serves as a warning to those who attempt to personally gain by deliberately cheating the government and the integrity of the banking system through financial fraud.  Our team of fraud experts will bring justice in these white-collar cases.”

According to court documents, from July 2006 until April 2016, Daughtrey conspired with others to commit the crimes to which he pleaded guilty. As part of the bank fraud scheme, Daughtrey directed another individual to submit a mortgage application to a national bank to purchase a $1.8 million five-bedroom residence, and to falsely claim that the funds used as down payment belonged to, and the residence would be used by, the third party.

In reality, Daughtrey provided the funds and the home was intended to be Daughtrey’s primary residence. Daughtrey made monthly mortgage payments of approximately $8,000 for his residence but continued to represent to the bank that the third party owned the house. Daughtrey later submitted a false hardship letter on behalf of the third party in an effort to modify the terms of the loan on the home. 

Over several years, Daughtrey conspired to commit tax evasion by filing tax returns listing substantially less income than Daughtrey actually earned.  Daughtrey’s tax return for the year 2012, for example, omitted at least $498,612 in income.  Daughtrey failed to report his total income in tax years 2013, 2014, and 2015, and did not file timely tax returns for subsequent years.  Daughtrey agreed to pay $1,053,989.63 in restitution to the IRS, which includes the total tax loss plus penalties and interest.

DEFENDANTS                                             Case Number 20cr2113-LAB                           

David Daughtrey                                            Age: 60                                   El Cajon, CA

SUMMARY OF CHARGES

Conspiracy to Commit Bank Fraud and Tax Evasion, 18 U.S.C. § 371 (count 1); and

Making a False Tax Return, 26 U.S.C. § 7206(1) (count 2).

Maximum penalty:

Five years’ imprisonment and $250,000 fine (count 1)

Three years’ imprisonment and a maximum fine of $250,000 or twice the gross gain or gross loss resulting from the offense, whichever is greatest (count 2)

AGENCY

Federal Bureau of Investigation

Internal Revenue Service

 

Assistant U. S. Attorney Alexandra F. Foster (619) 546-6735

NEWS RELEASE SUMMARY – March 22, 2021

SAN DIEGO – Deepanshu Kher was sentenced today in federal court to two years in prison for accessing the server of a Carlsbad Company and deleting over 1,200 over the company’s 1,500 Microsoft User Accounts.

According to court documents, Kher was employed by an information technology consulting firm from 2017 through May 2018. In 2017, the consulting firm was hired by the Carlsbad Company to assist with its migration to a Microsoft Office 365 (MS O365) environment. In response, the consulting firm sent its employee, Kher, to the company’s Carlsbad headquarters to assist with the migration.

The company was dissatisfied with Kher’s work and relayed their dissatisfaction to the consulting firm soon after Kher’s arrival. In January 2018, the consulting firm pulled Kher from the company’s headquarters.  A few months later, on May 4, 2018, the firm fired Kher, and a month after that, in June 2018, Kher returned to Delhi, India.

On August 8, 2018, two months after his return to India, Kher hacked into the Carlsbad Company’s server and deleted over 1,200 of its 1,500 MS O365 user accounts.  The attack affected the bulk of the company’s employees and completely shut down the company for two days. As the company’s Vice President of Information Technology (IT) explained, the impact was felt inside and outside the company. Employees’ accounts were deleted – they could not access their email, their contacts lists, their meeting calendars, their documents, corporate directories, video and audio conferences, and Virtual Teams environment necessary for them to perform their jobs. Outside the company, customers, vendors and consumers were unable to reach company employees (and the employees were unable to reach them). No one could inform these buyers what was going on or when the company would be operational again.

Unfortunately, even after those two days, the problems remained. Employees were not receiving meeting invites or cancellations, employees’ contacts lists could not be completely rebuilt, and affected employees could no longer access folders to which they previously had access. The Carlsbad Company repeatedly handled multitudes of IT problems for three months. The Vice President of IT closed by saying, “[i]n my 30-plus years as an IT professional, I have never been a part of a more difficult and trying work situation.”

In pronouncing the sentence, U.S. District Court Judge Marilyn L. Huff noted that Kher perpetrated a significant and sophisticated attack on the company, an attack which was planned and clearly intended as revenge. In addition to the two years in custody, Judge Huff sentenced Kher to three years’ supervised release and restitution to the Company of $567,084, the amount that the Company paid to fix the problems which Kher caused.

Kher, an Indian national, was arrested when he flew from India to the United States on January 11, 2021, unaware of the outstanding warrant for his arrest.

“This act of sabotage was destructive for this company,” said Acting U.S. Attorney Randy Grossman. “Fortunately, the defendant’s revenge was short-lived and justice has been delivered.” Grossman commended the excellent work of Assistant U.S. Attorney Alexandra F. Foster and the FBI agents on this case.

“The FBI was able to identify, arrest, and prosecute Deepanshu Kher, despite the fact that he committed this harmful hack while outside the United States.  This case shows the commitment, expertise, and reach of the FBI in working cyber intrusion cases,” said Suzanne Turner, Special Agent in Charge of FBI's San Diego Field Office. “We encourage companies to develop a relationship with the FBI and local law enforcement prior to a cyber security incident and incorporate us into incident response plans.  In this case, the victim company’s swift notification and cooperation with the FBI contributed greatly to the successful outcome.  Living in a digital world, it is important to get ahead of the threats, be proactive and predictive in the way we approach cybersecurity.”

If victimized in a cyber security incident, the FBI encourages companies to immediately contact the FBI.  Specialized cyber agents will work with companies to protect company information and the personal data of its customers. Please contact the FBI San Diego's cyber program by calling our field office at (858) 320-1800 or submitting tips at Internet Crime Complaint Center (IC3).

DEFENDANTS                                            Case Number 19cr4643-H                                    

Deepanshu Kher                                       Age:     32                             Delhi, India

SUMMARY OF CHARGE

Intentional Damage to a Protected Computer (18 U.S.C. § 1030(a)(5)(A) and (c)(4)(B)(i))

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

INVESTIGATING AGENCY

FBI

Kelly Thornton (619) 546-9726    

NEWS RELEASE SUMMARY – March 19, 2021

SAN DIEGO –  Acting U.S. Attorney Randy Grossman, San Diego FBI Special Agent in Charge Suzanne Turner and San Diego County District Attorney Summer Stephan today condemned racism, xenophobia, and intolerance against Asian Americans and Pacific Islanders in the United States and urged members of the community to report hate-based crimes and incidents to law enforcement.

“Acts of hate have no place in our community,” Grossman said. “No one should be targeted because of who they are or where they are from. When someone is targeted because of their race or ethnicity, terror reverberates to every member of their community. We want to receive reports of activities motivated by hate so that we can address civil rights violations, as well as hate and bias incidents.”

“The FBI and our partners at the United States Attorney’s Office and the District Attorney’s Office simply won’t tolerate crimes spurred by hate and which are meant to intimidate and isolate the groups targeted,” said SAC Turner. “People of all races, ethnicity and national origins deserve to feel safe in their communities. If a crime is shown to be motivated by bias, it will be investigated by the FBI and the perpetrators held responsible for their actions.” SAC Turner emphasized, “Today, we are reminding the public to report information regarding any hate crime to the FBI.”  Members of the public may report a potential hate crime to the Federal Bureau of Investigation at 1-800-CALL-FBI or online at www.tips.fbi.gov.

“Hate crimes are despicable and inexcusable, said Stephan. “Protecting our community from hate crimes is a priority for my office because hate erodes our right to equality and fairness, leaves a lasting impact on the victim and instills fear in the wider community. Hate won’t be tolerated, and I encourage the community to report both hate incidents and hate crimes.”  Stephan said the San Diego County District Attorney's Office has seen a three-fold increase in hate crimes targeting Asian communities in San Diego County and is currently prosecuting several such criminal cases. The DA’s Office has established an online tool at SanDiegoDA.com where the public can directly report suspected hate crimes.

The U.S. Attorney’s Office and the Federal Bureau of Investigation review information and community reports about potential hate crimes for potential prosecution, and also provide assistance to local, state, and tribal law enforcement with investigations of hate crimes through their participation in the San Diego Regional Anti-Hate Crime Coalition. Local leaders, including Assistant U.S. Attorney and Civil Rights Enforcement Coordinator Christopher Tenorio and Deputy District Attorney and Lead Hate Crimes Prosecutor Leonard Trinh, will participate in a webinar hosted by Alliant International University ABC 10 News, San Diego, on March 23, 2021, titled “Unpacking Domestic Terrorism: Combating Hate & Targeted Violence Against the Asian-American Community.”        

For information about this event, please see attached flyer.

The most recent statistics on hate crimes are available here 2019 Hate Crime Statistics from the FBI’s Uniform Crime Report.

Additional resources regarding hate crimes and bias incidents are here:

https://civilrights.justice.gov/#your-rights

https://www.fbi.gov/investigate/civil-rights/hate-crimes#FBI-Resources

 

 

 

Assistant U. S. Attorneys Tim Coughlin (619) 546- 6768, Victor White (619) 546-8439 and Blair Perez (619) 546-7963

NEWS RELEASE SUMMARY – March 17, 2021

SAN DIEGO – Federal officials are asking for the public’s help in identifying the smugglers whose actions led to the deaths of 13 Mexican and Guatemalan nationals in a crash of an overloaded vehicle on March 2 near Holtville, California.

The tip line number is (760) 335-5343.

U.S. Border Patrol was notified of the crash by the California Highway Patrol at about 6:30 a.m. on March 2. In a subsequent review of border surveillance camera footage, Border Patrol agents discovered that a 10-foot section of the border fence had been cut and at least two SUVs had driven northbound through the open section.

Border Patrol agents located one of the SUVs broken down on Interstate 8 near Holtville. Agents arrested 19 undocumented migrants located beside the disabled vehicle. Shortly thereafter, agents found the second SUV at the crash scene on Norrish Road at Highway 115, a remote stretch of road used mostly by farmers. Twelve people died at the crash site; one died later.  Multiple individuals were airlifted to hospitals with significant injuries. A 23-year-old daughter died in her mother’s arms at the scene of the crash.

“This tragic case is a grim reminder that putting your faith and future in the hands of smugglers is a very dangerous gamble,” said U.S. Attorney Randy Grossman. “Smugglers are motivated by greed and care nothing for the people they put in harm’s way. We will aggressively prosecute smugglers who recklessly cause deaths.”

“Homeland Security Investigations is conducting a criminal investigation into the human smuggling networks that callously and repeatedly place human lives in danger, such as the events that resulted in death during the March 2nd smuggling incident,” said Cardell T. Morant, Special Agent in Charge for HSI in San Diego.  “HSI is asking for the public’s help in bringing the people responsible for the activity that led to the tragedy on March 2nd to justice by providing any information to the HSI Calexico tipline at (760) 335-5343.”

Federal officials wish to thank the Mexican and Guatemalan consulates for their assistance in notifying family members of those individuals who died in the crash and in identifying and contacting family members of those hospitalized as a result of this tragedy.

 

Assistant U. S. Attorney Michael G. Wheat (619) 546-8437    

NEWS RELEASE SUMMARY – March 15, 2021

SAN DIEGO – Neil Edwin Valera, a U.S. citizen who resided in Tijuana, was sentenced in federal court today 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 two days after he crossed into the United States through the San Ysidro Port of Entry in the same car.

Valera, a truck driver from El Paso, Texas, pleaded guilty in February 2020 to Encouraging Aliens to Enter Resulting in Death and Bringing in Aliens without Presentation for Financial Gain.

At the sentencing hearing today, U.S. District Judge Anthony Battaglia said: “There’s an inherent danger with putting people in the trunks and compartments of cars. It’s not just a fairy tale that people will get hurt or die - it really does happen.”

On August 11, 2019, at 4:54 p.m., San Diego police received an emergency 911 call 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. According to the complaint, the driver was Valera, the registered owner of the vehicle. Valera used his Sentri card to enter into the U.S. After that day, Valera only crossed into the United States on foot, through pedestrian lanes at the San Ysidro Port of Entry.

“This smuggler showed a reckless disregard for the lives of his customers,” said Acting U.S. Attorney Randy Grossman. “This office will aggressively seek justice for victims who no longer have a voice.” Grossman thanked Assistant U.S. Attorney Michael Wheat and officials from the San Diego Police Department, Homeland Security Investigations and U.S. Customs and Border Protection, Office of Field Operations for their excellent work on this case.

DEFENDANT                                               Case Number 3:19-cr-03865-AJB

Neil Edwin Valera                                          Age: 52           Tijuana

SUMMARY OF CHARGES

Encouraging Aliens to Enter Resulting in Death – Title 8, U.S.C., Section 1324(a)(1)(A)(vi) and (B)(iv)

Maximum penalty: Life in prison or death 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

AGENCY

San Diego Police Department

Homeland Security Investigations

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

 

 

Assistant U.S. Attorneys Meghan E. Heesch (619) 546-9442 and Joshua C. Mellor (619) 546-9733

NEWS RELEASE SUMMARY – March 12, 2021

SAN DIEGO – A federal grand jury today returned an indictment against the Chief Executive Officer and an associate of the Canada-based firm Sky Global on charges that they knowingly and intentionally participated in a criminal enterprise that facilitated the transnational importation and distribution of narcotics through the sale and service of encrypted communications devices.  

Jean-Francois Eap, Sky Global’s Chief Executive Officer, and Thomas Herdman, a former high-level distributor of Sky Global devices, are charged with a conspiracy to violate the federal Racketeer Influenced and Corrupt Organizations Act (RICO).  Warrants were issued for their arrests today.

According to the indictment, Sky Global’s devices are specifically designed to prevent law enforcement from actively monitoring the communications between members of transnational criminal organizations involved in drug trafficking and money laundering. As part of its services, Sky Global guarantees that messages stored on its devices can and will be remotely deleted by the company if the device is seized by law enforcement or otherwise compromised.

The indictment alleges that Sky Global installs sophisticated encryption software in iPhone, Google Pixel, Blackberry, and Nokia handsets. Sky Global device users communicate with each other in a closed network, and Sky Global routes these communications through encrypted servers located in Canada and France.

There are at least 70,000 Sky Global devices in use worldwide, including in the United States. The indictment alleges that for more than a decade, Sky Global has generated hundreds of millions of dollars in profit by facilitating the criminal activity of transnational criminal organizations and protecting these organizations from law enforcement. 

According to the indictment, Sky Global’s purpose was to create, maintain, and control a method of secure communication to facilitate the importation, exportation, and distribution of heroin, cocaine and methamphetamine into Australia, Asia, Europe, and North America, including the United States and Canada; to launder the proceeds of such drug trafficking conduct; and to obstruct investigations of drug trafficking and money laundering organizations by creating, maintaining, and controlling a system whereby Sky Global would remotely delete evidence of such activities.

The indictment alleges that Sky Global employees used digital currencies, including Bitcoin, to facilitate illegal transactions on the firm’s website, to protect its customers’ anonymity, and to facilitate the laundering of the customers’ ill-gotten gains.  According to the indictment, Sky Global employees also set up and maintained shell companies to hide the proceeds generated by selling its encryption services and devices.

In 2018, the principals of another communications encryption company, Phantom Secure, were indicted in the Southern District of California for their roles in providing encrypted devices to criminal groups. Phantom Secure’s chief executive, Vincent Ramos, pleaded guilty and admitted that he and his co-conspirators facilitated the distribution of narcotics around the world by supplying encrypted communications devices designed to thwart law enforcement.

As alleged in today’s indictment, Sky Global instituted an “ask nothing/do nothing” approach toward its clients shortly after the takedown of Phantom Secure.  This policy allowed for Sky Global to claim plausible deniability from the activities of their clients that they knew or had reason to know participated in illegal activities, including international drug trafficking. 

“The indictment alleges that Sky Global generated hundreds of millions of dollars providing a service that allowed criminal networks around the world to hide their international drug trafficking activity from law enforcement,” said Acting U.S. Attorney Randy Grossman. “Companies who do this are perpetuating the deadliest drug epidemic in our nation’s history. This groundbreaking investigation should send a serious message to companies who think they can aid criminals in their unlawful activities. I want to thank the prosecutors on this case, Meghan Heesch and Joshua Mellor, as well as our federal law enforcement partners at the FBI, DEA, IRS and the U.S. Marshals Service, for their excellent work on this case.”

“The indictment of Sky Global’s CEO and main distributor is another major strike against transnational crime,” said Suzanne Turner, FBI Special Agent in Charge of the San Diego Field Office. “Eap and Herdman allegedly provided a service designed to allow criminals to evade law enforcement to traffic drugs and commit acts of violent crime without detection. Similar to our 2018 investigation of encrypted service provider Phantom Secure, the San Diego FBI targeted this Canadian company who also exploited encryption to go dark on law enforcement around the globe.  With these highly impactful cases, we have shown that the FBI focuses on investigating international criminal organizations from the top so we can shut down entire illicit operations—and the associated technological infrastructure.  Today, the FBI has removed what we allege to be another illicit secret communications network used by criminals in the US, Canada, and worldwide.”  SAC Turner added, “I want to thank our partners at the Department of Justice, as well as our Canadian law enforcement partners, for their incredible work on this case.”

“DEA maintains an evolving global reach and combined with strong foreign law enforcement partnerships, is committed to searching out the most significant organized criminal groups facilitating sophisticated narcotics trafficking networks,” said DEA Los Angeles Field Division Special Agent in Charge Bill Bodner. “The joint effort to pursue these individuals who hide behind encrypted communication platforms shows that even the use of advanced technology will not enable suspects to conceal their criminal activities from law enforcement.”

“This case is another example of IRS-CI working closely with our international partners to follow the money and bring significant criminal activity to light,” said Special Agent in Charge Ryan Korner of the IRS-Criminal Investigation (IRS-CI) Los Angeles Field Office. “The indictment alleges that Sky Global’s network facilitated international crime across the world, but just as criminals know no borders, neither does federal law enforcement. The combined efforts of the Joint Chiefs of Global Tax Enforcement (J5) ensure that these types of illicit behavior are identified, tracked, and ultimately prosecuted on a global-scale.”

The international operation to seize Sky Global’s infrastructure involved cooperation and efforts by law enforcement authorities in the United States and Canada. In addition, on March 10, 2021, Europol announced that judicial and law enforcement authorities in Belgium, France and the Netherlands had wiretapped Sky Global’s servers and monitored hundreds of millions of messages by Sky Global’s users. The European investigation resulted in hundreds of arrests, the seizure of thousands of kilograms of cocaine and methamphetamine, hundreds of firearms, and millions of Euros.

“With technological advancement comes increased levels of criminal sophistication, but also new tools for police to combat crime,” says Assistant Commissioner Dwayne McDonald, BC RCMP Criminal Operations Officer for Federal, Investigative Services and Organized Crime. “The RCMP will continue to adopt new technologies and strategies to keep our communities safe. Collaboration with our international policing partners, such as in this case with the FBI and DEA, has become an integral part in the ever-evolving fight against organized crime.”

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.

DEFENDANTS                                      21-CR-822GPC                                                              

Jean-Francois Eap                               Vancouver, British Columbia, Canada                                            aka “888888”

Thomas Herdman                               Vancouver, British Columbia, Canada                                        

SUMMARY OF CHARGES

Count 1: Racketeering Conspiracy, in violation of Title 18, U.S.C., Section 1962(d).  Maximum Penalty: Life in prison

Count 2: Conspiracy to Distribute Controlled Substances, in violation of Title 21, United States Code, Sections 841(a)(1) and 846, and Title 18, United States Code, Section 2. Maximum Penalty: Life in prison

AGENCIES

Federal Bureau of Investigation

Drug Enforcement Administration

Internal Revenue Service-Criminal Investigations

United States Marshals Service

Department of Justice, Office of International Affairs

Royal Canadian Mounted Police

International Assistance Group, Canadian Department of Justice

Organized Crime Drug Enforcement Task Force

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

 

Assistant U.S. Attorney Jaclyn Stahl (619) 546-8456

NEWS RELEASE SUMMARY – March 12, 2021

SAN DIEGO – Elan Leroy Gwynn, a San Diego resident, was sentenced today to nine months in custody for attempting to board an international flight from San Diego International Airport to London with a loaded gun in his carry-on luggage.

According to admissions in his plea agreement, Gwynn proceeded through the Transportation Security Administration (TSA) security checkpoint on March 17, 2020. Gwynn placed his carry-on luggage on the conveyor belt for the X-ray machine, and TSA officers identified an object that appeared to be a loaded firearm.

Officers with the San Diego Harbor Police responded and discovered, loose in the bottom of Gwynn’s bag, a Glock 19 replica ghost gun with a fifteen-round magazine, loaded with eleven 9-millimeter rounds of ammunition. A ghost gun is a firearm made by an individual without a serial number or other identifying markings. Ghost guns are illegal under California law. Gwynn was also in possession of several grams of methamphetamine. The FBI responded and placed Gwynn under arrest.

U.S. District Judge Janice L. Sammartino also ordered Gwynn to pay a $5,000 fine and ordered forfeiture of the gun and ammunition seized in this case.

“Firearms have no place on airplanes and pose a serious threat to all aboard,” said Acting U.S. Attorney Randy Grossman. “If individuals engage in this type of dangerous behavior, the FBI and the U.S. Attorney’s Office will investigate and bring appropriate charges.” Grossman thanked Assistant U.S. Attorney Jaclyn Stahl as well as the FBI, San Diego Harbor Police and TSA for their excellent work on this case.

“The FBI's Joint Terrorism Task Force (JTTF) is available to respond immediately to investigate federal violations of law that threaten the safety of airline passengers,” said FBI Special Agent in Charge Suzanne Turner. “The safety of the flying public is a priority for the FBI.”

The FBI and U.S. Attorney’s Office will continue to dedicate resources to investigations related to national security and criminal activity at San Diego air, land, and sea ports. This case was investigated by the San Diego FBI and the U.S. Attorney's Office, with support from San Diego Harbor Police and the Transportation Security Administration. Other agencies supporting the FBI include, the Department of Homeland Security, U.S. Customs and Border Protection, the Federal Aviation Administration, and the San Diego Port Authority.

DEFENDANT                                                                                   Case No. 20-CR-1188-JLS

Elan Leroy Gwynn                             Age: 36                                   San Diego, California

SUMMARY OF CHARGES

Carrying a weapon or explosive on an aircraft, in violation of 49 U.S.C. § 46505.

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

INVESTIGATING AGENCIES

Federal Bureau of Investigation

San Diego Harbor Police

Transportation Security Administration

 

 

 

 

 

Assistant U. S. Attorneys Nicholas Pilchak (619) 546-9709 or Andrew Haden (619) 546-6961

NEWS RELEASE SUMMARY – March 12, 2021

SAN DIEGO – Former San Diego County Sheriff’s Captain Marco Garmo was sentenced to two years in prison today for years of unlawful firearms transactions and for an array of corrupt conduct relating to unlicensed marijuana dispensaries operating in his former jurisdiction. 

In pronouncing sentence, U.S. District Judge Gonzalo Curiel said that Garmo’s conduct demonstrated arrogance reaching a level where Garmo was “almost becoming a mob boss of sorts” in picking winners and losers and dispensing unlawful favors to friends and family.

Garmo admitted in pleading guilty in September that he had acted as an unlicensed firearm dealer, buying almost 150 weapons and re-selling almost 100 over a period of roughly six years. A number of those transactions involved “straw purchases,” where Garmo acquired firearms for others by falsely claiming that they were for him. This was an important part of Garmo’s firearms dealing because California law limits the initial purchase of certain newer handguns to law enforcement officers only. 

In his plea agreement, Garmo admitted that one of his goals in selling so many guns was profit, but another was to curry favor with prominent county residents whom he expected might support his planned run for Sheriff of San Diego County. 

Garmo also acknowledged tipping off an illegal marijuana dispensary that he believed was about to be searched by Sheriff’s deputies, in order to give an advance warning to his cousin, who was one of the dispensary’s owners.  The unlawful cannabis operation cleared its shelves of cash and valuable products the same night it received Garmo’s warning.  And once the dispensary had reopened—after receiving the all-clear from Garmo the following morning—Garmo’s cousin sought his help again weeks later, after the premises was posted with an abatement notice. The warning would have required the dispensary to close its doors and cease its lucrative business, but Garmo forwarded it to an acquaintance employed at the county and asked “Can we push it back?”  Garmo’s associate replied, “Yes you can.”  

Court documents explain how Garmo also bent his public authority for his private gain by pitching a corrupt “consulting” arrangement to another property owner whose premises had been condemned for hosting a different unlicensed marijuana dispensary.  While acting as the chief law enforcement officer in charge of eradicating such unlawful activity, Garmo suggested that the landlord hire Garmo’s co-defendant Waiel “Will” Anton along with Garmo’s associate at the County as outside “consultants” to reopen his property.  According to his plea agreement and court filings, Garmo had secretly arranged with the County associate for Garmo to receive a 10 percent kickback on the fees.  When the landlord declined the offer, Garmo told the County employee to have the County “piss on” him by way of retaliation.  

“This investigation uncovered blatant and repetitive violations of the public trust by a senior law enforcement officer,” said Attorney for the United States Linda Frakes. “Garmo was sworn to uphold the law, but instead he abused his authority and the legal privileges he enjoyed as a police officer for his own personal benefit, and then lied to cover it up.  The U.S. Attorney’s Office is committed to ensuring that no public official is above the law.”

Garmo’s unlawful conduct persisted despite repeated warnings and admonitions from his superiors, the ATF, and the San Diego County District Attorney’s Office, according to court filings.  Garmo’s firearms dealing resulted in a prior disciplinary warning and his near prosecution by state authorities in 2017, but nevertheless continued with only minor alterations designed to avoid further scrutiny. Garmo’s efforts to avoid answering for his conduct continued even after he was confronted by FBI and ATF agents in February 2019, when he lied repeatedly during an interview. As he admitted in his plea agreement, Garmo lied to agents about tipping off marijuana dispensaries, conducting straw purchases, and receiving money from Anton as part of a separate kickback scheme.

In that enterprise, Anton had set up a different “consulting” venture in which he offered services to applicants for permits to carry a concealed weapon from the County.  In exchange for substantial fees, Anton would help his applicants submit their paperwork and secure an appointment with the civilian County staff that processed them.  As set out in Court records, Anton’s services included an eight-month reduction in the wait time for the initial appointment with the County—a service that Anton could provide because he had built an unusual relationship with County staff.  In particular, the indictment alleges that Anton made an illegal cash payment to a County clerk who ensured favored treatment for his clients. Garmo admitted in his plea papers that his role in Anton’s scheme was to refer “consulting” clients to Anton in exchange for kickbacks of $100 apiece. 

According to the indictment, Garmo was a Sheriff’s deputy for the San Diego County Sheriff’s Department for almost 27 years until September 20, 2019.  In his plea, Garmo admitted that he was engaged in the unlawful acquisition, transfer, and sale of firearms during his entire tenure as the Captain of the Rancho San Diego Station. 

In fact, one of Garmo’s firearms transactions involved a brazen sale inside the Captain’s Office of the Rancho San Diego Station on October 28, 2016. Garmo admitted that on that date, he and co-defendant Giovanni Tilotta (a licensed San Diego gun dealer) sold a Glock handgun, an AR-15 style rifle, and a Smith & Wesson handgun to local defense attorney Vikas Bajaj inside Garmo’s office. Garmo coordinated backdated paperwork to avoid the 10-day waiting period required by California law for handgun purchases, and Garmo supplied Bajaj with misappropriated San Diego Sheriff’s Department-issued ammunition.  Garmo acknowledged that this sale violated California law, which requires firearms sales to be conducted at a handful of specific locations such as the dealer’s premises.

Bajaj entered his own guilty plea on December 9, 2020, to a misdemeanor charge of aiding and abetting Tilotta with the entry of false records during the unlawful October 28 sale. According to Bajaj’s plea agreement, he knew that the firearms transfer records were backdated and falsified, but signed the forms and went ahead with the transfer regardless.  U.S. Magistrate Judge Jill L. Burkhardt sentenced Bajaj to one year of probation and ordered him to forfeit all four firearms involved in the transaction. 

Garmo’s co-defendant and prominent San Diego jeweler Leo Hamel pleaded guilty in November 2019 to aiding and abetting Garmo’s unlicensed dealing.  Hamel admitted working with Tilotta to create falsified records to make Garmo’s firearms straw purchases appear legitimate. Hamel also acknowledged that Garmo benefited from his arrangement with Hamel by securing Hamel’s future support for Garmo’s anticipated campaign for Sheriff of San Diego County.  Former Sheriff’s Lieutenant Fred Magana pleaded guilty at the same time, acknowledging his role in the straw purchase of two handguns at Tilotta’s gun shop for Hamel.  

The next hearing in the ongoing case against Anton and Tilotta is set for April 29, 2021 before Judge Curiel. 

In total, approximately 297 firearms and 131,458 rounds of ammunition have been forfeited as part of this investigation.  Garmo was also sentenced to pay a fine of $8,350. 

Frakes praised the lead prosecutors on the case, Assistant U.S. Attorneys Nicholas Pilchak and Andrew Haden, as well as the talented and dedicated investigators from the ATF and FBI.  Frakes added that the U.S. Attorney’s Office wishes to extend its sincerest gratitude to the San Diego County Sheriff’s Department for initiating this investigation, and for their assistance and support throughout its course.

“ATF’s mission of deterring illegal firearms trafficking and violent gun crime is best addressed through cooperative efforts with our partner law enforcement agencies,” said ATF Los Angeles Special Agent in Charge Monique Villegas. “This is an excellent example of working with multiple agencies to protect the public and increase public safety. ATF pledges an unwavering commitment to targeting, identifying and investigating trafficking schemes that divert firearms from lawful commerce into the illegal marketplace.”

FBI Special Agent in Charge Suzanne Turner said, “Former San Diego Sheriff's Department Captain Marco Garmo failed his department, his sworn oath, and the public trust.  Today’s sentence demonstrates that no one is above the law – not even a high-ranking law enforcement official.  This case demonstrates the FBI's commitment to investigating public corruption at all levels and highlights our dedication to preserving public confidence in law enforcement. SAC Turner further stated, “I want to commend the San Diego Sheriff's Department and the ATF for their partnership and commitment to fully investigating the corrupt actions by this former law enforcement officer.”

U.S. v. Garmo, et. al, 19-CR-4768-GPC

Defendants

Morad Marco Garmo, 52 years old

Leo Joseph Hamel, 62 years old

Giovanni Vincenzo Tilotta, 38 years old

Fred Magana, 42 years old

Waiel Yousif Anton, 35 years old

Summary of Charges

Title 18, U.S.C., Sec. 922(a)(1)(A) – Engaging in the Business of Dealing in Firearms Without a License

Maximum Penalty: Five years in prison

Investigating Agencies

Bureau of Alcohol Tobacco Firearms & Explosives (ATF)

Federal Bureau of Investigation (FBI)

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

Assistant U. S. Attorneys Eric Olah (619) 546-7540 and Seth Askins (619) 546-6692

NEWS RELEASE SUMMARY – March 9, 2021

SAN DIEGO – Arthur Jason “AJ” Morales of Pahrump, Nevada pleaded guilty in federal court today to a wire fraud charge, admitting that while employed as a bookkeeper for a San Diego lighting company, he abused his access to the company’s checkbook and issued himself 28 unauthorized checks totaling more than $183,000. 

In a hearing before U.S. Magistrate Judge Mitchell D. Dembin, Morales admitted he issued the checks—sometimes forging the signatures of company management on them—to his personal business, “AJ’s Tax & Bookkeeping Service,” 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 for a legitimate business expense to a third-party vendor.  The company realized Morales’ fraudulent activity in March 2016 when it discovered a check in the amount of $16,274 that Morales had issued to his personal business and cashed.

"The impact of fraud on small businesses can be devastation," 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 prosecutors Eric Olah and Seth Askins and FBI agents for their excellent work on this case.

“Accountants stealing money from an employer's coffers is the ultimate violation of fiduciary trust and can be a violation of federal law,” said FBI Special Agent in Charge Suzanne Turner.  “In this case, the FBI investigation revealed Arthur Morales fraudulently wired money to his personal bank account in regular increments over seven months, totaling approximately $183,408.02. Today's conviction shows the FBI's commitment to investigating financial crimes that affect San Diego businesses.”

Morales is scheduled to be sentenced on June 7, 2021 before U.S. District Judge Larry Burns.

DEFENDANT                                               Case Number  20-CR-2348-LAB                                  

Arthur Jason Morales                                    Age: 42                       Pahrump, Nevada

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

 

Mark W. Pletcher (619) 546-9714 and Michelle L. Wasserman (619) 546-8431

NEWS RELEASE SUMMARY – March 8, 2021

SAN DIEGO, CA – Pornpun Settaphakorn, a former executive of foreign defense contractor Glenn Defense Marine Asia (GDMA) who oversaw the company’s Thailand office, appeared in federal court in San Diego today following her extradition last week from Thailand.

Settaphakorn, also known as “Yin,” was charged with participating in a conspiracy to submit fraudulent price quotes, claims and invoices to the U.S. Navy in an effort to steal millions of dollars as part of a years-long fraud scheme.

The indictment in this case, returned December 23, 2014, alleges that Settaphakorn, along with co-defendants Neil Peterson and Linda Raja, among others, submitted false claims of more than $5 million. In addition, according to the indictment, Settaphakorn worked to perpetuate and cover up the fraud by consistently misrepresenting to the U.S. Navy the cost of providing services to its ships in Asia, even going so far as to submit false price quotes from non-existent companies, on letterhead created from graphics cut and pasted from the Internet. Settaphakorn is charged with one count of conspiracy to defraud the United States with respect to claims; one count of conspiracy to commit wire fraud; and multiple counts of making false claims.

Like Settaphakorn, co-defendants Peterson and Raja, both of Singapore, worked as chief deputies for foreign defense contractor Leonard Glenn Francis to fill the coffers of their company, GDMA, at the expense of the U.S. Navy. Peterson served as GDMA’s Vice President for Global Operations, and Raja served as the company’s General Manager for Singapore, Australia, and the Pacific Isles. Peterson and Raja were extradited from Singapore in October 2016, and both have since pleaded guilty for their participation in the massive scheme to defraud the U.S Navy.  In 2017, Peterson was sentenced to 70 months in prison, and Raja to 46 months in prison.  Both were ordered to pay $34.8 million in restitution.  Peterson and Raja have served their sentences and been returned to Singapore.

At today’s hearing, before U.S. Magistrate Judge Karen S. Crawford, Settaphakorn was detained pending trial. The next hearing in this matter is April 9, 2021, before U.S. District Court Judge Janis L. Sammartino. 

"Whoever you are, whever you are in the world, and however long it takes, justice awaits those who imperil the U.S. Navy," said Randy S. Grossman, Acting U.S. Attorney for the Southern District of California. Grossman praised prosecutors Mark Pletcher and Michelle Wasserman and agents from DCIS and NCIS for their extraordinary work on this case.

"The extradition of Pornpun Settaphakorn from Thailand to the United States is a monumental step in the judicial process to hold Settaphakron accountable for her alleged involvement in the sprawling, years-long scheme to defraud the U.S. Navy and the American taxpayer that was orchestarted by the disgraced Department of Defense contractor Glenn Defense Marine Asia, Ltd. and its chief executive officer Leonard France," said Bryan D. Denny, Special Agent in Charge of the Defense Criminal Investigative Service (DCIS), Western Field Office. "This action is but one example of the comprehensive actions DCIS and its parnters will utilize to pursue justice for the Warfighter."

“Settaphakorn’s extradition from Thailand to the United States marks a significant legal victory for the U.S. criminal justice system and the U.S. Navy, as Settaphakorn deserves to be held fully accountable in U.S. federal court for her alleged role in GDMA’s years-long scheme to defraud the Navy,” said Special Agent in Charge Eric Maddox of the NCIS Economic Crimes Field Office. “NCIS and our law enforcement partners remain dedicated to rooting out corruption and fraud that threatens the integrity of the Navy.”

Acting U.S. Attorney Grossman specifically acknowledged the indispensable contributions to this case of the Department of Justice’s Office of International Affairs; U.S. Embassy in Bangkok, Thailand; the U.S. Marshals Service, and the authorities of the Kingdom of Thailand.

Anyone with information relating to fraud or corruption connected to the United States military should contact the NCIS anonymous tip line at www.ncis.navy.mil or the DOD Hotline at www.dodig.mil/hotline, or call (800) 424-9098.

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

DEFENDANT                                   Residence                               Case Number             Age    

Pornpun Settaphakorn (“Yin”)           Bangkok, Thailand                            14CR0623-JLS            41

SUMMARY OF CHARGES

Conspiracy to Defraud the United States With Respect To Claims, in violation of 18 U.S.C. § 286

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

False Claims, in violation of 18 U.S.C. § 287

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

Conspiracy to Commit Wire Fraud, in violation of 18 U.S.C. §§ 1349 and 1343

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

INVESTIGATING AGENCIES

Defense Criminal Investigative Service

Naval Criminal Investigative Service

Defense Contract Audit Agency

 

 

 

 

 

 

 

Assistant U.S. Attorney Brian L. Hazen (619) 546-6695

NEWS RELEASE SUMMARY – March 8, 2021

SAN DIEGO – Manuel de Jesus Rodriguez-Hernandez pleaded guilty in federal court today to reporting fake bomb threats against the Imperial Regional Detention Facility in Calexico, California. The charge to which Rodriguez-Hernandez pleaded guilty carries a statutory maximum of five years in federal prison.

On January 13, 2021, Mr. Rodriguez-Hernandez was housed as a civil detainee at the Imperial Regional Detention Facility awaiting federal immigration proceedings. That afternoon, he called the U.S. Department of Homeland Security’s hotline and said that earlier in the day he had been speaking with his wife on the telephone when the line was interrupted by an unknown person who said there was a bomb at the Detention Facility that was going to explode.

Shortly after the Facility’s management was notified of the threat, security personnel activated emergency protocols, which included the deployment of the bomb squad from the Imperial County Sheriff’s Office. After hanging up with the hotline, Mr. Rodriguez-Hernandez separately approached a detention officer and told the same story—that a bomb was at the detention facility and it was going to explode. For the next several hours, authorities from the Detention Facility and the Sheriff’s Office’s bomb squad thoroughly searched the facility but no explosive devices were found.

When interviewed after the Detention Facility was cleared, Mr. Rodriguez-Hernandez ultimately admitted he fabricated the bomb threats so that federal authorities would initiate an investigation at the Detention Facility.

“This senseless hoax needlessly caused fear and disruption and jeopardized the sense of safety for inmates and employees of this facility,” said Acting U.S. Attorney Randy Grossman. Grossman praised federal prosecutor Brian L. Hazen and federal agents from Immigration and Customs Enforcement for their excellent work on this case.

DEFENDANT                                               Criminal Case No. 21-CR-0339-W

Manuel de Jesus Rodriguez-Hernandez                     Age: 33          

SUMMARY OF CHARGE

Conveying False Information and Hoaxes (Felony) – Title 18, U.S.C., Section 1038(a)(1)

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

INVESTIGATING AGENCY

U.S. Immigration and Customs Enforcement

Assistant U. S. Attorneys Kareem A. Salem (619) 546-8904 and Larry Casper (619) 546-6734

NEWS RELEASE SUMMARY – March 4, 2021

SAN DIEGO – Arnold Ray Walters III of San Diego pleaded guilty today before U.S. Magistrate Judge Karen S. Crawford to distributing fentanyl that resulted in the overdose death of a 24-year-old male who resided in Poway on January 1, 2017. The charge to which Walters pleaded guilty carries a 20-year mandatory minimum sentence.

According to his plea agreement, Walters admitted that, on or about December 31, 2016, he knowingly provided a pressed-blue pill containing fentanyl to another individual and understood that it would, in turn, be provided to the victim.  Walters also admitted he was aware of the potentially lethal impact of the fentanyl based on his knowledge of other individuals accidentally overdosing on fentanyl.

“We will continue to vigorously prosecute those selling deadly fentanyl for profit and who take lives and destroy families in the process,” said Acting U.S. Attorney Randy S. Grossman. “Fentanyl overdose deaths increased threefold in San Diego County from 2019 to 2020.  Our office is working with law enforcement to pursue fentanyl suppliers and hold them accountable for the tragic results of their unlawful activities.”

Acting U.S. Attorney Grossman praised the San Diego County Sheriff’s Department, Homeland Security Investigations, and Assistant U.S. Attorneys Kareem Salem and Larry Casper for their efforts on this case. The U.S. Attorney’s Office also works closely on these matters with agents from Narcotics Task Force Team 10, a multi-agency team housed by DEA that was created in July 2018 to address drug overdose deaths in San Diego.

Sheriff Bill Gore said, “This case highlights the commitment of the San Diego County Sheriff's Department in following all available leads and working collaboratively with our justice partners to investigate and prosecute overdose deaths.”

Walters, who is also pending sentencing on an earlier guilty plea to federal firearms charges, is scheduled to be sentenced on both cases by U.S. District Judge Janis L. Sammartino on May 21, 2021 at 9 a.m.

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 19-CR-4406-JLS                                     

Arnold Ray Walters III                                                    Age: 33          

SUMMARY OF CHARGES

Distribution of Fentanyl Resulting in Death – Title 21, U.S.C., Section 841(b)(1)(c)

Maximum penalty: Mandatory minimum 20 years in prison up to life

AGENCY

San Diego Sheriff’s Department

U.S. Homeland Security Investigations

SACRAMENTO, Calif. — Robert Joseph Maher, 42, formerly of Stockton, pleaded guilty today to single counts of mail fraud and aggravated identify theft in connection with an unemployment insurance benefits fraud and identity theft scheme, Acting U.S. Attorney Phillip A. Talbert announced.

According to court documents, from at least November 2010 through February 2018, Maher participated in a scheme to defraud the State of California Employment Development Department (EDD) by filing fraudulent claims for unemployment insurance benefits. In furtherance of this scheme, Maher and his co-defendant, Michael Herron II, also of Stockton, created fictitious companies and fictitious employees by using the real identities of persons with and without their knowledge. They then filed claims with EDD, falsely stating that the employees had been laid-off or fired. The unemployment benefits were deposited onto debit cards that were mailed to addresses controlled by Maher, Herron, or their associates.

In one instance, Maher and Herron electronically filed an unemployment insurance claim in the name of an identity-theft victim. Maher knew that the victim was a real person because the claim listed the victim’s correct date of birth and social security number. The claim also listed Maher’s address in Stockton as the claimant’s address, which caused a bank to mail an EDD debit card in the victim’s name to Maher’s address. Maher and Herron then transferred the card’s benefits to Maher’s personal bank account. Maher and Herron also used the victim’s name to register another fictitious business entity that was used in the fraud scheme. In all, Maher and Herron filed at least 72 fraudulent claims for unemployment insurance benefits, seeking a total of $739,535 in fraudulent claims to EDD, of which EDD paid out approximately $609,335. As part of his plea agreement, Maher has agreed to pay full restitution to victims of his offenses.

This case is the product of an investigation by the U.S. Department of Labor - Office of Inspector General, the Federal Bureau of Investigation, and the California Employment Development Department’s Investigation Division. Special Assistant U.S. Attorney Robert J. Artuz is prosecuting the case.

On March 26, 2019, Herron pleaded guilty to similar counts of mail fraud and aggravated identity theft and, on June 25, 2019, was sentenced to six years and three months in prison.

Maher is scheduled to be sentenced by U.S. District Judge John A. Mendez on June 8. Maher faces a maximum statutory penalty of 20 years in prison and a $250,000 fine for the mail fraud count, and a mandatory two-year consecutive sentence and $250,000 fine for the aggravated identity theft count. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

For Further Information, Contact:

Kelly Thornton (619) 546-9726    

 

NEWS RELEASE SUMMARY – March 1, 2021

SAN DIEGO - Randy Grossman, who has served as second-in-command at the U.S. Attorney’s Office, began his term as acting U.S. Attorney today.

Mr. Grossman stated, “I am honored to serve as the Acting United States Attorney. (Former U.S. Attorney) Bob Brewer’s steady leadership during these unprecedented times set a tremendous example. I look forward to continuing the office’s focus on civility and ethics as we fulfill our mission of ensuring public safety and the fair and impartial administration of justice.”

Mr. Grossman is an experienced prosecutor, private practice litigator and community leader. Mr. Grossman began his legal career as a Deputy District Attorney at the San Diego County District Attorney’s Office. During his eight years as a state prosecutor, he tried more than 70 cases to verdict including homicides and other crimes of violence. Mr. Grossman also worked in private practice as a partner at two international law firms. His practice areas included complex civil litigation, white collar criminal defense, corporate internal investigations and pro bono representation of refugees seeking asylum.

In March 2020, Mr. Grossman returned to public service as an Assistant United States Attorney for the Southern District of California where he served in the Border Enforcement Section and the Major Frauds/Public Corruption Section. He was selected to become First Assistant U.S. Attorney in September 2020. Mr. Grossman serves as a Trustee for California Western School of Law and he serves on a statewide civility task force associated with the California Lawyers Association and the State Bar of California.

Kelly Thornton (619) 546-9726    

NEWS RELEASE SUMMARY – February 26, 2021

SAN DIEGO – U.S. Attorney Robert Brewer announced today that he has submitted his resignation to President Biden, effective at midnight on February 28, 2021, concluding more than two years in the position.

“Serving as U.S. Attorney has been the highlight of my 45-year legal career,” Mr. Brewer said. “I am humbled to have led the office’s remarkable public servants. Together we have made our community safer through perilous times. I have witnessed our attorneys and staff, alongside officers, agents, and first responders, work tirelessly to meet these unprecedented challenges. For your sacrifices and your courage, I am eternally grateful. In departing, I am confident that the office will continue its critical mission with the highest ethical standards, and I could not be more proud of the work we accomplished together.”

First Assistant U.S. Attorney Randy Grossman will become Acting U.S. Attorney immediately following the effective date of Brewer’s resignation.

Mr. Brewer continued, “Randy Grossman is an outstanding prosecutor and leader.  In addition to his vast experience as a trial attorney, Randy’s judgment and collegiality will ensure a smooth transition for the office. I wish him and every member of the office the best of luck in the continued pursuit of justice.”

During Mr. Brewer’s tenure, the office hired a record 48 new assistant U.S. attorneys – almost one-third of the entire ranks of federal prosecutors in this district; strengthened relationships with law enforcement partners; and reorganized the criminal division, including the addition of the Violent Crime and Human Trafficking Section (VCHT). VCHT is tasked with leading collaborations between federal and local law enforcement in the investigation and prosecution of cases involving violent crimes, firearms and gang cases; sex trafficking and child exploitation; civil rights, and labor trafficking.

Brewer also continued the great work of two of the Southern District of California’s diversion programs, the Alternative to Prison Solutions (APS) Diversion Program and the Veteran’s Diversion Program (VDP). These programs offer select criminal defendants who plead guilty to felony charges an alternative to incarceration with an opportunity to have their case dismissed after 12 months in exchange for compliance with certain court requirements, such as obtaining employment, enrolling in education programs, and obtaining mental health and addiction treatment.

Mr. Brewer made combatting opioids a top priority and directed a strong response when the already-serious drug epidemic collided with the coronavirus pandemic, causing overdose deaths to spike in San Diego County. The U.S. Attorney’s Office pursued more than 20 defendants in connection with fentanyl- and heroin-related overdose death cases, bringing justice and a sense of closure to devastated family members. 

Under Mr. Brewer’s leadership, attorneys in the office have prosecuted some of the most sophisticated and important cases in the nation, including:

• U.S. Representative Duncan Hunter was sentenced to 11 months in prison for stealing $250,000 in campaign funds to pay for his and his wife’s living and luxury expenses.
• Gina ChampionCain pleaded guilty to masterminding the longest Ponzi scheme in San Diego history with hundreds of victims throughout California and the nation and losses estimated as high as $400 million.
• Abdullahi Ahmed Abdullahi, a Canadian national, was successfully extradited to the United States and faces trial on federal conspiracy charges of providing material support to terrorists.
• U.S. Navy Captain David Haas and former U.S. Navy Chief Petty Officer Brooks Alonzo Parks pleaded guilty to conspiracy to commit bribery, representing the 22nd and 23rd defendants to have entered guilty pleas as part of the bribery and corruption scheme involving Glenn Defense Marine Asia and its leader, “Fat Leonard” Glenn Francis. The decadelong scandal involves scores of numerous U.S. Navy officials and officers, tens of millions of dollars in fraud, and millions of dollars in bribes. Eight more defendants await jury trial.
• Rabbi Ysiroel Goldstein, former Director of Chabad of Poway Synagogue, and five of his associates pleaded guilty to fraud charges, admitting they participated in a complex, yearslong, multi-million dollar tax-evasion scheme and other illegal financial transactions involving theft of public money.
• Former Honolulu Police Chief Louis Kealoha and his wife, former Honolulu prosecutor Katherine Kealoha, were sentenced to 84 months and 156 months in prison, respectively, for a wide range of criminal conduct, including framing their relative with a crime to conceal their own fraud. Additionally, the Kealohas’ coconspirators, former Honolulu police officers Derek Wayne Hahn and Minh-Hung “Bobby” Nguyen, received 42 months and 54 months, respectively, for their involvement in what has been called the largest case of corruption in Hawaii in decades.
• Dr. Jennings Ryan Staley, a licensed physician, was indicted for mail fraud and additional crimes arising from his business venture selling alleged COVID19 “treatment kits” and agreeing with a Chinese supplier to smuggle hydroxychloroquine powder in the U.S., including lying to U.S. Customs by mislabeling a shipment as “yam extract.”

Mr. Brewer, a decorated Vietnam War veteran, former prosecutor and prominent San Diego litigator for decades, was sworn in on January 16, 2019 as the United States Attorney for the Southern District of California. President Trump nominated Mr. Brewer to serve as U.S. Attorney for this district on June 25, 2018. The full Senate unanimously confirmed his appointment on January 2, 2019.

Prior to becoming U.S. attorney, Mr. Brewer, a native of Ithaca, New York, was an Of Counsel litigation attorney at Seltzer Caplan McMahon Vitek. He previously served as a Deputy District Attorney in Los Angeles County from 1975 to 1977, and as an Assistant U.S. Attorney in the Central District of California from 1977 to 1982, where he successfully prosecuted a variety of cases including espionage, bank robbery, murder for hire and aircraft hijacking. He also held various management positions, including Assistant Chief of the Criminal Division.

From 1982 through the present, Mr. Brewer was in private practice, including from 1991 to 2009 as a partner at McKenna Long & Aldridge LLP, and from 2009 to 2014 as a partner at Jones Day. Before attending law school, Mr. Brewer served in the United States Army as an Airborne Ranger Infantry Officer and received the Silver Star and two Bronze Stars for his combat service in the Vietnam War. Mr. Brewer has been a Fellow in the American College of Trial Lawyers since 1999.  He received the Daniel T. Broderick Award from the San Diego County Bar Association in 2009 and the Distinguished Graduate Award from the University of San Diego School of Law in 2016.  Mr. Brewer earned his B.A. from St. Lawrence University, and his J.D. from the University of San Diego School of Law.

Assistant U. S. Attorney Matthew Brehm (619) 546-8983

NEWS RELEASE SUMMARY – February 25, 2021

SAN DIEGO – Ryan W. Nelson of San Diego was sentenced in federal court yesterday to 60 months in prison for committing three robberies, including two bank robberies and the armed robbery of a shoe store.

During the sentencing hearing, U.S. District Judge Cynthia A. Bashant told the defendant: “I just can’t ignore what you did in this case. It was dangerous and it was scary.” Nelson was also ordered to pay $11,572 in restitution to the businesses he robbed.

“These robberies were a terrifying and unforgettable experience for the victims,” said U.S. Attorney Robert Brewer. “Hopefully this sentence will restore a sense of safety to the victims and the community.” Brewer praised prosecutor Matthew Brehm, FBI agents and officials with the San Diego, National City and La Mesa police departments for their excellent work on this case.

“The FBI’s Violent Crime Task Force is out on the street with our local partners every day working to keep San Diegans safe,” said Suzanne Turner, FBI Special Agent in Charge of the San Diego Field Office.  “Violent crime investigations are a priority and our agents are dedicated to bringing justice for the victims and the communities affected by these robberies.”

Nelson entered his guilty plea in October of 2020,  admitting that on July 29, 2019, at approximately 8:45 a.m., he entered the Shoe Palace, located within the Plaza Bonita Mall in National City, dressed as a construction worker with a safety vest, safety glasses, and a hard hat.

In his plea agreement, Nelson admitted he told a Shoe Palace clerk that he was working on construction in the store above Shoe Palace and needed to inspect an electrical breaker panel in a room in the back of the store.  When Nelson returned to the front of the store, he approached a clerk, who was pregnant at the time, and pointed a black handgun at her. He demanded cash from the cash register, stating, “Give me all the money.” The clerk gave Nelson access to the cash register, and he took approximately $600 from the register and a nearby safe. After he took the cash, Nelson told the clerk, “Don’t call anyone or I will be back in five minutes!” He then fled the store, walked outside the mall, removed his construction worker disguise, retrieved a backpack hidden outside the mall, and changed his shirt.

Nelson also admitted that on August 15, 2019, at approximately 10:10 a.m., he entered the Vons Supermarket at 6155 El Cajon Boulevard, San Diego, and approached the teller window of the U.S. Bank branch located inside. Nelson pretended to talk on his cell phone but in fact gave the teller step-by-step verbal commands, demanding the teller to give him money by stating something similar to, “Grab a bag.

Start with the hundreds. Put all the money in the bag and give it to me, or I’m gonna shoot.” The teller complied with demands and provided Nelson with money from his teller drawer, totaling approximately $1,372. Prior to fleeing, Nelson told the victim teller, “Wait seven minutes, I’ve got someone in the store.” He then turned and exited the bank area, leaving out the east exit of the Vons Supermarket.

Nelson further admitted on August 23, 2019, at approximately 11:56 a.m., he entered the Vons Supermarket at 8011 University Avenue, La Mesa, California, and approached the teller window of the Wells Fargo branch located inside. Nelson pretended to talk on his cell phone but in fact demanded money from the three victim tellers by giving step-by-step verbal commands, stating something similar to, “Start with your 100s and put them in a bag, or I’ll start shooting.” The tellers complied with the demands and provided Nelson with a bag containing money from each of the teller’s drawers totaling approximately $9,600. He then left out of the Vons Supermarket’s main entrance.

Nelson also admitted that on August 29, 2019, FBI agents executed a federal search warrant at his residence and found a black bomber jacket, dark colored pants with white stripes down the sides, a navy blue-colored backpack, and a large black wristwatch, which were all items he was recorded wearing by surveillance cameras during, or just after, one of the bank robberies. FBI agents found a loaded, black .380 Smith and Wesson semi-automatic handgun in a drawer in Nelson’s room, which matched the description of the firearm he brandished during the Shoe Palace robbery. Agents also found $2,030 in cash on Nelson’s person, during his arrest.

This case is the result of the ongoing efforts of the Violent Crime and Human Trafficking (VCHT) Section.  Formed in 2019 by U.S. Attorney Brewer, the VCHT is tasked with leading collaborations between federal and local law enforcement in the investigation and prosecution of cases involving violent crimes, firearms and gang cases; sex trafficking and child exploitation; civil rights, and labor trafficking. The VCHT Section oversees the Southern District of California Coordinators for Project Safe Neighborhoods, Human Trafficking, and Project Safe Childhood.

DEFENDANT                                               Case Number 19cr3563-BAS                                  

Ryan W. Nelson                                              Age: 38           San Diego, California

SUMMARY OF CHARGES

Bank Robbery – Title 18, U.S.C., Section 2113(a)

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

Hobbs Act Robbery – Title 18, U.S.C., Section 1951

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

AGENCY

Federal Bureau of Investigations

San Diego Police Department

National City Police Department

La Mesa Police Department

 

Mark W. Pletcher (619) 546-9714 and Andrew J. Galvin (619) 546-9721

NEWS RELEASE SUMMARY – February 17, 2021

SAN DIEGO – Colas Djibouti, a contractor for the Department of the Navy at Camp Lemonnier and Chabelley Airfield, and the U.S. Embassy in Djibouti, admitted today that it faked testing results and submitted a series of false documents and false claims to the United States as part of a scheme to defraud the United States in the sale of substandard concrete used to construct U.S. Navy airfields in Djibouti.

Colas Djibouti, a French limited liability company, is a wholly owned subsidiary of Colas SA, a French civil engineering company.  According to documents filed in court, as part of its contracts with the Department of the Navy, Colas Djibouti was required to certify that it supplied concrete with specific composition and characteristics. Notwithstanding these obligations, Colas Djibouti created fictitious testing results, made fraudulent representations regarding the concrete’s composition and characteristics, and knowingly provided concrete to the United States that did not comply with the specifications.

In one particularly egregious example, in response to a request for an analysis of the water used in the concrete mix, Colas Djibouti provided an analysis for a store-bought bottle of drinking water. As a result of this criminal conduct, Colas Djibouti ultimately supplied substandard concrete to the Department of Navy in Djibouti that could promote early cracking, surface defects, and corrosion of embedded steel, and thus significantly impair the concrete’s long-term durability.  

In accordance with its agreement with the United States, Colas Djibouti will forfeit $8 million, pay another $2,042,002 to the Department of Navy in restitution, and pay a monetary penalty of $2.5 million. 

“Wherever our Navy goes, we go,” said U.S. Attorney Robert Brewer in the Southern District of California. “We will continue to unwaveringly protect our American warfighters from fraud, graft and corruption as they protect us from enemies foreign and domestic.”

The case was investigated by the Defense Criminal Investigative Service, the Naval Criminal Investigative Service, and the Defense Contract Audit Agency.  U.S. Attorney Brewer specifically commended the many agents and auditors who worked on this case in Djibouti and the United States, and Assistant U.S. Attorneys Mark Pletcher and Andrew Galvin, for their dedication and perseverance in the face of challenging circumstances. 

“Our Sailors and Marines depend upon high quality products and services from our Department of the Navy contractors in order to meet the Department’s world-wide mission,” said acting Secretary of the Navy Thomas W. Harker. “This outcome demonstrates that the Department of the Navy will continue to insist that our contractors must meet our high standards. This global settlement demonstrates the strong cooperation between the Department of the Navy and the Department of Justice in preventing fraud, no matter where in the world it happens.”

The criminal case was investigated and prosecuted as part of the Africa Strike Force, an initiative by the Major Fraud and Public Corruption Section of the U.S. Attorney’s Office in San Diego, in conjunction with its law enforcement partners from the Defense Criminal Investigative Service, the Naval Criminal Investigative Service, among others.  As the Department of Defense provides military and humanitarian aid throughout Africa to combat the rise of violent extremism from the likes of Boko Haram, Al Shabab and Al Qaeda in the Islamic Maghreb, Africa Strike Force was formed to serve an unmet need in protecting American interests from fraud and corruption. Africa Strike Force also recently announced charges against Micheline Pollock, a U.S. Army Corps of Engineers contractor who was indicted for defrauding the United States on military and humanitarian construction contracts throughout Africa.

Today’s criminal resolution, announced by the U.S. Attorney’s Office for the Southern District of California, was accompanied by the announcement by the Department of Justice, Civil Division, Commercial Litigation Branch of a simultaneous resolution of allegations of civil wrongdoing, under which Colas Djibouti will pay an additional $1,857,998.00.

“Government contractors that supply substandard materials to our armed forces not only cheat the American taxpayers but also impose added costs and burdens on the military,” said Acting Assistant Attorney General Brian M. Boynton for the Department of Justice’s Civil Division. “Today’s settlement demonstrates our commitment to ensure that those who do business with the government comply with their contractual obligations.”

“Aircraft taxiways are essential to military operations, and therefore require concrete that conforms to the high standards and specifications of the Department of Defense,” said Stanley A.  Newell, Special Agent-in-Charge for the DCIS Transnational Operations Field Office. “The DCIS along with our investigative partners will vigorously root out illegal conduct like this that threatens U.S. military readiness and harms the integrity of the Department of Defense procurement system.”

"Protecting Navy interests is a top priority of the Naval Criminal Investigative Service. Anyone considering defrauding the Navy and U.S. taxpayers should know NCIS will aggressively pursue all such allegations, in concert with our law enforcement partners and the Department of Justice," said Todd Battaglia, Special Agent in Charge of the NCIS Europe and Africa Field Office.

DEFENDANT           Corporate Location              Case Number            

Colas Djibouti             Djibouti, Djibouti                    21CR0280-WQH

SUMMARY OF CHARGES

Conspiracy to Commit Wire Fraud, in violation of 18 U.S.C. §§ 1349 and 1343

Maximum Penalty:  Twice the pecuniary gain or twice the pecuniary loss, whichever is greater

INVESTIGATING AGENCIES

Defense Criminal Investigative Service

Naval Criminal Investigative Service

Defense Contract Audit Agency

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

NEWS RELEASE SUMMARY – February 8, 2021

SAN DIEGO, CA – Jonathan Madison of San Diego pleaded guilty in federal court this morning to sex trafficking of children, admitting that he knowingly recruited, advertised, and solicited teenage girls and women to engage in commercial sex acts. Madison also admitted that he videotaped himself having sexual intercourse with an underage girl and later transmitted the video to her by cell phone.

In his plea, Madison acknowledged that he transported girls and women and provided them to customers for commercial sex acts, which took place in California and Colorado from November 2017 through April 2020. 

Madison, aka “Jay Jay,” “Boobutt,” and “JT,” was arrested in April 2020 on sex trafficking charges and ordered detained without bond by the Court. A federal grand jury returned the first post-pandemic indictment in May 2020 against Madison charging him with sex trafficking of a minor. Today, Madison entered his guilty plea before U.S. Magistrate Judge Allison H. Goddard.

According to his plea agreement, between November 2017 and September 2018, while in the Southern District of California, Madison admitted he transported, provided, maintained and obtained a minor female (while she was 15 and 16 years old) for the purpose of her to engage in commercial sex acts in San Diego County.  At this time, Madison knew the girl was under the age of 18. 

Madison also admitted that in order to further his pimping activities, he caused online ads to be posted offering the girl for commercial sex. During this time, Madison transported her to meet with sex trafficking customers. 

“This is a crime that affects young victims for the rest of their lives,” said U.S. Attorney Robert Brewer. “Our office will continue its collaborative work with our law enforcement partners to combat the abuse and exploitation of women and girls who are victims of sex trafficking.” Brewer praised prosecutor Joseph Orabona and members of the San Diego Human Trafficking Task Force for their excellent work on this case.

“There’s no place for human trafficking in California or anywhere,” said California Attorney General Xavier Becerra. “When our children are put at risk, we stand united to fight back. I applaud the efforts of the San Diego Human Trafficking Task Force and the U.S. Attorney’s Office for securing this conviction. At the California Department of Justice, we’ll continue to leverage our resources to stand up for the most vulnerable among us.”

“Today’s conviction is one more step in the journey to justice for the victims in this case,” said FBI Special Agent in Charge Suzanne Turner.  “As law enforcement, we work tirelessly to stop criminals from preying on children and vulnerable victims in sex trafficking cases. The dedication and selfless devotion of FBI Agents protecting those most vulnerable in our communities has been and always will be unwavering and undeniable.”

A sentencing hearing is scheduled for May 3, 2021 at 9:00 a.m. before U.S. District Judge Cynthia A. Bashant.  Madison has been in custody since his arrest in April 2020. 

DEFENDANT                                   Case Numbers: 20CR1228-BAS

Jonathan Madison                               Age: 29           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

Assistant U. S. Attorneys Michelle L. Wasserman (619) 546-8431 and Oleksandra Johnson (619) 546-9769

NEWS RELEASE SUMMARY – February 2, 2021

SAN DIEGO – Stuart Weinstock of Escondido 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.  For approximately eight years, Weinstock made supposed “donations” to Chabad of Poway, and Rabbi Goldstein funneled approximately 75 percent of those “donations” back to Weinstock in cash, allowing Weinstock to evade more than $100,000 in taxes. 

According to Weinstock’s plea agreement, between 2010 and 2018, Weinstock provided Rabbi Goldstein with at least approximately $872,815 in checks that fraudulently described the funds as “contributions,” “donations,” or “business expenses.”  Weinstock gave these “donations” to Rabbi Goldstein monthly.  Rabbi Goldstein then secretly returned 75 percent of the money, or approximately $654,611, to Weinstock.  To do so, Rabbi Goldstein met with Weinstock in person at Weinstock’s home or business to pick up the checks and give cash back – less the rabbi’s 25  percent cut – to Weinstock in an envelope.  Weinstock then falsely claimed on his tax returns that the full amount of his fraudulent donations were tax deductible donations or business expenses, thereby fraudulently reducing his taxes. Through this scheme, Weinstock avoided over $100,000 in taxes that he should have paid to the IRS. 

In his plea agreement, Weinstock also admitted that in October 2018, one of Rabbi Goldstein’s acquaintances contacted Weinstock to tell him that Rabbi Goldstein had been arrested and that Rabbi Goldstein wanted to warn Weinstock not to accept any more envelopes.  Weinstock understood this as a warning that the rabbi was cooperating with law enforcement and their future interactions could be recorded.

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.

So far, 10 people have pleaded guilty to crimes discovered in this investigation, including Weinstock and two others who have agreed to deferred prosecution agreements.  Rabbi Goldstein has agreed to cooperate with the ongoing investigation. He is scheduled to be sentenced by U.S. District Judge Cynthia Bashant on April 26, 2021.

“This was a deceptive, carefully-planned scheme and the victims are honest taxpayers,” said U.S. Attorney Robert Brewer. “Those who cheat the system by exploiting the tax-exempt status of non-profits and religious organizations will be held to account for their illegal conduct.” Brewer praised prosecutors Michelle Wasserman and Oleksandra Johnson and FBI and IRS agents for their excellent work on this case.

“Mr. Weinstock admitted that he broke the law and cheated the United States out of over $100,000, and in so doing, he also cheated honest taxpayers who pay their fair share,” said Special Agent in Charge Ryan L. Korner. “Mr. Weinstock’s tax evasion scheme spanned eight years, exploiting charitable giving laws and abusing a tax-exempt religious organization. IRS Criminal Investigation will pursue all who defraud the U.S. Treasury and we are committed to working with our law enforcement partners to uphold the law and protect our Nation’s tax and financial systems.”

“This years-long fraud and tax evasion scheme brought to light by this investigation has resulted in ten guilty pleas, including defendant Stuart Weinstock and previously convicted Rabbi Yisroel Goldstein,” said Suzanne Turner, Special Agent in Charge of FBI's San Diego Field Office. “Dedicated FBI agents uncovered and worked diligently to piece together a complex financial scheme perpetrated by those who exploited a non-profit and religious organization to cheat a system designed to benefit those in need. As shown in this case, the FBI, working with our IRS and DOJ partners, will bring justice to those who commit fraud and cheat honest taxpayers.”

Stuart Weinstock is next scheduled to appear at a sentencing hearing on April 26, 2021 at 9 a.m. before Judge Bashant.

SUMMARY OF CHARGES                       Case Number 21CR0042-BAS

Stuart Weinstock                                          Age: 64           Escondido, 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

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

Internal Revenue Service

Federal Bureau of Investigation

 

Kelly Thornton (619) 546-9726    

NEWS RELEASE SUMMARY – January 29, 2020

SAN DIEGO – Several federal prosecutors have received awards from the San Diego Drug Enforcement Administration for exemplary service and dedication to the mission of the DEA in San Diego and Imperial counties.

The recipients – Brandon Kimura, Larry Casper, Kyle Martin, Victor White and Dylan Aste – were honored for working tirelessly, hand-in-hand with DEA agents, to disrupt the movement of large quantities of narcotics; to dismantle transnational drug trafficking organizations around the world; to target maritime-based narcotics trafficking operations; and to hold dealers responsible for overdose deaths and doctors and pharmacies accountable for overprescribing opioids.

Collectively their efforts resulted in numerous maritime seizures of huge shipments of illicit drugs; seizures of bulk currency shipments totaling millions of dollars; the arrests and indictments of members of the command and control structures of drug trafficking organizations; and the collection of significant civil settlement payments.

“It was an honor and a privilege to recognize these Assistant U.S. Attorneys along with U.S. Attorney Robert Brewer on behalf of the DEA San Diego Field Division for their hard work and dedication to the mission of the DEA,” said Special Agent in Charge John W. Callery. “Their relationships directly with the DEA have led to proven results through countless successful prosecutions and the dismantlement of drug trafficking organizations operating in Imperial and San Diego counties and beyond. These AUSAs’ steadfast and unwavering partnership directly with DEA agents and task force officers of the SDFD is to be commended and admired.”

“During a time when drug overdoses have spiked to unprecedented levels during the pandemic, the accomplishments of these outstanding prosecutors and their DEA partners are even more crucial and impressive,” said U.S. Attorney Robert Brewer. “I am so proud of their dedication and hard work protecting the people of San Diego and Imperial counties from the violence and destruction associated with illegal drugs. And I am so grateful to John Callery and the DEA for this great honor, and for our strong and successful relationship.”

From the DEA’s commendations:

Assistant U.S. Attorney Brandon Kimura has demonstrated his commitment to the DEA Imperial County District Office through his time, his service, and his mentorship. Throughout 2020, AUSA Kimura assisted the DEA and U.S. Postal Inspectors in the prosecution of multiple investigations targeting a network of couriers, shippers, and receivers of drug laden packages originating in Imperial County and destined for cities across the United States; resulting in multiple arrests and enforcement actions throughout the country. AUSA Kimura is a reliable and valuable resource for the DEA in Imperial County and provides effective guidance and constructive feedback for prosecutorial avenues which investigators can build upon. His close partnership with his case agents results in the development of overwhelming evidence to ensure swift and meaningful prosecutions.

Assistant U.S. Attorney Victor White has demonstrated his commitment to the DEA Imperial County District Office through his dedication, determination and his mentorship. White assisted with numerous DEA investigations in Imperial County involving the prosecution of domestic and foreign targets, including Mexico-based drug trafficking organization leaders who used international drug laden vessels and aircrafts, and United States-based couriers, distributors, transporters, and receivers of narcotic shipments travelling through Imperial County and destined for cities across the United States. His efforts resulted in multiple arrests and enforcement actions throughout the country.

Assistant U.S. Attorney Kyle Martin has demonstrated his commitment to the DEA Imperial County District Office through his consistent and direct communication with DEA special agents and task force officers in pursuing transnational drug trafficking organizations. Of note, AUSA Martin took part in cases targeting organizations operating in Guatemala, El Salvador, Mexico City, the United States, and Europe. These organizations were responsible for the shipment of large quantities of narcotics on land and in boats and shipping containers. AUSA Martin’s efforts resulted in numerous maritime seizures of multi-hundred kilogram shipments of cocaine, seizures of bulk currency shipments totaling over $2.8 million, and the arrest and indictment of members of the command and control structures of the drug trafficking organizations. AUSA Martin’s commitment and steadfast dedication to the DEA in developing comprehensive investigations targeting the highest echelons of transnational drug trafficking networks has led to proven results in continuing DEA’s mission and is to be admired and commended.

Assistant U.S. Attorney Larry Casper exemplifies dedication, determination, and commitment to the mission of the DEA Imperial County District Office. AUSA Casper routinely integrates himself with the DEA, providing outstanding on the spot legal and prosecutorial guidance and insight to special agents and task force officers resulting in the progression of their investigations and the disruption and dismantlement of drug trafficking organizations. AUSA Casper’s unparalleled commitment as the U.S. Attorney’s Office Opioid Coordinator directly corresponded to the charging of the DEA’s first fentanyl overdose case in Imperial County, in which the Government alleges that the distributed fentanyl resulted in the death of a local high school student in March of 2019. Furthermore, AUSA Casper is the lead prosecutor on an Organized Crime Drug Enforcement Task Force Operation that has disrupted a Mexicali, Baja California, Mexico drug trafficking organization that allegedly exploits juveniles as body couriers and has already resulted in more than twenty successful prosecutions. Casper’s dedication is expected to further dismantlement of the drug trafficking organization and prosecution of its leadership.

Assistant U.S. Attorney Dylan M. Aste has demonstrated his dedication and commitment to the mission of the Drug Enforcement Administration by always being available and responsive and by working hard to hold doctors and pharmacies accountable for their roles in the opioid crisis. AUSA Aste has a demanding position prosecuting civil diversion investigations and responds without complaint and provides whatever assistance or guidance necessary for the investigators and agents to ensure a successful prosecution. His most recent cases have resulted in large civil settlements with doctors and a pharmacy. His deliberate and thorough approach was the driving force in the success of these investigations.

 

Kelly Thornton (619) 546-9726    

NEWS RELEASE SUMMARY – January 28, 2021

SAN DIEGO – U.S. Attorney Robert Brewer has released the office’s  2020 Annual Report, which details its major cases and achievements during a year that posed unprecedented challenges to law enforcement and federal court operations in the district due to the pandemic.

“I am very proud of our significant enforcement, community outreach, and administrative accomplishments under difficult conditions,” Brewer said.  “This 2020 Annual Report provides a window into a few of the many cases we worked on this year. While the report cannot possibly cover all the district’s significant cases,  it effectively summarizes the great variety of work handled by this office, and illustrates the tremendous skills and experience our prosecutors and law enforcement professionals bring to bear on each and every case.”

During 2020, the Office met the challenges of the COVID-19 pandemic while trying more cases than any other U.S. Attorney’s office in the Ninth Circuit. The Criminal Division and Civil Division successfully pursued enforcement priorities that made a direct impact on the safety of the District and upheld the rule of law. With the dedicated assistance from our Administrative Division, the Office also hired a record number of Assistant United States Attorneys.

Targeting Violent Crime and Seeking an End to Human Trafficking

In 2020 alone, the Office’s Violent Crimes and Human Trafficking Section (“VCHT”)successfully prosecuted more than 100 criminal street gang defendants, obtained significant prison sentences on gang members from our region’s most violent criminal street gangs, and prosecuted several individual firearm cases.

VCHT also led in the national effort to end human trafficking and child exploitation. According to a May 26, 2020 report from the Human Trafficking Institute, the Office was #1 in the nation in 2019 for charging the most new trafficking defendants. We were #4 in the nation for active cases, and we charged the largest human trafficking case in 2019 – a forced labor case involving 12 defendants.

Recently, in August 2020, VCHT led investigations resulting in the arrest of Luigi Popescu of Romania for his role in leading a seven-year alien smuggling operation. Popescu is expected to plead guilty in January 2021. Also, in September 2020, defendant Joseph Price was sentenced to 15 years in prison after pleading guilty to sex trafficking a 15-year-old minor.

Dismantling Organized Crime

The Southern District of California is a hub of drug smuggling by the world’s most dangerous international drug cartels. During 2020, the Office led and pushed for several bold new initiatives to dismantle these criminal organizations. For example, in March, our federal law enforcement partners shut down a nearly half mile-long subterranean drug tunnel with reinforced walls, ventilation, lighting, and a rail system – and seized $30 million of fentanyl, methamphetamine, heroin, cocaine, and marijuana. In October, Sinaloa Cartel leader Jorge Valenzuela-Valenzuela was arrested in Massachusetts after he entered the United States using a fraudulent Mexican identity document. And in November 2020, agents arrested three individuals for trafficking huge quantities of illicit drugs for the Sinaloa Cartel in connection with the largest single seizure of cash, narcotics, and ammunition in this district’s history ($3.5 million in bulk U.S. currency, 685 kilograms of cocaine, 24 kilograms of fentanyl, and approximately 20,000 rounds of .50 caliber ammunition and hundreds of body armor vests).

Securing Our Border

The Border Enforcement Section (“BES”) was created in early 2019 to ensure that the Office devotes adequate resources to addressing crime at our six ports of entry. Creating a BES section has been particularly important during the past year because of the historic increase in drug smuggling along the border. For example, federal law enforcement agencies seized 83% more methamphetamine in June of 2020 compared to June 2019, and seized 410% more fentanyl in June 2020 compared to June 2019. Due to the dedicated efforts of BES attorneys and support staff, the Office has responded to this surge with a corresponding increase in successful prosecutions. In July 2020 alone, BES doubled its prosecution numbers and charged 322 cases involving the importation of controlled substances, compared to 157 cases in July 2019.

Diligent Prosecution of Several High-Profile Cases

The number and quality of the high-profile cases the Office has handled during 2020, including during the pandemic, are additional evidence of our commitment to excellence. The following are just a few examples:

• U.S. Representative Duncan Hunter was sentenced to 11 months in prison for stealing $250,000 in campaign funds to pay for his and his wife’s living and luxury expenses.
• Gina Champion-Cain pleaded guilty to masterminding the longest Ponzi scheme in San Diego history with hundreds of victims throughout California and the United States and losses estimated as high as $400 million.
• Abdullahi Ahmed Abdullahi, a Canadian national, was successfully extradited to the United States and faces trial on federal conspiracy charges of providing material support to terrorists.  
• U.S. Navy Captain David Haas and former U.S. Navy Chief Petty Officer Brooks Alonzo Parks pleaded guilty to conspiracy to commit bribery, representing the 22nd and 23rd defendants to have entered guilty pleas as part of the bribery and corruption scheme involving Glenn Defense Marine Asia and its leader, “Fat Leonard” Glenn Francis. The decade-long scandal involves scores of numerous U.S. Navy officials and officers, tens of millions of dollars in fraud, and millions of dollars in bribes. Eight more defendants await jury trial.
• Rabbi Ysiroel Goldstein, former Director of Chabad of Poway Synagogue, and five of his associates pleaded guilty to fraud charges, admitting they participated in a complex, years-long, multi-million dollar tax-evasion scheme and other illegal financial transactions involving theft of public money.
• Former Honolulu Police Chief Louis Kealoha and his wife, former Honolulu prosecutor Katherine Kealoha, were sentenced to 84 months and 156 months in prison, respectively, for a wide range of criminal conduct, including framing their relative with a crime to conceal their own fraud. Additionally, the Kealohas’ co-conspirators, former Honolulu police officers Derek Wayne Hahn and Minh-Hung “Bobby” Nguyen, received 42 months and 54 months, respectively, for their involvement in what has been called the largest case of corruption in Hawaii in decades.
• Dr. Jennings Ryan Staley, a licensed physician, was indicted for mail fraud and additional crimes arising from his business venture selling alleged COVID-19 “treatment kits” and agreeing with a Chinese supplier to smuggle hydroxychloroquine powder in the U.S., including lying to U.S. Customs by mislabeling a shipment as “yam extract.”

Excellence in Civil Litigation  

Our Civil Division includes 23 attorneys who represent the United States and its agencies and employees in affirmative and defensive civil litigation. Much of our civil work arises out of the federal government’s activities along the southwest border and the military’s strong presence in the district.

Despite the pandemic, in 2020 alone, the Civil Division recovered $46 million on affirmative cases involving allegations of healthcare fraud, defense contracting fraud, and opioid over-prescribing. Since March 2020, when the lockdown occurred, the Office took on more than 100 new defensive cases, including successfully defending over 25 TROs. The Civil Division also responded to dozens of individual prisoner habeas corpus petitions and defended significant class action cases.

Successful Diversion Programs

In 2020, the Office continued the great work of two of the Southern District of California’s diversion programs, the Alternative to Prison Solutions (APS) Diversion Program and the Veteran’s Diversion Program (VDP).

In 2020, APS celebrated its 10-year anniversary as a flagship collaborative effort between the U.S. Attorney’s Office, U.S. Pretrial Services Office, defense bar, and federal bench. This unique program offers select criminal defendants who plead guilty to felony charges an alternative to incarceration with an opportunity to have their case dismissed after 12 months in exchange for compliance with certain court requirements, such as obtaining employment, enrolling in education programs, and obtaining mental health and addiction treatment. When successful participants graduate from APS, their charges are dismissed and they re-enter society as productive citizens with their personal trajectories altered, often in remarkably inspiring ways. During 2020, we substantially added to the number of successful graduates from the program, resulting in a 92% success rate over the past two years.

The Office also expanded the important work of VDP, which is the collaborative effort of our office, Pretrial Services, U.S. Magistrates, defense counsel, and the Veterans Administration. The program’s game-changing element is the Veterans Treatment Court, admission to which requires a service-related injury. VDP provides veterans a second chance at a meaningful future. Even in the pandemic, the VDP team has continued its work seamlessly online, providing resources, encouragement, and oversight that is significantly improving the lives of veterans in our community.

Leading the Way through Community Outreach Initiatives

The U.S. Atorney’s Office also prioritized our community outreach programs focused on the prevention of violent crime, fentanyl abuse, tribal relations, hate crimes, and other enforcement priorities. For example, in February 2020, the U.S. Attorney joined five other U.S. Attorneys from the Southwest Border in a series of briefings and meetings with senior Mexican law enforcement government officials and embassy personnel regarding coordinated efforts to combat transnational crime and trafficking of arms and illicit drugs. Our community outreach team has devoted significant resources to raise fentanyl abuse awareness through press releases and press conferences. Also, the Office prioritized our work on tribal relations through several initiatives that were implemented by a designated tribal liaison AUSA. Finally, the Office led successful community meetings and education programs regarding hate crime prevention and civil rights issues. These programs, which are just a few examples, have strengthened our relationship with the community by fostering important dialogue between our district’s law enforcement agencies and the citizens we serve.

“Despite the pandemic, the U.S. Attorney’s Office remains open for business, and throughout the year we fulfilled our critical mission,” said Brewer. “As I reflect on this extraordinary year, I am so impressed that even under the most difficult circumstances, the public servants in this office and throughout the criminal justice system maintained safety and security by adopting creative operational responses. I applaud the lawyers and staff in this office and our partners: the officers, agents, and first responders who continue to meet any challenge regardless of the risks they face, each and every day.”